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Why A Stupid App Like Yo May Have Billion-Dollar Platform Potential

Editor’s note: Sangeet Paul Choudary is the director of Platform Thinking Labs and analyzes platforms and network effect strategies at his blog Platform Thinking.

Yo! Is tech turning too stupid for its own good? Attempts at building better healthcare systems do not get the kind of investor interest that a new app called Yo seems to be getting. While the whole world was deriding (and downloading) Yo, the company quietly (well, not quite so quietly) raised further funding at a $10 million valuation.

Is the app worth $10 million? No. Will the app itself ever be worth $10 million? No. Is there the tiniest of possibilities that there’s a billion-dollar potential hidden behind the stupid app? Yo!

Let’s look at a bit of history to set the future of Yo in context.

Competing with Core Mobile Experiences

While the likes of Android and Apple created an extendible platform with the smartphone, they continue to own most of the core user experience of the phone. Angry Birds and Pinterest may create apps for the phone, but they don’t really challenge the core use case of the phone. Most apps typically extend the phone to new use cases.

However, every once in a while, a new experience emerges at the app layer to challenge the core experience of the phone. At the very basic level, these new experiences create compelling substitutes to the core experience. Evernote creates a substitute for the phone’s note-taking app, for instance, and Dropbox for the native cloud sync.

Some substitute experiences take it to the next step and develop network effects in ways that the original experiences did not. Instagram turned the phone into a camera-centric community in a way that the phone’s camera app never had. WhatsApp turned the phone into communities of chatter with much more flexibility than the original messaging app.

But the power of such substitutes can truly be realized when it ends up creating a new standard that dictates the core experience of not just the phone but of any app built on top of the phone. With such a move, the substitute becomes embedded into the platform layer of the phone.

Curiously, Yo has the potential to play in such a space.

Creating a New Standard

As an app, Yo is utterly stupid. Let’s all agree to that. It probably isn’t worth a tiny fraction of its current valuation if we were to evaluate it as an app. But as a platform, Yo has an outside chance at a moonshot.

Alerts and notifications are part of the core use experience of a phone. They come naked into the smartphone platform, and any app built on top of the smartphone leverages the alerts and notifications layer. This is where things get interesting: Yo isn’t about messaging; it’s about alerts and notifications. Yo’s potential to be much more than an app is in its ability to potentially be a platform.

As users, we hate alerts and notifications. No one’s particularly excited about interruptive alerts jumping up on the phone screen. Yet, in a short span of a few weeks, we’ve had millions of people downloading an app that does little more than send an alert. In fact, the alert doesn’t even mean anything, but usage continues to grow.

If the history of standards is anything to go by, standards do not have to be technologically intense, they just need to get adopted fast enough. And Yo seems to be ticking that box for now. The Betamax vs. VHS battle is testament to the nuances of multi-sided adoption that standards require.

For Yo’s moonshot chance at becoming a billion-dollar platform to work out, it has a long road ahead and an arduous journey to get the chicken and egg problem solved. As with all development platforms, it needs to drive rapid and simultaneous adoption among consumers and developers.

Yo has now opened itself as a platform and we’re already seeing “serious” use cases coming up. Israeli missile notification service, Red Alert, is using Yo to warn Israelis of incoming missile strikes.

What Yo has going in its favor right now is the massive adoption among consumers. For all we know, this may just be a fad. But if this massive adoption continues, and if Yo can pull up its platform play and get enough developers building real value using Yo as a notification service for their apps, Yo has the potential to be the next big thing.

The Next Big Thing

The Christensen-Lepore debate notwithstanding, the next big thing has always started out looking stupid. The experts derided Wikipedia for its errors, no one saw beyond the filters of Instagram, Eric Schmidt called Twitter ‘poor man’s email’ and Airbnb was a hipster mattress-sharing website until it completely blindsided the hotel industry.

Will Yo disrupt notifications? We can’t quite say at this point. But having seen the massive adoption, one has to believe that someone will. Notifications need a substitute. And given the massive growth in adoption, Yo may have as good a shot as any at it.

While Yo may have fast-growing consumer adoption going for it, an alternate notification substitute (which will look just as stupid, if not more) may yet gather traction, surpass Yo’s adoption and get taken up by more developers. Any investment in Yo at this point is highly risky, not unlike one in a service some seven years back that allowed you to type 140 characters.

Yo’s success or failure lies in its ability to kickstart a platform for notifications that one day becomes the standard for all apps using notifications. As an app it is little more than Facebook’s poke. But as a standard, it could become embedded in the workings of every other app out there. And that is Yo’s outside chance at venture scale returns.

For all we know, Yo’s brilliance may yet lie in its apparent stupidity.

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Enterprise Investments Surge To Over $5.4 Billion

After years of backing headline-grabbing consumer internet deals, it seems that venture capitalists are paying more attention (and more money) to the seemingly staid and stodgy enterprise technology companies (the businesses that sell technology to make businesses work better).

Their mission: to explore new ways of organizing data, to seek out new models for efficiency and security for business customers of all shapes and sizes, and to develop new technologies for marketing and selling on devices that no one has done before.

Investments into enterprise software companies of all stripes are soaring. The amount of capital invested in these startups has already surged to over $5.4 billion in the first half of 2014. That’s roughly the same amount that enterprise-facing companies raised in the entire year for 2013, according to data from CrunchBase.

Much of that capital was invested in the monster financing for new database technology, Cloudera, but it points to a belief among investors that there’s a huge change coming in the way that technology effects business. And these venture capitalists are hoping to cash in.

The surge in investment dollars is actually accompanied by a slowdown in commitments to new technology companies, indicating that investors’ confidence in the sector’s strength is matched by a belief that this current crop of business technology companies is maturing. In the second quarter of 2013, investors backed 328 startups in the enterprise software category, by the second quarter of 2014 that number had declined to 205.

While the numbers indicate a slowdown in the commitments going to business-focused technologies, some investors insist this is only the beginning. The idea of selling software as a hosted online service has been around for nearly a decade, beginning with the Salesforce.com customer relationship management revolution, but the technologies that are moving to the cloud were never part of core business operations, they argue. Now, these hosted software businesses are everywhere, and taking over core functions that used to be the purview of internal information technology departments.

Data storage is now a service, and even enterprise resource planning software can be bought as a service (and if there’s anything more important to a business than where it keeps its information and how it manages and organizes the use of its resources I’m not sure what it would be). Furthermore, new companies are taking advantage of the extremely powerful new infrastructure technologies that are available to rethink how customer service and other business processes can be automated to a degree that wasn’t possible before.

That’s why Salesforce.com is snapping up young cloud computing companies as if it were Oracle a decade ago, Microsoft has its head in the cloud, and why IBM and Apple have partnered to deliver software to mobile business users.

One need only look at the fact that Salesforce and Red Hat now trade above Oracle to see how momentum has shifted away from the traditional software vendors (although at 179.67 billion Oracle’s market capitalization is still over five times that of Salesforce.com’s $33.7 billion market cap). Not to mention the big bets that venture capitalists, corporate investors, and hedge funds and money managers are placing on technology like Hadoop and NoSQL.

“This is that next future data platform that in 30 years from now the vast majority that structured and semi-structured data would be stored in,” said Joseph Ansanelli, a partner at Cloudera backer Greylock Partners, in an April interview. “Oracle? Their core database is basically under attack from Hadoop.”

If Hadoop and NoSQL are eating at the core of the infrastructure businesses use to operate, then a slew of software as a service offerings, and technology solutions are attacking big enterprise companies on their periphery with services that better apply the new architecture of hardware, software, and cloud-sourced services with open interfaces for application integration.

“One of the themes we’ve invested heavily behind is this intersection between big data and traditional enterprise application software,” says Ajay Agarwal of Bain Capital Ventures. Indeed, Bain’s newest partner, Enrique Salem, the former chief executive of Symantec, sees business technologies on the cusp of a still-greater transformation.

“Historically some of these cycles have been a five-to-ten year change, but we are just at the beginning of this transformation,” says Salem. “Historically, $120 billion was spent on hardware implemented inside data centers. Now consumers will start running and picking their own applications and that $120 billion spend that was inside the four walls of the data center? A majority of the spend will not be in the data center, but in companies that are delivering services.”

Photo via Flickr user Scott Maxwell

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Excerpt from: Enterprise Investments Surge To Over $5.4 Billion

#9: Toshiba Satellite C55-A5105 15.6-Inch Laptop( Intel Dual Core Celeron Processor N2820, 4GB RAM, 500GB Hard Drive, DVD-SuperMulti drive, Windows 8.1)

Toshiba Satellite

Toshiba Satellite C55-A5105 15.6-Inch Laptop( Intel Dual Core Celeron Processor N2820, 4GB RAM, 500GB Hard Drive, DVD-SuperMulti drive, Windows 8.1)
by Toshiba
3.5 out of 5 stars(45)
Date first available at Amazon.com: April 20, 2014

Buy new: $399.99 $300.00
102 used & new from $249.99

(Visit the Hot New Releases in Computers & Accessories list for authoritative information on this product’s current rank.)

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The EFF Calls Gov Report Supporting Surveillance “Legally Flawed And Factually Incomplete”

The Electronic Frontier Foundation (EFF) isn’t enthused with a report from the Privacy and Civil Liberties Oversight Board (PCLOB) concerning government surveillance under Section 702 of the Foreign Intelligence Surveillance Act. The current report generally upheld the program, offering a few motes of potential reform as suggestions. The report was, I think it fair to say, expected to have more teeth.

PCLOB previously made friends among activists by indicating in a prior report that certain bulk surveillance under Section 215 of the Patriot Act is unconstitutional.

The EFF, often the voice of dissent on this sort of issue, called the report “legally flawed and factually incomplete.” Its core argument against the report is that it fails to properly deal with the issue of upstream collection, that it doesn’t handle privacy protection for non-U.S. persons, and that the document hides “behind the ‘complexity’ of the technology” employed by the U.S. government in its surveillance efforts.

Regarding so-called “upstream” collection (when the NSA taps directly into the cables that make up the core network of the Internet), the EFF finds the PCLOB report missing the core point at hand — that the “government has access to or is acquiring nearly all communications that travel over the Internet.” Instead it focuses on how that information is queried. It therefore all but endorses the collection itself, on a chronic basis, of such a large firehose of information that it can’t help but include the communication of Americans.

The EFF also dismisses the PCLOB’s constitutional analysis, stating that the Fourth Amendment “requires a warrant for searching the content of communication” and that under “Section 702, the government searches through content without a warrant.”

We’ll have to wait and see what impact the new report has, particularly in the Senate. The group’s earlier report didn’t appear to have much influence outside of the activist community.

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Yahoo putting People Search, Yahoo Voices, Xobni and other products out to pasture to further its focus

It’s summer time in Silicon Valley. Time to throw out all the stuff no one uses anymore. That’s what Yahoo is doing. Today the company announced it was shutting down some less-used services.

In a Tumblr post, SVP of the Cloud Platform Group, Jay Rossiter announced the company’s progress on focusing on its core mission: “making the world’s daily habits more inspiring and entertaining.” Part of that mission involves sunsetting products to focus on its core. Here’s what’s on Yahoo’s chopping block today:

People Search: As a user, you want one place to find everything you need. You can use Yahoo Search to find people, blogs, places, maps – anything. That’s why today, July 2, we are closing down Yahoo People Search, a defunct directory site that’s no longer useful.

Xobni: As we announced in July 2013, although we are shutting down Xobni.com and the Smartr Product Suite today, July 2, we have incorporated many Xobni-like features into Yahoo Mail (like compose auto-suggest and people-centric mail search) and the technology behind the product continues to inform our current and future user experiences.

Yahoo Toolbar on Chrome: By July 22, the Yahoo Toolbar will be removed from the Chrome web store, to comply with recent Google Chrome policy updates. Instead, we now offer the Yahoo Extension for Chrome, which will give you quick access to Yahoo.com whenever you open a new tab.

Yahoo Shine: We recently unveiled several new digital magazines that dive deeper into the topics our users have come to love on Yahoo Shine and offer unique advertising opportunities for brands. While Yahoo Shine will be closing on July 31, through our digital magazines, like Yahoo Beauty and Yahoo Travel, we will continue to bring these topics to life with stunning visuals, a strong editorial voice and engaging native advertising.

Yahoo Voices and the Yahoo Contributor Network: On July 31, Voices.Yahoo.com will be shut down and at the end of August, Contributor.Yahoo.com closes.

The post also highlights the company’s progress shutting down other services like Bookmarks.Yahoo.com, Research Reports, and Newlook Service.

Yahoo has been struggling to regain its former glory as the go-to portal for all things on the Web. To achieve that the company is focusing on its Search, Communications, Digital Magazines and Video. To help it gain a foothold in video, yesterday it announced it was producing a sixth season of the recently cancelled TV show Community. It’s a play out of the Netflix book of original content and one that gives Yahoo more clout in the video world.

➤ Furthering Our Focus [Yahoo]

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Microsoft Surface Pro 3 (i5) is on sale in the US and Canada now, i3 and i7 models available August 1

We knew it was coming, but Microsoft has just confirmed that the Surface Pro 3 is now on sale in the US and Canada.

Microsoft unveiled its new PC/tablet crossbreed at an event in New York on May 20, and we reviewed it shortly after. The Pro 3 comes in 3 main flavors, featuring Intel Core i3, i5, and i7 processors. The Intel Core i5 is now available online, through Microsoft retail stores, and third-party stores – though if you pre-ordered, you’ll be receiving it directly.

Surface review 798x310 730x283 Microsoft Surface Pro 3 (i5) is on sale in the US and Canada now, i3 and i7 models available August 1

For those interested in the Core i3 and i7 models, well, the goods news is that you’ll be receiving them a little earlier than planned. Microsoft has confirmed that they’re now going to be available on August 1 in the US and Canada in-store and online. Originally, it was thought they would be made available towards the end of August.

If you don’t live in the US or Canada, well, you can buy a Surface Pro 3 at the end of August.

Meanwhile, make sure you read our Surface Pro 3 review: Has Microsoft’s delicate compromise worked this time?

➤  Surface Pro 3 is now available in the US and Canada

Microsoft is retiring older versions of Skype for Windows and Mac, wants you to update today

Skype updates iOS app with focus on helping you delete messages and chats

Visit link: Microsoft Surface Pro 3 (i5) is on sale in the US and Canada now, i3 and i7 models available August 1

Apple Adds A New Entry-Level iMac For $1,099

Apple has a new iMac model today, an entry-level machine that brings the price of entry to the all-in-one desktop to $1,099, or $200 less than was the case just yesterday. The new version has a 1.4 GHz dual-core Intel Core i5 processor, 8GB of memory, a 500GB hard drive and Intel HD Graphics 5000 on board.

Configuration options allow you to scale the drive up to either a 1TB HDD or Fusion drive, or put in 256GB of SSD flash storage, but that’s about it. For $200 more, you start off with a quad-core Intel processor, a 1TB drive and Intel Iris Pro graphics, plus the option to upgrade the RAM to 16GB in the custom configuration options.

The low-end iMac likely won’t set anyone’s world on fire in terms of performance, but it should be plenty beefy enough to handle the needs of average light computer users who want something for the home, and it gives Apple another option for education sales just ahead of the back-to-school season.

Read the rest here: Apple Adds A New Entry-Level iMac For $1,099

#6: Toshiba Satellite C55-A5105 15.6-Inch Laptop( Intel Dual Core Celeron Processor N2820, 4GB RAM, 500GB Hard Drive, DVD-SuperMulti drive, Windows 8.1)

Toshiba Satellite

Toshiba Satellite C55-A5105 15.6-Inch Laptop( Intel Dual Core Celeron Processor N2820, 4GB RAM, 500GB Hard Drive, DVD-SuperMulti drive, Windows 8.1)
by Toshiba
2.6 out of 5 stars(14)
Date first available at Amazon.com: April 20, 2014

Buy new: $399.99 $300.00
108 used & new from $279.00

(Visit the Hot New Releases in Computers & Accessories list for authoritative information on this product’s current rank.)

The rest is here: #6: Toshiba Satellite C55-A5105 15.6-Inch Laptop( Intel Dual Core Celeron Processor N2820, 4GB RAM, 500GB Hard Drive, DVD-SuperMulti drive, Windows 8.1)

#7: Toshiba Satellite C55-A5105 15.6-Inch Laptop( Intel Dual Core Celeron Processor N2820, 4GB RAM, 500GB Hard Drive, DVD-SuperMulti drive, Windows 8.1)

Toshiba Satellite

Toshiba Satellite C55-A5105 15.6-Inch Laptop( Intel Dual Core Celeron Processor N2820, 4GB RAM, 500GB Hard Drive, DVD-SuperMulti drive, Windows 8.1)
by Toshiba
3.0 out of 5 stars(7)
Date first available at Amazon.com: April 20, 2014

Buy new: $300.00
87 used & new from $283.99

(Visit the Hot New Releases in Computers & Accessories list for authoritative information on this product’s current rank.)

Read more: #7: Toshiba Satellite C55-A5105 15.6-Inch Laptop( Intel Dual Core Celeron Processor N2820, 4GB RAM, 500GB Hard Drive, DVD-SuperMulti drive, Windows 8.1)

Online Fitness Startup Wello To Be Acquired By Weight Watchers, Sources Say

Wello, the startup that connects people with personal trainers to receive private fitness consultations through online video chat, is in talks to be acquired by Weight Watchers, sources tell TechCrunch.

We’ve contacted Wello for details on the deal, but at the moment, the company has declined to comment. This post will be updated with any additional information, such as financial terms, we receive.

Wello, which launched in mid-2012, has raised some $1 million in seed funding from a range of well-known investors including Rock Health, Kleiner Perkins, Mohr Davidow, Aberdare Ventures, Mayo Ventures, Morado Ventures, S-Cubed Capital, PhilQuo Ventures, and other angels.

Since its launch two years ago, Wello has extended its product lineup from one-on-one video chat to include group training sessions and gym-like monthly membership subscriptions.

Wello has said its core aim is to “democratize” access to personal fitness training, which has historically been a relatively high-end and rarefied service. This mission fits well with Weight Watchers, which has become a household name for making weight loss and nutrition consultation accessible to the masses. Weight Watchers has been moving in recent years to expand its reach into the wider health/fitness “lifestyle” market, so Wello could be a nice bolt-on product to add to its offerings.

Read the rest here: Online Fitness Startup Wello To Be Acquired By Weight Watchers, Sources Say