Facebook Buys WhatsApp: 3 Lessons for Your Business

February 21, 2014 by

www.jeffkorhan.com

WhatsApp is an instant messaging service for smartphones that has over 450 million users, and it is growing globally at a rate of one million users every day.

How WhatsApp operates promises to influence Facebook as much as its mobile technology. Tweet this

That has lessons that can help your business ensure its relevancy moving forward.

#1 – Don’t Fall in Love with Your Business Model

Facebook’s business model is clearly driven by revenue from advertising. This enriches Facebook at the expense of advertisers and users. That’s right, the content that finds its way into your newsfeed is largely the result of advertising. We tend to forget that.

This is one reason why I have never liked this model, and have instead suggested a subscription model, much like the one that WhatsApp employs. They charge all of their users 99 cents per year, with the first year being free. I’m sure you can expect that to go up in the future.

Is there anything wrong with that? Keep reading to learn why some form of subscription model may prove to be beneficial for everyone concerned.

#2 – The User Experience Matters

Wouldn’t your business gladly pay a few hundred dollars/year to have all of its content delivered to 100% of its fans? Would you as a user pay fifty dollars/year to have an unfiltered Facebook experience? Would you pay one hundred to have no advertising at all?

Thankfully, WhatsApp co-founder Jan Koum is an industry veteran who now has a seat on Facebook’s board of directors. If his voice is heard it will hopefully encourage more focus on earning revenue while respecting the user experience.

It’s doubtful Facebook will ever adopt a pure subscription model, but a hybrid incorporating some of its qualities is a possibility.

#3 – Partner with Relevant Businesses

From the beginning Facebook has encouraged it’s employees to “move fast and break things.” Breaking things will often get you into trouble, and over the years it has for Facebook, especially in regards to privacy. However, now that Facebook is a public company it is taking more prudent risks.

Facebook recognizes that it is not cool anymore, especially with the younger crowd that is gravitating towards applications like Instagram and WhatsApp. Thus, in order to ensure its future relevancy Facebook is buying relevancy.

While making acquisitions may not be a possibility for your business, it can partner with those in your industry that have different perspectives, approaches, and platforms. Many are lauding Facebook’s acquisition of WhatsApp, with some even beginning to compare Mark Zuckerberg’s forward thinking wisdom to that of Steve Jobs.

If this acquisition influences Facebook as suggested here, then count me in that camp too. Facebook has never been more profitable. That’s the best time to break things.

Is it time to reconsider your business model to provide a better customer experience?

About the Author:  Jeff Korhan, MBA, is the author of Built-In Social: Essential Social Marketing Practices for Every Small Business – (Wiley 2013)  

He helps mainstream businesses adapt their traditional growth practices to a digital world. Connect with Jeff on LinkedIn, Twitter, Facebook, and Google+.

When Users are Not Customers

September 16, 2012 by

The Ideal User Experience

Google’s mission is to deliver the most relevant results for ANYONE performing a search within their platform.

Google knows their customer. It’s any person doing a search query, regardless of whether that search is for business or personal reasons.

When Google focuses on providing the best user experience, they are equally serving users and customers.

To be profitable, Google employs a business model to deliver favorable results via organic and paid search. Their focus is providing a user experience that equally serves users and business customers alike.

Businesses want to be ranked highly within search results, and they can accomplish their objective using content marketing or paid search. Some choose both.

Users are indifferent. Their only concern is getting what they want. Their mission is congruent with that of Google.

Contrast this with Facebook.

The Compromised User Experience

You can I are the Facebook users. Though, we are not their customers, and that compromises the experience.

The Facebook model in the early days was designed to create the best experience for users, but those days are gone. Now everything is designed for the true customer – businesses that want to connect with users.

Facebook is not searchable for anything other than your friends or pages that you have liked. To be honest, it does a mediocre job at this at best, despite the fact that Facebook is sitting on a massive treasure trove of valuable, contextual information.

Why?

Have you ever wondered why you are limited to 5,000 friends.

Anyone desiring more than 5,000 friends is encouraged to migrate their Facebook experience to a page, thereby assuming a role as a personality or business, one that is encouraged to purchase advertising to stay engaged with their fans.

This is why Facebook is only searchable within the context of ads that target a specific demographic of users.

The Facebook experience is now designed for the benefit of the customer – not the user.

If you have never placed a Facebook ad, give it a try. It will indeed target your desired prospect with laser accuracy.

Facebook co-founder and CEO Mark Zuckerberg stated at the recent TechCrunch Disrupt conference that Facebook will become searchable when they get it right. What he is not saying is this will happen when they can monetize search results.

Here’s what he said. “Facebook is pretty uniquely positioned to answer the questions people have. At some point we’ll do it. We have a team working on it.”

He goes on further to say, “Search engines are really evolving to give you a set of answers. I have a specific question, answer this question for me.”

That’s what we have all been waiting on for years – the wisdom of friends. This is now somewhat possible by using Facebook questions, but that is a manufactured approach that ignores the valuable context that everyday, casual conversations within Facebook offer.

The reason that Facebook has met with so many challenges in its short history is they are straddling a line between their users and customers. This will always be a slippery slope.

Why can’t we learn what is REALLY being said in real conversations among our Facebook friends?

Privacy is no doubt the main reason, with the other being their business model.  If Facebook provided free information to users they would have to do the same for businesses.

Users and Customers on The Same Team

Here’s an idea. What if Facebook charged all of its nearly one billion users $5/month for a richer experience. If half of us took the deal, that provides 30 billion dollars of revenue – 15 times what they are generating now!  They could easily add another 20 to that by charging businesses for premium services.

What do you think? Would you pay a little extra to have full access to years of your friends wisdom?

When the needs of the users and customers are mutually served everything works.

Take my profession as a professional speaker. My audience, the meeting planners, and the event sponsors all want the same thing – great value for the audience (the users) that will benefit from the experience. You could say we are all on the same team.

An inclusive model that is focused on the user experience is much easier for a business to manage. If I serve my audience well everyone is happy.

How about you?

Is your business model designed to equally serve all of your users?

Leave a comment below and share this with your community.

Until next time, Jeff

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