READER REPORT:

WhatsApp's $22 billion could happen here

ANTHONY PATRICKSON
Last updated 12:00 26/02/2014
MCT
MADE IT: WhatsApp founder Jan Koum.

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Facebook's mammoth US$19 billion (NZ$22.9b) acquisition of WhatsApp made a few people rub their eyes, scratch their heads and try to put themselves in Mark Zuckerberg's shoes.

Why did they pay so much for a simple messaging app?

First of all, WhatsApp shunned the norm - they refused to monetise with annoying ads, they stuck to their vision to provide a service, they had close to half a billion users, but most importantly, they had the all-important anonymity.

WhatsApp's founders had something New Zealand tech companies are masters at - they fly under the radar.

We know that the usual tech start-up glory-story includes a 17-year-old know-it-all, circa Zuckerberg 10 years ago, but a little humility can go a long way.

WhatsApp co-founders Brian Acton, 42, and Jan Koum, 38, became overnight billionaires when they accepted Zuckerberg's $19b friend request, but before the big deal they purposely kept their company out of the spotlight, refusing to even have signage on their Californian offices.

They were reluctant to let the Silicon Valley venture-vultures enter their hidden fortress except for one, Sequoia, who invested US$8m to keep the company afloat. That 15 per cent share is now worth a reported US$3.5b. Not bad business.

But it was the purist ideal that helped the founders attract and keep their 450 million customers.

In fact, Koum and Brian decorated their offices with notes stating "No Ads, No Games, No Gimmicks!", focusing on a pure user-experience and scaling their business through an intermittent US$1 dollar download fee. Much like the front page of Google has always been clean and free of pesky ads - even though it must be one of the highest-traffic single-pages on the web.

It goes to show "100 per cent pure" is where the money is.

Remind you of a certain country's tourism tag-line?

New Zealand is a the hotbed of ingenuity, and believe it or not, there's more than just Xero making waves here.

Growth and humility can be a powerful combination and we have a few impressive jewels in our tech crown that may just be the next billion-dollar deal.

Hands-up who bought Xero shares at $3 and jumped for joy over the next few years as they sky-rocketed to $40?

There's money to be made and barring a repeat of the '90s tech wreck, the next WhatsApp could be lurking on our very shores.

Alternatively, the exciting array of commercial apps such as Auckland-based point-of-sale software, Vend, could be on the radar after their phenomenal growth over the last four years - raising $10m in funding and signing close to 90,000 paying customers, that's pretty impressive.

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Savvy investors be aware, we harbour the power of anonymity on these shores and judging from the waves being made overseas, that has just come into fashion.

Watch this space and be ready to invest like Sam Morgan.

* Anthony Patrickson is a freelance writer and director of two technology start-ups in New Zealand. 

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