For many people, this new era of global economic uncertainty means tightening belts, reining in expenses, and facing up to more austere times. Is this really the right moment to launch an exclusive social networking website for members who want to "celebrate life in style"? The founders of Elysiants.com think so.
This new company has its headquarters on the exotic-sounding island of Curaçao, with satellite offices in Amsterdam, Hong Kong and Dubai. Joost Hagensteijn and Ruud Smeets, two of the three founders, recently launched Elysiants.com in the UAE with an invitation-only party at the 400, a club in Dubai's Fairmont Hotel. The founders aren't hedging their bets on the site they created in 2007 and launched in mid-2008. They are going all in, confident that their luxury social network can still be a success in these troubled times.
Elysiants is billed as a social networking site for the world's young elite. The site is invitation only, though it is possible to purchase a premium membership for a hefty $5,000 (Dh22,000). Once inside the digital velvet rope, members can connect both with each other and with their favourite brands. They receive VIP treatment from all of Elysiants' affiliated partners, including companies such as Aston Martin. This treatment includes invitations to private events and spots on the world's hottest guest lists. The site's founders emphasise its exclusivity, ensuring that only those who are still living the high life can join this semi-secret party.
Exclusivity in online social networking sites is not a ground-breaking idea. Other sites like Asmallworld.net are also invitation only and the frankly-named Affluence.org is accessible only to those who earn a household income of $3 million (Dh11m) or more. The Elysiants mission states that their members "have colonised most parts of the globe and like to travel first-class through life, consuming only the best crops of the land. They gather around haute couture, exclusive parties, high-valued automobiles, yachts, real estate, charity and sheer beauty." The web site's founders have chosen Dubai for this reason, calling it the newest capital of style in the region. There are also plans to debut the network (as they have in Dubai, Curaçao and Hong Kong, with elaborate parties for members only) in Abu Dhabi, Beirut, Kuwait and Bahrain in the not-too-distant future.
Hagensteijn, Elysiants's chief commercial officer, is a bronzed 34-year-old with gelled curls and a silk pocket square who previously set up the AOL-Time Warner bureau in the Netherlands. He now heads the Elysiants Middle East office. He says he is confident that as social networking sites become bigger and better, the wealthy will be less likely to share the details of their jet-setting lifestyle with the general public. He predicts social networking sites will go "vertical" as people leave behemoth networks like MySpace and Facebook and flock towards more exclusive sites that are pickier and trendier.
However, there are no shortage of people who think that sites like Elysiants will die out. "The idea of closed-door networking sites is fading quickly," says Gary Sheynkman, an analyst at KCP Capital, a merchant bank specialising in restructuring and interim management in digital media companies. "Facebook can be just as exclusive as A Small World if you limit your visibility in the profile settings. Sites such as Elysiants are experiencing the trickle down effect of more forward platforms adopting such practices already. "
But according to Hagensteijn, there is still a gap in the elite-level social networking market. "We saw that there was a lack of existing companies like ours and the need from those people to have an exclusive platform where they can meet and share their experiences, talk with each other about where to go, what to buy and what to do and at the same time meet up for more social functions," says Hagensteijn.
Elysiants isn't about making its members feel guilty about their privileged lives; the company wants them to revel in it, bucking the trend of inconspicuous consumption. There are, of course, charitable platforms within the site as well. Members can "give back to people who are not as fortunate as we are", says Smeets. The website's home page features a black background with red and white type on top, clearly geared towards the same demographic that buys Lamborghinis and logo-laden clothing. "We thought of the idea when we did research in the quote-unquote 'emerging markets' and we found out from people that there is a need for something like this," says Hagensteijn. "They want to be in connection both with each other and with exclusive brands and on an invitation-only exclusive platform - the need is there." A need is the opposite of a luxury, but apparently bright young things cannot live without exclusive social networking sites.
"You have a lot of people within our members that are really not that affected by the credit crisis," says Hagensteijn. But the luxury industry that is fuelled by these consumers has also faltered. "We believe the luxury industry is entering a crisis, says Marc-André Kamel, the senior partner in charge of luxury in Europe and the Middle East for Bain & Company, one of the largest global business consulting firms working today. "This year, the luxury industry will decline in terms of sales versus a year before."
"There's a lot of people around the globe, especially in the time when there is a credit crunch who want to show they are not affected by it," says Hagensteijn. "They will buy the expensive shoes and the Rolex watch, even though it is not the right financial moment for them." Kamel counters that if brands are counting on these people to do the spending, they should be aware they are a marginal group.
To beef up sales, Kamel says his firm advises corporate clients to focus on their loyal customers. "It is in periods of crisis like the one we're entering today that is most critical to know your consumers better, leverage your loyal customers and the communities around your brand and try to localise your marketing activity as much as possible," he says from Paris. "What we say is focus on the customers, better know your consumers, stay tuned to your consumers even more than regular times."
Herein lies the crux of Elysiants' potential success. The website is selling itself to brands as a sort of middle man or matchmaker, introducing consumers with selected luxury brands through a "unique way to interact with members of the community". Online advertising is a commonplace occurrence, but instead of banner-style or pop up ads, brands will create their own profiles online like an individual person would. "Luxury brands present themselves through a brand profile to which members can connect," according to the web site's promotional material. "By connecting to a brand, members indicate their affiliation with the brand and will be eligible for special benefits and exclusive events."
Though Facebook is in the process of updating its format to allow brand profiles to act more like personal profiles, with wall and photo postings, Elysiants goes a step further. Since the website is more boutique in nature, Elysiants get VIP-style services that allocate tables for them at restaurants or invitations to private parties, even bespoke services at certain labels. "To me, it's an interesting idea," says Kamel. "Whether it will bring a lot of results or not, I think it will depend on the strategy of the brand within the social network, what they do, how active they are, et cetera. It will also depend on the quality of the selection of the members."
How many members are being courted by brands on the site remains unknown. Hagensteijn declines to specify the number of Elysiants currently online, explaining that part of being exclusive is remaining elusive. "We don't give exact numbers even when we have them," he says. There is also the old quality over quantity adage. "We could very easily have 25,000 members but we don't want to have 25,000 members overnight in Dubai," says Hagensteijn. "Right now, there is a buzz around town, 'there's this new network, it's invitation only - who can get me an invitation to the network?' We want to be and stay at that aspirational level so that not everybody who wants to join can actually join."
In the meantime, far from the crowd dealing with the dirty business of surviving this century's version of the Great Depression, the Elysiants will continue to live it up in private. email@example.com