If startup founders are asked to give an example of an inspirational product they are trying to create, they often point to the experience of Asia and are called WeChat. My friend and former colleague Connie Chan described WeChat as one application to manage everything . It dominates the Chinese mobile market with a monthly audience of 889 million active users . The WeChat platform completely changed the way Chinese communicate and interact online, and also changed the way money is transferred to each other and payments for purchases. WeChat is no longer just an application. And while the dazzling success of WeChat is concentrated in China, everyone in the Western world felt its influence, because the service gave inspiration for a completely new category of “messengers as a platform”. You do not need to search for a long time before you find references to WeChat in other messaging platforms such as Apple iMessage or Facebook Messenger.

Together with China Tech Insights , the research division of Tencent (the parent company of WeChat), we tried to understand what makes 889 million active WeChat users open the app 9 to 11 times daily and use, on average, more than 50 minutes ² . To better understand this figure - users spend approximately the same “cumulative” time in the entire set of Facebook applications, including Instagram, Facebook and Facebook Messenger ³ .

This article goes deeper into the growth strategy that made the key achievements of WeChat possible, it talks about the lessons learned and gives an insight into the way in which the WeChat messenger scaled from 0 to 800 million users in less than six years. Unlike AOL and Yahoo, Tencent is one of the few companies that has successfully managed to develop its instant messenger from a web / desktop application into a mobile / communication platform.


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Lesson 1: Build your own competition

Tencent began to create WeChat (mobile messenger) as a third-party product, and ended up reinventing the instant messenger market in China.

In 2010, Tencent was already among the leading Internet companies in China, and even before the launch, WeChat owned the largest service for communication. Many Chinese have grown using Tencent QQ, a popular desktop application (similar to ICQ and AOL Instant Messenger). At the time, Tencent programs had 650 million ⁴ accounts that are actively used on a monthly basis. Understanding the growing importance of mobile devices, the company released the mobile version of QQ in 2008, but at the time the application was heavy due to the presence of desktop-specific functions, such as multiple user statuses, transferring large files, embedded services like music translations.

Tencent made a bold decision: she commissioned a small decentralized development team of QQ Mail, her key product at the time, to create a new mobile application that could potentially compete with products from other Tencent divisions. This group of only seven programmers created the first version of WeChat in just three months . WeChat was released in January 2011 as a simple messaging and photo application. This small team, ruthlessly focused on a specific task, very quickly launched what will soon become the most revolutionary mobile service in China.

At that time, WeChat was not the first mobile messenger. The market was led by Xiaomi MiTalk with 5 million registered users. Due to strong competition, WeChat was unable to attract many users immediately after launch. It became clear that in order to attract users from another chat, it is not enough to start just another chat. In May 2011, three months after launch, WeChat rolled out the voice messaging feature, through which people could leave each other short voice messages (a similar feature appeared in the iPhone iMessage after 3.5 years). The idea of ​​voice messages borrowed from TalkBox and Kakao Talk. Voice messaging was strategically important because the native keyboard with Chinese characters was not easy to use at that time, and users considered voice messaging to be an intuitive way for personal daily communication. WeChat was the first service that combined the transmission of voice messages, text and photos - and the number of downloads jumped to 50-60 thousand per day.

Today, Mobile QQ continues to serve a younger audience and has 652 million active users per month, as of December 2016 ⁵ . Tencent was actively working to divide the audience between the two platforms. For example, QQ introduced more entertainment features, such as animated video desktops, face-to-face beauty shooters, etc. On the other hand, WeChat focused on providing useful services that people need in their daily lives, such as content subscriptions and utility bills.

This lesson is reminiscent of Amazon’s strategy to cannibalize its own market for selling paper books by promoting electronic books (anticipating a trend towards digital content), as well as the transition from Uber representative UberCab cars to UberX economy class machines. If you yourself do not create a culture of self-destruction, then you will probably be destroyed by competitors.

Lesson 2: Design for groups (“group effect”)

The behavior of an individual can be very different from how a group behaves. To identify these group effects, WeChat carefully observed how users in daily life behave in groups of friends and in groups of strangers. WeChat was not limited to traditional forms of research such as surveys, interviews, or competitors.

Allen Zhang (founder of WeChat) was adamant about developing a product based on a “group effect” (when the behavior of an individual can be very different from how a group behaves). So the WeChat team paid attention to how the individual functions of the program can be used by groups of users, and not by individual users. In turn, this increased the speed of mastering new functions - the more users began to use the function, the more others joined them.

Like most social networks, WeChat quickly realized that it was necessary to solve the problem of zero number of friends on the first day. At the same time, American Facebook, with its perseverance, was striving for the goal that users should have 10 friends in the first 14 days, because their data showed that this is a key indicator for long-term retention of the user. WeChat found another solution to the problem of engaging users through the People Nearby feature, a kind of real-world simulation. People could see other “people nearby” (who were not in their contact list) using Appendix ⁶ . The function based on the location of users satisfied their curiosity about what was going on around them, and at the same time reinforced the sense of community on the platform. It also helped accelerate the rate of growth of the audience to more than 100 thousand per day ⁷ .

After launching this feature, WeChat allowed us to link WeChat and QQ accounts, so that people could import their social graph from QQ into WeChat. It is important that the developers have opened this function only for those users who have already registered accounts in both services, that is, they used these messengers for different purposes, and could continue to do so. This led to a new wave of the total number of users, and the number of registered accounts on the platform reached 50 million by November 2011, due to which WeChat bypassed Xiaomi MiTalk and became the most popular messenger in China.

The Shake function used both GPS and an accelerometer at the same time — people could shake a smartphone to pick up a random person to communicate. This function served two purposes: 1) it helped newcomers to get used to it; 2) created a noticeable effect of WeChat presence in the offline world, very similar to people in Pokemon Go. Since its launch in October 2011, the Shake feature has been used over 100 million times in the first month. ⁸ . It was critical for initial scaling and was used as a creative growth strategy, but it is still popular, although most Chinese have already added their friends and colleagues to WeChat contacts. The Message in a Bottle function allowed to exchange random messages, throwing a virtual bottle into the sea, and once someone picked it up, users were connected for a chat.

After all these important for group communication functions were launched in November 2011, the number of registrations in WeChat set a new record of 200 thousand per day ⁹ .

Lesson 3: Extend functions based on unconscious user needs.

WeChat called attention to the motivation behind the nuances of communication between people, and to cultural peculiarities, to provide such services that they wouldn’t even think of in any survey. Allen Zhang was fascinated by the manipulation of unconscious needs that are behind the demonstrated behavior, which often led to the emergence of functions that naturally integrate into the world of users.

In the second year of WeChat, the Moments function was launched (in the Chinese translation “circles of friends”) - publication of the story in photos for the near circle of friends. Unlike the Facebook news feed, only “mutual friends”, but not “friends of friends”, could see comments and likes on a specific post. It was a deliberate function, made according to the idea of ​​the American messenger Path, which was released in 2010 with the function of social circles that unite close friends with strong friendly ties. Instead of accurately copying Path's idea, WeChat developers realized what a true innovation is here - and adapted it for the ancient Chinese philosophy of “social circles”, in which smaller inner circles are connected much more strongly and weaken with increasing circle and distance from the center of communication.

A group of just ten developers spent four months developing more than thirty versions of WeChat Moments before choosing a version to launch. This shows the efficiency with which product iterations were performed. WeChat has always kept a small number of programmers to concentrate as much as possible on the functions they are working on. Although there were few new functions, so far the key functions of the program are not much different from how they looked initially.

From the first days, many WeChat users reposted content from external blogs and news sites in chat and through Moments. WeChat team sought to transfer this content to themselves and allow authors to communicate directly with their audience. The solution was the official accounts of WeChat Official Accounts (OA) . Launched in 2012, OA accounts allowed a “one-way subscription” similar to Twitter (and competing Weibo), so that fans could easily and quickly subscribe to content from their favorite celebrities. But unlike Twitter or Weibo, here celebrities could send text and voice messages, photos and videos that looked like ordinary WeChat messages, as if in a personal and private conversation. As a result, many celebrities registered official WeChat accounts, even though they had millions of Weibo subscribers.

The success of official celebrity accounts pushed WeChat to expand OA to brands and companies. This allowed publishers to directly broadcast valuable content on an ongoing basis to their fans, although the frequency of posts was limited. Through official accounts, people also contacted service providers for any questions: order a service, get a service, leave a review, ask a question. If Twitter / Weibo were business tools for broadcasting and branding, then WeChat (through official accounts) became a channel of direct communication with users.

Sticker Store has become a way for people to express themselves when communicating with each other (it seems that Apple introduced iMessage many years later). However, WeChat was the first to create a market for artists and illustrators who were able to make money on rewards from WeChat users who liked their stickers. Members chose arbitrary rewards of up to RMB 200 ($ 25). The market has generated a healthy competition among illustrators for the top positions in the ratings (and made the messenger nicer for users along the way).

Lesson 4: Big ideas come from solving your own problems.

Y Combinator has long advised the founders to be avid users of their product and solve their own problems with it. Although WeChat felt comfortable with 300 million active audiences a month, a simple function to help company managers give out gifts for the Chinese New Year helped WeChat to almost double the audience.

The WeChat Red Packets function was born out of the tradition at Tencent and the general Cantonese tradition that every manager on the first working day after the Chinese New Year gives each employee a red envelope with a small cash gift. As Tencent increased, some managers found it difficult to hand out so many envelopes by hand, so they asked for a technical solution to the problem — managers did not know that this idea would become the prototype of the WeChat Red Packets feature in the messenger.

The first version of WeChat Red Packets was created by a group of twenty programmers in three weeks. Closed testing on official accounts immediately brought positive feedback. Instead of releasing numerous versions of the product, it was not necessary to choose here, because the WeChat team itself was an avid user of its own product. Often, in the middle of the night, the “only user” paid attention to certain details or found bugs. They also saw friends and relatives using the product prior to the official release of the function. From the pre-Christmas day of 2014 and until 4:00 pm of the next day, more than 4 million people used the WeChat Red Packets feature.

We WeChat Red Packets today have several options, including one with the distribution of random amounts, and the other - with fixed amounts. In the first case, everyone receives a virtual envelope with a random part of the established total number of gifts (no more than 200 RMB, $ 29 each, to avoid robbery). This makes getting a red envelope in the presence of colleagues something middle between a lottery and getting a “cookie of happiness” - you do not know how much money you will receive until you open the envelope, and getting more than others is considered a sign of good luck. The subtext of luck also makes it the perfect game among friends at the party. This is another manifestation of the “group effect” in practice. As red envelopes are sent out in group chats, the number of users grew along with the number of recipients of these envelopes.

Significant growth was recorded in 2015, when more than one billion red envelopes were sent out for the Chinese New Year. The initial growth of the payment system WeChat Pay was caused by social circles with close ties - friends and relatives who sent money to each other and wanted to tie their bank accounts. This important step was necessary to create trust between users and instill in them the habit of mobile payments, before expanding the function to more superficial (remote from the center) circles with less strong social connections, to pay for merchants, online and offline stores. The payment network has expanded even more thanks to the partnership with Didi (the Chinese version of Uber) to simplify payments within the application for taxi rides. This partnership opened the way for a large number of payment partners, who also wanted to be able to receive payments through the WeChat program for everything from telephone bills to utility bills.

In just two years, WeChat Pay has become the leader in the Chinese payment system market. This service was used for a variety of payments - from red envelopes to offline payments. In 2016, Tencent had a monthly audience of 600 million active payers and an average of more than 600 million payments per day.

Lesson 5: Monetize

Monetization and growth of the user base are not mutually exclusive concepts. WeChat was always ready to monetize services and even used this lever to improve the overall product.

The Game Center feature has connected WeChat to Tencent's core competency by opening up the ability to play games on the messenger platform. Externally similar to similar catalogs of games like Line or Kakao, WeChat brought the social element in games to a new level - when people massively flooded games. This small change in functionality was beneficial to both game creators and WeChat. For example, Tencent under the name Rhythm Master played 700 thousand users a day one year after launch, but after launching the Game Center, the audience jumped to 17 million a day (more than 20 times increase).

Launched in January 2015, WeChat Moments native advertising has become an important part of the WeChat business model. Although it is not a growth driver, it also did not slow down the trajectory of increasing the WeChat user base. To minimize user inconvenience, WeChat limited the number of native advertisements in the WeChat Moments feed to one per day (compare with the Facebook restriction of one ad for every ≈ 10 posts in the news feed ).

An example of Airbnb native advertising in the WeChat Moments feed


By clicking on an Airbnb ad, a user sees three or four photos with the text of the story, which is very similar to the photo stories that friends share in WeChat Moments.

Users interact and share advertising banners with friends as usual posts, which is unusual for other social networks. For example, if you click on a banner , you will see an Airbnb ad, which is very similar to regular visual stories in WeChat Moments. Comments and likes are also visible only to common friends, but not friends of friends. Despite the restrictions on advertising downloads and discussions only between mutual friends, the aforementioned Airbnb ads were viewed more than 1.8 million times after they were sent to each other by WeChat users. In this case, there was a five-fold higher CTR and a 600% increase in new registrations.

WeChat even introduced the classic coupon model when friends recommend products and services to each other. If the user redeems the coupon when buying in an offline store, then he is offered the option to share this coupon with his friends, so that all his friends receive a similar discount offer. Vendors often encourage customers in this way: when redeeming a coupon, they give another coupon to be used by oneself and among friends, thus expanding the audience of their goods and services. So WeChat founded a coupon credit system for vendors - they buy loans from WeChat to distribute their services through a coupon exchange system.

Lesson 6: Measure the parameters you need , not the generally accepted ones.

WeChat challenges the conventional wisdom that growth means an increase in the user base. Instead, they represent growth as an increase in value (for example, the number of tasks that WeChat helps to solve in people's daily lives).

Unlike other social products, WeChat not only measures the growth in the number of users and the number of messages. They also focus on measuring how deeply the product has penetrated people's daily lives (for example, the number of tasks WeChat helps to solve in everyday life). Although WeChat has KPIs, they are usually distributed only among department heads. Every day, the developers themselves get the question “Do you create more value for the user?” In order to achieve this goal to help people with everyday tasks, limits were set on the maximum number of friends, the maximum number of ad impressions, the maximum number of demonstrations from social circles - because The creators viewed these things as a distraction from the useful WeChat functionality.



Promoting QR codes by instant messenger as a link from offline became the core of the online-offline integration boom in China in 2015. Previously, to establish a connection with a service or brand, the user had to search for information or enter a website address. Pony Ma from WeChat said about QR codes: "This is a label of abundant online information, glued to the offline world." This logic explains why WeChat began to promote QR codes in the first place. QR codes have not been shot in the United States for three main reasons: 1) the most popular smartphone and the most popular social application did not allow scanning QR codes; 2) because of this, people had to download specialized applications for scanning QR codes and only then they were redirected to a mobile site - this is obviously a more cumbersome scheme than simply typing a URL or searching for a brand on social networks; 3) At first, QR codes were used to refer to low-level marketing materials, and sometimes just to spam. So, let QR codes be a dream of American marketers, this technology needed to overcome several barriers in order to become useful.

After universal adoption of QR codes, WeChat launched Mini Programs as an extension of official accounts, so that users can access services in a simpler way, as a web browser does (nowadays you don’t need to download a special program to access each service). In the same way, mini-programs have become a tool for opening these “applications” and performing actions online (like placing an order or paying for goods) without requiring downloading or installing the application. Imagine a local restaurant or a small shop in your city - they no longer need to develop their own application. Instead, they register with WeChat Mini Programs. This means that they can be found in the social network or in the offline world by scanning a QR code. WeChat claims that this user-friendly way leads to a higher level of conversion into purchases (although the function is still in the early stage of deployment). Many of these features are slower to deploy than daily messages.

Lesson 7: Do not choose your favorite features.

One of the key principles of WeChat as a product is that it is a “tool”, focused on the quality of utilitarian utility (highly functional, responsive and easy to use). This principle is considered vital for the perception of the product by users.

Most product managers are prone to developing intrusive functions and overclocking quantitative metrics. But Zhang was very worried if users start spending too much time on any one function, because it may prevent them from doing other useful things (such as paying for the world ... what you can do in WeChat). In fact, WeChat believes that a good product encourages user efficiency - that is, it allows a person to complete a task in the fastest way and exit the program. Zhang compared it with Google - if the user found a suitable link, then Google sends the user directly to the desired site. While it is encouraging to see people spend a lot of time reviewing Moments stories, the developers were worried if people were watching too many marketing materials,After all, the low quality of the content may not appeal to users and reduce the value of the product in the long term. As a result, WeChat has limited the amount of marketing material in Moments. For the same reason, WeChat limited the number of broadcast messages that can be sent from a commercial account to one per day. In reality, such messages do not even generate push notifications on phones, so as not to disturb the user.so as not to disturb the user.so as not to disturb the user.

Despite such a variety of functions and services in WeChat, the program has retained a very simple interface. The application has four tabs: chat, contacts, discoveries (discover) and your profile. The developers kept such a number of tabs in a very disciplined way, because every time you try to add a fifth tab, the conversion rate for the leftmost tab dropped by 20-30%.

Summing up, the developers of WeChat have found a way to create an interface using pieces of functionality, compete with their own products, build functions that meet cultural needs, and emphasize group interaction, and most of all they concentrated on creating the simplest tool that would be useful for every mobile user. In this sense, WeChat is not just an application, it's just the Internet. It's easy to see why WeChat is now becoming an example for many promising startups.

Notes

1. Source: The number of active accounts per month is based on Tencent data for 2016. ^backwards
2. Source: iResearch, Jiguang. ^backwards
3. Source: Facebook Q1 2016 Earnings Call. ^backwards
4. Source: Tencent Annual Report 2010. ^back
5. Source: Tencent Annual Results for 2016; Smart Device MAU of QQ. ^backwards
6. Note: those who did not use this feature did not appear. ^backwards
7. Source: The Story Of Tencent by Xiaobo Wu. ^backwards
8. Source: The Story Of Tencent by Xiaobo Wu. ^backwards
9. Source: The Story Of Tencent by Xiaobo Wu ^back