AIB Featured Business Leader – Jan Koum
Ukrainian-American inventor, entrepreneur and computer programmer Jan Koum has a true ‘rags to riches’ business story. Born in 1976, he grew up in Ukraine before immigrating to the United States with his mother at the age of 16. The now co-founder and CEO of mobile messaging application WhatsApp lived in a government apartment with her, and took on a cleaning job to make ends meet. At the time, neither of them would have believed that in a matter of years, Koum’s company would be acquired by Facebook Inc. for a mere US$19 billion.
Background and early career
While Koum was considered a troublemaker at school, he was clearly very intelligent. By the age of 18, he had taught himself computer programming, and did this through borrowing manuals from a used bookstore, returning them when he was done. After school, he enrolled at San Jose State University and worked at Ernst & Young as a security tester during his studies. In 1997, Yahoo hired him as an infrastructure engineer, where he met Brian Acton, his future business partner for WhatsApp. Over the next nine years he worked at Yahoo, before leaving in 2007 to take a year off to travel around South America with Acton. After this travel stint, both Acton and Koum applied to work at Facebook but were unsuccessful – a rejection which ultimately saw them pursue their own business venture.
The beginning of WhatsApp
Upon his return from South America, Koum purchased an iPhone and quickly realised that the relatively new App Store was about to boom. Koum wanted to create an app specifically for communication, deciding to call it WhatsApp, as it sounded like ‘What’s up’. Within a week from this idea in Feburary 2009, he had incorporated the businesses before even writing the code. Koum then spent days creating the code in his home, using a Wikipedia entry that listed international dialling prefixes to sync his app with any phone number in the world. Business Insider reports that the first ‘office’ for the organisation was a “couple of cubicles in the back of a warehouse shared by Evernote, where employees had to wrap blankets around themselves for warmth”. Koum and Acton worked for free in the company’s first few years, but by February 2013, WhatsApp boasted a user base of 200 million, with 50 staff.
In a short space of time, WhatsApp caught the attention of Facebook’s founder Mark Zuckerberg. He first contacted Koum in 2012 to discuss the acquisition of the company, but it wasn’t until February 2014 when he formally proposed a deal. Facebook announced that it was acquiring WhatsApp for US$19 billion, with Koum joining the board with a yearly base salary of US$1, in addition to stock options worth nearly US$2 billion.
On why he hates the word ‘entrepreneur’
In an interview with a Russian website, Koum explained why he is hurt by the word ‘entrepreneur’. He said, “As I understand it, an entrepreneur is a person who creates a company with the task to make money. I am not one of those people”. He then said that he created WhatsApp to build a product, rather than a company around it. The goal was not to build wealth, but to provide users with a useful communication tool. Koum also believes in focusing on one thing, and one thing only, stating, “I only have one idea, that is WhatsApp, and I am going to continue to focus on that. I have no plans to build any other ideas”.
The future for Koum is bright
Today, Jan Koum remains on the Facebook board, with an estimated net worth of US$8.9 billion. In 2014, he placed number 62 on the Forbes list of 400 richest Americans, becoming the highest-ranked newcomer to the list that year. In the first half of 2016, Koum sold more than $2.4 billion of Facebook stock, which is around half of his total holdings. It’s clear that despite not setting out to achieve great wealth, he has acquired a great deal of assets and money from his ventures.
I am interested to hear what you think of Jan Koum’s story. With a ‘self-made score’ of 10, do you find his journey inspirational? Comment your thoughts below to join the conversation.
This article was written by Laura Hutton on behalf of the Australian Institute of Business. All opinions are that of the writer and do not necessarily reflect the opinion of AIB. The following sources have been used to prepare this article: Forbes, Business Insider, Wikipedia, Forbes, Business Insider and Brainy Quote
Image Credit: BGR