Fast enough to snap your head back, Kik the chat app is back from the dead.
Ted Livingstone, the former CEO of Kik, had announced its closure in a Medium post, stating:
“So today we are announcing three things:
We will shut down the Kik app
We will reduce our headcount to an elite 19 person team
We will focus on one thing: converting Kin users into Kin buyers”
The reasons listed: Fighting the SEC to NOT be considered a security was burning through their limited cash pile of $100 Mil. That the SEC was using unfair methods to bear to force Kik/Kin to settle, or go out of business. That the company would fight this action until “No dollars left.”
It was the right decision.
Kin was never about a single app, rather the network of apps that use the token Kin. Kik, as the founding company of Kin, was the first to use the Kin token. Since then, there are now 76 monthly active apps.
Cutting off Kik allowed the burn rate to slow down. $100 million dollars sounds like a lot, until you factor payroll for 151 people, many of which were presumably developers with relatively high salaries:
Some are paid more, some less, with the bulk of employees presumably support, HR, Marketing, etcetera. If we average all salaries to $50,000, the burn rate just for employees is over $7.5 million/year. Not to mention additional costs such as healthcare, marketing budgets, travel and communication expenses, hardware and software needed to run a company, and they could be looking, at most, 5 more years — and that does not include legal fees for an elite firm to represent Kik against the legal heft of the SEC.
Now, it looks like Kik has a buyer committed to continuing and improving the Kik app, as the company tweeted:
What does this mean for Kin?
Immediately, this means that the fight against the SEC continues. This also means that the largest user base of Kin will remain intact:
Kin is now Dev focussed and Dev driven. As a tech currency with arguably the most daily usage (762k+ monthly active spenders) of any cryptocurrency, unlike Bitcoin, Kin is a currency that actually gets used.
Kin is not defined as a store of value, is not fighting to become the new world currency like bitcoin. Its status as an internet token for use among a growing network of apps has proven that there is an actual use case outside of bitcoin.
Unlike many other Altcoins pejoratively known as “sh!tcoins,” Kin has never acted like its existence was solely to line the pockets of its founders. If so, they would have simply paid the SEC fine and be along their way. They would not have ported from Ethereum to Steller, to finally their own blockchain for increased speed and scalability.
They would have not killed off their founding app Kik.
Or intended to.
Now, with a new company taking Kik over, this is the best of all possible outcomes of a bad situation. Now, Kin can continue development, and the company can continue the SEC fight versus Kin — and not lose the impact of the Kik app and their hundreds of millions of users.
Kin has its network effects in place, and as we’ve seen with Bitcoin, being first matters. Other dApps have seemlessly added Kin as their token, numbering over 70 (and growing). Other competing apps, such as Telegram’s Gram, or FBs Libra have a larger war chest, but despite such riches neither have gotten off the starting line.
Way back on August 30th I wrote about the Kin vs Gram situation, and since that time Kin has grown from 57 Monthly Active Apps to 76. AFAIK, Gram has a single app: a wallet app. No other apps using Gram on a daily/monthly basis such as Kin.
And Libra, despite Zucks billions, may be a lost cause, with several companies (Paypal, Visa, Mastercard, Stripe, Mercado Pago, Ebay…) bailing.
Like Jon Snow from GOT, Kik is back from the dead. And so is Kin.
Nothing in this article is to be construed as investment advice. Neither the author nor the publication takes any responsibility or liability for any investments, profits or losses you may incur as a result of this information.