How to build a product with WhatsApp co-founder Jan Koum

Today's speaker, we have Yann Koum. Yann is the founder of WhatsApp. WhatsApp, as we mentioned in earlier iteration of this, is the startup that did everything right. After not getting, after trying to get jobs at Facebook and not, for either Yann or Brian, they put their heads down. They figured out a product that people really wanted.

And while everybody else in Silicon Valley was going to conferences, doing PR, whatever else it is people do other than making a product that people really love, WhatsApp just quietly built this thing that was used by, how many people at the time of the acquisition? 450. 450 million people for a consumer app and more than a billion now. And it was acquired by Facebook a couple of years ago.

And Yann can tell that story. But thank you very much for coming to talk to us. Sure. Thanks for having me. So when Sam asked me to come and speak here, I think I made some smart-ass comment how I'm going to speak about people actually building a product and not going to class or something like that.

But as Sam mentioned, we were just fortunate in a way that we stumbled into something that people really wanted. And I'll explain in a second how we got there. But the credit really goes to not necessarily us having some brilliant idea. I think the credit goes to also being in the right time and the right place and building a product that people wanted and just realizing that people wanted it.

So just to kind of give the quick history of how we got where we got. We actually, both me and my co-founder Brian, we were at Yahoo for about, I was there for nine years, he was there for 11 years. And that time was actually really, really valuable for us to learn how to scale back end servers, how to, what makes a good product, what makes a bad product.

And kind of seeing the Yahoo as a company get really successful and then kind of, you know the story. So we left in 2007, just coincidentally, we both left around the same time, like within a month difference. And we took some time off, we took about a year off.

So we left in 2007, we took all of 2008 off, he moved to New York with his girlfriend, I was just like goofing off and I really kind of fell in love with my Nokia phone.

I had this candy bar, I think it was 6610 Nokia phone that I jail broke, I installed a Netmon software on it, which showed you which mobile cell you were connected to and all this advanced things you could do with a phone that you couldn't do when you took it out of the box. And so 2008 ends, and January of 2009, my birthday was coming up in February.

And I figured I'll get myself an early birthday present, I'll go buy an iPhone. So I went to Apple store, bought an iPhone, and right around the same time as the cake came out, I think there was no SDK when iPhone first came out in 2007. But I think they released it in September of 2008.

So I was like, literally three, four months after iPhone came out, sorry, after iOS SDK came out, I got an iPhone and I started tinkering with it. I was also really bored, and I had a lot of free time. So I'm like, okay, well, let's install this weird thing called Xcode. Luckily, I had a Mac, let's install Xcode, let's figure out what can be done.

Let's build a simple app, and then you kind of realize, holy shit, it has full Internet connectivity and it can do full TCP IP stack. So it basically is a little computer that can talk to your server. So I'm like, okay, cool, what can we do with it?

So the first thing that we built, which I don't know how many of you know the history of WhatsApp, the first thing that we built was actually this concept of a status. And so the idea was, if you ever used, and you all might be young for this, if you ever used something like AOL, AIM, or ICQ, or IRC, or any of these products, you have this concept of a status.

Like Yahoo Messenger has this away from keyboard, or I'm busy, or I'm in a meeting. And so the first thing that you would do when you use those messengers is you would, the first message you would send was, hey, are you there? That was the first message you sent to start a conversation with somebody on ICQ or if you private messaged somebody on IRC, because people would be away.

And so they would use the status to kind of indicate I'm not near a computer or I'm AFK or whatever. And so the idea was, well, let's take this concept of status and just apply it to your phone. So before people call you, they can check your status, like maybe you're busy, maybe you're in a meeting, maybe you're traveling, whatever.

So if you don't pick up, at least people know why you don't pick up. And that was kind of like the WhatsApp 1. 0 application. And what we built was the app that hooked into your address book. So the other thing that kind of worked in our favor was there were address book APIs on a mobile phone. They didn't really exist on a desktop, right?

If you think about desktop, like Windows, from 2000 to 2008-ish. People never really put address books on their desktops. People always had address books on their mobile phones. And so even if the API existed, there was nothing to query, because the address book database was empty on all these devices.

And so luckily, the one thing that Apple opened was their address book API, which was great for us. So what we did was, sorry, we basically went through the address book. And we could figure out if the contact in your address book was another WhatsApp user, and that's basically how the status worked.

We would take your phone number, and if it was an international phone number, we would try to normalize it to the plus format. So all of the phone numbers in our system would start with a plus in the full international format. And we would be able to detect if the other person is a person on a WhatsApp network, a user of our product.

And the idea was that before you start a phone call or before you send a message, you would check the status of this person from WhatsApp. And they would say, I'm available, and you would call them, right. So that was a WhatsApp 1. 0. It failed horribly, it was a disaster, it was depressing. Nobody used it, people downloaded it, actually, surprisingly enough.

And I think people downloaded it because there were no apps back at the time. There were maybe, I don't know, 1,000 or 2,000 apps in the whole app store, it just went live. So we benefited from being early, but the idea wasn't that great. So people would download, and they just never used it. People just called people like they normally would.

It was really hard to replace a native dialer, and that's kind of what we wanted to do. We wanted to replace a native dialing application. So we struggled for a little bit. We kept adding all these weird features in retrospect. Back then, we thought they were the best thing ever. You could set your status to automatically change at a certain time of day.

If you knew you were always in a meeting from two to four, you could automatically configure it to always say that you're in a meeting from two to four, so it kind of had that functionality. And then something happened around the summer of 2009, Apple introduced push notifications.

So back then, if you wanted the application to wake up, the only way to wake it up was the user tapping on the application icon. And there was no way to do anything in the background, which in retrospect was really backwards. Because I don't know if any of you know about Nokia Symbian phones.

But S60 and BlackBerry had all this capability, even before iPhone came out, to do autostart, to do background multitasking, to do networking, to do all of this stuff. And so iOS actually limited what we can do, so we were struggling. And then Apple introduced push notifications, and we were like, hallelujah. So we ended up hooking into Apple push notifications.

I think this was around the summertime, even before they were still in beta, because we had developer access. And we noticed that people were using the status as a way to kind of communicate with each other. They would change the status to say, I'm going to a bar. And the change in status would broadcast and go to all the other people who use WhatsApp in their address book.

And so around the summer of 2009, we were like, huh, interesting. Maybe we should build messaging. And then it all kind of clicked, because I've always used SMS. And if you remember on those old Nokia phones, the SMS was not threaded. So you would get a message, it would show up as a phone number.

And if you get another message from that person, it would show up with just another entry in your list. And then iOS came out, and they introduced threaded SMS, and everybody went like, wow. So we kind of said, okay, well, we can do full networking. We can do TCPIP. We can connect if your phone is a client to a server on the back end.

We already had all this code to figure out if you're a WhatsApp user or not. We could take your phone number, parse it, figure out all the international prefixes, we even figured out Argentina at some point, which was not an easy thing to do, but we got there. So we got to a state where we could actually send messaging, have people send messages over WhatsApp.

And if you look at our application today, you see all these features. You see group chat, you see ability to send media, to record voice messages, to do all this stuff. We didn't have any of it. We didn't have, the only thing we had was one-on-one messaging, that's it. Just think how antiquated that is. And that's what we launched with.

So around September, I think it was September-ish, maybe late August, early September, is maybe even early October, I actually don't remember. Is when we launched messaging, and it took off. And it was intuitive to us why it took off, because SMS was so expensive back in those days, right? And especially international SMS.

So if you had two people who were living in two different countries, how did they communicate? Well, they could send each other SMS, it was expensive. They could use Skype, but Skype mostly worked on a desktop, so you had to synchronize the time when both of you are in front of a computer. And people usually are not.

Some of you have computers open, but if you get a Skype call now, you're not going to answer it, right? So there was really no good way for people to communicate in real time. And so that's why SMS was so popular, because your phone was always with you. It was always in your pocket. It was always, no matter where you went, you had your phone with you.

So when you sent an SMS, you never said, hey, are you there? You never did that, you just sent an SMS. The only thing sometimes you could say is, hey, did you get my message? Because SMS was so unreliable, especially internationally. And so that was the other problem that we could solve by building on top of TCP IP, is we could add reliability in our protocol.

So we rolled out messaging, we made it super reliable. We added all these visual indicators. You knew if the message actually was successfully delivered to a server. You knew if it was successfully delivered to the device that you were sending it to. And it just took off.

And when Sam talked about, well, we kind of went heads down and we didn't go to conferences and we didn't do a whole lot of other stuff. It's just because we were lucky. We stumbled into something that people really, really had a need for. Just think about SMS back in 2006, 2007, right? There was no iMessage, nothing else worked on your phone. SMS was expensive, it was horribly limiting.

You can only send 160 characters at a time. And if you sent a longer message, it would break it into multiple chunks. And sometimes the chunk at the bottom would arrive first, so you have to read the message at the bottom and then read the message on top after that. Media was horribly expensive and it was not working well across platforms.

So if I sent a video recorded on Nokia phone to Blackberry users, they probably couldn't have watched it. Or if you sent a video recorded on Blackberry to iPhone, it probably wouldn't work either. So we had all these limitations with SMS that we were trying to address in our product, and obviously the biggest one was cost.

SMS was very expensive in Europe and in many countries outside of North America. And we just kept going. So once we figured out that there is a need for it, we were like, well, we better hire. So we hired some of our old friends from Yahoo, who left Yahoo, some of our ex-Yahoo friends.

We hired, I hired a friend of mine who I actually met when I was working at Stanford, when I was doing IT at Graduate School of Business in 96, 97-ish, back when I was in high school. So he came and he helped work on a Blackberry client. And so our goal was like, okay, well, we gotta build all these features, but we also gotta build all these platforms.

Because we started out with iPhone, but the world back then was very different. Nokia actually was majority smartphone platform back in the days. Not in North America, but if you kind of looked at the rest of the world, everybody was using Nokia smartphones and Blackberry. And Android, I think, didn't even exist or just barely existed at the end of 2009 and early 2010.

So we had to build for Nokia, and we had to find people who could actually build for Nokia, Symbian S60. And we had to find those people in Europe, because nobody in Silicon Valley even heard of Nokia. So we got lucky, we found two really good engineers to help us build that. Funny story about our Nokia client, it's actually built using Python.

Not a lot of people know that actually Nokia S60 had a Python runtime. So I remember when Brian, my co-founder, he started looking at Nokia, because we knew that we had to do Nokia. So he kind of went away for a week. He comes back a week later. He's like, you're not going to believe this. You can use Python to build a client. I was like, no way, get out of here.

He's like, no, no, no, no, seriously, you don't understand. You can run Python on this little tiny phone. I was like, okay, let's try and do it, and that's what we did. Basically, the whole back end, the communications, the protocol, was all in Python, and the UI was actually in C++. So we started working on building multiple platforms, and we started working on building features.

So we launched Blackberry, we launched Nokia 60, we launched Android, all within a few months of each other in 2010. And then we started building features. So we had to build what people asked us to build. People wanted group chat. Everybody's like, this is great. I love your product.

I want to have a group conversation with my family, or three friends, or five co-workers, or ten people in a study group. And we're like, okay, well, how do we build group chat? Let's figure it out. So we sit down and sketch the user experience, then figure out how to make the back end system work for group chat. And then people wanted, obviously we had, very quickly, we added multimedia.

And I think multimedia is what really took us to the next level. Once we added ability to send a picture, which today is comical. How could you not have ability to send a picture through a messaging product over your smartphone? Back then, you couldn't. There was nothing that worked really well, or was cheap, or was reliable. So we added ability to send a picture. We added ability to send videos.

We, at some point, introduced voice messages. And then things just took off. And so at that point, it was just scaling the back end. And this is where it kind of ties into what I was talking about earlier, where me and Brian worked at Yahoo. Because we spent so much time there, and because we were there in early days, and we saw the company scale, we had all this experience to scale the back end.

And we had our own share of outages, and our service wasn't 100% perfect. But we would make sure that we would learn from an outage, and make sure that we would add the right monitoring in place. And we would have enough capacity always for holidays, like Christmas and New Year's, where there's a traffic spike.

But having that experience working at Yahoo, learning how to scale the back end systems, learning how to tweak the operating systems, the kernels, the networking stack, the Ethernet driver if you have to, it all kind of tied together.

So our experience at Yahoo, our experience with difficult or challenging SMS protocol that we'll use as a consumer, kind of all combined with this perfect timing that happened in 2009, 2010, with smartphones coming online, and people wanting to have this ability to communicate. And if you think about smartphone, it's ultimately, the messaging is a killer app for a smartphone.

So we just basically stumbled into the killer app, because there is nothing else you do more with a smartphone than communicate. Most of it is probably talking to your friends and family and your loved ones, either over iMessage or WhatsApp or Skype or anything else. Yes, the guy from Virginia. Could you do it again? Huh? Could you make another app again that takes off?

A messaging app or just an app? Just any app. I could, I'm sure you can. I I mean, the chances of me being successful again are like zero. So the odds are on your side, so you should go and do something. So that's why we're able to actually spend all of our time heads down building a product, because we had this amazing product market fit. We had this amazing product that people wanted.

They were like, gimme, gimme, gimme. When we were rolling out Nokia S40, which was just like a step below Nokia S60, which was kind of like a feature phone, people were emailing us, asking for when is it going to be done, when is it going to be done, when is it going to be done? And so there was a huge pent up demand for any platform before we would launch it.

And so that's why we didn't have a need to go to the conferences and do a lot of PR or do anything like that, because we had people who needed our product and we had millions of people who were waiting for us to build a new feature or a new platform. And that's why we were able to just go heads up and go heads down and build a product.

So that was kind of the background that I wanted to give you on how we got started. We can do a Q&A for the next 15, 20 minutes, and yeah. The specific thing I want to hear most about is how you dealt with the launch of iMessage and Facebook Messenger and all of these other messaging platforms. WhatsApp was clearly first, and then it looked, the world got scary quickly.

How did you think about that, what was it like inside of it? So how did we think about iMessage and all these other platforms? Well, so with iMessage, we, when did they launch? I think 2011-ish, something like that. I think 2011 at the developer conference. So the world in Silicon Valley is very different from the world outside. In Silicon Valley, if you look around, 90% of people have an iPhone.

Not only do they have an iPhone, they have a latest, greatest iPhone. Outside of Silicon Valley, it's 80 or 90% Android, right? So for us, having an iMessage launch was just a small blip on the radar. What about Facebook Messenger? So Facebook Messenger, so I think Facebook for a very long time didn't really have a good messaging story.

I remember they bought this company called Beluga, which, I think it was Beluga. That was group messaging, so they were kind of focused on group messaging at first, and then they shut it down and turned it into Facebook Messenger. But Facebook Messenger was part of the Facebook app. It wasn't a really dedicated app back in the days.

But ultimately, if you look at a Facebook Messenger, the graph that the Facebook Messenger is using is very different from the graph on your phone. And if you think about people you add to your address book, and people who you add on Facebook, there's going to be some overlap, but for the most part, it's going to be different.

So people who I add on Facebook are probably not people who I'm going to message with a lot. And people who I put in my address book are people who are probably a different graph in terms of how important they are to me. And if I add you into my, basically, if I exchange a number with somebody, it means it gives them ability to WhatsApp me, SMS me, or call me.

There are probably a lot of people who I'm friends with on Facebook who, if they called me, I would probably first go, who is this? Yeah, we met each other once, and I added them. I'm probably not necessarily a typical example. I mean, I'm sure there are people who have different graphs on different networks.

I'm sure there are people who use WhatsApp only for work, and only have their co-workers on WhatsApp in their address book. And I'm sure that there are people who only have a certain set of their contacts in one or the other. But I think overall, this idea of, well, if I add you to my phone, I give you permission to interrupt my life, is what makes our network a little different.

Because people have these connections that are stronger with people who they have in each other's address book. With Facebook, I have people I went to high school with, I have people I went to university with. And it's great that I can keep in touch with them on Facebook, but I wouldn't want them to call me randomly out of the blue at 7 PM.

It would be just awkward, because I haven't talked to them for years. So the graphs are different in that sense. And so we always had, kind of going back and generalizing it, we always had competition from day one. There was actually a point in time where there was a new messaging app popping up every month.

And every month, there was an article on TechCrunch how this awesome new messaging app was gonna take down all other messaging apps. And I don't know if they paid TechCrunch to write it or what. And we would just read this and we would go, they have no users. How can you write that story in TechCrunch? It just makes no sense.

And obviously, we didn't want to say anything, because we don't want to draw attention to ourselves. We actually, on purpose, tried to stay under the radar. But it was just kind of funny to see this from the sidelines, all this kind of dog and pony show that happened with all these apps. I mean, there was Ping Me, there was Message Me, there was Group Me, there was Skig, there were like, hello.

There were like ten different messaging apps at some point, which kept getting all this publicity. And we were like, good for you, have the publicity you want. We'll just send it as a radar and not have any attention drawn to us. So we always had competition, be it big guys like iMessage or Facebook Messenger, be it little guys like Kik. We always had competition.

We always, even today, we still have apps like Telegram out there and Line and Kakao. But what we said that our destiny is really in our hands. Like we can't worry too much about competition. We have to worry about our product and our users. And if we spend a lot of time thinking about competition or looking at competition, we're going to fail. Yeah.

So trying to build upon what you just talked about, this social graph. I mean, I feel like there's this whole social graph and it's actually now changing. Like, I mean, at least among me and my friends, I mean, I think I don't call people so much. I don't really send them SMS.

I would probably add people mostly on this social media, like online, Facebook, or I could add them on chat apps like this, WhatsApp and more. But I feel like this whole social graph, it is also changing slowly because people call less and people send SMS less. People like to do it more on this social media platform. Do you have a view on that? And do you think there's any opportunity on that?

Or do you think this shift is even true? I think, yeah, I think it's true. So the question was, how is it, so the world is changing. People call less, and now people add. The social networks all kind of merge into one now. Yeah, you're right. I think people call less these days, and people mostly message each other. I don't really know if we would do anything differently today or even back then.

I think for us, the focus has always been on, well, we want to provide a utility. We want to provide an application that is purely only about communication. So if you look at some other apps like WeChat or Line or Kakao, they do a lot of different things, right? You can order taxis through WeChat, and you can follow people online. Line has a whole feed concept.

And we always wanted to build something that is really, really efficient and utilitarian, and also fast and reliable. I mean, not a lot of people can have the latest and greatest smartphone, right? A lot of people have Android phones that are low-end. A lot of people have, or used to have, Blackberry phones that didn't have a lot of horsepower and a lot of memory and a lot of CPU.

So for us, it was always about reliability and efficiency of the app, and not trying to do all these different things that a lot of different social networks and apps do. Yeah? So how do you think about Messenger right now? Because now that Messenger integrated a lot of the features that WhatsApp had, I am starting to use Messenger a lot more.

And that definitely takes away from the airtime of WhatsApp. So do you have an internal competition? No, I think in general, there is still a lot of room for both apps to grow. I think Messenger is really strong in countries like North America, like the United States, for example. So I think we complement each other geographically.

I think if you look at countries like India, or Israel, or Hong Kong, or Germany, or Spain, WhatsApp has really strong foothold in those countries. And I think if you look at something like Australia or North America, you're probably going to see Messenger do really well. So a lot of it is also not necessarily split by a graph, but also by the country you're in. Yeah?

I appreciate the humility that you couldn't do it again with another app. But I'm sure people ask you all the time for help or advice. How do you determine if you hear an idea or look at an application, if it can be really well? How do you think you do that? It's very simple. The question is how do you determine if an app has a potential or is a good idea?

It has to solve a really basic problem, and it has to do it in a really simple and efficient way. And going back to what we built, we, in some ways, solved a problem, right? People had problem communicating when they were not in the same room, when they were in different cities, or in different countries, or in different time zones. And so, it's not that it wasn't impossible.

It was hard and it was expensive, and we made it easier and cheaper. And when you offer something to people that is easier and cheaper, people, of course, will use it. So, I think the number one thing to look at, for me, when I look at a product, does it solve a need and doesn't solve a need on a global scale, right?

If you solve a need for people on Stanford campus, that's great, but can it scale to a billion or two billion people? If you solve a need for people only in Silicon Valley by providing them chargers for their Teslas, great, how many people have Teslas in the world, right? It's gotta be like a global, actually a lot of people have Teslas, I don't know.

It's gotta be like a global solution that applies to everybody in every country, potentially, right? And so, that was kind of like. That's something I've seen so many startups sort of get wrong. As you said, in Silicon Valley, everyone's got the iPhone 7S, or whatever we're on now. How did you build that into the culture of the company to think about your users all around the world? I don't know.

I was just lucky with the people who were hired. And that was the other thing that I didn't mention that I should have mentioned. We ended up with a really incredible team that we mostly hired out of our personal network from ex-Yahoo and from friends of friends. We, I think ourselves, had a really good understanding.

I mean, me, myself, being an immigrant and growing up in another country and going to all these other countries, I understood that there was more to smartphone than just iPhone. That was the thing that everybody talked about and wrote about in 2008 and 2009.

So for me, especially as somebody who really liked Nokia phones before Nokia went out of business, I was like, we gotta build for Nokia because they're great phones and there's a billion Nokia smartphones out there.

So I think just me and my co-founder having that perspective probably distilled through the company and people understood that, hey, you don't want to just build for iPhones, you don't want to just build for the latest and greatest. You have all these millions of phones out there, billions of phones out there, that you gotta build for because you want those users to be using your product.

And they also were asking us to do that. Yeah? Can you talk about the business side as far as incorporation, equity, and raising money? A business side, my favorite topic, sure. So we incorporated on my birthday, on February 24th of 2009. And the reason I, the thinking that was going through, so let me back up. We were trying to submit an app into the Apple store.

And I didn't want to do it under my own name. I didn't want the app to say Yankoon, because I figured who would want to install an app made by some guy? So I figured we should probably be more official. We should have a company. I'm like, okay, so go to Google, how do you start a company, right? It's just like step one. So I got a friend of mine, he was an insurance broker.

So he had his own company, and he was three blocks away from me in Santa Clara, where I lived. And so I went to his office, because I used to buy insurance for my car and my house from him. And so I was like, dude, how did you incorporate? He's like, it's easy, you take these articles of incorporation. It's like one page with like five things written in it.

And you go to San Francisco to the state building, the Secretary of State or whatever. And he gives them $100 and they stamp it and you're done. I'm like, no way, it can't be that easy. He's like, yeah, it's that easy. I'm like, all right. So we had to submit an app, and they wanted us to show, like Apple Store wanted us to actually send them a copy of the incorporation article.

So it was like, okay, easy, I have nothing to do that day. I'm like, drive to San Francisco, get lunch, go to his office, get a stamp, get a letter, great. Send it to Apple, they look at the letters, they're like, yep, you're legit, you're a company, you can now submit under the name WhatsApp. I'm like, cool, submitted an app under the name WhatsApp. So that was how we incorporated.

In terms of, it's easier than it sounds, back then it was like a struggle for me because I never done it. How did we think about money or the whole funding thing? So we left Yahoo with some savings, because Yahoo did really well in late 90s, early 2000s. And so we had stock, we had options, we had RSUs.

So I was actually able to not only take a year off, obviously not do anything extravagant, but live off my savings for a year. And then I had enough money to where, while I was still tinkering around with an app and we didn't have exuberant costs, I actually remember when we started out, I was using my buddy's server, this guy Chuck, who also used to work at Yahoo. He used to run Yahoo Sports.

And so I used to sit next to the Yahoo Sports team, so we became friends. So I was like, hey Chuck, can I use your server? I don't want to pay $20 a month for a server. He's like, yeah, sure. So saving $20 a month on the server was a big deal for me. And so we would run originally on his server.

And I remember at some point, as we launched messaging and saw all this growth, he's like, dude, you gotta get your own servers. And I'm like, no, no, no, I'm fine. I don't want to pay for my own servers. He's like, no, no, no, you gotta get your own servers. You're taking up all this CPU and bandwidth. And I'm like, no, no, no, I'm fine, I'm fine. So eventually he kicked me off his server.

Which was great, because we switched from Linux to FreeBSD, which we all loved and we had experience with at Yahoo. And so we were able to actually, for a long time, live off our savings. And since we had all this experience on how to run the company efficiently when it comes to servers and backend and bandwidth and everything, there was not a lot of expense.

The expense started when we had to go hire people. And the idea was that, okay, well, we're gonna have to pay for more servers. We're gonna have to pay for bandwidth. We're gonna have to pay for SMS verification, because to sign up on WhatsApp, you have to verify your phone number. And we did a small angel round. I can't even remember, I think it was end of 2009.

We did a small angel round, and then we basically kinda kept our company running without losing too much money, because in the early days, iPhone app was actually paid. People had to pay a dollar to download iPhone app, while everything else was free, like Android and Blackberry and Nokia.

And so we had people paying for iPhone app, and that kinda went to, it gave us ability to pay for the bill, for electricity, for bandwidth bills, for server bills, and all that stuff. And I think probably around 2011, 2010, 2011, people started knocking on our door. We didn't even went out to look for money, which is a great situation to be in.

Cuz if you're gonna go and raise, and you need money, you're probably not gonna get the terms you want, which is, for us, was kinda worked in our favor, because all these VCs started coming to us. And they're like, you guys are doing great, we wanna partner with you, we wanna give you money, and we're like, eh, we don't really need it. Which makes them wanna invest even more.

So we kind of did this dance where we were like, no, no, we don't really want your money, come back in a few months. And eventually, after all these conversations, me and Brian sit down and we're like, okay, well, we're just wasting their time and our time. Should we just take funding or should we not?

And we decided that we should because it's better to have money in your bank account for your business than not. And that's the words of wisdom that I got from Jeff Ralston, because Jeff was like, if you can have money in your bank account, you should have money in your bank account.

Because you never know if you need to buy a building or if you need to buy some office space, because you're starting growing too quickly. And you don't want to negotiate and raise money when it's too late. Like, you want to do it when you don't need money.

So, listening to words of wisdom of Jeff Ralston, we were like, okay, let's get some funding and we partnered with Sequoia and we got money from Sequoia. Any other questions? Yeah. Did you sort of walk us through your internal psychology and confidence over the trajectory of the company?

Like, at the beginning, did you identify that the market timing was pretty spot on, or were you just sort of following what your users were saying to you? I think until we did messaging, when we're doing that dinky status feature, Obviously, it was rough, because we had no users and nobody uses our product.

And so, you're sitting there in your room, building a product and thinking, well, nobody wants it. Why am I doing this? What is the meaning of life? And all that stuff, right? And so, it's tough, right? When you're building a product that people don't really want, you feel rejected. You feel like, why aren't you using it? It's great.

I put all my energy in it. So, once we added messaging, it was like 180 degrees difference, right? All of a sudden, everybody wants our product. Everybody thinks it's the coolest thing ever. We get all these letters into our own inboxes. All these emails from people saying, how great your product is. I'm able to keep in touch with my fiance. I got married because of your product.

Your product helped me save life, because the hikers were lost, and the hikers were able to use WhatsApp share location to send. It's just night and day, right? When people want your product, and they love your product, the psychology inside a company is just different. People would come into work, and they would be like, we're building the best thing ever. People love the product. This is great.

And so, we didn't really have to do a lot of selling, even to the candidates. People who came in to interview with us basically fell into two camps. People who live in a Silicon Valley bubble and never heard of WhatsApp, and they'll be like, why would I want to work for WhatsApp? And people who kind of fell into, well, there is a whole world out there bubble.

And they were like, you guys have millions of users. My cousin in Spain, or my friend in Germany was telling me about your product, and everybody uses it. Or people would say, I went to India, or I went to Middle East, and everybody uses your product. It's amazing, how come nobody heard about you? And they're like, well, that's the purpose.

And so, basically, we have these two types of people we would interview. And so, obviously, people who had a Silicon Valley bubble didn't even want to come work for us, which is not the end of the world, because there were plenty of people who understood there was a whole big world out there, and they were happy to build product for hundreds of millions of users all over the world. Yeah.

You only get a couple questions, so. How was the fundraising experience, and why did you partner with Sequoia? Why did we partner with Sequoia? So, we had a few companies give us term sheets. One of them even gave us a blank term sheet. They're like, fill out the number you want.

And we were like, well, if they're that irresponsible with other people's money, maybe we shouldn't do that, shouldn't be partnering with them. Sequoia is just an amazing brand, right?

For me, living in Silicon Valley since 1992, and reading articles and seeing news about all these companies that went public, like Netscape, and Cisco, and Google, and knowing that a lot of them were backed by Sequoia, just made it not a very difficult decision to pick Sequoia. I've also really liked people who work there. A lot of it is just personal chemistry.

A lot of it is the VC company understanding how much to be hands-on or not. Like, Sequoia was actually really great about, they knew the numbers, they knew we were growing, they didn't meddle, right? They didn't need to come in and say, you guys are doing this wrong or doing that wrong, like, there was no need for that.

And I think we had that understanding up front, whereas it kind of made us a promise, we're like, we're here to help you financially. We're not here to help you with management. We're not here to help you write code. We're not here to help you build features. We're here just to help you grow and to help you financially.

And if you need any help, outside of that, come knock on our door and we'll try to help. And they were really helpful with stuff when we asked, like recruiting or anything like that, they would sometimes meet with prospective candidates and tell them why they should join WhatsApp. So Sequoia was really great.

It was a brand, and I remember, actually, when we had multiple term sheets, me and Brian went to Jeff Ralston's house, and we were talking to him. It was late in the evening. We were trying to just get advice on what should we do, and he kind of looked at all them, and we talked through all the different term sheets. And then he kind of said, once you're a Sequoia company, you're a Sequoia company.

It's like that branding is really strong, and it means a lot. I have an important one. Yes, last one. Last one for you. How did you get your first few thousand users back in the days of the status? Well, how did we get our first few thousand users? So there was no apps back then. And iOS, well, it wasn't iOS back then.

It was iPhone OS. And the Apple store had this category, what's new? And the trick was to submit a new app every few days, so you would always show up on top of what's new. And you would make a small change to the name. Because I think back in the old days, the name difference triggered you as a new app.

So we would basically have status, and then we would say, status for your smartphone, or status for your calls, or status for your iPhone, or updated status. We would basically tweak the name a little bit with every new version we submit, which always kept us almost always at the top of the new category.

And since there are no apps, people would go to what's new category all the time to download, to try to download whatever people would build. Because today you have thousands of apps, back in the days you had hundreds. And basically by gaming the system a little bit, we were able to, I think the loophole got closed really quickly. But luckily by that time we already had messaging. Yeah?

How do you scout up your company? I mean, how do you scout up WhatsApp into different countries? How do we scale into different countries? Yeah. We didn't have to scale. Well, we did have to do a couple of things, I take it back. So there were two things that we had to do. One, we had to build different platforms.

Because there were some countries where iPhones just didn't exist and everybody was using either Nokia or BlackBerry or a combination of two. The second thing that we started doing early on is focusing on localization. Right, so again, this kind of goes back to Silicon Valley bubble, where everybody in Silicon Valley speaks English. Therefore, the rest of the world must speak English. Not quite.

So we focused early on localization. We actually hired people internally into the company who were doing two things. They were customer support representatives, so they would help people with problems and write FAQs and help debug issues. But they were also all multilingual. So we would hire somebody who was perfect in Spanish. And we would hire somebody who was perfect in German.

And we would hire somebody who was perfect in Portuguese. And we would hire somebody who was perfect in Italian. And we would hire somebody who was perfect in all these languages where our apps were starting to grow so we could build a really good localized experience. So when you download WhatsApp in Brazil, it's not in English, it's in Portuguese.

And I think that is what helped us grow in all these countries. Yeah. Your first few employees, I know that they came from your personal network. But how did you convince them to join you? It wasn't hard. Most of them were unemployed. So let me see. So Brian joined.

So Brian left Yahoo, and he, I think, didn't really do anything for like, I think he left in 98. So he didn't really do anything for like ten years. He was one of the early Yahoo engineers. So that was one. Chris, my friend who I met from Stanford, I think he was doing this startup that wasn't really going anywhere. And he was in LA.

And he got married to this wonderful girl whose parents are actually from here. So I think for her it was an advantage to move here to be closer to her parents. So I'm like, yeah, yeah, you guys should move. You guys should move here. Move back to Northern California.

So it's a combination of her wanting to move to be closer to her parents and him not really doing anything, not having a full-time job also contributed. This guy Eugene, who was one of our early hires, he was working at a company. I actually knew him through my social network. We are and still friends.

He would always complain how he hated his job and how they were trying to screw him over by promising him stock options and never delivering. It was like, he hated it. So I'm like, well, that's a good opportunity. We had, let's see who else. We hired this guy Michael, who was in New York, wasn't really doing anything also. So he was a referral through a friend of mine from Yahoo.

So there was this guy, Michael Radman, who I used to work with at Yahoo, who was working at a startup. And we would keep in touch. And at some point I was complaining to him how hard it is to find good engineers that are smart and capable and can get shit done and don't just sit there and theorize. And he was like, I know a guy. Calls this guy Michael in New York.

And so we randomly called this guy Michael in New York. And I'm like, hey, Michael, I got your name from other Michael. Do you want to come and interview? And I figured he would say, no, I'm pretty happy in New York. But he wasn't really doing much. He's like, yeah, okay. So he came in and interviewed. And so we had, let's see, we had one of the guys, one of our engineers was in Russia.

This guy Igor. He wasn't really doing much in Russia also. It's not like they have Silicon Valley in Russia. So we were like this band of outcasts in some way. The group of people who weren't really doing much who got together and built the product. But there were also people who were working full time who actually had to try really hard to convince to join.

One of the guys, Rick, who helped us a lot with the back end, as we were scaling the back end. He was working at Yahoo. And so I think it took us six months of meetings and dinners with me and Brian trying to convince him. And we would meet him. And we would do it in a very subtle way. Not like, come join us. We're like, we have all these users and we have all this skin.

And we knew that he was really, really technical and he loved solving problems. So we weren't saying, come join us and we'll give you lots of money or options or whatever. We were playing a different angle. We were saying, hi, Rick, if you're watching this. We were like, hey, Rick, we're having all these technical problems. And we did. And we were like, we just don't know.

There was this weird issue with FreeBSD 8 where it computes for kernel resources with Erlang. And Erlang is trying to run on these 48 cores. And we don't know how there's some contention in the kernel. If only we could figure it out. We just need some help. And we knew that he loved doing this kind of stuff, right? So with him, we played a different angle. It took us a few months to convince him.

But eventually he joined and he helped us fix a lot of bottlenecks in our system. So they were all different stories. But I think the bulk of the initial kind of core of people who joined, they were from our professional and personal networks. We are out of time, unfortunately. Man, I think you're going as long as you're going. All right, if you've got. I have time.

All right, we'll go do one more question. Thank you. Sure. I think WhatsApp is a role model of being focused. I want to understand your decision making process when you get feedback from users, how you define it as a noise to your product. How you define it as a key feature we need to improve.

And how you find out that the efficiency of communicating is a core feature you want to focus on for so many years. How do we know what features to build and what features not to build? And you're absolutely right. Because in the early days, people would write in and say, we want usernames or we want pins.

Because people were so conditioned by all these messaging apps that came before us that you need to have a username or pin. So if you were using BBM or if you were using ICQ, you have some random pin that you would have to exchange with people. Or if you were using Skype or Yahoo Messenger, you had to have a username.

And people didn't understand that what we were building was this whole new idea of you don't need any of that stuff. You just sign up with your number and it's connected to your phone that has the same phone number and you go. And so in early days, a lot of feedback we took from users was useful.

They're like, we want groups, we want multimedia, we want to have additional privacy controls, we want to turn off our last scene, great, we built a lot of what people asked. But we also didn't build what people asked because we didn't think it was the right fit for our product.

Having the fundamental belief and the gut feeling that what you're doing is right and having that vision of it's just going to work. I'm going to build it using phone numbers, I'm not going to have usernames, I'm not going to have pins because it makes product more complicated. It makes product harder to use, people forget their usernames and pins and all that stuff.

Having that belief in yourself and knowing that what you're building is going to work is obviously also important. So that's kind of how we would make decisions. Okay, you go and then we'll get kicked out for the 1 PM class. Yeah? Yeah, what do you feel about security issue or future security issue of messenger app? What do I feel about security issue, future security issue?

For us, well, as you know, we rolled out end-to-end encryption. And we weren't the first ones to do it. Obviously, there were apps before us that focused on security. But we were the first ones to do it on such a global scale for everybody seamlessly, right?

I mean, there is no other app today that has more than a billion people that has end-to-end encryption enabled by default into everything you do. Individual chats, group chats, and everything else. So we didn't start out, again, this kind of goes back to what we started with. It was just a pure one-on-one messaging, right? There was no group chats. There was no multimedia.

There was no end-to-end encryption. There was no video call-ins. There was no voice call-ins. There was none of that. But over years, we made a commitment to our users that we were going to add all these features and we were going to make them work and make them work really well. And so obviously, we feel strongly that encryption is important.

And we feel strongly about end-to-end encryption, which is why we added it. And which is why we have it in our application today. Great, thank you so much. Thank you. Yeah.