7 ms·

The WhatsApp Story Challenges Some of the Valley’s Conventional Wisdom

91 points by ckelly 13y ago

johnrob 13y ago
The bit about recruiting is definitely on to something. Management and culture are significantly more important than hiring the absolute best people. I've had the (mis) fortune to witness individuals flounder in a poorly manage company only to shine later on in good ones. Great employees won't fix a broken company; Great companies will succeed with good (but not necessarily great) people who are motivated.
- DamnYuppie 13y ago
  I have been preaching this for awhile. It is my sincerest hope others start to catch on and really focus on the environment and culture they are trying to build and the ramifications seemingly little decisions they make have on it.
  - josh33 13y ago
    "The Advantage" by Patrick Lencioni is also a great read on this topic of Organizational Health and how much it matters.
bobsil1 13y ago
Rules like "only fund Harvard dropouts under 25" screen out big hits.
- interstitial 13y ago
  Personally, I'm happy VC screens keep them in their bubbles. Unfortunately, the rest of the world has their own screens and their own bubbles, too.
antr 13y ago
What I really like from WhatsApp/Telegram/Apple's Messages is their simplicity, no over-engineered app for msging, an app that even my dad can use. I want to use the app that any of family members can use. Unlike, for argument sake, Path, which requires me to register with them, makes me use a "complex" menu, unnecessary status wall, tell me how many connections I should have, etc.
- mrtksn 13y ago
  My ex didn't have a smartphone but her phone had WhatsApp and Facebook and pretty much nothing else from the smartphone world was supported. I don't think that I had any choice other than WhatsApp since the person I wanted to talk had no other choice. I was using it not because of the interface or anything but because it enabled me, I personally don't like the visual design of WhatsApp btw. WhatsApp become incredibly popular here in Turkey and I suspect that it's mostly because of the fact that it was the only messaging app that almost everybody can install to their phone, including non-smartphone users. Everybody here have at least one phone but not everybody had a smartphone and if some of your friends are out of reach, its a deal breaker. Line, I belive had little bit traction, Viber too. WeChat even run TV ads but eventually, everybody have WhatsApp :)
strlen 13y ago
I made many of the same points recently (albeit in a cheesy Facebook post -- https://www.facebook.com/alex.feinberg/posts/10100216571031784?stream_ref=10 https://www.facebook.com/alex.feinberg/posts/101002165710317...), but I had a different take on this: I saw this as a hearkening to Valley's original values as opposed to a media-fueled distortion of them that doesn't quite correspond to on-the-ground reality. Full disclosure: I worked at Facebook and am still holding on to some stock. I also worked on a project ("Panama") with Acton at Yahoo and knew the reputation of others involved in WhatsApp like Rick Reed. Rick Reed built a high performance messaging bus in C++ at Yahoo that was the foundation of much of Yahoo infra outside of search, so the use of Erlang was not a surprise for me. Nonetheless, I'm sure my opinion would be the same even if I never worked at FB or Yahoo and didn't know of anyone involved. Keep in mind that while I know nothing of Brian's rejection from FB (it happened before my time), but "Facebook has good talent" is not mutually exclusive with "Facebook rejected some really great people". It's also very likely that he was going for a more senior/leadership position and interviewing engineering leadership is an even more of a dubious "science" than interviewing individual contributors.
- nl 13y ago
  Panama Ah. Has there ever been a Yahoo project that had more hype?
  - strlen 13y ago
    The entire survival of Yahoo under a specific business model was staked to this. At the time -- this was my first job out of college -- I didn't care at all about those aspects, but the technical learnings for me (primordial NoSQL data stores, software-based high availability, hugely distributed architecture spanning many continents, what later came to be known as "devops" practice, etc...) were immense.
gopi 13y ago
The article missed the biggest one. Whatsup is built by outsourced russian talent. Jan hired the first programmer thro RentaCoder!
- prostoalex 13y ago
  The client, not the server.
- pdevr 13y ago
  So was Digg, with Owen Byrne being hired on Elance.
nostromo 13y ago
This illustrates the challenges of pattern matching in a hits-driven black-swan-finding industry. Investors are looking for the next Facebook, so it only makes sense to invest in people who seem very Zucklike, which the WhatsApp founders are not (at least superficially). It reminds me of how generals are always preparing to fight the last war rather than the next war. Or how political pundits are convinced the US will never have a black president, let alone a Democrat from the North, until suddenly we do. I guess predicting the future remains a hard thing to do. :)
- prostoalex 13y ago
  The only conventional wisdom is to be contrarian, and even that doesn't work half the time.
  - lutusp 13y ago
    > The only conventional wisdom is to be contrarian, and even that doesn't work half the time. True, but if (a) the choices are binary ones, and if (b) they only work half the time, then (c) it's not wisdom, conventional or otherwise. But now it occurs to me that your post was meant in fun.
crassus 13y ago
As Steve Sailer said "Perhaps one reason these two guys couldn't get hired by Facebook is because they are so old: Koum is 38 and Acton 42."
nl 13y ago
this particular VC firm [Sequoia] missed the first wave of social networks, invested a large sum in the debacle known as Color, and then, in about three years’ time, turned their investment in WhatsApp into one of the great IRRs in the history of venture capital? Ahh, Color. Could the differences between Color & WhatsApp be any more pronounced?!
rdl 13y ago
No one is arguing Yahoo! didn't have talent. We're arguing Yahoo! doesn't have talent now (except for H1B people who are basically imprisoned there, and not many of them). You'll note that the WhatsApp guys are not at Yahoo! today. Yahoo! used to have some of the best people.
- antics 13y ago
  I'll be honest, this is a pretty despicable comment, Ryan. The fact that you personally don't like the culture at Yahoo certainly does not mean that everyone who is talented also dislikes the culture at Yahoo. For example, I know a very talented woman who chooses to work there because her judgement is that the company has superior procedures for dealing with sexism. Versus, say, the generally-toxic startup scene. You should carefully consider whether you actually understand why someone would choose to stay in a situation like this, because I suspect you don't. Beyond the fact that I don't think you understand the reasons why people would stay at a company like Yahoo, I don't think you actually know much about the people who work there. Yahoo owns Tumblr, which still employs some of the best engineers I've ever met. More than 20% of the hires the first year after the Mayer takeover were boomerangs, which is a good indication that your implication that between 2009 and now Yahoo suddenly lost every talented non-immigrant employee is just wrong. And so on. I'm not saying this to pick on you or just to be critical for its own sake. I'm sure you're a nice person. But this comment was just painful to read. Please think carefully about this sort of thing before you say something else like it. EDIT: Ah, HN. Where telling someone that a company with 10,000 employees probably does in fact have a few talented engineers earns you anonymous down votes. :(
  - rdl 13y ago
    Technically competent and borderline-or-better ambitious people do not work at Yahoo!, generally. There exception are people who are trapped there (H1B, a massive side project, sick family member, whatever), or are vesting out after M&A. Come back to this in 0.5 to 3.5 years when the Tumblr team have filled their vesting. (You can make a reasonable case that big companies are better at EoE than startups, but I don't see a strong case that Yahoo! is better than Apple or Google or ...) This is because the culture at Yahoo! has been horrible in terms of actually turning technology into products, or at any real innovation. A succession of utterly incompetent CEOs and ossified and incompetent upper management pretty much killed the company, technically. Every Yahoo! I've talked to said it was a "nice" place to work if you're just collecting a paycheck. It was a horrible place to actually try to do anything meaningful (with a few exceptions, like Panama, and even then). So, it depends on your goals with a job: a paycheck ,or a chance to change the world. It's up to the individual which it is. However, people who are neither competent nor ambitious are irrelevant in general, and those who aren't both are largely irrelevant in creating anything new. (I know many highly-competent but situationally-lazy people who remained at Yahoo! a bit longer than was good for them. They had impressive personal projects during that time. They were vastly happier when they moved on to other companies.) (As an indicator: outside of Government, Yahoo! had more contractors in more key roles than anywhere else I've ever seen. Microsoft had a lot of contractors, too, but they were generally not in core roles, and after that court case, were only there for ~a year.) So, I stand by my original comment.
alok-g 13y ago
Many of the assertions made by the OP seem highly uncorrelated to the event being discussed, which is may really be a significantly outlying event as OP itself notes, though not astronomically rare of course. >> “Yahoo! doesn’t have talent.” ... The two WhatsApp founders worked at Yahoo! OK, so two people from Yahoo were talented. How does this lead me to any conclusions about Yahoo's talent overall (positive or negative)? Without any disrespect to them, I am sure the smartness levels of Whatsapp founders is not astronomically greater than those of other Yahoo employees to change the overall Yahoo averages significantly. >> “Companies like Facebook have the best talent.” One of the WhatsApp founders applied for a job at Facebook and was rejected. I am at a complete loss for this one. This rejection at best speaks to inadequacy of the interview processes. >> “The best founders are relatively young.” The WhatsApp founders were in their mid to late thirties. Let's say there is a probability distribution relating startup success with the age of the founders. You sample this distribution a very large number of times and find that for a very rare event, the founders are in mid to late thirties. Can you really draw any significant conclusions about the shape of this probability distribution from it? >> “The center of gravity for consumer products has moved north from the Valley to San Francisco.” Well, that’s largely true, but WhatsApp remained headquartered deep in Silicon Valley. I would assume that WhatsApp's location was not a criteria for the acquisition given that the locations considered here are relatively close by. Surely there would be correlations between a startup success and location within Silicon Valley based on talent pool available, startup atmosphere, etc., but again, the estimated probability distributions would not see a significant change from the new knowledge of this event. >> “Mobile products should be delightful, beautiful.” ... apps should look nice, but at minimum, they should work to solve some problem ... I wonder if the conclusion really needs this specific event to be seen as generally valid. It is quite obvious that the app should solve some problem, most probably even if it is a beauty product. >> “Don’t worry about making money, just grow big.” This one was an eye-opener for me given the scale of this acquisition, under the assumptions that this high a valuation was sensible and that this event is not actually astronomically rare. Founders and VCs always ask themselves questions on how to monetize. Unless we are in an acquisition bubble, the relevance of this question partly comes under question.
sayemm 13y ago
interesting tweets from Jan Koum: "Be so good they can't ignore you" - https://twitter.com/jankoum/status/262099630773399552 https://twitter.com/jankoum/status/262099630773399552 "If you run a startup and your goal is to get on techcrunch, you are doing it wrong." - https://twitter.com/jankoum/status/199240645745979392 https://twitter.com/jankoum/status/199240645745979392
IanCal 13y ago
Oh bloody hell. I'm tired of this "Oh but they did X and Y!!!! That's the magic key!" They did this, in order of importance: 1) They built something that solved a problem. 2) They sold it at a price that the people were willing to pay for that problem to be solved. 3) They built something with powerful network effects, drawing in new users & keeping old ones. Ian's magic guide to making money by building things: 1) Build things that people will pay for 2) Sell it to those people ADVANCED COURSE (DLC - send payments to 1QKocu7qqiSGbmaviR4aFVTq3zVWtvdFiA ) 3) Charge more than it costs you 4) Charge no more than those people are willing to pay Astoundingly, I've missed off things like "be mobile first" or "don't be mobile first" or even "it should have been built in this city". I've also managed to not dwell on the language anything like that. Turns out, having loads of people pay you money for a service somehow makes a good business! WHO COULD POSSIBLY HAVE FORESEEN THAT? TIME TO CHANGE ALL OUR PRECONCEPTIONS! > I’m not suggesting we throw out all the rules and engage in chaos. But, it is a good time to reexamine them. If a business that makes a profit and has nearly 6% of the global population as active users (and growing, it seems) being bought for a lot of money is shocking then I cannot fathom what world you live in.

91 points by ckelly 13y ago

The bit about recruiting is definitely on to something. Management and culture are significantly more important than hiring the absolute best people. I've had the (mis) fortune to witness individuals flounder in a poorly manage company only to shine later on in good ones. Great employees won't fix a broken company; Great companies will succeed with good (but not necessarily great) people who are motivated.

DamnYuppie 13y ago
I have been preaching this for awhile. It is my sincerest hope others start to catch on and really focus on the environment and culture they are trying to build and the ramifications seemingly little decisions they make have on it.
- josh33 13y ago
  "The Advantage" by Patrick Lencioni is also a great read on this topic of Organizational Health and how much it matters.

bobsil1 13y ago

Rules like "only fund Harvard dropouts under 25" screen out big hits.

interstitial 13y ago
Personally, I'm happy VC screens keep them in their bubbles. Unfortunately, the rest of the world has their own screens and their own bubbles, too.

antr 13y ago

What I really like from WhatsApp/Telegram/Apple's Messages is their simplicity, no over-engineered app for msging, an app that even my dad can use. I want to use the app that any of family members can use. Unlike, for argument sake, Path, which requires me to register with them, makes me use a "complex" menu, unnecessary status wall, tell me how many connections I should have, etc.

mrtksn 13y ago
My ex didn't have a smartphone but her phone had WhatsApp and Facebook and pretty much nothing else from the smartphone world was supported. I don't think that I had any choice other than WhatsApp since the person I wanted to talk had no other choice. I was using it not because of the interface or anything but because it enabled me, I personally don't like the visual design of WhatsApp btw. WhatsApp become incredibly popular here in Turkey and I suspect that it's mostly because of the fact that it was the only messaging app that almost everybody can install to their phone, including non-smartphone users. Everybody here have at least one phone but not everybody had a smartphone and if some of your friends are out of reach, its a deal breaker. Line, I belive had little bit traction, Viber too. WeChat even run TV ads but eventually, everybody have WhatsApp :)

strlen 13y ago

I made many of the same points recently (albeit in a cheesy Facebook post -- https://www.facebook.com/alex.feinberg/posts/10100216571031784?stream_ref=10 https://www.facebook.com/alex.feinberg/posts/101002165710317...), but I had a different take on this: I saw this as a hearkening to Valley's original values as opposed to a media-fueled distortion of them that doesn't quite correspond to on-the-ground reality. Full disclosure: I worked at Facebook and am still holding on to some stock. I also worked on a project ("Panama") with Acton at Yahoo and knew the reputation of others involved in WhatsApp like Rick Reed. Rick Reed built a high performance messaging bus in C++ at Yahoo that was the foundation of much of Yahoo infra outside of search, so the use of Erlang was not a surprise for me. Nonetheless, I'm sure my opinion would be the same even if I never worked at FB or Yahoo and didn't know of anyone involved. Keep in mind that while I know nothing of Brian's rejection from FB (it happened before my time), but "Facebook has good talent" is not mutually exclusive with "Facebook rejected some really great people". It's also very likely that he was going for a more senior/leadership position and interviewing engineering leadership is an even more of a dubious "science" than interviewing individual contributors.

nl 13y ago
Panama Ah. Has there ever been a Yahoo project that had more hype?
- strlen 13y ago
  The entire survival of Yahoo under a specific business model was staked to this. At the time -- this was my first job out of college -- I didn't care at all about those aspects, but the technical learnings for me (primordial NoSQL data stores, software-based high availability, hugely distributed architecture spanning many continents, what later came to be known as "devops" practice, etc...) were immense.

gopi 13y ago

The article missed the biggest one. Whatsup is built by outsourced russian talent. Jan hired the first programmer thro RentaCoder!

prostoalex 13y ago
The client, not the server.
pdevr 13y ago
So was Digg, with Owen Byrne being hired on Elance.

nostromo 13y ago

This illustrates the challenges of pattern matching in a hits-driven black-swan-finding industry. Investors are looking for the next Facebook, so it only makes sense to invest in people who seem very Zucklike, which the WhatsApp founders are not (at least superficially). It reminds me of how generals are always preparing to fight the last war rather than the next war. Or how political pundits are convinced the US will never have a black president, let alone a Democrat from the North, until suddenly we do. I guess predicting the future remains a hard thing to do. :)

prostoalex 13y ago
The only conventional wisdom is to be contrarian, and even that doesn't work half the time.
- lutusp 13y ago
  > The only conventional wisdom is to be contrarian, and even that doesn't work half the time. True, but if (a) the choices are binary ones, and if (b) they only work half the time, then (c) it's not wisdom, conventional or otherwise. But now it occurs to me that your post was meant in fun.

crassus 13y ago

As Steve Sailer said "Perhaps one reason these two guys couldn't get hired by Facebook is because they are so old: Koum is 38 and Acton 42."

nl 13y ago

this particular VC firm [Sequoia] missed the first wave of social networks, invested a large sum in the debacle known as Color, and then, in about three years’ time, turned their investment in WhatsApp into one of the great IRRs in the history of venture capital? Ahh, Color. Could the differences between Color & WhatsApp be any more pronounced?!

rdl 13y ago

No one is arguing Yahoo! didn't have talent. We're arguing Yahoo! doesn't have talent now (except for H1B people who are basically imprisoned there, and not many of them). You'll note that the WhatsApp guys are not at Yahoo! today. Yahoo! used to have some of the best people.

antics 13y ago
I'll be honest, this is a pretty despicable comment, Ryan. The fact that you personally don't like the culture at Yahoo certainly does not mean that everyone who is talented also dislikes the culture at Yahoo. For example, I know a very talented woman who chooses to work there because her judgement is that the company has superior procedures for dealing with sexism. Versus, say, the generally-toxic startup scene. You should carefully consider whether you actually understand why someone would choose to stay in a situation like this, because I suspect you don't. Beyond the fact that I don't think you understand the reasons why people would stay at a company like Yahoo, I don't think you actually know much about the people who work there. Yahoo owns Tumblr, which still employs some of the best engineers I've ever met. More than 20% of the hires the first year after the Mayer takeover were boomerangs, which is a good indication that your implication that between 2009 and now Yahoo suddenly lost every talented non-immigrant employee is just wrong. And so on. I'm not saying this to pick on you or just to be critical for its own sake. I'm sure you're a nice person. But this comment was just painful to read. Please think carefully about this sort of thing before you say something else like it. EDIT: Ah, HN. Where telling someone that a company with 10,000 employees probably does in fact have a few talented engineers earns you anonymous down votes. :(
- rdl 13y ago
  Technically competent and borderline-or-better ambitious people do not work at Yahoo!, generally. There exception are people who are trapped there (H1B, a massive side project, sick family member, whatever), or are vesting out after M&A. Come back to this in 0.5 to 3.5 years when the Tumblr team have filled their vesting. (You can make a reasonable case that big companies are better at EoE than startups, but I don't see a strong case that Yahoo! is better than Apple or Google or ...) This is because the culture at Yahoo! has been horrible in terms of actually turning technology into products, or at any real innovation. A succession of utterly incompetent CEOs and ossified and incompetent upper management pretty much killed the company, technically. Every Yahoo! I've talked to said it was a "nice" place to work if you're just collecting a paycheck. It was a horrible place to actually try to do anything meaningful (with a few exceptions, like Panama, and even then). So, it depends on your goals with a job: a paycheck ,or a chance to change the world. It's up to the individual which it is. However, people who are neither competent nor ambitious are irrelevant in general, and those who aren't both are largely irrelevant in creating anything new. (I know many highly-competent but situationally-lazy people who remained at Yahoo! a bit longer than was good for them. They had impressive personal projects during that time. They were vastly happier when they moved on to other companies.) (As an indicator: outside of Government, Yahoo! had more contractors in more key roles than anywhere else I've ever seen. Microsoft had a lot of contractors, too, but they were generally not in core roles, and after that court case, were only there for ~a year.) So, I stand by my original comment.

alok-g 13y ago

Many of the assertions made by the OP seem highly uncorrelated to the event being discussed, which is may really be a significantly outlying event as OP itself notes, though not astronomically rare of course. >> “Yahoo! doesn’t have talent.” ... The two WhatsApp founders worked at Yahoo! OK, so two people from Yahoo were talented. How does this lead me to any conclusions about Yahoo's talent overall (positive or negative)? Without any disrespect to them, I am sure the smartness levels of Whatsapp founders is not astronomically greater than those of other Yahoo employees to change the overall Yahoo averages significantly. >> “Companies like Facebook have the best talent.” One of the WhatsApp founders applied for a job at Facebook and was rejected. I am at a complete loss for this one. This rejection at best speaks to inadequacy of the interview processes. >> “The best founders are relatively young.” The WhatsApp founders were in their mid to late thirties. Let's say there is a probability distribution relating startup success with the age of the founders. You sample this distribution a very large number of times and find that for a very rare event, the founders are in mid to late thirties. Can you really draw any significant conclusions about the shape of this probability distribution from it? >> “The center of gravity for consumer products has moved north from the Valley to San Francisco.” Well, that’s largely true, but WhatsApp remained headquartered deep in Silicon Valley. I would assume that WhatsApp's location was not a criteria for the acquisition given that the locations considered here are relatively close by. Surely there would be correlations between a startup success and location within Silicon Valley based on talent pool available, startup atmosphere, etc., but again, the estimated probability distributions would not see a significant change from the new knowledge of this event. >> “Mobile products should be delightful, beautiful.” ... apps should look nice, but at minimum, they should work to solve some problem ... I wonder if the conclusion really needs this specific event to be seen as generally valid. It is quite obvious that the app should solve some problem, most probably even if it is a beauty product. >> “Don’t worry about making money, just grow big.” This one was an eye-opener for me given the scale of this acquisition, under the assumptions that this high a valuation was sensible and that this event is not actually astronomically rare. Founders and VCs always ask themselves questions on how to monetize. Unless we are in an acquisition bubble, the relevance of this question partly comes under question.

sayemm 13y ago

interesting tweets from Jan Koum: "Be so good they can't ignore you" - https://twitter.com/jankoum/status/262099630773399552 https://twitter.com/jankoum/status/262099630773399552 "If you run a startup and your goal is to get on techcrunch, you are doing it wrong." - https://twitter.com/jankoum/status/199240645745979392 https://twitter.com/jankoum/status/199240645745979392

IanCal 13y ago

Oh bloody hell. I'm tired of this "Oh but they did X and Y!!!! That's the magic key!" They did this, in order of importance: 1) They built something that solved a problem. 2) They sold it at a price that the people were willing to pay for that problem to be solved. 3) They built something with powerful network effects, drawing in new users & keeping old ones. Ian's magic guide to making money by building things: 1) Build things that people will pay for 2) Sell it to those people ADVANCED COURSE (DLC - send payments to 1QKocu7qqiSGbmaviR4aFVTq3zVWtvdFiA ) 3) Charge more than it costs you 4) Charge no more than those people are willing to pay Astoundingly, I've missed off things like "be mobile first" or "don't be mobile first" or even "it should have been built in this city". I've also managed to not dwell on the language anything like that. Turns out, having loads of people pay you money for a service somehow makes a good business! WHO COULD POSSIBLY HAVE FORESEEN THAT? TIME TO CHANGE ALL OUR PRECONCEPTIONS! > I’m not suggesting we throw out all the rules and engage in chaos. But, it is a good time to reexamine them. If a business that makes a profit and has nearly 6% of the global population as active users (and growing, it seems) being bought for a lot of money is shocking then I cannot fathom what world you live in.