WhatsApp: The new billionaires behind it

Jan Koum Jan Koum left Ukraine for the US when he was 16

Related Stories

Until 24 hours ago, WhatsApp founder Jan Koum and his business partner Brian Acton were relatively unknown outside Silicon Valley tech circles.

Now they are being discussed worldwide as California's latest billionaires.

The internet is alive with the news that Mr Koum, 37, and Mr Acton, 42, have sold WhatsApp to Facebook for $19bn (£11.4bn).

In fact, before founding WhatsApp, both men were actually turned down for jobs at Facebook.

This is an irony that has not been lost on internet commentators in light of the huge amount the social networking giant is laying out for WhatsApp.

So what do we know about the men behind WhatsApp?

'Appreciate communication'

Ukrainian Mr Koum emigrated to the US at the age of 16 with his mother, to escape "the political and anti-Semitic environment", according to Forbes.

His childhood in the Ukraine was a seminal influence on the creation of WhatsApp, according to investor Jim Goetz. The service, with its emphasis on messaging privacy, was influenced by "growing up in a communist country with a secret police", Mr Goetz said in a blog post.

"Jan's childhood made him appreciate communication that was not bugged or taped," Mr Goetz wrote.

When he arrived in the US, Mr Koum and his mother lived on food stamps, Mr Goetz added.

Mr Koum has been shaped by his experiences, and appears to remain true to his roots, reportedly signing the Facebook deal that is set to make him a billionaire on the door of his old benefits office.

No ads

Mr Koum met Mr Acton in 1997, and the two became friends while they were both working at Yahoo.

Facebook's $19bn WhatsApp deal explained in 60 seconds

Mr Acton's background was somewhat different from Mr Koum's - his adoptive father had attempted a career in golf, and his mother ran an air-freight business, according to Wired UK.

By 2007, both men had become disillusioned with their employer, and had developed an intense antipathy to advertising, a central plank of Yahoo's business model.

"No-one wakes up excited to see more advertising, no-one goes to sleep thinking about the ads they'll see tomorrow," Mr Koum said in a 2012 blog post.

They left Yahoo to unwind and follow other opportunities, leading to Mr Koum setting up WhatsApp in 2009.

Mr Acton joined the company in November of that year after a failed job hunt, which included rejections from both Twitter and Facebook.

But the California-based software engineer took the knockback from Twitter with good humour, tweeting: "Got denied by Twitter HQ. That's ok. Would have been a long commute."

And when he also failed to get a job with Facebook, he took it graciously, tweeting: "Facebook turned me down. It was a great opportunity to connect with some fantastic people. Looking forward to life's next adventure."

Silicon Valley maverick

Despite WhatsApp's emphasis on social messaging, Mr Koum has been opposed to much of what makes Silicon Valley tick.

Rather than embracing self-promotion, marketing, an advertising-funded business model and an eye for a fast buck, Mr Koum has gone in the opposite direction.

"Next person to call me an entrepreneur is getting punched in the face by my bodyguard. Seriously," he tweeted in May 2012..

"People starting companies for a quick sale are a disgrace to the valley," he said in a later tweet.

Some might say that just five years after starting, 450 million users and 50 employees later, the deal with Facebook would constitute a "quick sale".

Just don't call Mr Koum an entrepreneur.

More on This Story

Related Stories

The BBC is not responsible for the content of external Internet sites

BBC Business Live

  1.  
    PEARSON RESULTS 09:19:

    Financial Times owner Pearson Group has reported a pre-tax loss of £36m for the six months to the end of June. That compares with a loss of £16m a year earlier.

     
  2.  
    NO ARGENTINA DEAL 09:06:
    Argentina"s President Cristina Fernandez de Kirchner

    Argentina failed to reach a deal for its debts late on Thursday, with hedge funds demanding full payment on its defaulted bonds, veering closer to what the IMF warned could be a painful new default. There's less than a week to go to either pay up or risk being declared in default. Argentine officials met with the US court-appointed mediator trying to break the impasse, but refused to meet the hedge funds' representatives directly.

     
  3.  
    RBS RESULTS Via Twitter Kamal Ahmed BBC Business editor

    tweets: RBS Ross McEwan says UK recovery "broader than a consumer recovery". Gross lending to businesses up.

     
  4.  
    RBS RESULTS 08:41:

    More market musings on RBS. Chirantan Barua, an analyst at Sanford C. Bernstein, says the reduction in money set aside for bad loans was "extremely strong" compared with City expectations. Sales and capital were better than he expected too, he said. He reckons the shares may be worth 440p apiece.

     
  5.  
    RBS RESULTS Via Twitter Kamal Ahmed BBC Business editor

    tweets: RBS CEO Ross McEwan says there has been a cooling in the mortgage and housing market over the last two months. "That is not a bad thing."

     
  6.  
    MARKET UPDATE 08:24:

    European markets are lower today with investors focused on earnings news and economic data release. The biggest rise on the FTSE 100 is perhaps unsurprisingly RBS - up 10.07% or 33.10p so far to 361.9p after it took everyone by surprise by announcing first-half pre-tax profits of £2.65bn a week early.

    • The FTSE 100 is 0.28% lower at 6806.49
    • The Dax is down 0.22% to 9772.94
    • The Cac-40 has fallen 0.50% at 4138.73
     
  7.  
    RBS RESULTS 08:11:

    Vivek Raja, an analyst at Oriel Securities, is one of the first out of the traps with some insight into what the RBS results mean. "The preannouncement reflects better than expected operating performance on credit performance, in the Bad Bank (RBS Capital Resolution) and on capital ratios," he says. So that means 1) loans are performing better, 2) the worst loans are performing better, and 3) the bank has more capital as a percentage of loans.

     
  8.  
    VODAFONE 07:56:
    People walk past a Vodafone shop

    Vodafone's first quarter trading shows the mobile operator getting no relief from its European market. Group service revenue - that's customers buying handsets and using the Vodafone network to you and me - was £6.4bn in the three months to 30 June, down 7.9% on the same period last year. Competition and regulation "continue to create a challenging operating environment," it says.

     
  9.  
    LLOYDS SETTLEMENT 07:41:
    A general view of a sign for Lloyds Bank

    Lloyds Banking Group has responded to recent stories regarding settlements "with a number of government agencies" regarding rates setting - Libor. It's in "late-stage" discussions, it says.

     
  10.  
     
  11.  
    RBS RESULTS 07:27:
    RBS

    "Asset quality continued to improve in the UK and Ireland," says what was once the world's largest bank. In English, more of their loans are more likely to be repaid in full and on time. The bank has set aside £22.4bn against bad loans, down from £25.2bn in December. Ulster bank posted a modest profit of £55m - that's from a £381m loss a year ago.

     
  12.  
    BSKYB PROFITS 07:20:
    British Sky Broadcasting headquarters

    BSkyB has reported a slight slip in annual pre-tax profit to £1,1bn compared with £1,2bn a year earlier. Tax for the year was £249m compared with £295m in 2013, an effective tax rate of 21% as a result of the reduction in the rate of UK corporation tax.

     
  13.  
    RBS RESULTS 07:16:

    Pre-tax profit was £2.65bn, up from £1.37bn as impairments dropped like a stone -- down to £269m from £2.15bn. Those reductions in bad loan costs far outweighed a rise in restructuring costs and a drop in sales. £150m was added to provisions for Payment Protection Insurance (PPI) and £100m to interest rate swap provisions.

     
  14.  
    RBS RESULTS 07:08: Breaking News

    A turn up for the books. Royal Bank of Scotland Group has put out its first-half results early. They were due 1 August, according to the bank. Operating profit rose to £2.6bn from £708m in 2013.

     
  15.  
    BALFOUR MERGER 07:02:
    A Balfour Beatty workman on a construction site

    UK construction firm Balfour Beatty is in talks with rival Carillion about a potential £3.05bn merger, it has emerged. The two companies confirmed what they described as "preliminary discussions." In a joint statement they said they believed a "merger of the two groups has the potential to create a market leading services, investments, and construction business of considerable depth and scale."

     
  16.  
    DISCOUNT STORES 06:51: Radio 5 live

    Look out for Hussein Lalani, co-founder and commercial director of the 99p stores, on 5 live. He says before the recession suppliers would just give them their leftovers. Now many brands are making products just for the discount market.

     
  17.  
    GDP FIGURES 06:40: BBC Radio 4

    Marian Bell, economist and former member of the Bank of England's Monetary Policy Committee has been talking to the Today programme about the UK's economic recovery. She says it is "people are expecting a 0.9% rise in output and that would be sufficient to surpass the 2008 level." But it has taken more time to achieve that economic recovery than in the past. In fact, she says, it has been "the longest that output has been below its previously level for more than 100 years."

     
  18.  
    GDP FIGURES 06:27: Radio 5 live

    Elaine Coverley, head of equity research at Brewin Dolphin is on Wake up to Money. "We need other markets to keep that going," she says of growing UK gross domestic product. Markets like the US aren't doing so well. The IMF slashed its US economic growth estimate on Wednesday to 1.7% for 2014.

     
  19.  
    GDP FIGURES 06:11: Radio 5 live

    "The consumer is doing a lot of the heavy lifting," in the economy, says economist Alan Clarke of Scotiabank on 5 live. How, when wages are stagnant? The housing market, of course. As the value of homes rises, people are prepared to save less and spend more without earning more. House prices won't go up at the current rate forever, though, he says.

     
  20.  
    GDP FIGURES 06:03: Radio 5 live

    CBI director-general, John Cridland is still on 5 live. The recovery is currently investment-led rather than export-led. Sterling's strength isn't helping but isn't wholly choking things off either, he says.

     
  21.  
    GDP FIGURES 06:01: Radio 5 live

    Director-General of the Confederation of British Industry John Cridland expects growth of 0.8% in the second quarter, he tells 5 live. "We are getting some balance in the recovery, like a boxer in the boxing ring finding his feet," he says. Companies are investing, finally, he says, and that's crucial. This is what will add to wages.

     
  22.  
    06:00: Howard Mustoe Business reporter

    Good morning! Please get in touch via email on bizlivepage@bbc.co.uk or via twitter @BBCBusiness

     
  23.  
    06:00: Matthew West Business Reporter

    Good morning. So, let's catch up from last night: Amazon had a tough second quarter, as did General Motors. And the International Monetary Fund downgraded its global economic growth forecast. Here at home it's as good as confirmed that the UK is richer than it has ever been (you literally have never had it so good, you lucky, lucky people). Do you feel richer than you did last year? How about last week? Or yesterday even? We'll find out at 09:30 with second quarter GDP, so stay with us.

     

Features

From BBC Capital

Programmes

  • A cargo shipThe Travel Show Watch

    It is not cheap or glamorous - so why are people choosing to travel by cargo ship?

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.