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Comment by senttoschool | Hacker News Reader

But they lost $140m in 2014 and made only $10m in revenue. They would have had to shut down their service if they didn't find product market fit or if Meta/someone else didn't buy them.

When you need to start making money, you suddenly need to a lot more engineers. Now you need developers to make sales tools, compliance, moderation, finance, A/B test engineers for growth ideas, niche features for big customers, engineers to bring down cloud costs, etc.

It doesn't make their engineering less impressive but I think we need to understand the full picture.

At the end of the day, WhatsApp needed to make money to keep their service going.

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> But they lost $140m in 2014 and made only $10m in revenue

you posted the same comment two times already.

same response

https://news.ycombinator.com/item?id=34566572

So it was still a $26.5m net loss for 6 months? Or $53m net loss for 12 months?

For the year ending December 31, 2013, WhatsApp had $10.2 million in revenue and a net loss of $138.146 million. Net cash used in operating during this period was only $9.9 million, while share-based compensation amounted to $98.8 million

They only spent $9.9 million over $10.2 million in revenues for operations.

WhatsApp’s goal is still growth, rather than monetization. Mark Zuckerberg and WhatsApp CEO Jan Koum said when the acquisition was made in February that ads aren’t the right way to earn money on messaging

They were investing on growth, an investment that lead to a $16 billion acquisition from Facebook.

I would love to replicate their same "unsustainable business"

They took in more cash than they spent, the opposite of what you are implying.

Are you really that upset about GAAP accounting and how non-cash, stock-based compensation can lead to paper "losses"?

No, I'm not upset. I was just operating with different information.

My point remains. They created impressive technology. But 900m users and 50 engineers needed more context. It's not like they shipped a 900 million iPhone-like product with 50 engineers. They made $200k/engineer which is pretty bad compared to more successful companies. When they needed to make more money, they would have needed a lot more engineers.

They never spent their Series A cash. What you're reading is a common misinterpretation of GAAP, which values equity on a cash basis, even though it has no material impact on the company balance sheet. If you look at the cash flow statement in their SEC documents, the cash story is more clear.

They never spent investor money from their Series A-on. After Sequoia completed the Series B, Jan and Brian forwarded them a copy of the bank account statement before the Series B financing, showing the original invested funds untouched. They were acquired less than a year later.

Whatsapp was a money-printer! It deserves that reputation.

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