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Comment by senatorobama | Hacker News Reader

I swear to God, WhatsApp is THE startup fairytale.

No dilution, bootstrapped, greenfield tech and mind boggling earn out. A once in a generation business story.

I always mention WhatsApp when people want to do something overly complicated.

The fairytale for startup employees is probably Microsoft and its 10,000 millionaires. But that was two generations ago. A generation ago, it was 'The Google Chef' and far fewer millionaires though several thousand. While WhatsApp created a lot of wealth, it did not create a lot of wealthy people. That seems to be the trend.

Remember when Zynga clawed back options because "unimportant" employees were going to make money? Heck, remember Zynga?

Nowadays the 'google chef' would be an underpaid temp supplied by an agency.

To be realistic, Whatsapp is massive and popular, but totally incomparable to Microsoft or Google as a company. Whatsapp is a chat app, Microsoft is the operating system and office software of 1.25 billion computers around the world.

you're underselling it. yes, it's a 'chat app', but one that runs on a billion phones in every country on the planet

But it is still just an app, a messaging app at that. AFAIK no one I know has ever got the voice call function to work to a minimum standard. So whilst it is a useful and pervasive chat application that's all it really is.

Voice calls on WhatsApp are simply fantastic. I'm not sure how you are measuring, but this is based on my experience in Brazil over Wifi and 3Gish 4G

Yup, WhatsApp voice calls beat Skype, hangouts, FaceTime audio, Slack audio. I don't know why, but I've tried them all. Somehow WhatsApp seems so much better.

Second this. WhatsApp uses the least data and can work well in network connection transition. Most importantly, it is binded to your phone number and can call people regardless of country (unlike Skype) .

If I remember correctly since 2016, WhatsApp is completly free from any fee charge? How is facebook planning to use that? Finally integrate with facebook?

You're not seeing it. It is, to some or other partial-but-very-noticeable extent, a Skype killer, an SMS killer, a GSM/CDMA voice call killer, an email killer, a Hangouts killer, a Facebook killer (yes i know they bought it), [insert many others here]. Communications are very important, this app is a beast. The voice calls work perfectly for me.

I don't think that the technical scope of the software or the company behind it were what was being measured against the notion of a "fairytale startup" by the parent, or the grandparent. They spoke of "greenfield tech", "mind-boggling earn out", "10 000 millionaires" but the product didn't have to be an entire operating system. A game could be a fairytale startup then. Flappy Bird would have done it for me

I guess, but if we're talking about the number of millionaires to come out of a startup, then I think the scope and size of the company is very relevant.

You don't need a huge team to build WhatsApp or Instagram. Guess software is eating the world- including itself.

But you need a group of highly skilled team players. Which is a hard problem.

The reason for the trend, of course, is that companies are staying private longer to maximize returns for early investors and VCs.

Simplicity is part of it but it's really also the business model. With good focus they exploited a unique opportunity at just the right moment: SMS arbitrage. To offer "free" messaging when carriers were beginning to offer affordable data plans for third party apps, yet still trying to disproportionately monetize SMS. And this came with a very, very strong network effect.

If carriers had proactively disrupted their business model and offered free/cheap SMS sooner, it's unlikely that WhatsApp would have succeeded despite their simplicity and focus. This is why they never took off in the U.S., where carriers did away with SMS fees faster.

Having said that, focus is absolutely a reason why WhatsApp beat out its other free-messaging app competition. But the "mind-boggling earn out" is more about the business model -- network effects, exploiting incumbent blindspots, etc.

Agreed, not to mention Sequoia literally went and hunted the Founders down on foot in SF [1].

[1] https://youtu.be/8-pJa11YvCs?t=8m22s

Great video.

That's like something out of SV (HBO's show).

Interesting video.

Brian Goetz mentioned that Sequoia built a tool they called "Early Bird" to help them keep track of messaging apps that show lots of traction in non-US app stores which was how they knew they really needed to get a Whatsapp deal, at any cost.

This is interesting; I've never come across job postings from VCs for their tooling/business line application development needs, but surely these roles must exist.

Yes, those roles do exist among top and aspiring top tier VCs, but VC being a people-oriented business means that Sequioa and other top tier VCs like a16z and YC [0] who build their own tools in-house should have no problem assembling a talented team of 1-3 engineers to write software by just reaching out to their network.

[0] https://blog.ycombinator.com/investor-day-software/

Also didn't focus on US. I'd wager most Americans haven't heard of it. Seems relevant.

> I swear to God, WhatsApp is THE startup fairytale.

May I suggest a Black Swan as the main character for your fairytale? :)

https://en.wikipedia.org/wiki/Black_swan_theory

> greenfield tech

how so?

We like startups here, so we pretend they didn't leverage ejabberd.

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