Whatsapp $19B deal implies “What Projects”?
I think many of us are familiar with the recent $19B acquisition of Whatsapp by Facebook. I do think it has much of the hallmarks of a frothy tech bubble and for the most part, I just rolled my eyes and kind of forgot about it. But as anyone who reads my posts knows, I’m very much into discussing and thinking about future career trends, especially as it relates to those who manage projects and it hit me that this event has enormous implications on this topic.
There’s not doubt that our economy has become a digital economy and in this kind of economy, profit creation and job creation do not run in parallel. In “classical” times, the creation of companies usually meant the creation of more jobs and one would think a company that just got purchased for $19B would create at least a few more. But consider that Whatsapp has a total of about 50 employees of which 32 are the core software engineers and the numbers are staggering as this section from an Economist article points out:
Thanks to things such as cloud computing, which lets young firms buy vast amounts of cheap computing capacity, entrepreneurs can create globe-spanning businesses on shoestring budgets. WhatsApp has just 32 software engineers, which means that each one supports some 14m users. And the volume of messages it is handling is said to be the equivalent of all the SMS messages transmitted by the world’s telecoms companies… Assuming it keeps adding users at its current rate of 1m a day—and they end up paying for its service—it could generate hundreds of millions of dollars of revenue. Twitter, which reported $665m of revenue last year, has a market capitalisation of $30 billion.
In this scenario, hiring people just becomes a reluctant necessity rather than a strategic and growth enhancing pursuit. So what’s the implications for project managers? Huge, in my opinion! If companies can get by with less and less employees while still staying productive and profitable, then there will be less of a need for people to manage projects and teams. I think this is why there’s a sentiment that the employment model is broken beyond repair.
I hate to be so pessimistic but there are certain realities of the world that we cannot just ignore. I have heard about the idea that new technologies initially disrupt the workforce by obsoleting certain jobs (data entry clerks, secretaries, etc.), but later create new jobs as people re-educate and re-tool themselves for the new opportunities that the new technologies create. The information technology industry is a prime example of this. But I can’t help but to think that where we’re headed to now is different in that the pace is so fast and the automation highly productive that it will create a very skewed career skills curve. A recent article on LinkedIn discussed this about the myth of the bell curve and how its transforming into a kind of inverted power curve:
I don’t have a full backup of research data for the assertions I’m going to make, but just from my own perspective, one way to interpret all of this is that the middle range of average performers (another way of saying middle-class) will continually get squeezed down while hyper performers become more in demand and get paid higher. Who are these “hyper-performers”? The article states:
Think about how people perform in creative, service, and intellectual property businesses (where all businesses are going). There are superstars in every group. Some software engineers are 10X more productive than the average; some sales people deliver 2-3X their peers; certain athletes far outperform their peers; musicians, artists, and even leaders are the same.
These “hyper performers” are people you want to attract, retain, and empower. These are the people who start companies, develop new products, create amazing advertising copy, write award winning books and articles, or set an example for your sales force. They are often gifted in a certain way (often a combination of skill, passion, drive, and energy) and they actually do drive orders of magnitude more value than many of their peers.
I definitely aspire to this hyper performance level, but on a macro scale how sustainable is it? I’m not so sure a lot of people can achieve it. In addition, my feeling is that certain low level but high touch careers such as hair dressers, plumbers, etc. will still be in demand but will have a small number of openings and opportunities.
Yet again more evidence that we live in very interesting times and a continual testament to the idea of the imperative to take a more entrepreneurial and project-based approach to you career. More to come on this topic.
P.S. – A good book I recently read on this is The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies by MIT’s Erik Brynjolfsson and Andrew McAfee, which outlines the impacts of this digital economy on our careers. I high recommend you check this out if you can.