Formspring.me takes off with $2.5M and a hoax

Online Q&A site attracts heavy-hitting investors, millions of users in under 4 months.

I’ve used Formspring quite a bit for event registration purposes. The site lets anyone create an online form, and has robust data-collection backend. From the start, I thought the service was a great small businesses tool, but apparently I (and the company) got it wrong—the real opportunity is in social media.

That’s why Formspring.com is soon changing its name to FormStack and has spun out Formspring.me as a separate entity—an entity that just landed $2.5 million from Freestyle Capital and heavy-hitting angel investors including Baseline Ventures, Ron Conway’s SV Angel, Digg founder Kevin Rose and former Facebook executive Dave Morin.

Formspring.me lets users field random personal questions from friends. CEO (of both companies) Ade Olonoh explains the evolution:

The purpose of formspring.com was to allow people to easily create online forms. It was launched over 4 years ago, well before formspring.me was ever conceived, and the name made a lot of sense given what the product did. Plus, the domain was available :)

The history of formspring.me is that it began when people started using free formspring.com accounts to collect questions and comments from friends. It wasn't long before people started using the name of the site as a verb. People would post a link and ask friends to "formspring me". So it only made sense to launch the new site at formspring.me.

The idea is similar to online question-and-answer sites like Aardvark (acquired by Google), ChaCha and Yahoo Answers except that those sites are serious. They’re meant to yield expert answers to real questions, whereas Formspring.me is a venue for social frivolity. When users sign up, the site sets the tone with seed questions like

If you could ask Barack Obama one question what would it be?

What song do you want played at your funeral?

If your house was on fire and you could only grab three things, what would they be?

The company's genesis reminds me of what Gil PenchinaI, CEO of Wikia, said at an AlwaysOn event several years back: to grow fast, find a small fire and pour gasoline on it.

Formspring.me's blaze has been steadily growing since it launched over Thanksgiving weekend last fall. I first heard of the service a month ago when an update from my college-aged cousin appeared in my Facebook News Feed. He linked to his Formspring.me account and announced “So I figure I'll sign up for this and probably forget about it within a week.”

Four weeks later, my cousin was still active and had answered 63 questions. The site has seen 50 million unique visitors in the last 30 days and 300 million questions in total have been answered, according to the company.

The site has gained enough notoriety to be the target of a broad hoax, launched during the South by Southwest conference last week. Many twitter users, following the lead of a fake AO story, thought their private data on Formspring.me was about to be made public and that the CEO had been arrested. Both parts of the story were false. "Rumors of my arrest are completely untrue. (But ironically, I did get a speeding ticket this a.m.)," Olonoh tweeted recently. I've pinged the company to find out what action, if any, it plans on taking to identify the perpetrators of the hoax, and how the company plans to use the new funds.

Then again, the company execs probably aren't too perturbed by the hoax. Nothing fuels a small fire like a faux scandal.