How Culture Shapes Success, Evaluating Facebook's WhatsApp Acquisition, and Challenges with New Investors

 

ENTREPRENEUR WEEK 6 - BLOG

INTRODUCTION

By So Matthew Christian (TP075241) on April 27, 2024

Every successful entrepreneur has worked extremely hard to achieve their dreams and their journey to unlocking their potential and growth to expand their business. However, handling a business could be tough and stressful to compete in this revolutionary era especially when technology has integrated with society’s life. Entrepreneurs have always been recognized for their “MINDSETS” which implement various thinking and concepts to develop their business. Many haven’t realized how crucial having values, long-term missions, and cultures within a business is.

Why Culture is important?

Technology in culture is a permanent state in this world, both emerge with others and create “digital culture” which is a concept that describes technology and culture are shaping the way people live their lives. Not to mention it grows and is rooted in developing a business. Edgar Chein, an expert on business theories and psychologist became a professor at MIT Sloan School of Management and pioneered the concept of “Company Culture” which is the core of an organization’s values. Culture becomes essential for employees in helping technical business decisions and how they interact with everyone. People are communicative and supportive of each other, they provide the best service for the customer (Contributor, 2014). Businesses are made to fulfill customers’ needs and aim to more innovative impact on the world. Satisfaction and making the customer happy are the missions to be prioritized and that’s how we design our culture within a business ecosystem.

Do you think Facebook overpaid for WhatsApp? Why?

By Adrico Corson Mulia (TP073788) on April 27, 2024

Brian Acton and Jan Koum founded WhatsApp in 2009 to offer a replacement for expensive SMS services. (Page, 2024). WhatsApp is an ad-free application used by users to send unlimited messages to their contacts without using wireless networks or paying data charges. This app is free to download and is an alternative to traditional text messaging platforms provided by mobile carriers. In February 2014, more than 450 million individuals utilized WhatsApp every month, with the platform experiencing a consistent addition of over 1 million new users daily. With 70% of WhatsApp users active daily, the app was expected to rapidly grow to one billion users. Facebook viewed this as a strategic move and agreed to pay $19.6 billion, an increase of $3.6 billion from the original price, to compensate WhatsApp employees for staying on board with Facebook (Deutsch, 2022).

In our opinion, Facebook's purchase of WhatsApp is a great move. With more than 2 billion users worldwide use WhatsApp by 2022 (Dean, 2023). Despite its costly price ($19 billion), Facebook has integrated some of WhatsApp's infrastructure into other parts of its business, allowing the company to save money and improve efficiency. Furthermore, owning WhatsApp has enabled Facebook to broaden its reach and user base, allowing the company to grow and become even more valuable.

What are the problems in bringing in new investors?

By Brandon Indradjaja (TP072931) on April 27, 2024

Research has shown that entrepreneurs may have a strong identification with their startup which results in them having a hard time in giving up some control over their startup. It is also hard to bring in the correct investor into the business, some investors may not understand the craft mentality of the business which may result in a conflict between the entrepreneur and investors (Risen, 2014). From the investors' side, they may not be interested in investing in a startup because it may have a high cost of investing or low return of their investment, an investor must want to get the most out of their money and not invest in uncertain sectors in the industry due to the lack of knowledge in the sector (Funds Europe, 2020).

Startups may also have problems in attracting new investors due to the lack of diversity of the product with products of the same type made by competitors, investors would want to find a startup/business that has a unique product or service that would be very difficult for other competitors to imitate. A good business plan would also be needed to convince investors into investing in the business, investors would like to see the business specifics such as how it would operate and what to expect in the future. Communication would be a very important skill to have as an entrepreneur as investors could have a different ideology which can result in investors being agitated about the decisions made for the business (Dublino, 2023).

Conclusion 

By Evan Ferdinand Xie (TP073921) on April 27, 2024

In conclusion, having a long team goal and company culture which is the core of a company value is what makes a business thrive. In addition, technology significantly impacts the way that companies operate and interact with their customers' base strategic maneuvers like Facebook buying what app can be beneficial when it aligns with the company goals. Furthermore, bringing in new investors can be hard due to various reasons which is the reluctance of the entrepreneur to sacrifice control over the company. there is a chance of a conflict with the investor and the hassle of making a compelling business plan and unique value proposition. Also, the need to understand the investor perspective when you create your business plan is the key to maintaining the happiness of your investor. In short, success in entrepreneurship requires a strong company value, a long-term goal, and the ability to attract and retain investors who share your long-term goals and values.

References:

Page, V. (2024, February 23). How WhatsApp makes money. Investopedia. https://www.investopedia.com/articles/personal-finance/040915/how-whatsapp-makes-money.asp

Dean, B. (2023, December 12). WhatsApp User Statistics 2024: How many people use WhatsApp? Backlinko. https://backlinko.com/whatsapp-users

Risen, C. (2014, December 27). How Dreams and Money Didn’t Mix at a Texas Distillery. The New York Times. 

Funds Europe. (2020, March 23). Challenges in Attracting New Investor. https://www.funds-europe.com/challenges-in-attracting-new-investors/

Dublino, J. (2023, November 3). 4 Marketing Hacks to Help You Attract the Right Investors. Business. https://www.business.com/articles/marketing-for-investors/

Deutsch, A. L. (n.d.). WhatsApp: The best meta purchase ever?. Investopedia. https://www.investopedia.com/articles/investing/032515/whatsapp-best-facebook

            -purchase-ever.asp 

Contributor. (2014, April 14). Culture eats strategy for breakfast. TechCrunch. https://techcrunch.com/

            2014/04/12/culture-eats-strategy-for-breakfast/