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The message of the article is good but it's not seeing the forest from the trees. Having just read the Forbes artcile on the company and Jan in particular, som

The message of the article is good but it's not seeing the forest from the trees. Having just read the Forbes artcile on the company and Jan in particular, some interesting things stood out: 1) Jan had money to start and was able to take time to build a user base and find the real value in the App and didn't need to go around "raising money". The SMS component of the app wasn't the initial focus. The company didn't need VC funding at any point. He was able to focus on product development and revenues started to come in to cover costs. 2) Jan is a technical guy. He did the initial backend but hired out the iPhone development. Either way he was involved. He developed the initial app for the first 9 months or so before bringing on Ackon as a cofounder. 3) There is real value in the app. No one needs to question this. There's no big pitch deck's, presentations, etc.The app was allowed to grow organically due to its network affect. The business can scale into the millions and billions of users. The $16 billion exit is largely due to number 3. It's rare for a lot of businesses to have that kind of scale. Reading the Forbes article, my takeaway is that there is no way anyone can "build a path to a xx billion exit". What one can do is find a business model that can actually scale and generate real revenue. Maybe not to billion users or hundreds of millions in revenue but enough to take it outside of the "lifestyle" business mode. Also, having money of your own and technical skills to execute doesn't hurt one bit. I think one lesson that I would take away for the younger crowd is - slow down a bit. Go work for a big corp or even a startup that pays well. Save every penny. Instead of spending that $100 on the get together every other night save it. Build your skills. At some point, go for it. You'll have money to live off, money to test your business model and a fallback if it doesn't work (get another job). EDIT: Another big reason for the big exit is incredible leverage by Jan. He's got the most equity. He doesn't need Facebook. He is already a millionaire and the App can only get better. This is deal making at its finest. I can only imagine how much back and forth happened, each time with a bigger number from Facebook.

deleted 13y ago
[deleted]
JoeAltmaier 13y ago
I'm a little more skeptical. This guy worked hard, sure, but as he seems to be the only guy making out big, after scores of guys worked hard. Maybe he's not much of a hero.
- clavalle 13y ago
  I don't think anyone is denying the role of luck, but there is something to be said about not falling in love with 'making the start up scene' so to speak. For many people it is a colossal waste of time. I am trying to reign in a co-founder right now (not surprisingly the only non-technical co-founder) that is just a goo-goo eyed about the scene and not our product and not what I think his main goal should be which is selling. I get breathless phone calls describing some lunch meeting with some formerly successful founder or wealthy investor who now wants to partner/might know someone to invest/just wants to chat about common goals or whatever. I don't care. We don't need funding. He is wasting time or worse. I've tolerated it because it keeps him enthusiastic (he really does beat the pavement fairly well and this obsession is fairly new) but it is starting to get a little overboard. I think that is what avenger123 is saying: keep your feet on the ground, focus on the product, and ignore the scene bullshit. That takes some foresight and discipline.
  - outworlder 13y ago
    Yeah, you are either fundraising, or you are not. If you are, then go have lunch with the wealthy investors. If not, don't bother, it is a waste of energy.
bernardom 13y ago
I think the three points you raised are about how the company was built. For entrepeneurs, it's good to study success stories, but it's sort of like the comment below saying that "J2ME is how it was built, it's not really the story." Knowing how WhatsApp was built gives some clue as to how it reached success, but doesn't fully explain why the value is so high. The article is right- it "reached the middle billion" of people who spend $10/day and don't have a smartphone. Here's a really interesting question: how many of WhatsApp's customers overlap with Facebook's? For the ones that do overlap, what are their usage patterns (i.e. which service do they use more)?
yohanatan 13y ago
> 3) There is real value in the app. No one needs to question this. There's no big pitch deck's, presentations, etc.The app was allowed to grow organically due to its network affect. The business can scale into the millions and billions of users. Can you explain this one? Something that seems to have been lost in all the hype is how yet another messaging app is somehow novel, innovative, or exciting. Is this somehow a major technological leap from other instant messengers (which we've had for nearly 2 decades now).
- hayksaakian 13y ago
  His 3rd point was regarding the value of the app. I think we can agree on it's usefulness, but your concern was Whatsapp's novelty. The part that's indisputable is the massive and active user base. The real question is whether Whatsapp can retain their users, due to it's novelty or despite the lack thereof.
  - bertil 13y ago
    > whether Whatsapp can retain their users, due to it's novelty or despite the lack thereof. WhatsApp's been around for years; not sure what novelty you are talking about. It's a very classic and straightforward user-base argument: do I know anyone who uses it? Yes, then it's absolutely worth the six SMS it costs me; no? Meh. I personally had it for years, on and off, simply depending (internationally mobile) friends asking: “Communicate via WhatsApp?” It's about as obvious to subscribe as a all-you-can-eat SMS plan.
- twic 13y ago
  WhatsApp is different to most messaging apps in that it runs on dumb phones (featurephones), not just smartphones. It's different to built-in text messaging in that it uses data rather than SMS. Dumb phones are a lot cheaper than smartphones, and for most people, data is cheaper than SMS. There are an awful lot of people in the world who can't afford a smartphone or a serious SMS habit. Those people use WhatsApp. There is a parallel here to BlackBerry Messenger. In the UK at least, the two groups that use (or used, a couple of years ago) BlackBerries are businesspeople, who use it because it integrates with their corporate IT whatnot, and schoolchildren, who use it because BBM is free, unlike SMS. However, BBM is tied to a shonky and still not that cheap hardware platform that uses special snowflake network services that are not available everywhere, whereas WhatsApp is portable.
marincounty 13y ago
"Instead of spending that $100 on the get together every other night save it. Build your skills." --if I didn't spend so much on chasing tail; I could have retired at 30. Honetly! And yes pathetic, but you are only young once.

deleted 13y ago

[deleted]

JoeAltmaier 13y ago

I'm a little more skeptical. This guy worked hard, sure, but as he seems to be the only guy making out big, after scores of guys worked hard. Maybe he's not much of a hero.

clavalle 13y ago
I don't think anyone is denying the role of luck, but there is something to be said about not falling in love with 'making the start up scene' so to speak. For many people it is a colossal waste of time. I am trying to reign in a co-founder right now (not surprisingly the only non-technical co-founder) that is just a goo-goo eyed about the scene and not our product and not what I think his main goal should be which is selling. I get breathless phone calls describing some lunch meeting with some formerly successful founder or wealthy investor who now wants to partner/might know someone to invest/just wants to chat about common goals or whatever. I don't care. We don't need funding. He is wasting time or worse. I've tolerated it because it keeps him enthusiastic (he really does beat the pavement fairly well and this obsession is fairly new) but it is starting to get a little overboard. I think that is what avenger123 is saying: keep your feet on the ground, focus on the product, and ignore the scene bullshit. That takes some foresight and discipline.
- outworlder 13y ago
  Yeah, you are either fundraising, or you are not. If you are, then go have lunch with the wealthy investors. If not, don't bother, it is a waste of energy.

bernardom 13y ago

I think the three points you raised are about how the company was built. For entrepeneurs, it's good to study success stories, but it's sort of like the comment below saying that "J2ME is how it was built, it's not really the story." Knowing how WhatsApp was built gives some clue as to how it reached success, but doesn't fully explain why the value is so high. The article is right- it "reached the middle billion" of people who spend $10/day and don't have a smartphone. Here's a really interesting question: how many of WhatsApp's customers overlap with Facebook's? For the ones that do overlap, what are their usage patterns (i.e. which service do they use more)?

yohanatan 13y ago

> 3) There is real value in the app. No one needs to question this. There's no big pitch deck's, presentations, etc.The app was allowed to grow organically due to its network affect. The business can scale into the millions and billions of users. Can you explain this one? Something that seems to have been lost in all the hype is how yet another messaging app is somehow novel, innovative, or exciting. Is this somehow a major technological leap from other instant messengers (which we've had for nearly 2 decades now).

hayksaakian 13y ago
His 3rd point was regarding the value of the app. I think we can agree on it's usefulness, but your concern was Whatsapp's novelty. The part that's indisputable is the massive and active user base. The real question is whether Whatsapp can retain their users, due to it's novelty or despite the lack thereof.
- bertil 13y ago
  > whether Whatsapp can retain their users, due to it's novelty or despite the lack thereof. WhatsApp's been around for years; not sure what novelty you are talking about. It's a very classic and straightforward user-base argument: do I know anyone who uses it? Yes, then it's absolutely worth the six SMS it costs me; no? Meh. I personally had it for years, on and off, simply depending (internationally mobile) friends asking: “Communicate via WhatsApp?” It's about as obvious to subscribe as a all-you-can-eat SMS plan.
twic 13y ago
WhatsApp is different to most messaging apps in that it runs on dumb phones (featurephones), not just smartphones. It's different to built-in text messaging in that it uses data rather than SMS. Dumb phones are a lot cheaper than smartphones, and for most people, data is cheaper than SMS. There are an awful lot of people in the world who can't afford a smartphone or a serious SMS habit. Those people use WhatsApp. There is a parallel here to BlackBerry Messenger. In the UK at least, the two groups that use (or used, a couple of years ago) BlackBerries are businesspeople, who use it because it integrates with their corporate IT whatnot, and schoolchildren, who use it because BBM is free, unlike SMS. However, BBM is tied to a shonky and still not that cheap hardware platform that uses special snowflake network services that are not available everywhere, whereas WhatsApp is portable.

marincounty 13y ago

"Instead of spending that $100 on the get together every other night save it. Build your skills." --if I didn't spend so much on chasing tail; I could have retired at 30. Honetly! And yes pathetic, but you are only young once.