Case Study: WhatsApp Development

Introduction

WhatsApp Messenger application is a freeware that allows for sending text messages, images, videos, documents, and making both voice and video calls (Bourque, 2014). The application runs on mobile devices, although it is also accessible from personal computers. Development of the application was driven by the need for users to know when recipients of their messages were online and, therefore, reachable. To come up with an application that could notify users over the internet of the reachability of recipients, Koum and Acton decided they would build it such that it displayed their status next to their names. The status would show whether they were online or offline. No other application had the feature incorporated yet and so Koum and Acton endeavored to create a first of the kind. Koum thought that incorporating the status next to the user's name, which would notify their contacts whenever they were reachable, would reduce the probability-reliant way of trying to contact someone without knowing whether you could reach them.

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Background of the Company

WhatsApp was started by former employees of Yahoo, Jan Koum and Brian Acton in 2009. Jan Koum got motivated by the need to place statuses to show availability of people next to their names, a feature that he could not find in other message applications he used. However, they could not do this without a developer for iPhone, so Jan Koum hired one from Russia named Igor Solomennikov (Bourque, 2014). In the beginning, the early versions of WhatsApp kept crashing to the point that Koum thought of quitting but got encouraged by Brian Acton to hold on for additional few months. Apple Inc. launched a push notification in June 2009 which allowed users to create connections even when they did not use the network. Koum then changed the features of WhatsApp such that users in a network would get a notification if one of them changed their status. The second version of WhatsApp was released with a messaging feature, a change that saw an increase in the number of users of the application (Bourque, 2014). Acton then convinced five other employees of Yahoo to invest close to $250000 in seed funding, a move that got him become a co-founder of the company. In November 2009, the application launched exclusively on App Store. Two months later, the Blackberry version launched after Koum hired an associate in Los Angeles to build it. In December 2009, the feature that allowed for pictures was introduced. By 2011, the application made it to the top 20 applications list in App Store. Later, in April 2011, WhatsApp Inc. managed to land $8million in investment from Sequoia Capital, and by February 2013, there were close to 200 million active WhatsApp users and over 50 WhatsApp employees. In 2013, Sequoia Capital invested an additional $50million into the company to bring the value of the company to approximately $1.5billion. By December 2013 the users of the application shot up by close to 200 million more active users (Bourque, 2014).

Product Description

The application began as an alternative to text messaging, also known as Short Message Services (SMS). Later it improved to allow sharing of pictures, videos, documents, and locations. The application also supports both voice and video calls as well. The reason why users get thrilled by the application is its security features (Bourque, 2014). WhatsApp shared texts, images, videos as well as video and voice calls are secured with end-to-end encryption. The meaning of the end-to-end encryption is that no third party can tap any communication through the network.

Analysis before Design and Production

The day the idea of WhatsApp was conceived was when Jan Koum, the CEO, and co-founder of WhatsApp Inc. went to the gym and missed calls on his iPhone while working out. As a result, he together with Brian Acton (the other co-founder of the company), embarked on building an application that could make others identify when they were reachable to receive calls or respond to text messages instantly (Bourque, 2014). Despite the use of SMS being a way to communicate without missing to reach the recipients, the two envisioned an application that would expedite response among users by texting when the recipients were online to avoid waiting for a reply, especially urgent ones.

At the start, the aim of the two was to display user status and updates. This way, their social circle of friend and relatives could know when they were online and able to receive calls or respond to texts instantly. During the start-up, Jan Koum and Brian Acton relied on the simplicity of the application and launched it in App Store. However, at the time no one used it as they expected (Kimmel, 2014).

Ever since the launch, WhatsApp has maintained updates on its design to appeal more to users. With the SMS that was used before, sharing images and videos could not be possible. The founders, therefore, thought that incorporating these other ways of sharing content over a network would enhance communication (Kimmel, 2014).

Role of Marketing in Design and Production

The company invested less in features of its products before knowing how well the product could do in the market. This caution on investing is known as the Minimum Viable Product philosophy. From the consumers' point of view, they need to familiarize with the product first before new features can be added to it. For WhatsApp, users' interaction with the product became the marketing strategy. The application was founded on a very simplified interface that almost all of its users were conversant with it from the beginning (Moogk, 2012). The interface did not require coaching for a people to know how to use WhatsApp since it functioned like the traditional SMS interfaces. The simplicity allowed users of the application to give feedback to the company concerning its functionality, its limitation and their views on what could make the application better. Users' feedback on the application, therefore, resulted in the addition of features that upgraded the application from only showing statuses to sharing of text, images, and videos through the interface. The strategy allowed for upgrades to be incorporated into the application to make it more user-friendly than before (Moogk, 2012).

Level of Success of Product

Over the years, WhatsApp has increased its service platform to enhance its services to users. Apart from working to replace SMS, the application has included other features like sharing images, videos and even making both video and voice calls. With WhatsApp, users enjoy the texting feature like they did SMS, only this time in a better, improved way. With other features like the voice and video calls, WhatsApp has eased communication across nations, scrapping off service-provider-tariff limitation that restricted communication across countries. Because of all these, and the ever improving features of the application, it continues to grow better with each update. For example, with the traditional usage of SMS to communicate via text messaging, users had no control over what they sent over the network. However, WhatsApp makes it possible to delete a message that a user sends accidentally. Also, traditional SMS services did not usually notify the sender about the receiver's activity, but with WhatsApp, the sender can now know when the message is delivered to the receiver and when the receiver reads it. As a result, these milestones have brought huge success to the company (Bourque, 2014).

The first level of success of WhatsApp came when the company shifted its product from free to paid service in 2009. The aim of the switch, however, was to prevent the application from growing too fast out of control. With the initial levy on the application usage, users would purchase the application and use it freely. The subsequent charges only came from the service providers through which WhatsApp exchanged content. The first levy brought in money with the increasing new subscribers to the application. By early 2011, the application made the top twenty on App Store. The success led to Sequoia Capital investing $8 million into the company (Hartung, 2014).

The second level of success came when the application usage clocked 200 million active users. With the increasing numbers of users, Sequoia Capital invested another $50 million. The new investment into the company and the growth in users brought the company's worth to $1.5billion at the time and boosted the number further to over 400 million active users.

The highest level of success, though, came in February 2014 when Facebook requested to purchase the company. Facebook had done a valuation of the company and announced that it would acquire the company for $19billion. The acquisition by Facebook became the biggest purchase of a venture-backed organization ever done in history, putting WhatsApp Inc.'s worth at $19billion (Hartung, 2014).

Conclusion

In conclusion, the need to build WhatsApp messenger application was driven by a simple need to notify message senders whether the receivers were reachable. Fortunately, many people related to the need and saw the application as a better option to SMS, thus buying into the idea immensely and causing it to become one of the biggest companies in the world today.

References

Bourque, A. F. (2014, February 20). WhatsApp's blog. Retrieved May 1, 2018, from The telling diary of a $16 billion startup: https://mba.americaeconomia.com/sites/mba.americaeconomia.com/files/thediaryofa16billionstartup-140220173512-phpapp01.pdf

Hartung, A. (2014). Three Smart Lessons From Facebook's Purchase Of WhatsApp. LEADERSHIP, 4, 27.

Kimmel, L. &. (2014). What's up with WhatsApp: A Transatlantic View on Privacy and Merger Enforcement in Digital Markets. Antitrust, 29, 48.

Moogk, D. R. (2012). Minimum viable product and the importance of experimentation in technology startups. Technology Innovation Management Review, 2(3), 23.