By AllBusiness Editors
Los Angeles-based Carrot Group, Inc. recently launched its social messaging app on iOS and Android devices worldwide. The company’s platform allows users around the world to message each other with digital currency attached.
Users send each other “Carrots” – messages consisting of an image, question and coin amount. Recipients have 24 hours to open the message, then two minutes to respond and receive their coins. It is stimulated communication.
Two trillion text messages are sent every year, that’s billions per day. None of these have any monetary value.
We spoke with James Tashjian, founder and CEO of Carrot, and asked him some key questions about the company and its market opportunity.
What Does Carrot Do?
Carrot allows users to connect with friends and family anytime and spontaneously by asking questions they otherwise wouldn’t be able to ask. Recipients receive “Carrot Coins” for responding, which is a great motivation to participate. Carrots can be used as a gift, reward or incentive to spark social engagement.
Once a day, the company sends a question to all Carrot app users, offering coins in exchange for answers. Called the “Daily Dig,” comments are public and engaging, allowing friends and other users to thumbs up for answers they deserve. Users receive an extra coin for every thumbs-up they receive.
Coins the company earns for answering the Daily Dig then fund users’ engagement with their friends and family.
What social messaging problem is Carrot trying to solve?
Social media is saturated, full of filters and curated content to garner followers, rather than inspire real connection. Some say it has done more harm than good to relationships. Meanwhile, messaging is mostly used for everyday and trivial communication, making it an ineffective catalyst for deeper conversation.
In a post-pandemic world where we are acutely aware of our need for authentic connection, there seem to be few options online that make this possible.
How does Carrot solve this problem?
Unlike the routine of messaging apps and the insincerity of social apps, Carrot goes deeper. It encourages users to get to know each other better, in a fun, gamified way.
By nature, the app values originality over conformity and connection over accumulating anonymous followers. It allows users to express themselves through the questions they ask, the answers they give and the images they choose.
You mentioned “coins.” Does Carrot use real money?
Carrot runs on “Carrot Coins”, a digital token that can be used in the app to send Carrots to others, exchanged for NFTs, or transferred out of the app and exchanged for other currencies. It’s real value that users get for their engagement.
Root coins are minted on the Polygon blockchain, a popular layer on the Ethereum blockchain, and these tokens can be bought and sold on the Uniswap exchange for Bitcoin, Ether, US Dollar Coin, or any other digital currency a user desires.
How is Carrot different from other cryptocurrency startups?
Unlike other cryptocurrency tokens that have little to no intrinsic value or rely on perceived value generated by popularity, Carrot Coins have an intrinsic utility: the ability to provoke a response from another person. With a Carrot Coin, a person can motivate someone to respond to their question. We’ve already discussed consumer use, but the B2C application is even more compelling, potentially replacing all of the unwanted customer survey emails cluttering our inboxes.
NFTs in Carrot also have an intrinsic utility. Users who have an NFT in the app are the only ones who can send the corresponding image with their Carrot to further motivate a response. Unlike most NFTs that only offer owners the prospect of resale, Carrot NFTs actually allow exclusive use within Carrot.
Does this mean Carrot is exposed to cryptocurrency hackers?
No. Unlike Web3 startups exposed to online hackers, Carrot is a Web2.5 platform, whose user balance is backed up on our own AWS servers (Amazon). Minted Carrot Coins and NFTs are stored offline, with multiple keyholders, in secure repositories, safe from hackers or bad actors.
Users can rest assured that their Carrot Coins and NFTs are safe in the app, but they are also free to transfer their holdings from the app and sell them on the open market at any time.
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What is the company’s business model?
In addition to receiving coins from the company for answering the Daily Dig, users can choose to purchase more coins in the app or earn coins through participating promotions, both of which generate revenue for Carrot. With more coins, users can offer more incentives to their friends. In addition, users need coins to exchange for exclusive NFTs in the app.
Brands can use Carrot to send instant messages and incentivize customers for their feedback, instead of cluttering customer inboxes with surveys that are usually ignored. To engage with customers, brands need coins that can be purchased both on the open market and directly from Carrot.
Unlike other social platforms, we don’t have to sell user data.
What is the market opportunity for Carrot?
Carrot aims to complement the other social messaging tools currently available – Snap, Tik Tok, Instagram – and will eventually be translated into other languages besides English, for universal appeal.
The app is aimed at users who prefer to respond verbally, as in-app questions require up to 2 minutes of thoughtful response, rather than the more typical social consumption of scrolling content. So adoption may look different to the demographics of other social platforms, but the overall potential should be proportionate.
The market opportunity for the company is over $25 billion.
What is the background of Carrot’s management team?
Carrot’s co-founders have a unique combination of financial and technical experience, having held previous positions at Goldman Sachs, JP Morgan and Varga Capital.
They have each been entrepreneurs for over 20 years and have collaborated on several projects during those two decades.
What’s next for Carrot?
A beta version of the app was launched globally in December. We are busy collecting initial user experience feedback to determine next steps for development as we prepare for user base growth in the new year. Then we have the necessary traction to launch our B2C offer.
How can someone download the Carrot app?
It’s easy, just go to the Google Play Store if you have an Android device or the App Store if you have an Apple device. Users can also connect their external wallet to Wallet Connect, which is easy to do from within the app.
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