From Welfare To A Self- Made Billionaire- Jan Koum, Founder Of Whatsapp

Atanu Sarkar

Most of the tech geniuses are already affluent take the example of Mark Zuckerberg, Bill Gates or Larry Page. Can you imagine a person growing up without hot running water turning into a billionaire? A person growing up on welfare is now a billionaire. That happens when you aspire to dream big and achieve in the best possible way. Some start-ups stories are really interesting and do offer more to us than a story. They are an inspiration in themselves.

But again there are some who are not so rich like Biz Stone, the Twitter co-founder who was raised on food stamps receiving bowl haircuts. But very different is the story of Jan Koum who until Facebook’s $16 billion was the WhatsApp CEO. Thus became popular the story of Jan Koum, the man who became a billionaire with nothing.

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Jan Koum- The Person Many Have To Thank To

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If statistics is considered, one out of seven people on earth really wants to thank Jan Koum and his company WhatsApp for their ability by which they can call or text their friends as well as the family without any charges.

More than one billion people usually use the free mobile messaging app all over the world with most popular being in Europe, South America and Africa. In comparison to WhatsApp, Twitter has 313 million monthly active users.

WhatsApp’s popularity is again the success reason of the person Jan Koum is. Let us delve deeper into the story of Jan Koum and how he founded Whatsapp.

Growing up in a small village in Ukraine

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Just outside Kiev in Ukraine in a house with no facility of hot water, Jan grew up. Moreover, his parents did not even use their phones as there was always a constant fear that government was listening in. That is the reason why Koum respects the privacy of one and all. That is one of the reasons why WhatsApp respects the user’s privacy and is very opposed to using advertising right into the app.

While commenting about his rural life, Jan says,

“My School did not even have an inside bathroom and we at -20 degree Celsius have to stroll the parking lot to use the bathroom. There was an extremely closed society which we were experiencing.”

To avoid this situation in Ukraine, Koum and his mother moved to Mountain View, Calif when he was just 16. They lived in a modest two-bedroom apartment on the assistance of government. His mother worked as a babysitter making ends meet by sweeping the floor of a grocery store. Later when his mother was diagnosed with cancer, they stayed on her disability payments.

The student, Koum Was

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Koum was an indifferent student at school not to mention a troublemaker. He did not have a computer till the age of 19 but by 18, he taught himself all about networking he can by buying manuals from used book store and returning them when it was done. He also joined a hacker group by the name w00w00 on the Efnet internet relay chat networks interfering with the server of Silicon Graphics and had a chat with Napster co-founder Sean Fanning.

He got enrolled at San Jose State University and joined at Ernst & Young as a security tester. Right at a point, he found himself inspecting the company’s advertising system and sitting right opposite Acton. Acton had said about him “You could tell he was different and he had no nonsense attitude.” “He was different from other Ernst & Young people and was not touchy-feely.”

Six months from there, Koum was interviewed at Yahoo and then got a job as an infrastructure engineer. He was still then studying at San Jose State University when just two weeks after he has joined, one of the servers of the company broke. He was called for help. Jan has said,

“I am in class.”

He was retorted with the comment, “what are you doing in class? Get into office.” This was when he decided to drop out of school anyway as he hated it.

His Job at Yahoo

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Koum joined Yahoo in the year 1997. He has seen Yahoo go through multiple ups and downs. Acton has invested in dotcom boom which has caused him a loss of millions in the year 2000. Koum did have a distaste in advertising but was given the responsibility to help to launch Yahoo’s important and certainly much-delayed advertising platform Project Panama in 2006.

“Advertising is depressing. They certainly do not make anyone’s life better if the advertisements work better.”

Koum described his last few years in Yahoo as saying did some work.

The Foundation Of Whatsapp

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Finally, in September 2007, Koum and Acton left Yahoo and took a year break to travel around South America enjoying their life. They played Frisbee and spent their days at leisure. Both had applied but certainly failed to work at Facebook. They became part of the Facebook reject club. Koum was rapidly spending his saving of $400,000 which he had gathered from Yahoo and moving from one place to another. In January 2009, he bought an iPhone by which he realized that the seven-month-old App store is changing and creating a whole new industry of apps.

He visited the home of Alex Fishman, one of his Russian friends who invited him to local Russian community to his place in West San Jose for a movie and pizza nights. More than 40 people showed up. There the two of them stood for hours talking about Koum’s idea over tea right at Fishman’s Kitchen counter.

Fishman said that Jan was showing his address book and thinking that the whole process to have statuses right next to names of people can be an interesting idea. Various statuses will show if one is on call, or whether the battery is low or whether one is at the gym. Koum said that he could do the backend but they needed an iPhone developer. Fishman then introduced Koum to Igor Solomennikov who was a developer in Russia.

The name WhatsApp was chosen because it sounded like “what’s up” and just a week later on February 24, 2009; he incorporated WhatsApp Inc in California. The app was not yet written yet and Koum spent his days creating the backend code to synch the app without any phone number in the world. Later in months, he would update hundreds of numbers of international dialing prefixes.

Right in days, WhatsApp kept crashing or got struck and when Fishman installed it on the phone, only a few numbers in the address book who had downloaded it. Soon Koum took notes of the problems in one of the Soviet-era notebooks which one had brought over the years previously saved for important projects.

Then was the ultimate fight with Acton, when Koum backed out and decided to start looking for a job. Acton told him not to quit and told him that he would be a fool to quit at that time and to give it few months time.

Whatsapp rising to ultimate power

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Apple helped a lot in the whole journey of Jan. In the year 2009, they launched push notifications which would let the developers ping their respective users when they were not using an app. Following the trend, Jan updated WhatsApp so each time one changed status, it would ping everyone in the network. This whole process started out as a joke with Fishman’s Russian friends started to ping each other with jokey status. “I woke up late,” or “I’m right on my way.”

Right at some point, it became like instant messaging. People all across started using it as the option for changing statuses. Jan would observe all the status on a Mac Mini right at the townhouse in Santa Clara and got the realization that he had created a messaging service.

“Well given that you are able to reach somebody halfway right across the world instantly right on a device is certainly very very powerful.”

There was only one other free texting service all around the world which was BlackBerry’s BBM but that worked just among Blackberries. Though there was presence Google’s G-Talk and Skype with WhatsApp, it was unique as it was log in with the particular own phone number. Then Koum released WhatsApp 2.0 with any sort of messaging component watching suddenly the active users swelling to 250,000.

They then observed that sending messages to each other right on WhatsApp will show the famous double check mark which showed that the messages have been received by another phone. They were trying to upgrade the whole system making it more effective with MMS messages by giving the option to send photos and various other media. For them, there was huge space for them to work with.

More and more targeted users were interested in using “WhatsApp” as it was their free texting and desperate way to contact their friends on Nokias and Blackberries. Android was also on the radar for the processing of the property.

In the first few years, Koum was working for free and their biggest early cost was sending verification texts to different users. They were using SMS brokers like Click-A-Tell who allowed then to send SMS to U.S for nearly 2 cents but in the Middle East for nearly 65 cents. In the present day, the SMS verification runs the company to nearly $500,000 a month. There were no funding but the amount was high enough to drain Koum’s Bank account. But then WhatsApp was bringing in more revenue which was near $5,000 a month by early 2010 which was enough to cover the cost. One of the best things about the founder is that they switched the app from “ Free” to “paid” so they would not grow very fast.

In December 2009, they updated Whatsapp for iPhone allowing them to send photos and were shocked seeing that user growth increased when they charged with a $1 price tag. That was when they decided to stay paid.

By early 2011, WhatsApp was on top 20 of all apps in U.S. App Store. The app was going viral and Koum and Acton were refusing all requests to talk. But then Sequoia partner Jim Goetz was determined to make either of founders engage. But neither of the founders was ready to comply. They eventually agreed to take $8 million from Sequoia right on top of $250,000 seed funding.

In February 2013, WhatsApp’s user base reached nearly 200 million active users with the staff count reaching to 50. They decided never to be put off the payroll and thought to opt for second funding. They at the time had a balance of $8.257 million excess in all their years.

Facebook, the new owner of Whatsapp

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WhatsApp really became popular in short time which seriously caught Facebook’s attention. Facebook’s founder Mark Zuckerberg is said to have contacted Koum in spring 2012. They had a meeting at a coffee shop in Los Altos, California having a series of dinners and walks in hills above the Silicon Valley.

Right on February 9, 2014, Zuckerberg was asked by Koum to have dinner at their home and then proposed a deal to join a Facebook board and after nearly 10 days Facebook announced that it was acquiring WhatsApp for nearly US$19 Billion USD. Nearly over the first half of 2016, Koum sold some of Facebook stock which was more than half of his holdings worth $2.4 billion.

Koum now enjoys his leisure time in boxing practicing what his dreams aspire for. He goes on driving around in his Porsche which was something he was wanted to purchase. Though Koum and Acton are really rich now, they still have not forgotten their roots yet.

The Key Takeaway Here

Koum has proved that your background was certainly not an excuse for failure in life. He once depended on government welfare for his financial help but now he is the co-founder of one of the popular app of the world. He is self-made man who made career with no educational background and learnt networking all by himself.

If you want, you can make the profit from disappointment as it is not there to put you down. Koum has taught us to be passion-driven and certainly not money-driven as if you are passionate worker money will surely come to you.

As Koum has rightly said,

“I want to one thing, and do it well”

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Atanu Sarkar is the Chief Executive Office and Founder of the award-winning software development company, Webskitters. Possessing immense interest and great skills in the IT industry, he takes out time from his strictly-maintained schedule, to manage his blogs and to update it on a regular basis. It is through his blogs that he shares his views and insights about the industry with others.

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