Buying Luck

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The talk of the day last week was Facebook acquiring WhatsApp for 16 billion dollars. Whenever a company with just a handful of employees (55 in WhatsApp's case) is acquired for billions of dollars the pundits (especially the ones with an MBA degree) starts banging the drums of balloons inflating and irrationality of acquirer. What the pundits are missing is that there are no alternatives to achieve growth at scale required by Facebook but to spend a shitload of money and buy a product customers already demonstrably love. 16 billion dollars would pay a decent salary to 10.000 people for 10 years! But as large organizations show time and again, a large head count is no guarantee for successful product and customer discovery. On the contrary, as Chris Dixon noted, the more parties who can block experiments the less innovation! Creating a product customers would love requires a very talented product owner, a great support team, and enormous amount of luck that all circumstances align in just the right direction. While money can get you people, luck can be bought only in retrospect and that's what Zuckerberg actually got for 16 billion dollars of his.

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