TECHNOLOGY

How an App You’ve Probably Never Heard of Helped Save Houston–and Could Help Florida Next

Austin-based Zello might be the most important social network you’ve never heard of. And one of the most controversial.

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BY Tom Foster - 09 Sep 2017

PHOTO CREDIT: Getty Images

As Hurricane Harvey's unprecedented rainfall pummeled Houston and people whose homes had never flooded watched the water rise to their countertops and beyond, the number who needed rescuing far exceeded the number of official first responders. Cue the civilian heroes who climbed in their flats-fishing boats and jacked-up pickups and swarmed out over the city's suddenly Venice-like web of waterways, to move countless trapped families and pets to higher ground.

On TV, it looked as if the rescuers were simply roaming the city looking for people in distress, but in fact their efforts were highly coordinated, thanks in large part to a tiny, 6-year-old social-media company named Zello, which is based a couple hours away in Austin. Zello's app turns anyone's smartphone into a CB radio. Users can set up channels, as on Slack, and listen to real-time chatter.

In the case of Harvey, a group of civilian rescuers who drove to Houston from Louisiana (the so-called Cajun Navy) started using Zello, and it fanned out from there. While the Cajun Navy patrolled the streets, several Zello users slid into the role of dispatchers, who matched distress calls with rescuers. As the system began to work, word spread around the city and more and more rescuers and flood victims joined.

CEO of Zello Bill Moore.

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A week after Harvey, I met with the CEO of Zello, 55-year-old Bill Moore, in the company's headquarters, a small craftsman bungalow on the outskirts of downtown Austin. The day we met, Hurricane Irma was barreling toward Florida, and Zello was the number one app in the iOS app store, with most of the new downloads coming from that state. Moore's team was struggling to keep up with the demand---more than 7,000 new users per minute, Moore says--but he didn't seem all that surprised at the sudden surge of interest.

Zello, in fact, has gone viral during critical world events before, beginning with protests in Egypt and Turkey. In early 2014, Zello became the go-to app in both Ukraine and Venezuela, as protestors marched against their governments. "The government of Venezuela shut us off, and we were able to work with the Venezuelan tech community to get it back up," Moore says. "And we've battled with the government of Russia for months now, who have tried to block us."

A different kind of social app

The appeal of Zello in a crisis is twofold. One, communicating by voice creates a sense of immediacy and allows users to convey nuanced information in a way that's different from texting. "It's terrible for delivering a complicated URL or lots of different kinds of facts, but it's ideal for solving problems, especially for coordinating groups of people," Moore says. "Now we're getting to see that with rescue efforts just as with protests."

And two, unlike most other social apps, Zello does not require confirmation of a phone number or email address, so people can remain anonymous. That, of course, is also an open door to bad guys--like, say, ISIS, or drug cartels. Moore says he prefers to take a "libertarian" view when it comes to policing his users, but acknowledges the moral quandary that presents. While the company cooperates with any legal requirements to help U.S. law enforcement, it's not hard to imagine Zello getting into scrapes with the feds, if Apple's battle with the FBI last year over whether to open a back door into its phone software is any indication.

Despite all the high-profile episodes, Zello has remained a small business. It has about 20 employees, and will bring in less than $10 million in revenue this year, Moore says. He adds that it has been profitable for the past two years.

The revenue all comes from an enterprise version of the app that allows businesses to use it as a central dispatch system, for a fee of $6 per user per month. Moore cites trucking companies, hotels and resorts, retailers, and event organizers as the biggest customers. The free consumer app, which has some 100 million registered users, Moore says, is so far completely untapped as a business--there are no ads, no fees, and the company doesn't sell user data.

Zello has bootstrapped its growth over the past six years, and at several points has rebuffed venture-capital investors who've come calling, because it had the revenue to keep growing on its own, albeit slowly.

Should Zello ever pursue venture capital, Moore says, he'd be armed with "a pair of aces." The ZelloWork app is a safe business with recurring revenue--the kind of thing that's attractive to certain investors--and the consumer app is a blank canvas for the kind of venture capitalists who would push Moore to go huge or die trying.

A chart-topping, profitable social network with a global audience and a lot of untapped potential? It's a good bet Silicon Valley will come knocking in the wake of hurricane season. Either way, expect to be hearing more about Zello in the coming weeks and months.