Another aspect of becoming a successful platform was for WeChat to be attractive to business users. The Official Accounts feature was launched in August 2012, equivalent to a Facebook page, a ‘shop window’ for a business or brand to present itself to the outside world, which users could then follow and receive updates..
Initially WeChat planned to charge a fee to third parties, but they decided to make it free of charge, with just a certification fee of 300 RMB (£33.2) to verify the identity of the third party. These Official Accounts grew rapidly, to about 20 million in 2017.
A related innovation that consolidated WeChat Pay’s leadership position in the face-to-face (offline) world, was the use of QR Codes. Zhang had started looking at QR codes as an ‘entry’ to the mobile internet back in 2011, before most people had heard of them. As they trialled QR codes with a small number of vendors, the ease of using them became apparent, and they quickly became an integral part of the WeChat payment system.
Another significant moment for WeChat came with the introduction of the Mini Program feature in 2017. This was an ‘app within an app’, which made it possible for users to scan the QR code of a coffee shop on entering the premises, and quickly access the menu, and pay.
These Mini Programs were significantly simpler than the native applications developed for iOS or Android, and could be created for about 20% of the usual cost of mobile apps. Speed and ease-of-use led to widespread adoption.
A work of art, not a commercial product
There are many elements to WeChat’s huge success, but a common theme is an ability to manage paradox. The Chinese yin/yang symbolises two opposing worldviews that come together to create an integrated whole, and we can think of WeChat’s innovation strategy as managing the tension between these two worldviews, and shifting their position over time as the product has matured (see figure 1).
We identified four main areas where tensions in WeChat are most acute, and where adjustments to the business model are most likely to be needed to enable the firm to continue to grow.
Let’s look at each dimension in turn.
Figure 1: Managing the Yin/Yang of Innovation
Dimension
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Typical start-up perspective
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Typical large firm perspective
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Overall Product Philosophy
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Product as a work of art
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Product as a commercial venture
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Relationship with users
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We create user demand
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We respond to user demand
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Internal decision-making process
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Top-down process
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Bottom-up process
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The role of the leader
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Leader as product architect
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Leader as enabler of others
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Like most really successful mobile products, WeChat is simple and elegant. It is impressive not because it has so many features, but because it has so few. We asked Zhang about his product philosophy. This is what he said:
“Before perceiving WeChat as a commercial product, I’d rather picture it first as an impressive work of art. When I started designing user interactions for Foxmail, I complicated everything. It felt wrong because it no longer looked neat. For WeChat, I now see the necessity of subtraction – making things simpler –and focusing on the product’s aesthetic quality.”
As one example, the feature bar at the bottom of the screen is four icons: Chat, Contacts, Discover, Me. Over the years many people suggested adding to this list, like many other apps. Zhang refused.
He added: “I told the team to establish a rule that WeChat shall always have a four-icon bar, and never add anything to it.”
Another example is the almost complete absence of advertising. Unlike Facebook or LinkedIn, WeChat users see a maximum of two ads per day or so through the Moments feature. Again, Zhang has been relentless on this. In a rare public speech in early 2019, when talking about ads on the WeChat start screen, he said:
“How much time do you spend on WeChat every day? Do you spend more time with your loved ones or on WeChat? If WeChat were a person, they would have to be your best friend for you to spend so much time on them. So, how would I even dare to put an advertisement on your best friend’s face?”
Of course fewer ads means lower revenues, and fortunately WeChat has other sources of income (a commission on transactions) as well as a supportive owner company (Tencent makes a lot of money from gaming and venture investments, and a growing share of revenue from its cloud business).
But there will always be a tension between artistic ideals and commercial reality in the world of mobile apps.
The New York Times reported that Mark Zuckerberg wants Facebook to emulate WeChat by reducing the number of ads, but he hasn’t done so, presumably for fear of reducing Facebook’s profitability.
Allen Zhang, in contrast, is facing requests to increasing the amount of advertising on WeChat because Tencent, like any publicly-traded company, is under pressure to increase its profitability. Zhang has, to date, held his ground. As the HR head for WeChat notes, this decision “is a testament to Allen’s ideology sinking into the heart of the team”.
Adopting a ‘dumb user’ perspective
Every software company claims to design its products around its user needs, but some clearly do it better than others. WeChat’s approach is to ask developers to put themselves in the shoes of their least sophisticated ‘dumb users’ – people who might be technology illiterate, or trying WeChat for the first time.
Zhang is well known for his ability to shift in and out of dumb user mode. And from his early days in the company, he pushed others to develop this capability, through what he called the 10/100/1000 principle: product managers were expected to do 10 end-user interviews, read 100 user blogs, and collect feedback from 1000 user experiences every month.
In Steve Jobs-like fashion, Zhang has shown an uncanny knack for creating user demand, rather than responding to existing demand. Mini Programs and QR code scanners have helped to secure WeChat’s dominant position in off-line payments, while quirky innovations like the ‘shake’ function, which link people shaking their phone at the same moment have proven popular.
Harvey Zhou, Corporate Vice President and Head of WeChat Technology Development explained the logic:
“Allen thinks social interaction should not be forced: if you send me a message, I may not want to respond immediately, and if I know you have received a notification, that pressures me to respond. We are determined not to add this, to respect the individual and to preserve their independence.”
Another striking feature of WeChat’s user orientation is the amount of work the teams do before moving into development. Many software companies today adopt a scattergun approach, trying out a range of different prototypes to see what sticks. But this can lead to wasted effort and an incoherent offering. As explained by Wawa Ye, Product Head of WeChat Pay:
“We talk about what we are actually going to produce, who the target user is, what the functionality is…and only after thoroughly discussing everything would we ask the team to start developing. The key is being able to zero in on the gist of the problem, for example, demands for sending pictures, or changing the way group chat is done, or including different things in the friend circle.”
Of course, not all WeChat’s new features are successful, but by deliberating over how users are likely to respond, and selecting for trial only those things that fit with existing features, the coherence of WeChat is maintained.
The term strategy is rarely used inside the company. As Lake Zeng, a senior executive, observed: “strategy is a pretty far-removed concept. Our attention is focused on the problems users encounter. We use all the necessary and most reasonable methods to satisfy their demands. I have always believed that everything we do revolves around this.”
Top-down coherence over bottom-up innovation
There is an inevitable tension between top-down and bottom-up input in the innovation process. WeChat managers recognise the importance of people in their teams coming up with new ideas, and they explicitly seek to hire challenging and creative employees. “We encourage people who present their own way of thinking - I encourage them to speak out,” said Zhang.
But at the same time, it is clear that the top-down process dominates in WeChat, with Zhang making all the key decisions. New features are submitted to him for approval, and he decides on the icon, the nickname, and other key aspects of the user experience. The Mini Programs project, as a recent example, was led directly by Zhang. Developers are keenly aware that the biggest challenge is how to ‘get past Allen’, and that many seemingly good features are vetoed by him. If Allen says no, there is an “immediate sense of defeat.” While he kills off many of the ideas people bring to him, he also kills many of his own ideas, after debating them with others.