Yammer is TC50 Winner - This is a Joke? Right?
I am an "enterprise guy". I edit the RWW Enterprise channel and I think that Enterprise 2.0 is a large wave of opportunity. So was I pleased to see an enterprise start-up win the Techcrunch 50 bake-off? Yes, but not this one. Surely not a 'Twitter for enterprise' product called Yammer?
In this post I outline the reasons why I do not consider Yammer to be a serious start-up.
Given the massive 'start-up buffet' presented by TC50, with the tables absolutely groaning with exotic goodies, you have to graze selectively. The first pass is the quick snapshot description, the 3 lines that try to sum up all the passion, talent and excitement of a start-up.
Yammer totally failed that test. As I cast my eyes over the buffet, it was like "hmm, that looks like Crayfish and chillis over there, so I think I will pass on the plain pasta". When I saw that Yammer had won, I thought "I must have been mistaken, it is not plain pasta". So I looked at the site. "Hmmm, it still looks like plain pasta". So I thought "I must have missed the passion of the presenters and the nuggets of wisdom unearthed by the panel during Q&A". But having watched/listened to that, it still looks like plain pasta.
Not that there is anything wrong with plain pasta, it is quite nutritious and good for you if you need the carbs - and totally delicious if you are starving. But I was not starving. The buffet was groaning with delicious alternatives (more on that in another post).
Here is why I would not consider Yammer a serious start-up:
1. No barriers. Lots of alternatives already exist, some very credible. Even some open source. This looks like an engineer's side project. In engineer speak this is "trivial". I am sure there are dozens of clones already and many more being hatched right now.
2. The incumbent can replace their advantage way too easily. What stops Twitter adding some features to make it more appealing to enterprises? I imagine they are already considering this.
3. No natural early adopter. The normal early adopter is on Twitter. The early adopter within companies? If you are a good corporate citizen Yammer would look a bit career-threatening - for reasons explained below.
The reason Yammer was considered brilliant was that it had a "cunning revenue model". Let me see if I've got this right. You use Yammer rather than Twitter to restrict the Followers to your colleagues. So you can discuss company secrets really securely. (That, by the way, was a joke!) You use your corporate email ID (Gmail, Yahoo etc not allowed). All that is free, so massive viral adoption. Then companies want to claim/control the conversation. So they pay for all users on Yammer with a corporate email ID.
Yep that is cunning all right. Other words come to mind as well.
Whatever happened to building great software that gets massive adoption just because it is great software. Oh, 37 Signals has a lock on that?
Assuming Yammer gets traction, will enterprises meekly pay up?
Alternatively, will the CIO send an email saying: "Yammer is not allowed with our corporate email". Just to show that he/she is social media hip, the email could also say "you can use Twitter as much as you like". Maybe even deliver the message on Twitter.
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finally.
Posted by: shammara | September 12, 2008 10:50 PM
I work at a start-up. Our IT department said "hell no" for security reasons when I asked about Yammer. I assume this will be the common response.
Posted by: Dave | September 12, 2008 10:56 PM
I was shocked as there were several other, IMO more deserving companies
Posted by: David Ward
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September 12, 2008 10:59 PM
If enterprise people chose the winners, passion and excitement must have been a *liability* for any candidate, no? :P
Posted by: Felix Pleşoianu | September 12, 2008 10:59 PM
agreed!
Posted by: Four20 | September 12, 2008 11:12 PM
Full ACK - that's exactly what I'm thinking. Thanks for the story.
Posted by: Falko Timme
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September 12, 2008 11:55 PM
Richard I would like to see who gets to fund them ... that will probably answer the question of why they won?
Posted by: sam sethi
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September 13, 2008 12:12 AM
I agree. There is absolutely no big deal in Yammer.
Posted by: Mert Nuhoglu | September 13, 2008 1:15 AM
I guess it was because yammer sponsored the T-Shirts in the TC50 bag that everybody got!
Posted by: Nitram | September 13, 2008 1:31 AM
I've actually wished for a product like this when working with corporate clients, but they're so used to Outlook and email it'll be a really hard sell.
Even though a lot of technical people don't like Outlook, most business people I work with seem to love it. The immediacy and flexibility of CC or BCC'ing a group of select people and "reply to all" will make this seem awkward at first.
Also does it handle attachments? Dragging screenshots of my work into an email and sending it out to people to view is easier than uploading to a URL and pasting it into there.
Posted by: Alex Young
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September 13, 2008 1:43 AM
Our entire team signed up to yammer within 24hours of its launch day. And the experience has actually been pretty good.
I've used twitter for a while and imo yammer fixes the bits that are broken with it.
Sure my first response was, how is this any different to Twitter, and the difference isn't great:
built in support for hashtags (really great for posting on projects/products/topics) and doing away with the 140 char limit.
As you say the security isn't great, but it's something, and honestly it's no less secure than google's enterprise app products, like docs, calendar and sites.
I aggree that as an piece of sofware, it's trivial. but so is twitter. I also agree that copycats will spring up everywhere. And I also belive that calling this an enterprise product is a mistake, it doesn't scale well to enterprise, as the bigger it gets, the more like twitter it becomes. Where this is valuable and usefull is in productivity enhancement in tandem with something like basecamp to store things for posterity and planning. i.e. basecamp is the past and future, yammer is now.
Whether it was a worthy winner, I can't judge, I haven't seen all the pitches/products but it's one of the more usefull products I've seen coming out of these kind of events.
Is the vehemence of this denouncement perhaps linked to all the twitter love that permeates RRW?
Posted by: Ronald Hobbs | September 13, 2008 2:26 AM
It is not a joke. For TechCrunch guys, anything related to Twitter is automatically cool, especially if it possesses some sort of business model.
Posted by: Pavlo Zahozhenko
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September 13, 2008 5:11 AM
Yammer addresses one of the biggest challenges for Twitter newbies: finding followers and gathering friends.
Yammer also helps security-conscious microblogging fans who can't get laconi.ca installed because of lack of resources.
Yammer solves some of Twitter's privacy concerns. Less need to set all notices to private, send direct messages or create multiple accounts.
And then ...
Yammer can quickly become gossip central for Web 2.0 individuals working for not-so-aware companies.
Until ...
A Yammer message (a yam?) offends someone. That person complains to company leaders, who then contact Yammer and insist they take down negative comments.
At which time ...
Yammer pulls out its "business model."
Posted by: Kevin Sablan
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September 13, 2008 6:04 AM
The real winner is TC taking advantage of all this stupid startup hype.
Making a "real" company win would kill their own business
They have to continue to spread the myth that a couple of geeks with no valid business model can ask for VC funding and live in the dream they will make one real dollar one day
Posted by: pierre | September 13, 2008 6:37 AM
Wow. Honesty. I like!
This is simply a niche variation(enterprise focus) of a niche service(micro-blogging).....what's so hot in THAT pot?!!
Posted by: preetam mukherjee | September 13, 2008 6:57 AM
If it makes you feel any better, yammer means male genitalia in another language. They'll be changing their name soon.
Posted by: Mark Elson | September 13, 2008 8:48 AM
I had to pull out my yammer too.
Posted by: Damon Damony | September 13, 2008 8:55 AM
I also had the same response.... I was waiting for the punch line....
Posted by: Al Delgado | September 13, 2008 9:44 AM
Bernard,
I'm generally a fan of your insights but I think you might be overlooking the place where Yammer can fit in corporate communications.
I wrote my thoughts on why I think Yammer matters:
http://blog.blist.com/2008/09/13/why-yammer-matters/
In that post you could substitute any Yammer-like offering. It's not a post in support of Yammer the company, but rather the need for an enterprise-Twitter offering.
One irony is that it seems everyone is quick to criticize web 2.0 companies for having no business model and here's one that has come up with an admittedly controversial way to get paid and everyone criticizes the business model. Isn't Yammer's business model similar to the one employed by GetSatisfcation, which no one objects to?
Posted by: Kevin Merritt | September 13, 2008 10:05 AM
Well, I thought I was the only one who didn't like Yammer thus why I didn't post anything on my blog about it, I just saw this company as too much of a combination of different ideas that already exist, I wanted to see Twitter make more of a go as this notion of corporate microblogging, however with their current problems I am sure they don't have the resources available for this kind of thing!
Posted by: Josh Chandler
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September 13, 2008 10:20 AM
agree, and i guess companies who want to keep things private would prefer to run a messaging service on their own server. so yammer's business model won't work, imho
Posted by: marcuhlig | September 13, 2008 1:48 PM
I don't like to say Yammer is a copy cat but it doesn't have any thing new even a new UI.
Despite there are lots of great start up like fitbit I do not understand why Yammer must get the Prize ?
This kind of judges reduce the quality of Techcrunch
Posted by: Reza R | September 14, 2008 6:24 AM
You deserve kudos for standing up.
Many people look at the articles and opinions about start-ups as gospel. This is far from the truth. Everyone has an opinion and the reader must disseminate good advice from bad.
Yammer is a joke. My company would never embrace it. It is not even original.
However, what I find more troubling is the current mentality of US small business ventures. The mentality is to create hip google like name, like Yammer, get VC funding, roll out a mediocre product and hope that you can sell your stock or company as quickly as possible. Please do not forget the people who are getting rich hyping these companies.
How about this ladies and gentlemen...why don't you invent a technology that solves a very simple mainstream problem and be cash flow positive! I do not care if you make 50k or 200k profit but be profitable! Once you are profitable getting VC is a snap. Showing positive cash flow is a proven method for success.
People forget that investing in stocks is capitalism at it's finest. Stock are risk reward. VC companies also invest in risk reward. They know out of 10 deals maybe 5-7 will return zero investment. But the other 5 or 3 might be home runs. This shotgun mentality is what makes America great.
However, younger generations are being so spoiled by technology companies which have "15 minutes of fame" that they have forgotten to be innovative. It is always about building a company and being profitable. Have a sound business model from day one and don't wait years to show a profit.
We need to move away from the "top 10 mentality" and get back to reading War and Peace.
Our foreign competitors are blowing the doors off us. Yammer is a disappointing winner and is a reflection or our pop mart vc initiative.
Sorry for the rant but Yammer winning rubbed my rhubarb. I have 3 companies in my hometown that deserve higher praise.
JF
Posted by: Jim Felder | September 14, 2008 8:52 AM
Of the TC50 startups presented, Yammer would have been my pick, and it's the only one I have a use for.
At Hosting365, we have just over 50 staff, spread across two countries and 3 offices. We have people that tele-work as well.
Yammer has been the best communication tool we have ever used. I absolutely love it. All our staff are on it, and we've set up hash tags for major cross-departmental projects.
We use IM heavily - but group chat is just not suitable. Email the same problem. The best comm's tool we've utilised to date has been an Internal Blog.
Yammer allows anyone in the organisatio to post an update of what they are working on (say, a customer deployment) or something interesting they have come across. Previously this information was limited to their immediate peers and line manager - now the entire staff can see it. Already we've seen better visibility from remote teams, and better integration of projects that affect more than one department.
We've been on Yammer for just a few days now - but it's been well adopted and used for positive business communication. So far - it's the web tool of 2008 for us. Highly recommend.
Posted by: Ed Byrne | September 15, 2008 3:11 AM
Saying what you are doing/working on is interesting, but sharing what you are going to do in the future is even better. That gives you the opportunity to plan what you could do, follow or attend. We call it micro scheduling. Of course you can publish what you did or are doing, but if you publish what you plan to do, the discussion and suggestion begins until the event is definitely planned.
Posted by: Carolina Cash 5 | September 16, 2008 11:31 AM
thanks for story
Posted by: keten1 | September 19, 2008 3:38 PM
Amen to that Bernard. Your analysis is correct 200%. IMO, I put Emerginvest as the best innovation so far in all the competitors who were involved in the TechCrunch-50.
Posted by: Falafulu Fisi | September 19, 2008 4:12 PM