Quiet Quitting Is a Trend Taking Over TikTok and Possibly Your Workplace

Closing your laptop at 5 p.m. Doing only your assigned tasks. Spending more time with family. These are just some of the common examples used to define the latest workplace trend of “quiet quitting.” Some experts say it’s a misnomer and should really be defined as carving out time to take care of yourself.

Ed Zitron, who runs a media consulting business for tech startups and publishes the labor-focused newsletter Where’s Your Ed At, believes the term stems from companies exploiting their employees’ labor and how these businesses benefit from a culture of overwork without additional compensation.

“If you want people to go ‘above and beyond,’ compensate them for it. Give them $200. Pay them for the extra work,” Zitron told NPR over email. “Show them the direct path from ‘I am going above and beyond’ to ‘I am being rewarded for doing so.'”

Quiet quitting doesn’t actually involve quitting. Instead, it has been deemed a response to hustle culture and burnout; employees are “quitting” going above and beyond and declining to do tasks they are not being paid for.

How employees have changed their approach to work

Workplace culture has gone through many changes during the COVID-19 pandemic, including with the “great resignation.” Some workers are negotiating for better work conditions and benefits with newfound leverage.

Some workers have expressed a desire for a less rigid line between their work and personal selves. Professionals told NPR’s Morning Edition how during the pandemic, they have made changes in their work lives, from how they dress to their career field, to align more closely with their personal values.

“I started to realize that all of the hang-ups about being away from work to spend time with my kids, that was all me wanting to be a really good employee,” Kristin Zawatski told NPR’s Morning Edition. “But my work speaks for itself.”

Zawatski works in project management, a job that has afforded her the flexibility she needs as a mom of two. Although she would always make sure her work was done, she felt guilty whenever she needed to leave early or take a day off. That changed with the pandemic.

“Knowing that life could be short, I didn’t want to waste it anymore all the time just worrying about what kind of employee I was, because my kids don’t care what kind of employee I am,” Zawatski said. “My kids care what kind of mom I am.”

Quiet quitting is in line with a larger reevaluation of how work fits into our lives and not the other way around. As Gen Z is entering the workforce, the idea of quiet quitting has gained traction as Gen Zers deal with burnout and never-ending demands.

However, Gen Z is not the first generation to experience burnout, and quiet quitting is not a new idea. Zitron shared his frustrations with the framing of the term, because it mischaracterizes doing the tasks you are paid for with the idea of quitting your job.

“The term ‘quiet quitting’ is so offensive, because it suggests that people that do their work have somehow quit their job, framing workers as some sort of villain in an equation where they’re doing exactly what they were told,” Zitron said. Employers benefit financially from workers doing extra work without compensation and it is reasonable for employees to push back against that, he added.

“It’s part of an overwhelming trend of pro-boss propaganda, trying to frame workers that don’t do free work for their bosses as somehow stealing from the company,” Zitron said. For employers that are dealing with workers who may be exhibiting signs of quiet quitting, Zitron has one simple message for them: Pay them for extra work.

If you are experiencing burnout at work, setting boundaries can help you regain some control. Additionally, working on addressing workplace conflict head-on can make a situation easier — or be a sign it’s time to move on.

By:

Source: Quiet quitting is a trend taking over TikTok and possibly your workplace : NPR

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Critics by Mariah Espada  

Maggie Perkins, a Georgia-based teaching advocate, had been working as a teacher for nearly half a decade before she decided to “quiet quit” her job. The decision didn’t mean she’d leave her position, but rather limit her work to her contract hours. Nothing more, nothing less.

“No matter how much I hustle as a teacher, there isn’t a growth system or recognition incentive,” Perkins told TIME. “If I didn’t quiet quit my teaching job, I would burn out.”

Perkins joins a larger online community of workers who have been sharing their experiences on TikTok, taking a “quiet quitting” mentality—the concept of no longer going above and beyond, and instead doing what their job description requires of them and only that.

The movement comes in the wake of a global pandemic that caused employees to reimagine what work could look like, considering the potentials of extending remote work, not working much on Fridays, or in some cases, amid the Great Resignation, not working at all. Arianna Huffington, founder of the Huffington Post and CEO at Thrive, wrote in a viral LinkedIn post, “Quiet quitting isn’t just about quitting on a job, it’s a step toward quitting on life.”

Why companies are worried about quiet quitting

With worries of an economic slowdown swirling, productivity levels are a major concern to company executives. U.S. nonfarm worker productivity in the second quarter has fallen 2.5% since the same period last year, its steepest annual drop since 1948, according to the Bureau of Labor Statistics. Companies are now looking at productivity scales as a metric for excellence, with some going as far as moderating employees’ keyboard activity.

Major tech companies like Google are signaling that they are slowing hiring and could lay off staff amid concerns about overall productivity. Johnny C. Taylor Jr., President and CEO of Society for Human Resource Management, the world’s largest HR society, says remote work has caused severe burnout, Zoom fatigue, and made it harder for some workers to take breaks from home. “I don’t know a company in America that is not sensitized to burnout and the need for employees to step away from the workplace for their mental health.”

Taylor, who, as a CEO himself leads a team of over 500 associates, advocates for his employees taking time off when they’re feeling overworked, but he doesn’t see how embracing quiet quitting will be helpful to employees in the long term. “I understand the concept, but the words are off-putting,” he says. “Anyone who tells their business leader they are a quiet quitter is likely not to have a job for very long.”

Gergo Vari, CEO of job board platform Lensa, also believes the decision won’t serve employees long-term either. “Anytime that you silence your own voice in an organization, you may be depriving yourself of the opportunity to change that organization,” says his spokesperson.

Employees acting on their dissatisfaction at work isn’t only potentially affecting their job security. Gallup’s State of the Global Workplace report found that job dissatisfaction is at a staggering all-time high and that unhappy and disengaged workers cost the global economy $7.8 trillion in lost productivity.

The decision to step away from “hustle culture” can cause tension between employees and company executives, and can also cause a rift between fellow colleagues who may have to pick up the slack. “Whether people feel like their coworkers are committed to quality work can affect the performance of the organization and cause friction inside teams and organizations,” says Jim Harter, Chief Scientist for Gallup’s workplace management practice…

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Related contents:

“Quiet quitting: why doing the bare minimum at work has gone global”. the Guardian. 2022-08-06. Retrieved 2022-08-12.

Bakshi, Pema. “In Defence Of ‘Quiet Quitting’ Your Job”. http://www.refinery29.com. Retrieved 2022-08-12.

Scott, Ellen (2022-07-29). “Could ‘quiet quitting’ your job be the answer to burnout? What you need to know”. Metro. Retrieved 2022-08-12.

Yang, Lindsay Ellis and Angela (2022-08-12). “If Your Co-Workers Are ‘Quiet Quitting,’ Here’s What That Means”. The Wall Street Journal. ISSN 0099-9660. Retrieved 2022-08-12.

Kolev, Galin (2022-08-16). “What Is “Quiet Quitting” (And Should You Join The Trend)”. Officetopics.com. Retrieved 2022-08-18

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“Conversation with Noam Chomsky, p. 2 of 5”. Globetrotter.berkeley.edu. Retrieved 28 June 2010.

“From wage slaves to wage workers: cultural opportunity structures and the evolution of the wage demands of the Knights of Labor and the American Federation of Labor, 1880–1900. Crime”. Socialissues.wiseto.com. 30 August 2007. Archived from the original on 30 June 2009. Retrieved 28 June 2010.

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Want A Pay Raise? Switching Jobs Has Much More Upside Amid Soaring Inflation, Report Finds

A new report from Pew Research Center finds that 60% of workers who changed jobs between April 2021 and March of this year reported an increase in their wages, as adjusted for inflation, significantly more than the 51% of job switchers who said they saw wage gains the year before. It really does pay to change jobs. During the second year of the pandemic, according to a new Pew Research Center analysis, half of workers who changed jobs saw their pay increase nearly 10%. The median worker who stayed put saw an inflation-adjusted loss of almost 2%.

It’s long been thought that changing companies leads to bigger bumps in pay than asking for a raise from the same employer. Now, a new analysis of government data confirms that conventional wisdom—but appears to suggest a growing gap in the fortunes of those who stay put versus those who switch jobs, as high inflation and record turnover rates amid the Great Resignation have shaken up the job market.

Sixty percent of workers who changed jobs between April 2021 and March of this year reported an increase in their wages, as adjusted for inflation, significantly more than the 51% of job switchers who said they saw wage gains the year before, according to a new report released Thursday from Pew Research Center that analyzed data from the Census Bureau’s Current Population Survey. Among workers who stayed with their employers, the share that reported an increase in real wage gains fell from 54% to 47% over the same period.

The difference was stark: During the second year of the pandemic, half of the workers who changed jobs saw their pay increase 9.7%, while the median worker who stayed in the same job experienced a loss of 1.7%.

In addition to Pew’s analysis of government data, it also surveyed 6,174 U.S. adults about their job search plans, which could reveal concerns about a slowing economy. While 22% of workers surveyed shared plans to search for a new gig within six months, a greater share—37%—said they expect finding a job to be difficult.

“That’s the feeling on the ground, which may or may not contradict what we hear about labor shortages,” says Rakesh Kochhar, who led the research on Pew’s analysis. “But it may be some insight into what lies ahead, or what people are thinking lies ahead.”

Kochhar says the difference between the two groups reporting real wage gains during the first year of the pandemic was not statistically significant. He speculated more workers who switched jobs during those early months may have done so involuntarily, which could explain why more of their new jobs didn’t pay more.

But as the Great Resignation took hold, the benefits for job switchers appear to have grown. The findings are another indicator of how the tight labor market has continued to hand workers a bigger payday while employers struggle to hire.

“Across the board, workers are going to their bosses asking for more money,” says Ben Cook, CEO of the job negotiations firm Riva HQ. “But it’s often difficult to get large percentage increases at your current role, so that’s driving workers to seek other opportunities.” Over the past year, those other opportunities were often coming with a 10% or more jump in pay, according to Cook, who says he believes newfound confidence among employees has had the most impact on the increased turnover rate.

The Pew analysis of government data found that 2.5% of workers, on average, quit their jobs each month in the first quarter of 2022, a rate that suggests some 50 million workers could switch jobs this year. Its survey of U.S. adults also found that Black and Hispanic workers, young adults and those without a high school diploma were more likely to change jobs in any given month, as well as that about half of job switchers also change industries or occupations in a typical month.

The report closely follows the Federal Reserve’s announcement of another move to cool inflation, raising interest rates Wednesday by 75 basis points for only the second time since 1994.

The Fed’s aggressiveness, plus uncertainty in Ukraine and other factors, including Thursday’s report that GDP shrank 0.9% in the second quarter, have stoked fears of a recession. Layoffs in tech have accelerated—Shopify shed about 10% of its workforce earlier this week, for example—and venture-capital funding for startups has slowed. But U.S. employers added 11.3 million jobs in May, and that rate, while down from previous months, still exceeds the pre-pandemic norm.

“We’re not seeing a profound, pervasive decline in labor market activity at all — that’s what you’d normally see in a recession,” says Julia Pollak, chief economist at the online employment marketplace ZipRecruiter.

In a survey published in April of 2,064 U.S. adults who had started a new job within the past six months, Pollak’s team at ZipRecruiter found that 69% of new hires who voluntarily left their old jobs ended up with a higher salary under a new employer..

“We can see in the data that this was not a Great Resignation out of the labor force,” she says. “This Great Resignation was really the ‘Great Trading-Up.’”

While most workers who quit their jobs in 2021 did so for higher pay, others stepped down primarily to escape burnout, which surveys show has reached more than half of American workers.

Whatever the reason for changing jobs, higher pay is often a helpful byproduct. Take Bethlehem, New Hampshire, resident Ashley Willumitis, who a year ago swapped her job as a school admissions director for a program management role at a software company.

“One of my friends actually said to me, ‘if you’re going to be miserable at work, can you at least make some more money?’” recalls Willumitis. The 35-year-old, who earned less than $50,000 in her education job, has more than doubled her paycheck, enabling her partner to step away from work for a break.

After quitting, she met with a career coach and therapist, and first took up a low-stakes marketing job where she practiced shutting off her computer at the end of the work day and letting emails sit more than a few minutes before responding, freeing up more time for activities she loves, like biking.

“You gave your whole self to it and didn’t necessarily make a ton back,” Willumitis says, referring to the way she used to think about work. “It was through having some other people point out my skills to me that I realized I could not only make more money elsewhere, but arguably work a lot less.”

I’m an editorial intern on the Leadership and Communities team, covering founders, small business and Under 30. Previously, I worked in business development for a startup

Source: Want A Pay Raise? Switching Jobs Has Much More Upside Amid Soaring Inflation, Report Finds

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Five Types Of Talent Behind The Great Resignation

Last summer, Shannon Harrell left a marketing role at Nestlé to work in the then booming telehealth industry at Teladoc Health. Several months later, as her new employer’s stock was falling amid disappointing results, Harrell switched her LinkedIn status to “open to work.” By April, she’d been recruited to run strategic communications and channel marketing at pet insurer PetPartners.

“I saw the writing on the wall,” Harrell says. “The growth of that category looked a little uncertain, so I was—as anyone would be—concerned.”

Harrell is what McKinsey would call a traditionalist, one of five types of talent that has spurred The Great Resignation—and may be key to defeating it. In a new study released Wednesday, the consultancy analyzed data and surveyed more than 13,000 workers worldwide to determine what motivated people in different industries to quit over the past two years in order to figure out what might make them stay.

One thing that cuts across all types of workers is a persistent sense of optimism. Three-quarters of respondents felt it would not be difficult to get a job that’s comparable to, or better than, their current role. “People are confident enough that they don’t even need the other job in hand when they do move,” says Aaron De Smet, a senior partner and co-author of the report. “They’re like, ‘I’ll just quit and go find another job,’ and they’re not worried about it.”

Quitting Trend That Just Won’t Quit

With record-low U.S. unemployment and 11.3 million open jobs, it’s easy to understand the optimism. High demand has enabled more than half of those who quit to not only move into new jobs but also move into new industries. Only 6% made what could be considered a lateral move within their industry. The public and social sector had the greatest attrition rate in the survey, with 57% leaving the sector, while healthcare and pharma had the least.

What matters is that many of them aren’t returning to their former industries or even the job world anytime soon. Of those who quit without a new job in hand, only 47% have returned to the workforce, with 29% returning to traditional full-time employment. “Some companies are waiting for those people to come back,” De Smet says. “And they might be waiting a long time.”

The Five Personas of Quitters

That means employers have to recognize who is open to new jobs—and figure out what it will take to hire and retain them. In the study, McKinsey identified five personas:

  • Traditionalists — Like PetPartners’ Harrell, these are career-oriented workers who are willing to make some trade-offs for the right price. They’re less likely to quit without a job to go to and more likely to stay if they get enough money.
  • Do-it-yourselfers — They emerged as the largest cohort in the study, a group that tends to value flexibility, meaningful work and compensation. Typically 25 to 45, they can be self-employed or doing gig work or part-time jobs. They want flexibility and a friendly work environment.
  • The caregivers and others — These are the people at home but are wanting more. Typically 18 to 44, with more women than men, they decided to sit it out at home and are looking for roles with flexibility that allow them to still continue their caregiving and responsibilities outside their jobs.
  • The idealists — Typically a younger cohort of students and younger part-timers, 18 to 24, this persona wants flexibility, strong organization culture and clear career advancement trajectories. They ranked belonging to an inclusive and welcoming community more highly than the other personas.
  • The relaxers — These are a mix of retirees, those not looking for work and others who might return to traditional work if the job is right. They want meaningful work and balance. Many retired workers are increasingly returning to work following a surge in retirement during the onset of the pandemic.

To appeal to these cohorts and address the attrition-attraction issue, companies need to double down on their value propositions—both traditional, which includes pay, title, benefits and career paths, and nontraditional, which involves flexibility, company culture and personalization, McKinsey outlines.

“There are some super talented people out there sitting on the bench because the offer is still the traditional offer,” De Smet says.

Source: Five Types Of Talent Behind The Great Resignation

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The WhatsApp Business Model – How Does WhatsApp Make Money?

Screenshot-2022-03-14-at-18-27-13-779593_1179282_wjhatsapp_updates.webp-WEBP-Image-700-×-400-pixels-1

What Is WhatsApp & How Does It Work?

WhatsApp is a messaging application that allows users to communicate with each other via text, audio, and video.WhatsApp can be accessed via its tablet and smartphone apps (available on Android and iOS devices) as well as its web application (called WhatsApp Web).

Users can communicate with each other individually (in private chats) or via groups. WhatsApp’s platform is end-to-end encrypted, meaning that only the users in the chat can read the messages. If users feel like sharing their special moments, they can do so via WhatsApp’s Stories feature. These moments are then displayed for 24 hours.

Apart from its consumer application, WhatsApp has also a communication tool for businesses (named WhatsApp Business). Businesses can:

  • Set up business profiles with helpful information for their customers (such as an address, email addresses, or a link to their website)
  • Labeling contacts for better categorization
  • Automated messages and quick replies
  • Broadcasts (similar to a newsletter)

The WhatsApp Business tool is geared toward small businesses. If a business has some greater scale, it can opt into using WhatsApp’s Business API. The API endpoint allows them to integrate it into their existing business software.WhatsApp is used by more than 2 billion people in over 180 countries across the globe. As such, it is the world’s largest communication platform.

The History Of WhatsApp

WhatsApp, headquartered in Mountain View, California, was founded in 2009 by Jan Koum and Brian Acton.Koum was born in Kyiv, Ukraine, during the 1970s. He spent the transformative years of his childhood in Fastiv, a small town just outside of the Ukrainian capital.Being of Jewish descent, Koum and his family often became the subject of anti-Semitic behavior. On top of that, the Soviet government was notorious for spying on its citizen, leaving the family with no room for privacy to express the predicament they felt being in.

In 1992, at the age of 16, Koum and his mother were allowed to immigrate to the United States where they ended up in Mountain View. Unfortunately, his dad was never allowed to enter the states and eventually died in 1997.The mother-son-duo spent their first few years in a small two-bedroom apartment provided via government assistance. To make ends meet, Koum’s mother took up a babysitting job while Jan worked as a grocery store clerk.A few years later, his mom was diagnosed with cancer and they continued to live off her disability allowance.

By that time, Koum was already head deep into computers. He became a self-taught programmer by purchasing manuals from used bookstores and returning them when he was done reading (to save money).In the mid-1990s, he enrolled himself at San Jose State University to pursue a degree in Computer Science. Koum ended up joining Ernst & Young as a security tester post-graduation. In 1997, EY assigned him to work on Yahoo’s advertising system where he ended up meeting Acton.Acton’s path prior to their meeting couldn’t have been more different.

He was born and raised in Michigan where his mother ran a freight-shipping company, allowing them to live a fairly comfortable life.He ended up doing his Computer Science undergrad at Stanford and then joined Apple as a software engineer. In 1996, Acton became Yahoo’s 44th employee where he quickly climbed the corporate ladder.The pair hit it off immediately and Acton convinced Koum to apply for a role at Yahoo. 6 months later, Koum joined the internet giant as an infrastructure engineer.

He even dropped out of college (he was still attending San Jose State at the time) to completely focus on Yahoo.Their relationship deepened in the years that followed. When Koum’s mother died of cancer in 2000, Acton immediately offered his support. He’d frequently invite Koum over to his house, on skiing trips, or to ultimate Frisbee matches.While their bond became stronger throughout the years, their dissatisfaction with working at Yahoo grew alongside it.

The majority of their time at Yahoo was spent on releasing Project Panama, the firm’s long-awaited advertising platform.In the end, having worked on an advertising product for almost a decade, both Acton and Koum felt emotionally drained. Their dislike for advertising products should eventually come back to haunt them (but more on that later).In 2007, a year after the launch of Project Panama, both Acton and Koum handed in their resignation. They embarked on a year-long hiatus, traveling around South America and enjoying games of ultimate Frisbee.

Then, around the beginning of 2009, Koum purchased his first-ever iPhone. He immediately realized that the App Store, which had just launched a few months prior, would spawn a whole new generation of businesses that build on top of Apple’s ecosystem.A mutual friend of Koum introduced him to Igor Solomennikov, a Russia-based iOS developer that would help him build the product’s frontend (while Koum was responsible for the backend portion).

A few weeks later, on February 24th, 2009 (which is also Koum’s birthday), he incorporated WhatsApp Inc. in California. WhatsApp, by the way, is short for “what’s up”, a phrase Koum found befitting for a messaging app.Over the next months, Koum spent hours upon hours programming the app. Unfortunately, a plethora of bugs caused it to continuously crash. At one point, he was even ready to call it quits. Acton’s response was fairly blunt: “You’d be an idiot to quit now,” he stated. “Give it a few more months.”Koum’s perseverance eventually paid off when Apple released push notifications in the summer of 2009.

Each time one of the app’s users changed their status, all of their contacts would get a notification.Eventually, people would start messaging each other through the app – from any place around the world. While this may sound dull in today’s hyper-connected world, WhatsApp’s introduction became a huge revelation and, for the first time, indicated the impact smartphones could have on our lives.At the time, the only free texting application was BlackBerry’s BBM, which was solely accessible to users that owned a BlackBerry device.

User growth started to snowball when Koum released an upgraded version of WhatsApp that included a messaging interface (i.e. chats). Over 250,000 users downloaded the app within a matter of days.To keep up with demand, Koum came to see Acton, who at the time was still unemployed and working on another startup idea, to convince him to join the project. When Acton used the app for the first time, he immediately realized the limitless potential that a messaging platform like WhatsApp could have.A few months later, Acton was able to convince 5 of his former colleagues at Yahoo to invest $250,000 in the startup’s first-ever seed funding round.

The funding round furthermore granted him co-founder status and a significant stake in the company.The money allowed them to hire a few more developers that would build WhatsApp products for the Android’s and BlackBerry’s operating system, respectively. Yet, they remained true to their frugal origins.The team would share a warehouse with Evernote (who’d later take over the whole building and essentially kick them out). They would wear blankets to keep them warm and used the cheapest Ikea furniture for work.What became more abstruse was that the team find it necessary to put up an office sign.

Instead, they’d tell job candidates to get to the Evernote building, walk around the back, find the unmarked door, and simply knock.A bigger problem became the startup’s largest cost pool: SMS verifications. SMS brokers like Click-A-Tell would send the messages on WhatsApp’s behalf and charge them anywhere between $0.02 to $1 depending on location.The team would occasionally change the app’s pricing structure from free to paid (equal to $1) to cover its cost. Yet, despite the fact that they charged users, WhatsApp would rise to become a top 20 app in the U.S. App Store by the beginning of 2011.

WhatsApp’s growth was solely based on word of mouth and the quality of the product they delivered. Deeply affected by their experience at Yahoo, the founders promised themselves to never derail the app with ads or other distractions. To that extent, Koum had a note in front of his desk reminding him of the exact same thing.Being on top of the App Store world and building a high-quality product put the team on the radar of a lot of Silicon Valley investors. Yet, they were rejected right from the start. Acton’s fear, at the time, was that VC funding would lead to lesser decision-making power – and investors would force them to insert ads into the application.

One investor proved to be particularly enduring. Jim Goetz, Partner at Sequoia Capital, tried to get in contact with the founders for well over 8 months – without any success. Eventually, his persisting follow-ups led to a meeting at the Red Rock Café, a famous Mountain View workspace known to be home to many startup founders.Goetz ensured the duo that he’d only act as a strategic advisor and not force them to make any business decisions they weren’t comfortable with.

In the end, Sequoia was able to lead WhatsApp’s Series A round, which netted the company $8 million.The founders made sure to use the money to the best of their ability. By 2013, WhatsApp had over 200 million monthly active users and a staff of 50 people. Sequoia would go on to invest another $50 million via WhatsApp’s Series B, which valued the company at $1.5 billion.Ironically enough, when Goetz signed the check, Acton sent him a screenshot of the firm’s account balance, which was equal to $8.2 million. They simply needed the money ”for insurance”, as Acton recalled.

Being a highly capital efficient company with a rapidly expanding user base does eventually put you on the radar. In the spring of 2012, Koum’s email inbox was hit with the following subject line:“Get together?”The recipient was no one other than Mark Zuckerberg asking the WhatsApp founder to have a chat over dinner. Over the next year, the pair got together for many more of these dinners, discussing the chances of a potential acquisition.In mid-June 2013, when WhatsApp just crossed the 300 million user mark, the founders had a scheduled meeting with Google’s Head of Android Sundar Pichai (who now serves as the company’s CEO).

Pichai would even introduce the pair to then Google CEO and co-founder Larry Page. A few days before that meeting was bound to happen, a WhatsApp employee ran into Amin Zoufonoun, Facebook’s Director of Business Development and one of the brains behind the $1 billion Instagram acquisition.He told him that Acton and Koum were supposed to meet Page in the next few days. Zoufonoun immediately went back to the office to speed up the acquisition process in order to avoid a last-minute counteroffer by Google.

Yet, the founders still attended that Google meeting but actually didn’t even receive an offer from Google.About 2 weeks after that meeting, on February 15th, 2014, Zuckerberg and Koum inked the deal. Facebook would pay $19 billion to acquire 100 percent of WhatsApp, paying $4 billion in cash, $12 billion in stock, and another $3 billion in stock grants if the founders would stay on at Facebook for at least 4 years. The price ended up rising to $22 billion due to the share-based components of the deal.

To make this even more of a Cinderella story, Koum signed the agreement on the doorsteps of his old welfare home in Mountain View.Furthermore, the deal would make Koum and Acton overnight billionaires. Koum would make $6.8 billion after taxes while Acton would pocket $3 billion. Lastly, Sequoia walked away with $3.5 billion, which represented a 60-fold return on the firm’s $58 million investment.Ironically enough, both Acton and Koum applied for roles at Facebook after they left Yahoo but were ultimately rejected. Now, they had not only a seat at the table but access to quasi-infinite resources.

As a result, WhatsApp was able to triple its user base to 1.5 billion within 3 years of the acquisition.On the outside, everything was looking great but the tension between Facebook and WhatsApp executives began to rise soon after.Sheryl Sandberg, Facebook’s Chief Operating Officer, as well as many other Facebook executives started to push WhatsApp’s founding team to ease the end-to-end encryption it became known for.Furthermore, they wanted to include targeted ads within the app, a concept that both Acton and Koum opposed heavily (they even had a clause in their contracts that granted them accelerated payouts if Facebook insisted to include ads).

A few disagreements between the company’s employees also popped up. For instance, Facebook employees issued their dissatisfaction about the fact that WhatApp’s desks, which were brought over from their Mountain View location (WhatsApp moved into Facebook’s headquarters after the acquisition), were larger than the standard desks Facebook employees were equipped with.WhatsApp also negotiated for nicer bathrooms and had conference rooms which permitted Facebook employees from entering.

WhatsApp, on the other end, wasn’t without fault either. When the founders were tasked with replicating Snapchat’s Story feature into WhatsApp, Acton and Koum used that assignment as an excuse to delay exploring other revenue-generating avenues.Eventually, the mounting tension between the 2 camps became irreparable. On September 17th, 2017, Acton announced he would leave WhatsApp. Koum’s departure came just 7 months after (in April 2018). Due to their premature exit, Acton and Koum gave up $900 million and $400 million in stock compensation, respectively.

To make matters worse, Acton publicly denounced Facebook, criticizing the company on how it handled its user data in the wake of the Cambridge Analytica scandal. He even pushed people to stop using Facebook by publicly supporting the #DeleteFacebook movement.Facebook, that same year, was even slapped with a $122 million fine by the European Union due to providing “incorrect or misleading information” in regards to the acquisition.While all these incidents painted a gloomy picture of how miserable life as a Facebook-owned property can be, it did not seem to affect WhatsApp’s usage growth at all.

Particularly India, with its 1.37 billion inhabitants, became one of the major growth markets.WhatsApp’s popularity among Indians allowed many businesses to flourish by offering products and services to millions of smartphone users via the app’s Business tools. Unfortunately though, just like its mother company, WhatsApp became a breeding ground for spreading fake news.In 2017, 17 men were killed after false rumors of their attempts to kidnap kids from a village spread on the app.

WhatsApp introduced various measures, such as limits on message forwarding and full-page newspaper ads warning about these rumors, to combat the spread of fake news on its platform.In some instances, WhatsApp (albeit unintentionally) even caused political leaders to be ousted. In October 2019, Lebanon’s Prime Minster Saad Hariri, amidst intense public pressure, was forced to resign from his position after proposing a 20 percent tax on the first WhatsApp call users made in a day.And the bad news did not end there. In January 2021, WhatsApp announced that it would roll out a new privacy policy which forced users to share data with its parent company Facebook.

While it turned out to be a misunderstanding (Facebook already gathers WhatsApp data in an encrypted way, so user information remains private), the damage was already done.Many of its users flocked to other messaging platforms, such as Signal (as promoted in a tweet by Elon Musk), Telegram, or Viber. Initially, the company said it would remove users who wouldn’t accept the new terms. However, the company reversed its course days before the supposed go-live on May 15th, 2021.In fact, the company has now doubled down on privacy-related changes and other features that often mimic those of Telegram and such.

For instance, in June, the platform introduced multi-device support, which allows users to message on various devices at the same time. Other features include encrypted video chats as well as disappearing photos and videos (August 2021).Unfortunately, not everyone seemed to believe in WhatsApp’s noble intentions. In September 2021, Irish authorities imposed a €225 million (~$267 million) fine on WhatsApp for failing to tell some users how much data was shared with Facebook.

The fine was the second highest ever issued under Europe’s General Data Protection Regulation (GDPR), which was first introduced back in May 2018.Today, WhatsApp is widely considered to be the world’s largest communication platform. Over 100 billion messages are now being exchanged on the platform – every day. WhatsApp currently employs well over 1,000 people in 6 office locations across 4 countries.

How Does WhatsApp Make Money?

WhatsApp makes money by charging medium and large enterprises for access to its Business API. But before we go into more detail, let’s take a closer look at the firm’s previous monetization efforts.As earlier stated, WhatsApp used to monetize its customers via a subscription model. Users paid $1 per year to be able to use the app. That would be equal to a $2 billion revenue run rate given WhatsApp’s 2 billion user base.In 2016, 2 years after the acquisition, Facebook decided to ditch the $1 fee.

The underlying strategy was to continue focusing on user growth and help WhatsApp become the ubiquitous leader in the messaging space.That also meant ditching any plans to insert ads into the product. Whilst Facebook’s Messenger product does offer in-app advertising, its executives have decided to work with businesses to monetize WhatsApp.In 2018, WhatsApp launched its Business API, which became the first continuous effort to monetize the app post-acquisition.

The B2B tool is free to use for small companies. Meanwhile, larger organizations have to pay whenever they send a reply 24 hours after the initial message was sent. Everything beyond the 24-hour threshold will cost anywhere between $0.05 to $0.90 per replied message.Furthermore, WhatsApp partners up with other companies, such as the cloud communication platform Twilio, to deliver its API.

Future Monetization Channels

In recent times, multiple reports have emerged about new revenue streams that WhatsApp may pursue.WhatsApp has been working on a payment product since 2018. In June 2020, it finally launched a payment service in Brazil that allowed users to pay each other (mirroring Venmo and Zelle) as well as other businesses on the platform.Unfortunately, around 10 days later, Brazil’s central bank suspended the launch, stating that it wanted to “preserve an adequate competitive environment” within its mobile payments industry.

Mastercard and Visa, WhatsApp’s payment partners, were asked to suspend any money transfer within the app.While the failed launch was a tough pill to swallow, it hasn’t stopped the company from pursuing the payment concept.In November 2020, it enabled P2P payments in India, the firm’s largest market by user count. Business payments, in which WhatsApp would receive a portion of the order value, are expected to follow in the next few months. Also, in May 2021, Brazil lifted its payment ban, adding another country to the mix.

For the longest time it had been speculated that Facebook might finally decide to put ads on WhatsApp. Will Cathcart, the Head of WhatsApp, has indicated a more native approach.Instead of advertisements pointing towards a website (like on Messenger), ads would be directed at existing WhatsApp Business accounts that sell products and services a user might need.Another possibility might be ads within WhatsApp’s Story feature. These ads would, in all likeliness, show up in between stories. Businesses would then pay WhatsApp a fee in exchange for being shown on these advertorial placements.

Lastly, it has also been speculated that WhatsApp is set to introduce business directories as well as cashback rewards. With the directory, businesses would pay WhatsApp a fee for being listed or promoted on it while cashback rewards would grant the company a portion of the purchasing price (known as a referral fee).However, due to the firm’s troubled past, it remains very timid with the monetization features it introduces.

WhatsApp Funding, Valuation & Revenue

According to Crunchbase, WhatsApp has raised a total of $60.3 million across 3 rounds of venture capital funding. The company’s only investor throughout its startup time was Sequoia Capital, with partner Jim Goetz leading negotiations.The last time WhatsApp valuation was publicly disclosed occurred during its acquisition by Facebook. The tech giant paid a whopping $19 billion to acquire a 100 percent stake in the company.Facebook has furthermore decided to not disclose any revenue it generates from WhatsApp. Instead, any revenue figures are included in the firm’s overall income figures.

By: Victor

Hi folks, my name is Viktor. A twenty-something year old who all the sudden found himself in the world of blogging.The information you can find on this website is a reflection of my lifelong experiences working in technical account management, consulting, and data analytics. My work has been featured in a variety of media outlets, including Business Insider, Yahoo Finance, Seeking Alpha, Coindesk, BuzzFeed, and hundreds more……

Source: The WhatsApp Business Model – How Does WhatsApp Make Money?

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