Last week, I attended a friend’s house warming in Boston. As most attendees were MBAs, vigorous debate about business trends was inevitable. This time, the debate was about the commercial viability of the “Yo” application. With a whiskey (neat) in hand, I sat back and listened to the arguments being made.

For context, Yo is an iOS, Android and Windows Phone mobile application that, at least initially, only allowed users to send the word “yo” (in text or audio format) to friends. In one corner was a Harvard Business School student, who thought the Yo app was useless and had no commercial value. His argument was: there is no way to monetize such a useless service. I saw where he was coming from. After all, 47% of app developers either make no money or less than $100 per month, per app.[1] The top 2% of app developers claim 54% of all app revenues.[1] So, how could such a seemingly useless service hope to make money in a competitive app market?

In the opposing corner was an MIT Sloan student, who also thought the Yo app was useless. However, she believes that the Yo app has credible commercial value because of its user base (represented by 2.7 million registered users, 1.2 million active).[2] She believes that, despite the uselessness of the service, the user base is a captive audience. I thought her point was valid. It seems users are active on the platform – a peak of 100 million “Yo’s” sent in one day – which has attracted partnerships with big brands, like the NBA, SoundCloud, and even presidential candidate Donald Trump.[2][3] To add, Yo did manage to raise $1.5MM in seed funding from credible investors, like the Mashable founder Pete Cashmore, among others.[4] There must be something we are not seeing.

Who is right?

Well, both parties are wrong. After some digging of my own, I conclude that the Yo app, if the business model is tweaked correctly, creates value. There is emerging demand for condensed communication (i.e., Twitter, SnapChat) and, more recently, one-bit communication (i.e., messages that signal intent and not thought). Further, I believe that the Yo app does have commercial significance. Before I continue my argument, let’s understand Yo a bit better.

The Making of Yo

Or Arbel, Yo’s founder, founded Yo serendipitously. The CEO of Mobli, Moshe Hogeg, Arbel’s then boss, asked Arbel to create a single-button app that will allow him (Hogeg) to call the office assistant quickly. Arbel created the app in eight hours.[6] Arbel saw some potential in the application and left Mobli to work on Yo full-time. Yo was released to the public in April 2014.

Initially, Yo only had one feature, which allowed users to send “yo” (in text or audio) to friends. Since, Yo has added three more features: Yo Link, Yo Location and Yo API. [3] Yo Link and Yo Location allows users to send friends links (articles, web sites) and current location, respectively. Yo API allows organizations to connect to Yo users via an application protocol interface (API). For example, if users subscribe to the World Cup, users will receive a “yo” every time a goal is scored.[7] Yo has a “store”, which allows users to subscribe to similar brand based events. Over 50 global brands are using the Yo API in order to connect with the Yo user base.[3]

Image of Yo Store

Yo app screen shot

Source: Yo app/

How Yo Creates Value

Yo is at the forefront of an important, emerging trend – one-bit communication. One-bit communication is a message with no content other than the fact that it exists.[5] For example, People in Bangladesh, and other frontier markets, use missed calls (or a deliberate hang-up of calls) as a way to communicate a pre-agreed message.[5] To illustrate, friends may agree that two successive missed calls means “I am not coming to hang out.” People in frontier markets do this in order to avoid charges on pre-paid call minutes and other telecom fees. This type of missed call, one-bit communication consumes over 70% Bangladesh cellular traffic.[5]

Yo has significant value as a cost-efficient, time-efficient way to communicate intent. With the cost of smart phones declining significantly, one could see how the Yo app could be adopted in a variety of markets. If Yo developers are able to make “yo” notifications compatible between smart phones and non-smart phones (which I believe it is, but I cannot confirm), there is explosive potential for Yo adoption in frontier markets.

Yo also represents significant value to brands (i.e., NBA). The Yo API/store is a great way to engage the consumer. Prior the Yo API/store, brands had ineffective means of consistently connecting with consumers. For example, DVRs allow people to skip TV ads and consumers are trained to ignore online or mobile ads. The Yo API/store is an unobtrusive way for a brand to consistently connect with consumers.


To the best of my knowledge, Yo does not generate any revenue.

It is important to note that, to the best of my understanding, Yo developers do not intend to sell more words (i.e., “Yo man”) as a monetization strategy. However, some sources suggest that the Yo developers are considering the audio “yo” in different celebrity voices as a monetization strategy. Regardless, Yo will have to lean on a revenue model that starts and stops with “yo”.

Also, I assume that people in Bangladesh, and other frontier markets, will not download Yo just to have a cooler option for one-bit communication. However, the trend is there – both in frontier markets and in established markets (i.e., demand for reduced communication services like Twitter, SnapChat).

Further, I assume that in-app ads are not a viable monetization strategy. Consumers tend to be annoyed by in-app ads and have learned how to ignore them.

Since Yo has garnered a credible user base (1.2 million active users) – with potential for significant user base growth – there are some options for monetization. I suggest this option:

Yo Emergency

Yo, as a one-bit communication tool, would be valuable in emergency situations. With 30 types of “yo” already, “yo” for emergencies makes sense.[7] Yo founder, Arbel, an Israeli, is exploring ways Yo can be used to alert Israeli citizens of pending attacks on its home land.[8] Yo would be very valuable in other emergency situations. Imagine a school shooting, terrorist attack or natural disaster where a simple “yo” can communicate “shelter in place”. A follow-up “yo” from users can communicate to family and friends that, “I am ok” without congesting cellular traffic. I beleive governments and other institutions would pay a per “yo” fee to facilitate emergency one-bit messages during a crisis. Further, in this context, adoption of the Yo app would be naturally viral – since family and friends would encourage each other to download the app in case of emergency. Yo as a safety application – for governments and other institutions – makes Yo very useful and bankable.

End Notes

[1] Vision Mobile, “Developer Economics: State of the Nation Q3 2014”,

[2] Mashable, “Yo App Users Have Sent More Than 100 Million Yos”,

[3] Yo App Download for Android

[4] Business Insider, “An App That Just Says ‘Yo’ Has Raised $1.5 Million At A $5–10 Million Valuation”,

[5] Business Insider, “ANDREESSEN: People Dismissing Yo Are Missing A Social Trend That Consumes 70% Of Bangladesh Cellular Traffic” ,

[6], “Money for nothing? $1mn for app that says ‘Yo’ to your friends”,

[7] Business Insider, “The Brilliantly Simple ‘Yo’ App Is Going Viral — Here Are 30 Types Of Yos”,–here-are-30-types-of-yos-2014-6.

[8] IT ProPortal, “Yo! You’re about to be hit by a rocket”,

By: Dominique St-Fleur

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Conventional wisdom among many startup founders and investors suggests that to build significant scale as an Internet company, you must be able to demonstrate strong repeat usage, engagement, and virality.  If your users aren’t coming back to your website frequently and/or sharing with their friends, how will you generate sustainable growth? While these metrics may be critical for some startups, there is one major exception to this rule – that is, sites that are fortunate enough to have figured out how to attract millions of free monthly visits from Google and other search engines.

Organic Search Market Overview

According to SimilarWeb, a platform for measuring consumer behavior online through its worldwide panel of tens of millions of users, in October 2014, an estimated 28% of all desktop traffic across the millions of websites in its database came from organic search (as opposed to direct traffic, referrals, or social media.) Within organic search, 89% of this traffic came from Google. In select categories though, the majority of traffic to all websites in that category is actually driven by users searching for something specific online. A few notable examples are Health (63% from search engines), Reference (62%), Food and Drink (57%), Home and Garden (56%), and Recreation & Hobbies (55%). Any company entering one of these markets would be making a huge mistake by not evaluating the potential strength of Search Engine Optimization (SEO) as a critical customer acquisition tactic.

Even some of the largest sites on the Internet are almost entirely dependent on organic search as opposed to direct visits or referrals from other sites. For example, in SimilarWeb’s Top 200 US websites, you’ll find popular sites like WebMD (87% from search engines), (87%), Wikipedia (83%), TripAdvisor (70%), and Yelp (67%) that all generate over 2/3 of their traffic from users who first go to Google or Bing to type in a query. Without SEO, these sites would have a fraction of the traffic and revenue they have today.

Upward Mobility in SEO: A Boon for Startups

There is no doubt that organic search can be an extremely powerful customer acquisition channel, but how easy is it for a newer company to master the ins and outs of SEO and build meaningful levels of traffic in a reasonable period of time? To answer this question, I analyzed historical ranking data from SEMRush, a company that tracks keyword rankings and competition for over 100 million keywords on the web. In looking at the top 30,000 search-driven sites in the United States this month on SEMRush, I uncovered some interesting trends. When comparing this to a similar list from May 2012, the oldest data set I was able to access, I found that 42% of the top 30,000 sites today (as ranked by estimated search traffic) were not in the list of top 30,000 sites 2.5 years ago. This suggests a reasonable degree of fluctuation in search rankings that presents an opportunity for SEO-savvy startups to gain share against incumbents. In looking at an even more recent list (from August 2013), that number was still surprisingly high, with 29% of today’s top 30,000 sites not appearing on the same list 15 months ago. When analyzing the ups and downs of the rankings of individual sites more deeply, I found that a lot of the fluctuations seemed to be due to Google’s increasing emphasis on promoting high-quality content. Google’s major algorithm changes in the past couple of years have generally benefited agile, user-driven companies with a unique content strategy that sets them apart from competitors.

Some notable examples of sites that have benefited from a focus on SEO best practices include (now ranked #181 on SEMRush), (ranked #284) and (ranked #990) who all grew from nonexistent or relatively small levels of traffic to millions of monthly visits from SEO in less than 2 years. Although generating growth at this frenetic pace is not a trivial task, there were many other examples of new companies that entered the upper echelon of SEO-driven sites in just a few years.

How Startups Can Evaluate the Importance of Organic Search

Mastering SEO is certainly not critical for all startups, and its relevance varies significantly by industry. However, for any company that offers content of any kind that is likely to meet the needs of a meaningful population of online searchers, it is one that should not be ignored. Two fantastic research tools that should be explored have already been mentioned: SimilarWeb and SEMRush. With SimilarWeb, you can check to see what percentage of traffic is being driven by SEO for any competitors and other adjacent sites, and determine if it is moving the needle for them. With SEMRush, you can generate lists of hundreds of relevant sites that overlap with your top competitors in Google’s search results, and dig in deep to lists of thousands of keywords that may be relevant for your own site. By looking at patterns across groups of keywords and top competitors, you can start to piece together a preliminary view on which SEO strategies are most effective in your market and where there is room for improvement. Once you do this, you still have your work cut out for you, but popular resources like Moz’s Beginners Guide to SEO,  QuickSprout’s Advanced Guide to SEO, and even Google’s own Webmaster Academy and Guidelines can help get you up the learning curve fast enough to make strong progress on your way to generating strong levels of traffic from SEO.

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According to, a new startup is founded in Berlin every 20 minutes.[i] Berlin startups are set to independently produce 100,000 jobs by 2020. The city is home to some of today’s startup giants, including Rocket Internet and Zalando, valued at $4 billion and $5.4 billion respectively.[ii] Why the success and exponential growth? Berlin offers a highly beneficial mix of location, living costs, labor, investment sources and community support to attract ambitious entrepreneurs.

First – location, location, location! Berlin is at the very heart of Europe and is the capital of the EU’s economic powerhouse. Germany’s sustained growth has enticed a high amount of skilled workers, considerable investment and has allowed for the development of top technology university programs. It is a short flight or train ride away from most major cities. Incredibly, despite its appeal, Berlin’s living costs have remained among the lowest of any capital in Europe. According to, you would need around 2,940€ ($3,722) in Berlin to maintain the same standard of life that you can have with $5,400 in Boston (assuming you rent in both cities). The expectation of startup salaries for recent graduates can be as low as 800-1000€ per month! This is approximately equal to an annual salary of $13,600.

How can this be possible? In a nutshell, the lack of a working break between Bachelor’s and Master’s degrees means that the majority of late 20-year olds to early 30-year olds have little to no working experience. Since public universities in Germany are virtually free, graduates don’t have much debt and are open to low salaries for the first years of their careers. Additionally, the Euro Crisis that broke in 2011 sent waves of young workers from Spain, Italy, Portugal and elsewhere that can legally work anywhere in the EU. The abundance of young professionals seeking an entry-level position undoubtedly puts downward pressure on wages.

These factors all play to the advantage of the eager entrepreneur. Applications are numerous and payment expectations are low. Candidates are highly educated and speak multiple languages. Rents are also significantly cheaper than other cities (Numero claims that Berlin rent is 56% less than Boston’s).

In terms of capital, Berlin attracted 173€ million in VC funding last year.[iii] Angel investors, private equity firms, family offices and private wealth management funds hover over the Berlin scene looking for potential to invest in.

Finally, the high-concentration of startups offers great support to entrepreneurs. The community can be a source of cross-pollination of talent and connections to investors. There is a constant line-up of conferences, idea competitions and networking events for founders to meet partners and garner best practices.

However, not everything about Berlin is ideal. Its typical investor profile, mentioned above, means that investments are more risk adverse and come with more conditions. Large sums common in San Francisco and Boston are harder, if not impossible, to find. Because of investors’ relative inexperience with online businesses, they often want to be much more involved in the startup’s decision-making – which can be a help or a hindrance.

Furthermore, although the size of the labor pool is attractive, the inexperience of the workforce results in high training costs and turnover. Graduates need to learn the job’s tasks, but also the basics of office conduct and work ethic. In addition, German labor laws are much stricter than those of the U.S. If not careful with the writing of contracts and the documentation of employee performance evaluations, labor can start to represent a fixed cost.

Finally, Berlin is not a business city at its core. It is a musical, art and political hub – a city known for its laidback culture and edgy attitude. It can be difficult to find business savvy recruits and build a productive working environment.

The US startup scene is slowing starting to take notice of Berlin. Just this past June, Google invested $1.3 million in “The Factory” – an incubator for tech startups. Four IPOs are expected to take place this year. While it has its own set of challenges, Berlin eagerly welcomes entrepreneurs and should be considered a real alternative to the increasingly expensive tech hubs found in the US and elsewhere.

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The US housing market is a 10.1 trillion dollar market (1) and represents 25% of all US household wealth (2). Given it’s size and importance it’s not surprising we’re seeing a lot of startups try to tackle this market. Venture capital funding will be used as a leading indicator of what’s to come the reason I do this is – 1) for the data, because there’s much more information on fundraising and 2) I assume venture capitalists have a good eye towards the future and their investments are a good indicator of a future large company.

The Catalyst

A rebounding housing market, (3) along with strong showing of Zillow, with 219.6% gains since it’s IPO (4) and it’s 3.5 billion acquisition of Trulia (5) all have given the real estate startups validation and spurred on founders.  Zillow, Trulia and Redfin all were founded around the same time (2005, 2005 and 2004) and finally have emerged nearly a decade later as successful 4 billion, 3.5 billion and half a billion dollar companies. So what does the next decade hold?

Commercial Real Estate

What often is seen with technology is that the consumer market will innovate first and then startups will move more upstream to enterprise. I attribute this to the easier cost of acquisition of consumers and larger diversity including people more willing to be first adopters versus enterprise clients who are usually more conservative. So what Zillow and Trulia did for consumer’s who wanted to easily search for real estate, is happening in the commercial real estate market. In area long controlled by brokers, who haven’t really leveraged technology we’re starting to see innovation creep up in two different areas. The first is that commercial real estate search is being disrupted by companies such as 42Floors, a company that is acts just as Zillow did but for commercial real estate (mostly office spaces). 42Floors was funded by YCombinator, NEA and BVP backed company and raised 12.3MM in January 2013 (6) to disrupt this space. Commercial brokers too have found themselves being forced to leverage technology in their work with a mobile app called Hightower that functioned as mobile way to manage their sales process, recently raising 6.5MM.  (7)

Real Estate Investing

With the market jumping back on real estate, personal investors want to get in on investing in real estate. When the “JOBs act legalized crowding funding” back in 2012, we saw that it became easier to invest individually with an obvious area being real estate. Housing projects are easy to understand where their revenues come from – rentals and are asset backed. This area has quickly been funded by venture capital with Fundrise raised 31MM in May of this year (8), Realty Mogul and Real Crowd have also similarly raised million dollar rounds.

Brokers strike back

Brokers have become aware that if they don’t adapt to the use of technology, the large fees they generate will become a thing of the past. Responding to the threats they face, brokers have started using startups such as Realscout, a company that addresses the imbalance of “real estate agents getting the short end of the stick and are being left behind. Generally speaking, agents are still using outdated search and client management tools”(9) RealScout claims to “put realtors back in the driver’s seat — both by making the search process itself more collaborative and by offering them better tools to engage clients and find new business” (10)

Selling Real Estate

Selling real estate has remained complicated despite the increased options in searching for properties. Two separate startups have recently arisen to solve this problem by letting property owners sell directly online: Allre that was announced at TechCrunch Disrupt 2014 (11) and Keth Rabois of Square fame who recently launched OpenDoor (12) both of these new startups have emphsaized being able to sell online directly without any brokers at all. It makes sense that given the simplicity of information and the rise of ecommerce that more and more things can just be sold directly online.


As technology evolves it continues to changes spaces that were once considered un-modernizable. Real estate information was disrupted nearly a decade ago by easier ways to find information now other aspects of this industry are being innovated upon by a whole new range of startups.



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The international money transfer industry is about to be re-disrupted but the jury as to which innovation will disrupt it is still out there. Not long ago (in the early 2000’s) Xoom disrupted the industry by creating a platform to send money online, removing the large costs of operation derived from having a network of physical locations to collect the money to be sent. In the past year we have seen two new types of startups emerge in the international money transfer industry that aim to disrupt this industry once again.

One of the models is peer to peer. This model is designed to avoid incurring one of the largest costs of money transfer which is sending money across international borders.  The way it works is that once a customer sets an order to send money abroad the company finds someone that wishes to send money the other way around. By doing this they can transfer the money without it actually moving across the border because they just do a local transfer (e.g. someone sending from the US to Europe and another one sending from Europe to the US get paired up so that the money sent doesn’t leave Europe nor the US). Another key advantage to this model is that since the company doesn’t hold foreign currency they don’t need to manage its risk and therefore are able to offer a better foreign exchange rate.

Of course, getting this model off the ground will not be easy since one big challenge with this model is building a large enough network so that every time a user wants to send money the company can find a counterparty to complete the transaction.  Some of the most important players using this model are TransferWise and CurrencyFair.

The second model that has been launched is the one that uses bitcoin as the tool to send remittances abroad. An example in this sector is Bitpesa which sends money to Kenya using Bitcoin and allows users to withdraw the money through mobile banking platforms already pretty popular in Kenya or the recipient’s bank account. The way it works is that customers buy bitcoin through one of the available bitcoin vendors, they send Bitcoin to Bitpesa and then Bitpesa delivers it in Kenyan Shillings. Since bitcoin is a virtual currency that can travel internationally without any additional charges there are large savings to be created in the remittance market. However bitcoin has not yet taken off and there are two key things holding back its adoption: first the regulation that will continue being imposed on it and second the large volatility that it still has which makes exchanging fiat money for bitcoin a highly risky activity by itself.

Because of this it would seem that the peer to peer model should be adopted much more quickly causing it to be the clear winner, right? Well in this case I think that the two innovations will coexist but eventually bitcoin will end up being the main technology to send remittances.

The reason is that while peer to peer is a great idea and the technology is already out there working there is one huge flaw in it which is that for it to work there needs to be a balance in the amount of money transferred between countries and unfortunately the majority of remittances are sent between countries that are not balanced. Take for example the US to Mexico market. Mexico is one of the largest recipients of remittances (about 25 billion USD are sent every year from the US to Mexico); however Mexican immigrants can’t use a peer to peer service because there are very few people sending money from Mexico to the US. This is the case for other key markets such as India and the Philippines.

For this reason I think that the peer to peer services will be interesting players for some markets but will not end up being the dominant technology and they will only survive until bitcoin takes off (by reducing its volatility and getting through regulatory hurdles). Once bitcoin takes off and uses its scale to provide even larger savings than the ones offered by peer to peer models maybe we’ll see bitcoin emerge as the winner. For now nothing is set in stone.

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