5 ms·

It's super easy to focus on a single metric (user growth) when you have a seemingly unlimited amount of capital and have no immediate pressure to turn _any_ rev

by mbesto 9y ago

It's super easy to focus on a single metric (user growth) when you have a seemingly unlimited amount of capital and have no immediate pressure to turn _any_ revenue/profit. This article does a massive disservice to those who are not as fortunate who will inevitably be lead into failure. Note, this should not discredit the more interesting and glorified aspects of WhatsApp (strong leadership, technical aptitude, tech stack, etc).

CyberDildonics 9y ago
> seemingly unlimited amount of capital Did they burn through lots of money? > no immediate pressure to turn _any_ revenue/profit Didn't some people pay for it?
- numbsafari 9y ago
  They lost something close to $138MM the year before Facebook purchased them. https://mobile.nytimes.com/blogs/dealbook/2014/10/28/facebooks-21-8-billion-acquisition-lost-138-million-last-year/ https://mobile.nytimes.com/blogs/dealbook/2014/10/28/faceboo...
  - senatorobama 9y ago
    I'm a philistine, can someone explain how they paid their engineers when they lost SO much money?
    - deleted 9y ago
      [deleted]
    - tw04 9y ago
      They didn't lose SO MUCH MONEY, that's the thing. The article link points that out. They "lost" money on paper by handing out stock/equity to attract talent. Their actual financials, while underwhelming, looked solid.
    - 1024core 9y ago
      WhatsApp was a very lean shop (and, btw, mostly (all?) FreeBSD). At acquisition, IIRC, they had about 40 employees total (or maybe it was 40 engineers).
      - deleted 9y ago
        [deleted]
    - gordon_freeman 9y ago
      I think if I remember correctly one of their main cost was paying a service like twilio (or something like that) to verify phone numbers of users when they registered to use whatsapp. Anybody has an idea if they are still outsourcing that verification part to a third party or doing in-house at Facebook?
- tw04 9y ago
  They didn't burn through lots of money at all based on facebook financials. And they charge $1/month for the app (although I don't think on all platforms). I don't recall if it was + or -, but their "profitability" was less than $10 million in either direction so they weren't making or losing a ton.
  - aetherson 9y ago
    I've used WhatsApp for years and have never been charged a dime.
    - Xunxi 9y ago
      it doesn't rule out the fact that there was an annual subscription fee at some point in time. https://blog.whatsapp.com/615/Making-WhatsApp-free-and-more-useful https://blog.whatsapp.com/615/Making-WhatsApp-free-and-more-...
    - wpietri 9y ago
      It varied by country. Some places it was $1 for the app. Other places, $1/year. Other places, free entirely. My guess is their goal was to make enough money to keep in the black, but to otherwise not worry too much about revenue. That let them maximize growth while avoiding the headaches and dilution of raising money.
    - tw04 9y ago
      I'm not sure what to tell you, I'm not fabricating the fact there was very much a yearly subscription fee associated with the app (and prior to that a price to just download the app). I'm aware it didn't apply universally which is why I specifically said it varied depending on platform. https://www.imore.com/whatsapp-moves-yearly-subscription-payment-app-now-free-download https://www.imore.com/whatsapp-moves-yearly-subscription-pay...
      - aetherson 9y ago
        Well, you claimed in the post I responded to a monthly subscription, not an annual one. What's a factor of twelve between friends? My understanding is that the annual fee was essentially nonexistent, honored far more on the breach than in the observance, though all I know for sure is that they never charged me.
- hobarrera 9y ago
  There's not option to pay for anything, so I couldn't pay even if I wanted to. IIRC, the registration screen even said it's be free forever. Given that they have extremely little metadata too, I actually wonder if they have any revenue stream.
deleted 9y ago
[deleted]
maqbool 9y ago
tech stack : Erlang
- rdtsc 9y ago
  Here is the description of their stack and how Erlang helped them by Rick Reed at Erlang Factory: https://www.youtube.com/watch?v=c12cYAUTXXs https://www.youtube.com/watch?v=c12cYAUTXXs Here is Jamshid Mahdavi talking about their stack as well but focusing on development, testing and shipping code. Some of the stuff they do will surprise you if you've been at a shop with a large QA team and deployment pipelines with many stages. https://www.youtube.com/watch?v=tW49z8HqsNw https://www.youtube.com/watch?v=tW49z8HqsNw
- zerr 9y ago
  Modified Erlang, as described in one of their talks.
zeroxfe 9y ago
> It's super easy to focus on a single metric (user growth) when you have a seemingly unlimited amount of capital Where are you getting this from? Whatsapp was a very lean shop _because_ they had very little capital to work with. Even after Sequoia came along, they sailed a tight ship.
wpietri 9y ago
Did you read the article? They're explicitly not focusing on user growth: "But while Facebook has long prided itself on the way its growth team has turned attracting new members into a science, Koum is equally proud of the fact that WhatsApp has not done so. Instead, all of its attention has gone into making the app as simple as possible to get started with—it doesn’t even require you to create a user name or password—and so useful that you’ll tell friends and family about it." And that's consistent with what I've read of their pre-FB approach. During that period, they definitely didn't have an unlimited amount of capital. They got to 250m users (as of June 2013) [1] on only $8.3 million [2]. So no, I don't think this does a disservice. Especially when you compare it with things like Juicero, which rode a wave of hype into a $120m failure (14.5x what WhatsApp spent). Hype can get you money, but unless you focus intensely on user experience and user value you won't build the audience you need to succeed. [1] https://www.statista.com/chart/2614/monthly-active-whatsapp-users-worldwide/ https://www.statista.com/chart/2614/monthly-active-whatsapp-... [2] https://www.crunchbase.com/organization/whatsapp/funding-rounds https://www.crunchbase.com/organization/whatsapp/funding-rou...
- dingaling 9y ago
  You are quite correct, and indeed they surrendered a considerable number of potential users by refusing to make their app easily usable on a tablet or other SIM-less device. Which is a very interesting and rare example of prioritising one aspect of UX by completely sacrificing another.
- mbesto 9y ago
  > Did you read the article? I did. > as simple as possible to get started with How is that not applying a focus on "user growth"? Just because you're not "growth hacking" or "using a a growth team" doesn't mean you are not implementing a strategy of growth of a user base. Adding a paywall or an advertisement would actively thwart the "simplicity of getting started", and thus halt user growth. My point still stands - most businesses who didn't have the type of capital backing that WhatsApp has would be insolvent or have to actively cause friction in their sign-up process to remain solvent (and hence halt user growth). > Especially when you compare it with things like Juicero, which rode a wave of hype into a $120m failure No one was comparing it to Juicero...I have no idea how that's in any way relevant...

by mbesto 9y ago

CyberDildonics 9y ago

> seemingly unlimited amount of capital Did they burn through lots of money? > no immediate pressure to turn _any_ revenue/profit Didn't some people pay for it?

numbsafari 9y ago
They lost something close to $138MM the year before Facebook purchased them. https://mobile.nytimes.com/blogs/dealbook/2014/10/28/facebooks-21-8-billion-acquisition-lost-138-million-last-year/ https://mobile.nytimes.com/blogs/dealbook/2014/10/28/faceboo...
- senatorobama 9y ago
  I'm a philistine, can someone explain how they paid their engineers when they lost SO much money?
  - deleted 9y ago
    [deleted]
  - tw04 9y ago
    They didn't lose SO MUCH MONEY, that's the thing. The article link points that out. They "lost" money on paper by handing out stock/equity to attract talent. Their actual financials, while underwhelming, looked solid.
  - 1024core 9y ago
    WhatsApp was a very lean shop (and, btw, mostly (all?) FreeBSD). At acquisition, IIRC, they had about 40 employees total (or maybe it was 40 engineers).
    - deleted 9y ago
      [deleted]
  - gordon_freeman 9y ago
    I think if I remember correctly one of their main cost was paying a service like twilio (or something like that) to verify phone numbers of users when they registered to use whatsapp. Anybody has an idea if they are still outsourcing that verification part to a third party or doing in-house at Facebook?
tw04 9y ago
They didn't burn through lots of money at all based on facebook financials. And they charge $1/month for the app (although I don't think on all platforms). I don't recall if it was + or -, but their "profitability" was less than $10 million in either direction so they weren't making or losing a ton.
- aetherson 9y ago
  I've used WhatsApp for years and have never been charged a dime.
  - Xunxi 9y ago
    it doesn't rule out the fact that there was an annual subscription fee at some point in time. https://blog.whatsapp.com/615/Making-WhatsApp-free-and-more-useful https://blog.whatsapp.com/615/Making-WhatsApp-free-and-more-...
  - wpietri 9y ago
    It varied by country. Some places it was $1 for the app. Other places, $1/year. Other places, free entirely. My guess is their goal was to make enough money to keep in the black, but to otherwise not worry too much about revenue. That let them maximize growth while avoiding the headaches and dilution of raising money.
  - tw04 9y ago
    I'm not sure what to tell you, I'm not fabricating the fact there was very much a yearly subscription fee associated with the app (and prior to that a price to just download the app). I'm aware it didn't apply universally which is why I specifically said it varied depending on platform. https://www.imore.com/whatsapp-moves-yearly-subscription-payment-app-now-free-download https://www.imore.com/whatsapp-moves-yearly-subscription-pay...
    - aetherson 9y ago
      Well, you claimed in the post I responded to a monthly subscription, not an annual one. What's a factor of twelve between friends? My understanding is that the annual fee was essentially nonexistent, honored far more on the breach than in the observance, though all I know for sure is that they never charged me.
hobarrera 9y ago
There's not option to pay for anything, so I couldn't pay even if I wanted to. IIRC, the registration screen even said it's be free forever. Given that they have extremely little metadata too, I actually wonder if they have any revenue stream.

deleted 9y ago

[deleted]

maqbool 9y ago

tech stack : Erlang

rdtsc 9y ago
Here is the description of their stack and how Erlang helped them by Rick Reed at Erlang Factory: https://www.youtube.com/watch?v=c12cYAUTXXs https://www.youtube.com/watch?v=c12cYAUTXXs Here is Jamshid Mahdavi talking about their stack as well but focusing on development, testing and shipping code. Some of the stuff they do will surprise you if you've been at a shop with a large QA team and deployment pipelines with many stages. https://www.youtube.com/watch?v=tW49z8HqsNw https://www.youtube.com/watch?v=tW49z8HqsNw
zerr 9y ago
Modified Erlang, as described in one of their talks.

zeroxfe 9y ago

> It's super easy to focus on a single metric (user growth) when you have a seemingly unlimited amount of capital Where are you getting this from? Whatsapp was a very lean shop _because_ they had very little capital to work with. Even after Sequoia came along, they sailed a tight ship.

wpietri 9y ago

Did you read the article? They're explicitly not focusing on user growth: "But while Facebook has long prided itself on the way its growth team has turned attracting new members into a science, Koum is equally proud of the fact that WhatsApp has not done so. Instead, all of its attention has gone into making the app as simple as possible to get started with—it doesn’t even require you to create a user name or password—and so useful that you’ll tell friends and family about it." And that's consistent with what I've read of their pre-FB approach. During that period, they definitely didn't have an unlimited amount of capital. They got to 250m users (as of June 2013) [1] on only $8.3 million [2]. So no, I don't think this does a disservice. Especially when you compare it with things like Juicero, which rode a wave of hype into a $120m failure (14.5x what WhatsApp spent). Hype can get you money, but unless you focus intensely on user experience and user value you won't build the audience you need to succeed. [1] https://www.statista.com/chart/2614/monthly-active-whatsapp-users-worldwide/ https://www.statista.com/chart/2614/monthly-active-whatsapp-... [2] https://www.crunchbase.com/organization/whatsapp/funding-rounds https://www.crunchbase.com/organization/whatsapp/funding-rou...

dingaling 9y ago
You are quite correct, and indeed they surrendered a considerable number of potential users by refusing to make their app easily usable on a tablet or other SIM-less device. Which is a very interesting and rare example of prioritising one aspect of UX by completely sacrificing another.
mbesto 9y ago
> Did you read the article? I did. > as simple as possible to get started with How is that not applying a focus on "user growth"? Just because you're not "growth hacking" or "using a a growth team" doesn't mean you are not implementing a strategy of growth of a user base. Adding a paywall or an advertisement would actively thwart the "simplicity of getting started", and thus halt user growth. My point still stands - most businesses who didn't have the type of capital backing that WhatsApp has would be insolvent or have to actively cause friction in their sign-up process to remain solvent (and hence halt user growth). > Especially when you compare it with things like Juicero, which rode a wave of hype into a $120m failure No one was comparing it to Juicero...I have no idea how that's in any way relevant...