What if Facebook made Facebook go away?
When the news of Facebook buying WhatsApp broke, the first thought that crossed my mind was:
How much would it matter if Facebook went away in favor of a light wt Instagram + tweaked WhatsApp. That’s 90% of the native behavior.
Seriously.
WhatsApp can keep 450 million daily active users highly engaged with 35 employees. Instagram now has over a 150 million daily active users and came with 13 employees. That’s a total of 600 million daily active users driven by 50 employees.
Contrast that with Facebook’s 950 million daily active users, requiring 6300 employees to keep the lights on.
It IS a rational buy as Om Malik astutely opines:
Facebook has had a tough time trying to invent new native behaviors, mostly because it has a powerful basic unit of communication and interaction. WhatsApp brings some unique capabilities, much like Instagram, which brought a different set of attributes.
F
acebook had to do this. But any rational investor has to consider this: If Facebook could add revenue generating capacity by increasing its talent pool of Instagram + WhatsApp by say 10 fold, that’s still a far cry from the economics of supporting a business that affords 6300 employees.
Think about it. Status based communication, plus sharing of photos adds up to a significant chunk of the commonly used modalities on Facebook. This is what most of us do. If just these two modalities can be supported by under 1/100th of the current workforce, you have to stop and wonder about how much cheaper it has become to build and operate a network-first business and how this will keep threatening the likes of bloat-ier Facebooks, year after year.
This isn’t about bashing Facebook. It’s about the broader topic of the economics of any network-first business model.
Marc Andreessen famously said that software is eating the world. Clearly, networks are proving to threaten existing networks at a much faster clip.
Facebook’s purchase of WhatsApp is a fascinating, expensive lesson in building complexity, only to then be forced to buy your way back to simplicity. The first step was to buy simplicity. The more important task will be to operate at simplicity.
So, what if Facebook Inc made [the complex] Facebook go away? This an uncomfortable but legitimate question to ask.
