From yesterday, the Twitter sphere and online bus stops have been agog with the incredible news of Whatsapp, the mobile messaging platform with 450 million users, being bought over by Facebook for a possible total of $19 billion. The reactions ranged from hilarious to outright crazy across the top tech blogs that broke the news.
Facebook, the mother of all social platforms with its over 1.1 billion users, certainly made an audacious statement with this purchase. Following on from its earlier acquisition of Instagram for $1 billion, Facebook is now the certified behemoth for social platforms. Some may be wary of the Whatsapp deal and what it portends for user privacy and non-ad interruptions, despite a statement from Zuckerberg saying Facebook will let Whatsapp run independently as it is. However, in the midst of the massive $16 billion buy, what lessons are there for our own little ecosystem and mobile business space in Nigeria and Africa by extension?
Here are five things we can learn from Facebook buying Whatsapp for $19 billion:
1. Mobile is here to Stay
Facebook may have seen its years of stupendous growth, but by the sheer nature of the platform it is having issues dominating on mobile, especially in the advanced countries of the world. Sexier and sleeker mobile-focused engagement platforms like Whatsapp and Snapchat have been continually eating through the Facebook’s audience, especially the teens.
The major difference for Facebook is that these messaging platforms (Whatsapp, Wechat, Snapchat etc) are solely built for optimum mobile experience, so their adoption and use by the ever growing teenage audience is a given. Facebook understands where next the battle of social media, real time communication is going and wants to take the front row seat.
Many startups today can only ignore mobile at their own peril. You don’t need to play in messaging (as that is an already crowded and sophisticated space). You only need to work out the prototype of how very easy to use your product or platform can be on mobile.
2. User Numbers and Rapid Active User Growth Cannot Be Overlooked
How many active users does your product have? What is your User Growth Rate (UGR)? Whatsapp had 200 million users in early 2013. In 7 months, the messaging app added 250 million new users. Now, from reports, they add like 1 million new downloads/users per day. Zuckerberg could clearly see they are on their way to 1 billion users across the world.
Who wouldn’t notice such numbers?
Your startup may have a million visitors per month, but how many of them are users? How many of them do you have their data? How many have given you permission to own their information and thus call them users? How many are active, repeat users of your service, product or platform?
Several months ago at Ngcareers, we decided to become not just a job site but a career community, to have users we would be responsible for. Even if your revenues are not that great, if your numbers are good and promising you can build something awesome. It means thousands of people love what you are building. Investors will invariably feel you are valuable. That may not be so evident down here in this part of the world, but it is nevertheless true.
3. Building a Platform is more Valuable Than Building a Product/Service
Whatsapp started as a messaging app (more like a product). Then they said they wanted to build a platform to connect people real time and make messaging easy and stress free. Today, Whatsapp has succeeded in building a great messaging platform that runs seamlessly across the major mobile operating systems across the world while keeping the experience similar across board.
Sure; building a platform is very much more difficult than just putting a product or an online service out there. You have to invest in creating something people will use over and over. You invest heavily in infrastructure, managing loads of data, worry about failures and downtimes etc. But if you succeed in building something millions of people see as a place to be rather than a thing, 9 times out of 10, you win.
4. SMS is Dead
This may seem like saying the obvious. The telcos had the opportunity and all the leeway to innovate on cheaper, faster ways for people to stay in touch and communicate, but they stuck with SMS and the long dead MMS. Then Whatsapp came along. As at January 2014 Whatsapp handled 50 billion messages daily. This was thought to be already more than the total SMS sent and received daily worldwide.
On the average most people I know have at least one messaging app on their phone. SMS is either dead or in a coma.