5 ms·

People try to find flaws or special circumstances when the order of magnitude itself is just mindbogling. Seven orders!! 1000000000/100 = 10^7 This is a featu

People try to find flaws or special circumstances when the order of magnitude itself is just mindbogling. Seven orders!! 1000000000/100 = 10^7 This is a feature of software as an economic good which, particularly when further leveraged in open source ecosystems, makes it fundamentally different that any other example. Imagine 50 "bricks and mortar" engineers trying to provide anything to 900M users.

senttoschool 4y ago
But they lost $140m in 2014 and made only $10m in revenue. They would have had to shut down their service if they didn't find product market fit or if Meta/someone else didn't buy them. When you need to start making money, you suddenly need to a lot more engineers. Now you need developers to make sales tools, compliance, moderation, finance, A/B test engineers for growth ideas, niche features for big customers, engineers to bring down cloud costs, etc. It doesn't make their engineering less impressive but I think we need to understand the full picture. At the end of the day, WhatsApp needed to make money to keep their service going.
- peoplefromibiza 4y ago
  > But they lost $140m in 2014 and made only $10m in revenue you posted the same comment two times already. same response https://news.ycombinator.com/item?id=34566572 https://news.ycombinator.com/item?id=34566572
  - senttoschool 4y ago
    So it was still a $26.5m net loss for 6 months? Or $53m net loss for 12 months?
    - B8MGHCBekDuRi 4y ago
      For the year ending December 31, 2013, WhatsApp had $10.2 million in revenue and a net loss of $138.146 million. Net cash used in operating during this period was only $9.9 million, while share-based compensation amounted to $98.8 million They only spent $9.9 million over $10.2 million in revenues for operations. WhatsApp’s goal is still growth, rather than monetization. Mark Zuckerberg and WhatsApp CEO Jan Koum said when the acquisition was made in February that ads aren’t the right way to earn money on messaging They were investing on growth, an investment that lead to a $16 billion acquisition from Facebook. I would love to replicate their same "unsustainable business"
    - erichocean 4y ago
      They took in more cash than they spent, the opposite of what you are implying. Are you really that upset about GAAP accounting and how non-cash, stock-based compensation can lead to paper "losses"?
      - senttoschool 4y ago
        No, I'm not upset. I was just operating with different information. My point remains. They created impressive technology. But 900m users and 50 engineers needed more context. It's not like they shipped a 900 million iPhone-like product with 50 engineers. They made $200k/engineer which is pretty bad compared to more successful companies. When they needed to make more money, they would have needed a lot more engineers.
    - gen220 4y ago
      They never spent their Series A cash. What you're reading is a common misinterpretation of GAAP, which values equity on a cash basis, even though it has no material impact on the company balance sheet. If you look at the cash flow statement in their SEC documents, the cash story is more clear. They never spent investor money from their Series A-on. After Sequoia completed the Series B, Jan and Brian forwarded them a copy of the bank account statement before the Series B financing, showing the original invested funds untouched. They were acquired less than a year later. Whatsapp was a money-printer! It deserves that reputation.
nly 4y ago
Of course it helps that WhatsApp weren't providing any kind of support to them 900M users
- onion2k 4y ago
  It helped even more that they'd built a system that worked well enough that users didn't need support.
- drexlspivey 4y ago
  There’s no way to support that many users
  - Jensson 4y ago
    If you have 900M users then you have money to hire people to support them. Microsoft manage to support people at similar scale for example.
    - drexlspivey 4y ago
      Are you just assuming that? Does whatsapp make any money? It’s free to download and there are no ads. How would they hire possibly hundreds of thousands support agents to service their 2.3 billion monthly users?
      - philliphaydon 4y ago
        it cost $1 /yr… Back between 2009-2013.
      - Jensson 4y ago
        You said "There’s no way to support that many users", if you added "for free" I would have agreed with you. However there is no way to support any users for free, so your comment doesn't make sense in that context either.
- college_physics 4y ago
  for sure there are several non-trivial factors that helped this dramatic scaling example: * ability to isolate a fairly universal need that can be solved in full by software. as soon as you have to customize to meet cultural/political fragmentation you start losing orders of mangitude. once there is a need for a "human in the loop" to provide person-to-person support the "magic" is pretty much gone * ability to deploy across vast numbers of devices. this universal canvas is generally not the case. exceptions being e.g. web standards or having an oligopoly in mobile devices still, despite all those caveats, software is a completely different game at its heart. in principle it scales to infinity and it becomes a whack-a-mole game to figure out which factor will land things back to reality
ilyt 4y ago
Software complexity doesn't scale linearly with number of users. Features have much more effect on that. Few hundred or thousands of users can run happily off one server. Then you can just... buy a bigger box for long time, maybe not need more for hundreds of thousands of users. And once you put all of the effort to get highly available loadbalancing, a bunch of app servers, maybe use some distributed database or add a lot of caching for your current one you can, again, just add more and more nodes for a long time till you get to "next step". Of course, make your app in Rails with people that have no clue about architecture and some N+1 queries and you might need to get to the scaling steps much earlier > Imagine 50 "bricks and mortar" engineers trying to provide anything to 900M users. They are not providing any support to the users tho. Hell, I'm pretty sure some of the best selling cars and motorcycles in history(...being probably beetle and honda super cub) had less than 50 engineers
- netsectoday 4y ago
  > Of course, make your app in Rails with people that have no clue about architecture... So you're a front-end guy?

senttoschool 4y ago

But they lost $140m in 2014 and made only $10m in revenue. They would have had to shut down their service if they didn't find product market fit or if Meta/someone else didn't buy them. When you need to start making money, you suddenly need to a lot more engineers. Now you need developers to make sales tools, compliance, moderation, finance, A/B test engineers for growth ideas, niche features for big customers, engineers to bring down cloud costs, etc. It doesn't make their engineering less impressive but I think we need to understand the full picture. At the end of the day, WhatsApp needed to make money to keep their service going.

peoplefromibiza 4y ago
> But they lost $140m in 2014 and made only $10m in revenue you posted the same comment two times already. same response https://news.ycombinator.com/item?id=34566572 https://news.ycombinator.com/item?id=34566572
- senttoschool 4y ago
  So it was still a $26.5m net loss for 6 months? Or $53m net loss for 12 months?
  - B8MGHCBekDuRi 4y ago
    For the year ending December 31, 2013, WhatsApp had $10.2 million in revenue and a net loss of $138.146 million. Net cash used in operating during this period was only $9.9 million, while share-based compensation amounted to $98.8 million They only spent $9.9 million over $10.2 million in revenues for operations. WhatsApp’s goal is still growth, rather than monetization. Mark Zuckerberg and WhatsApp CEO Jan Koum said when the acquisition was made in February that ads aren’t the right way to earn money on messaging They were investing on growth, an investment that lead to a $16 billion acquisition from Facebook. I would love to replicate their same "unsustainable business"
  - erichocean 4y ago
    They took in more cash than they spent, the opposite of what you are implying. Are you really that upset about GAAP accounting and how non-cash, stock-based compensation can lead to paper "losses"?
    - senttoschool 4y ago
      No, I'm not upset. I was just operating with different information. My point remains. They created impressive technology. But 900m users and 50 engineers needed more context. It's not like they shipped a 900 million iPhone-like product with 50 engineers. They made $200k/engineer which is pretty bad compared to more successful companies. When they needed to make more money, they would have needed a lot more engineers.
  - gen220 4y ago
    They never spent their Series A cash. What you're reading is a common misinterpretation of GAAP, which values equity on a cash basis, even though it has no material impact on the company balance sheet. If you look at the cash flow statement in their SEC documents, the cash story is more clear. They never spent investor money from their Series A-on. After Sequoia completed the Series B, Jan and Brian forwarded them a copy of the bank account statement before the Series B financing, showing the original invested funds untouched. They were acquired less than a year later. Whatsapp was a money-printer! It deserves that reputation.

nly 4y ago

Of course it helps that WhatsApp weren't providing any kind of support to them 900M users

onion2k 4y ago
It helped even more that they'd built a system that worked well enough that users didn't need support.
drexlspivey 4y ago
There’s no way to support that many users
- Jensson 4y ago
  If you have 900M users then you have money to hire people to support them. Microsoft manage to support people at similar scale for example.
  - drexlspivey 4y ago
    Are you just assuming that? Does whatsapp make any money? It’s free to download and there are no ads. How would they hire possibly hundreds of thousands support agents to service their 2.3 billion monthly users?
    - philliphaydon 4y ago
      it cost $1 /yr… Back between 2009-2013.
    - Jensson 4y ago
      You said "There’s no way to support that many users", if you added "for free" I would have agreed with you. However there is no way to support any users for free, so your comment doesn't make sense in that context either.
college_physics 4y ago
for sure there are several non-trivial factors that helped this dramatic scaling example: * ability to isolate a fairly universal need that can be solved in full by software. as soon as you have to customize to meet cultural/political fragmentation you start losing orders of mangitude. once there is a need for a "human in the loop" to provide person-to-person support the "magic" is pretty much gone * ability to deploy across vast numbers of devices. this universal canvas is generally not the case. exceptions being e.g. web standards or having an oligopoly in mobile devices still, despite all those caveats, software is a completely different game at its heart. in principle it scales to infinity and it becomes a whack-a-mole game to figure out which factor will land things back to reality

ilyt 4y ago

Software complexity doesn't scale linearly with number of users. Features have much more effect on that. Few hundred or thousands of users can run happily off one server. Then you can just... buy a bigger box for long time, maybe not need more for hundreds of thousands of users. And once you put all of the effort to get highly available loadbalancing, a bunch of app servers, maybe use some distributed database or add a lot of caching for your current one you can, again, just add more and more nodes for a long time till you get to "next step". Of course, make your app in Rails with people that have no clue about architecture and some N+1 queries and you might need to get to the scaling steps much earlier > Imagine 50 "bricks and mortar" engineers trying to provide anything to 900M users. They are not providing any support to the users tho. Hell, I'm pretty sure some of the best selling cars and motorcycles in history(...being probably beetle and honda super cub) had less than 50 engineers

netsectoday 4y ago
> Of course, make your app in Rails with people that have no clue about architecture... So you're a front-end guy?