Saturday, February 22, 2014

FROM RAGS TO RICHES WITH WHATSAPP

Like most folks, I love stories, especially the rags-to-riches kind. I find them so inspiring. Here's one about this kid from Ukraine who started out in life disadvantaged and poor, and ends up on Forbes list of the world's richest men. To think that he took only five short years to achieve this. Certainly makes for a better story than the previous post about Li Ka-Shing's advice on how to own a car and a house in five years. This one tells how you can own 10 Porches, 10 beach villas and 10 mansions in five years, and that's only for starters!

I am referring, of course, to Facebook's acquisition of WhatsApp for USD19 billion, turning co-founders of the mobile social media service, Jan Koum and Brian Acton, into instant multi-billionaires. The pioneer 55 employees also stand to receive USD345 million each - more than enough for them to laugh all the way to the bank.

The figures that led to Facebook buying WhatsApp for USD19 billion. Was it a good investment?

WhatsApp's phenomenal rise since its launch in 2009. (Source: Forbes.com)

If you are using a smart phone, chances are you already have WhatsApp installed. I use the application countless times a day to send text or voice messages, hold group chats or discussions, and send photos. As it is a mobile application, I can communicate with my family and friends anytime I want and from wherever I am. It's no wonder WhatsApp is the fastest growing social media service by far, out-stripping even Facebook by a mile. And no wonder too Mark Zuckerberg is ready to pay big bucks to have it in his stable of acquisitions. To think that Koum had once applied for a job with Facebook but was turned down. What irony!

The big question now for Facebook is how to add advertising and generate returns on their huge investment. (Photo: thenextweb,com)

Here's the back story of how it all began for Jan Koum, who came up with the original idea for WhatsApp, and Brian Acton, who sourced for the seed money. You can read the full article written by Ryan Mac and Kerry Dolan for Forbes. The link is given at the bottom of the page.

Brian Acton and Jan Koum - they look more like
technicians than multi-billionaires. (Photo: NYT)

Koum, 37, was born and raised in a small village outside of Kiev, Ukraine, the only child of a housewife and a construction manager who built hospitals and schools. His house had no hot water, and his parents rarely talked on the phone in case it was tapped by the state. He once stood in line to collect food stamps. Now Koum is believed to own 45% of WhatsApp and thus is suddenly worth $6.8 billion.

At 16, Koum and his mother immigrated to Mountain View and got a small two-bedroom apartment through government assistance. His dad never made it over. Koum’s mother took up babysitting and Koum swept the floor of a grocery store to help make ends meet. When his mother was diagnosed with cancer, they lived off her disability allowance.

Koum was a troublemaker at school but by 18 had also taught himself computer networking by purchasing manuals from a used book store and returning them when he was done.

He enrolled at San Jose State University but dropped out soon after he landed a job at Yahoo where he met Brian Acton. The two hit it off immediately.

When Koum’s mother died of cancer in 2000 Koum was suddenly alone; his father had died in 1997. He credits Acton with reaching out and offering support. “He would invite me to his house,” Koum remembers. The two went skiing and played soccer and ultimate Frisbee.

In September 2007 Koum and Acton finally left Yahoo and took a year to decompress, traveling around South America and playing ultimate frisbee. Both applied, and failed, to work at Facebook. “We’re part of the Facebook reject club,” Acton says. Koum was eating into his $400,000 in savings from Yahoo, and drifting. Then in January 2009, he bought an iPhone and realized that the seven-month old App Store was about to spawn a whole new industry of apps...