WhatsApp co-founder Jan Koum, once a penniless immigrant living on food stamps, becomes the latest Jewish refugee from the former Soviet Union to join the charmed circle of Silicon Valley billionaires with the $19 billion sale of his mobile messaging app company to Facebook.
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Koum reportedly has a 45% stake in the company, which he founded with Brian Acton five years ago. His success at WhatsApp is along the same path as Sergey Brin, the co-founder of Google, and Max Levchin, who helped start Paypal. Brin is from Russia while Levchin, like Koum, is from Ukraine.
Koum and his family had a tough go of things when they arrived in California as immigrants, according to a blog post by Jim Goetz of Sequoia Capital. “When he arrived in the U.S. as a 16-year-old immigrant living on food stamps, he had the extra incentive of wanting to stay in touch with his family in Russia and the Ukraine. All of this was top of mind for Jan when, after years of working together with his mentor Brian [Action] at Yahoo, he began to build WhatsApp,” Goetz wrote. And Wired magazine reports that Koum’s family picked up their food stamps just blocks from a location in Mountain View that is now WhatsApp’s headquarters.
An in-depth profile in Forbes says that the family fled Ukraine because of anti-Semitism and political instability. During high school, he had a job sweeping up at the local grocery store.
Koum and Acton worked together at Yahoo before later founding WhatsApp. Koum was also a founding member of the San Francisco Bay area’s JFE network, which stands for Jews For Entrepreneurship, a non-profit organization which provides networking opportunities among Jewish high-tech entrepreneurs.
WhatsApp has become a global force, with 450 million customers, who use it to send messages across borders and between different brands of mobile devices. The application is particularly popular in Israel. According to the Globes business daily, an iPanel survey found that 92% of Israeli smartphone owners use WhatsApp, and 86% of users said they used the app daily.
Israel is not alone on that score. It appears to be more popular in many international markets than it is in the United States. Cathy Boyle, a senior analyst at the New York-based research firm eMarketer, told the BBC that WhatsApp has greater market penetration in many international markets than Facebook does.
According to Goetz, whose Sequoia Capital firm backed WhatsApp, its approach is entirely different from high-tech titans like Google and Facebook, which try to learn as much as possible about each user. WhatsApp does not collect personal information such as name, gender, or age, Goetz wrote in a blog post, and messages are deleted from servers once delivered. “It’s a decidedly contrarian approach shaped by Jan’s experience growing up in a communist country with a secret police,” Goetz wrote.
“Jan’s childhood made him appreciate communication that was not bugged or taped.” Similarly, Brin’s early childhood in Russia contributed to its “Don’t Be Evil” motto. Koum’s view was evident in a tweet he wrote last year about Iran and Turkmenistan blocking WhatsApp. “When government gets in the way, consumers and freedom to communicate suffers,” he wrote. Last month, as the crisis in Ukraine escalated, Koum posted photos of revolutionaries and tweeted “praying for peace and quick resolution to the crisis #ukraine #freedom.”
WhatsApp charges 99 cents a year, and that bargain-basement approach extends to the WhatsApp’s original office, according to Yoav Leitersdorf of the American-Israeli venture capital firm YL Ventures. Leitersdorf visited WhatsApp’s offices in 2010 in an attempt to invest in the young company. He says he’s still impressed by both the founders and what he saw. “It was like a car dealership with no cars inside and hardly any furniture at all for that matter,” Leitersdorf recalled. “I remember parking my car and walking around the building for about five minutes or more, looking for the office door.” The office contained a handful of desks atop a stained wall-to-wall carpet, he said.
With reporting from Reuters.