WhatsApp has succeeded because it is focused on creating a great product, not another social network. What will make your business unique is what you deliberately choose not to do.
After almost two years of chit-chat, WhatsApp sold to Facebook for $19 billion yesterday. For a moment, let’s ignore whatever we think about the valuation, and whether in the larger economic picture this is something to be concerned about.
Here I won’t get into the whole strategic thinking behind why this deal makes or doesn’t make sense. What I will do is talk about the picture below:
Soon after the deal was announced, Sequoia Capital partner Jim Goetz published a post explaining how a singular focus on building the best possible product helped a company with only 32 engineers build a network that reaches 450 million users.
Goetz shared the above note from co-founder Brian Acton to CEO Jan Koum, which perfectly illustrates what makes WhatsApp unique. Koum keeps it taped on his desk and serves as a daily reminder of their commitment to stay focused on building a pure messaging experience.
The essence of strategy is choosing what not to do
Personally, I don’t use WhatsApp that much, but one thing that I did like about it is that it doesn’t monetize with ads. It’s an intriguing proposition because it is the only social network with scale that I know of that doesn’t use ads. Did they deliberately choose not to use ads?
In a 2012 blog post, CEO Koum writes the reasoning behind not showing ads in WhatsApp:
At every company that sells ads, a significant portion of their engineering team spends their day tuning data mining, writing better code to collect all your personal data, upgrading the servers that hold all the data and making sure it’s all being logged and collated and sliced and packaged and shipped out… And at the end of the day the result of it all is a slightly different advertising banner in your browser or on your mobile screen.
When we sat down to start our own thing together three years ago we wanted to make something that wasn’t just another ad clearinghouse. We wanted to spend our time building a service people wanted to use because it worked and saved them money and made their lives better in a small way. We knew that we could charge people directly if we could do all those things. We knew we could do what most people aim to do every day: avoid ads.
No one wakes up excited to see more advertising, no one goes to sleep thinking about the ads they’ll see tomorrow. We know people go to sleep excited about who they chatted with that day (and disappointed about who they didn’t). We want WhatsApp to be the product that keeps you awake… and that you reach for in the morning. No one jumps up from a nap and runs to see an advertisement.
At WhatsApp, our engineers spend all their time fixing bugs, adding new features and ironing out all the little intricacies in our task of bringing rich, affordable, reliable messaging to every phone in the world. That’s our product and that’s our passion. Your data isn’t even in the picture. We are simply not interested in any of it.
When people ask us why we charge for WhatsApp, we say “Have you considered the alternative?”
Any conversation about monetization I have with other entrepreneurs almost always ends up in ads. They can’t imagine not having them. The pull of the herd is so strong that figuring out ways to not have them is completely ignored.
So for them, choosing not to have ads is a radical idea.
A radical idea is simply choosing to focus on one thing and making it matter. And context matters. This is what Google Chrome did, they chose to focus on speed when every other browser was focused on extending the browsers functionality with plugins, the effect was it made the browsing experience slower.
Simplicity and a focus on speed is how Google Chrome pulled ahead, and hasn’t looked back since!
A few weeks ago a published a series of posts on how to leave me-too thinking behind, and on the first one I published a few tips on how to go from me-too ideas to radical ideas. The important thing, just like the co-founders of WhatsApp did, is to develop your own point of view of things should be, not how they are.
Bottom line: Featuritis and simplistic thinking are contagious, and they usually lead to me-too ideas. Thinking about what not to do, on the other hand, is strategic thinking of the highest order. Ask yourself: what can we be the most at?
- In one acquisition, Facebook beat out Google to become Silicon Valley’s top dealmaker (qz.com)
- The Inside Story On How Jan Koum Built WhatsApp Into Facebook’s New $19 Billion Baby (forbes.com)
- Sequoia Capital Takes Victory Lap After Facebook’s $19 Billion WhatsApp Deal (blogs.wsj.com)
- WhatsApp: The inside story (wired.co.uk)
- WhatsApp: Sequoia’s Second Big Facebook App Deal (recode.net)
- There’s Only One Lucky Investor Who Got A Piece Of $16 Billion WhatsApp (businessinsider.com)
- Who is WhatsApp co-founder and CEO Jan Koum? (news.cnet.com)
- In One Chart, Here’s The Key Reason Facebook Is Blowing $19 Billion On WhatsApp (forbes.com)
- Zuckerberg: ‘It’s The Only App We’ve Ever Seen With Higher Engagement Than Facebook Itself’ (FB) (embargozone.com)
- By the Numbers: Facebook Buys WhatsApp for $19 Billion (blogs.wsj.com)