In part 1 of this two part interview with Neeraj Arora, head of business for WhatsApp, we spoke about telecom operator deals, how business development for WhatsApp is going to change this year, carrier deals post WhatsApp Voice, and WhatsApp’s plans to hire in India. In part 2, he discusses ideas for monetization for WhatsApp via integration of services, the Facebook deal, and why he joined WhatsApp:
MediaNama: Look at what WeChat has: they’re trying to integrate games and commerce solutions. People are already using WhatsApp for commerce, like ordering services. Do you see integration of services, and premium accounts?
Arora: Our philosophy has been very clear from day 1: Anything that clutters the experience is not going to be done. No games, no gimmicks, no ads. With Facebook or without Facebook, that was always the plan.
We’ve always been intrigued by how small businesses have been using WhatsApp. That’s a discussion we’ve had, but we don’t have a plan for it. Anything that adds to the utility of WhatsApp, we’re happy doing. Anything that takes away from the experience, we don’t want to do. Nothing should come in the way of you messaging your friends and family. If you’re promoting games, to us, is a bad idea. (In comparison) My Uber is coming and I get a message on WhatsApp, that’s a utility.
Those kind of ideas, I’m open to, but I don’t have a product timeline for it. We think about it all the time, but the challenge there is – how do you make it happen without spam? If you’re giving access to a third party to message a user, and even if they say that it’s all about utility and they’ll only give messages they want, and it’s opt-in, there’s always a danger that they’ll cross the line at some point and say, 20% off on this. We hate that shit. We would rather not rush into it, and make sure we build a system that is totally clean and no spam, and then opt-in and then think of monetizing it, because if you’re involving a business entity, they can pay for it. It’s something that saves cost for them in the end. They don’t need to have so many call centers, and it’s a great option for SMB’s (small and medium businesses). That idea we’re open to, but we don’t know when that will happen.
E-commerce, games and ads are not going to happen.
MediaNama: Going back to the deal: why Facebook?
Arora: Jan (Koum, co-founder of WhatsApp) and Mark (Zuckerberg, founder of Facebook) talked about it earlier. The visions of the two companies are aligned, even though the products are totally different. The vision is to connect billions of users, and when society gets connected, everyone benefits. If you look at how WhatsApp is being used in small towns, it’s an economic difference to their lives: they can do their business better, they feel more connected with their family. Facebook is doing this with their social networking product, we’re doing with our messaging product. So, Mark and Jan’s vision…they’ve known each other for two years now and there’s a lot of comfort confidence, and trust that we can build an amazing partnership together.
MediaNama: Why not Google?
Arora: Goes back to the same thing. It’s not that we discussed this in an objective way that, lets go meet 5 companies, have a parameter and see who fits. It’s not like that. These things are about person-to-person relationships, company vision, and we felt good about Facebook.
MediaNama: So what made this the right time for the deal? They must have spoken with you before, and overtures from other companies in the past…
Arora: The way the deal was structured as a partnership and not an acquisition, I think was the first time we heard about that kind of idea.
It wasn’t that we were looking to hit certain milestones and grow to a certain size. We are never thinking of an exit, as we’ve said publicly before. That was not something that we were looking to entertain. But when Mark and Jan talked, this was like a partnership, our visions are aligned, we can change the world together, it just felt right. At that time it was not about price or timing, it was about “This feels right, lets do it.”
MediaNama: There are a lot of comments that about the price was right or not. Was it also about the price?
Arora: Price in any deal is important, but we didn’t spent too much time on it. The most amount of time was spent on making sure that WhatsApp keeps on doing what it is doing, and how do we make that possible. How do we empower WhatsApp to keep on executing on what it has been doing. Price was obviously a part of the discussion. I think it’s a good price. Both sides feel good about it.
MediaNama: How does this change things for you personally?
Arora: I feel good about the fact that people who worked hard and early employees – it’s very rewarding for them. That side is amazing. If you come and spend some time with us there, you’ll see that these people are not driven by any financial gain. The kind of company we’ve built, it’s all about how to build the best product for the users.
MediaNama: I remember reading that Jan said that you came and told him you want to join WhatsApp, and found a role for yourself.
Arora: Everyone in the company is passionate about what we’re doing. Passion for what we’re doing drives us more than anything else. This is three and a half years back. What I saw in WhatsApp was these two people – Jan and Brian – two founders who are trying to build a company with core values that I had rarely seen in the valley. Rarely. Deeply caring about the users and the product, the minimalistic nature of the product. Not worrying about financial gains. Not creating hype. Silicon Valley is a lot about hype. They had a business model. When was the last time you saw a company have a business model from Day 1?
There were so many elements to this founding team that when I saw them, I spent some time with them…so there were two things to it: an amazing mission, core values were great, and what they were trying to achieve was super fascinating, to connect billions of people. They always had it. It wasn’t like when they were 5 people, they thought their job would be done once they reached 100 million users. From day one they were always talking…that’s why we understood international and global three years back. US companies always focus on the US market. We cared about India and Brazil, Indonesia more than the US.
MediaNama: Does this acquisition change things for WhatsApp in the US? It’s not been one of your stronger markets.
Arora: It has not been. We’ve always thought of this as a global company and our hope is that this deal will strengthen our growth everywhere. Because, as a company, we will get everything we want: the time we need to monetize this, the resources, the independence and autonomy. It will help us.