What Do WeChat and Slack Have in Common?
One of my favorite podcasts, Exponent, had an episode on WeChat and how it has managed to disintermediate the ultimate intermediaries: Apple and Google.
It suddenly occurred to me (and it’s possible that Thompson and Allworth touched on this in the podcast, so potentially I’m just parroting their points) how similar Slack and WeChat’s value propositions are: It’s a new layer of abstraction sitting atop existing abstractions. At work, I don’t use Slack to simply chat with my coworkers. Slack has become my default communication hub into which I bring other communication touchpoints (GSuite, Box, Evernote, etc.) I have no first-hand experience with WeChat, but I expect to be similar: people order and arrange food pick-ups, buy movie tickets, even get some civic services arranged (Connie Chan@A16Z has written a WeChat compendium).
Just when we thought iPhone and Android have disintermediated a bunch of services (all apps have to go through them), WeChat has created a new layer of abstraction on top of the rival platforms.
A similar story for Slack: We thought group chat to be just a tool running on our devices. But Slack quickly grew to be way more than that and now influences how other business applications are accessed and orchestrated.
So what’s driving this? The common theme I see is platform fragmentation and desire to avoid lock-ins.
In the Exponent episode, Thompson and Allworth observes how iPhone failed to establish a cult following in China. Over there, people view iPhones to be merely another high-end smartphone device, not as a distinguished brand in a category of its own. As such, there’s a higher rate of churn among iPhone users. If they see a new Android device of superior design and bang for the buck, they are more likely to jump than their US/rest-of-the-world counterpart.
What does this mean? It means that there’s an opportunity for a cross-platform app that can become a platform itself. Think of the biggest pain you feel when you switch from an iPhone to Android: it’s the apps. It’s all these apps that you need to re-download. Some of them exist in one but not the other (ex: iMessage) and many of them are designed differently.
And then there’s data. Data needs to move from one system to another, and while most apps do a good job of keeping their data synchronized, photos always end up being a huge problem. It’s not a coincidence that Google Photos and iCloud are the 1st party apps: Both Google and Apple know that data gravity creates a massive switching cost (and hence prevents churn), and there’s no better vector than photos — universally used and always hungry for more storage — to pull in the center of data mass.
The same thing is actually happening in my professional domain: analytics and data infrastructure. AWS, while dominant, is unlikely to be a monopoly. GCP, Microsoft Azure, IBM, Pivotal, Red Hat and all kinds of data centers will remain in the picture, which in turn means fragmentation. Applications need to remain portable, Docker (or Moby now?), Kubernetes and all that jazz.
In other words, there will be room for further abstractions that will legitimately add value on top of these existing infrastructure abstractions.
(All of that said, let’s not forget the ultimate data gravity well that is Amazon S3. The fact that S3 is the oldest service on AWS is the hundredth example of Amazon’s strategic foresight. The longer S3 stays as the dominant cloud storage service, the harder it becomes for the competitors to dethrone AWS).
As always, Stephen O’Grady over at Redmonk puts it best:
If you’re in another area of the technology market feeling grateful or even smug that you don’t have to cope with this accelerating stream of disruption, you’re going to be unpleasantly surprised sooner or later. This is not unique to the application market; the exact same pattern is identifiable in markets from databases to hardware. Abstraction is a force of nature in this industry, and if anything it’s getting stronger. Those who fail to recognize this will be supplanted by those that do.
Informally among my friends, I call this phenomenon “getting the right abstraction at the right time” or abstraction market fit. This is incredibly difficult to achieve, similar to its product-centric cousin “product market fit”. Like product market fit, abstraction market fit is elusive, dynamic and hard to sustain.
Slack and WeChat’s genius? They got both their product-market fit and abstraction-market fit right (for now).
