Billionaire Jan Koum is one of the few billionaires with a ‘poor’ start, living on pensions. But he rose to build the popular messaging app WhatsApp, which was later acquired by Facebook for $19 billion.
Rejected by Facebook Jan Koum is of Jewish descent, born in 1976 into a poor family on the outskirts of Kiev, the capital of Ukraine. Koum’s father worked as a hospital and school construction manager, and his mother worked as a housewife. At the age of 16, Koum followed his mother and grandmother to the US to settle first, intending to settle down to welcome his father. They live off social welfare, from food stamps for those who cannot afford food. Koum’s mother takes care of the kids to earn extra money, while Koum cleans a grocery store. Koum still uses notebooks and pens brought from Ukraine because he lacks money to buy them. In 1997, when Koum was 21 years old, his father died in his hometown. Three years later, Koum’s mother also died in the US from cancer. In high school, Jan Koum didn’t have many friends and was seen as an outcast. He almost failed to graduate because of his lack of education. Jan Koum finds joy in his old computer. This time, Koum joins a hacker group called woowoo. With the experience gained from this hacker group, he applied for the exam and entered the University of San Jose. During his studies, he worked for Ernst and Young Auditing Company in the position of security vulnerability tester. In 1997, he ran into Yahoo employee Brian Acton. With the help of Acton, Koum got a job in cybersecurity six months later at Yahoo. Koum decided to leave school to focus on working for Yahoo. After 9 years at Yahoo, Koum rose to the position of infrastructure manager. In 2007, Koum and Acton both quit their jobs at Yahoo, spending time traveling South America in search of new inspirations. When they returned, the two applied to Facebook together, but were rejected. During his unemployment, Koum mulled over his next job. Buying an iPhone, Koum realized he could succeed with apps from the App Store. Koum came up with the idea to let people set up status updates on their phones. He said: “I am annoyed because I miss a lot of calls when I am at the gym. So I came up with the idea of an app that lets friends know if the person on the other end of the line is ready to take a call, with a feature called “status”. We didn’t originally plan to start a company, we just wanted to make a product that people could use.” In February 2009, Koum and Acton co-founded WhatsApp, turning the product into a messaging app. At first, the cost to verify SMS for users cost about 500,000 USD/month, making Koum’s bank account almost exhausted. By December 2009, they updated a new version for WhatsApp on iPhone, making it possible for this application to send images, immediately the number of users increased. To ensure coverage, WhatsApp charged about $1 a month to use, which brought in about $5,000 in revenue in early 2010, enough to cover expenses later. By February 2013, when the number of WhatsApp users reached about 200 million and the number of employees was 50, Acton and Koum decided to organize a fundraiser and was invested 50 million USD by Sequoia Investment Fund, increasing the value of WhatsApp to 1 , 5 billion USD. The founding duo is very concerned about security for users. “We want to know as little of the user’s information as possible. We don’t run ads, so we don’t need personal data,” Koum said. WhatsApp quickly grew without any marketing or PR campaigns, especially in less developed countries where users rely heavily on SMS messages. Return to conquer the big man WhatsApp’s growth caught the attention of Facebook’s CEO. In 2012, Mark Zuckerberg phoned Koum to express his interest in WhatsApp. The two then kept in touch, often climbing mountains and chatting about the topic of world connection. In February 2014, Zuckerberg met Koum and offered to buy WhatsApp for $19 billion (including $4 billion in cash, the rest in Facebook stock). At the time Facebook acquired WhatsApp, the app had 450 million monthly active users. In 2019, this number has reached 1.5 billion. By February 2021, the application has surpassed 2 billion users in 180 countries, is the world’s most popular free messaging application over the internet today. However, the sale of WhatsApp by co-founders Jan Koum and Brian Acton is said to be a bad decision. The biggest split between WhatsApp and Facebook is the messaging app’s monetization policy. Koum and Acton have resisted the adoption of Facebook’s widespread advertising model, which uses personal data to allow marketers to show ads to specific sets of customers on the social network. Those disagreements have led to tensions with Facebook CEO Mark Zuckerberg and COO Sheryl Sandberg. Acton left WhatsApp in 2017, 8 months later Jan Koum also left. “I sold my company. For great personal gain I sold my users’ privacy to Facebook. I made a decision and compromised with that and I regret it” – Jan Koum shared with Forbes. After the two founders left, Facebook persisted with the policy given to WhatsApp. In early January 2021, WhatsApp made a controversial decision, when it changed its policy and terms of use, requiring WhatsApp users to agree to the sharing of their personal information with the parent company Facebook. and Facebook affiliated companies. According to WhatsApp, sharing information will help this application better understand users, in order to improve and enhance the quality of the service. However, this move of WhatsApp has angered many users and called for a boycott of the application, because they do not want to share their information with Facebook. Many WhatsApp users have switched to other free internet messaging apps and services, like Telegram and Signal. In 2014, Jan Koum entered Forbes’ list of the 400 richest Americans at number 62, with an estimated net worth of $7.5 billion. As of August 2020, his net worth is estimated at $10 billion.
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