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It might be. But it's also just over four years since Facebook bought WhatsApp. Were his FB shares on a four year vesting plan? I don't mean to be too negative

by untog 9y ago

It might be. But it's also just over four years since Facebook bought WhatsApp. Were his FB shares on a four year vesting plan? I don't mean to be too negative, but I'm still very disappointed they sold to FB in the first place. There was no need to do so - WhatsApp's business was sustainable. And surely they must have considered this possibility?

colmvp 9y ago
I mean... 19 Billion... it's hard to pass that up.
- KSS42 9y ago
  FB tripled in the last 4 years. So, a 4 year vesting period would have been a good thing for Koum!
- untog 9y ago
  Oh, I know. On a human level I can't blame anyone for making that choice. But then exiting with a big pile of cash while complaining about what Facebook is doing feels a bit... eh.
  - jonny_eh 9y ago
    What else should he do? He took billions of $ along with a promise that he'll keep control. FB lied, so now he's leaving. I can't blame him here. Money can easily buy a bit of naïvety.
    - dingaling 9y ago
      > What else should he do? That really depends on what was stated in the terms of acquisition. At the most extreme sue to demerge. But is that a fight he is willing to accept?
      - jonny_eh 9y ago
        That'd be gutsy, but suing wouldn't have a chance unless he had promises in writing, which I doubt.
  - dasil003 9y ago
    I'd rather have him do that then decide to stop complaining and give Facebook a pass now that he's one of them.
paxy 9y ago
Was the business sustainable? They tried some form of paid apps or recurring subscriptions several times, but no one I know actually paid for WhatsApp ever. I imagine they were just burning through VC funds.
- fasj82 9y ago
  It does not take much money to run a messenger, especially one that does not store conversations or files server-side once they are delivered.
  - pdonis 9y ago
    Doesn't matter if revenue is less than costs.
- dman 9y ago
  I paid for it.
  - denimnerd 9y ago
    yeah so did I and all my friends. $1 whatever.
- rmason 9y ago
  Actually in one of their interviews after the acquisition Koum said that they still had every single penny of their VC money, they hadn't spent it. He even showed the bank statement showing it was all there before they took a second round of financing from Sequoia. Jim Goetz said they were the only startup we'd ever dealt with that was paying income tax before taking any money. https://www.forbes.com/sites/parmyolson/2014/02/19/exclusive-inside-story-how-jan-koum-built-whatsapp-into-facebooks-new-19-billion-baby/#1af840b22fa1 https://www.forbes.com/sites/parmyolson/2014/02/19/exclusive...
- tim333 9y ago
  I paid 79p for a lifetime subscription but yeah that probably wasn't going to cover costs. They used charges partly to limit uptake when the servers were struggling I think.
EpicEng 9y ago
>WhatsApp's business was sustainable Was it? Sure, they had a lot of users, but most weren't paying. FB said that the revenue was so small that it wasn't even worth charging. They brought in something like 10M on 0.5B users, hardly sustainable.
- untog 9y ago
  > They brought in something like 10M on 0.5B users, hardly sustainable. Why not? Their team was tiny and they spent next to nothing on advertising (nor needed to). $10m seems like a pretty decent amount of money to be spending on servers in a year. (I'm not saying it definitely was fine, just that I wouldn't assume it wasn't)
  - abhishekjha 9y ago
    Curious. How much do servers cost for serving 1B+ users? Does it really consume millions of dollars if there is no ML/analytics being generated? I used to think that as you scale you start getting cheaper rates.
simonebrunozzi 9y ago
Have you ever been on food stamps, in a foreign country, only to get offered Billions of dollars a few years later? (yes, that's Jan Koum). Frankly, I can easily defend his choice of selling to Facebook. Instead, good point on his vesting.
- bb611 9y ago
  You imply a tale of woe by saying "few years", when it was really closer to 2 decades. He was on food stamps as a child, he'd worked at Yahoo for a decade and started working on Whatsapp with hundreds of thousands of dollars in savings, and at the time of the acquisition their finances were extremely healthy.
  - simonebrunozzi 9y ago
    So, after two decades, the memory of having been on food stamps goes completely away, you say? And it doesn't count in that decision anymore? Let me remind you that elderly people still have very vidid memories of famine and war troubles even 70+ years later. It seems to me you are just being pedantic.
    - untog 9y ago
      It seems to me that you're using someone's personal history to project your own personal views. We have no idea if he is motivated by what you're saying. The OP's counter point is just as valid as yours. Personally, if I'd grown up on food stamps and was deeply concerned for my future welfare you can bet I would have sold before the price reached $18bn. I'm quite sure WhatsApp had many offers over the years.

by untog 9y ago

colmvp 9y ago

I mean... 19 Billion... it's hard to pass that up.

KSS42 9y ago
FB tripled in the last 4 years. So, a 4 year vesting period would have been a good thing for Koum!
untog 9y ago
Oh, I know. On a human level I can't blame anyone for making that choice. But then exiting with a big pile of cash while complaining about what Facebook is doing feels a bit... eh.
- jonny_eh 9y ago
  What else should he do? He took billions of $ along with a promise that he'll keep control. FB lied, so now he's leaving. I can't blame him here. Money can easily buy a bit of naïvety.
  - dingaling 9y ago
    > What else should he do? That really depends on what was stated in the terms of acquisition. At the most extreme sue to demerge. But is that a fight he is willing to accept?
    - jonny_eh 9y ago
      That'd be gutsy, but suing wouldn't have a chance unless he had promises in writing, which I doubt.
- dasil003 9y ago
  I'd rather have him do that then decide to stop complaining and give Facebook a pass now that he's one of them.

paxy 9y ago

Was the business sustainable? They tried some form of paid apps or recurring subscriptions several times, but no one I know actually paid for WhatsApp ever. I imagine they were just burning through VC funds.

fasj82 9y ago
It does not take much money to run a messenger, especially one that does not store conversations or files server-side once they are delivered.
- pdonis 9y ago
  Doesn't matter if revenue is less than costs.
dman 9y ago
I paid for it.
- denimnerd 9y ago
  yeah so did I and all my friends. $1 whatever.
rmason 9y ago
Actually in one of their interviews after the acquisition Koum said that they still had every single penny of their VC money, they hadn't spent it. He even showed the bank statement showing it was all there before they took a second round of financing from Sequoia. Jim Goetz said they were the only startup we'd ever dealt with that was paying income tax before taking any money. https://www.forbes.com/sites/parmyolson/2014/02/19/exclusive-inside-story-how-jan-koum-built-whatsapp-into-facebooks-new-19-billion-baby/#1af840b22fa1 https://www.forbes.com/sites/parmyolson/2014/02/19/exclusive...
tim333 9y ago
I paid 79p for a lifetime subscription but yeah that probably wasn't going to cover costs. They used charges partly to limit uptake when the servers were struggling I think.

EpicEng 9y ago

>WhatsApp's business was sustainable Was it? Sure, they had a lot of users, but most weren't paying. FB said that the revenue was so small that it wasn't even worth charging. They brought in something like 10M on 0.5B users, hardly sustainable.

untog 9y ago
> They brought in something like 10M on 0.5B users, hardly sustainable. Why not? Their team was tiny and they spent next to nothing on advertising (nor needed to). $10m seems like a pretty decent amount of money to be spending on servers in a year. (I'm not saying it definitely was fine, just that I wouldn't assume it wasn't)
- abhishekjha 9y ago
  Curious. How much do servers cost for serving 1B+ users? Does it really consume millions of dollars if there is no ML/analytics being generated? I used to think that as you scale you start getting cheaper rates.

simonebrunozzi 9y ago

Have you ever been on food stamps, in a foreign country, only to get offered Billions of dollars a few years later? (yes, that's Jan Koum). Frankly, I can easily defend his choice of selling to Facebook. Instead, good point on his vesting.

bb611 9y ago
You imply a tale of woe by saying "few years", when it was really closer to 2 decades. He was on food stamps as a child, he'd worked at Yahoo for a decade and started working on Whatsapp with hundreds of thousands of dollars in savings, and at the time of the acquisition their finances were extremely healthy.
- simonebrunozzi 9y ago
  So, after two decades, the memory of having been on food stamps goes completely away, you say? And it doesn't count in that decision anymore? Let me remind you that elderly people still have very vidid memories of famine and war troubles even 70+ years later. It seems to me you are just being pedantic.
  - untog 9y ago
    It seems to me that you're using someone's personal history to project your own personal views. We have no idea if he is motivated by what you're saying. The OP's counter point is just as valid as yours. Personally, if I'd grown up on food stamps and was deeply concerned for my future welfare you can bet I would have sold before the price reached $18bn. I'm quite sure WhatsApp had many offers over the years.