Mobilizing the Masses via Mobile

Founders: Steve Martocci, 29, and Jared Hecht, 24

Company: GroupMe

Founded: July 2010

Site: groupme.com

What GroupMe Does: GroupMe is a group texting service that functions like a private chat room and works on any phone. 

How GroupMe is changing the game: “There’s no real-time group coordination tool for mobile phones,” said Martocci. “I thought it was a cool idea but it seemed so generic and simple I thought, ‘why hasn’t this been done this before?’ After thinking about it for a night and sleeping on it, I was psyched because I realized this is a giant opportunity.” 

Martocci and Hecht weren’t the only one’s psyched about it. According to Tech- Crunch, the company counts heavy hitters such as Betaworks, Ken Lerer, and David Tish among its investors. The company has been valued at $30 million and has received more than $11 million in funding. 

How does GroupMe expect to generate revenue without charging for this service? Sponsored content. The example Hecht gives for how this works is a group that is texting about making plans for a sushi dinner can opt into receiving a coupon for the entire group at a local sushi restaurant. “From day one we’ve said we want to enable groups to make decisions better in real-time. Right now we’re giving brands the potential to tap a real-life network of people who know each other and engage around certain content. The way GroupMe works with brands will evolve and change in the future.” 

The culture at GroupMe is also game changing. According to Martocci and Hecht, who both had experience at technology start ups, they made a deliberate decision to create an engineering-focused organization. Martocci spoke about a startup he worked for that became more corporate as the company grew and he saw how the engineers were treated. “At one point, we were moved to a temporary office space that had no windows and it was like working in a cave,” he said. Martocci and Hecht recently moved their employees to a new space near Union Square with southfacing floor to ceiling windows. 

They believe this type of engineer focused culture is important for retaining top tech talent, which can be a challenge in New York. “There’s more money here than there is talent, so it creates this interesting dynamic,” says Martocci. Hecht adds, “There’s talent here but they’re often doing their own thing. To get really good people, you have to convince them that this is a product that will change lives or it’s a product that they use every single day already. There is plenty of talent here but it’s just really, really hard to attract and retain that talent.” 

Despite the tough competition for talent, the GroupMe guys wouldn’t run their business anywhere else. “New York, at least for social applications like us and Foursquare, allows for so much usage, feedback, and interesting scenarios on how your product has worked and not worked,” said Martocci. Adds Hecht, “Our whole team is filled with New Yorkers who love this place and are here for a reason. They’re very social people, and, truthfully, that’s really important to us. We want them testing our app every single night.” 

What’s next: GroupMe is doing group texts and conference calls around specific events. In addition to groups around music festivals, they are hosting groups around Oxygen Network’s Bad Girls Club and MTV’s America’s Best Dancer that will include stars from the shows.