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A Startup Raises $6.1 Million To Surface "Cool" Products

Product Hunt, a leaderboard of sorts for new products, has raised $6.1 million in financing. But can it burst out of the San Francisco bubble and become a household name?

Posted on October 8, 2014, at 11:02 a.m. ET

Product Hunt

Product Hunt is one of Silicon Valley's best-known destinations for surfacing new applications and websites — but founder Ryan Hoover's next challenge is to push it beyond just the San Francisco bubble.

To do that, Hoover has raised $6.1 million in financing from Andreessen-Horowitz and other investors (Andreessen Horowitz is also an investor in BuzzFeed). With "hundreds of thousands" of visitors, Hoover said Product Hunt drives more than 2 million visits to applications and products from its site and its own application.

Here's how it works: members of the Product Hunt community find interesting services and applications on the Internet, and post them on Product Hunt. They are then voted up, and the top ones are ranked on a leaderboard. There's no 'down-voting,' and right now the people that can comment on links are curated by Hoover and his team. At any point, the creator of the product can join in on the discussion.

As part of an update, Hoover is rolling out the ability to follow specific people — such as investor Alexis Ohanian, one of the most outspoken proponents of Net Neutrality, and a partner of Silicon Valley startup school Y Combinator. Eventually, Hoover wants to grow beyond just technology limited to Silicon Valley circles, into verticals like gaming and fashion.

The community that Product Hunt has attracted, Hoover acknowledges, still has some work to do. In Silicon Valley, where failure is celebrated and criticism is sometimes hard to find, the challenge will be to ensure Product Hunt does not become a community of entrepreneurs patting each other on the back.

"We might err a little too much on the positivity side, but I'd much rather err on positivity than negativity," he said. "We have some cases, we have people saying yeah awesome product and they don't add much value to the discussion. But we also have people who are respectful and have bullet points of suggestions and feedback. So you see some really honest discussion happening, that's what we wanna encourage, honest and respectful discussion. We don't want pandering and people saying good job, that's not really useful for anyone. Part of it is demonstrating that and showing that this is how you use Product Hunt."

A snapshot of Product Hunt.

The site has become a must-read within technology circles. That's part of what attracted Steven Sinofsky, previously of Microsoft where he ran Windows, as an investor. Long a product developer, Sinofsky said sites like Product Hunt serve as a well of information for new products and help pick out high-quality services and applications. Such a service, in general, did not exist in previous eras like the Internet boom of the early 2000s.

"The way the dynamic has changed so much in terms of how easy it is for something to be thought up, get live on the internet, get live on the app store, the volume of things is so huge," Sinofsky said. "So it's exciting to have this opportunity to get plugged into the launch in one place. It's not just like an RSS feed of new stuff, but as soon as you see something and visit the link, you're interacting with a community of people seeing what's new, what's the latest. As a bonus, you're there interacting with the people that made the product."

Product Hunt's investment started with a coffee meeting with Marc Andreessen, a founder of Andreessen-Horowitz and outspoken tech critic on Twitter, and Andreessen-Horowitz partner Jeff Jordan. At the time, both were quizzing Hoover on his ability to grow the site beyond just technology products. Hoover, however, has a history curating things beyond just technology, with his father originally owning a retail gaming store.

With startup burn rates rapidly becoming a concern in Silicon Valley, the challenge for the site is to not only surface products that are interesting to entrepreneurs and investors, but those outside of the San Francisco Bay Area. The risk is that Product Hunt becomes an echo chamber promoting products that don't have much value beyond techn circles.

Still, there are signs that the site is slowly finding its way to that — including an investment from one of the most prominent firms in Silicon Valley.

"I believe the model and the way it's designed can be applied to many different product categories and people," Hoover said. "Right now the tech-y circle is what we're focusing on, but we're seeing it slowly expand. The current community is something that will expand, but other categories will expand too — fashion, games, books."