Facebook’s $19B acquisition of real-time messaging company WhatsApp punctuates a broader technology trend towards the real-time economy. While pundits continue to debate the sanity of the purchase price there is no arguing the fact that WhatsApp is the fastest growing and most engaging software product in history. Over 450 million people use WhatsApp on a monthly basis. 72% of those users use it daily. So why does Facebook see it as so valuable? Simple. WhatsApp solved real-time social messaging. Real-time companies like WhatsApp are transforming the way we live. In short, real-time is eating the world.
Real-time technologies are taking off because they enable and promote real human interactions. Companies have always tried to create competitive advantage by producing more products faster and at lower cost (think Ford’s assembly line and Maclean’s standardized shipping containers). However, the real-time economy is not about speed for the sake of lower costs and great margins—its about creating the most human experience. Today's most innovative companies, including WhatsApp, create customer loyalty through real-time experiences.
Examples of the Real-Time Economy:
Amazon Kindles now come with a Mayday button. Mayday is a single-click support service that lets users talk to a remote technical support representative in real-time. Amazon knows two things about customer service: i) people want their problems solved immediately and ii) customers like talking to real people. Mayday represents the future of customer service.
How did this app gain so much traction with email, Facebook, and SMS as entrenched incumbents? Simple. It provided real-time push messages for free over the internet from any mobile device. People use Facebook to share pictures and comments about the past while they use WhatsApp to share pictures and messages about what's happening right now.
From the miracle on the Hudson to Egypt's political revolution, Twitter is now the preferred platform for breaking real-time news. TV networks simply can't keep up with the immediacy of Twitter, nor can they hold information for prime time viewing hours. The Sochi Olympics further illustrated the “death of prime time” as race results broke on Twitter long before NBC's tape delayed prime time broadcast. During the Olympic Games Visa ran a particularly poorly timed ad on Twitter congratulating alpine skier Julia Mancuso on winning an Olympic medal several hours before NBC broadcasted the race on TV.
Massively Multi-Player Games
In South Korea real-time online gaming is now a professional support with top "athletes" earning more than $1M per year for playing games such as StarCraft and League of Legends. Real-time gaming is not just a South Korean obsession. The League of Legends finals, hosted as a live event at the Staples Center in LA, sold out within an hour of tickets going for sale.
Can people play video games asynchronously? Yes. Do they want to? No. People want to play and spectate in real-time.
Amazon is disrupting its own business model once again with its new Amazon Fresh service. Sure, Amazon consumers can already order anything online and have it delivered to their doorsteps two days later. But Amazon knows about the real-time economy and now provides a new same-day delivery service. Amazon Fresh, Google Shopping and similar services provide same-day delivery services creating a near real-time experience for physical goods.
Gone are the days of calling a cab and guessing when it would arrive. Uber’s geo-aware app gives riders a real-time view of the Uber fleet including estimated time of arrivals. Book an Uber and real-time SMS messages notify you when the Uber is arriving. Furthermore, surge pricing ensures that Uber cabs are always available regardless of demand or time of day.
Email, once heralded for its speed, is losing its share of team-based communications to real-time messaging and video conferencing tools such as HipChat, Google Hangouts, and Skype.
So what’s next?
Real-time Satellite Imagery
Real-time satellite imagery has tremendous applications from environmental management to crop yield optimization to law enforcement. Today only deep pocketed organizations like governments and oil companies have the resources to access satellite imagery. Companies like Urthecast and several others plan to democratize access to real-time satellite imagery.
Real-time manufacturing has the potential to transform the manufacturing landscape by eliminating the long lead times between product design and product delivery. Companies will have the ability to produce products ranging from apparel to durable goods with a day’s notice and no minimum orders.
Real-time technologies are changing the world as we know it. Not just by creating lower cost products and services but by fostering social interactions and creating delightful customer experiences. Speed kills is the new mantra in the real-time economy. Are you and your co-workers moving at the speed of real-time?