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Business Rx: YaSabe

The entrepreneurs

U.S. Hispanics spent more than $1 trillion last year, according to the Pew Hispanic Center. And the U.S. Census Bureau revealed that Latinos are the fastest-growing segment of the population and of the middle class, representing a potent market of customers, clients and patients for retailers, doctors, dentists and other local service providers in communities around the country. It’s a market opportunity that serial entrepreneurs Zubair Talib and Azim Tejani couldn’t ignore.

While working in Latin America with the local search engine PaginasAmarillas.com (“yellow pages”), they saw thousands of U.S.-based consumers coming to the Web site to search for local information — in the United States.

The duo set out to launch YaSabe, their fourth company together, after having helped build and sell other successful local search ventures in the Netherlands and Canada. Based in Herndon, YaSabe is a niche local search venture aimed at the 52 million Hispanics living in the United States.

The pitch

Tejani, executive vice president

“YaSabe, which translated from Spanish, means ‘now you know,’ is an online and mobile search engine focused on helping Latinos in the U.S. find businesses and other information in their local communities. Users either come directly to YaSabe.com or they come via search engine when they search in Spanish or when they search for products and services that are culturally Hispanic. Approximately 40 percent of traffic is from mobile devices.

“YaSabe helps to capture word-of-mouth by encouraging social sharing and engagement, allowing users to post comments, ‘like’ a business or ask questions of others in their community. The company has developed strong relationships with established players in the Hispanic media and local advertising markets.

“We’ve been happy to see our usage grow steadily, nearly doubling every quarter, reaching 2 million queries in September. We are selling search-related advertising directly to local businesses and also leverage the sales organizations of existing media companies that already have feet-on-the-street in order to get to market faster.

“Because of the nature of our searches — people who are seeking a product or local service provider, trying to decide where to spend their money — we focused on monetizing that traffic early, even though it might have been more fashionable to build our user base. But there are risks and rewards associated with each strategic path forward. What is your perspective on the debate between monetization vs. usage?”

The advice

Elana Fine, managing director of the Dingman Center for Entrepreneurship

“Stick with the success you’ve had already in getting users to the site and providing a unique user experience for the Latino demographic. That’s Ya­Sabe’s core competency. Let a partner organization that might be better at finding advertisers be the one to have the feet on street to broker those deals.

“That said, don’t fall into the trap of only focusing on building users without thinking about monetization. You need to clearly define your monetization strategy. The strategy of building users and letting the dollars follow is not as viable as it used to be. As we’ve seen with other organizations, building a huge sales organization for hyper-local sites is very expensive. A higher return on investment for you would be to invest in growing users and then use your partner channels to grow advertisers.

“I’d also suggest you think about ways to diversify your revenue streams beyond advertising. There is over penetration of that model. Think about additional opportunities you can offer on your site — perhaps, a premium user experience or enhanced membership experience. You could explore offering premium benefits to advertisers. Given your position in this niche market, you could use the data you have on users as a potential opportunity for monetization.”

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