Is it a good idea to sit on a success story ? Or is it important to keep innovating ? Here’s a story from China that holds significance in this regard :
Tencent is the parent company behind the popular messaging app WeChat – an app which combines features of ecommerce to commuting among other features. Globally it has more than 1.2 billion users taking benefits from its vibrant platform. Yet, very few know that prior to WeChat, Tencent had created a desktop messaging platform QQ which was at that time China’s most popular messaging platform. It had revenues of nearly 2 billion USD and a valuation of over 30 billion USD. By launching WeChat, Tencent effectively cannibalised its own product and eventually had to close its QQ service. Tencent presently has a market cap exceeding 730 billion USD.
The journey of WeChat’s creation is even more interesting. Tencent made a bold decision: it created a team of 7 engineers to build a product which will eventually compete with its existing core product. This team delivered the first version of WeChat in just three months as a simple messaging and photo sharing app. At the time of launch, Xiaomi’s MI Talk was the leader in the Chinese market with nearly 5 million registered users. In order to have higher user penetration, WeChat realized that they had to offer additional services. This was required to motivate the users to switch from other mobile chat solutions to WeChat. The first new service launched in 2011 was voice messaging which allowed individuals to send short audio notes (It is worthy to note that iPhone took nearly 3,5 more years to build such a feature. WhatsApp was able to launch it as late as 2015). This decision was extremely critical as it is difficult to type Chinese alphabets in a normal keyboard. WeChat was the first messaging application to offer this service which catapulted its growth in the initial years.
WeChat also used location services in a very interesting manner. For any social platform to be successful, it is important for users to build connections. The location service was used to display nearby users who are using the platform which prompted users to connect and keep using the platform repeatedly. It was a very smart move which was one of the cornerstones for its enormous success. WeChat has since remained focused on offering useful daily services to build a successful ecosystem.
It is important to accept change and not take things for granted. Tencent could have continued on with its QQ platform and enjoyed the steady cash flow, but instead it decided to innovate and embrace change. It is similar to Amazon’s decision to launch e-book reader (Kindle) which was meant to cannibalize its own book sales. As individuals, we too have the same obligation towards ourselves to continuously learn, un-learn and re-learn and be able to predict changing business scenarios. It is eventually our ability to embrace change that defines our success.
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