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Thursday, June 24, 2021

How Jan Koum, the Founder of Whatsapp, Set Up His Empire

Jan Koum, the man who founded WhatsApp, came from a tiny hamlet close to Kiev, the capital of Ukraine. Koum was born in a poverty-stricken family and they relocated to California. There, Jan began acquiring knowledge about computers during his free time. 

When Jan turned 18, he became an efficient developer and got an opening with Yahoo. He started working there as an infrastructure engineer. 

He kept working in that sector for almost 10 years till the time he felt the tremendous prospects of the app business in 2009. As a consequence, he launched WhatsApp Incorporated. WhatsApp gained immense popularity by 2014. As a result, Facebook, the global leader in social networking, took over WhatsApp for an overwhelming $19.3 billion. 

How Jan Koum set up WhatsApp

Jan Koum is a Ukrainian-American software programmer and business tycoon who was born on 24th February 1976. He is the Chief Executive Officer and co-founder of WhatsApp that is a smartphone messaging application taken over by Facebook at a valuation of $19.3 billion in February 2014.

Jan Koum was born in Kyiv (or Kiev), in Ukraine, erstwhile Soviet Union. Koum comes of Jewish descent. He spent his childhood in Fastiv, near Kiev. In 1992, Koum relocated to Mountain View, CA with his family members. 

They got a tiny two-room suite under a social aid scheme. At that time, Jan was just 16 years old. Jan’s father planned to unite with them afterward. However, he could not make it and passed away in 1997. Both Jan and his mother were in contact with him till the time of his demise. Initially, Jan’s mother was employed as a child-minder. At the same time, Jan was recruited as a grocery shop cleaner. However, Jan’s mother also passed away following an extensive fight with cancer in 2000.

When Koum turned 18, he got quite keen on computer programming. He formally registered at San Jose State University. At the same time, he was employed with Ernst & Young in the position of security testing professional. Koum also became a part of a community of hackers that launched in 1996. The name of the community was w00w00. Here, he came in touch with the upcoming originators of Jordan Ritter, Shawn Fanning, and Napster.             

In 1997, Jan contacted Brian Acton, a US-based Internet tycoon, and software programmer when he was employed as a security testing professional with Ernst & Young.

The Yahoo! Chapter 

Afterward, in 1997, Jan got recruited by Yahoo! in the position of an infrastructure engineer. Soon, Koum said goodbye to his school. During the following 9 years, Brian and Jan were colleagues in Yahoo. Both of them quit Yahoo! in 2007 September and stopped working temporarily for around 12 months. They also toured across different parts of South America and took part in ultimate Frisbee games. In the meantime, both sent applications for getting a job at Facebook. However, their applications were turned down. 

2009- Launch of WhatsApp

Jan purchased an iPhone in 2009 January and felt that the app store that just came into existence 7 months back was all set to generate a wide range of apps. Subsequently, he went to talk to Alex Fishman, one of his friends, and discussions went on for long hours regarding Jan’s concept for an application. They were thinking about launching a new variety of messaging applications that would demonstrate statuses beside the names of the individual users. They understood that to turn the concept into reality, the assistance of an iPhone developer was necessary. Alex then sought the help of RentACoder.com, met Igor Solomennikov, a Russian software developer, and acquainted Igor with Jan.  

Instantly, Jan picked the name WhatsApp since it appeared similar to “what’s up”. After seven days, on Jan’s birthday, the company was officially launched in California on 24th February 2009. 

In the early phases, WhatsApp did not pick up much popularity. However, Jan could turn the tables once Apple incorporated the push notification feature in apps from 2009 June. Jan modified and introduced the ping feature for the users in WhatsApp as soon as they got a message. Shortly thereafter, Jan and the Russian pals of Alex started using WhatsApp in the form of a messaging app instead of SMS (short messaging service). WhatsApp garnered a massive subscriber base. Subsequently, Jan persuaded Brian who was jobless at that point to be a part of WhatsApp. Brian also got the co-founder position once he was able to draw seed financing worth $250,000 for the startup.

The photo-sharing feature was included in the iOS version of WhatsApp messenger in December 2009. 

By the start of 2011, WhatsApp turned into one of the top twenty applications in Apple’s American app store. Sequoia Capital made investment worth $8 million for over 15% of the firm in 2011 following prolonged bargaining by Jim Goetz, collaborator of Sequoia.

By 2013 February, the messenger application worked up a user base of around 200 million. There was an additional investment to the tune of $50 million by Sequoia in the same year and the valuation of the company stood at $1.5 billion. During the same period, it took over SkyMobius, the firm that developed Vtok, a voice, and video calling application.

Growth – Acquisition by Facebook

9th February 2014 was a landmark day for both WhatsApp and Jan Koum. Mark Zuckerberg, the co-founder, and CEO of Facebook, requested him for dinner at Zuckerberg’s residence and made an official proposal to Jan for an agreement to be a part of the board of directors of Facebook. Just 10 days after that, Facebook declared about the acquisition of WhatsApp at a valuation of $19 billion.

Throughout the first six months of 2016, Jan sold off Facebook stocks valued at over $2.4 billion, which was approximately 50% of his overall stake.

In 2018 April, Jan declared about quitting Facebook and resigning from the BOD of Facebook because of differences of opinion with them. Initially, it was assumed that by quitting, Jan was surrendering the unvested stocks valued at around $1 billion. Nonetheless, after many months, it was found that Koum enjoyed the official payroll of Facebook, making a disclosed income of $450 million (in equity shares) from the organization via a process known as “rest and vest.”

What were the challenges in the beginning and how did Jan overcome them?

There were reports of crashing of the initial versions of WhatsApp. Jan was so upset that he thought about quitting and searching for a new opening. However, Brian motivated him to hold on for one or two months. The wait paid off with good dividends. 

How does Jan view himself?

According to a Twitter post made by him in 2012, Jan does not like being labeled as a business tycoon or impresario. Rather, Koum senses that he is not a business magnate since business magnates are always inspired by the goal to earn a profit while he just wishes to develop effective products.

What is the net worth of Jan Koum?

As of January 15, 2021, the net worth of Jan Koum is $9.9 billion.

Achievements of Jan Koum

Forbes ranked Jan at #62 as one of the 400 most affluent businessmen in the US in 2014. At that time, his net worth stood approximately at $7.5 billion and it was the top rank to be attained by any entrant that year. His net worth was calculated at $10 billion in August 2020.



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Daniyel Carlson
Daniyel Carlson is a Young Researcher in the field of Data Science & Analytics having research experience of more than 8 years. He has a Masters in Computer Engineering and currently serves as an Editorial Assistant in IGI Global, United States of America. Daniyel also holds honorary positions in the Associate Member of Institute of Research Engineers and Doctors, International Association of Computer Science and Information Technology, International Association of Engineers, Society of Digital Information and Wireless Communications.

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