How a lonely Aussie student inspired $US19 billion WhatsApp

How a lonely Aussie student inspired $US19 billion WhatsApp

February 25, 2014

David Ramli

Australia’s tyranny of distance and excessively expensive phone call charges are what transformed WhatsApp into the $US19 billion ($21 billion) company it is today, according to its co-founder and chief executive Jan Koum.

WhatsApp is a program that allows smartphone users to send each other text messages and images over the internet at no cost. It has 450 million users and was last week bought by Facebook for $US19 billion.

Mr Koum told a Mobile World Congress event in Barcelona on Monday he had originally planned to make WhatsApp a paid product, with the goal of being a profitable business.

“But there was a turning point when we realised we were actually onto something else here,” he said. “I got an email from this girl who lived in Australia who was an exchange student … where she said, ‘I’m all by myself in Australia, I don’t have any family here and it costs [too much] money for me to send them a message or call them.’

“She said ‘I cry myself to sleep because I’m all by myself’ and I couldn’t say no so I gave her a link [to the app] … and that’s the moment when I realised we have a mission here of making sure people can communicate easily and affordably no matter where you are in the world and that’s what we set out to do.”

The student’s sob story helped to ensure the company concentrated on providing a high quality service at no cost, which in turn has won it a large and valuable user base. Facebook’s multibillion-dollar deal came about despite the company earning just $US20 million in revenue last year.

Mr Koum used the same event to announce the company would launch a voice call service by the second quarter of 2014. The move is likely to further anger traditional telecommunications companies like SingTel-Optus, which have seen revenues decline thanks to the rise of cheaper rivals like WhatsApp.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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