This week’s podcast is about WeChat, which really has reached a level of daily usage that makes it the “everything app”. Here is my breakdown on how it got there strategically.
Here is the link to TechMoat Consulting.
From the Concept Library, concepts for this article are:
- Innovation Platforms
- Payment Platforms
- Complementary Platforms
From the Company Library, companies for this article are:
- Tencent / WeChat / Mini programs
Welcome, welcome everybody. My name is Jeff Towson and this is the Tech Strategy Podcast where we analyze the best digital businesses of the US, China and Asia. And the topic for today, how WeChat became the everything app. Now, for a long time, WeChat was kind of described as the super app. I never really knew what that term meant and all these companies all over the world started saying they were super apps and You couldn’t really tell what the heck this meant other than we offer more than one service. That’s kind of what it meant But Elon Musk has been talking about his desire to turn Twitter and Whatever he’s calling it X now into the everything app and I think this term which has been floating around as well I think that’s really what we’re talking about I mean, it’s the app that you use sort of for everything in your daily life. It’s almost like the operating system for your digital life. So I’m thinking that’s the right term to use for this. And I wanna kind of talk about how WeChat became this because I’ve put forward a proposal that I think chat GPT may be the West’s version of WeChat. I’m pretty skeptical that this is ever gonna happen. I have been for a long time, but chat GPT could be it. And I’ve done sort of articles on that. So anyways, that’ll be the topic today. Just sort of go through a little bit of the history, how it got where it is from a strategy point of view, not the endless features, which could go on forever, but taking apart the strategy. So that’ll be the topic. I’m actually in Beijing again, hanging out here for about… two weeks which is really fantastic. I mean it is just such a go-go place and you know if you’re into digital stuff this is kind of like one of the big epicenters. I’m using my phone for everything there’s new companies new services everywhere it’s pretty fantastic. I’ll talk a little bit about that. We’ve got the China Tech Tour starting on Monday which is two days away so that’s going to be awesome. We did have some people reach out, actually several, in the last couple days asking if they could jump on the tour. Maybe for all of it, maybe for part of it. And I’ve kind of politely said, look we can’t really do that because everything is sort of locked down. We’re visiting a lot of companies. We have to sort of clear who’s coming ahead of time. So it’s a little bit too late for that process. So I’m sorry I couldn’t do that. If that’s something that’s interesting to you, we’re going to do this again in the fall. That’s kind of our schedule, spring and fall. So just reach out to me. As for this week, man, it is gonna be good. I kinda even surprised myself a little bit. We ended up, we’re gonna visit ByteDance, the TikTok headquarters. Well, the headquarters is now technically in Singapore, but let’s say the main facility here in Beijing on Monday. That’s fantastic. That was a little bit of a surprise because you know they’re under the political radar right now and Are on the political radar and you know usually in that sort of situations companies tend to be a little bit more quiet So that was a nice surprise By do their autonomous vehicle Facility their generative AI program Bernie their search engine IGE which is arguably the biggest entertainment app here that’s similar to YouTube and Netflix. JD, smart logistics facility, the e-commerce facility, Tsai Niao, Ant Group, a couple other places. I mean, it’s just going to be an awesome week. So I’m pretty psyched. I mean, this, this is about as much fun as I have in life. So it’s going to be a good week. I’ll be vlogging a little bit along the way, so I’ll put up some videos and probably talk about it in the podcast, but yep, that is kicking off tomorrow. Anyways, okay, I think that’s all I needed to go through. Standard disclaimer, nothing in this podcast or in my writing or website’s investment advice. The numbers and information for me and any guests may be incorrect. The views and opinions expressed may no longer be relevant or accurate. Overall, investing is risky. This is not investment advice. Do your own research. And with that, let’s get into the content. Now, in terms of concepts for today, we’re actually gonna have several. This is gonna be sort of the strategy story of WeChat. So we’ll get to use quite a few concepts. The big ones are innovation platform and standardization network effects. We’ll also talk a little bit about embedding payment platforms and basically communication networks. But the three I think that are worth paying attention to are innovation platform, standardization, network effect and embedding. And I’ll sort of explain those as we get into them. But again, they’re in the concept library. Feel free to check it out there and I’ll sort of detail those. But if you’re taking notes, those are the three to write down. Okay, so, I mean, WeChat is, man, it is a Saturday. It’s about 4 p.m. in Beijing. I’m kind of in the southeast of Beijing. I kind of like to stay down here actually. It’s called Yizhuang, which is one of the newer districts. It’s funny that Beijing is ring roads, first ring road, second ring road, third ring road, fourth ring road. And now there’s a fifth ring road that goes around the city that’s really going into the next province. Most of the cool digital companies are out sort of beyond the third ring road usually. because they’ve sort of built new districts out there that are, you know, they’re very modern, wide streets, you know, great trees and some it’s really modern looking, right? You go downtown, then you’re dealing with more historical neighborhoods. So most of the companies tend to be out third ring road, fourth ring road. And that’s cool. If you go down to the southeast, which is Yizhuang, that’s where companies like JD are. Now the problem, which is something we’re is if you want to go to multiple tech companies, they’re all kind of on the edge of town. So you got to go from the Southeast up to the Northwest. Northwest is upward Baidu, Jonggwan Sun, Baida, that sort of area. A lot of them are up there, Dee Dee’s up there. If you want to go to the Northeast, that’s Maytuan and some others. So it’s cool in that they all have these sort of nice districts that are very well developed. The problem is if you’re trying to visit a lot of them. you end up having to take these hour long drives to go from one to the other. So that’s a little bit of a challenge. But anyways, I’m down here in the Southeast. I have pretty much used WeChat. I doubt I’ve gone 30 minutes without using it in the last two days. Maybe an hour at most. It is for everything. You know, you get off, let’s say the subway. walk into Starbucks where I pretty much have my only conversation of the afternoon, which is you might walk up and you say I want a whatever latte, whatever, and then you pull out, you do WeChat, you do scan the QR code or you give them your QR code, one of the two, you pay for it. That little interaction of here’s what I want, you can deal with a lot of businesses without even having that interaction anymore. So maybe you sit down, have a coffee, fine, fine. Get into DD, which is like Uber. Again, no conversations, call it up. I usually do it within WeChat. Call up the DD mini app within there. Either grab a bicycle or if it’s longer, get in a car. Very, I mean, this is another sort of general point I make. Pretty much every app you use is better than the equivalent in the West. And not a little bit. DD is dramatically better than Uber. It just is. The interface is fantastic. It gives you 15 different options to get from A to B. I mean, it’s really, and that’s kind of standard. There are a couple exceptions, but generally speaking, they’re better. So let’s say you get into a Didi, takes me to the hotel, the hotel I booked it on Ctrip, which is different than trip.com. If you’re outside of China, it’s trip.com. If you’re in China, it’s Ctrip or Xiecheng. That app is, I mean, because I travel a lot, right? That app is spectacular. It is so much better than Expedia or Booking or no offense, Agoda. I know some of you that listen, work at Agoda. I mean it is like, yeah it’s travel, you can book your hotel, your train, your car, your hotel, but it’s got videos and travel vlogs and it’s dynamic and it’s awesome. You can learn everything you want about where you’re going and then I go over to Airbnb or Expedia. It’s so primitive. Anyways, but again, pay for that using WeChat. I can either use the app directly or more often than not I use it within WeChat. And then of course I’m sending messages all over the place. individual messages, I got lots of groups going, because we’ll do everything in a group, private chat, group chat. Okay, fine. Go over to Papa John’s, I like Papa John’s pizza here. You go in there, you don’t even have a conversation anymore. There’s no waitress. Well, she’s there, but she doesn’t come and talk to me. You sit down, there’s a QR code on the table, you scan the QR card, the menu comes up. You order what you want, you pay with WeChat. 15 minutes later, some comes over and gives you your pizza. I didn’t even talk, I mean, I can go the whole day without talking to almost anybody but the Starbucks barista although we don’t call them that here. Okay, Papa John’s, I go in and see a movie, Spider-Man across the Spider-Verse, whatever it is. Very good movie, by the way, surprisingly artistic. Like it was really awesome to watch. Again, same thing, pull it up on the app within WeChat, pay for my ticket, walk-ins, done. Like the idea that it’s the everything app, it’s just, oh, and then of course get home later back at the hotel, I go on to Maytuan, order food, fantastic, delivered. Again, no conversation, which is actually really, it’s really terrible for my Mandarin because I don’t speak it at all. Although I do read a tremendous amount on my phone. it’s half good and half bad. I mean, you just use it for everything. Now you use some other apps directly, but more often, not about half the time I’m operating within WeChat, and then about half the time I’m using the app directly, but then paying with WeChat. And that’s kind of, it’s just ubiquitous in your daily life. Like I don’t carry my wallet, I don’t carry cash. The only thing I carry when I leave is my phone. and I gotta carry a backup battery. Although you don’t really need that because you can pretty much anywhere you sit down, you can plug in your phone and charge it. But yeah, if I drop my phone and it breaks, I don’t know how I’m gonna get home. Like I literally don’t know how. Probably have to walk it or something. Anyways, so it’s ubiquitous in daily life. It’s kind of, you know, your operating system for everything. It’s pretty amazing. And so the question is could something like this emerge in the West? Which used to be called the super app. Now I think everything app is a better description. So given that, let me sort of walk through how this thing evolved to be like this. And there’s really almost four stages strategically for how this happened. But even, you know, Strategy is always sort of question number two. Question number one is, do people really like whatever you’re doing? Like if people don’t like what you do, your app, your service, whatever your product, the strategy question is moot. So everything about this had tremendous adoption on step one, and then strategically it evolved second to that. The other thing to keep in mind, so keep that in mind that like, look, Customer adoption is always first, otherwise who cares about your strategy? Point number two is strategy is path dependent. What you’re gonna do next, what you become depends on what you did. Partly because you’ve built certain capabilities that you can build upon. If you have chat, you can add payment fairly easily, which is what we judge it. So you have the internal capabilities to take the next step. But also when you offer certain services, you do close doors in terms of the customer’s mind to other services. If you decide to be like JD, where you’re doing e-commerce, but you’re high quality. That’s the biggest difference in the mind of customers in China between Alibaba and JD, is JD never has fake goods. It has a smaller selection, but it’s always quality. Alibaba is more like an open bazaar. You know, you might get some good stuff, you might get a fake, it’s cheaper, the selection’s much, much more. Okay, JD’s decision to be that higher quality position closes certain doors for them strategically going forward. They can’t go and then launch used goods very easily because it’s inconsistent with what they’ve done. Whereas someone like Alibaba or especially Pinduoduo, that’s a very natural step. So your strategy is somewhat path dependent. Certain decisions enable one, your next step, but they close other doors. Something to keep in mind. Okay, with those two qualifiers, let me sort of go through, let’s call it four phases of strategy for the development of WeChat. Now I would start with, let’s say 10 cent back in 2005 to 2010. I mean Tencent started out as a messenger, right? For those of you who are old enough, this was like Yahoo Messenger in 2000. And they started QQ, which was basically like Yahoo Messenger, which ran on a PC, you could chat with people. And they had a cute little penguin as their logo. Did very, very well. For obvious reasons, it’s a very good product. It has direct network effects. That’s something to keep in mind. When you do a communication network, whether it’s putting in phone lines in neighborhoods, whether it’s a social network like Facebook or a communication network like WhatsApp, Line, WeChat, one, you get arguably the most powerful network effect we see thus far. is the direct network effect that comes in that sort of system. You get the highest density of connections, which sort of determines your network effect. It tends to be better if it’s a utility versus a differentiated service. If you’re doing something like, let’s say, e-commerce, you have two big differences with what I just said. Number one, you have an indirect network effect. The more merchants on an e-commerce site, the better it is for the consumer. The more consumers, the better it is for merchants. It’s indirect. And in fact, more merchants doesn’t help other merchants. It’s actually quite bad for them. More consumers doesn’t really impact more consumers. Okay, that’s an indirect network effect. It tends to be less powerful than a direct network effect, although as a little… compensation for that, you do get the chicken and the egg problem. You get this funny situation, which is basically a barrier to entry, where to get the merchants, you have to have the consumers. To get the consumers, you have to have the merchants. It’s hard to get started. They often call that the cold start problem. Okay, a direct network effect, like a social network, a communications network, a payment P2P network, we get a stronger network effect, a direct network effect. but we actually don’t have a chicken and the egg problem. You get five people sending each other money or messages and you add six and add seven, it still works fine. Okay, so there’s a little bit of a difference there and it also turns out it’s a utility. So the network effect is different than let’s say e-commerce. The other difference is it’s sort of a commodity. E-commerce tends to be much more differentiated. You can be upscale, you can be used goods, you can be specific for makeup, you can be vintage clothing. There’s a lot of ways to differentiate your service. If it’s a basic commodity like just chatting or sending money, if you get a network effect there and a service there, there’s no real dimension by which another company can enter and differentiate. There’s just not enough space to be different. So in those situations, one or two companies tend to take everything, which is what we see with WhatsApp, Line, WeChat in China. In their respective geographies, it’s usually one or maybe two players. So direct network effect, fantastic service that’s free. People love that. Super useful, super convenient. different network effect. And you also think about, if you wanna be the everything app, what is it that people do more than anything else in life? They talk to each other, privately. That’s a big difference between WeChat and Facebook. People talk to individuals privately and they talk to groups privately. It could be your class, it could be your team at work, it could be your family. Private team chat and private individual chat is arguably the most common and frequent human activity full stop. So you’re grabbing the most valuable piece. Now Facebook did a weird thing where they got it in their head. We want to do communication, chat, individual chat, group, but we want it to be public. because then they can advertise against it. And there was a big push in this 2010, 2015 under Sheryl Sandberg, Mark Zuckerberg. I think Alan Zhang of WeChat, who really rejected this approach, identified the real problem, which is people aren’t themselves when they speak publicly. In fact, we very rarely in life stand in front of lots of people and say something. That’s very rare, very unnatural. Almost all of our communication is private and that’s what is natural to us. So WeChat went in the other direction and said all of this should be private and we’re not gonna monetize it by advertising very much at all. That turned out to be the right strategy. Okay, so that’s Tencent 2000, 2005. Then they jump into gaming at the same time. do incredibly well because gaming, it turns out, is a spectacular business. They dominate gaming globally the way Hollywood dominates movies and television. If you take all of Hollywood and rolled it into one company, that’s how big Tencent is in gaming globally. Fantastic business, they dominate. So they’ve got two fantastic businesses. So Phase one of their strategy, let’s just talk about the messenger. We’ll put gaming to the side. Although you can start to put chat within gaming, which was powerful. You can start to do coins, QQ coins, within there as well. So they already had a foot in this. But the other part of that strategy, you know, those of you who have read my books, The Motes and Marathons, I always talk about structure and then I talk about operating performance. We can also see 2000 to 2010, Tencent is exceptionally good at innovation in a way I would argue Facebook is not, I think Apple is not, I think Airbnb is not. They have their one popular product, they’ve made minor iterations and improvements. We haven’t seen these companies jump into business after business after business every three to five years and knock it out of the park. We see that with Tencent. So we’ve got two powerful structures, 2000, 2010, and we have got a proven track record of serial innovation and entrepreneurship within the company. They’re getting good at this. Google’s okay. Apple was spectacular at this under Steve Jobs. then it kind of fell away. Microsoft, I would say, I would argue this Microsoft story now, 2013 to now, is the same. Tremendously powerful business models, proven ability to innovate and launch new products successfully, over and over, which is a pretty rare thing. Okay, let’s call that phase one. The ending of phase one is really the launching of WeChat. I don’t have the dates exactly off the top of my head. It’s like 2012-ish. This is when Messenger was really taking off. WhatsApp was taking off in the West. We saw Line coming out of South Korea. And this idea of a messenger on your phone, not your PC, I mean, it really came out of Hong Kong more than anywhere else. The first messengers for China. WeChat was a little bit late to the game. There were some good apps coming out of Hong Kong and they got some pretty good traction. Alan Jong famously sends a late night email, I believe to Martin Lau, the president, I’m not sure exactly, one of the senior people at Tencent. We should do something like this. He launches a team, calls it WeChat, they launch WeChat. It doesn’t do very well. About six months they really struggled to get some traction with this, but they get there, they get it going. They start shifting people over from QQ, which was a messenger, into WeChat. WeChat takes off. It is the consumer-facing messenger of China. Later on Alibaba tried to jump in with Ding Talk. Pretty much gave up on that. realized that B2C, C2C was, they dominated. Ding Talk pivoted and went after Enterprise Chat, more like Slack, which is where they now do very, very well. They’re pretty dominant within Enterprise in China. WeChat came back many years later with WeChat Work, which was similar, it’s an Enterprise version. But anyways, that would be sort of the end of strategy number one, which is… Let’s build a communication network for Chinese speakers, Mandarin speakers, mostly greater China and then as well various Chinese speakers outside of China area, geographically, some in the US, some in Europe, but mostly mainland China was where they dominated. They did incredibly well. That’s phase one. Has all the strengths I just mentioned in terms of And they really did this first. I don’t think anyone else that I can see did this where they said look if we can send a message to someone Why can’t we send money to someone? So they launched payment and they start with a direct network effect Not sending money to businesses, but sending money person to person They famously launched red envelopes, which was dates about 2014 ish which in Chinese New Year, you give red envelopes with a little bit of cash to your friends. It’s very expected. Everyone knows how much you have to give, family, friends, work colleagues. They launched a digital way of doing that, of sending red packets to other people. It takes off like crazy during Chinese New Year, and there was a lot of incentives they gave, giving away free money. Jack Ma. later refers to this period, this event as the Pearl Harbor. He called it our Pearl Harbor, that this thing just came in and took payment in China. And up until then Alipay, which they had built on top of their e-commerce platform, was dominant, just like PayPal was built on top of eBay. Alipay was built on top of Taobao and Tmall. So they were dominant. They had all the market The payment market of China was 50-50, Alipay, WeChat Pay, where it pretty much has remained ever since. But that was a shocking break into this business. A very powerful move. Now, from a strategy perspective, this is just a traditional payment platform. So one of my five platform types, payment platform, you can send money to each other, which people do when they pay bills. We use it all the time. Generally, that is free. There’s no fee. Or you can send money to a business B to C. They may charge you 30 basis points. I forget what it is now. Maybe 20 basis points. It’s nothing like PayPal, which is 3%, 4%. International transactions on PayPal, 6%, 7%. It’s obscene. Credit cards, 1% to 3%. Sending money to a business. All those examples I just gave of WeChat Pay. for my coffee, whatever. WeChat is maybe charging 20 basis points for that. So it’s everybody uses it for everything. They make a small margin. Very good business. So phase two of the strategy, payment platform. Indirect network would affect between merchants and consumers. You know, the more merchants that accept, the better it is for consumers and vice versa. But you can also send money. person to person or business to business, fantastic business, and then it tees up things like doing credit and financial service, which Alibaba has been more aggressive in. They’ve got wealth management and credit and microcredit. WeChat not as much. Okay. So that’s sort of phase two of strategy, payment platform. And I think what else is important to note about that particular move? is what that really did, it was really O2O. That was when what you did online moved into the real world in a major way. You’re sending messages, it’s not the real world. Suddenly you’re using WeChat Pay everywhere on the street, in every store, in every restaurant. It took the digital world into the physical world and merged those two together very directly. That was really the first time. where people started using their smartphones to do everything as they walked around town. And that’s what enabled a whole wave of new businesses to emerge, like Mobike, renting bicycles, all these funky, you know, vending machines that sell everything you can imagine. Because that’s all doable when everyone’s walking around with the phone they can pay with for the first time. So that’s kind of phase two. So phase one was social network with a proven entrepreneurial innovation track record. Phase two, payment platform that sits on top of that. That is now, if you count gaming, three to four particularly powerful business models all working together. And for those of you who read my books, you know I love complimentary platforms. I love one platform business model. I love two that help each other even more. So this is really, in this case, it’s mostly two. But then again, payment can also go in with gaming. So let’s call it two to three. So let’s call that phase two strategically of the development of WeChat. Okay, phase three. And this is where I start to think about the development pathway. Other companies that have tried to become the everything app, or let’s say a super app, the pathway I just described isn’t available to most of them. When Grab launched in Southeast Asia, Grab wanted to be a super app. They talked a lot about this, but being a messenger was no longer an option because WhatsApp was already in Southeast Asia. So this next phase, which is an innovation This is where I think there’s other on-ramps into this process. Okay, you couldn’t become a messenger, therefore, and maybe you couldn’t become a payment app. You couldn’t do a payment platform. You’re not MasterCard. You’re not Square. Those are pretty rare, typically in a country or a region. There’s maybe one or two of those, because they’re both, as I mentioned, direct network effects and mostly commodity utilities. Okay, then we move to the next phase, phase three, innovation platform. And this is where I think there’s more on-ramps. And why chat GPT, if they’re gonna go down this path, it might be here, this would be where they jump in. Okay, so innovation platform, that is, you know, that’s Microsoft Windows, it’s Android, it’s iOS, it’s the Google Play Store. It’s where you become the platform that developers, maybe game developers, software developers, content creators, or other people innovate on your platform. A content version of an innovation platform would be YouTube and TikTok. People who create videos go on there to post their videos and get viewers. I usually call that an audience builder, which is a subset of an innovation platform. But we go one level up. gaming platforms, where gamers all, game developers build games that run on one specific platform where all the gamers go. Microsoft Windows, people write software that runs on Windows. People write apps for the smartphone that run on Android. So everyone is innovating on the platform, and then it’s a two-sided platform. The more people that are creating apps or games or videos or music… The more valuable it is to people that are using that platform, consumers, viewers, whatever, and vice versa. The more people that are using that, the more valuable it is to the people that are developing and innovating on that platform. So indirect network effect, two-sided platform. And what WeChat did, this is when they added mini programs. where we’re all using our phones, we got tons and tons of apps. Those apps started to make mini versions of themselves that are inside of WeChat. So when I’m in WeChat, I can pay my bills, top up my phone, get a ride, order a pizza, buy movie tickets, whatever I want. And it’s a mini version that has been built for WeChat, as opposed to the full app version, which sits on, let’s say iOS. Although it’s pretty much the same. They call them mini. I can’t really see that much difference in functionality. The mini apps and the full app look pretty much the same to me. I don’t know. But by being a mini app within WeChat, it automatically ties into a lot of functionality. It doesn’t need you to identify yourself. It doesn’t need you to upload your passport, which is a thing in China. It doesn’t need to know your payment information. It doesn’t need to know a lot of stuff. It can piggyback all the functionality of WeChat, which saves a lot of trouble. I use it a lot within WeChat because I get sick of signing in and I get sick of doing all these other checks and two-step verification and blah. No, I just go into WeChat, it all works beautifully. Okay, so they open up WeChat, two mini programs. basically launch an innovation platform. This thing takes off like a rocket ship. I mean, hundreds of thousands, now probably millions of mini apps are there. It’s pretty much everything you’d see in the Play Store or in iOS. If you’re in China, it’s all in WeChat now. I mean, it’s pretty amazing. And if you look at GMV, WeChat is probably the second or third largest e-commerce site in China now. Everyone always says, oh, it’s Alibaba, then it’s JD, then it’s PinDuoDuo, and now people are talking a lot about TikTok Shop as being two or three. You know, WeChat, I mean, they were going, I remember one year they went from $200 billion in GMV to $400 billion in one year. This is like 2019-ish. I mean, the growth was incredible. So they’re a major e-commerce company, and they have an innovation platform. That’s when people started to referring, okay, yes, it’s an innovation platform, and yes, it’s an e-commerce company. It’s starting to look like another operating system that just sits on top of iOS. It’s like, why do I need to use iOS or Android? Why don’t I just live on WeChat, which kind of sits on top? It’s kind of like an operating system. they didn’t just do mini programs, they also did mini games which are huge. So that’s all in there, that’s phase three of their strategy. This is where I think a Western firm could jump in, a Western app could jump in. Maybe ChatGPT, which okay they don’t have payment, they don’t have messenger, that’s not what they use, but they are sort of becoming your go-to place for information. People are using ChatGPT all day long. I use it all the time. When they added plugins to that, that starts to look like an innovation platform with a very high frequency core app, which is, I need to find out something on ChatGPT. So maybe, I think there’s a good chance that’s what’s gonna happen. There’s also a very good strategic move. Okay, oh, to finish up, so Grab in Southeast Asia, They couldn’t really do payment and they couldn’t really do messenger, so they started with basically ordering food, food delivery, and getting rides. So they did ride sharing and food delivery, which if you look at the highest frequency, if you ever map frequency of activities that people do on their smartphones, number one is always messenger, number two is usually payment. And then the next three, depending how you measure it, is either watching videos, ordering food or getting rides. So Grab had two within, let’s say, the top five or six. So they got a lot of frequency, they got ride sharing, they got food delivery, they tried to add payment. It didn’t really take off that well. It’s doing all right. But they were trying to go at the super app from this direction. Now what I think they should have done is open up into mini apps, in mini programs, and trying to build out an innovation platform. That would have been my recommendation. And normally I would have said that probably wouldn’t work, except for the fact that the dominant messenger people use in that part of the world is WhatsApp. And for some reason, this is the app that never innovates. Like WhatsApp could have done everything. that WeChat did and they haven’t. So they left a big opening that Grab could have jumped in. It’s a real anomaly that, you know, they haven’t done something like this. Anyways, so I think that’s kind of phase three is innovation platform. That’s been incredibly successful. They’re gonna do search on top of that and some other things, but that to me is how I would describe the first three phases of their big strategic moves. And then underpinning that is some really outstanding execution, which they’re very good at. Okay. That’s kind of what I want to talk about strategically and then get to phase four, which is this idea of the everything app. I’ve been thinking more and more about what that means, the everything app. It seems to me… I mean, think about what I just described of how I went through my day. That strikes me as something more powerful and significant than just three to four platform business models that support each other. It seems like it’s gone to the next level where my usage of it and everybody’s usage of it is so constant and ubiquitous. It’s starting to look more like just sort of your daily life tool. I think it’s moved up to something more significant. The analogy that I keep thinking in my brain is it’s almost like it’s become a language. Like everybody in the US speaks English. Everyone in China speaks Chinese. Why? Because we use it all day long and if everyone uses the same language, it benefits absolutely everybody. It makes our communication better. It makes our businesses better. It makes every aspect of society better when we have a common standard language. And we would describe that as a standardization network effect. I think that’s almost what WeChat has become. And that’s kind of how I’m starting to think about the Everything app. What is an Everything app? I think it’s when you become the operating standard for a population. where everybody uses WeChat the same way everyone speaks Chinese, because it benefits everyone if we all just do the same thing. So that was kind of the other idea. I mentioned three concepts to start with. I talked about innovation platform. I talked about embedding. Well, I mentioned embedding. Embedding is when your app feeds into other apps. I don’t use this term much, but VCs talk about it. You could say WeChat’s been doing that. It’s embedded into everything. But then there’s this other idea of a standardization network effect where I don’t know if you call it a common language, a common operating system, but that’s kind of how I’m thinking about the Everything app. And I think that’s where WeChat is. I think it’s definitely benefiting from a standardization network effect. For… our digital lives if you’re in China. And that’s kind of where my thinking is. I think there’s another level to all this, but I don’t quite have the strategic framework to talk about it. But I’m convinced there’s something more powerful going on beyond just innovation platform, payment platform, connectivity, social network, and so on. I think there’s something else happening at the next level up. And I think WeChat has transcended to that. I just don’t quite have the right mental framework for it. And then it, you know, Okay, we can go back to the Elon Musk question. He wants to be the everything app for the US, but he’s coming at this from a completely different on-ramp, which would be news and discussion. That’s where Twitter is sort of evolving. It’s where all the current events are. It’s where people are starting to publish. Well, they’ve always published the writing there, but more and more they’re going to start publishing videos. He said very clearly… He’s going to focus on adding payment and he’s going to add video. If he adds payment… Right now when people walk around the street, they don’t open Twitter 10 times as they go through the shopping mall and through their day. Once they add payment, that could change the behavior, maybe. I don’t see the obvious on-ramp for Twitter, but that guy’s pretty… I mean, he gets stuff done in this world, so maybe he’ll do it. I think when you look at chat GPT, it’s easier to see an on-ramp into innovation platform and then something beyond that. Anyways, that’s kind of where I am in my thinking. I think it’s sort of a fun question. If you have any language that you can suggest or frameworks for how to think about this fourth level, send it my way. I’d appreciate it. I’ve been mulling this over for a while. Anyways, that is it for me for content for today. I hope that was helpful. I don’t really have, kind of told you what’s going on here. I’m just hanging out, having a good time. I think it’s the end of the day here, so I’m gonna go out and have my usual bubble tea, which is my standard way to end the afternoon here. And it’s, yeah, fantastic. Anyways, that’s it for me. I hope everyone is doing well, and I will talk to you next week. Bye-bye.
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