From zero to $19B of business value in five years; WhatsApp's sale to Facebook is an important moment in the history of the consumer web. The deal proves distribution, reach and large user bases aren't the competitive moats they once were. Apple's App Store and Google Play have leveled the playing field to such an extent that a startup can command 10% of the market cap from a $200B company.
Interesting point of view of Tomasz Tunguz on what the AppStore model had to do in WhatsApp's massive valuation.
I'm not sure I agree with everything he writes though. Yes, the AppStore is very competitive and the old tricks don't work there. Yes, increased competitions and a short-tail distribution means higher outcomes and rewards for those who make it. But I'm not sure the model is that virtuous:
- first, I'm not sure it favors innovation that much: web sites are optimized on a daily basis (or actually often multiple changes per day) while Apps need to go through approval processes and tests, etc...
- second, as Andrew Chen pointed out, this hit or miss market the AppStore is means that mobile startups are failing without a second chance to iterate and come out with the right product.