As it turned out the two men had similar backgrounds. They both come from humble backgrounds, both dropped out of college (Cobo dropped out of school in Spain but then earned a masters degree from Parsons after getting a scholarship to attend; McCune dropped out of San Diego State University in 2015 because he thought school was holding him back from devoting time to work in tech) and both started app businesses with little technical knowledge.
"I told him about my vision for Unfold and asked him right away if he wanted to be my co-founder with 40 percent of the company. It's the biggest risk I've ever taken in my life." (Cobo owns the other 60 percent.)
That was October 2017, and the two started promoting Unfold with Earth right away, Cobo says. "For months, we seeded Unfold with all these ... influencers." With no budget, Cobo and McCune relied on this word-of-mouth marketing, while continuing to make more templates and improve the app.
Then in February, "we saw the biggest celebrity influencer in Spain, Dulceida, using Unfold. She has 2.5 million Instagram followers," says Cobo. "We reached out to her, and she said she got hundreds of messages of fans asking her what she was using to create her Instagram Stories. She finally did a video promoting Unfold and a few hours later, it was the No. 1 app in Spain."
"We got up to 50,000 downloads in February, which was great." However Unfold saw no revenue because the app was free.
After Dulceida, other influencers started giving it a shout out on Instagram, says Cobo, "and it just went crazy viral." Normally such promotion would cost thousands of dollars, he says. Unfold have not paid any influencer or spent money on marketing, McCune says.
As of Sept. 19, Unfold has had 9 million downloads. Since Unfold debuted, it has had an average 3 million monthly active users, according to McCune. Unfold has ranked the No. 1 photo and video app in the App Store in almost a dozen countries, according to App Store's charts, including Spain, Italy, Argentina, Portugal, Croatia, Malaysia, Indonesia, Senegal and Czech Republic.
In May, Unfold released in-app purchases in the App Store (for 99 cents users get access to a nicer template collection) and is projected to do $2.5 million in revenue this year, according to McCune.
Of course, Unfold is new and apps tend to have a shelf life.
"Mobile apps have an infatuation period that can fade quickly," technology industry analyst Maribel Lopez tells CNBC Make It. "Today's multi-million download is tomorrow's throw away."
One of the few areas where this isn't always the case is with apps around photos and creativity, says Lopez, and Instagram has built a following so there is an opportunity for longevity. Still, says Lopez, "Unfold will have to be unrelentingly innovative and build stickiness with partnerships to avoid being yesterday's cool fad."
In response, Cobo says "I think people will always be telling stories in Stories." In an email, he references Facebook's 2017 fourth quarter earnings call when Mark Zuckerberg said Stories was on track to overtake feed posts as the most common way that people share across all social apps.
However since then, Instagram added IGTV, designed specifically for mobile video, though the idea is that it's for longer form content. It remains to be seen how this could affect Stories. But according to a transcript of Facebook's most recent earnings call, Instagram has 400 million people sharing with Instagram Stories.
McCune adds that Unfold is also focused on innovating and building outside the confines of Instagram, saying the company is "looking into deeper integration with Facebook as well as other platforms such as Whatsapp." (Both Instagram and Whatsapp are owned by Facebook.) He also says the app's users are "growing exponentially in countries which don't have the same sharing habits as we do. For example, we have a really large user base in Indonesia, and we've found out that they do not only love sharing their Unfold stories on Instagram, but Line [similar to Whatsapp] too."
Beyond that, McCune and Cobo are working toward a subscription model to continue generating revenue. And to this point, Cobo and McCune say they have never taken outside investment or loans, instead bootstrapping the business, which is now a team of 13, mostly working in development and social media strategy.
"You make bad decisions when you take other peoples money," says McCune. "When you raise money, there's this inclination to throw it around to see what works. We didn't want that. We've stayed as lean as possible. We built everything with money from our own pockets."
Correction: This story has been revised to correct that the $1 million was revenue, not profit; the Q&A feature is Instagram, not Unfold; and other details.
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