Nov 22, 2015

The Rags To Riches Story Of WhatsApp CEO Jan Koum (Read His Story)

WhatsApp cofounder Jan Koum just disposed of a lot of Facebook stock.

Earlier this week, he sold shares amounting to nearly $300 million.

Although the sale wasn’t discretionary and was just meant to pay off the taxes on stock Koum received after selling his company, that’s a lot of money — and makes the about $160 million Marc Andreessen just sold look like small potatoes.

But it’s even more interesting in light of Koum’s rags-to-riches story.
Here’s how Koum got to where he is today:

Koum’s net worth is $8.8 billion, ranking him No. 3 on Forbes’ list of America’s richest entrepreneurs under 40.

But the CEO comes from humble beginnings. He was born in Ukraine in 1976, into a household without running water.

Here’s how he describes life in his hometown outside Kiev: “It was so run-down that our school didn’t even have an inside bathroom. Imagine the Ukrainian winter, -20°C, where little kids have to stroll across the parking lot to use the bathroom. Society was extremely closed off: you can read 1984, but living there was experiencing it.”

After Koum turned 16, he and his mother immigrated to the United States, leaving behind their anti-Semitic and communist environment to wind up in a small apartment in Mountain View, California, where they lived on welfare and used food stamps.

In high school, Koum taught himself about computers by buying manuals from a local store and then returning each one when he finished reading it.

Although a self-confessed troublemaker in high school who “barely graduated,” Koum enrolled at San Jose State University and started working for Ernst and Young as a security tester.

One thing Koum wishes he could erase from that part of his history: A restraining order from an ex-girlfriend. “I feel I was irrational and behaved badly after we broke up,” Koum said in a statement to Bloomberg. “I am ashamed of the way I acted, and ashamed that my behavior forced her to take legal action. I am deeply sorry for what I did.”

While on assignment for Ernst and Young, Koum met early Yahoo employee Brian Acton. Six months later, in 1997, Acton helped him get a security job there.

For about two weeks, 21-year-old Koum tried to go to school part-time at San Jose State while also working full-time at Yahoo. But then one day Yahoo cofounder David Filo, a mentor to Koum, called about server issues and the conversation went something like this: “Where the f— are you?” “Well, I’m in class.” “Get your a– in here!” Koum decided to drop out of San Jose State soon after.

While at Yahoo, he joined an elite security-focused hacker group called “w00w00,” which included Napster’s Shawn Fanning and dozens of other members. When a Canadian teen launched a massive denial-of-service attack on Yahoo, he called on the crew for advice and help.

Learn more about “w00w00” and Koum’s involvement in this Reuters story.

Koum remained at Yahoo for nine years, rising to become manager of infrastructure engineering. But in 2007, he and Acton both left the company and spent some time traveling through South America and playing ultimate Frisbee.

When they returned, he and Acton applied to Facebook. Ironically, the company rejected them.

During his time off, Koum mulled over what he wanted to do next and came up with an idea for letting people set status updates on their phones. Koum incorporated WhatsApp on his birthday, February 24, in 2009. By that summer, he and Acton decided to morph the product into a messaging app.

And so it began. WhatsApp’s first “office” was a couple of cubicles in the back of a converted warehouse shared by Evernote, where employees had to wrap blankets around themselves for warmth. Influenced by their time at Yahoo, Acton and Koum had a similar product philosophy: Advertising sucks.

The company also cares about user privacy. According to Koum: “We want to know as little about our users as possible. We don’t know your name, your gender… We designed our system to be as anonymous as possible. We’re not advertisement-driven so we don’t need personal databases.”

The company started growing organically, without any marketing or PR.

If you run a startup and your goal is to get on techcrunch, you are doing it wrong.

— jan koum (@jankoum) May 6, 2012

But grow it did. In 2012, WhatsApp first caught the attention of Mark Zuckerberg, who gave Koum a call. The two met for coffee and went on a hike, but no deal came out of it. Yet.

But Koum and Zuck have stayed in touch, going on more hikes and talking shop about connecting the world. Fast-forward two years.

In February 2014, Zuckerberg had Koum over for dinner and put an acquisition offer on the table. Koum thought about it for a couple of days and then came back to Zuck’s house on Valentine’s Day, interrupting his dinner with wife Priscilla. They hashed out terms over chocolate-covered strawberries.

The night before signing the final papers, Koum stayed up late going over everything with the team from Sequoia, which had given WhatsApp its Series A. Driving home at 2:30 a.m., Koum’s tire blew out at 75 mph hour and he almost died.

The next day, in a somewhat symbolic move, Koum signed the paperwork for the Facebook acquisition on the door of his former welfare office. The office is just a few blocks away from WhatsApp’s headquarters in Mountain View.

Suddenly, as of February 2014, Koum’s stake in WhatsApp was worth $6.8 billion.

Koum joined Facebook’s board and agreed to a yearly base salary of $1, with stock options worth nearly $2 billion.

The WhatsApp team celebrated the Facebook deal by popping bottles of Cristal champagne. Igor Solomennikov, one of WhatsApp’s first employees, posted this photo to Instagram, though he later took it down. A bottle of Cristal typically costs about $200.

Just days after the acquisition was announced, Koum and WhatsApp cofounder Brian Acton jetted off to Barcelona for the Mobile World Congress. While there, they met with Xavier Trias, mayor of Barcelona.

They also took some time to party during their time in Barcelona. Koum celebrated the acquisition and his 38th birthday with a massive, paparazzi-filled party at a nightclub called Boujis.

But even though he’s now worth billions, Koum has carried his money-saving ways into adulthood. According to a message he posted on FlyerTalk, Koum pressured Facebook to close the deal before he missed his flight to Barcelona, which he had bought with frequent-flier miles.

Though Koum does own a Porsche — which he bought before the Facebook deal — he doesn’t like being called an entrepreneur and says he prefers to focus on building a great product rather than on wealth.

Just months after his company was bought, Koum made a serious turn to philanthropy, quietly making a $556 million donation to the Silicon Valley Community Foundation.

He also donated $1 million to the foundation responsible for the open-source operating system FreeBSD. “In a way, FreeBSD helped lift me out of poverty,” Koum wrote at the time. “One of the main reasons I got a job at Yahoo is because they were using FreeBSD, and it was my operating system of choice.”

When Facebook bought WhatsApp for a stunning $19 billion in 2014, it had about 450 million monthly active users. Today, it has 900 million.

And Koum’s not quitting there: “We won’t stop until every single person on the planet has an affordable and reliable way to communicate with their friends and loved ones.”

Credit: Business Insider

No comments:

Post a Comment