Can a company that spent 28 years perfecting B2B SaaS suddenly crack consumer? That’s what Zoho is aiming to do with Arattai. But I can't recall any instance globally of a B2B SaaS company successfully incubating a market-leading pure consumer app!
Arattai went from 3k to 350k signups a day in 72 hours. It’s vying to replace WhatsApp, which operates more like internet infrastructure than a messaging app.
The app isn’t new, just newly viral. It’s topping the charts. But in consumer, virality is vanity. Retention is sanity.
Arattai has matched one-to-one most of WhatsApp’s features. It is slick. The design is broadly minimal. Absolutely no complaints. Though none of my friends who I speak to on a daily basis were on it yet.
The reality is that for consumer apps to hit population scale adoption, it takes years if not decades and hundreds of millions of dollars in burn without a monetization angle in sight.
Zoho cracked B2B by being patient, bootstrapped, frugal and methodical. Once the initial momentum fades, it has to contend with the fact that the app now with millions of users and that does not make money requires its own resources. Facebook, the cash machine, is supporting Threads. Can Zoho do the same for Arattai?
It definitely helps that Zoho is privately owned so they can selectively in national interest choose to tread a different path with Arattai now that they are in consumer territory. They don't have a need to go public or raise venture funding. They’re financially very strong, and made almost ₹3,000 crore in net profit in FY23.
The real test isn't whether Zoho can compete with WhatsApp. It's whether they can compete with themselves. Zoho built an empire by counting every rupee. Now they need to learn how to burn them.