Why I Changed My Mind On Klout (And Invested)

Klout has been one of my go to punchlines for some time now. For example – in May I wrote a post titled “My Detailed Thoughts On Klout” that contained a single word in the post itself: “Why?”

The problem I had with Klout was that it was just another meaningless social game to play. People were wrecking their heads trying to game it and get their score up higher.

To keep his [Klout] score up, Lee tweets up to 45 times a day—an average of one every 32 minutes. “People like food porn,” he notes, “so I try to post a lot of pictures of things I eat.” Lee once took a vacation during which he had no access to the Internet. This made him uncomfortable. “I was worried that brands couldn’t get in touch with me. It’s easy for them to forget about you. And I knew my Klout score would go down if I stopped tweeting for too long.”

That’s just pathetic. And then having companies focus their marketing attention on these people. Lee got an Audi A8 for a few days. More:

Matt Thomson, Klout’s VP of platform, says that a number of major companies—airlines, big-box retailers, hospitality brands—are discussing how best to use Klout scores. Soon, he predicts, people with formidable Klout will board planes earlier, get free access to VIP airport lounges, stay in better hotel rooms, and receive deep discounts from retail stores and flash-sale outlets. “We say to brands that these are the people they should pay attention to most,” Thomson says. “How they want to do it is up to them.”

So my “Why?” post was just that – this wasn’t something I had a big problem with, it just seemed kind of stupid.

Not long after that Chi-Hua Chien from Kleiner Perkins contacted me and convinced me to give the company another look. Yes, the current product was a bit cheesy he admitted. But that was all going to change in the very near future, he said. MG Siegler and I soon sat down with CEO Joe Fernandez at the companies offices in San Francisco, saw the product vision and met some of the people who work at the company.

And Chi-Hua was right. I’ve changed my mind. So much so that CrunchFund has now invested in Klout, and we’re big believers in what they’re doing.

They’ve relaunched the product and a lot of the tricks that people used to game the system are gone. And better, Justin Bieber is no longer considered the most influential person in the world on Klout.

Klout will have a constant, ongoing battle in fighting gaming. But that’s ok. Google is in a constant fight defending the integrity of PageRank, too. And yet we find it interesting. Klout is very much like a PageRank for people and things. And it can be much more useful than just helping companies hand out perks.

First, there’s a lot of data being collected and processed by Klout. A staggering amount of data about people and things from a wide variety of social services. No one else is doing this. The end Klout scores are just the tip of the iceberg, so to speak, on what this company can eventually do with all that data.

Second, Klout’s head is in the right place. Here’s a snippet from an email exchange I had with Fernandez not long after my “Why?” post:

In the end, my goal is to build a product that goes beyond the gimmicks and drives real value for everyone. I believe that every person who creates content online has influence to some group of people and on some topic. Everyone also wants to feel listened to and interesting and I think we can do this in a way that empowers people to become better, more effective, online citizens.

That’s what I really like about the company’s goals. It isn’t to get people like Lee to spend all day tweeting to try to drive his score up. It’s to showcase what’s interesting about people, and help them “feel listened to.”

Klout’s goals are sort of the opposite of what I first presumed. They’re encouraging constructive online behavior, and they’re gathering and processing tons and tons of data along the way.

That’s why I like Klout so much. And why CrunchFund recently invested.

53 thoughts on “Why I Changed My Mind On Klout (And Invested)

  1. Dave Winer says:

    Mike, I don’t use Facebook, but I have a high Klout score (I just signed in). What if I quit Twitter? Would I stop being influential? Is that theory of Klout? What if I had found other ways to be influential. How far out into the world does Klout venture??

  2. “Soon, he predicts….” this if Klout would be more comprehensive; as of now it scores based on social media data, not social data. Based on fb’s no of users, that means 6 billions of people will be excluded…

  3. I use it with reluctance because whenever I scan my Topics list I’m bemused by the issues in which Klout considers me influential. 80-100 tweets a day and some of what I cover is on the list but there are some unfathomable surprises. This makes me mistrust something about the data, not sure what. All in all there’s an impression of the Emperor’s new clothes.

  4. Interesting read. Recently, I opined a bit negatively on Klout and specifically pointing out how it’s ‘not really important in the real world’. Yeah, I was also a bit bitter since I have over 9,000 followers and Klout labeled with a ’29’ score. So, within a few days (post my rant) I miraculously hit ’50’ on my score. Funny how that worked out. :-/

  5. @harscoat says:

    Beyond Social media influence there is Real life influences: can you trigger other to do things. That’s the next frontier in our opinion, that’s why we build http://didth.is Inspiring actions.

  6. Dan Rollman says:

    Michael, what are the societal benefits of a PageRank for people? Can you provide a tangible example? To me, Klout still feels like a fancy velvet rope that gives free schwag to well-connected people. I have no understanding of how it help people “feel listened to.”

  7. Did you like their business model?

  8. “Klout scores are just the tip of the iceberg, so to speak, on what this company can eventually do with all that data.” I agree. What do you think the company will do with it?

  9. Reblogged this on Briskin, Cross & Sanford, LLC and commented:
    Here’s an interesting turn-of-opinion from Michael Arrington, a previous detractor of Klout. AS an update to my post earlier this year on whether Klout matters of not, the answer now appears to be “Maybe not yet, but soon.” It will be interesting to see how Klout’s new algorithms and data points actually play out and whether that actually succeed in making Klout meaningful.

  10. Matt says:

    Maybe I’m missing something here, but the concept that you can score a person seems fundamentally flawed. I suppose you can place an arbitrary value on their interactions online, but what does that really tell you about a person other than that they spend too much time online.

  11. Smart investment. Having influencer maps online is as inevitable as having them in the real world (from bouncers at doors to elite guests etc etc).

  12. tedr (@tedr) says:

    It’s got to be so hard for them to be purely on the side of the user, when it’s the users data they’re trying to aggregate for a business model.

  13. I love Klout! In the beginning of a new paradigm there are always bumps in the road. Klout is not perfect. The pioneers see the future of marketing and advertising, algorithms like Klout and Kred will give us better ideas of what our customers and clients want.

  14. chrislasanta says:

    Reblogged this on chrislasanta and commented:
    Well I guess Klout’s new updates are turning heads…

  15. Seth Gold says:

    klout scores on quora seem like a match made in heaven…as does Yelp or any other review/expertise services that want to establish identity

  16. “there’s a lot of data being collected and processed by Klout. A staggering amount of data about people and things from a wide variety of social services” Need more detail here.

    Klout has a credibility gap problem. I have trouble believing that Klout can collect enough meaningful data from enough sources to measure true clout.

    When talking about Klout to friends, I can always point out numerous ways in which one can have serious clout on the Internet…that I doubt Klout is, or can monitor / measure.

  17. And the price finally came down low enough?

  18. For some reason I’m still in the “why” phase of trying to understand Klout. I just can’t really see a real world value in what the Service provides. In a world where entrepreneurs are told to be ambitious and solve real world problems, I just can’t seem to get it. And I don’t mean to imply anything negative about Klout; I’m only commenting about it because it sounds like you’ve gained some insight into what they’re all about.

    From a business perspective, I think the idea is genius. Like Facebook (to some extent), Klout really appeals to some deep down psychological triggers that I believe we all have as human beings (including validating ourselves among other things). So the desire to use the Service will always be there. On top of that, the amount of Funding and Attention that Klout commands really indicates that Joe Fernandez (and team) are doing a fantastic job. But I still don’t really understand the problem that Klout is trying to solve. Help me determine how relevant I am? Help me determine how relevant others are? These kinds of things can usually be determined pretty quickly just by listening to someone (or reading what they say) and using some common sense. But I also realize that I just might be missing something (probably something obvious). I imagine there are just some things that can’t be talked about (trade secrets and the such), but it would be really cool if you had some insights on this; The real world problem Klout is trying to solve. Heck, maybe after learning more about the Service, I might become a user.

    On a side note, I can see the business related value to processing large amounts of data; Especially considering that (in order to perform their algorithms) Klout processes a large amount of aggregated data across many walled gardens. But I am a little concerned about the implications of what else they may do with this data. I admit, I have been known to be a bit paranoid when it comes to Privacy; But I think the unfortunately reality is that a bit of paranoia might be needed in today’s world where Developers / Services do first, and ask second. It would also be really cool if you had some additional comments or insights about that.

  19. For me the question is still “Why ?”. I still don’t get that Klout score, maybe it is too impersonal. I don’t have a lot of followers on Twitter but I feel way more listened to when I get a new real one than when my Klout score goes up…

  20. jon says:

    good luck with that. 🙂 is this what happens when milo isn’t there to slap you every so often?

  21. Peter Cowling says:

    Spelling: Chi-Hui s/b Chi-Hua

  22. There’s definitely value somewhere.

    Klout could be a major factor from a marketing perspective. Having all of that juicy data pinned to individual accounts might very well be invaluable. Where the value lies from a users perspective is a little cloudy right now.

    Thanks for the post Mike, insightful as always.

  23. Brad B says:

    I look at Klout as the Nealson of the Internet. Nealson is a 8 Billion dollar Company in every Country in the world. They Count everything that needs to be counted, and that is important. Now Klout is not only counting, but the counting is where they will see the best gross margins. And in time maybe Joe will learn that too.

    • Dasein says:

      You might:

      + Learn to spell the company’s name: Nielsen.

      + Learn how Nielsen works and acquires its metrics and data. There’s a statistical science to Nielsen’s demographic sampling. There’s nothing of the sort with Klout, which is based on shout.

  24. Yeah similarily when I’ve been in direct contact with the team and highlighted an issue, I’ve seen a bump upwards. Whatever algorithms are being employed it still feels a tad whimsical.

  25. kattest123 says:

    Klout is yet another example of major societal problems.

    They also can’t get their data straight: they think I (@24AheadDotCom) am @dasbina13.

  26. > It’s to showcase what’s interesting about people, and help them “feel listened to.”

    How pollyannish without real substance.

    LOL with your Klout investment 😉

  27. I’m truly amazed by the comments here. Isn’t it absolutely obvious that Klout tries to measure influence in the channels that Klouts’ measuring.
    It’s not about offline influence, or even of total online influence, it’s about what it can see and count on facebook and Twitter. And it does a fairly good job at just that.

    How can that be so hard to understand?

  28. Thomas Hawk says:

    Why does Klout tell me I’m influenced by Sprint and Verizon? That’s so not true.

    First of all it’s lame that Verizon won’t let me use Google Wallet with my Nexus so I don’t like them. Also we’re supposedly able to tether without paying them an additional $20/month and I still can’t tether. Jellybean is out but we can’t have it. All the usual complaints.

    As far as Sprint goes, it’s lame that they can’t even update the software for their 4G cards to support Apple Lion. It’s only been out for how long now, not Mountain Lion, they can’t even support Lion.

    Anyways, Klout should have more people who really *do* influence me on there and less people like that. I’m sure all this will get better in time.

    As far as the score goes, it seems to jump around a lot for no apparent reason. Am I really 6 pts less influential than I was 2 weeks ago? Klout scores remind me a little bit of Zillow home prices, compete.com traffic numbers, Facebook poke recommendations and TiVo programming recommendations — none of which come remotely close to accuracy. Maybe people are harder to figure out than we think they are.

  29. Thomas Hawk says:

    One other thing. Klout’s constant push to get us to tweet/facebook out about Klout feels like spam. I don’t want to tweet that I just gave someone +K and I don’t like having to constantly dismiss prompts by Klout trying to get me to tweet/facebook promote them to my friends. It would be nice if there was an option that said I prefer not to tweet ever — let me opt out of all of these constant prompts. Or maybe after a user has dismissed 50 of these prompts and not taken Klout up on their offer, stop serving them up to that user as they are just annoying at that point.

    • Klout’s thirst for my Facebook connections is suspect and has a spam vibe to it too, consequently i absolutely refuse to ‘invite Facebook friends’. Although my online interactions are predominantly Twitter based, Klout tells me I do most of my interacting on Facebook, these are the things that drain their credibility with me.

  30. I’ve been bagging on them for quite some time too. I hated that if I was silent for 3 days, my score dropped. Seemed to be a perverse incentive to talk too much. I must say I was very impressed with the new features that rolled out. I felt they categorized me and my influence far better in relationship to my peers, and the scoring seemed much better thought out. Best of luck to you and them on the investment.

  31. I am the Lee in the Wired article (quoted at the top). The reporter spun the story. My part of the article anyways. He left out half of what I said. Pieced parts of the interview together. Yes, I am Twitter addict. I like sharing good info, news, helping others not for the perks. Which was left out. Ask any of my followers. 🙂

  32. Justin says:

    I have been going through Klout, and with its update my influence meter is higher than Oprah. Now that seems strange

  33. The empowered part made me gag a little. How is this empowering? I recently stepped back from my personal social media accounts as I don’t see value in spending time there.

    Is Klout supposed to “give me the recognition I deserve” for wasting time in social media by giving me faster plane boarding? LOL COME ON!

    You can’t call yourself the standard for influence when you don’t measure influence. Klout measures the ability to get people talking. All that takes is controversial content and the best part is you don’t even have to create the content yourself! You just have to share it with the right people at the right time in the right way. So you’re either a great communications strategist who knows how to network and use social media, you’re gaming the system or just really lucky but that’s far too much time invested for the “reward”.

    Who really wins? Klout and the companies who choose to buy in to the idea that if they give people perks those people will be grateful and tell their audiences all about it which MIGHT turn into more sales. I’d love to see THAT data!

    So, Klout is really just a hope and pray outreach program that takes a little less work than real brand engagement and people will gobble up free stuff if the free stuff is good enough, which is why people care about Klout anyway.

    Which bring me to the PageRank analogy. The only reason people care about PageRank is because they want their site to show up first in a Google search. How is that relevant here. Are people really using Klout to find “experts” ?

    I hope Klout’s investors see a return on their investment but this is not like PageRank for people, nor is it empowering. It’s a lazy way to hijack someone else’s audience for the benefit of a company’s bottom line and even that benefit is dubious! All it is doing is feeding this ridiculous drive for likes, mentions, retweets and follows which really are meaningless in the grand scheme of things.

  34. Jenn Allen says:

    This is obviously a short term investment. Because…Klout is magnifying 1/100th of the Google algorithm that turned out to be mostly irrelevant long term for valid user data — the social part: Co-op. The gorgeous Klout game is to enhance the use of their partners, not reality, and who is influential in real life. I do understand that if 50% of FB users are using games, then this would interest them, and you as an investment, but the other 50% are looking at algorithms, damned algorithms, and meta statistics, of social data which is becoming less relevant by understand human social nature and social theory over a period of time. Not one person can be categorized by their social data, because intent and bias cannot be measured by an algorithm, a single person, or even both on such a ever-changing aggregate. The best most accurate stats for any statistical data, even meta data are usually 60% correct, so don’t take your Klout scores too seriously, unless you want to have a pissing fight in numbers with your friends.

  35. Klout thinks that if Obama quits all his social networks he’ll be no more an influencer. mmh

  36. Dasein says:

    Klout is an overt, shameless narcissism play.

    What conceivably could be its relevance, other than feeding into social’s narcissistic dynamic and conning marketing partners that these people are important somehow?

    Dead pool in two years.

  37. Ravi says:

    They do have data and an algorithm just like Google just before they got big. A lot of entities are going to be interested in paying for it. Marketing, Political, etc. I need a set of social contacts who have influence on key social media sites for ‘x’ and Klout becomes the go between in a way, maybe charging both ways. They have a base and head start and if they are focussed they can dominate this space. And Social Media sites will support them, Klout does get people to use Social Media more (for the wrong reasons maybe).

  38. I met Lee, Calvin Lee, on twitter and can confirm that he is indeed a great guy. He has helped me a ton of times with raising money for charity and I am lucky to call him a friend.

  39. jasontoheal says:

    very interesting post. sold me. If people who have products can find the consumers that are most likely to influence their friends, it could change the entire world of advertising and marketing.
    I for one think Apple should give me free iPhones and iPads for the rest of my life for the amount of people I have convinced to use their stuff. Klout could become a very useful way of actually making this (kind of thing) happen.
    I remember one of the biggest selling (christian) books in recent years was such a hit in part due to the fact that the author sent a copy to every pastor he could. Smart marketing.

  40. I can also concur, Calvin Lee @mayhemstudios does at times seem like a machine on Twitter, but it is always him, he always cares and is a cool guy in real life too. Influential, absolutely. I know if I was running any sort of promotion he is the type of person you want to be there. Klout helps you to find the needles, you can then do your own due diligence on whether someone has gamed the system. It’s pretty easy to fake a lot of things online but credible interaction with important people is not one of them.

  41. msmirastrology says:

    Klout still is far from perfect as it still has a lot of improvements to make but I see the potential in it and glad to read this post. Tired of the haters out there. Klout may still have flaws but they are being corrected and improved. Kinks take time to works it’s way out.

  42. msmirastrology says:

    I am glad to have read this. Klout still has a lot if kinks to work out but I see the overall picture in the end and the potential for it to be great is there. Those who bash it also just won’t ever take the time to really understand it. Klout can still be games but it never lasts when it is as it catches on fast with it.

  43. What problem does Klout solve? Supposedly this is the question every investor should ask when they consider a product for potential investment. Does not seem like the CrunchFund asked that question before investing in Klout. Having tons and tons of data about people is not a problem.

    Klout is a technology looking for a problem. Not a valuable solution to a pertinent problem.

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