UPDATE, March 13, 2012: The final acquisition price was not $0. It was $62,221. Original story follows.
Facebook co-founder Chris Hughes has struggled with his ambitious solo start-up, the social network for activism Jumo, ever since its bumpy launch. Waning traffic and disinterested users were making it obvious that the site was not going to catch on, despite multiple redesigns; a tough pill to swallow for the wunderkind whose second act after Facebook, online strategy at the Obama presidential campaign, was another huge success story.
But Mr. Hughes found a solution: rather than folding the grant-funded, well-meaning and inordinately high-profile start-up and admitting what would surely be a very public failure, he arranged a deal with an old friend. GOOD, the publisher-turned-digital-media-platform with a focus on good design and social causes, announced today that it has acquired Jumo for undisclosed terms. But the “acquisition” is not quite the earth-shaker it was made out to be. Betabeat has learned the terms amounted to $0, a loose “advisory” role for Mr. Hughes at GOOD, and the opportunity for Jumo’s 16 employees to interview for the start-up’s new owner.
Mr. Hughes and GOOD co-founder Ben Goldhirsh are old buddies who went to boarding school together at Phillips Academy in Massachusetts. After the Obama campaign, GOOD tried to recruit Mr. Hughes to build out GOOD’s online community–but declined so he could try his hand at his own start-up.
The Goldhirsh Foundation became one of Jumo’s early investors and the pair stayed close during their entrepreneurial journeys. When it became clear that even Mr. Hughes’s resume and extensive network could not save Jumo, Mr. Goldhirsh offered a way for the CEO to save face while imparting web 2.0 cred to GOOD, which produces a website, videos, live events, and print magazine, but wants to beef up its technology, interactive apps, online community and other digital offerings.
Since GOOD is acquiring no technology–Jumo is open-sourcing its code–and hasn’t committed to acquiring any engineering talent, the partnership is more of a symbolic marriage than a business deal (contrary to the report today that the companies are “merging forces” in Fast Company, the source of an earlier profile of Mr. Hughes called “The Kid Who Made Obama President”).
Jumo is a nonprofit 501c(3) dedicated to building loyal online communities for causes and charitable organizations. But the site’s traffic peaked when it launched, and the reaction from the nonprofit sector was tepid, although 15,000 nonprofits signed up. The site’s design was confusing, some elements such as a Kickstarter-esque component for campaigns fell flat, and the core idea itself was questionable: why ask users to build a separate profile on a new network, and how do you get them to go from clicking “like” to meaningfully supporting a cause with action?
“As our teams combine, you will see the emergence of a single, vibrant online network on GOOD.is,” Mr. Hughes wrote in a vague post on the Jumo blog today. “I will be teaming up with GOOD’s CEO, Ben Goldhirsh, to help grow GOOD and Jumo through an important stage of development.”
Sources report that employees within Jumo reacted to the story in Fast Company which broke the news of the acquisition and discussed the future integration. Mr. Hughes is a former Fast Company cover boy. And Inc. Magazine, Fast Company’s sister publication, was founded by Mr. Goldhirsh’s father, Bernie Goldhirsh.
Betabeat reached out to Chris Hughes, Jumo and Good Media for this piece. Jumo general manager Kristen Titus responded: “ We are not disclosing the terms of the agreement, but GOOD is purchasing Jumo assets for an undisclosed sum. Chris Hughes is joining GOOD’s team, along with other Jumo employees, as a Senior Advisor.”
Video of Chris Hughes talking about Jumo on Colbert – h/t Working in Boxer Shorts