Page 65 - Forbes Magazine-October 31, 2018

FORBES BRIAN ACTON

etize WhatsApp, he pushed back as Facebook questioned the in the Facebook universe and continued to operate for a
encryption he had helped build and laid the groundwork to while out of its original offices, was “a product group to him,
show ads and facilitate commercial messaging. Acton also like Instagram.”
walked away from Facebook a year before his final tranche So Acton didn’t know what to expect when Zuck beck-
of stock grants vested. “It was like, okay, well, you want to do oned him to his office last September, around the time Acton
these things I don’t want to do,” Acton says. “It’s better if I get told Facebook brass that he planned to leave. Acton and
out of your way. And I did.” It was perhaps the most expensive Koum had a clause in their contract that allowed them to get
moral stand in history. Acton took a screenshot of the stock all their stock, which was being doled out over four years,
price on his way out the door—the decision cost him $850 if Facebook began “implementing monetization initiatives”
million. without their consent.
He’s following a similar moral code now. He clearly To Acton, invoking this clause seemed simple. The Face-
doesn’t relish the spotlight this story will bring and is quick book-WhatsApp pairing had been a head-scratcher from
to underscore that Facebook “isn’t the bad guy.” (“I think of the start. Facebook has one of the world’s biggest advertis-
them as just very good businesspeople.”) But he paid dearly ing networks; Koum and Acton hated ads. Facebook’s added
for the right to speak his mind. “As part of a proposed settle- value for advertisers is how much it knows about its users;
ment at the end, [Facebook management] tried to put a non- WhatsApp’s founders were pro-privacy zealots who felt their
disclosure agreement in place,” Acton says. “That was part vaunted encryption had been integral to their nearly unprec-
of the reason that I got sort of cold feet in terms of trying to edented global growth.
settle with these guys.” This dissonance frustrated Zuckerberg. Facebook, Acton
Facebook is probably the most scrutinized company on says, had decided to pursue two ways of making money from
WhatsApp. First, by showing ads in WhatsApp’s new Sta-
tus feature, which Acton felt broke a social compact with its
ACTON’S PLAN WAS SHOT users. His motto at WhatsApp had been “No ads, no games,
no gimmicks”—a direct contrast with a parent company that
DOWN BY SANDBERG.
derived 98% of its revenue from advertising. Another motto
“HER WORDS WERE ‘IT had been “Take the time to get it right,” a stark contrast to
WON’T SCALE.’ ” “Move fast and break things.”
Facebook also wanted to sell businesses tools to chat with
WhatsApp users. Once businesses were on board, Facebook
the planet, while simultaneously controlling its image and hoped to sell them analytics tools, too. The challenge was
internal information with a Kremlin-like ferocity. “Thanks WhatsApp’s watertight end-to-end encryption, which
to the team’s relentless focus on building valuable features, stopped both WhatsApp and Facebook from reading mes-
WhatsApp is now an important part of over a billion people’s sages. While Facebook didn’t plan to break the encryption,
lives, and we’re excited about what the future holds,” says a Acton says, its managers did question and “probe” ways to
Facebook spokesperson. That kind of answer masks the kind offer businesses analytical insights on WhatsApp users in an
of issues that just prompted Instagram’s founders to abrupt- encrypted environment, according to Acton.
ly quit. Kevin Systrom and Mike Krieger reportedly chafed at Facebook’s plans remain unclear. When Sandberg, Face-
Facebook and Zuckerberg’s heavy hand. Acton’s account of book’s COO, was asked by U.S. lawmakers in early Septem-
what happened at WhatsApp—and Facebook’s plans for it— ber if WhatsApp still used end-to-end encryption, she avoid-
provides a rare founder’s-level window into a company that’s ed a straight yes or no, saying, “We are strong believers in
at once the global arbiter of privacy standards and the gate- encryption.” A WhatsApp spokesperson adds that What-
keeper of facts, while also increasingly straying from its en- sApp would begin placing ads in its Status feature next year,
trepreneurial roots. but that even as more businesses start chatting to people on
It’s also a story any idealistic entrepreneur can identify the platform, “messages will remain end-to-end encrypted.
with: What happens when you build something incredible There are no plans to change that.”
and then sell it to someone with far different plans for your For his part, Acton had proposed monetizing Whats App
baby? “At the end of the day, I sold my company,” Acton says. through a metered-user model, charging, say, a tenth of a
“I sold my users’ privacy to a larger benefit. I made a choice penny after a certain large number of free mes sages were
and a compromise. And I live with that every day.” used up. “You build it once, it runs everywhere in every
country,” Acton says. “You don’t need a sophisticated sales
DESPITE A TRANSFER OF SEVERAL BILLION dollars, Acton force. It’s a very simple business.”
says he never developed a rapport with Zuckerberg. “I Acton’s plan was shot down by Sandberg. “Her words
couldn’t tell you much about the guy,” he says. In one of their were ‘It won’t scale.’ ”
dozen or so meetings, Zuck told Acton unromantically that “I called her out one time,” says Acton, who sensed “greed”
Whats App, which had a stipulated degree of autonomy with- at play. “I was like, ‘No, you don’t mean that it won’t scale. You

54 | FORBES OCTOBER 31, 2018