
YesGraph (YC W15) Raises $1M to Build a Better Referral System for Mobile Apps - ivankirigin
http://techcrunch.com/2015/02/27/yc-backed-yesgraph-raises-a-million-to-build-a-better-referral-system-for-mobile-apps/
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Animats
_These invite systems are often fairly basic – they connect to a phone’s
address book and then force the user to sift through their hundreds of
contacts for those they think would be interested in joining the new app, too.
A Y Combinator-backed startup called YesGraph wants to make these invite and
referral systems more intelligent, with a tool for developers that puts the
best contacts – meaning those who are most likely to accept an invite – at the
top of the list provided to users._

So they want to mine your contacts list, identify likely suckers, and spam
them.

This is why most apps shouldn't have access to your contacts list.

~~~
ivankirigin
Actually what most apps do without YesGraph is try to get users to send-all to
every contact. Ugh. We want to fight that.

No one wants spam. It is a bad experience and has horrible conversion rates.
No one wins. I literally pushed for removing send-all while running growth at
Dropbox. We saw an 80% decrease in emails sent and only a 3% decrease in
signups.

We want to make apps smarter using the data users have already shared with
them. It's a better user experience that drives deeper engagement. Everyone
wins.

~~~
colinplamondon
Love it. Early stage, hard to justify optimizing send-all into 'suggest 5
people to invite'.

Total no-brainer to use a drop-in like this. Make onboarding a way better
experience, captures exactly the same, if not more, value on referrals.

~~~
ivankirigin
Check out this post on viral metrics:
[http://blog.yesgraph.com/top-3-metrics/](http://blog.yesgraph.com/top-3-metrics/)

In short, look at # sending, # invites, and % accept. We know we can do a lot
better than the status quo.

Invite all: very small # sending, large # invites, very small % accept. By the
way, getting marked as spam hurts all your invites, lowering your overall
acceptance rates even for direct invites that weren't spamming the whole list.

YesGraph: larger # sending, more # invites, larger % accept.

This by the way is how to tell the difference between buzzword bullshit
"viral" and real products: Math.

~~~
Zephyr314
I love that last line.

I can understand how YesGraph gets a larger % accept, and probably larger #
sending because you are so much better than the terrible "solutions" built
into most apps, but I don't see how larger # invites directly follow from what
you have. Isn't the point fewer, better invites?

~~~
ivankirigin
When comparing to reply all it will be fewer. Most people sending invites send
one or two. Making that two or three, on average, is huge.

It's hard to generalize about performance like this because apps are so
different. Even within Dropbox for example, there are multiple invite
channels, and their performance stats aren't similar.

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ivankirigin
I help make YesGraph.

This is actually my second time through YC. I was in W08 with Tipjoy. AMA

~~~
jeffwass
Firstly - congratulations on your company's success and fundraising round.

As for the AMA, I'm curious of the differences you see in YC between now and 7
years ago.

There are some obvious ones, like larger class sizes, more partners, different
funding amounts.

But YC is way more popular now, some of its earlier companies have had
tremendous success, and I'm sure YC partners have learned a lot in 7 years of
what works well and what doesn't. So I'm quite interested in how their
strategy has changed in 7 years from the point of view of a startup founder.
Eg, is there a different relative focus on building customer base vs product
development, or a different view on accepting VC funding, etc? Are the office
hours more intense, and does YC expect more progress faster throughout the
program?

Cheers and thanks for offering the AMA!

~~~
ivankirigin
The other day they had a YC Alumni party and Jessica Livingston, my wife
(+Tipjoy Cofounder), and I were chatting. The general sentiment is "OMG 7
Years!"

Yes, the obvious things are obvious: much bigger and more advanced. The
reputation has improved. The process is more solidified.

Much of the advice is part of my DNA now when it comes to how to build
companies. So when I hear it, the ideas are reinforcing rather than new. I can
easily predict how a VC might answer a question, for example, about their
process, what they look for, etc.

So the big difference is what I'm looking for out of YC. I want more anecdotes
and operational details to enrich my understanding of how to build a great
company.

Beyond that, one difference is how they need to treat the batchmates. They
have warnings about what not to do that sound like they are talking to
children. I think "why would anyone do that?!" when hearing the warning of
what not to do. It turns out that at scale you see a lot, so they warn against
things they've seen. Surprising, but true.

Another difference is that a lot of the speakers are YC alumni. I think they
can commiserate and tell more interesting stories than people that have been
very established and rich for a very long time.

Another difference, related to size, is that I don't know everyone. This is a
pretty big difference but I end up talking to a few people repeatedly, making
a closer connection.

I could go on, but I think this should probably be a blog post :)

~~~
jeffwass
Interesting, thanks for that!

I for one would be interested in reading a more detailed blog post if you are
able to get to it.

Cheers!

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mallyvai
Why did you guys pivot away from employee referral amplification? The original
idea seemed incredibly powerful - we all know hiring is broken, and amplifying
the referral graph seemed like a great way to add a lot of value to growing
orgs.

~~~
ivankirigin
There are a few reasons.

#1 This new idea is better. It's a bigger opportunity with larger barriers to
entry that we're especially well positioned to take advantage of.

#2 Deployment of the recruiting app was challenging. The old app worked like
this: you connect to Facebook, LinkedIn, and email, and we parse and rank your
contacts to find matches for a job rec. But that means employees go through
multiple auth flows -- and recruiting teams need to push their team to do it.
Recruiters are pitched new products weekly, and have a barrier to getting
their team involved. As a result, most recruiting teams are incredibly
inefficient and make poor use of technology. It is hard to change that.

#3 We saw better traction with pilot customers for the new idea. That is how I
decided to change directions: sell the idea before making the product. I
highly recommend people focus on customer development when thinking about a
new product -- rather than just on what is technically possible.

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gustaf
Congrats on the launch and the financing! New products is awesome!

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tonydiv
Good luck Ivan!

As for others, I built this concept in 2011, unfortunately Facebook shut us
down after we hit about 1.5 million queries per month. Never got access to
LinkedIn.

~~~
ivankirigin
Facebook is certainly concerned about passing around user tokens, so we won't
do that.

Facebook doesn't control the email or phone number graphs though. And users
don't connect directly to Facebook via a YesGraph Facebook app, so there is
nothing to shut down.

There is more to say about platform risk here. I've built apps on every major
platform. Email me: ivan@yesgraph.com

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eldavido
Interesting optics. I first see $1m as a "small raise" but maybe you're just
running really lean and don't need as much money?

Good luck

~~~
ivankirigin
LOL at $1M being small. Imagine explaining that to your grandparents.

But you're right! This is just a seed. Demo day is coming up, so we're
thinking about the strategy there with a larger seed. I guess I'm not allowed
to say I'll be fundraising because of SEC rules? [edit: for those confused,
there is a rule that you can't fundraise in public. I think that means I can't
say "we're fundraising" but I'm not sure about future tense. IANAL]

We have a team of 4 and I'd like that to be 6 or 7 soon. Payroll makes up most
of our costs.

