The rags-to-riches story of WhatsApp cofounder Jan Koum, who grew up without running water and is now worth over $9 billion
Alex Heath,Madeline StoneMay 18, 2017, 21:49 IST
WhatsApp cofounder Jan Koum.Reuters
Few people have benefited from Facebook's incredible success more than WhatsApp cofounder Jan Koum.
With an estimated fortune of roughly $9.5 billion, 41-year-old Koum has come a long way from growing up without running water in Soviet-Era Ukraine to creating a messaging app used by 1.2 billion people.
Facebook purchased WhatsApp in 2014 for a jaw-dropping $19 billion, adding Koum to the company board and sending his net worth into the stratosphere.
Koum now leads a team of around 100 people working on WhatsApp, which is used heavily in developing countries like India and Brazil. And he sold over half of his shares in Facebook last year, totaling roughly $5 billion.
For now, Koum seems focused on growing WhatsApp around the world (the app's largest market is India). "At this moment, I am busy working on WhatsApp and I keep thinking all the time how I can make this product better," he said last year.
When Facebook bought WhatsApp for a stunning $19 billion in 2014, the app had about 450 million monthly active users. Today, it has 1.2 billion.
Koum has been selling his Facebook shares at a rapid pace. He unloaded more than half of his holdings in 2016 alone, totaling roughly $5 billion. For comparison, Mark Zuckerberg sold roughly $1 billion in stock last year.
One of Koum's few indulgences is his love for Porsches. “For me, a Porsche always represented the epitome of success," he said in 2016. "And the desire to have a car like that was a key incentive to learn more and to work even harder.”
Despite his wealth, Koum has maintained a low profile throughout his career. He claims that selling WhatsApp to Facebook only changed 10% of his life, and that he still lives in the same house and has the same friends.
He also donated $1 million to the foundation responsible for the open-source operating system FreeBSD. "In a way, FreeBSD helped lift me out of poverty," Koum wrote at the time. "One of the main reasons I got a job at Yahoo is because they were using FreeBSD, and it was my operating system of choice."
Just months after WhatsApp was bought, Koum made a serious turn to philanthropy, quietly making a $556 million donation to the Silicon Valley Community Foundation.
But even though he's now worth billions, Koum has carried his money-saving ways into adulthood. He pressured Facebook to close the deal in time for his flight to Barcelona, which he couldn't change and had bought with frequent-flier miles.
Just days after the acquisition was announced, Koum and WhatsApp cofounder Brian Acton jetted off to Barcelona for the Mobile World Congress. They took some time there to party. Koum celebrated the acquisition and his 38th birthday with a massive, paparazzi-filled party at a nightclub called Boujis.
The WhatsApp team celebrated the Facebook deal by popping bottles of Cristal champagne. Igor Solomennikov, one of WhatsApp's first employees, posted this photo to Instagram, though he later took it down. A bottle of Cristal typically costs about $200.
Koum joined Facebook's board and agreed to a yearly base salary of $1 with stock options worth billions. He would continue to lead WhatsApp out of a nondescript office in Mountain View, miles away from Facebook's headquarters.
Suddenly, as of February 2014, Koum's stake in WhatsApp was worth $6.8 billion. His net worth would continue to surge along with Facebook's stock value.
The next day, in a somewhat symbolic move, Koum signed the paperwork for the Facebook acquisition on the door of his former welfare office. The office is just a few blocks away from WhatsApp's headquarters in Mountain View.
The night before signing the final papers, Koum stayed up late going over everything with the team from the VC firm Sequoia, which had funded WhatsApp's Series A. Driving home at 2:30 a.m., Koum's tire blew out at 75 mph hour and he almost died.
In February 2014, Zuckerberg had Koum over for dinner and put an acquisition offer on the table. Koum thought about it for a couple of days and then came back to Zuck's house on Valentine's Day, interrupting his dinner with wife Priscilla. They hashed out terms over chocolate-covered strawberries.
Koum and Zuck stayed in touch, going on more hikes and talking shop about connecting the world. Fast-forward two years.
In 2012, WhatsApp caught the attention of Facebook CEO Mark Zuckerberg, who gave Koum a call. The two met for coffee and went on a hike.
WhatsApp quickly started growing organically without any marketing or PR, especially in lesser developed countries that heavily relied on SMS texting.
Koum and Acton also cared deeply about user privacy from the get-go. According to Koum: "We want to know as little about our users as possible... We're not advertisement-driven so we don't need personal databases."
And so it began. WhatsApp's first "office" was a couple of cubicles in the back of a converted warehouse shared by Evernote, where employees had to wrap blankets around themselves for warmth. Influenced by their time at Yahoo, Acton and Koum had a similar product philosophy: advertising sucks.
During their time off, Koum mulled over what he wanted to do next and came up with an idea for letting people set status updates on their phones. Koum incorporated WhatsApp on his birthday, February 24, in 2009. By that summer, he and Acton decided to morph the product into a messaging app.
When they returned, Koum and Acton applied to Facebook. Ironically, they were rejected.
Koum remained at Yahoo for nine years, rising to become manager of infrastructure engineering. But in 2007, he and Acton both left the company and spent some time traveling through South America.
While at Yahoo, Koum joined an elite, security-focused hacker group called "w00w00," which included Napster's Shawn Fanning and dozens of other members. When a Canadian teen launched a massive denial-of-service attack on Yahoo, Koum called on the crew for advice and help.
While on assignment for Ernst and Young in 1997, Koum met early Yahoo employee Brian Acton. Six months later, Acton helped him get a security job there.
One thing Koum wishes he could erase from that part of his history is a restraining order from his ex-girlfriend. "I feel I was irrational and behaved badly after we broke up," Koum said in 2014. "I am ashamed of the way I acted, and ashamed that my behavior forced her to take legal action. I am deeply sorry for what I did."
Although he was a self-confessed troublemaker in high school who "barely graduated," Koum enrolled at San Jose State University and started working for Ernst and Young as a security tester.
In high school, Koum taught himself about computers by buying manuals from a local store and then returning each one when he finished reading it.
After Koum turned 16, he and his mother immigrated to the United States, leaving behind their anti-Semitic and communist environment to wind up in a small apartment in Mountain View, California, where they lived on welfare and used food stamps.
Here's how he described life in his hometown outside Kiev: "It was so run-down that our school didn't even have an inside bathroom. Imagine the Ukrainian winter, -20°C, where little kids have to stroll across the parking lot to use the bathroom. Society was extremely closed off: you can read 1984, but living there was experiencing it."
But Koum wasn't always wealthy. He was born in Ukraine in 1976 into a household without running water.
Koum has an estimated net worth of roughly $9.5 billion. His fortune is made up almost entirely from Facebook stock, which he's been selling aggressively over the past year.