Yik Yak or Jodel?

Yik Yak vs Jodel

When it comes to the Internet business and especially to apps and services intended to connect people, history repeats itself: As soon as a new player (usually U.S.-based) shows signs of success, its idea is being adopted by startups elsewhere in the world. Often these imitators fail, but sometimes they manage to capture market share in their “home” regions before the “original” service is being made available there. We have seen this playing out with many of today’s leading social services such as Facebook, Twitter, LinkedIn, Pinterest or Instagram.

Right now it is happening again, at least partly: Yik Yak, an Atlanta-based app for anonymized, location-based public messaging which got very popular among high school students, inspired the Berlin-based company Jodel to launch a very similar app last year, which managed to become a success in Germany.

But here is where history follows a slightly different path this time: Jodel has managed to grow beyond its home market. Google Trends shows Norway, Switzerland, Sweden, Germany, Austria and France as the current Jodel hotspots. Yik Yak on the other hand sees most of the searches in Ireland, the U.S. New Zealand, Canada, the U.K. and Australia. Searches are not a perfectly precise measurement for popularity, but good enough.

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Yik Yak is clearly the more powerful player, with $73.5 million in total funding and 3.6 million monthly active users across the U.S. (that’s the most recent public number, but it was released at the end of 2014). Jodel has received an estimated seven digit Euro amount in funding and announced “a million users across Europe” in October 2015.

As the user numbers indicate, the Yik Yak / Jodel phenomenon is still quite small compared to the major social apps. But within certain user groups, the activity is pretty high. High enough that large media organizations such as the BBC are incorporating Yik Yak into their social media work. Despite not being a student anymore, I myself started to use Jodel last fall here in Stockholm where it has many active users. I found it to be both quite engaging and extremely insightful. Since all contributions are anonymized and not attached to a personal identity, there is no room for narcissism, which impacts heavily how people present themselves. And surprisingly, at least in Stockholm, the majority of the “Jodels” are civilized and friendly.

Now, to the important question: How will Yik Yak and Jodel handle each other’s existence? Here are the scenarios I see:

  1. Yik Yak will acquire Jodel
    The current core markets are very complementary. A merger should be quite easy, even technically, considering the simplicity of the apps and the absence of public user profiles or social graphs. For users it would hardly make any difference if Jodel turns into Yik Yak from one day to another. Jodel could even continue to appear under the Jodel branding. There is not a lot of risk for confusion because in most of their core markets, the competitor’s app is not even available (Jodel is not in the U.S. app store, Yik Yak is not in the German, Swiss or Swedish app store).
  2. Jodel will acquire Yik Yak
    Considering the different valuations of both companies, this scenario is extremely unlikely.
  3. Yik Yak will try to outcompete Jodel
    Yik Yak could simply try to push Jodel out of its core markets by launching its app there and pushing it hard. That has happened before in similar situations. However, it takes time. Furthermore, Jodel has no incentive letting this happen. As long as it is the much smaller player without deep pockets of venture capital and with a much lower valuation, its founders and investors might be very happy to sell it to Yik Yak at a good price. Especially in the current economical climate in which large tech companies are seeing massive drops in valuations.
  4. Jodel will try to outcompete Jodel
    That would be fun to watch, but it would be a high risk move and requires a lot more funding.
  5. Both services will coexist for a long time, splitting the world’s markets among them
    Possible but not the most likely option. This looks like another winner-takes-it-all market, even if the dynamics differ a bit from typical social networks and messaging apps in which people maintain a network of contacts, which in turn creates lock-in effects and network effects. Currently, Yik Yak and Jodel generate hardly any lock-in effect, and the network effects are weaker due to the anonymized nature of the service. But I am sure both companies are working hard on changing that.
  6. Jodel will be bought by some old school company from Europe
    That has happened a couple of times before. It worked for Burda, which acquired Xing and succeeded with defending the German speaking market against LinkedIn. It did not work for Holtzbrinck, which acquired studiVZ and eventually had to witness how all its users moved over to Facebook. But studiVZ was inferior to Facebook. Jodel, in my opinion, actually is better than Yik Yak. At least when it comes to the visual appearance.

Whatever happens: I will be following this story with a lot of interest.

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  1. Yeah I definitely failed at coming up with scenario #7: Yik Yak will fade away and Jodel will have to find a way to survive.

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