IRL App Collapses Because It Has No Users IRL

Image: IRL logo edited by author

IRL, a unicorn social app that had raised over $200 million in funding, shut down this week because… wait for it… the majority of its users weren’t real at all.

The irony is not lost on anyone. 

The app appeared to have the world at its feet. Despite its focus on in-person event discovery, it endured the Covid pandemic thanks to an albeit-forced pivot to online events. It had a great domain name, IRL.com. It had a growing user base, with former CEO and founder Abraham Shafi claiming the app had a high of 20 million monthly active users. Keep that one in mind. It eventually landed VC funding in a SoftBank-led Series C round (the SoftBank curse strikes again!), raising over $170 million. The cash injection put the company’s value at $1.17 billion, and with it came the prestigious unicorn label. 

There was, however, one teeny tiny problem. 

The app didn’t have 20 million users. It barely had 100,000. 

Bot-ched statistics

Behind the scenes, things had already been shaky at IRL, with the company laying off 25% of its employees only a year after the raise. In a memo, Shafi had tried to assure the remaining staff and was adamant that the company had years of financial runway. It also came with this zinger (read: absolute yogababble) —

Becoming one of these iconic, impactful companies is akin to winning a gold medal in the Olympics. In fact, probably more challenging. Like the Olympics, we know most people don’t want to be Olympians. In the same way, not everyone will want to walk the path we are walking.

The worst was yet to come. 

It turns out that the figures Shafi quoted had been met with some internal skepticism. According to an article from The Information, which broke the story, employees didn’t buy it. This eventually led to an internal investigation, which revealed a shocking issue — 95% of IRL’s users weren’t real. They were either automated or bots, but they certainly weren’t human. Worse for the company, the SEC also launched an investigation into whether the company misled investors with these claims, which would have violated securities laws. In April 2023, Shafi was suspended, and shortly after, he resigned. 

The IRL shareholders did the math. 

It was over. 

Earlier this week, a spokesman for the company confirmed the decision to shut the app, saying, "Based on these findings, a majority of shareholders concluded that the company's going forward prospects are unsustainable." And, just like that, another unicorn loses its horn because, like the others who have fallen before it, there was too much dirty laundry stuffed behind the closet door. I’ve seen comparisons drawn to Frank, the fintech startup acquired by JP Morgan earlier this year for $175 million before it turned out the founder had lied about its size and had created an enormous amount of fake accounts to bolster the numbers. Before we connect those dots, it remains to be seen (or at least confirmed) that those at the top of IRL knew most users were fake. Could it be an innocent mistake? Here at Trend Mill, we always veer on the more cynical side. If the top brass were aware, the app closing down would be the least of their worries. 

Bot-tomless 

The story of IRL points to a much bigger problem facing social media, one that has existed since its inception and has seemingly worsened as the platforms have grown into the sprawling, society-damaging mega corps they are today. 

Everything is just bots. 

It touches on a great tweet I saw last week that pondered the million-dollar question - how much of what we see or interact with in the digital space is fake? 

Though Elon Musk only raised the concern over the number of bot accounts on Twitter to try and weasel out of the deal, he was perhaps on to something. What is an acceptable number of bots? Musk wanted proof Twitter’s bot count represented less than 5% of accounts on the platform. Is that acceptable? I’m not sure how Twitter tracked this, but I’d guess the real figure is much higher than that, and that same figure plays out across all social media platforms. 

They are inundated with fake. Fake accounts. Fake profile pictures. Fake engagement. Fake comments. Fake following numbers. Fake everything. And with the rise of A.I., even real accounts are just using systems and programs to pump out content that isn’t authentic. A.I. allows people to create life-like profile pictures and life-like imagery and spit out content, all at an unprecedented scale. It’s long since damaged the user experience, and the problem will only be exacerbated in the coming years as A.I. tools continue to integrate into society. 

We have to ask ourselves, at what point does the whole thing just become pointless? When we get to 25% bots? 50% bots? 75% bots… even 95% bots? And at what point does the entire social media ecosystem collapse under the weight of this bot invasion? Much like IRL, there will be a line where shareholders and investors pull the plug, likely when it came to light that everything the platform generates, and all that sweet, sweet data, is essentially fake. There is no value in bot accounts engaging with other bot accounts. If that became the majority interaction, there would no longer be a need for these platforms to exist.

IRL is the warning. If the overlords of the current social media system — and the founders of the apps trying to join them — are ignoring bots, downplaying it, or even encouraging it in an effort to inflate numbers and metrics, the platforms are doomed. It might not be today, but eventually, they’ll become so saturated with pointless, computer-generated content that the remaining humans will log off. And this time, they’ll stay off.