The messaging is all a fuss with the billion dollar deal offered for WhatsApp by facebook. To be precise, $12 billion in stock and $4 billion in cash, and Facebook set aside another $3 billion in restricted stock units to be granted to WhatsApp’s founders and employees that will vest over the next four years. This totals to $19 Billion dollars. It was the largest tech deal since Time Warner ’s $124 billion merger with AOL in 2001. People are still a little skeptic of why pay such a high price but what is clear is that Zuckerberg wanted both WhatsApp’s users and its team on Facebook’s side. And this is because WhatsApp is a step above the rest, as it’s a personal real-time messaging network allowing millions of people around the world to stay connected with their friends and family and as such, a texting replacement. It has grown to be a big success and may even give entrepreneurs some lessons, some totally changing the books of business in the tech industry and in the industry as a whole.
Concentrate on Product development.
Many startups today rely on press releases to get their products out. However by doing this, we bring another problem of inhibiting the growth of the product and developing it more. WhatsApp certainly knew this and used it to its advantage. Instead of focusing on press coverage, it focused on building a great app that got traction by word of mouth. It infact excluded all the press coverage from the acquisition. WhatsApp has just fewer than 200 press mentions and even barely got any coverage until 2011.
Marketing should really not be an issue.
Mobile apps today are spending so much money in marketing as they do believe that to acquire users you must devote a significant chunk of time and money into user acquisition. To them, you need ads and ad campaigns to rise the ranks of the app store. However what WhatsApp demonstrated is that you can actually acquire users, and keep them engaged, with a marketing budget of $0. By creating an app that simply solves a problem facing millions of users internationally, the founders were able to create traction organically.
You never need a big team.
At the time of the WhatsApp’s acquisition, the company only had 55 employees, 32 of whom are engineers. But this is considerably a very small tea, considering the magnitude of whatsapp. This is obviously a tiny team, but operating lean has allowed them to focus on creating a reliable, low-latency service that processes 50 billion messages every day across 7 platforms. Instead of dedicating time and resources to constantly hiring and onboarding, the team focused on building a great product; a strategy that obviously paid off.
Face and accept rejection.
WhatsApp has been the costliest mistake that Facebook ever made, but it ended up turning WhatsApp cofounder Brian Action into a billionaire. In August 2009, he applied for a job with Facebook but was rejected. As he tweeted back then, “It was a great opportunity to connect with some fantastic people. Looking forward to life’s next adventure.” As an entrepreneur, instead of throwing in the towel and giving up on his dreams of working on a product that would change people’s lives, Action partnered with co-founder Jan Koum to build WhatsApp and spent the next four years developing the app. The strategy is to remain focused on your goals and dreams, even in the face of setbacks and rejection.