

The WhatsApp Story Challenges Some of the Valley’s Conventional Wisdom - ckelly
http://techcrunch.com/2014/02/23/the-whatsapp-story-challenges-the-valleys-conventional-wisdom/

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strlen
I made many of the same points recently (albeit in a cheesy Facebook post --
[https://www.facebook.com/alex.feinberg/posts/101002165710317...](https://www.facebook.com/alex.feinberg/posts/10100216571031784?stream_ref=10)),
but I had a different take on this: I saw this as a hearkening to Valley's
original values as opposed to a media-fueled distortion of them that doesn't
quite correspond to on-the-ground reality.

Full disclosure: I worked at Facebook and am still holding on to some stock. I
also worked on a project ("Panama") with Acton at Yahoo and knew the
reputation of others involved in WhatsApp like Rick Reed. Rick Reed built a
high performance messaging bus in C++ at Yahoo that was the foundation of much
of Yahoo infra outside of search, so the use of Erlang was not a surprise for
me. Nonetheless, I'm sure my opinion would be the same even if I never worked
at FB or Yahoo and didn't know of anyone involved.

Keep in mind that while I know nothing of Brian's rejection from FB (it
happened before my time), but "Facebook has good talent" is not mutually
exclusive with "Facebook rejected some really great people". It's also very
likely that he was going for a more senior/leadership position and
interviewing engineering leadership is an even more of a dubious "science"
than interviewing individual contributors.

~~~
nl
_Panama_

Ah. Has there ever been a Yahoo project that had more hype?

~~~
strlen
The entire survival of Yahoo under a specific business model was staked to
this. At the time -- this was my first job out of college -- I didn't care at
all about those aspects, but the technical learnings for me (primordial NoSQL
data stores, software-based high availability, hugely distributed architecture
spanning many continents, what later came to be known as "devops" practice,
etc...) were immense.

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nostromo
This illustrates the challenges of pattern matching in a hits-driven black-
swan-finding industry.

Investors are looking for the next Facebook, so it only makes sense to invest
in people who seem very Zucklike, which the WhatsApp founders are not (at
least superficially). It reminds me of how generals are always preparing to
fight the last war rather than the next war. Or how political pundits are
convinced the US will never have a black president, let alone a Democrat from
the North, until suddenly we do.

I guess predicting the future remains a hard thing to do. :)

~~~
prostoalex
The only conventional wisdom is to be contrarian, and even that doesn't work
half the time.

~~~
lutusp
> The only conventional wisdom is to be contrarian, and even that doesn't work
> half the time.

True, but if (a) the choices are binary ones, and if (b) they only work half
the time, then (c) it's not wisdom, conventional or otherwise.

But now it occurs to me that your post was meant in fun.

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johnrob
The bit about recruiting is definitely on to something. Management and culture
are significantly more important than hiring the absolute best people. I've
had the (mis) fortune to witness individuals flounder in a poorly manage
company only to shine later on in good ones. Great employees won't fix a
broken company; Great companies will succeed with good (but not necessarily
great) people who are motivated.

~~~
DamnYuppie
I have been preaching this for awhile. It is my sincerest hope others start to
catch on and really focus on the environment and culture they are trying to
build and the ramifications seemingly little decisions they make have on it.

~~~
josh33
"The Advantage" by Patrick Lencioni is also a great read on this topic of
Organizational Health and how much it matters.

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gopi
The article missed the biggest one. Whatsup is built by outsourced russian
talent. Jan hired the first programmer thro RentaCoder!

~~~
pdevr
So was Digg, with Owen Byrne being hired on Elance.

------
alok-g
Many of the assertions made by the OP seem highly uncorrelated to the event
being discussed, which is may really be a significantly outlying event as OP
itself notes, though not astronomically rare of course.

>> “Yahoo! doesn’t have talent.” ... The two WhatsApp founders worked at
Yahoo!

OK, so two people from Yahoo were talented. How does this lead me to any
conclusions about Yahoo's talent overall (positive or negative)? Without any
disrespect to them, I am sure the smartness levels of Whatsapp founders is not
astronomically greater than those of other Yahoo employees to change the
overall Yahoo averages significantly.

>> “Companies like Facebook have the best talent.” One of the WhatsApp
founders applied for a job at Facebook and was rejected.

I am at a complete loss for this one. This rejection at best speaks to
inadequacy of the interview processes.

>> “The best founders are relatively young.” The WhatsApp founders were in
their mid to late thirties.

Let's say there is a probability distribution relating startup success with
the age of the founders. You sample this distribution a very large number of
times and find that for a very rare event, the founders are in mid to late
thirties. Can you really draw any significant conclusions about the shape of
this probability distribution from it?

>> “The center of gravity for consumer products has moved north from the
Valley to San Francisco.” Well, that’s largely true, but WhatsApp remained
headquartered deep in Silicon Valley.

I would assume that WhatsApp's location was not a criteria for the acquisition
given that the locations considered here are relatively close by. Surely there
would be correlations between a startup success and location within Silicon
Valley based on talent pool available, startup atmosphere, etc., but again,
the estimated probability distributions would not see a significant change
from the new knowledge of this event.

>> “Mobile products should be delightful, beautiful.” ... apps should look
nice, but at minimum, they should work to solve some problem ...

I wonder if the conclusion really needs this specific event to be seen as
generally valid. It is quite obvious that the app should solve some problem,
most probably even if it is a beauty product.

>> “Don’t worry about making money, just grow big.”

This one was an eye-opener for me given the scale of this acquisition, under
the assumptions that this high a valuation was sensible and that this event is
not actually astronomically rare. Founders and VCs always ask themselves
questions on how to monetize. Unless we are in an acquisition bubble, the
relevance of this question partly comes under question.

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rdl
No one is arguing Yahoo! didn't _have_ talent. We're arguing Yahoo! doesn't
_have_ talent now (except for H1B people who are basically imprisoned there,
and not many of them). You'll note that the WhatsApp guys are _not at Yahoo!_
today.

Yahoo! used to have some of the best people.

~~~
antics
I'll be honest, this is a pretty despicable comment, Ryan. The fact that you
personally don't like the culture at Yahoo certainly does not mean that
everyone who is talented also dislikes the culture at Yahoo. For example, I
know a very talented woman who chooses to work there because her judgement is
that the company has superior procedures for dealing with sexism. Versus, say,
the generally-toxic startup scene. You should carefully consider whether you
actually understand why someone would choose to stay in a situation like this,
because I suspect you don't.

Beyond the fact that I don't think you understand the reasons why people would
stay at a company like Yahoo, I don't think you actually know much about the
people who work there. Yahoo owns Tumblr, which still employs some of the best
engineers I've ever met. More than 20% of the hires the first year after the
Mayer takeover were boomerangs, which is a good indication that your
implication that between 2009 and now Yahoo suddenly lost every talented non-
immigrant employee is just wrong. And so on.

I'm not saying this to pick on you or just to be critical for its own sake.
I'm sure you're a nice person. But this comment was just painful to read.
Please think carefully about this sort of thing before you say something else
like it.

EDIT: Ah, HN. Where telling someone that a company with 10,000 employees
probably does in fact have a few talented engineers earns you anonymous down
votes. :(

~~~
rdl
Technically competent and borderline-or-better ambitious people do not work at
Yahoo!, generally.

There exception are people who are trapped there (H1B, a massive side project,
sick family member, whatever), or are vesting out after M&A. Come back to this
in 0.5 to 3.5 years when the Tumblr team have filled their vesting.

(You can make a reasonable case that big companies are better at EoE than
startups, but I don't see a strong case that Yahoo! is better than Apple or
Google or ...)

This is because the culture at Yahoo! has been horrible in terms of actually
turning technology into products, or at any real innovation. A succession of
utterly incompetent CEOs and ossified and incompetent upper management pretty
much killed the company, technically.

Every Yahoo! I've talked to said it was a "nice" place to work if you're just
collecting a paycheck. It was a horrible place to actually try to do anything
meaningful (with a few exceptions, like Panama, and even then). So, it depends
on your goals with a job: a paycheck ,or a chance to change the world. It's up
to the individual which it is.

However, people who are neither competent nor ambitious are irrelevant in
general, and those who aren't _both_ are largely irrelevant in creating
anything new. (I know many highly-competent but situationally-lazy people who
remained at Yahoo! a bit longer than was good for them. They had impressive
personal projects during that time. They were vastly happier when they moved
on to other companies.)

(As an indicator: outside of Government, Yahoo! had more contractors in more
key roles than anywhere else I've ever seen. Microsoft had a lot of
contractors, too, but they were generally not in core roles, and after that
court case, were only there for ~a year.)

So, I stand by my original comment.

~~~
antics
Let's recap a bit. You said there wasn't any talent. I said that's not true,
and there talented people who have good reasons for staying. You now say that
the culture sucks and the talented people who stay are there because of
they're handcuffed, or because they're lazy, or they're going to leave soon.

My opinion is that you're now debating a completely different set of
points.First you only told us that no one talented works there, and I think we
both know that's just wrong. That you haven't brought it up again indicates
that you concede this point. Correct me if I'm wrong.

Look. This is not to say that everything you've said is completely wrong. A
lot of what you say is true. But I do think your case is pretty overstated,
especially since these things depend pretty dramatically on which team your
on. The disparity between a good Yahoo team and a good Google team is
miniscule, even though the difference between a good Yahoo team and a bad
Yahoo team is really high.

------
antr
What I really like from WhatsApp/Telegram/Apple's Messages is their
simplicity, no over-engineered app for msging, an app that even my dad can
use. I want to use the app that any of family members can use.

Unlike, for argument sake, Path, which requires me to register with them,
makes me use a "complex" menu, unnecessary status wall, tell me how many
connections I should have, etc.

~~~
mrtksn
My ex didn't have a smartphone but her phone had WhatsApp and Facebook and
pretty much nothing else from the smartphone world was supported. I don't
think that I had any choice other than WhatsApp since the person I wanted to
talk had no other choice.

I was using it not because of the interface or anything but because it enabled
me, I personally don't like the visual design of WhatsApp btw.

WhatsApp become incredibly popular here in Turkey and I suspect that it's
mostly because of the fact that it was the only messaging app that almost
everybody can install to their phone, including non-smartphone users.
Everybody here have at least one phone but not everybody had a smartphone and
if some of your friends are out of reach, its a deal breaker.

Line, I belive had little bit traction, Viber too. WeChat even run TV ads but
eventually, everybody have WhatsApp :)

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nl
_this particular VC firm [Sequoia] missed the first wave of social networks,
invested a large sum in the debacle known as Color, and then, in about three
years’ time, turned their investment in WhatsApp into one of the great IRRs in
the history of venture capital?_

Ahh, Color.

Could the differences between Color & WhatsApp be any more pronounced?!

------
bobsil1
Rules like "only fund Harvard dropouts under 25" screen out big hits.

~~~
interstitial
Personally, I'm happy VC screens keep them in their bubbles. Unfortunately,
the rest of the world has their own screens and their own bubbles, too.

------
IanCal
Oh bloody hell. I'm tired of this "Oh but they did X and Y!!!! That's the
magic key!"

They did this, in order of importance:

1) They built something that solved a problem.

2) They sold it at a price that the people were willing to pay for that
problem to be solved.

3) They built something with powerful network effects, drawing in new users &
keeping old ones.

Ian's magic guide to making money by building things:

1) Build things that people will pay for

2) Sell it to those people

ADVANCED COURSE (DLC - send payments to 1QKocu7qqiSGbmaviR4aFVTq3zVWtvdFiA )

3) Charge more than it costs you

4) Charge no more than those people are willing to pay

Astoundingly, I've missed off things like "be mobile first" or "don't be
mobile first" or even "it should have been built in this city". I've also
managed to not dwell on the language anything like that. Turns out, having
loads of people pay you money for a service somehow makes a good business! WHO
COULD POSSIBLY HAVE FORESEEN THAT? TIME TO CHANGE ALL OUR PRECONCEPTIONS!

> I’m not suggesting we throw out all the rules and engage in chaos. But, it
> is a good time to reexamine them.

If a business that makes a profit and has nearly 6% of the _global population_
as active users (and growing, it seems) being bought for a lot of money is
shocking then I cannot fathom what world you live in.

------
sayemm
interesting tweets from Jan Koum:

"Be so good they can't ignore you" \-
[https://twitter.com/jankoum/status/262099630773399552](https://twitter.com/jankoum/status/262099630773399552)

"If you run a startup and your goal is to get on techcrunch, you are doing it
wrong." \-
[https://twitter.com/jankoum/status/199240645745979392](https://twitter.com/jankoum/status/199240645745979392)

------
crassus
As Steve Sailer said "Perhaps one reason these two guys couldn't get hired by
Facebook is because they are so old: Koum is 38 and Acton 42."

