{"id":13975,"date":"2026-01-07T10:00:45","date_gmt":"2026-01-07T04:30:45","guid":{"rendered":"https:\/\/gtm360.com\/blog\/?p=13975"},"modified":"2026-01-29T15:45:57","modified_gmt":"2026-01-29T10:15:57","slug":"arattai-v-whatsapp-network-effects-dont-grow-on-trees","status":"publish","type":"post","link":"https:\/\/gtm360.com\/blog\/2026\/01\/07\/arattai-v-whatsapp-network-effects-dont-grow-on-trees\/","title":{"rendered":"Arattai V. WhatsApp: Network Effects Don’t Grow On Trees"},"content":{"rendered":"

The mainstream media has already started writing the obituary of Zoho’s Arattai<\/em> <\/strong>messaging app.<\/p>\n

Take, for example, Economic Times<\/em>.<\/p>\n

In its oped entitled Why Arattai Isn’t A WhatsApp<\/strong><\/a> by Akshat Khandelwal, ET writes:\u00a0<\/p>\n

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Arattai will join the long list of \u2018dead\u2019 Indian apps such as Koo, Hike and Chingari that tried to punch above their weight against Silicon Valley giants, and failed.<\/div>\n<\/blockquote>\n

I tend to agree with the author’s prediction – after all, Arattai has fallen out of the league table of \u2018Top 100\u2019 apps on Apple and Google app stores after topping the charts in mid-October.<\/p>\n

However, I don’t agree with his root cause analysis or remedies.<\/p>\n

Root Cause Analysis<\/strong><\/p>\n

According to the author:<\/p>\n

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The reason why Indian apps have consistently failed to take on Instagram, X, YouTube or WhatsApp is simple: messaging, social media and similar digital services thrive on network effects and user data, making them natural monopolies.<\/div>\n<\/blockquote>\n

<\/p>\n

This RCA is simplistic, not simple.\u00a0It totally misses that network effects is a retention<\/em><\/strong>, not customer acquisition<\/em><\/strong>, strategy. In other words, it helps a vendor to retain existing customers but not to acquire those customers in the first place.<\/p>\n

Prospects who have encountered network effects with other products have experienced the helplessness that results from the vendor lockin caused by those network effects. As a result, they will get turned off, rather than be attracted, by GTM around network effects.<\/p>\n

On the other hand, once you have a critical mass of customers, network effects will help you to hold on to them (even if they’re not so keen on holding on to you!).<\/p>\n

To understand this better, let us take the examples of three products that are widely believed to have network effects: Google Search<\/em>, Facebook Social Network<\/em>, and WhatsApp Messaging<\/em>.<\/p>\n

Google<\/em> was not the first web search engine. Facebook<\/em> was not the first social network. WhatsApp<\/em> was not the first messaging app. The incumbent leaders in those categories had network effects, however weak. Google, Facebook and WhatsApp none. Still they managed to dislodge the incumbents on the strength of their product, marketing and whatever other secret sauce they had – but not network effects. They gained network effects much later.<\/p>\n

\"\"<\/a><\/p>\n

Proposed Remedy<\/strong><\/p>\n

The author proposes two remedies:<\/p>\n