Jan Koum came to the US with nothing. Twenty years later Mark Zuckerberg is giving him $6.8 billion. The inside story of the greatest tech deal of the century
Get together?”
The subject line of the e-mail was like every other come-on that hit Jan Koum’s inbox in the spring of 2012. He was pounded daily by investors who wanted a piece of his company, WhatsApp. Hatched on his birthday, February 24, 2009, WhatsApp was emerging as a global phenomenon. Some 90 million people were using it to text and send photos for free. No social utility had ever grown as fast. Facebook had only 60 million by its third birthday.
On the Friday before that meeting a WhatsApp staffer ran into Facebook’s head of business development, Amin Zoufonoun, and told him that Koum was meeting with Page imminently. Zoufonoun raced back to Facebook and set the wheels in motion to accelerate an acquisition offer that had already been in the works for some time. Zuckerberg got Koum over to his house Monday night and finally floated the idea of an acquisition that would leave WhatsApp independent and, crucially, make Koum a board member of Facebook. “It was a partnership, where I would help him make decisions about the company,” Koum recalls. “The combination of everything that was discussed is what made it very interesting for us.”
When they got back to the office, Koum sent a WhatsApp message to ‘WhatsApp All’, the chat group for all employees, saying there would be an all-hands meeting in the conference room at 2 pm.
“Jan was showing me his ad- dress book,” recalls Fishman. “His thinking was it would be really cool to have statuses next to individual names of the people.” The statuses would show if you were on a call, your battery was low or you were at the gym. Koum could build the guts of the service, but he needed an iPhone developer. So Fishman intro- duced Koum to Igor Solomennikov, a developer in Russia whom he’d found on RentACoder.com. Koum almost immediately chose the name WhatsApp because it sounded like ‘What’s up?’ A week later on his birthday, February 24, 2009, he incorporated WhatsApp in California. The app hadn’t even been written yet. Koum spent days writing the software to synch his app with any phone number in the world, poring over a Wikipedia entry that listed international dialing prefixes—he would spend many infuriating months updating it for the hundreds of regional nuances.
Two years later in February 2013, when WhatsApp’s user base had swelled to about 220 million active users and its staff to 30, Acton and Koum agreed it was time to raise some more money. “For insurance,” says Acton, who recalled that his mother, who ran her own freight- forwarding businesses, used to lose sleep over paying the bills. “You never want to be in a position where you can’t make payroll.” They decided to hold a second funding round, in secret. Sequoia would invest another $50 million to up its stake to 25 percent, valuing WhatsApp at $1.5 billion. At the time Acton took a screenshot of WhatsApp’s bank balance and sent it to Goetz. It read $8.257 million, still in excess of all the money they’d received years before. Now it’s down to Zuckerberg and Koum to figure out how to make WhatsApp worth the $19 billion Facebook just paid for it. The first move is to make sure the app keeps working. The Saturday after the deal was announced people around the world slammed WhatsApp’s servers with new sign-ups. The app suffered a four-hour outage. The founders say it was coincidental, but it was bad timing for a startup that prides itself on reliability. Koum and Acton are so fixated on uptime that no one is allowed to talk to WhatsApp’s server guys in the months before Christmas as they prepare for the message deluge. Visitors are rarely allowed into the office, lest they be a distraction. A whiteboard in the office shows the number of days since the last outage or incident, as a factory might show a tally for injuries or deaths. “A single message is like your firstborn child,” says Acton, a new parent. “We can never drop a message.” He pulls up a photo of his late stepfather, sent to his phone in April 2012. “This is why I hate Snapchat,” where photos and messages disappear after viewing.
(This story appears in the 04 April, 2014 issue of Forbes India. To visit our Archives, click here.)