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And yet their purchase of WA shows Zuck's ruthlessness and business genius. He saw his team fail to beat WA, he realized they would never beat them, and he made

And yet their purchase of WA shows Zuck's ruthlessness and business genius. He saw his team fail to beat WA, he realized they would never beat them, and he made a decision to buy WA for what was an insane price. 16 billion dollars for a 24(?) person company with no revenue. I think 99% of executives on earth wouldn't have made that decision. They would have believed their teams that said victory was around the corner, or deluded themselves into thinking success was inevitable, or would have been afraid to demoralize their team, or would have rationalized away why messaging wasn't important after all. He just acted and won, for what now seems like a bargain.

edmundsauto 4y ago
WhatsApp had revenue; part of their “what could have been” tragic narrative was they charged $1/yr, iirc.
- justapassenger 4y ago
  Most of users never paid it, and skeleton of the team they had was supported also by contractors, and most importantly, ignoring any abuse. That was ok in those days, but it wasn’t sustainable as they grew. Dealing with abuse, spam, misinformation is very costly, even when you’re e2ee.
  - 0des 4y ago
    what is misinformation?
    - danrocks 4y ago
      It’s when you disagree with me.
      - pocket_cheese 4y ago
        I don't trust big tech to regulate truth, but let's not dismiss misinformation with such broad strokes. There are deliberate attempts by politically and monetarily motivated groups to spread objectively false propaganda. FUD/HODL to mislead investors, conspiracy theories to sway public opinion, pseudoscience to peddle ineffective medical treatments... The people doing this effectively aren't individuals disagreeing with mainstream discourse, they know exactly what they're doing.
    - lern_too_spel 4y ago
      https://en.wikipedia.org/wiki/Indian_WhatsApp_lynchings https://en.wikipedia.org/wiki/Indian_WhatsApp_lynchings
    - jjeaff 4y ago
      According to Wikipedia: "Misinformation is incorrect or misleading information presented as fact. It is differentiated from disinformation, which is deliberately deceptive." https://en.m.wikipedia.org/wiki/Misinformation https://en.m.wikipedia.org/wiki/Misinformation
danrocks 4y ago
Fair point, but he also had the opportunity to buy Twitter for 500m and passed on it.
- nickstinemates 4y ago
  He knew it was all bots then and still is now :)
ksec 4y ago
>I think 99% of executives That is giving too much credit to 1% of executives, I am willing to bet 99.999% wouldn't have made that decision. Although arguably speaking, executives are managerial mindset. Which is very different to entrepreneur.
rr808 4y ago
Is it really a bargain though? What does FB get out of WA?
- throwaway290 4y ago
  Contacts and metadata. Who knows who and how often they talk. Good for building shadow graphs.
- laluser 4y ago
  A chance to monetize billions of users. There’s not much else to it.
apatters 4y ago
It was a smart acquisition for sure, but "ruthless business genius" is a bit of hyperbole imho. FB's market cap was in excess of 200B at the time and they were growing like crazy. 16B on buying what they had failed to build internally and needed as a moat around their core business seems pretty straightforward. Mere mortals like us just get caught up on all the extra zeroes these guys are playing around with.
- el_nahual 4y ago
  Exactly, spending 10% (!) of your business to buy something that adds no revenue, was built by 20 people, where your team is working on an alternative that is "better", "just around the corner", etc is actually insanely counterintuitive. If it were one percent of the business, sure, play defense, whatever--but 10%, over an abstract notion of "defensibility" is a really hard pill to swallow. It would be amazing to know what the FB board thought at the time, and if zuck had to push hard for the transaction or not .
  - jagtesh 4y ago
    Zuck controls the board though! Majority voting rights. Still, have to give it to him. Need guts to make such a call. WA and Instagram, the Crown Jewels of Meta. Then again, nobody wins all the time (cough oculus cough).
    - anoopelias 4y ago
      Maybe we're too early to talk about Oculus, there might be a reason why Facebook then is called Meta now.
    - bredren 4y ago
      I don’t think Facebook’s social graph / ad-based business model can be connected to a successful hw/sw XR experience. However, Oculus is way too early to call as a bad bet. Oculus could be like late model, pre-touchscreen Blackberry. Where it is proving potential and demand for a new type of connectivity, but unable to leap forward far enough and fast enough to counter an entrance from Apple. It could pivot its business model and become the most successful XR platform for Android users, consolidating support from Epic, Snap and others. If Zuck wrote that email in 2013, he knows the headwinds against this direction and I don’t think he’s reached the Bowling Alley scene of There Will Be Blood quite yet.
estreeper 4y ago
In addition to the agreed price of $16B, Facebook added $3.6B to retain employees. WhatsApp had 55 employees at the time [0]. Near the end of the referenced article is an interesting comparison of different prices/employee for other acquisitions. 32 of the employees were engineers [1]. [0] https://theconversation.com/whatsapp-bought-for-19-billion-what-do-its-employees-get-23496 https://theconversation.com/whatsapp-bought-for-19-billion-w... [1] https://india.sequoiacap.com/article/four-numbers-that-explain/ https://india.sequoiacap.com/article/four-numbers-that-expla...
WHA8m 4y ago
> shows Zuck's [...] business genius > I think 99% of executives on earth wouldn't have made that decision. We conclude, 99% of executives are geniuses. I just feel like the term 'genius' gets thrown around inflationary. Being successful != being a genius. There is more to it (it actually isn't even a requirement) . At least I want to believe that.
mandeepj 4y ago
> 16 billion dollars for a 24(?) person company with no revenue. You are minimizing the impact of WA….. by a lot. At that time, almost all the smartphone users in India were using WA. The transaction gave FB all of those ~half billion users in just one shot. It’s notable here that none of the founders of IG and WA are with Meta today - due to ethical differences.

edmundsauto 4y ago

WhatsApp had revenue; part of their “what could have been” tragic narrative was they charged $1/yr, iirc.

justapassenger 4y ago
Most of users never paid it, and skeleton of the team they had was supported also by contractors, and most importantly, ignoring any abuse. That was ok in those days, but it wasn’t sustainable as they grew. Dealing with abuse, spam, misinformation is very costly, even when you’re e2ee.
- 0des 4y ago
  what is misinformation?
  - danrocks 4y ago
    It’s when you disagree with me.
    - pocket_cheese 4y ago
      I don't trust big tech to regulate truth, but let's not dismiss misinformation with such broad strokes. There are deliberate attempts by politically and monetarily motivated groups to spread objectively false propaganda. FUD/HODL to mislead investors, conspiracy theories to sway public opinion, pseudoscience to peddle ineffective medical treatments... The people doing this effectively aren't individuals disagreeing with mainstream discourse, they know exactly what they're doing.
  - lern_too_spel 4y ago
    https://en.wikipedia.org/wiki/Indian_WhatsApp_lynchings https://en.wikipedia.org/wiki/Indian_WhatsApp_lynchings
  - jjeaff 4y ago
    According to Wikipedia: "Misinformation is incorrect or misleading information presented as fact. It is differentiated from disinformation, which is deliberately deceptive." https://en.m.wikipedia.org/wiki/Misinformation https://en.m.wikipedia.org/wiki/Misinformation

danrocks 4y ago

Fair point, but he also had the opportunity to buy Twitter for 500m and passed on it.

nickstinemates 4y ago
He knew it was all bots then and still is now :)

ksec 4y ago

>I think 99% of executives That is giving too much credit to 1% of executives, I am willing to bet 99.999% wouldn't have made that decision. Although arguably speaking, executives are managerial mindset. Which is very different to entrepreneur.

rr808 4y ago

Is it really a bargain though? What does FB get out of WA?

throwaway290 4y ago
Contacts and metadata. Who knows who and how often they talk. Good for building shadow graphs.
laluser 4y ago
A chance to monetize billions of users. There’s not much else to it.

apatters 4y ago

It was a smart acquisition for sure, but "ruthless business genius" is a bit of hyperbole imho. FB's market cap was in excess of 200B at the time and they were growing like crazy. 16B on buying what they had failed to build internally and needed as a moat around their core business seems pretty straightforward. Mere mortals like us just get caught up on all the extra zeroes these guys are playing around with.

el_nahual 4y ago
Exactly, spending 10% (!) of your business to buy something that adds no revenue, was built by 20 people, where your team is working on an alternative that is "better", "just around the corner", etc is actually insanely counterintuitive. If it were one percent of the business, sure, play defense, whatever--but 10%, over an abstract notion of "defensibility" is a really hard pill to swallow. It would be amazing to know what the FB board thought at the time, and if zuck had to push hard for the transaction or not .
- jagtesh 4y ago
  Zuck controls the board though! Majority voting rights. Still, have to give it to him. Need guts to make such a call. WA and Instagram, the Crown Jewels of Meta. Then again, nobody wins all the time (cough oculus cough).
  - anoopelias 4y ago
    Maybe we're too early to talk about Oculus, there might be a reason why Facebook then is called Meta now.
  - bredren 4y ago
    I don’t think Facebook’s social graph / ad-based business model can be connected to a successful hw/sw XR experience. However, Oculus is way too early to call as a bad bet. Oculus could be like late model, pre-touchscreen Blackberry. Where it is proving potential and demand for a new type of connectivity, but unable to leap forward far enough and fast enough to counter an entrance from Apple. It could pivot its business model and become the most successful XR platform for Android users, consolidating support from Epic, Snap and others. If Zuck wrote that email in 2013, he knows the headwinds against this direction and I don’t think he’s reached the Bowling Alley scene of There Will Be Blood quite yet.

estreeper 4y ago

In addition to the agreed price of $16B, Facebook added $3.6B to retain employees. WhatsApp had 55 employees at the time [0]. Near the end of the referenced article is an interesting comparison of different prices/employee for other acquisitions. 32 of the employees were engineers [1]. [0] https://theconversation.com/whatsapp-bought-for-19-billion-what-do-its-employees-get-23496 https://theconversation.com/whatsapp-bought-for-19-billion-w... [1] https://india.sequoiacap.com/article/four-numbers-that-explain/ https://india.sequoiacap.com/article/four-numbers-that-expla...

WHA8m 4y ago

> shows Zuck's [...] business genius > I think 99% of executives on earth wouldn't have made that decision. We conclude, 99% of executives are geniuses. I just feel like the term 'genius' gets thrown around inflationary. Being successful != being a genius. There is more to it (it actually isn't even a requirement) . At least I want to believe that.

mandeepj 4y ago

> 16 billion dollars for a 24(?) person company with no revenue. You are minimizing the impact of WA….. by a lot. At that time, almost all the smartphone users in India were using WA. The transaction gave FB all of those ~half billion users in just one shot. It’s notable here that none of the founders of IG and WA are with Meta today - due to ethical differences.