Hacker News Reader

Comment by AndrewKemendo | Hacker News Reader

I mean to me this is a totally wild story from the money side.

- Raised $73 M from notable, no bullshit VC's including Sequoia, DCM, Draper

- Valued around $400M (results may vary)

- Sold for <$3M

Either we don't know the whole story (>50% chance), someone fucked up royally with IP or something or everyone was pissed off about this entire situation. It's really surprising to me that the Series B folks couldn't engineer or claw back more than that, especially given the brand recognition etc...

[1]https://www.crunchbase.com/organization/yik-yak#/entity

[2]http://www.businessinsider.com/yik-yak-sells-to-square-for-3...

View on HN

I attend a university where YikYak was extremely popular from 2014-2016 (new posts every minute, top posts got >400 upvotes). Getting rid of anonymity was unpopular, but what really killed the app was, right before summer 2016 they eliminated the ability to post to your Herd even when you weren't in the Herd location. People went home for the summer, couldn't post or even view the university Herd, and it died overnight. Didn't help that they also stopped sorting by top (and only by new). When people came back in the fall, everyone had already moved on (now there are only a handful of posts a day, and a couple of likes). People moved to Snap Stories, and now to Facebook Meme pages. There was no way people were going to get back on YikYak, no matter what features they reverted.

Good input. Can you tell me more about the Facebook Meme pages? I mean I can guess, but are those really places to hangout?

Seems like people moving to that defeats the anonymity aspect that people think were the real killer.

I'm not that person, but I think the Facebook meme pages fill a specific niche that Yik Yak had their hands in. Most Universities these days have a "$University Memes" page, filled with "relatable" content. Sometimes talking smack about a particularly tough prof, sometimes making inside jokes about the campus, or local dive bars. Yik Yak had this market cornered for a long time, but because of some dumb decisions it's mostly dead now

And for a large university there'll be meme pages for specific majors.

I just wrote a story in those groups. https://m.mic.com/articles/175420/ivy-league-college-meme-wa...

Whenever I see something like this all I can feel is insanely jealous that I didn't get to go to one of those schools. Their memes are so much better than my commuter school's

The other commenter is generally right, I think. I think what the campus was really drawn to was the idea of a place where you could express unfiltered observations about the campus community. The anonymity of YikYak provided sufficient cover in that regard, but so does the Meme Page. This might sound absurd, but fitting these same observations into meme format almost provides the same amount of cover that anonymity does. Now, the anonymity of YikYak did mean that there were typically many more controversial posts, but those posts almost never got any traction. The Facebook meme page seems to fill the bulk of the void, in terms of broadly appealing, humorous observations about campus culture.

Yik Yak destroyed their product the moment they introduced handles/names. That move, combined with bowing to pressure from community groups to block & de-anonymize, ruined any trust in the service.

The complete lack of understanding of their own product that they demonstrated was absolutely astounding. $3M almost sounds like too much; there's no reasonable way you can recover anything of value besides the employees in this situation.

I used Yik Yak as a tech observer as recently as 6 months ago, so I'm not unfamiliar with the platform.

That said, it seems extreme to me that two reversible decision could so devastatingly and permanently tank what was a significant userbase ~1.25 MAU.

Other platforms have endured much more with much less money and not been sold off in a fire sale.

At Backplane we sold for way the fuck less for not a much smaller userbase. Tech's wild.

1.25 MAU isn't actually that much for a company with such a fickle userbase. It's a good start, but most of the valuation is still in the growth potential at that stage.

> 1.25 MAU

1.25 anonymous MAU. Unless you're a VPN provider, I can't see anyone monetizing anonymity.

Destroyed, to the tune of 70M?

Surely they could just issue a 'mea culpa' at that point and recommit to their previous direction? In spite of how the web acts, users can be incredibly forgiving as far as 'voting with their wallets' go - at the end of the day they'll just use whatever works, and a 'mea culpa' post would be sufficient for most to 'begrudgingly' resume using the old/familiar service? (I mean, maybe not all of them, but enough to not take such a massive hit...)

Hot damn, adding this to my 'further reading' list.

>Surely they could just issue a 'mea culpa'

They did [1], but that was 3 month later and by then it seems most of their users had moved on and forgotten about them. Plus, being an anonymous app they didn't have emails for their users, so there wasn't really any way for them to get the word out that they were reverting back.

[1] https://blog.yikyak.com/blog/optional-handles-and-hot-feed-a...

I'm pretty sure everyone at my University was aware that they reverted those changes within a month, just by word of mouth. But the people who reinstalled it were greeted with a ghost town and didn't fully re-engage, so it never achieved critical mass.

I don't disagree. But I wonder if the reason it was a ghost town when people reinstalled the app was precisely because it took a month for all the users to hear about it via word of mouth. If they had been able to send an email blast out to all of their users at once, perhaps there would have been enough people reinstalling the app that day to kick start it back into popularity.

Overall I find it a fascinating case study, just because they fell so quickly. If the founders wrote a memoir I would be very interested in reading it.

Easily. Pretty much all of the appeal and audience attraction of Yik Yak was the anonymity and the self-regulating nature of the platform.

Last place I worked was a smaller University and it was tasked to me to keep en eye on the posts due to the potential for harassment. The system was, at the time, 5 down votes immediately cleared a post - the users were very good at moderating themselves while still preserving the rather "raw" nature of the service. People were still wry and biting and uninhibited with their comments, but outright threats and harassment seemed to get moderated pretty well. Ultimately we never intervened (Yik Yak had a system to geo-block regions from accessing the service), and for the most part it was just the equivalent of a bathroom stall wall for most of the students. Hell, often times I'd learn about network issues from Yik Yak posts before I'd get even a hint from my networking team.

You take away the anonymity and the isolating culture, you take away the magic of it. Since our Campus was situated right in the middle of a neighborhood, we'd often get nearby residents trying to participate. According to my student workers who used it, it was almost always obvious who was a student and who wasn't.

Makes sense.

But, maybe it's a case where they knew the negativity (racism, harassment, bullying, etc.) was so bad, they had to do something to curb it, even if it meant destroying the company.

Sounds crazy, even I'm skeptical, but maybe for once somebody chose to do the right thing despite the money at stake. Dunno.

I was a promoter throughout my time using it, turning lots of my friends onto it at its peak. I even have a Yik Yak beer koozie!

The day handles came out was the day I uninstalled.

To me this isn't wild but what should (logically, not morally) happen with most tech companies. The microbubble of their own evaluation burst. If you used the app for longer than a month, you knew the app was going nowhere unless they completely changed the entire product by evolving so quickly. A lot of companies have similar problems in my opinion but are propped up by VC evaluations. If they play their cards right, they can cash out before the bubble bursts and get integrated into a product or company that has much more value than themselves. Yik Yak obviously failed there, but I don't think they are much of a unique situation.

Reading the sibling comment to this one, it doesn't sound at all like what happened. But alright

Fair for sure. I think the act that burst their bubble was the aforementioned switch to required handles combined with an already shrinking community at that point in many urban areas who got bored with it. The bigger point of the comment was basically that most tech companies are overvalued and only get bailed out by acquisition. The money isn't really surprising here to me, which was the claim of the parent comment. The interesting part is how royally the fucked up their product to burst the evaluation bubble that quickly.

These no bullshit VC's, in your opinion what did they expect to get out of this? What was the vision? Since most of the value of YikYak seemed to come from the anonimity, this was never going to be the "next facebook".

Most startups go out of business. Raising $ doesn't guarantee success.

I'm not even talking about success - I'm talking about investors looking out for their own money and getting a deal done for a buyout. I wouldn't even really call it a soft landing.

> I wouldn't really even call it a soft landing.

Let me help - you're looking for the phrase, "a cautionary tale."

These investments are intentionally high-risk, though. Most of them go south, including most of those made by famous firms.

social apps are really hard, no one going to pay more money to acquire a dead app

If we're talking about money wasted, the winner has to be Uber. Raised $8.8 billion, (billion!) lost $800 million (million!) 2016Q3, is on the fast track to bankruptcy, with nothing to show for it than a bunch of heavily subsidized cab rides.

Devil's advocate: "Growth"

(Though of course I only set it up because it's so fun to knock down. Uber's 'growth' is of economically-minded bellweather users happy to jump ship to save a few bucks, and they have built next to zero and possibly even negative brand loyalty)

If Uber can constantly outperform other apps on price (read: without huge ride subsidization) they might be able to maintain a tentuous lead; but even then it'd just be a war they'd be fighting on many fronts as a 'goliath' against hundreds of davids. And they (Uber) are fronting the major legal costs for all of them :)

Microsoft, Facebook, Google, Valve, et al have taught us the major lesson: to have staying power, you must become a platform, and aggressively protect your source of lock-in. An ecosystem of applications/businesses that depend on your platform for access to a userbase is the best way to do this.

The platform giants, especially Microsoft and Google and to a lesser extent Apple and Facebook, have the power to "NetScape" any other non-platform tech company at will. Mobile apps are coming to exist at Google's mercy, like web sites dependent on "organic" traffic have for the last decade.

If Google decided they'd had enough of Uber, they could integrate ride hailing into GMaps and Uber would be done for. They just did this to a handful of startups that were oriented around real-time location tracking. [0]

[0] https://blog.google/products/maps/share-your-trips-and-real-...

Reply on news.ycombinator.com