The WhatsApp Story: How the $100B startup started by accident

Jan Koum meets Brian Acton in 1998, and they spend 9 years working together at Yahoo and become good friends.

But in 2007, they both leave Yahoo with some cash and no plans.

At first Acton and Koum apply to Facebook

…and fail.

In failing they become proud members of the “Facebook reject club”.

But In January 2009, Jan Koum buys an iPhone and thinks,

“Wow, this new App Store could be huge.”

At the time, the App Store is 7 months old.

So he meets with a friend named Alex Fishman to brainstorm app ideas.

Koum thinks it would be fun to put statuses next to friends’ names in your address book.

So he goes to RentACoder to hire a guy to build the 1st version.

They call it WhatsApp.

WhatsApp launches and gets a few hundred downloads.

But it keeps crashing.

After a few months, Koum wants to quit and look for a job.

So he asks his friend Brian Acton for advice.

Acton said, “You’d be an idiot to quit now. Give it a few more months.”

Then, Koum gets lucky.

In June 2009, Apple unveils push notifications for iPhone apps.

Koum adds 1 feature to WhatsApp:

Every time a friend changes their status, you get a notification.

Some early WhatsApp users started using statuses to make jokes with friends.

These statuses turn into fun messages.

He had accidentally created a messaging service.

Koum quickly builds WhatsApp 2.0.

It has 1 main feature: Messaging

2.0 takes off like a rocketship and hits 250,000 users.

At the time, Acton is unemployed working on other dead end projects.

But Action realizes that this SMS platform has potential and joins the company in November of 2009.

He secures some funding, joins as the 2nd co-founder, and gets 20% of the business.

The next 2 years, they work out of a cafe and then an office with no sign.

Koum has an obsessive focus:

“No distractions. No bullsh*t”.

By 2011, WhatsApp is top 20 in the U.S. app store.

Sequoia invests $8 million and then later $50 million at a $1.5 billion valuation.

Then Jan Koum got an email from some guy named Mark Zuckerberg.

The subject line?

“Get together?”

Zuck is impressed by WhatsApp after seeing them hit 90 million users in only 3 years.

It was growing faster than early Facebook.

Over the next 2 years, Zuck wines and dines Jan Koum while the business grows.

In 2013, WhatsApp is adding 1 million new users…

PER DAY.

In February 2014, Facebook buys WhatsApp for $19.3 billion.

WhatsApp had:

450 million users

And only 56 employees.

Today, WhatsApp has 2 billion users and could be worth $100 billion as a standalone company.