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ENTREPRENEURSHIP

LUBM301 - Entrepreneurship
Geanina Oana Sofrone
Student ID BH70LQ
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Table of Content

1 Introduction Page 3

2 Main Body Page 4

a. About the entrepreneur who is behind the Page 4

b. About the Entrepreneurial Organization - Page 5

c. Contribution to the Economy and Society - Page 7

3 Conclusions and Recommendations Page 9

1. INTRODUCTION
We can find successful entrepreneurs all over the world, they come from different backgrounds
with different personalities and different ways of doing business.
Entrepreneurs create new businesses, new job opportunities, new products, they can be defined as “a
person who habitually creates and innovates to build something of recognized value around perceived
opportunities” [ CITATION Bol07 \l 2057 ]. In other words, an entrepreneur is someone who finds or
creates a business opportunity and is willing to risk his time and money in order to make his idea
profitable.
Once an entrepreneur puts his idea in action, we can say that he created an entrepreneurship.
Howard Stevenson the well-known Harvard Business Scholl teacher define entrepreneurship as “the
pursuit of opportunity beyond resources controlled” [ CITATION htt \l 2057 ]. Entrepreneurship plays a
very important role in every country economy, especially in difficult times. For many years it was
believed that and successful entrepreneur is born with the qualities needed but in fact during the years it
was proved that an entrepreneur can be trained and he can learn and obtain the necessary skills. There
are many real life stories of people coming from different background with different level of studies
and knowledge that became very successful entrepreneurs and their entrepreneurship managed to make
them rich and in the same time survived during bad economy, when other companies small or big were
closing down this successful entrepreneurs managed to make profit, help the society and the economy.
This essay will analyze one of this entrepreneurs Jan Koum and the founder of WhatsApp.
Social media and chatting apps are daily life needs especially in this time, 2020 may be the year
when people depended on chatting apps more then ever in order to communicate and keep in touch
with family, friend, colleagues. There are many apps available, and one of them in WhatsApp.
Established in 2009 by Brian Acton and Jan Koum the app came as a new and fresh way to
communicate, with the options of group chats, sending unlimited texts, photos and videos and in the
same time being very easy to use , WhatsApp became a pioneer in its category.
This essay is structured in three main parts:
A. About Jan Koum the founder of WhatsApp
B. About WhatsApp
C. WhatsApp contribution to the Economy and Society
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2.MAIN BODY

A. About Jan Koum the founder of WhatsApp

Even if his idea created a very successful company, Jan Koum does not like to be called an
entrepreneur. He thinks entrepreneurs create businesses to make money and he just wanted to create a
good product to help people communicate cheaper and better. Koum grew up in a poor family in Kiev
and had his first computer when he was nineteen. Some may say that he is a genius because in a very
short time he ended up working for Yahoo!. But in the business world he is a successful entrepreneur,
he saw a gap in the communication industry and not only he took advantage of it, but he created the
perfect product to fill the gap.
- Even if he does not like to be called an entrepreneur Jan Koum meets all the personality traits a
successful entrepreneur needs to have. As a teenager Koum worked a lot of jobs to help his mother
financially, he discovered his passion for technology when he was 18 and he taught himself computer
programing. His passion and self-learning capacity got him a job at Yahoo!. He studied for a few
months at San Jose State University, but he dropped out to follow his passion “programing”. As most
successful entrepreneurs Koum was not afraid of hard work, he was so focused and passionate about
his work that he managed to create an innovative a successful app and at the same time doing what he
loves.
Koum is a very creative and open-minded entrepreneur, when he was turned down by Facebook in his
job application, he bought an iPhone and realized that apps are the next big thing. His idea of creating a
adds free and instant message app having mobile users as a base created a revolution in the
communication industry. It took months of hard work and endless tests, early versions of WhatsApp
kept crashing, but Koum was determined and confident that his app will be successful and kept going,
with the help of his partner he managed to make WhatsApp the world’s biggest messaging service.
Working for Yahoo! Koum understood how people use their mobile phones, he saw that people are
tired of adds on all apps, he saw the opportunity in the market and decided to create a product and
provide a services that people would be delighted to use, and would also make their life easier.
Driven by his passion he created a product with the purpose of complete client satisfaction without the
use of profit-making ads and given the multi million users it is obvious that the world appreciated it.
- Kirzner argued that finding an opportunity is the pumping hart of entrepreneurship, according to him
“entrepreneurs find and exploit opportunities by taking advantage of economic disequilibria by
knowing or recognizing things that others do not” [ CITATION Kir73 \l 2057 ]
The opportunity was there, it just needed a visionary mind like Koum to create the perfect product
to fill the needs of millions of people including his own needs. Jan Koum revealed that the idea for the
messaging app came about so he could stop missing out on calls on his new smartphone because apart
from all the ads that made al communication apps hard to use, there wasn’t the option of knowing
when someone was available for a chat or phone call. It was then when he realized the necessity of an
app that could let people know if you were available or busy through an easy to use feature called
Status. [ CITATION htt2 \l 2057 ]
The simplicity and utility of WhatsApp made it a successful app, but the timing played a decisive role
in its success. By recognizing the potential offered by Apple’s new app store and moving quickly to
develop and release his messaging app, Koum ensured that his would be one of the first professionally
designed apps on the market.[ CITATION Car \l 2057 ]
- To be a successful entrepreneur you need to bring something new or different into the market.
Innovation means using new technology and using new ways of thinking to add value to an existing
idea or product and to make substantial changes in society.[ CITATION Lis20 \l 2057 ]. And this is exactly
what Koum did, he took a service already accessible to the users and made it better, different.
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Innovation gives competitive advantage, in a market with so many established players such as
Facebook, Viber and many more, WhatsApp gained competitive advantage thru its innovative system
and by being an app that offered a safe and quality way of communicating. Innovation also brings loyal
customers, in WhatsApp case this was gained by offering a service free of ads, customers appreciated
this, WhatsApp has more users then all the other competitive apps. Innovation also bring brand
recognition,  KFC is known for its unique flavors, Apple is known for its cutting edge technology,
and WhatsApp is known for its safety communication without time wasting ads.
WhatsApp had an explosive growth, and this is because of the true innovation the brought to the
communication and because of the ambitious entrepreneur that stood behind it. The difference between
Koum App and the other apps that were on the market is the lack of ads, when WhatsApp started to
became popular Koum had a lot of multi zeros offers from companies that wanted to make publicity
thru his app but he rejected all. He thought is lack of respect and an insult to his user’s intelligence to
add disrupting advertisements to their chats. [ CITATION Bae13 \l 2057 ]. Koum explained that when a
company sells ads, the engineers behind the app work hard to come up with effective ways to minimize
the data they collect from users, to update the servers that must hold that data and to create codes so
they can collect as much personal data as possible. He decided that his engineers must work on much
important things such as fixing bugs, enhancing the existing features or adding new ones, keeping his
user’s conversations private and safe.[ CITATION htt4 \l 2057 ]

B. About WhatsApp as an Organization

Koum worked for Yahoo for nine years, he saw the fast rise of the internet giant but also his fall.
Koum got bored with Yahoo, he also could not stand the integrated ads into its service, and he wanted
to create something different. He was not the only Yahoo engineer with this perspective, his colleague
Brian Acton wanted the same. Even if Koum started the project on his own using all his savings, after
building a base of 250.000 active users he decided to bring along as a co-founder his colleague Brian
Acton. They decided to team up and create a messaging service free of all the problems they saw on
Yahoo. They made firm commitments specially to deliver a stable and easy to use service, free of ads
and without storing user’s information. They had the idees, they had the startup of what seemed to be a
successful business, but they were running out of money. In October 2009, Koum got five friends,
Yahoo employees, to invest $250.000 in seed funding. From there they continued to grow the app
Between 2009 and 2015, WhatsApp went from a non-existing app to the largest messaging app in the
world with more than 900 million active users. The biggest cost for the company was sending
verification texts to users, and in the same time they were working without a salary draining out their
bank account. This is when they decided to switch the app from “free” to “paid” ($1), like this
WhatsApp was earning around $5000 a month. Even if they were not investing anything in advertising
the app was getting a lot of attention, in 2011 WhatsApp was in the top 20 apps. Now they were
getting a lot of investment offers from Venture Capitalists, but Koum and Acton were rejecting them,
they needed to make on their own merits. Late in 2011 after promising not to push advertising models
on the app, the co-founders accepted a $8 million investment from Sequoia. In 2013 WhatsApp was
serving 200 million users, at this point they decided to take more founding just as insurance in case
something goes wrong. Sequoia invested another $50 million, growing WhatsApp value to $1.5 billion.

Just one year after they got an offer from Facebook, that ended up with the acquisition of WhatsApp
for $19 billion in a combination of stock plus cash.
Being a strong leader and having the correct leadership skill is crucial for every busines large or
small. Qualities like integrity, empathy, confidence and the ability to inspire others make Jan Koum a
good leader. Setting the right example is how leaders manage to inspire the people around them, is how
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they manage to create a team with a shared vision. Koum new from the beginning what he wanted, and
he followed his principles all the way, even when he accepted investors in his company, he made sure
they follow his vision. Koum was always in a continuous development, this made him a strong leader
and in the same time made WhatsApp a strong and successful app. As a leader you need to have
security in yourself and to be confident that what you and your team are creating will succussed. Koum
new from the first time he had an iPhone in his hand that his idea will change the communication
industry, even if at the beginning was hard and unpaid work he didn’t give up, he stook to the plan,
made very less compromises and at the end all paid off. As a no name in the market Koum managed to
gain trust by being hones and transparent, stating clear expectations and goals and by welcoming all
ideas. As a leader you should be able to trust your judgment, it is important to follow your instinct and
trust yourself. Koum trusted his instinct that an app without ads and with the possibility of status will
bring him not only success but also revolutionized the communication apps.
[ CITATION Lol18 \l 2057 ]
Since 2009 WhatsApp continued to grow and is still growing, the skyrocketed success made
history with 1.5 billion users, 1 million new registers every day. When Koum launched his app, he had
a straightforward position: he would create a messaging app that people wanted and needed, without
bombarding them with advertising. This was hardly a revolutionary product in terms of technology but
in terms of communication it was a revolution because it easy to use and secure. This was enough to
make WhatsApp go viral and from to produce an incredible growth powered by word of mouth among
online communities. Koum knew what his costumers wanted and he stuck on it, avoiding corporate
temptation like doing multiple things at once, this helped him grow his number of costumers very fast,
he even got to the point where he had to transform the app from a free app to a paid one just to make
sure the servers and the platform can sustain the number of users. By deciding to ban ads from his
product, Koum took a huge risk, letting the company value to depend on building a big base of users
and not worried about monetization. This clearly paid off, WhatsApp has a revenue, but it remains
based on volume, and at the same time the volume depends on utility. [ CITATION Pau \l 2057 ]

Fig 1: WhatsApp users’ growth. [ CITATION Sta \l 2057 ]

C. WhatsApp contribution to the Economy and Society

Individuals use WhatsApp to communicate with friends and family, businesses, doctors,
government agencies and many other entities. With more than one billion users WhatsApp is the most
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used app. Relying on mobile data or on internet connection, WhatsApp is focused on users and in
creating tools to make consumer-business communication easy. WhatsApp contributes to the
economic growth by lowering the communication barriers, facilitating less expensive communication,
faster and easier.
Ways WhatsApp is driving communication growth:
- WhatsApp is driving the economic growth by lowering production costs and increasing
communication efficiency in businesses. WhatsApp help businesses by facilitating interaction
between colleagues, supervisors and other employees. WhatsApp saves time by offering a good
internal communication, this helps companies to increase their productivity
- WhatsApp improves customer service, more and more companies use WhatsApp to communicate
with stores, service providers and customers. People use WhatsApp to make or confirm
appointments, to make or track orders. By offering such an efficient and easy to use service,
WhatsApp enabled businesses to lower their labor cost and to attract more customers.
- Affordable and fast communication lowered the cost for businesses by lowering the marketing
costs. Lower costs mean increasing profit and contribution to growth.
- More than 20% of WhatsApp users communicate with business partners or investors. Affordable
and fast communications decrease costs for businesses, increasing profits
- and contributing to growth.
- By improving public sector services, WhatsApp became a very useful tool for schools, health care
providers, councils and many other governmental agencies. Allowing a free communication for
this agencies WhatsApp enabled them to use their already tight budget to more useful services for
the society instead of using the money to pay for communication. [ CITATION Gre \l 2057 ]

WhatsApp is a free, downloadable app, that allows users to communicate using their phone internet
connection. In order to use WhatsApp in the most effective way you need to have a good internet
connection. Improvement in broadband speed affected in a positive way the economy by developing
new internet services in order to have a good connection wherever you are, improvement in goods and
services, increased competition between broadband providers. WhatsApp complement all previous
communication innovations, such as Email, mobile phones, text messaging and improved broadband
speed.
Mechanisms through which WhatsApp may impact the economy:
- Lower Production Costs/Increased Work Efficiency by Using WhatsApp for Internal Business
Communication. Using WhatsApp in a workplace setting can increase workers productivity by
saving time and improving workflow efficiency by facilitating documents and image
transmissions. If workers productivity is improved, the company productivity is improved as well,
like this WhatsApp may contribute to overall economic growth. Using WhatsApp group chats
supervisors and managers can communicate quickly and safe, to set up meetings and to save time.
For example: a transport business owner with business all over Europe uses WhatsApp to
communicate with its drivers in real time and more important safe and free.
- Increased Sales/Revenues Related to More Responsive Client/Customer Service via WhatsApp.
Apart from internal communication, companies use WhatsApp to communicate with customers,
clients or patients. Moving costumer service to WhatsApp platform may attract more customers
and may increase sales and revenue gains. WhatsApp users find it more easier to race a concerns
about a product or service or to get in touch through WhatsApp with the costumer service
department, rather that staying on huge queues on the phone, going thru the robotic authentication
system. WhatsApp makes it easy to interact with service providers, including mechanics, barbers,
lawyers, accountants and many more. For example: a driving instructor that owns a driving school
uses WhatsApp to schedule driving lessons.
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- Lower Marketing Costs Through the Use of WhatsApp as a Promotional Tool Making. Apart from
using WhatsApp as a communication tool, businesses are using it to promote or advertise services
and products. Because WhatsApp is a free to use app, using it to advertise may decrease
promotional costs. Promoting new inventory to existing customers via WhatsApp is a new way of
promoting products. Also, services providers use WhatsApp to let costumer know about their
availability, discounts and promotions, and some use it to provide maintenance to services already
provided. For example: a real estate agency uses WhatsApp to let its costumer know about new
proprieties available on the market and to remind tenants about rent day.
- More Efficient Communications with Investors and Financial Contributors. WhatsApp may enable
or facilitate relationships between business partners, investors and founders. Businesses use
WhatsApp to set up and confirm meetings, to discuss future work or to provide information abut
products and services.
- Improvements in Public and Social Sector Services Due to WhatsApp. WhatsApp not only
changed the private sector, but also affected in a good way the public sector and the nonprofit one.
WhatsApp is used to interact with doctors, teachers, volunteer organizations and public
institutions. For example: a schoolteacher may use WhatsApp to let parent know of their kid’s
absences or to send homework. [ CITATION Gre \l 2057 ]

WhatsApp and its role in people live during the global pandemic
Covid-19 is affecting everyone, it’s a global pandemic, and if ever there was a time for collaboration,
this is it. The ability to communicate between colleagues within utilities has always been quite good,
but what we are seeing now is that walls between utilities have crumbled.[CITATION htt3 \l 2057 ]
WhatsApp helps people to connect and communicate, especially during the coronavirus pandemic
when restrictions were and still are in place. Using WhatsApp features like voice and video calls can be
a huge source of support for the vulnerable ones. WhatsApp helped during the pandemic by facilitating
Communication with health care providers, educators, local government authorities. During the
pandemic local health care provider servicer were closed the only way to get in touch with your doctor
was thru phone call, but how can a doctor set a right diagnostic if he doesn’t see the pacient? This is
where WhatsApp played a very important role by facilitating video calls, easy to use, with a very good
connection and quality image.
School were also closed during the pandemic, but education has to continue, WhatsApp became a very
important tool for teachers and for students, helped them to keep in touch, to transfer files such as
homework and learning materials.
During the pandemic WhatsApp wasn’t used just for good things, it was used for misinformation as
well. With a service the provides such a speed communication a simple rumor or gossip can travel all
over the world in minutes. And because WhatsApp is fully encrypted due to their privacy policy, it
can’t be stopped. To avoid the spread of misinformation WhatsApp tightened the limits of message
forwarding. The company has now reduced the amount of chats to which users can share frequently
forwarded content to just one at a time.[ CITATION htt5 \l 2057 ]
During the Covid 19 pandemic WhatsApp has seen a 40% increase in his usage as more users go online
to stay connected with family friend and colleagues. Not long ago UK government was criticizing
WhatsApp for enabling encrypted communication, but now they are relying on the platform to keep
people updated about the coronavirus pandemic. Anyone who subscribes to the official advice system
will receive updates and news on WhatsApp. The government even launched a coronavirus advice
campaign on WhatsApp in order to battle the misinformation about the pandemic.
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3.CONCLUSIONS AND RECOMANDATION

Social media and chatting apps are part of our modern lives, statistics show that 85% of people
are addicted to their mobile phones, tablets and computers chatting more than three hours a day. People
tend to search for chatting apps that are easy to use and safe, apps that respect user privacy and is not
after their personal date are the most used ones. The explosion of digital technology forces companies
to speed up their innovation. Companies like WhatsApp, that raise up from nothing and become leaders
in a few years not only excel in developing digital technology but also find solutions for existing
problems by combining elements in distinctive and unconventional ways.
Even if he is known all over the world, Koum remains very realistic, he knows that if
WhatsApp doesn’t provide the best service for its users it may end up as Yahoo. He is aware of the
competition and all the other apps that come to the market every day. Even if he sold WhatsApp to
Facebook he remains a important figure in the company, making sure his basic principles are still
followed. Innovative leadership inspire others to think outside the box, creates a good environment for
new ideas. Leaders like Koum tend to be visionaries and motivate their followers. [ CITATION DrK \l 2057
]

Appendix 1
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