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Comment by mbesto | Hacker News Reader

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).

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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-...

[2] https://www.crunchbase.com/organization/whatsapp/funding-rou...

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.

> 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...

Please understand some of the details about _HOW_ WhatsApp did what they did.

Focusing on reach (ubiquity is an innovation). Focusing on operational efficiency (a low-cost tech company is an innovation).

The apocryphal stories about WhatsApp in support of the two above points are:

1) Supporting J2ME clients (ie: dumb-phones) ... connecting "poor people" in dumb-phone countries w/ "rich people" in smart-phone countries (for $0.99 app).

$0.99 / user * 25% of your userbase isn't enough revenue for most companies to be successful.

2) Be operationally efficient, reliable, and lean. How? By running like 10 erlang servers (targeting peak message transmission RATES, not all-time storage of messages or number of users)

This allowed them to _SCALE_ revenue because they're basically dividing by zero (Income v. Expenses) if they're extremely lean on number of employees, maintenance, and operations costs.

Therefore: it compares extremely well to Juicero as a counter-example.

>This allowed them to _SCALE_ revenue because they're basically dividing by zero (Income v. Expenses)

Don't disagree with anything you said except scaling revenue. As far as I can tell they never really scaled revenue, but instead became such a threat to FB in terms of users that Zuck felt he had to give up a substantial portion of his company to own them.

Or put another way, if FB (or anyone else) and not bought them, where would they be?

Probably 20-50 people, 100-200 servers, and comfortably sitting on 10-30% of global instant messaging traffic running through their servers. If that's not somewhat interesting to somebody then I've got a bridge to sell you.

It's not a question of "somewhat interesting" - it's a question of what would be their revenue source.

> Did you read the article? They're explicitly not* focusing on user growth:*

I also RTFA, and it's hard to understand how someone could think user growth wasn't the focus.

— "…all of its attention has gone into making the app as simple as possible to get started with…" [Hint: They did this to improve virality.]

— "All along, he adds, the company's goal has been 'getting every single smartphone user on our network and getting them to use WhatsApp.'"

Plus, they'd said as much elsewhere as well. From https://www.wired.com/2016/01/whatsapp-is-nearing-a-billion-...:

— "Continued growth, it turns out, was one of the main reasons Koum agreed to the Facebook acquisition. The deal allowed WhatsApp to concentrate on growth without worrying too much about revenue."

To me there's a giant difference between people focused on growth for the sake of growth and people trying to make a valuable product that is then rewarded with growth.

As an example, look at Google in the early days. They were mainly focused on making a great, valuable product. Growth was a consequence of that. In contrast, look at all the people that glued gamification, growth hacking, etc, onto mediocre mediocre products. As with things like MLMs, a growth-first focus can get business results, but I think it's a very different mindset than, "Let's make a product people love."

Growth is surely a useful metric for them, and from that quote, it looks like it's a goal. But a goal is different, broader thing than what one focuses on. Compare people who want to be, say, great athletes (and therefore famous) with people who just want to be famous. The former will focus on doing the hard work; the latter will be more inclined to chase self-promotion and attention directly.

> 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.

> 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?

They lost something close to $138MM the year before Facebook purchased them.

https://mobile.nytimes.com/blogs/dealbook/2014/10/28/faceboo...

I'm a philistine, can someone explain how they paid their engineers when they lost SO much money?

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.

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).

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?

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.

I've used WhatsApp for years and have never been charged a dime.

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-...

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.

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-pay...

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.

Or one might have not even noticed it. Just a click somewhere in a dialog, end of story. Among 10,000 other events we go through everyday...

Not sure why I typed /month, it was always a yearly fee or a flat fee to buy the app. Can't edit it at this point.

I have an iTunes receipt from 2013 for 69p paid for a year's worth of Whatsapp service. Their message then was "we charge because we don't want to show you ads".

IIRC they were always free in emerging markets like India though.

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.

tech stack : Erlang

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

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

Modified Erlang, as described in one of their talks.

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