Meerkat Madness

The latest obsession in Silicon Valley is an app called Meerkat. For those of you who haven’t been reading tech news or following Twitter feed, Meerkat is an app that makes it really easy to stream live video from your phone to your Twitter followers. Although the app was released just 10 days ago, I haven’t seen such a meteoric growth for a while.

The video streaming idea behind Meerkat is not new and has been tried several times before. In a perfect cosmic irony, only a few weeks ago Twitter completed the acquisition of BVP’s portfolio company, Periscope, which does exactly the same thing as Meerkat. What is truly amazing about Meerkat though is that it was built as a side project by an Israeli startup called Yevvo in eight weeks. The Yevvo team has spent the past two years building a video sharing app which never took off, yet the Meerkat side project hit the jackpot from day one of release.

The game is far from over, and I wouldn’t rush to announce Meerkat as the next Instagram or Snapchat. For starter, Meerkat is completely dependent on Twitter, and Twitter has already stopped playing nice by cutting Meerkat’s access to Twitter’s social graph. Furthermore, there is no doubt Twitter will quickly integrate Periscope into their platform to try to prevent users from switching to Meerkat. Meerkat, on the other hand, needs to move fast to reduce its dependency on Twitter, build its own user base, and potentially support other social platforms (Facebook, Snapchat?).

There are however a few things that we can already learn from the Meerkat phenomenon:

First of all, this is another example that communication apps are probably the most interesting category of all. Whatsapp, Snapchat, Line and Instagram grew extremely fast to reach hundreds of millions of users and billions of dollars in valuations. And the game is far from over. There are still many opportunities for over-the-top (OTT) communications apps to change the way we interact with each other. Just think how much the world has changed in the past few years when the main communication method was via a regular a phone call.

Second, is that startups are moving at a faster pace than ever. While it took Facebook nearly 4 years from launch to reach 100M+ users, WhatsApp has reached 400M users in the same timeframe. It took Snapchat only two years to build an incredibly devoted user base which shares 700M photos daily (twice as much as Facebook)! The same phenomenon is happening in the enterprise world, where Slack which launched only a year ago is already the fastest growing business app in history. For investors, this means we need to keep our eyes open and be ready to move faster than ever.

But perhaps the most interesting point for me is that we are seeing increasing signs of success for Israeli startups in the consumer space. Up until recently Israel was thought of as a great place for strong technology B2B startups in spaces such as cyber-security, semiconductors, storage infrastructure etc. The new wave of Israeli consumer startups like Waze, Wix, Viber, Fiverr, Rounds, Moovit and now Meerkat shows that there is no reason why Israel can’t compete head to head with the Valley in this space. Furthermore, unlike B2B startups which are difficult to scale when you are far away from the customer, the consumer space is a level playing field. I see no reason why Israel wouldn’t produce a few unicorns ($1 Billion exits) in the consumer space.

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