Last month Jan Koum just sold his 4 year old company, WhatsApp, to Facebook for $19 Billion(!) He drove to the North County Social Services office to sign the deal. That’s where he used to stand in line to collect food stamps not so
Jan has gone from having no money to $19 Billion in four years (That works out at at every day in retrospect being worth over $13 million, day after day for four years).
How did he do that and what can we learn behind the crazy-big numbers?
Back in 2009 the idea was hatched in the kitchen of Jan’s friend, Alex Fishman. Alex recalls
“Jan was showing me his address book, His thinking was it would be really cool to have statuses next to individual names of the people.”
Within a month, Jan had WhatsApp up and running on the Apple Store. But it kept crashing and few people were using it. Faced with his failure, while out playing frisbee with his friend, Brian Acton, he said he was going to have to go look for a job. Acton said “You’d be an idiot to quit now, Give it a few more months.”
Jan tried again, adding instant messaging and deciding the app would be the opposite of Yahoo, where he had worked for a while: Simple and non-commercial. He wrote the rules: “No ads, no games, no gimmicks”
As a simple alternative to expensive text messaging, WhatsApp began to grow. First to 10,000 users, then 1,000,000, and now, today, to a staggering 450,000,000 users (That’s compared to Facebook who only had 145 million users after four years).
It’s free for a year, then 99c a year. By focusing on the users and their experience, the number of users has grown exponentially.
IT’S ALL ABOUT LIFETIME VALUE
Jan’s whole focus has been on his customers – and the lifetime value of each customer. What’s the lifetime value of your customer?
Here’s the math on WhatsApp…
With WhatsApp’s growth (with one million NEW customers each day), Jan sees the potential for between 1 billion and 2 billion customers within the next two years. If they stick around for even just 5 years at $1 per year, that’s up to $20 billion in sales.
The $19 billion price Facebook is paying for WhatsApp puts each WhatsApp user at $42 in lifetime value.
Facebook, on the other hand, has 1.3 billion users and is worth $176 billion, which means each user is worth $135 (That’s 3x the value). So Mark Zuckerberg sees the $19 billion he is spending as a bargain.
How much is the lifetime value of your customer? What will keep them coming back again and again? And who can you partner with or even eventually sell to where each of your customers is worth even more to them than to you?
“NO ADS, NO GAMES, NO GIMMICKS”
Jan’s focus on what to deliver to his customers has as much to do with what he said “no” to (“No ads, no games, no gimmicks”) as what he said yes to. What is it that you can say “no” to today, that will keep more of your customer saying “yes”?
One more thing – In a world where everyone’s focused on brand-building, Jan has been so focused at his customers over the last four years, he hasn’t even put a sign outside the WhatsApp office, which is behind a signless door down a back street in San Jose.
After all his success, Jan was asked if he would fork out for a WhatsApp sign for the office…
“I can’t see a reason for there being a sign. It’s an ego boost.” he answered, “We all know where we work.”
Follow your Genius!
Founder, Entrepreneurs Institute
Fast Forward your Business 2014
I invite you to join me and leading changemakers for one day where you will learn the very latest of what to do and how to do it to transform your business in 2014. I guarantee this will be the most important, helpful and practical event for you to grow your business this year.
Below are the dates for our Fast Forward your Business Global tour. I begin my tour in Australia this week, followed by Japan & Taiwan in June, US in August and UK in September.
This is the one event to catch up with the very latest strategies and systems to fast forward your business. Over 8,000 entrepreneurs have attended the Fast Forward annual tour.
In 2014, everything in business will get an upgrade. This is the event where you get to upgrade YOU.
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Fast Forward your Business March Webinar
Join me and my top 3 marketers from Australia, on our Fast Forward your Business March Webinar.
I will be sharing some of our internal processes to create super successful promotions, for example, four multi-million dollar strategies we implemented last year – from the launch of his Genius Test Facebook App, which attracts over 10,000 new users every month.
Register now to be on the call, and hear how our top marketers create connection with their audience, stay front of mind, build rapport, give value, enrol and build their database of raving fans continuously.
7th March, 1 PM Melbourne Time
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Four Stages of Flow
When was the last time you experienced true flow? When you connected to the genius within you? What if you had the process to tap in to your flow whenever you want? That’s what this blog is about – Getting into your flow state does not need to be by accident!
On my trip to the United States last month i had a chance to connect with a super-expert in Flow: Steven Kotler.
Steven co-wrote the NY Times Bestseller, “Abundance”, with Peter Diamandis. His latest book, “The Rise of Superman” comes out this March. It is all about how elite athletes and extreme sportspeople get into flow, and what we can learn from them. Steven has teamed up with many of the leading action and adventure athletes along with top scientists to decipher what these athletes are doing to harness flow.
What does this mean to you? How can flow improve your results? Steven calls flow “The source code to our intrinsic motivation”. He cites many studies, from McKinsey to the US Army, that have found that people who harness their
flow state can increase their productivity and results by 200% to 500%+
“The opportunity cost…is enormous…. Most report that they and their employees are in the zone at work less than 10 percent of the time. [But] if employees…are five times more productive in flow than they are on average,
consider what even a relatively modest 20-percentage-point increase in flow time would yield in overall workplace productivity—it would almost double.”
—The McKinsey Quarterly
I’ve recorded a conversation I had with Steven about the science behind “The Rise of Superman” and the mission of his “Flow Genome Project” – to understand and unlock ultimate human performance in each of us.
You can listen to the entire conversation we had below. One of the things Steven explained is the four stages that we go through to achieve our flow state. There’s much more in the recording, but here’s a summary that you can apply immediately:
The Four Stages of Flow
Stage One – STRUGGLE
The first stage of the four stage flow cycle feels almost like the opposite of flow. This is when you’re working hard, pushing to train, research, brainstorm – when you’re overloading the brain with information “until your heads about to explode, but not completely explode”. Most people never push this first stage far enough, which is why they constantly miss the doorway to the flow experience.
Stage Two – RELAXATION
This is when you take your mind off the problem entirely, taking a break, going for a walk or doing something physical. This isn’t the same as watching television or some other distraction that keeps your brain busy. It’s about relaxing the brain so the conscious mind lets the subconscious mind take over. Many people miss this break and as a result are constantly in overload and burnout, missing flow altogether.
Stage Three – FLOW
This third stage is the superman experience – where inspiration takes over, and where your preparation and relaxation expresses itself almost magically. You come up with the best ideas, you achieve results almost effortlessly, and you often surprise yourself by your own performance. It’s almost an out-of-body experience whether it’s mastery of a physical, emotional or mental activity.
Stage Four – CONSOLIDATION
The final stage is where learning and memory is amplified dramatically, consolidating the experience of flow into your unconscious. There’s also a downside, where you come off the high of the feel-good neurochemicals released during the flow state. You go on a down which often leads to self sabotage or an emotional reaction to try and regain the flow state. The key here is not to let this stress block the learning or reverse the results of being in flow, but to move smoothly back to the next phase of struggle and repeat the cycle.
Most of us aren’t aware of this four stage cycle, and so we end up either not getting into flow, or we mess things up when we get there. Knowing the cycle exists gives you a map to know where you are, and what to do at each stage.
What challenge or task do you have where it would really help to step in to your flow to conquer it? Use these four steps to get going today.
You can listen to my full conversation with Steven here. Steven is highly engaging and is full of interesting studies and science to back up what he says.
Notes from my US Trip
I have just returned from my US trip where i met incredible changemakers and partnered with some big names from the industry for my upcoming Millionaire Masterplan book release. While on this tour, i attended the Transformational Leadership Summit, Joe Polish’s 25k and Yanik Silver’s Maverick event.
Due to popular demand i am sharing my notes here. These are full of great insights and learnings. Hope they make sense.