The real reason behind WhatsApp’s acquisition
Short post. Mostly a note to self.
The WhatsApp acquisition story, being one of the biggest M&A exits the internet sector has ever seen, has been obviously covered by everyone from every different angle: “rags to riches”, “Facebook overpaid”, “Erlang!”, “price per employee off the charts!”, etc.
As everybody knows, there are tons of similar messaging services, with great user traction, insane growth and higher revenues, but Facebook still acquired WhatsApp.
There are some product and fit reasons: focus on growth, great diversity of markets, highest number of users, no marketing, and so on, but I believe the main reason for the choice is their location. 7.4 miles between the companies’ headquarters and probably less than a mile between the CEOs’ houses.
The other companies’ CEOs couldn’t grab coffee and have dinner with Zuck’s at a moment request. Much less develop a friendship over a 2 years period.
This exemplifies perfectly what still makes Silicon Valley the place to be. No matter what New Yorkers and other “startup hubs” enthusiasts want you to believe.
The simple truth is that if you want to build a world-changing company and you’re not here, you’re just making it much harder for yourself to succeed.