YC Founders' 5 Pivots to $1M ARR Social App

From Pivot Hell to Success: The Candle App Story

Just a couple of months prior, the founding team of the YC-supported social application, Candle, found themselves deeply immersed in a cycle of ideation, exploring over a dozen concepts following their entry into Y Combinator’s Fall 2024 program. Simultaneously, their initial seed funding was nearing depletion.

Early Ventures and Challenges

Alex Ruber, with a prior engineering role at Apple, and Parth Chopra, formerly an engineer at both Asana and Twitter, had collaborated on several projects previously. This included Encore, an AI-powered shopping assistant which secured them entry into YC and $2 million in funding.

Despite the functionality of the technology, Ruber explained that the underlying unit economics proved unsustainable. He stated in an interview with TechCrunch that succeeding in the secondhand shopping market necessitates either achieving the scale of Google Shopping or establishing a robust marketplace akin to Whatnot or eBay.

A Period of Intense Experimentation

This realization led to a period of rapid experimentation spanning from December to April. The team explored ideas within the fashion and sports sectors, but none gained significant traction. “We investigated more than ten distinct concepts within a timeframe of four to five months,” Ruber revealed.

The mounting pressure began to impact the founders’ personal relationships, a common experience for startups in their early stages. Interestingly, this strain ultimately provided the inspiration for what would become their successful venture.

The Birth of Candle

The initial iteration of the app was remarkably simple: a series of questions presented in a swipeable format, intended to initiate conversations between partners. An intern, who now serves as the startup’s marketing lead, then shared a TikTok video showcasing the app, which unexpectedly went viral, particularly in Europe.

A surge in downloads and an influx of user feedback prompted the team to capitalize on this momentum. This early prototype subsequently evolved into Candle, a gamified application designed to help couples and close friends maintain consistent connection.

Impressive Growth and Engagement

Within six months of its launch, Candle has amassed a user base of 300,000, including 150,000 couples. The company reports over 250,000 monthly active users, boasting a DAU/MAU ratio of approximately 50%. This strong ratio indicates high engagement and potential for establishing a daily habit among users.

Furthermore, Candle has consistently appeared in the top 25 of Apple’s App Store rankings.

Focus on Existing Relationships

Candle differentiates itself by focusing on strengthening pre-existing relationships through daily prompts and interactive games, rather than facilitating the creation of new connections. Users respond to questions, compare answers, share photos, and maintain a “streak” to track consistent engagement.

These mechanics are intentionally designed to appeal to Gen Z and young millennials, leveraging established principles of mobile engagement.

Early Monetization Success

In a departure from typical consumer social app strategies, Candle has prioritized early monetization. The app’s monthly revenue has surpassed $150,000, translating to an annual run rate exceeding $1 million.

Candle employs a freemium model, offering daily prompts, photo sharing, and core games in the free version, while a premium subscription unlocks additional content and features.

The CEO emphasized that early monetization serves as a strong indicator of product-market fit, stating that users are willing to pay for enhanced features, demonstrating the app’s value in strengthening their connections.

Addressing a Growing Need for Connection

Candle joins a small group of apps, including Paired and Couple Joy, dedicated to enhancing relationships. These platforms are responding to a cultural trend where post-pandemic work patterns, solitary meals, and constant social media use have eroded daily interactions, contributing to increased loneliness in the U.S.

The team at Candle believes the future of social networking will prioritize fostering deeper connections with a small circle of close individuals, rather than broadcasting to a vast network of strangers.

Looking Ahead: Sustainability and Expansion

Despite the initial success, key questions remain regarding the app’s long-term sustainability and depth. Can the daily photo-and-game format maintain user engagement over 12, 24, or 36-month periods? Can Candle broaden its offerings without compromising the user experience?

Ruber and CTO Chopra outlined a roadmap focused on expanding the “sparks” point system to encompass a wider range of interactions and introducing more robust features to encourage consistent use.

The funds initially raised for their previous shopping app will now be allocated to expanding the engineering team, accelerating experimentation, and scaling the platform. Existing investors, including Goodwater Capital, Pioneer Fund, Progression Fund, and Y Combinator, have expressed their full support for this new direction.