Jan Koum

From food stamps to billionaire

Jan Koum is a Jewish Ukrainian American immigrant that unfortunately collected foodstamps when he was 16 years old at the North County Social Services office in Mountain View and it was in this location where he signed the deal to sell WhatsApp to Facebook for $19 billion netting him an estimated $6.8 billion.

Aged 16 Jan Koum emigrated to the USA from Ukrainia due to a growing anti-Semitic environment. His subsequent years were financially tough. Koums mother took up babysitting and Koum got a job sweeping the floor at a food shop to make ends meet.

By the age of 18 Koum developed an interest in computer networking and regularly read books on it. It was this fascination that led to him joining a hacker group , later he got a part time job as a security tester and joined a course at University.

After University he went onto work at Yahoo where he gathered a reputation for having a no nonsense attitude and as his future business partner Brian Acton puts it “Neither of us had an ability to bullshit”.

In 2000, Koum’s mother died of Cancer and his future business partner Brian Acton reached out to help Koum by inviting him over to his home and playing football with him.

Late in September Koum left Yahoo stating that working on their advertising system was depressing because it didn’t improve people’s lives.

Koum and Acton traveled South America whilst deciding what to do next and both of them applied for jobs at Facebook and failed.  Later Koum applied for a job at Twitter and also failed to get it.

In 2009, Koum bought an iphone and this made him want to create an app that would allow him to see which friends where able to take calls by setting statuses.  The early app crashed a lot during testing. Koum got disheartened and was encouraged to stay the course by Acton.

The breakthrough came when Apple launched push notifications, this enabled the WhatsApp application to ping everyone in the users network. Acton noticed his Russian friends were updating their status in a jokey manner. It was at this point that Acton realized he had unintentionally made a messaging service. Later Acton came on board and helped to raise over 1 million dollars in capital from his Yahoo friends.  Acton and Koum coded in a coffee shop in California.

The great thing about the WhatsApp service was that it showed someone had received a message, was platform independent and was free. Acton hated the fact that messaging was like a cash cow for many carriers and was using outdated technology and compared it to a fax machine.

The company quickly started bringing in revenue but in the first few months they had to cover the high costs of sms verification (they were using old sms carriers) which  emptied Koums bank account.

In 2009 they added the send a photo feature and added a $1 price tag. User growth skyrocketed.

Famously  during a staff lunch someone asked Koum why he wasn’t promoting to the press and media more about the app. Koum said “Marketing and press kicks up dust,” Koum replied. “It gets in your eye, and then you’re not focusing on the product.”

More capital was raised for the business and user growth continued to explode. In February 2014 the business was sold to Facebook for $19 billion.

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