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The Cost of Ideals
2 min read

The Cost of Ideals

In the year 2012, the then founder and CEO of Whatsapp wrote a blog post titled Why we don't sell ads. This was in response to the question that many of its users where asking, where Whatsapp used to charge $1 per user per year for its service.

Jan went on to explain that if we are not paying for the product that we are using, then most often than not, we are the product being sold.

Fast forward to 2021 and there is a new terms of service that has come out by Facebook where everything stands on the other pole of where the founders intended the service and platform to be.

The new rules under which WhatsApp will share the data it collects with Facebook will take effect on February 8, 2021.

This goes on to ask a very important question that we as startup founders have to ask ourselves - are we being too idealistic? and how much of those promises can we keep anyways?

Think about it - there are folks who have moved their parents and grandparents onto the platform, assuming that it was a private and safe environment. There is a bit of a moral conundrum going on.

Every startup that has raised money, more or less signals that they are up for sale - it is just a matter of when. When you raise capital, you are obligated to give your investors an exit and that essentially comes in the form of a sale to a larger company. (Yes, you can go public, but those odds are fewer.)

When you do sell the company, the money you get includes the cost of walking away from the promises you made. How the new company uses the product / service or network to maximise profits, is really no longer in your hand.

So be mindful of the promises you make as a startup and entrepreneur. You are staking your reputation in the balance.

Companies like Zoho can make promises around privacy and being around for a long term, because they have opted for a long term model. Those are conscious decisions made that enables them to deliver on those.

If one of the things that moved you as an entrepreneur is to change the world for the better, then it is almost an obligation that what you are building is reliable - that the rest of the universe can revolve around. If you are the sun, you need to hold steady for the rest of the universe to settle around - else it is just a temporary chaos.

Also read: Mark Cuban's 12 rules for Entrepreneurs.

These two rules he talks about stand out - Don't start a business unless it is an obsession. If it is an obsession, you wouldn't be in a hurry to exit.

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