In the 12th century, birds delivered messages over large distances. Even in the TV show 'Game of Thrones', ravens have the job to shuttle messages between the castles and the cities of the seven kingdoms. For a long time known to our kind, we have created and used tools to share messages with people that matter. WhatsApp is one such tool that has allowed 450 millions of us to send messages using our mobile devices in a most reliable manner, without any interruption from advertisers and also without needing any of our personal information. Ever since Facebook acquired WhatsApp, it's strategy got widely discussed in the media; the attention largely attributed to its $19B price tag. As I read through them, I felt most of those viewpoints ignored the principle with which the product was built.
Here are 3 things I believe WhatsApp's team will not focus on going forward.
No In-app Advertising or In-app Games
WhatsApp may not feature any advertisements or games within their application adhering to its values of "No ad, No games, No gimmicks". The founders had developed products at Yahoo that used advertising for its revenue stream. When they were building WhatsApp product, they took a difficult decision to challenge and ignore the conventional wisdom of using advertisements and games unlike their competitors WeChat and Line. They focused on fixing the messaging problem and full marks to them for getting it right. This decision ultimately became one of the sources of its competitive advantage that led to its viral growth, something which WhatsApp may not want to tinker with.
No data crunching
As per the founders blog post, the users data isn't even in the picture and they are not interested in it. What will you do if the phone carrier records your conversation and sends advertisers at your doorsteps? The policing of WhatsApp's data will raise serious privacy issues and will result in users switching to other messenger products. The switching costs for messenger products are quite low even though the switching costs for social networks are a lot higher. Unlike Facebook one does not have to invest in building a network on WhatsApp since the tool does it for you. This is likely to be the characteristic for most of the messenger products going forward. The viral characteristic of the social products applies to both user adoption and attrition. Remember MySpace during its downfall; it lost 40M customers within a period of 3 years. So crunching conversations for monetizing purposes may cause more damage to WhatsApp's brand.
Not just for young demographic
WhatsApp never collected any personal information that would have helped identify the user demographic. Today anybody in the world with a smart phone and a data plan can claim a seat in its addressable market. So however much we would like to blame the usage of messenger products on the teenagers of the world, it is not really a tool that was meant just for them. Since WhatsApp didn't collect personal information before, I don't see a good reason for them to start now.
So now the billion dollar question is how will Facebook monetize WhatsApp? What will be their strategy? Should we expect a WhatsApp app on Facebook that would integrate its functionality just like Instagram? Will the WhatsApp team focus on making major changes to the product? Can they demonstrate its value to a new customer type? Just like most of us, I am not sure in which direction Facebook's and WhatsApp's think tank will take the product forward but here are few ideas for starters in my next blog post "Think outside WhatsApp".
Here are 3 things I believe WhatsApp's team will not focus on going forward.
No In-app Advertising or In-app Games
WhatsApp may not feature any advertisements or games within their application adhering to its values of "No ad, No games, No gimmicks". The founders had developed products at Yahoo that used advertising for its revenue stream. When they were building WhatsApp product, they took a difficult decision to challenge and ignore the conventional wisdom of using advertisements and games unlike their competitors WeChat and Line. They focused on fixing the messaging problem and full marks to them for getting it right. This decision ultimately became one of the sources of its competitive advantage that led to its viral growth, something which WhatsApp may not want to tinker with.
No data crunching
As per the founders blog post, the users data isn't even in the picture and they are not interested in it. What will you do if the phone carrier records your conversation and sends advertisers at your doorsteps? The policing of WhatsApp's data will raise serious privacy issues and will result in users switching to other messenger products. The switching costs for messenger products are quite low even though the switching costs for social networks are a lot higher. Unlike Facebook one does not have to invest in building a network on WhatsApp since the tool does it for you. This is likely to be the characteristic for most of the messenger products going forward. The viral characteristic of the social products applies to both user adoption and attrition. Remember MySpace during its downfall; it lost 40M customers within a period of 3 years. So crunching conversations for monetizing purposes may cause more damage to WhatsApp's brand.
Not just for young demographic
WhatsApp never collected any personal information that would have helped identify the user demographic. Today anybody in the world with a smart phone and a data plan can claim a seat in its addressable market. So however much we would like to blame the usage of messenger products on the teenagers of the world, it is not really a tool that was meant just for them. Since WhatsApp didn't collect personal information before, I don't see a good reason for them to start now.
So now the billion dollar question is how will Facebook monetize WhatsApp? What will be their strategy? Should we expect a WhatsApp app on Facebook that would integrate its functionality just like Instagram? Will the WhatsApp team focus on making major changes to the product? Can they demonstrate its value to a new customer type? Just like most of us, I am not sure in which direction Facebook's and WhatsApp's think tank will take the product forward but here are few ideas for starters in my next blog post "Think outside WhatsApp".