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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 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 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 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 can say “you can use Twitter as much as you like”. Maybe even deliver the message on Twitter.


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