Careers at WhatsApp
WhatsApp’s mission is to let people communicate anywhere in the world without barriers.
Jan Koum and Brian Acton were employees at Yahoo!, with a combined 20 years at the company. In 2007 they resigned their jobs and traveled to South America on vacation. They then applied for jobs at Facebook but were turned down. They relied on savings for an extended period. Then in 2009, they purchased an iPhone and realized that its App Store would help the app industry explode.
They decided they wanted to get in on the action. So they visited Koum’s friend Alex Fishman, and discussed ideas for new apps. They eventually settled on an alternative to SMS (text) messaging – an app that would enable users to communicate without paying service fees. The team named their product WhatsApp (a reference to the phrase “What’s up?”) and founded a startup in 2009.
During the development process, the app kept crashing, causing Koum to have doubts. However, Acton encouraged him to stick with it. The finished prototype allowed the exchanging of unlimited text and multimedia messages. After its release, it garnered hundreds of thousands of beta users within a few months. On the strength of this, the team was able to obtain $250,000 in seed funding.
The app officially launched in November 2009 on the iPhone’s App Store as a paid service. Over time, its capabilities grew, and it could be used to send audio, video, and photo messages. By 2011, it was ranked in the top 20 list of apps in the store, and by 2014, it had more than 600 million active users worldwide. In October 2014 WhatsApp was acquired by Facebook, becoming a subsidiary.
Business model of WhatsApp
WhatsApp has a mass market business model, with no significant differentiation between customer segments. The company targets its offering at anyone who wants to communicate using its app.
WhatsApp offers five primary value propositions: accessibility, convenience, price, risk reduction, and brand/status.
The company creates accessibility by providing a wide variety of options. Its app enables communication in both mobile and desktop formats – specifically through iPhone, Android, and Window phones and Windows/Mac PCs. It allows users to communicate in over 50 languages.
The company creates convenience by making it easy for users to do many things beyond text messaging. These include the following:
- The app has a built-in camera, enabling users to take photos
- The app enables users to send photos and videos instantly, even on slow connections
- The app enables users to record and send voice messages
- The app enables users to conduct group chats with up to 256 people at a time
- The app enables users to send Word documents, PDFs, spreadsheets, slideshows, and more, in message size amounts of up to 100 MB
The company provides a price proposition. It allows users to send messages for free, avoiding SMS fees. Its WhatsApp Calling feature allows users to talk to others for free, even if they are in other countries. It accomplishes these tasks by using the phone’s Internet connection.
The company reduces risk by maintaining high security standards. It provides automatic, end-to-end encryption, giving every exchanged communication a unique lock and key. This means that messages and calls (including group chats) are secured so that only the user and the person receiving the communication can read or hear it. Even the company is not able to intercept it.
The company has established a powerful brand due to its success. It has over one billion users in more than 180 countries, making it the world’s most-used and fastest-growing messaging app. Users make over 100 million voice calls on a daily basis – over 1,100 calls a second. Lastly, it has been ranked as one of the “Top 25 Most Downloaded Apps” overall in more than 100 countries in Apple’s App Store, and has generated more than one billion installs on Google Play.
WhatsApp’s main channel is its mobile app. The company promotes its offering through its website and social media pages.
WhatsApp’s customer relationship is primarily of a self-service, automated nature. Customers utilize the service through the main platform while having limited interaction with employees.
The company’s website provides answers to frequently asked questions. That said, there is a personal assistance component in the form of e-mail support.
WhatsApp’s business model entails providing its messaging and calling service to its customers.
WhatsApp regularly forms strategic partnerships with mobile operators in order to enhance its services and/or expand its reach. High-profile examples of these include the following:
- The company entered a strategic marketing partnership with Cable & Wireless through which C&W customers would be able to access all of WhatsApp’s features across its networks; C&W would unveil a selection of packages with additional benefits for customers
- The company formed an agreement with E-Plus through which it would introduce a pre-paid WhatsApp SIM for E-Plus customers, essentially becoming an operator on the network
WhatsApp’s main resource is its proprietary software platform, which serves over one billion users worldwide. It depends on its technology employees to maintain and update the platform and its customer service staff to provide support. As a startup it has relied heavily on funding from outside parties, raising $60.25 million from one investor as of July 2013.
WhatsApp has a cost-driven structure, aiming to minimize expenses through significant automation and low-price value propositions.
Its biggest cost driver is likely product development, a fixed cost. Other major drivers are in the areas of customer support/operations and administration, both fixed costs.
Up until early 2016, WhatsApp’s sole source of revenue was a $1 annual subscription fee charged to users. However, it abandoned the fee and now has a different revenue stream: advertising revenues.
The company provides user information to businesses so that the firms can create targeted ads. That said, it does not allow third-party banner ads designed for general audiences on its platform.
info: Jan was working towards a B.S. in Computer Science at San Jose State University but dropped out. He previously worked at Yahoo! He is responsible for setting overall strategy and direction at WhatsApp. He is a Director on Facebook’s board.
info: Brian earned a B.S. in Computer Science at Stanford University. He previously served as a VP of Engineering at Yahoo!, a Software Engineer and Hardware Test Engineer at Apple, a QA Engineer at Adobe, and a Systems Administrator at Rockwell International.
info: Mubarik earned a B.S. in Electrical Engineering at MIT, a B.Eng. in Electrical Engineering at Cambridge University, and an MBA at Stanford University. He previously served as Business Development & New Ventures Director at Packages Group.
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