What’s the lesson a start up can draw from Whatsapp acquisition by Facebook !!!


It was not a very bright idea !! a messaging platform for connected phones to communicate with each other and I still remember when I downloaded this app on my phone some four years back I was a bit skeptical to register as it was asking for my phone number  however I did that and started using it to communicate with friends. I believe Whatsapp gathered momentum after 2011 when more and more phone platforms started using whatsapp and people realised the true value of a cross platform communication application. As stated earlier it was not a very tempting idea to begin with, prior to whatsapp there were and even now there are text (SMS) messages to communicate with others however the biggest pain point was the cost of sending text messages. All the Telcos have made Text messages as a milking cow and one was being charged Re1 here for sending a text message till the emergence of internet based messaging platform. So there definitely was a merit in the idea of building a cross platform messaging application and it fortunately coincided with penetration of smartphones !! Such kind of App couldn’t have proved its metal in absence of affordable smartphones and increasing use of internet on them.

What Lessons I would like to draw as an Entrepreneur from this acquisition ?


1. Notice the change in consumer’s usage patters very early: 

Try to understand whats going to be useful to the consumers ? Founders of Whatsapp realised that messaging cross platform is going to grow big and they can do this using Internet. Mind it they may not be the ones who thought it first but they were definitely ones who implemented it first.

2. When you do something which adds immense value to your users you don’t have to invest an iota in market promotions: 

I have never seen any marketing promotion of whatsapp on any platform. It just went viral and spread like a wild fire. Users who started using it clearly understood the importance of the App and they spread it with their families and friends. Whatsapp grew to its present 450 Million user base with a very little expenditure on customer acquisition.

3. Keep it Simple and working !! 

Whatsapp is a very simple application to use, the moment you install it scans all your address book and then shows you who is already using this app. You don’t have to add your friends and then wait till they accept your request. Whatsapp provided platform to share images, photos and videos again with simplicity of use. There were bombastically costly MMSs introduced by all the Telcos however they were very difficult to use so the simplicity of just attaching an image or a video won over the complexity of Telco’s native MMS service. The most important fact is they kept it working even after such a bombastic growth the service hardly failed to deliver.

Value added features like Groups, location sharing, contact sharing:

Whatsapp brought the idea of ‘Groups’, ‘Broadcast Lists’, and brought yet another innovation in messaging, now friends could create their groups and stay in touch ( I am member of a very active group of my X and XII batch mates) groups gave a simplistic approach to stay connected over e mails and text messages. Other features of being able to share location and contacts also added lots of value. Earlier as well one could send address cards however most of the time there were compatibility issues in phone platforms that was resolved by contact sharing in whatsapp.

Forcing you not to change your online status and last seen timestamp:

Some of their features like getting locked into the App and not been able to log off or the last seen timestamp was a little annoying but it helped whatsapp to build their user stickiness. It meant once you are on whatsapp you are forever on whatsapp. Sometimes you need to betray your users by locking them in in a smarter way  

The first mover advantage: 

As I said earlier Whatsapp may not be first cross messaging platform to do think of doing something like this however they did it at a very early stage. This early mover advantage gave them access to untapped urge of users to communicate with each other. This particular aspect reinforced my belief on starting up early even with no perfect product. You can perfect the product later on but you won’t get the early mover advantage if you waited for the product eco system to get better.

Lack of foresight by the competing services:

I remember BBM was considered as one of the USP of Blackberry and at one time youths in India were hooked up to BBM just because of its instant messaging however Blackberry could never think beyond using their platform only for their users. Though did it after a while to salvage however that time it was tool late and whatsapp literally started ruling the cross platform messaging application marketplace. Even Google came out with its google hangout app for other phone platforms however they still needed a google account to communicate which was again a limiting factor. Facebook started their Facebook Messenger service which is also cross platform however they soon realised its tool late for them to make users change their habits.

I am sure with this acquisition Mark Zukerberg has become a ‘Numero Uno’, player in social network and personal messaging space. It would be interesting to see whether he and if yes how does he integrate both these services and whether he keeps Whatsapp ads free ? However at this point in time its one of the important news for all Techies and one of the major acquisition in the history of start ups. The valuation this deal has got of $ 19 Billion will always keep on motivating investors and start ups to work on innovative ideas which can create value for people.

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