When Facebook agreed to buy WhatsApp in February, people were agog at the US$19bn price tag. Now that has grown to US$22bn based on shares, making a Ukrainian immigrant a wealthy man indeed.
But there is something very telling about the Jan Koum story.
On that fateful day in February, Koum marched up to a non-descript building near San Francisco, California, a few blocks from mobile messaging service WhatsApp’s headquarters and Forbes magazine captured him signing his contract to sell WhatsApp to social network Facebook on the door of the building.
The meaning of this is significant because the building used to house social services offices, where Koum and his mother once queued up to collect food stamps.
Within a few short years of arriving in the US, through his hard work and endeavour, Koum is now a multi-billionaire with a private fortune of just over US$8bn. Some US$4.59bn of the proceeds from the acquisition, which closed yesterday, will be shared among WhatsApp’s employees. As a board member of Facebook, Koum will receive the same US$1 salary as Facebook’s founder Mark Zuckerberg.
Rags to riches
WhatsApp’s Jan Koum signed the $19 billion Facebook deal on the door of his old welfare office http://t.co/Oz5fuff6zU pic.twitter.com/ppRZYk53gI
— Forbes (@Forbes) February 20, 2014
But how did Koum arrive at that moment where he signed a multi-billion dollar contract upon the site of tormented youthful memories?
Koum, now 38, is the driving force, along with WhatsApp co-founder Brian Acton, behind a revolutionary communications app that charges US$1 a year and has more than 600m users around the world. It brought in revenues of US$20m last year.
Koum spent his earliest years in a little village outside Kiev in Ukraine, the son of a construction manager and a housewife.
At the age of 16, Koum left Ukraine with his mother to escape a tense political and anti-Semitic environment and initially survived through odd jobs, from babysitting to sweeping the floors of grocery stores.
After doctors diagnosed his mother with cancer, they had to live off her disability allowance and social services.
Koum, who didn’t own a computer until he was 19, is understood to have taught himself programming from used books he had purchased. He moonlighted as a security tester for Ernst & Young to fund his way through San Jose State University.
It was while working on a security job at internet giant Yahoo! in the late 1990s that he met Acton and dropped out of university to join Yahoo!
The Facebook rejects club
According to Forbes, both Koum and Acton shared a disdain for workplace bulls— and Acton’s friendship helped fill a void in Koum’s life after his father died in 1997 and his mother died in 2000.
After watching Yahoo!’s steady decline from the go-to destination of the internet to playing catch-up with Google, Koum and Acton left Yahoo!
Ironically, they were both turned down for jobs at Facebook and describe themselves as members of the ‘Facebook rejects club.’
They had something of an epiphany when the Apple iPhone arrived on the scene in 2007 and realised they were at the dawn of a revolution in apps.
When Apple introduced push notifications in 2009 they began work on making push notifications more useful, personal and flexible. And so WhatsApp was born.
Five years later, and WhatsApp is now one of the world’s most popular smartphone apps, with some 18bn messages sent daily around the world.
It is estimated it now has some 450m daily active users, including a quarter of the UK population, according to Wired.
Describing WhatsApp as the most atypical Silicon Valley company, Koum focuses on the product while Acton focuses on paying the bills and taxes.
Koum keeps a pair of walkie-talkie devices on his desk to remind him of his mission to keep communications simple.
Koum also keeps a note pinned to his desk, signed by Acton: “No ads! No games! No gimmicks!”
As these two former members of the Facebook rejects club become fully avowed members of the broader Facebook church, it will be interesting to see how much they will be able to remain true to such principles and how much the core of the WhatsApp product may be about to change.
Jan Koum image via Shutterstock