- The video features a conversation between the founder and a board member of WhatsApp.
- The founder, Jan, talks about his background growing up in Ukraine and the challenges of staying in touch with people before the internet.
- Jan spent 9 years at Yahoo and learned a lot about scaling and managing servers, which influenced the development of WhatsApp.
- The decision to start WhatsApp came from wanting to build a product rather than starting a company.
- Jan and the board member, Sam, initially had difficulty connecting and communicating, but eventually met and decided to work together.
- WhatsApp had revenue from its paid iPhone app and also developed for Blackberry and Nokia, which paid off in the long run.

- The founders of WhatsApp chose to partner with Sequoia because of their successful track record with companies like Cisco, Apple, Google, and Yahoo.
- They were able to monetize their iOS app and generate revenue, which allowed them to sustain their business without relying on raising funds.
- WhatsApp became dominant globally in the messaging space, despite being lower in the charts in the US.
- The founders focused heavily on the product and customer support, even personally answering customer support emails.
- They intentionally charged for their app to slow down growth and focus on improving infrastructure and user experience.
- The company avoided press and marketing to stay focused on the product.
- WhatsApp used phone numbers instead of usernames and tapped into users' address books as a network, which was a unique and successful decision.
- The founders did not mention the worst product decision they made.

- The speaker discusses the challenges of removing features that may not be useful to all users due to the large number of people using the platform.
- They mention two features, the broadcast feature and the status functionality, that may need improvement or removal.
- The speaker explains how they chose to use the programming language Erlang for their chat server due to a lack of other options, and how it has worked well for them.
- They talk about the Facebook acquisition and how the two companies shared common goals and visions, leading to the decision to merge.
- The speaker emphasizes their focus on connecting everyone with a smartphone and improving the WhatsApp application's performance and reliability.
- They mention that there is still a lot of work to be done.

- Jan, the founder of WhatsApp, discusses his background and the challenges of staying connected before the internet.
- WhatsApp initially had difficulty connecting with a board member, but eventually decided to work together.
- The company generated revenue from its paid iPhone app and partnerships with Blackberry and Nokia.
- WhatsApp partnered with Sequoia due to their successful track record with other tech companies.
- The founders focused on the product and customer support, intentionally charging for the app to slow down growth.
- WhatsApp became globally dominant in messaging, despite lower rankings in the US.
- The company used phone numbers and address books as a network, making a unique and successful decision.
- The speaker mentions challenges with removing features and discusses potential improvements or removal of certain features.
- WhatsApp chose to use the programming language Erlang for their chat server.
- The Facebook acquisition aligned with their goals and vision, focusing on connecting everyone with a smartphone.
- There is still much work to be done in improving performance and reliability.

Jim Goetz and Jan Koum at Startup School Silicon Valley 2014

View the annotated transcript, and add annotations of your own, on Genius: http://tech.genius.com/Jim-goetz-jim-goetz-and-jan-koum-at-startup-school-sv-2014-annotated

This is the first time we have had a founder and a board member up here together, and I think it will be a really interesting talk for that.

It's also the first time these 2 guys have ever spoken together.

This is, you know, 1 of the most exciting startups of the last many years.

But before we jump into what happened with WhatsApp, I want to talk a little bit about Jan's background.

So maybe you could talk about sort of growing up in Ukraine and how that influenced your thoughts about coming to Silicon Valley and startups and WhatsApp?

It's exciting to see so many people here.

Yeah, I grew up in Ukraine and I came to the United States in 1992.

I was 16 at the time and I left, my dad stayed in Ukraine and I left a lot of friends and people I went to school with.

And so part of what I experienced was it was really hard to keep in touch with people.

Back then, think back to 1992, there was no internet, there was no emails, there was no skype, there was nothing.

You don't even have a cell phone for the most part.

You just have like this landline and, you know, to call somebody you have to like sign up with MCI or AT&T and it was just like all this kind of like weird, weird international dialing stuff you had to do.

And I think part of it is part of that influenced me.

And then I think also growing up in a country where education was really valuable, and there was a lot of kind of focus on just learning and studying influenced me.

Like I came here, and I was able to quickly start learning about computers and pick up computer science.

And also growing up in a country which didn't have a whole lot of advertising, it was very kind of clean, very basic life.

And then you, actually we have a slide of this I think.

So You have a somewhat non-traditional path to starting a company, or at least in the current world.

I think this is probably how it happened for a long time.

You spent, it looks like, 9 years at Yahoo.

And you also dropped out of college to join Yahoo.

Yeah, well, I didn't get to start WhatsApp.

So I was wondering if you could talk about sort of your path from how you decided to drop out of college and go to Yahoo and then how your experience at Yahoo shaped WhatsApp and how you came together with Brian there.

I actually, the funny story about me and Brian is that we met even before I joined Yahoo, because he technically interviewed me.

He was, my co-founder was actually 1 of the people who interviewed me back in 1998, and I think we also met earlier when I worked at this Ernst & Young auditing company.

And so I was actually recruited into Yahoo by 1 of the co-founders at Yahoo, David Filo, who I worked with for a long time and who was a big role model and a mentor in many ways.

Because when I joined Yahoo, it was still a pretty small company.

We had like maybe 500 servers or 400 servers.

And over 9 years, we grew to thousands of servers.

And so to see that grow and to experience all the technical issues that you have to deal with when it comes to scaling the company was extremely useful when we ended up starting WhatsApp because we didn't have to make the same mistake twice.

We were able to basically look at what worked at Yahoo and what didn't work at Yahoo.

And we're also able to tap into our network.

We had a really good network of very skilled, very senior server engineers who joined us at WhatsApp.

Some who already left Yahoo at a time, some who were still at Yahoo, that we were able to recruit and convince them to join us.

And we were able to have this very small team of engineers supporting, obviously, a lot of users at WhatsApp because we learned so much about scaling and managing servers.

And so that experience and that mentorship from David and Jerry at Yahoo was really valuable to us

How many engineers did you have at the time of the what's up acquisition?

Supporting about 400 million active users.

just a couple quick anecdotes about Jan's resume.

He didn't know we were gonna present it today.

We collect resumes at times and try to share them with the portfolio.

But a lot of you are thinking about starting a company, which is wonderful.

But I also think Jan took a different path.

He actually joined a great company during their growth years, and I think learned a great deal from David Philo, and just the whole experience.

In fact, much of the approach to leadership that I think Jan embraced at WhatsApp was formed at Yahoo.

He watched Yahoo hire hundreds of engineers every month and realized the lack of focus was creating challenges for the company.

And then over time, Yahoo, as they looked to monetize as a public company, spent a lot of energy on advertising, which created a distraction, if you will, for the consumer.

And I think Jan's passion around simplicity and no advertising, and also just the approach to focus, came from that experience at Yahoo.

I want to share 1 final anecdote for those of you that are looking at Crucible moments.

Jan was at San Jose State in a computer science class and Philo called him and said, where the fuck are you?

And that was a crucible moment, I think, set Jan on this wonderful journey.

And I think it's great to have, kind of, Philo in the mix.

Yeah, David claims he doesn't remember that ever happening, but I think that was what probably caused me to drop out.

I was like, well, OK, I guess I have a real job to do.

You were working while you were still a student?

I was trying to go to school part-time and work full-time.

That only lasted for about 2 weeks and I was like, well shit, I really love working at Yahoo.

So we're using FreeBSD operating system, which I was really passionate about and still am really passionate about.

It was like a dream job for me and the learning experience that I was getting there was just like mind blowing.

Can you tell us about the moment that you decided to start this company?

Well so the interesting thing is that I don't think I ever decided to start a company.

In fact now that I look back I was like well I never thought that I'll be starting a company.

I thought I was just, I would be building a product.

And I think a lot of great companies actually start out that way.

They're not thinking of starting a company because starting a company requires that you have a general consul and business team, and they char, and you have to look for office space, and have to make sure your employees are getting paid.

It's a lot of complicated, and you've been there, you've done that.

It's very not that exciting as compared to building a product.

And so we started out just trying to build a messaging app.

And now looking back, I must have been so naive to think that I could build an app that millions of people would use.

I was just like, yeah, it's easy to do, right?

We had a lot of challenges on our way, but it basically started out with me buying an iPhone in January of 2009.

I took a year off after Yahoo and I kind of traveled and spent a lot of time just figuring out what to do.

And in January of 2009, I bought an iPhone.

And this was literally 3 or 4 months after SDK for iOS came out.

And people were trying to figure out what they can do with it.

And we started just playing around with the phone and SDK and trying to build an app.

And our original idea was actually not messaging.

Our original idea was a status indicator.

I don't know if a lot of people know about this.

But because we built all this quality code that could figure out who your contacts are, who your friends are based on your contact list, we were able to pivot into messaging because we already had that foundation.

We had a server piece written and we had the client code written for iPhone.

And so in the summer of 2009, when the status thing wasn't working out so well for us, we're like, well, let's try messaging.

We were able to just kind of put the back end piece and drop it in and just go from there.

So I forget exactly when you 2 met each other and decided to work together, but I know it happened sort of relatively quietly and there weren't a lot of people paying attention.

I'd love to just hear the story of how you guys met and decided to partner together.

Well, to be clear, I don't think Yann was interested in talking to anybody in the investment community, nor anybody in the carrier community, including CEOs, or handset manufacturers, including CEOs.

He essentially ignored those emails, and He had phenomenal focus on any customer email, but certainly my initial emails were rebuffed without a reply.

There were enough people at Yahoo that I think we collectively knew together, along with Brian, where we eventually were able to secure a brief interaction at the Red Rock Cafe, for those of you that are in Mountain View.

Jan was in a beanie, and his first stare was a bit intimidating, and I didn't get him to smile for maybe 5 minutes, and I thought, I'm definitely in trouble.

That definitely happened, and I remember...

And yeah, I remember our interactions and we were trying to figure out… Me and Brian has always kind of focused on building a company and building a product that can sustain itself.

And we were actually getting revenue at that point already because our iPhone app was paid and our other platforms were free.

We were actually doing Blackberry and Nokia.

I don't think we had Android at that point yet.

But we're probably 1 of the few companies that decided to build for Blackberry and Nokia at the time.

And I think that gamble paid off for us because a lot of those people who were using Nokia 5 years ago who were WhatsApp users are now using Android or iOS and they're still using WhatsApp because of the connections and group chats that they have.

But I think we were able to choose our partnership and our investors because we were able to monetize our iOS app.

We were actually having revenue and we were able to pay for electricity and pay for servers and pay salaries to some of our early employees.

And so we weren't in this situation where we're like, well, we need to raise money, otherwise we're going to go out of business tomorrow.

So we were able to leverage our situation and take our time and make sure that we carefully partner with the people who we think will support us in building what we set out.

And do you remember what about Jim and Sequoia made you want to partner with them?

I think Sequoia in general is, I mean first of all they've been an amazing partner for us, but I think in general if you look at the history of Sequoia they've supported companies like Cisco and Apple and Google and Yahoo.

And I think growing up in Silicon Valley, and I lived here for 22 years, There is this heritage that Sequoia has that and pedigrees that a lot of other venture funds don't have.

And I remember I remember sitting after we got a few different term sheets, I remember sitting and talking to Brian, and I was like, we were trying to figure out what to do.

And I was like, Brian, look, like 5 years ago, if somebody told us we would have a term sheet from Sequoia, and we were starting this company, we would be like, nobody would believe us, we wouldn't believe this ourselves.

And now we have this opportunity, we should just do it and go for it.

I mean, Jeff Ralston, who was 1 of our co-workers at Yahoo, I remember me and Brian drove over to Jeff Ralston's house.

It was like 11 PM, It was like the scene from James Bond movie because nobody knew about us And we didn't want to tell anybody's we were raising we didn't want to get any attention And we got to his house at 11 p.m.

When everybody was asleep and like Jeff was kind of looking at various arm system He goes like Sequoia company is always a Sequoia company and we're like, okay.

and Jim what about what's up made you so excited at that point?

Well, look, we were looking at the messaging space.

So we were at the time we had built a system we call the early bird that was tracking the activity on the app stores.

And WhatsApp had become dominant globally, not in the US.

In fact, they were well down the charts in the U.S., but in maybe 35 of 60 countries we were monitoring at the time, there were 1 or 2.

And we had been looking at the messaging space and group messaging, and it concluded that this pay model that they had crafted and just the utility to experience, it reminded me and many of my partners of Chrome, just the simplicity.

And then for the next few months, it was all about trying to get to Jan and Brian because they didn't have an address that was publicly available.

I knew that they were in Mountain View, but we literally walked the streets of Mountain View to see if we could intersect with these guys.

Yeah, you actually had people, just Sequoia partners walking down

It was actually the partners walking around, yes.

But I'll say this about Brian and Jan, and Jan's being too modest, the level of focus, we all talk about focus, but the level of focus that Jan had at WhatsApp to the product and to the client is absolutely shocking.

I've never had an entrepreneur as focused as Jan.

And whether it was executives from various companies or CEOs or partners from various firms, Jan ignored the vast majority of that activity, including the PR inbound, and stayed focused on the product.

And I think that served the culture incredibly well.

Guy Czajka Well, we just didn't have time.

Brian and me would spend hours answering customer support emails.

How many users did WhatsApp have the last time you regularly answered customer support emails?

Obviously I don't spend hours answering customer support emails today, but people who write in to me, somehow as I find my emails, they write in and I try to answer and try to help.

And I still run Zyphon beta program to this day.

But I think at around 150 to 100 million, we started hiring like dedicated customer support folks.

And, and we actually have, we actually have a lot, we're focused a lot on our customer support and localization.

Our customer support team is probably 1 of the most diverse teams that exist because we have to support Italian, French, Turkish, Arabic, Hebrew, all these languages.

And they help users and they translate the app at the same time.

So this is actually something I want to dig in on.

You know, WhatsApp had this approach that was very different than most startups.

You know, like ignoring Sequoia is not something most startups do.

Ignoring the press is not something most startups do.

I remember in like, you know 2011 or whatever people would still say well What's app is never gonna work because they charge a dollar and it's a viral app and that's just gonna kill it right there.

So how how did this sort of culture of being sort of like anti sort of Silicon Valley standards come about and how important was that to the company?

I think, well, first of all, me and Brian are engineers.

We just want to like sit behind our computer and just do fucking work, right?

It's like, don't, don't, yeah, Don't make us go to meetings, please And so and so when you have to meet press or you have to meet other people you know, it takes you away from being in front of a computer getting work done and when when you're running at 80 to 90 hours a week speed and all you do is want to work, you don't have a lot of time to take meetings.

The thing about charging is actually very interesting.

We used this lever to charge to actually slow our growth.

And I know it sounds very counterintuitive, because like, well, why would you want to slow your growth?

We wanted to slow our growth so we could better support our existing users, so we could build servers that don't crash, so that we could build product that doesn't drop messages, so that we could answer their customer support emails.

And a lot of people were telling us, what you're doing is wrong.

You should really be growing as fast as you can.

We want to build the infrastructure first.

And it's very similar a little bit to Facebook in early days.

They were doing colleges only, and they weren't open to the entire world.

And that's kind of similar to what we did.

We wanted to slow our growth so we could really focus on existing users.

We wanted to make sure that we have our existing users happy and that when people sign up, they have a great experience and that the app works and it's fast and the servers are up and running all the time.

And that's part of why we charge for iOS.

And sometimes we would have promotions at the end of the year, we would make it free and we would have an influx of new users.

But overall, we just kind of wanted to stand under the radar, which is why we did IndiePress.

So, we felt that if people were talking about us or writing about us in the press, it would be a distraction to employees, it would be a distraction to me and Brian, because we would have to comment on it internally or do something about it.

And we just felt that if we don't talk to the press, which we tried not to do for the most part, We would be able to focus on the product and and that was our strategy And I think that worked for us because we really were able to focus on the product

So I think there's no marketing inside of what's app right?

I don't believe there's a finance individual or organization There are essentially 2 people who are in non-technical roles.

1 of us right here in Neeraj, and I think we describe his role as business operations.

Over time, with the regulatory issues, we begrudgingly, or Jan begrudgingly, hired a wonderful GC.

This is a company that's very rare in terms of its functional structure.

And 1 of our challenges at Sequoia was to avoid encouraging Yon to go hire a marketing team or follow up on that tech crunch request because the authentic Yon and Brian was a very different anti-valley company in a number of ways.

Related to this approach, other than deciding to charge, could you talk about, you know, the best or 1 of the best product decisions you made that sort of is somewhat counterintuitive, or was at the time?

I think the 2 biggest ones that people couldn't wrap their mind, their head around were 2.

And We had a lot of people asking us to do usernames and I was like, well, why would you want to introduce this an extra layer of handshake between 2 people when you already have their phone number in your address book?

And what was looked at SMS as this very simple way for people to communicate and stay in touch.

And, you know, by actually growing up in Russia and Ukraine, I would go visit every couple of years and I would, like, I remember going back to Ukraine in 2004 and 2005 and, like, basically everybody was using SMS.

And then I came back to the United States and I was telling my friends about it and they were like, what is SMS, right?

And so we wanted to have that simplicity of just using the phone number.

It's like if you know somebody's phone number and it's in your address book, you probably call them, you probably text them, well you should also be able to WhatsApp them.

And the second 1 was that we didn't wanna use usernames.

I think the ability to tap into your address book and use that as a graph to build a network and not use the usernames was probably the biggest 1.

Yeah, at the time, I remember no 1 else was using the phone book as

We try with every release to get rid of a feature that we don't think that useful or get rid of the settings that's not that useful.

The problem is when you have the number of people that we have, you can't just easily remove stuff because there's always a million people or 2000000 people that find something useful and it's like, well, you don't want to upset them.

It's like a small percentage, like 0.1%, but absolute numbers, it's a lot.

And so I think there's probably a couple of things that I think are not that great.

We have this broadcast feature that we can probably improve on Or maybe at some point get rid of it altogether or maybe improve it probably is a better thing to you The status thing we have you know we started with it, so I can't really like Be very negative about it because that's how what's up started, but the status functionality is There it's legacy, but I don't think anybody uses it at some point.

And then 3 people asked me to ask this this morning.

It's it's 1 of those intuition intuition thing it I knew nothing about Erlang and when we Actually still don't we have a lot of engineers who do.

And we actually have like a really small server team, we probably have like 7 or 8 people supporting our entire user base on the back end.

Who are insanely brilliant, who wake up in the middle of the night and fix servers.

The thing about Erlang is that I was looking for an open source chat server to drop into these backends that we've built that could identify which of your contacts were WhatsApp users.

And I was thinking, okay, we can probably use XMPP, which was an open protocol for messaging.

And I was looking for an open source XMPP server and I couldn't find 1.

There was 1 written in C, but outdated, 1 written in Perl, I knew that wouldn't be able to scale.

I came across Erlangen, what is this Erlangen thing, it was the first time I heard of it.

So I started researching it, and It turned out probably 1 of the best engineering decisions we ever made by just, we were forced to because there was nothing else to use.

It's like built for what we need to do it.

It lets you like cluster servers into nodes and you have this like key value database built into it called Amnesia that is really cool.

It synchronizes all the data across the servers.

And we obviously tweaked it a lot internally.

We have a couple of guys who specialize in tuning Erlang, but part of it was just like we had no choice.

It was the only 1 available at a time, and it worked really well for us.

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Jim Goetz and Jan Koum at Startup School SV 2014