By AllBusiness Editors
Los Angeles-based Carrot Group, Inc. recently launched its social messaging app on iOS– and Android-enabled devices, worldwide. The company’s platform allows users across the globe to send each other messages with digital currency attached.
Users send each other “Carrots”—messages comprised of an image, question, and coin amount. Recipients have 24 hours to open the message, then two minutes to respond and get their coins. It’s incentivized communication.
Two trillion text messages are sent every year—that’s billions every day. None of these come with monetary value.
We sat down with James Tashjian, Founder and CEO of Carrot, and asked him some key questions about the company and the market opportunity.
What does Carrot do?
Carrot allows users to connect with friends and family in a spontaneous way, at anytime, by asking questions that they otherwise wouldn’t have the chance to ask. Recipients receive “Carrot Coins” for responding, which serve as a great motivation to participate. Carrots can be used as gifts, rewards, or incentives to initiate social engagement.
Once per day, the company sends a question to all Carrot app users, offering coins in exchange for replies. This is called the “Daily Dig,” and responses are public and engageable, allowing friends and other users to vote with a thumbs-up on answers they find deserving. Users receive an extra coin for each thumbs-up they receive.
Coins earned from the company for answering the Daily Dig then fund users’ engagement with their friends and family.
What problem with social messaging is Carrot trying to solve?
Social media has become saturated, full of filters and curated content to amass followers, rather than to inspire genuine connection. Some say it’s caused more harm than good for relationships. Meanwhile, messaging is mostly used for mundane 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 enable it.
How does Carrot solve this problem?
Unlike the routineness of messaging apps and the disingenuousness of social apps, Carrot goes deeper. It incentivizes users to get to know each other better, in a fun, gamified way.
By its nature, the app values originality over conformity, and connection over the amassing of anonymous followers. It allows users to express themselves through the questions they ask, the answers they give, and the imagery they choose.
You mentioned “coins.” Does Carrot use real money?
Carrot runs on “Carrot Coins,” which are a digital token that can be used in the app to send Carrots to others, redeemed for NFTs, or transferred out of the app and exchanged for other currencies. It’s real value that users are getting for their engagement.
Carrot 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, U.S. Dollar Coin, or any other digital currency a user wishes.
How does Carrot differ from other cryptocurrency startups?
Unlike other cryptocurrency tokens that have little to no intrinsic value or that depend on perceived value generated by popularity, Carrot Coins have intrinsic utility—the ability to elicit a response from another person. With a Carrot Coin, a person can motivate someone to respond to their inquiry. We’ve already discussed consumer use, but the B2C application is even more compelling, potentially replacing all the junk customer survey emails that clutter our inboxes.
NFTs in Carrot also have intrinsic utility. Users who own an NFT in the app are the only ones capable of sending the associated 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 that Carrot is exposed to cryptocurrency hackers?
No. Unlike Web3 startups that are exposed to online hackers, Carrot is a Web2.5 platform, with user balances backed up on our own AWS (Amazon) servers. Minted Carrot Coins and NFTs are stored offline, with multiple keyholders, in secure depositories, safe from hackers or bad actors.
Users can rest assured that their Carrot Coins and NFTs are safe while in the app, but are also free to transfer their holdings out of the app and sell 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 buy more coins in-app or earn coins through participating promotions, both of which generate revenue for Carrot. More coins allow users to offer greater incentives to their friends. Plus, users need coins to redeem for exclusive NFTs in the app.
Brands can use Carrot to send instant messages and incentivize customers for their feedback, rather than polluting customer inboxes with surveys that are mostly ignored. To engage with customers, brands will need coins, which can be purchased on the open market, as well as from Carrot directly.
Unlike other social platforms, we don’t need to sell user data.
How big is the market opportunity for Carrot?
Carrot aims to be a complement to the other social messaging tools currently available–Snap, Tik Tok, Instagram–and will eventually be translated in other languages besides English, for universal appeal.
The app does target users that prefer to engage verbally, since questions in the app require up to 2 minutes of thoughtful response, rather than the more typical social consumption of scrolling content. Thus, adoption may look different than the demographics of other social platforms, but overall potential should be commensurate.
The market opportunity for the company is over $25 billion.
What is the background of Carrot’s management team?
The co-founders of Carrot have a unique combination of financial and technical experience, having had prior roles at Goldman Sachs, J.P. Morgan, and Varga Capital.
They have each spent over 20 years as entrepreneurs, and have been working together on various projects over those two decades.
What’s next for Carrot?
A beta version of the app was just launched globally in December. We’re busy collecting initial feedback on the user experience to determine next steps for development as we prepare efforts to grow the userbase in the new year. Then we’ll have the necessary traction to launch our B2C offerings.
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 using Wallet Connect, which is easy to do from within the app.