what made whatsapp worth $19 billion?
TRANSCRIPT
The Whatsapp timeline
April 2009
October 2009
April 2011
November 2011
July 2013
January 2014
February 2014
April 2014
ORIGINAL PROBLEM: MISSED PHONE CALLS Koum, the founder, built an address book app that also showed the current status of your friends. He was tired of missing phone calls while at the gym.
The Early Pivot
• Original app was buggy and crashed
• Apple launches push notifications in iOS
• Koum adds push notifications to WhatsApp
• Users use the change in status to ping each other—the notification becomes the message
The Early Pivot
• Koum realizes he’s built mobile messaging and pivots from address book status manager to messaging app
• User base explodes to 250,000 with pivot
Remarkable Focus on Product
• Laser focus on core user experience—no ads, no games, no gimmicks
• No user acquisition spend
• Focus on maximum utility
• Focus on broad adoption and interoperability, not just smartphones
Whatsapp’s aha! moment
• The cheap alternative to SMS and MMS messaging with no limits
• Additional features like photo, video and group texting
• Super simple to use—uses your existing contact book, no rebuilding of a social graph
• Cross-platform, not closed like BBM and iMessage
GLOBAL Focus
• Feature phones focus across carriers
• Super-simple to send pictures, video and texts overseas
• Unlocks pent-up text demand from restrictive carrier charges & plans
Word of mouth drives growth
• No paid advertising
• No marketing
• Not a press darling
• “Near perfect market information”
The YEAR LONG TRIAL
• No cost to use for first year, $0.99 per year thereafter
• Sets paid expectation, but eliminates friction from network building
• Creates lock-in and habit prior to charging
Today’s Growth engine
• Facebook effect helps fuel growth
• Face challenges in US market with low messaging rates and in China with tough competition
• Will they introduce voice calling next?
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