The ‘Yo’ Effect

 

yo-app_1403109635.jpgThe Internet went crazy this week over the inexplicable rise to fame and fortune of the app “Yo”, its developer Or Arbel and his boss Moshe Hogeg, both of Mobli (a photo and video sharing service).

Said Robert Scoble, “This is the stupidest, most addictive app I’ve ever seen in my life” sealing the app’s fate as the next must-have thing. ONE MILLION users later, you can’t buy that kind of virality.

And, like most communication apps, it has viralilty built in, or, in other words, it takes two to Yo.

You could almost hear the sound of air escaping from the collective dropped jaws of the startup community when word got out that an eight-hour-old app had raised over $1 million dollars and was turning down more money.

What seems to have escaped everyone’s attention – or due to jealousy? – is that Arbel did pick up on something that seems to be so missing from communication: context.

A ‘Yo’ from one person to another means something because the two understand the context under which it is sent. Arbel also followed a principle that should guide all good developers: KISS (Keep It Simple Stupid, for the uninitiated). You can perhaps debate the developer’s aesthetic choices but Yo takes “One App-One Job” to the extreme and does it pretty well. While I wouldn’t call Yo a scalpel, it’s definitely not a Swiss army knife.

Can an app that took less than one working day to put together (and was at first rejected by the App Store since they considered it to be unfinished) really be worth so much to investors, or is the investment market so frothy that investors will throw money at anything with a digital pulse?

A little bit of both…

Venture investors look for “hockey stick growth” and in this case the adoption curve looked more like a rocket’s trajectory. There is still plenty of growth possible for this app, and the mono-syllabic greeting has appeal.

Yet the app had no business model – or even a bank account at first – and while that’s not a barrier to receiving funding (twitter and Foursquare being two famous examples), there should be some kind of financial logic behind an investment.

Perhaps the investors foresee a very quick acquisition on the horizon by a major player with a desperate need to be popular with the kids again. This is just speculation but Yo’s app icon is, after all, a purple square. And not just any shade of purple. Like Yahoo! shade of purple…

So what to do with all that money? Piña coladas on the beach? Retire in everlasting wealth? Hardly. Like anything thrown together with string and sticky tape there are bound to be problems. With fame came the fanatics, the app was hacked within a week of its logarithmic rise in popularity. While this might be inconvenient in some scenarios in this case it’s potentially hazardous since users are identified by their real phone numbers. As the hackers were more interested in digital vandalism and snubbing the stupid app, damage was minimal (although it did impact usage). A more malicious team could have caused serious stolen-identity issues.

So one must figure that some of that money is going to be used not just beefing up security but creating security for Yo.

For developers of serious apps, even ones that may send two, three, or even five (gasp!) words at a time, there are several lessons to be learned.

Many developers make their first release on the basis of MVP (minimum viable product). But before that rush to release they should roadmap their feature set and development plan, and spend a lot of time working on “what if” scenarios.

What-ifs should also revolve around threshold numbers (what if we reach X users? Y users? rocket-ship growth?), implementing security (at what point, what methods, what cost), A/B testing, engagement metrics, and competition, to name but a few.

Scoble, I have some stupid ideas up my sleeve. If you see any frothy investors out there, send them a “Yo” from me.

Reposted from http://blog.appnext.com/2014/06/25/the-yo-effect/

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