There’s more than one way to be a successful tech start-up, and it doesn’t always have to involve advertising your app.

By relying on mostly international users and spending no money on marketing, WhatsApp proves there is more than one strategy to having a successful and profitable startup in 2014.

Facebook founder, Mark Zuckerberg is no stranger to throwing money at trendy startups to add to his empire.

After dropping $16 billion for WhatsApp, more than five times what he offered Snapchat, the creators of the messaging app decided to join Facebook’s growing team of daughter companies on Feb. 19.

Jan Koum, a WhatsApp co-founder, arrived to the United States as a 16-year-old Russian immigrant, and was living off of food stamps. Twenty-two years later, he now holds 45 percent of his recently sold company’s shares and is estimated to be worth around $6.8 billion. The idea for the app began as just a method for Koum to remain in contact with friends and family back home in Russia.

Now, WhatsApp has more than 450 million monthly active users and has grown into the most popular mobile messaging app in India, Brazil and Spain where it commands 96 percent of the country’s total messaging marketplace. Its international origin, combined with its compatibility with a variety of phones such as Blackberry and Nokia, is one of the reasons for its rising popularity outside of the United States.

This multi-billion dollar deal should force upcoming tech companies to consider looking at their brand from a global scope. Facebook has recently adapted that way of thinking and it’s probably why it saw so much potential in WhatsApp. Zuckerberg wrote on his Facebook blog that the acquisition fuels Facebook’s mission to make the world more open and connected.

Facebook has grown so large during the past year that its only way to increase its user growth is to provide smartphones and Internet access. Facebook’s internet.org project was formed last year to increase technology use in underprivileged regions. WhatsApp’s strong international base is a major step toward fulfilling that mission.

Besides opening the eyes of investors to the overseas business potential, the purchase of WhatsApp also exposed a few myths about how to become a quality startup in today’s market.

Koum keeps a note taped to his desk that reads, “No ads, no games, no gimmicks.” At a time where it seems as if advertisements are everywhere, WhatsApp is completely ad-free and determined to give users the best and simplest experience possible. The startup currently only has 32 employees, none of which are relegated to marketing or public relations duties. You won’t find a WhatsApp promo placed in between your YouTube videos. Instead, the company depends on word-of-mouth and organic user growth, which has worked well so far.

WhatsApp went against the proven blueprint of releasing a free app into the iOS and Android marketplaces and instead opted to charge a small free to alleviate some of its financial pressure. Most startups shy away from charging to download apps initially out of fear of losing potential new users. By offering a $1 per year subscription fee, Koum and his fellow employees paid for reoccurring maintenance problems and managed to keep the company afloat during the rough development stages.

WhatsApp also reminded the world that entertainment apps aren’t the only ones people are using. Apps like Snapchat and Instagram receive most of the fanfare because of its sharing capabilities but no matter the category, the real success of an app comes down to attachment — how many times throughout the day you open the app. WhatsApp was able to revamp text messaging and make it cool again.

WhatsApp’s unusual business plan ultimately paid off big and possibly opened the door for other unorthodox tactics in the future. There are plenty of lessons that can be learned from Facebook and WhatsApp’s agreement, but I think the biggest takeaway is: you don’t have to be the “next big thing” to be successful.

 

 

 

 

 

Published on February 25, 2014 at 11:19 pm