Recently I stumbled upon the work of Mike Vance who started 'Creative thinking association of America'. He has been known as the guide to Walt Disney's senior leadership team, even having a deep influence on the culture of Apple and for famously popularizing the phrase 'Think outside the box'. Lot of interesting theories such as Lean Startup and innovative businesses have emerged by challenging the conventional wisdom. This deforestation of previously known business models has become the need for an improved tomorrow. It can be achieved only with the deep understanding of customer behavior and their shifts.
In my previous blog post "3 myths on WhatsApp's strategy", I discussed why WhatsApp may not change path to conventional ideas followed by its competitors such as in-app advertising or some popularly suggested ideas such as data crunching or focusing on a specific demographic to accelerate its adoption.
Here are 3 things that WhatsApp can do to monetize their success:
Facebook and WhatsApp can operate as two separate social networks
Apart from Facebook, we use other social networks such as LinkedIn, Twitter, Pinterest and even communities such as Quora, GitHub etc. Each of these networks serve specific needs. Facebook operates as a social network with its ad based revenue model allowing us to connect and share with friends, discover and learn new things. Its core strategy is to increase the user engagement so that it can provide ongoing value to users like us, advertisers and app developer community. Whatsapp with its user base of 450M growing at a rate of 1M users/day is well positioned to operate as a separate social network at the current subscription fee of 99 cents/year. It's core strategy seems to be making instant messaging as easy as possible on any smart phone. Since the switching costs are relatively low for messaging applications, the user attrition can be controlled with a nominal subscription fee and this model can be a source of a growing revenue stream.
Enrich the chat experience with small changes
WhatsApp may choose to focus on making smaller changes that can further enrich the chat experience. They have announced plans to add voice to their application. Some of these adjacent shifts may come at an additional price tag that will be negligible for an individual user but the multiplication factor of the user volume can result in a significant contribution to its top line. WhatsApp may even try to make the messaging more secure using encryption algorithms which may help slow down user attrition attributed to security concerns. Such micro-opportunities to enrich the chat experience will continue to pay great dividends in long term.
Not the in-app advertising but include outside-the-app advertising
In-app advertising approach conflicts with WhatsApp's value system. Is it possible to include a new paying customer without hurting the current user experience? Also this new customer type will have to add a meaningful dimension to the chat experience. So let's think outside the world of WhatsApp. Imagine a WhatsApp icon in the mobile optimized search results of services such as restaurants, bars or products listed on amazon which can be clicked to invoke a chat conversation with your contact. The conversation will now have a reference to the clicked service solely brought in the chat context by the user and the service vendor can be charged an advertising fee. Our current behavior is to send email with links to services/products to our contacts. Such a feature can change that behavior. It will also serve as a a new paid customer segment for WhatsApp that will only elevate the experience for their current users.
Do you agree with these ideas for sustaining existing and new revenue streams? Many of you may have wondered about the monetizing strategy after the acquisition. What can be other additional revenue streams for WhatsApp that complies with its core principles of "No ads, No games, No gimmicks"?
In my previous blog post "3 myths on WhatsApp's strategy", I discussed why WhatsApp may not change path to conventional ideas followed by its competitors such as in-app advertising or some popularly suggested ideas such as data crunching or focusing on a specific demographic to accelerate its adoption.
Here are 3 things that WhatsApp can do to monetize their success:
Facebook and WhatsApp can operate as two separate social networks
Apart from Facebook, we use other social networks such as LinkedIn, Twitter, Pinterest and even communities such as Quora, GitHub etc. Each of these networks serve specific needs. Facebook operates as a social network with its ad based revenue model allowing us to connect and share with friends, discover and learn new things. Its core strategy is to increase the user engagement so that it can provide ongoing value to users like us, advertisers and app developer community. Whatsapp with its user base of 450M growing at a rate of 1M users/day is well positioned to operate as a separate social network at the current subscription fee of 99 cents/year. It's core strategy seems to be making instant messaging as easy as possible on any smart phone. Since the switching costs are relatively low for messaging applications, the user attrition can be controlled with a nominal subscription fee and this model can be a source of a growing revenue stream.
Enrich the chat experience with small changes
WhatsApp may choose to focus on making smaller changes that can further enrich the chat experience. They have announced plans to add voice to their application. Some of these adjacent shifts may come at an additional price tag that will be negligible for an individual user but the multiplication factor of the user volume can result in a significant contribution to its top line. WhatsApp may even try to make the messaging more secure using encryption algorithms which may help slow down user attrition attributed to security concerns. Such micro-opportunities to enrich the chat experience will continue to pay great dividends in long term.
Not the in-app advertising but include outside-the-app advertising
In-app advertising approach conflicts with WhatsApp's value system. Is it possible to include a new paying customer without hurting the current user experience? Also this new customer type will have to add a meaningful dimension to the chat experience. So let's think outside the world of WhatsApp. Imagine a WhatsApp icon in the mobile optimized search results of services such as restaurants, bars or products listed on amazon which can be clicked to invoke a chat conversation with your contact. The conversation will now have a reference to the clicked service solely brought in the chat context by the user and the service vendor can be charged an advertising fee. Our current behavior is to send email with links to services/products to our contacts. Such a feature can change that behavior. It will also serve as a a new paid customer segment for WhatsApp that will only elevate the experience for their current users.
Do you agree with these ideas for sustaining existing and new revenue streams? Many of you may have wondered about the monetizing strategy after the acquisition. What can be other additional revenue streams for WhatsApp that complies with its core principles of "No ads, No games, No gimmicks"?