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Executive summary

            The rise of the internet led to the proliferation of many online businesses that help to enhance a quick communication. WhatsApp saw the existing gap in communication through messages and sharing of videos and decided to exploit the opportunity. This paper seeks to offer enough information concerning WhatsApp as a company and its innovation. The paper highlights how the company has managed top record the success it currently enjoys.

            The paper studies the internal structure of WhatsApp and how it deals with innovation. The company has managed to come up with various inventions that are pace-setters in the industry. With better decision making processes, inventions, entrepreneurial characteristics, and a good creativity climate, the company managed to be the industry leader. The paper researches the internet, journals and book to come up with various findings concerning the company.


            Innovation refers to the application of new solutions that meet existing market needs, new requirements, or in-articulated needs. Innovation is accomplished through effective products, services, processes, ideas or technologies that are available to governments, markets and society. Innovation is something original and new which breaks into the society or market. In the field of economics and business, innovation plays a big role in catalyzing growth. With fast advancements in communication and technology, innovation has led to creation of many products and services that benefits users. Innovation is different from invention, innovation is the use of a better or novel method while invention is more directly towards the creation of the method or idea itself. Innovation is different from improvement, whereas innovation is the idea of doing something different; innovation is doing something better (Plana et al. 2013).

            Creativity refers to the ability to surpass traditional ideas, patterns, rules, or relationships and create significant new ideas, methods, forms, and interpretations.  Creativity is a fact whereby something valuable and new is created such as invention, idea, joke, solution, literary work, and musical composition among others. The concepts and ideas conceived can manifest themselves in different ways, but often become something seen, touched, heard, smelt or tasted. Creativity is also the process of producing a worthwhile or original thing or something characterized by imaginative, expressiveness or originality. Creativity helps to bring in new products to the benefit of consumers (David 2013).

            Change refers to the process of becoming different. Change is making the nature, form, future, content or course of something different from what it could be if left alone or from what it is now. Change is important since it offers new way of doing something differently.   

Background to Whatssap

            WhatsApp is a messaging app founded in 2009 by former Yahoo employees, Jan Koum and Brian Acton. In 2013, WhatsApp reported revenue of $20 million. WhatsApp is a messaging app which took advantage of smart phones to present a free substitute to texting. The service is free for the first year and it costs $1 a year thereafter, allowing users exchange text, audio clips and pictures, and also group chats. WhatsApp has about 460 million active users, the number adds by about million users every day, with many users coming from Asia and Europe (Church & de Oliveira 2013).

            Apple started push notifications in 2009 allowing pinging of users when not using an app. Jan Koum designed WhatsApp so that every time a user changed status it would ping each user in the network. After the release of WhatsApp 2.0 with a messaging module, active users swelled to over 250,000. Koum invited Brian Acton, who was unemployed while still managing the failed start up, to join the company. Acton convinced five former Yahoo colleagues to invest $250,000 in funding. As a result, Acton was granted co-founder stake and status (WhatsApp 2013).

            Koum employed an old friend living in Los Angeles to design BlackBerry version of WhatsApp. His name is Chris Peiffer. WhatsApp got switched from a free service to paid service to restrict it from growing very fast, primarily because the cost was sending texts to users. Later, in 2009, WhatsApp for the iPhone could send photos. By 2011, WhatsApp was leading all 20 apps in the U.S. App Store. After a negotiation with Jim Goetz, a Sequoia partner, Koum and Acton agreed to get $7 million from Sequoia Capital in addition to $250,000 seed funding. WhatsApp’s user base rose to 200 million active users while it had a staff of 50 employees by February 2013. Sequoia added an investment of $50 million making WhatsApp value to be $1.5 billion. Facebook acquired WhatsApp on 19th February, 2014 for $19 billion. By April 2014, WhatsApp users had surpassed a half billion user mark (Yeboah & Ewur 2014).

            WhatsApp competes with many Asian-based messaging services including LINE, WeChat, KakaoTalk, and Telegram among others. In August 2012, WhatsApp managed 10 billion messages every day having grown from 2 billion in April 2012, and 1 billion the preceding October.  On June 2013, WhatsApp managed to reach a record by processing 27 billion messages each day.

            WhatsApp has enjoyed success thanks to sticking to two important approaches. Firstly, WhataApp ensures that its features are made in a manner allowing even technophobia to understand. For instance, its service of voice just requires a swipe to make active, while other services require three taps. Secondly, instead of using a staggered release strategy, it uses a parallel release strategy when issuing updates. It means all operating systems (OS’s) get the update simultaneously instead of weeks or months apart, which enabled WhatsApp to draw a big percentage of users from operating systems like Microsoft Windows and BlackBerry. While WhatsApp’s rivals capitalize on the bases of their users through using a variety of monetization strategies such as stickers, adverts, games and payments, WhatsApp charges its users who have used the service for over a year, a fee of $0.99.

WhatsApp Innovations

            WhatsApp utilizes a customized edition of Extensible Messaging and Presence Protocol (XMPP). Upon its installation, it makes a user account using a phone number as username. The software of WhatsApp automatically evaluates every phone number from the address book of the device with its database of users to immediately add contacts to WhatsApp contact list of users. Formerly, the S40 and Android versions utilized an MD5-hashed version of the IMEI of phone as the password, while the iOS type used the Wi-Fi MAC address of phone instead of IMEI. The 2012 update generates an unsystematic password on the side of server.

            WhatsApp is supported on many Android, iPhone, BlackBerry, Windows and Nokia smart phones. Every Android phones with the Android 2.1 and above, BlackBerry devices using OS 4.7 and BlackBerry 10, and every iPhone running iOS 4.3. Some Dual SIM devices can not be attuned to WhatsApp, although there are workarounds concerning that issue. Users send Multimedia messages by uploading the audio, video or image that are sent to an HTTP server, and then send a link to the content together with applicable Base64 encoded thumbnail.

Organizational structure

            Jan Koum is the founder and current Chief Executive of the company. The other co-foundr is called Brian Acton. The company was bought by Facebook Inc which is under the leadership of Mark Zuckerbeg. The company has less than 60 employees.

Creative climate and creativity of employees

            Creativity neither happens in an emotional iceberg nor in an intellectual vacuum that many companies or organizations fashion for themselves. WhatsApp has key areas in which it focuses on to develop an efficient climate where employees are not only creative, but motivated to develop their ideas into great contributions to the progress of the company. Analysts argue that if an organization wants to be more creative, instead of just teaching or encouraging people, the best way is to prepare an organizational climate. Instead of telling the grass to grow, it is better to tend the soil where they may become fully grown.

            Motivation: In order for people to do anything important, they need motivation from the management of the company. The climate of the company need to provide the forces and cues that lead employees into the motivation that is needed to move from ideas to end products. Employees need to feel challenged, that there is a push for them to expand their boundaries, develop talents and discover other possibilities. Employees that feel challenged engage in their work seriously. It turns to be part of them, not just a work for them to do. The employees feel the urge to get out and act, not just to be idle. WhatsApp challenges employees by linking their talents, motivation and potential with the strategic plan of the company. The trick of motivation involves giving employees a high level of objectives, thus making them challenge and excited, not directed or constrained.

            Empowerment: Once employees are encouraged to be creative, they require the right environment where they can be very creative. People feel empowered to act in systems that are not constrained by management oversight and job descriptions. WhatsApp employees enjoy personal freedom of resource and choice that grants them real authority to accomplish the challenge the management gave them. In many companies, empowerment has been abused and slated, for instance where every power of the organization is maintained by managers even as junior employees are asked to attain results without the power and authority to act. If done well, as in the case of WhatsApp Inc, it delegates powers and the freedom of choice to do what one has to do within his/her power.

            Dynamism: Besides being a motivated and empowered company, WhatsApp requires a hard edge to drive forward towards much more success. WhatsApp boasts of a dynamic environment where employees are energized towards success. Energy and buzz comes from the leaders of the company. It includes the formal management and social leaders. Employees look to these leaders to get cues on how to behave. If a leader is full of enthusiasm and energy, the emotion will 'infect' employees and motivation will spread all over the organization. People connect themselves to impractical positions and will immediately defend them, sometimes by attacking what appears to be a threat. A climate where there is a presence of conflict, it enables the challenges to be heard and for employees to argue their case. In supporting the right climate, the conflict is about the issues of the organization and the practicality of ideas, and not about the value and personalities of different characters. In circumstances where conflicts turn to personal attack, their values and ideas remain eroded. Creation of healthy conflict requires openness to a challenge and focus on a problem, not employees. The company ensures that there is respect for every employee.

Problem solving        

            WhatsApp’s problem solving is beyond making decisions. It includes finding and formulation of the problem, implementation of the decision, and auditing and reviewing of results. The process of problem solving in this company may take a long time. Every stage of solving problems depends upon the earlier stage. By spending enough effort on the early stages, money and time are saved on last stages.

            There are five stages in the problem solving process of WhatsApp:

  • Problem finding
  • Formulation of the Problem
  • Making a solution
  • Implementation of the chosen solution
  • Audit and review of the implementation

            WhatsApp Inc. problem solving starts with the process of discovering the problem. Problem finding is the most difficult level since things are not what they appear. What is seen as a problem depends may not be the real problem. Symptoms that exist at WhatsApp can illuminate and mask the existing problems. Finding the issues leading to problems can be obvious or sometimes intuitive and subtle, emerging after a lengthy process of elimination. Existing problems are obvious, but may not appear so at the start. What the company wants to avoid is the error of working on a wrong problem (Schrittwieser et al, 2012).

            The second stage of problem solving is problem formulation. The stage is hard since it involves values that require surfacing and dealt with to create a shared understanding concerning issues going on and how to advance it. WhatsApp has stakeholders with differing values and objectives. For instance, stockholders may seek greater profits and dividends. Management wants wealth, control, and increased growth. WhatsApp may demand more pay, security, and health benefits. On the other hand, the government will require a portion of the company in terms of tax. Creditors and bankers may want to get repayments. Environmentalists may insist that the company invest in pollution abatement. Customers may demand additional services, quality, and lower prices. The above competing objectives and values need to be considered when formulating the problem to be solved.

            The third stage in problem solving is making a decision. The third stage is simple. After the completion of the two earlier stages, the third level involves selecting the best alternative given the constraints and circumstances surrounding the problem. The new pattern provides insights that create new solutions to apparently unsolvable problems.

            The fourth stage is the implementation of the solution. It involves implementation of planning and the real implementation of the result as deployed all through the organization. The fourth stage is referred to as the stage where the "rubber meets the road". Problems always arise in the implementation of solutions that are designed to improve a company. The fourth stage is where theories and concepts meet the rocks of reality. Although attention to details is also important, what matters most is the encounter between the solutions and reality. Once the fourth stage is done right, it helps improve the shared understandings needed for making progress in remaining well–organized.

            The fifth stage involves auditing and reviewing of the outcomes of the solution deployment. In this situation, the idea is to monitor the issues happening against the objectives. The audit and review level leads to suggestions and facts for improving all of the above stages. It is valuable to validate if solutions have worked.

Managing innovation

            When implementing an approach of innovation management, WhatsApp Inc employs three core elements. The three are: strategy, process and innovation culture.

            In WhatsApp, innovation is embedded in its strategy. The company’s top management sponsor ideas that arise and encourage capturing of any ideas that come up. WhatsApp identifies an innovation manager who will oversee and drive the process at the strategic level in the company. By ensuring that innovation is sponsored and driven from the top-down gives ideas that could be drowned in daily duties to be drawn out and given an opportunity to flourish.

            Behind strategy, WhatsApp has developed an organizational process that helps innovation. Without an effective process, the originators of ideas may lack the know-how of where to capture their ideas from an unspoken conversation to something that people will look at systematically. Generating and capturing ideas need processes to assist their maturation and to make them into viable projects. In the implementation of innovation management approach, WhatsApp has a defined process that allows for the generation and capturing of ideas.

            In conclusion, bringing strategy and organization to work together, WhatsApp has developed an innovation culture that sustains the process of innovation and take it from being a one-time exercise to be a way of life for this company and its employees. A culture of innovation materializes when the first two aspects of an innovation management approach is in action. It takes time to develop a culture. By sharing real life of innovation outcomes, employees start believing that their ideas could result in the same outcomes. Ensuring that every team member has innovation described in the daily chores description will allow ideas development in various areas of a business. WhatsApp does not view any idea as bad idea or simply discard it because it does not seem to work according to opinions. It is critical to bring about a culture that studies every idea on merit, prioritizing the idea, and mature it to develop.

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