You cannot outperform a marketplace if you adhere to its conventions.
Jean-Marie Dru, CEO TBWA
Facebook, the largest social network worldwide, still thriving and still growing, is buying Whatsapp, a startup-like SME for $19bn. What happened? With 1.2bn registered users (700 million of them active every day) Whatsapp is nowadays outperforming Facebook. It attracts nearly one million new users per day, a number Facebook cannot match. Particularly young users, the digital natives, have changed their communication patterns and have started to use alternative channels – primarily Whatsapp.
What this acquisition reveals is that the pace of change is increasingly accelerating. Market leaders are threatened by new players that disrupt their business models. Consider the progressive turnover rate of the Fortune 500 (Figure 1), and how even well established players in mature markets can nowadays lose market share in increasingly short timespan. Look at Dell and HP, who both were the leading vendors in the personal computer space – until they suddenly weren’t. Both didn’t recognize the shift in consumer demands – their traditional customer base has started to use new technologies to cope with daily tasks they traditionally have used personal computers for.