A family-oriented social networking site plans to take on social media giant Facebook, despite warnings from industry experts that start-ups should be wary of competing directly with major players.
Jase and Brooke Farmer, based on the Gold Coast, are the founders of Family HQ, which is essentially a private website for communicating with family and friends.
The site has attracted some 5,000 visitors despite launching just one month ago.
The Farmers, who have four children, sold their family home and two investment properties in order to finance the venture with around $250,000.
They have been developing the site since 2007 and recently had it valued at $10 million by an independent accountancy firm.
Jase Farmer says Family HQ allows family members to share photos and videos, and communicate via live messages, instant chat and a family message board.
It’s been reported the site, which will soon include a family tree feature, will be in direct competition to social media heavyweight Facebook, which boasts 800 million active users.
Jase Farmer told goldcoast.com.au the main difference between Family HQ and Facebook is that it doesn’t leave a “digital footprint” on the internet.
“If you searched on Google you would not be able to find your profile… Everything is privately stored and secured for each user,” Farmer said.
However, Farmer tells StartupSmart he doesn’t view Family HQ as a competitor to Facebook but a “quality alternative”.
“We don’t expect people to close their Facebook account and join us… Some of our features will rival Facebook but it’s more in the ethos and the way you do the networking that is quite different,” he says.
Craig Hodges, managing director of digital marketing agency King Content, says competing with the likes of Facebook could be a “risky move”.
“You only need to look at MySpace, which had the top spot and lost it pretty quickly. There are always going to be new players but it’s going to be difficult to compete with someone like Facebook,” Hodges says.
Hodges believes the only social networking site that could potentially rival Facebook is Google+, a social networking site launched by Google earlier in the year.
“[Niche social networking sites] shouldn’t worry about Facebook – they should worry about their own offering,” Hodges says.
“Facebook isn’t perfect and if they can offer something different, great… It’s no different from going into any market with major players. Do you have any differentiation from the majors?”
“It all comes down to the users and the content. People aren’t going to [visit a site] if there’s nobody there. If it can get some sort of traction, that will improve its chances.”
Hodges says the challenge for small sites is attracting high audience levels, particularly in a small market like Australia.
“The key is having the audience – content will drive the audience… Make sure your numbers are right and the site can operate on small cost bases,” he says.
Similarly, online entrepreneur Fred Schebesta says the challenge for niche sites is building their membership, particularly so late in the game.
“It’s a little bit crazy to come so late into the market and try and take up the space Facebook has taken,” he says.
Nevertheless, Family HQ is hoping to attract 500,000 members by the end of next year, and is in negotiations with a Sydney firm to sell 10% of the site for around $1 million.
“It’s time that we need this. We’ve got significant plans and we need more money. We’re working with three or four staff when we need 30 or 40,” Farmer says.
“In the near future, we’re rolling out to New Zealand, Ireland and the UK. From there, South Africa, India and Canada are on the next level. We then want to enter the US market in a really strong position.”
Meanwhile, a Chicago-based online social scrapbooking company is suing Facebook’s new Timeline feature for trademark infringement.
Timelines.com, which creates timelines for individuals on different topics, has requested an immediate injunction on the Facebook tool and is demanding damages.