The Man Who Gave "Yo" $200,000
This week, a group of otherwise mentally sound adults agreed to go fucking insane all at once. The object of their manic episode was Yo, an app that sends the word "Yo" to other people with the app installed. It's garnered over a million real dollars from investors. I talked to the one in charge.
Yo is exactly the kind of thing that techies adore. The story—intentionally stupid app nets $1.2 million in venture funding—is eminently bloggable. The app itself is clever on an 8th grade level, simple enough to tweet about, and proof that truly, money is a pastry puff, a trifle that can be scooped and bent and mushed around without any tethers to reality. On its own, Yo is just evidence of what we already know: that people are silly, and that TechCrunch is the kind of publication that will write an earnest essay on Yo. But Yo isn't just another viral migraine—it's an insincere idea, but it's received very real money. If money still means anything anymore—and I'm not sure it does!—we need to insist that a million dollars is not a trifle, and that giving this amount of money to an app that does literally one thing is worth scrutinizing. We're supposed to be talking about businesses here, right?
Israeli investor Moshe Hogeg is the CEO of Mobli, an Instagram clone, and led the $1.2 million angel investment round with $200,000 from his own pocket. He declined to list the other investors, but was nice enough to speak with me as I asked why someone would ever spend $200,000 on a joke app. The answer, basically, is why would you ever not?
"You need to be nuts to regard the numbers," Hogeg tells me. "It's crazy, it's viral, the engagement is unbelievable." This occult metric of "engagement" is something every startup craves more than Teslas and stock options, an end in itself that's defined roughly as "how much are people clicking your shit instead of someone else's shit?" In the case of Yo, it's a lot: Hogeg says he's literally never seen anything that's engaged users more. But are people tapping single button that does one thing really "engaged" with anything? Is it a problem that this app doesn't really do anything? Hogeg says I'm being shortsighted:
"I like to do things in the easiest way. We are always looking for the easiest way. My secretary, I love her, but I hate to tell her to come." Now Hogeg can send her a message that says "Yo" instead, using a specialized app for this purpose alone. "My wife, she complains I don't call her enough during the day. Now I can send a push notification anytime I want." When I ask if this is enough to build an entire company on top of, Hogeg speculates about Yo's future: he can imagine Starbucks baristas, McDonald's cashiers, and Virgin America flight crews all getting your attention with Yo. Nevermind that many service companies have their own apps that send out their own push notifications. "Yo is more than a yo," Hogeg says, like a software yogi. "I have no idea if it's going to succeed."
OK, so again, why invest so much money in this thing that took, by its founder's admission, eight hours and zero dollars to code? "It's a stupid app," Hogeg admits. But "it's not responsible to not give it a chance." He cites its virality again, and points out that Marc Andreessen recently praised the app. Marc Andreessen is never wrong, right?
2/Yo is an instance of "one-bit communication" -- a message with no content other than the fact that it exists. Yes or no. Yo or no yo.
— Marc Andreessen (@pmarca) June 19, 2014
Hogeg demurs when asked if he thinks $200,000 is even a lot of money: "200 is a lot of money, but it's not a lot of money at the same time." But why does it need any money at all, if it took zero money to create? Hogeg points out that Yo now has a staff of five, and it'll need office space. Office space for what, he doesn't say. Will Yo make money? "Yeah, I guess." He compares it to Google, which in its early days was doubted as a viable business.
@cullend @samfbiddle Having VCs shit themselves over this and talk about it seriously, makes what we do *feel* meaningless to an impt group.
— Jenna Bilotta (@jenna) June 19, 2014
But even if $200,000 isn't a lot of money to you, is there any moral element to promoting a deliberately joke-y app when so many people are working—in vain—on software with a purpose?
Does Yo deserve a million dollars? What could someone more earnest have done with even Hogeg's $200,000 slice? "The world doesn't work on deserve," replies Hogeg. He's worked just as hard as his father back in Israel, he explains, and has far more money. So much for the glimmering Silicon Meritocracy. "I'm not a hater," Hogeg elaborates. "I never was. But I can understand the criticism: I was a young engineer, I worked my ass off. If back then I could see an app like Yo getting a million, I would go nuts." I feel like I'm on the verge of a moral breakthrough with Hogeg, but he drifts back into software zen-speak. "[Success] is not about the technology, it's about the execution." "Execution" here is a euphemism, I think.
To anyone struggling in Startupland who might wince at Yo's 24 hour attention spree, Hogeg has a message of hope: "I hear you. We love you. You need to be creative, disruptive, think outside the box. You need to be a lover, not a hater. The energy you send into the world, you get back."
So why not send $200,000 worth of energy into the world via charity, rather than investing in Yo? "Charity?" Hogeg bristles. "Who says I'm not? I choose my life, I choose to enjoy it." For Hogeg, enjoying one's life seems to include this sort of recreational investing, treating business ventures like parlor games, or a kind of thrilling diversion—Hogeg refers to his habit of buying lottery tickets. It's all a very fun and giggly "maybe" for a man who can afford to play "what if" with large sums. The stakes sound low: "[Yo] is not making the world a better place…[and] I don't think it's too much money. It's surprising we're on the phone right now. If Marc Andreessen writes what he writes, we should all be very humble. Who knows, there might be something to it." And even if there's nothing to it, as there likely is not, Hogeg remains calm: "Don't be so arrogant to think that Yo can't make you eat your words. You can look at this interview, years from now. We will never eat our words. We already won."