Coming from poverty in Ukraine, Jan Koum moved to California with his mother when he was 16. He used to work odd-jobs to make ends meet, but later landed a job at E&Y as a security tester. On a work trip to the Yahoo offices, he met Brian Acton, a Yahoo engineer, and they struck a chord immediately. Koum enrolled at college to study Math & Computer Science, but soon dropped out after David File, a Co-Founder at Yahoo, convinced him to work for him.
Jan Koum came up with the initial idea for WhatsApp in 2009 during a movie night at a friends place. This was after he had bought an iPhone, which had made him foresee an industry of app creation. He built the back-end, and hired an iOS developer from a freelancer platform to create the front-end. Koum gave the prototype, which was a simple app that displayed a user's 'status', to some of his Russian friends to test it out. Initially, the users didn't find much use for it. This changed later that year, when Apple launched push notifications. Receiving a notification whenever one of their friends updated their status somehow made it fun, and they soon started using it as a messaging service.
Jan Koum was quick to spot this, and hence, WhatsApp pivoted to a full-fledged messaging platform. He showed Acton what he had built and convinced him to join. The pair then left Yahoo to work on WhatsApp full-time. In October of 2009, Acton contacted several of his old Yahoo friends and managed to get together 250,000 dollars in seed funding. In November 2009, WhatsApp was officially launched on the App Store, and enjoyed incredible user growth.
Evolving Business Models
Soon, they built the app for other mobile OS'es and priced the app at $1 to cover costs. Due to their strict 'no-ads' policy, they were also reluctant to secure funding from VCs. However, Sequoia's Jim Goetz convinced them to take up an $8 million investment after promising not to push advertising models on them. By 2013, they had grown to 200 million users and a staff of 50. After a second funding round, they again pivoted to an annual subscription model, charging $1 per year after a free trial of 1 year. In February 2014, Facebook acquired WhatsApp for $19 billion.