Elon Musk vs. Nik Storonsky: Who Will Build the Next Western Super App?

Decoding Super Apps

Even though the Super App business model most probably can't be copied in the developed world, it is a blueprint for completely detaching financial services from Banks.?

I agree with Sangeet Choudary`s statement [1] that whenever people claim they want to become the next WeChat, this stems from an utter lack of understanding of the unique circumstances that made WeChat what it is today. When I think of the potential of wannabee SuperApps like X (ex-Twitter) and I manage to abstract the politics and power plays, the first question that has to be asked is: How many of X employees are developers and focused on R&D?

Tencent, the parent company of WeChat, has had over two-thirds of its employees in R&D. Maybe Elon Musk is actually hiring people in significant numbers from Alipay, Meituan, or WeChat to bring the cultural business mindset that made the Chinese Super Apps what they are.

Why do I believe this is core to evaluating SuperApp potential? Let me explain. During an online seminar entitled “Can the All-in-One App be Replicated?” ? hosted by the Technology and Management Centre for Development (TMCD) at the University of Oxford, Xiaolan Fu , the TMCD Director, introduced the findings of their research based on facts and interviews. The core message I took away was the obsessive approach of Tencent to researching customer needs. It felt to me like that Wechat researchers are like mad, obsessive scientists who keep asking questions to get to the bottom of the customer needs. As a result, product innovation has a high probability of becoming a sustainable part of the ecosystem.

At the same time, cooptetion between groups internally is normal and fosters what I think of as breakthrough innovation on top of incremental innovation.

These are important business cultural ingredients and organizational structures that are invisible to most. Lots of business people, business journalists, and consultants think that the big success of these Super Apps came just from the lack of a mature financial services sector, the lack of strict financial and privacy regulations, and the ease of gathering loads of granular data. While these factors have contributed to this business model's success, they are less than half the recipe.

A significant part of the SuperApp success is the scaling and success of Mini-programs. The Wechat founder Pony Ma, came up with the concept which is a perfect union of the lightness of a website with the flexibility and complexity of the functionalities of an app. Kevin Shimota , the CMO of WeChat and author of the Book The First Super App, came up with the name mini-programs as his job was to differentiate it from websites and apps. This was extremely important for established businesses that already had websites and apps. Why would Nike launch a mini-program on the Wechat ecosystem? When I spoke to Kevin Shimota on Conversations & Insights he explained that the evolution of mini-programs (like all innovations) was not straightforward or evident. In the beginning, it was similar to launching a business page on Facebook which has very limited functionality (you can follow, like, share). It later evolved into today`s mini-programs as businesses started using them for specific outreach — e.g. Nike wants to sell a new shoe line — and developers added functionalities (order, buy, pay).

The success came as Wechat already had 800 to 900 million users spending about 80 minutes a day, which is two or three times the average of people using Facebook. Because of the existing high engagement on the platform, the innovative lightweight business pages coined mini-programs started being successful. Wechat attracted 1 million mini-program developers and shared 50/50 the revenues of mini-programs. This resembles more the way the ios and Android developer community functions but not focused on developing apps and without a central depository of mini-programs (like the App Store or the Google Play Store).

After established businesses found value in launching mini-programs, Wechat developed templated mini-programs for SMEs and even for mom-and-pop stores.

Wannabe SuperApps shouldn’t confuse the business model with closed platforms or platform-based ecosystems with lots of functionalities.

The SuperApp recipe is based on an interconnected business model involving and empowering three communities: Users, Businesses, and Developers. The mini-programs are the flywheels that enable interactivity between these three communities. The scale and network effects of this design are remarkable and keep evolving.

Data as of Jan 2022:

• The number of Mini Program Developers has exceeded 3 million.
• The daily active users on WeChat Mini Programs reached 450 million according to WeChat official data in January 2022.
• WeChat Pay has over 10 million merchants and more than 1800 banks and Payment institutions.

In Conclusion

Adding features like Revolut does, is not going to create the engagement of the interconnected business model powered by mini-programs. Revolut mobile had over 600 features while most neobanks had 200 features (data via FinTech Insights as of 2023). Revolut continues to defend its lead in 2024, however, its focus is on geographic expansion rather than aggressively embedding non-financial services, empowering businesses and a developer community. Revolut`s embeddings like travel booking, eSim cards for traveler subscribers, and online shopping, have very limited potential (if any) to involve and empower millions of businesses and merchants, millions of developers that will compete and create an evolving and sustainable (in the sense of long term business growth) flywheel effect.

In the developed world, we only have marketplaces like Shopify with successful business models whose recipe includes two essential communities: Businesses and Developers. Users are also Businesses in this case.

Can Elon Musk who has a scaled (albeit declining) social media business, design a business model with a breakthrough ingredient (not mini-programs) that is invisible and serves a deep user need for the three communities: Users, Businesses, and Developers? I assume he has thought about launching it from scratch but decided that he needs the user base and engagement of a social media platform, much like Wechat leveraged its large user base before launching the experimental mini-programs in early 2017.

Does Nik have more chances of achieving flywheel effects for not only retail users, but also businesses and merchants and the developer community? Revolut seems clearly better at obsessing about user needs compared to X, and driving sustainable innovation. However, Revolut`s geographic and relentless expansion comes at the cost of creating silos that undermine internal competition and cooption. Both Revolut and X, lack the developer community aspect that is core to the secret sauce of mini-programs.??????

Wannabe SuperApps shouldn’t confuse the business model with closed platforms or platform-based ecosystems with lots of functionalities.

The SuperApp recipe is based on an interconnected business model involving and empowering three communities: Users, Businesses, and Developers. The mini-programs are the flywheels that enable interactivity between these three communities. The scale and network effects of this design are remarkable and keep evolving.

• The “secret sauce” goes far beyond just having many features or an existing user base.
• WeChat’s obsessive focus on understanding user needs drives sustainable innovation.
• Internal competition and autonomous teams enable breakthrough and incremental innovations.
• The mini-programs model powers an interconnected ecosystem of Users, Businesses, and Developers.

Fun fact: What does Pony Ma (whose actual name is Ma Huateng), Elon Musk, and Mark Zuckerberg, have in common beyond being wealthy entrepreneurs?

They were all born in 1971.