My Contribution to the “Tech Bubble 2.0” Literature

I’m linking this piece here a bit late, but when I wrote it there wasn’t a consensus that any sort of bubble had formed. Literally a week later there was, and then the next week it started cooling off as start-up valuations began to descend from the stratosphere.

WhatsApp’s unseen hordes of engineers and the massive, global compute infrastructure that those engineers are constantly growing and maintaining, are all rented in very small time slices by the full-time members of the WhatsApp engineering team. It’s the combination of on-demand engineers, the on-demand compute resources that those engineers are packaged with, and the proliferation of cheap, capable client devices at the network’s edge (i.e. smartphones and tablets) that makes up the real force multiplier—the lever, if you will—for WhatsApp’s core team, and not any particular technology.

When you think about the fact that this very same force multiplier can be rented by anyone with a credit card, a laptop, and an internet connection, then you realize that the breathtaking scale and speed of WhatsApp’s success isn’t any more of a “tech” story than, say, the similar success of BuzzFeed. Rather, it’s a story about the sudden, outsized rewards that can accrue to a relatively small amount of properly timed effort applied from just the right spot to a globe-spanning networked computing platform.

Because WhatsApp is renting a really long, world-moving lever that anyone can rent to move anywhere from a few dozen users to a few billion, then the difference between the 50 engineers at WhatsApp and any other group of talented engineers with access to the same really long lever of networked compute resources, is that someone at WhatsApp has pointed those engineers to a fulcrum that’s sitting in exactly the right place — in this case at the nexus of free SMS and no ads, no games, no gimmicks — so that when they grab that lever the world moves.

Thus the secret to success in the present moment — if we define “success” as “I have a billion users” — seems to lie in grabbing the big public lever and being the first to iterate into one of the primo fulcrum spots that’s characterized by minimal in-house engineering hours and rapid user growth.

Lots more at the link.

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