Build a Business, Not a Financial Machine: Insights from Allen Zhang, Father of WeChat

Build a Business, Not a Financial Machine: Insights from Allen Zhang, Father of WeChat

In the world of startups and entrepreneurship, there is a common misconception that securing funding from venture capitalists or angel investors guarantees success. However, the truth is that it is the market that determines the fate of a business. Too often, entrepreneurs focus on raising the next round of funding and artificially inflating their company's valuation, rather than building a sustainable business. This approach turns them into financial arbitrage machines, rather than actual businesses.

The key to success lies in building a business that investors are drawn to, rather than constantly chasing after them. Take the example of VaynerMedia, a company that was built without any external investment and continues to run on thin margins. The founder, Gary Vaynerchuk, attributes this success to his patience and focus on building a real business.

This reframing of the discussion around entrepreneurship is crucial. It is important to understand that VC funding does not guarantee the success of an idea. Instead, it is hard work and dedication that pave the way for a sustainable business.

Now, let's shift our focus to Allen Zhang, the Father of WeChat, and explore his insights into building successful products. Zhang's approach to product management is rooted in art rather than commerce. He views the creation of products as a work of art, combining intuitive design, human psychology, and technological feasibility. By approaching product creation as a relationship with the users, rather than just a business transaction, Zhang ensures that the products he creates have a lasting impact.

One of Zhang's key principles is the integration of the "Grand Design" approach with "Design Thinking" in the product development process. While he values the input of various stakeholders, he believes that a certain degree of "dictatorship" is necessary to maintain a singular and coherent identity for the product. This top-down management style has allowed WeChat to become a platform with a clear vision and purpose.

Zhang also draws inspiration from Dieter Rams, a renowned industrial designer, who believes that both hardware and software products should adhere to certain principles. These principles include innovation, usefulness, beauty, ease of use, unobtrusiveness, honesty, timelessness, attention to detail, and environmental friendliness. By following these principles, WeChat ensures that its products are not only functional but also aesthetically pleasing and environmentally responsible.

One of the unique aspects of WeChat is its focus on getting users out of the app as quickly as possible. Zhang believes that the primary goal of technology should be to increase human efficiency. In 2018, WeChat ran a campaign encouraging users to put down their phones and meet their friends in person. This approach reflects Zhang's belief that products should serve the purpose of facilitating human connection and bringing delight to users' lives.

Another important principle that Zhang adheres to is putting the user above all else. He believes that treating users with genuine empathy is the key to creating products that are used for a longer time. Despite the potential for advertising revenue, WeChat limits the number of ads in its social feed to just two per day. This decision is driven by the respect for users and the desire to avoid negatively impacting their daily experience on the platform.

Zhang's approach to empowering creators is also noteworthy. He believes that a well-designed platform should enable creators to monetize their authentic and quality content themselves. WeChat has implemented features such as tipping, allowing users to support creators directly. This approach not only benefits creators but also enhances the overall quality of the platform.

Quality, rather than openness, is another principle that Zhang emphasizes. He believes that a platform's core responsibilities lie in providing breadth and diversity of content, as well as maintaining the quality of that content. By offering users a wide range of content choices, WeChat allows individuals to freely choose what they want to consume, shaping their thoughts and experiences.

Zhang's philosophy also extends to the social aspect of products. He believes that socialization is a core human need and that products should aim to alleviate stress and foster authentic connections. WeChat's "Moments" feature, which allows users to share photos of their lives, serves this purpose by providing a platform for users to express themselves and connect with others.

A crucial insight from Zhang is the importance of organic growth. He believes that if a new product cannot grow naturally, then it should not be marketed. This approach ensures that the product is healthy and sustainable in the long run.

In evaluating the success of a product, Zhang emphasizes the need to look beyond monetary key performance indicators (KPIs). He believes that the job of product managers is not just to create the best products but also to use all possible means to acquire traffic. Each feature or service should have a meaningful purpose and provide value to users. Without these considerations, a product is likely to face challenges and fail to resonate with users.

User research is a requirement for all WeChat product managers, following the 10/100/1000 Principle. This principle entails conducting 10 end-user interviews, reading 100 user blogs, and collecting feedback from 1,000 user experiences every month. However, Zhang advises being selective with the user research to act on and making decisions based on good principles. The coherence and simplicity of a feature are two important factors to consider before implementing it.

Zhang sees the biggest challenge as keeping up with users' changing tastes and needs. He believes that the competitor for WeChat is WeChat itself, and the organization's ability to adapt to user demands determines its success.

Finally, Zhang's view on KPIs is unique and profound. He believes that hope is the best KPI for a product. If a product can provide even a glimmer of hope to users, then it is on the right track.

In conclusion, the insights from Allen Zhang, the Father of WeChat, shed light on the importance of building a business rather than a financial machine. By focusing on creating sustainable businesses and products that genuinely serve users, entrepreneurs can increase their chances of success. Incorporating principles such as intuitive design, empathy, and organic growth can lead to the creation of impactful products. It is essential to prioritize the needs of users, empower creators, and maintain the quality and coherence of the platform. By embracing these principles, entrepreneurs can pave the way for a successful and fulfilling entrepreneurial journey.

Actionable Advice:

1. Focus on building a sustainable business rather than chasing funding rounds. Patience and dedication are key to long-term success.
2. Prioritize empathy and genuine connection with users. Treat users as friends and put their needs above all else.
3. Embrace organic growth and ensure that your product can grow naturally. If a product cannot gain traction without excessive marketing, it may not be sustainable in the long run.