The name isn't the problem, Arattai has something else to solve

Sridhar Vembu Sir just launched Arattai, a personal messaging app. While there's a lot of chatter on whether it could use a different name, the real concern is something else.

Right now, there's no difference between Arattai and Whatsapp. Both are messaging apps. Both are simple, intuitive and functional. And while there are doubts about the latter, both claim to be "safe and secure".

If this situation stays, why will anyone switch from Whatsapp to Arattai? What's the reason anyone would jump ship?

I had the privilege of getting mentored by the CTO of Hike, back when the company was soaring with over 100 Million DAUs. He told me something incredibly interesting. He said:

"What we learnt with Hike was that 'network effects' is an unimaginably strong force. Let's say if in a market, Whatsapp had 100 people. Even if Hike got 99 people there through sheer marketing force. In just two weeks, all those people dropped off, one by one".

Normally, as Mr. Musk says, moat is a myth. The fight amongst businesses is usually a continuous battle where only relentless focus and operational excellence wins. All things analysts point out as "moats" are usually total BS.

Except network effects.

Network effects are that magical shield that can keep a business intact, even if it's in deep shambles and stinks in a lot of ways. Network effects allow a business to stand tall and proud, even if it screws its customers like it's 1999. Even if it makes mistakes. Even if has solid "concerns" over security or privacy, or whatever.

Network effects. They're hard to beat.

Once again, Sanjeev Bikhchandani Sir said it really well. When asked about how Naukri has been able to keep the leadership position for such a long time in the recruitment space, he said, "We have more job seekers because we have more recruiters. And we have more recruiters because we have more job seekers. We're No. 1 because we're No. 1".

You're No. 1, because you're No. 1. That's network effects in a nutshell.

So given that context, how do you beat that? How can you break network effects? You can do it, only by doing something 'radically different'.

Like Facebook beat Orkut by being a totally different product that made the 'scrapbook' irrelevant. Instagram beat Facebook by being focusing exclusively on pictures. Snapchat broke Instagram's network effects (albeit temporarily) by bringing disappearing texts and filters to the fore, and TikTok beat Instagram (perhaps permanently) by making short videos the centre of everything.

Since breaking network effects of an existing product is practically impossible, no matter the capital, distribution might, or time (think Bing vs. Google Search, or Threads vs. Twitter), the only way to do it is by doing something totally different altogether (think Chatgpt vs. Google Search).

So with Arattai, that's what's really needed. Something "radically different" from Whatsapp. Hope it happens soon!

Vembu Sir is one of my personal heroes. Best wishes to him.

What can make Arattai beat Whatsapp?

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