BORN into poverty in communist Europe, he taught himself computer code and sold his idea to Facebook for £11.4bn
Standing outside a derelict building that was once his lifeline, Jan Koum signed the deal that consigned his impoverished childhood to the history books.
The last time he stood outside the run-down former North County Social Services offices in the Californian suburb of Mountain View he was queuing to collect food stamps as a teenager.
But on Wednesday he went back to the boarded-up building to sign a deal to sell WhatsApp to Facebook. The instant messaging company he founded less than five years ago went for an incredible £11.4billion.
The disused building is only a few blocks from the WhatsApp offices, but Jan’s life is now a world away. Today he is an estimated £4.1 billion richer thanks to his stake in the firm, said by financial magazine Forbes to be around 45%.
The complex deal, with Facebook paying a mix of cash, stocks and shares, means Jan, 37, will make even more in four years. He will also sit on Facebook’s board – an incredible turnaround from the day he was rejected for a job there while unemployed.
In the five years since it was founded by Jan and his former Yahoo colleague Brian Acton, WhatsApp has regularly topped best-selling apps lists and has 450 million global users per month, with more than 50 billion messages sent through it per day.
Though his is one of the most remarkable rags-to-riches tales Silicon Valley has ever seen, little is known about Jan’s personal life and he is not prone to flashy gestures with his wealth. But then when you learn about his childhood behind the Iron Curtain, perhaps that’s not surprising.
Born to a builder and housewife in a village near Kiev, by his own account he was a “rebellious little kid” in a home where there was no hot water and his parents rarely used the phone in case it was tapped by the oppressive Communist state.
“Our school didn’t even have an inside bathroom,” he said. “Imagine the Ukrainian winter, -20°C, where little kids have to cross the parking lot to use the bathroom.
“Society was extremely closed off. You can read 1984, but living there was experiencing it. I didn’t have a computer but I did have an abacus.”
The constant threat of secret police spies, with pupils questioned for joking about national leaders, took its toll. And anti-Semitic overtones to the state intrusion made it worse for his Jewish family.
But with the break-up of the Soviet Union in 1992 he and his mum and grandmother moved to California to start a new life. He was 16. His father was supposed to join them but never made it and died in 1997.
They lived in a small two-bedroom flat. His mother worked as a babysitter and Jan went to school and swept floors in a shop. He could speak English, but struggled with what he called the “flimsy” friendships of US high schools.
He got his first computer when he was 19, and taught himself from second-hand books.Advertisement
He won a place at San Jose State University studying Computer Science, only to drop out after he got a job with Yahoo in 1998. Brian Acton was sitting across the desk from him.
“You could tell he was a bit different,” Brian told Forbes. “He was very no nonsense.” Jan added: “Neither of us had the ability to bulls****.”
They stayed at Yahoo for nine years and when Jan’s mother died in 2000 it was Brian who stepped in with support, inviting him around to his house.
It was getting his first Apple iPhone in 2009 that made Jan realise the possibilities of mobile apps. He focused on one that could update his status to all his contacts after his gym banned phones while working out.
On his birthday in February that year he registered WhatsApp, the name a twist on the greeting “What’s Up?”
His years in a totalitarian state influenced its ethos. Unlike Facebook and Twitter, WhatsApp does not collect any personal information from users. Jan was also keen for it to remain advert-free.
And after difficulties keeping in touch with his dad, he was keen to develop a system that let people swap messages across continents for free. Initial sales were very low and it was a breakthrough in “push” notifications in May 2009 – this lets users instantly receive messages – that saw it take off with 10,000 downloads a day.
Making the app paid-for rather than free slowed its growth but helped maintain their stand against advertising. In a 2011 tweet Jan quoted the movie Fight Club to explain his views: “Advertising has us chasing cars and clothes, working jobs we hate so we can buy s*** we don’t need.”
Venture capitalists were keen to invest. Facebook founder Mark Zuckerberg, 29, was interested too, and he made contact in early 2012.
He and Jan met for the first time in a coffee shop. They spoke for a couple of hours but no deal was struck. After more meetings a formal proposal on February 9 this year invited Jan to join the Facebook board.
He mulled over the offer and went round to Zuckerberg’s home on Valentine’s Day, gatecrashing the romantic meal the Facebook founder was enjoying with his wife Priscilla Chan.
They negotiated over a plate of chocolate-covered strawberries intended for Priscilla and by the end of the weekend they had an agreement.
For Mark Zuckerberg, buying the app was an obvious move.
He said: “WhatsApp is a simple, fast and reliable service used by over 450 million people on every major mobile platform. More than one million people sign up for WhatsApp every day and it is on its way to connecting one billion people.
“I’ve also known Jan for a long time, and I know that we both share the vision of making the world more open and connected.”
But as part of the Facebook empire, can WhatsApp continue to set its face against invading its users’ privacy? It seems the answer is that while Jan Koum is still in charge, it certainly can.
“Here’s what will change for you, our users,” he wrote on the WhatsApp blog. “Nothing.”
What’s WhatsApp?
It’s an instant messaging service used between two people or a group. It sends text-style messages for free and needs no login. It simply uses your mobile number.
It is now used to send photos, short videos and voice recordings. The app is free for the first year, then costs 69p per year.
WhatsApp has 55 staff. In October 2011, one billion WhatsApp messages were sent per day. By June 2013, it had grown to 27 billion and today it’s 50 billion.
