First published in Russian in RBC
by Darya Luganskaya
WhatsApp co-founder Jam Koum invited a Russian journalist to his office for the first time. He explained how WhatsApp changed after merging with Facebook, why he dislikes being a manager and how he imagines the future of WhatsApp.
The deal between WhatsApp and Facebook went down in the history of the venture market. At the beginning of 2014, the messenger was sold for record-breaking $19 billion. The WhatsApp co-founders Yan Koum and Brian Acton became the Facebook shareholders, but they kept working on WhatsApp.
I am meeting Koum at the office where WhatsApp has moved in this summer. The three-storey building from bricks and glass in the centre of Mountain View became the fifth “home” for the company. There are no hammocks and other perks loved by tech companies in Silicon Valley and outside of it. They have a self-service canteen, some graffiti on white walls, and the gym, which Koum labels “the emptiest in the world”.
Koum is my guide. The 39-year-old Koum, wearing a gray T-shirt, a dark blue hoody and jeans, assures that last year’s deal changed at best 10% of his life, all the rest is “as it used to be”.
Jan Koum has lived in California since he was 16, but he speaks fluent Russian. And he makes a lot of jokes the Russians would understand. For example, during the photo shooting he suggests taking a picture in the gym in the brutal “style of Putin and Medvedev” and claims that he keeps billions from Facebook under his mattress.
The office of WhatsApp is spacious, and lots of cubicles are empty. “I hope the engineers will sit here”, says the WhatsApp co-founder. His brain is always preoccupied with thoughts about WhatsApp as the product, that is why he cares about developers in the first place. In their room he lowers his voice not to disturb the process. The co-founder himself works in the open space, next to Brian Acton. The billionaire does not want to have a cabinet: it is uncommon in Silicon Valley and he wants to know what is going on in the team.
Koum stops next to the wall with photos and letters attached to it. Two founders together, the partner of the Sequoia venture fund Jim Goetz, who believed in the prospects of WhatsApp at the early stage and led two venture rounds, funny and grateful emails from users — this composition welcomes the WhatsApp guests at the entrance.
The founder of popular messenger points at the photo with the WhatsApp team of 2011. “Only one of the 15 people left the company”, Koum underlines. About 100 people work at WhatsApp now.
After the tour around the office, we go down to the meeting room on the ground floor. Jan Koum told in the interview to RBC about the reasons for WhatsApp’s takeoff, the support from Facebook, and also explains why he respects the investor Yuri Milner.
“I am not interested in any other projects”
— There are different data about WhatsApp audience in Russia, but the only thing is clear: your messenger is the most popular in Russia. Could you unveil exact figures (monthly active users, installs etc) regarding the Russian market?
— We did not analyze the installs. This metric does not matter at all. We follow monthly and daily audience of WhatsApp. I think we never said it, but I will tell you: our Russian audience is 25 million monthly active users. Russia is one of the most important countries for us. It is huge, many people here have smartphones, and lots of them talk to their friends and colleagues abroad.
— How many users do you have in total? Does it match your expectations?
— The last figure we announced publicly was 900 million users [Jan Koum wrote about it on his Facebook page on 4th of September]. But we want WhatsApp to be installed on every phone, or rather every smartphone, because there will be only smartphones in the future. I do not know exactly how many smartphones there are in the world now, possibly about 2 or 3 billion. So, for the moment we are lagging behind our goal, and we have a lot of work to do.
— Eighteen months ago you sold WhatsApp for the astronomical sum of $19 billion. How was the valuation calculated?
— It was long ago, so I do not remember the details. I think, we looked at the number of users at that very moment and potentially in the future. Looking at our growth rate, it was easy to predict what would happen in a year or two. I think, a year and a half ago Facebook understood that we did not have any competitors on the global market.
— What did you do with the money you received after the purchase [$4 billion the founders got in cash, and all the rest in Facebook shares]? Do you plan, for example, to launch a new venture or invest into startups?
— I keep everything under the mattress in a tin. Oh, no! In Sberbank [Russian bank].
Actually I do not have any plans of investing into startups: I am not the man who would do this. I think that most of startup ideas are absolutely stupid. At this moment, I am busy working on WhatsApp and I keep thinking all the time how I can make this product better. I am not interested in any other projects at the moment.
— How did your life change after the deal?
— It would not be fair to say that nothing changed. But I still live in the same place. I have the same friends, and that is very important. And I have the same job. After the deal with Facebook, 90% of my life did not change.
— But what did change in WhatsApp as the company? Do you have less freedom in decision-making?
— The product development is totally under our control. Facebook helps in other spheres — finances, lawyers, PR, HR… When we were independent, we did not have a financial director. We received the bills, and Brian or I pressed the button “pay”.We were a small independent company, and we could afford it. Now we are a part of Facebook, a public company, and the requirements are different. Now we have the financier. He moved from Facebook, and he reports to the financial director of Facebook.
Brian and I, we were always interested in product development, and we still control it. All the changes you see now we wanted to implement before the deal. We launched voice messages, the desktop client. By the way, we receive help from Facebook with infrastructure. For example, we have recently added calls. It had to be done globally without delays, and the social network helped us.
— Facebook launched its own messenger in 2011. How do you coexist with this product? Do you compete?
— We have different niches, and these messengers are completely different products. Facebook Messenger is linked with Facebook contacts, so it works with friends within the social network. And WhatsApp is focused on the friends from the phone book. They have completely different contact lists, and people communicate via them in different ways. WhatsApp is focused on mobile while Facebook Messenger is concentrated on how to work equally well on the desktop and mobile, and stay the part of Facebook.
— You often said in the interviews that you did not want to earn money in the first place, but you were focused on the quality of the product. Given your not really prosperous past, why did not you want to get rich?
— I worked at Yahoo! for a long time, and I owned the company’s shares. Also, I had some savings, and it was enough for a comfortable living. It gave me the opportunity not to worry if WhatsApp would bring revenue. I planned to work on WhatsApp for a year, and then, based on the outcome, decide what to do next.
When we built the product, and people started using it, we realized, that we had a chance to continue its development. We received venture capital from Sequoia [one of the largest VCs in the world], so we did not have to worry about the personal financial benefit.
— Is WhatsApp profitable now?
— For the moment, we do not have the task to earn money. The deal with Facebook helped us to channel our resources into growth and product development. In coming future we do not plan to focus on monetization. Our aim is to attract more than 1 billion users [Facebook has already passed this milestone].
— You said in one of the interviews, that you sold the company to Facebook because you share views on the future of the Internet with Mark Zuckerberg. What exactly did you agree on? How the online communication will look like, for example, in 10 years?
— I am not the kind of person to give forecasts how the Internet will look like in 10 years. You can find lots of people who will be happy to make predictions. I look at the world in a short perspective. I am much more interested in what happens tomorrow and the day after tomorrow.
If you look at what Facebook is doing and what we are doing, you will see that we have similar goals. We want the world to be connected and the people to be able to communicate with their friends and get the information from them easily. It does not matter where you are based in the world, you should have a chance to make this world smaller and feel your family and friends are beside you.
“A sophisticated process is going on behind the curtain”
— Do you follow the news about Ukraine? What do you think about the situation?
— I would not say that I follow situation in Ukraine in particular. I follow lots of global news. The situation in Ukraine is not good, but I hope eventually everything will work out and people will find a common language. War is always a bad thing, and it does not matter where it happens. We hope that such technologies that Facebook and WhatsApp, let people be closer to each other no matter what is going on. Possibly, in the next 5–10 years they will help to make the world civilized.
— By the way, did the concept of WhatsApp grow out of personal desire to be close to the people you left in Ukraine?
— Frankly speaking, I do not remember where the idea came from. Possibly, it was a mix of circumstances. On the one hand, we wanted to build something new, on the other hand, we disliked lots of things in SMS. I used SMS when my American friends did not use them. I traveled to Europe, Ukraine, Moscow to see my friends and we chatted via SMS.
When we were building the messenger, I understood, that is is a killer app for phones, because people always carry smartphones with them. We were just happy to make something useful.
— In Russia, as well in some other countries, people buying smartphones want to see WhatsApp installed. But usually pre-installed services annoy people. Why did WhatsApp become such a must? Is that because you were among the first messengers?
— I do not want to seat here with a smart face explaining why it happened. Yes, we were one of the first, and it helped us. But, firstly, we created a unique thing: we built the messenger connected to contacts from a phone book. ICQ, for example, gave you a 7-digits number you had to memorize, write on a paper and tell your friends. It was not very user-friendly, to put it mildly. Using Skype you had to get the username, share this with friends, add each other… The same was with Yahoo! messenger. All of them were not handy.
Secondly, using the messengers which had launched before WhatsApp, people did not know if somebody received the message. But Skype, as well as the computer, could be turned off. We had the different concept from the very beginning: the phone is always with you, in the pocket or on the table as it is in my case now. This insight helped us to build something new, which people across the globe take on.
Finally, we helped people to save a lot of money they would have spent on SMS or MMS. But we did not simply replace SMS, but we built new features, for example, group chat or voice messages. If somebody would have told 20 years ago, that the video calls would become a norm, and we would send each other geolocation, it would be considered science fiction. But we, humankind, quickly got used to it.
— Right, but now people are used to messengers and rarely call each other. Why people turn to text communication so fast?
— I can not speak from the others. I personally prefer not to call, because I am afraid to disturb people. Everybody has very rich life, and it seems to me I can distract them from something important. Somebody could have dinner with his family, prepare the homework with his children or attend an important meeting. And then all of a sudden his phone rings, but my call could be absolutely unimportant. I may just want to ask: how is it going?
Usually I try to plan the call. I ask in the messenger if I could call, for example, in half an hour. For me it is much easier to chat via messengers.
— In which direction is WhatsApp going? Which new features are you going to introduce?
— We usually do not announce what we are building right now or plan to launch in the future. That is our policy. But we have a simple task to make our product easy to use and fast. That sounds easy, but it is rather difficult to implement.
It is difficult to make the global product available for everyone, because you have to translate it into many languages, test it on different networks and different mobile phones. We have a small team, and we constantly redesign our product, we try to follow new versions of operating systems and introduce new features. There is a sophisticated process behind the curtain, although we have a simple task “to make our product more stable, faster and easier to use”.
— Did you try to step into the niche of corporate messengers where Slack dominates?
— Frankly speaking, I do not know if companies use WhatsApp for internal communications. Of course, we use WhatsApp within our company. Very often we hear stories about people using WhatsApp in small groups, for example, among students. We try to build a universal messenger suitable for any situation. We do not try to make something specially for companies or youngsters. Our messenger should be available to everyone. We always have this task.
— Do you think Pavel Durov’s Telegram is your competitor?
— I do not really think about Telegram, we spend all the time thinking about our product.
— WhatsApp users, as well as the clients of other messengers, receive plenty of spam. Do you fight this problem?
— It is one of the things Brian and me are highly involved into. Unfortunately, every network has its own problems. We have people working only on this task, so we invest heavily into solving this problem. And Facebook helps us a lot, for example, we have an engineer focused on this task who came from Facebook.
“I did not plan to build a company”
— You are really focused on WhatsApp. But did you have moments when you wanted to quit? How did you overcome such moves?
— Since we have launched the messenger we did not have such moments. But when we just started WhatsApp as the service for statuses [originally Koum created an application that enables people to write statuses informing all their contacts, for example, that their battery is dead]… It went nowhere, and it was really depressing. My friends kept telling me I should quit and find a normal job. We had such a period during the summer 2009. But then we built the messenger and it rocked, we started to build the company, hire people…
My hobby turned into business, and I did not notice how it happened. Frankly speaking, I did not plan to launch a company, I just wanted to build the product. But I became the CEO of the company.
— Do you like this role?
— The Chinese have a proverb: “Be careful what you wish for, it might just come true”. Of course, I like the fact I work on the product I adore with people I love.We have a great team of engineers. They are one of the smartest people in the world, and they managed to build WhatsApp being such a small team.
But, on the other hand, very often we has to resolve issues we are not really interested in. For example, we have to decide about the office building we move in. We constantly have issues with HR. These things distract me from the things I like to do, but still I keep working on the product.
— Do you have time for coding? Which percentage of your time you can spend coding?
— It is difficult to say, because most of the time I spend interviewing the candidates. Our team is constantly growing. I think it takes half of my time at the moment. All the rest I devote to product development.
— You used to work long hours on WhatsApp. Do you spend less time working now?
— I do not spend nights in the office anymore, because we have quite a big team now. They help to solve the problems that Brian and me used to deal with alone. Back then we spend weekends at work.
We had a period of two years when I did not see my relatives and friends. I even forgot how they look like. Indeed I was dropped out of society, but it is one of the sacrifices you make if you want to achieve something, especially here in Silicon Valley where the competition is high. But then company started to grow, our schedule harmonized. Now we did not work 70–80 hours per week anymore.
— You created a company in a rather mature age after 12 years of employment. Do you regret that you had not created a business before?
— No, it would be stupid to regret anything, because the result is not bad. It would be blatantly for me to express regrets.
— You are a dropout [Jan Koum left San Jose State University in California for the work at Yahoo!]. Do you have regrets about it ?
— I do regret it for a simple reason. My parents wanted me to complete a college degree. But I was a bit bored at the university, and when I got a chance to work at Yahoo! and earn relatively big money for a 21-year-old emigrant from Russia, I caught this opportunity. Moreover, I liked the job, the company and my colleagues. We are still friends, despite 15 years have past. Of course, it is sad I did not graduate, but the result of my career is not that bad to worry about it.
— There are some dropouts among the millionaires and billionaires. Is there correlation between leaving college early and launching a successful venture?
— I think university education is always useful and necessary. People often focus on the stories of dropouts. They say Bill Gates and Steve Jobs did not graduate from their universities, so there is no need in a degree. But you can come out with thousands of stories about people with the degree who build a successful career. I think the degree is the building block necessary for everyone. If I was lucky, it is just a rare case, not a standard.
— Do you have any idols in tech?
— I need to think about it. I really like what Yuri Milner is doing, especially in science and innovations. He actually does it not for money.
— Do you mean his latest project about the search of life in the universe?
— He did similar things before that. He launched the award for achievements in science, including maths, — Breakthrough Prize. He does it every year.
— Do you plan to launch a non-profit venture yourself?
— Not anytime soon. Frankly speaking, it is too early to talk about it. At the moment, I am still focused on WhatsApp.
— They often say that immigrants barely have any chance to become successful in a new country. Your story disproves this stereotype. Do immigrants have a chance to build a career in the US?
— I can speak about it for hours. America is the country built by immigrants. The concept of “American dream” is often applied to the people who was not born here. On the contrary, they say the first generation is the most successful. The first generation is actually very successful in a new country. Of course, it is not easy. I saw what my mother and grandmother who did not speak English went through. They moved to the US aged 50 and 60 years. It was very hard for them.
It is very different for the young people. Especially now, given the spread of Internet and technologies, the situation is completely different than it used to be 10,20 and 30 years ago. But it depends on a particular person. If you are lazy, it does not matter which country you live in. And if you want to achieve something, change something, it does not matter where you live.
— Is it worth trying to build something in a troubled economy, for example, in Russia or Ukraine now? Do you think that the entrepreneurs should move to such countries as the US instead?
— It is a very personal decision to immigrate from one country to another. I am not the sort of men who likes to give any advice. It depends on the situation.
— Which future do you picture for WhatsApp?
— I have a simple dream — I want people to use WhatsApp in 10 and 20 years. I hope it will be a standard in communication for years to come.