The Entrepreneur Who Became a Billionaire After Being Rejected by Facebook

Jan Koum had a rough upbringing. At 16, he immigrated from Europe to the United States with his mother and grandmother, who were fleeing political unrest and religious persecution. Jan’s mother got a job as a babysitter in California while Jan went to school and worked at a grocery store cleaning floors.

His father planned to join Jan and his mother once they were settled, but he got sick and died five years later, unable to be reunited with his family. Jan’s mother was diagnosed with cancer, to which she would succumb just three years after Jan’s father passed away.

Jan Overcame Adversity

Perhaps not surprisingly given the adversity in his life, Jan acted out in school and got into trouble. He disliked school and what he found to be the shallow relationships of high school students. He barely graduated, but during his teen years in the US, Jan began to teach himself. He became interested in computers and networks and bought books and manuals on these topics at a nearby used bookstore, returning them when finished to get his money back.

He taught himself network engineering and eventually enrolled at San Jose University to study computer science and mathematics while getting involved in online network groups and hacker communities. Like high school, college also wasn’t appealing to Jan. “I hated school,” he told Forbes.

During college, Jan took a part-time job with the large accounting firm Ernst & Young, helping with computer security audits. One of E&Y’s clients with which Jan worked was Yahoo! and he was offered a job with the tech company while still studying at San Jose University. He quit college soon after to work full-time at Yahoo!.

Jan got bored with Yahoo!. At 31, he quit and took some time off to travel the world with a friend who also left Yahoo!. The duo applied for work at Facebook, but both were turned down. Two years later Jan bought an iPhone. He saw the potential of the App Store world and began working on code to create a new application that would streamline communication and conversation. Frustrated by his inability to get it working, Jan Koun almost gave up.

American Success Story

He stuck with his invention a bit longer and in 2009, at age 33, Jan Koum founded the text messaging platform WhatsApp with his former Yahoo! colleague Brian Acton. In 2014, it had 400 million users worldwide, and the pair sold the company to Facebook for $19 billion.

They might not have gotten that job offer at Facebook, but the offer they eventually got was something far better. By 2017, WhatsApp had 1.3 billion monthly users and billionaire Koum, who spent his childhood in communist Ukraine, became an American success story, showing the transformative power of freedom, entrepreneurship, and self-education.

Koum told WIRED Magazine:

I grew up in a society where everything you did was eavesdropped on, recorded, snitched on…Nobody should have the right to eavesdrop, or you become a totalitarian state – the kind of state I escaped as a kid to come to this country where you have democracy and freedom of speech. Our goal is to protect it.

Koum’s teenage self-education took place in the 1990s, before knowledge and information were so widely available and easily accessible, often at our fingertips. Today, a kid like Koum wouldn’t have a used bookstore as his only resource. He would be able to learn network engineering or any topic that interested him through free, online information portals and connect easily with people from around the world, finding mentors and like-minded peers—thanks in large part to inventions like WhatsApp.

Technology increasingly facilitates self-education, leading to new opportunities to pursue passions and uncover talents. Unlike formal education, that to many people like Koum can be stifling, self-education can be liberating. With self-education, you can become the agent of your own life and livelihood, setting your own path. As the author and entrepreneur Jim Rohn wrote: “Formal education will make you a living; self-education will make you a fortune.”

For Koum, that fortune was big, but the rest of us gained too. Freedom and entrepreneurship lead to the innovations that improve our lives and give our own dreams a boost, and self-education is the pathway to get there.

Click here to sign up for my weekly education and parenting email newsletter!

Open This Content

Pork is Not the Problem

It’s that time of year: Citizens Against Government Waste just released its annual “Pig Book,” a compendium and analysis of pork barrel spending, aka earmarks, by the US Congress in 2019.

Summary: Congressional appropriations for 2019 include 282 earmarks, up from 232 last year. The cost comes to $15.3 billion, up from $14.7 billion.

That sounds like a lot of money, and it is. But not nearly as much as one might think, in the scheme of things.

The federal government plans to spend more than $4.5 trillion in 2019. Those earmarks constitute a whopping one third of one percent of that total.

Critics of earmarks point out, correctly, that they’re used by members of Congress to direct federal spending to their own districts, not always with much “public good” justification (cue complaints about $500,000 for the Sparta Teapot Museum, $7.5 million for golf education, etc.)

True, all of it — but it’s baked into any political process. Whether formal earmarks exist or not, politicians will support bills that spend money in their districts, oppose bills that don’t, shill for their favored projects, and make deals to bring home the bacon.

And, it should be mentioned, earmarks do not directly increase total spending. They simply require that if Congress appropriates $10 billion for Purpose X, $1 million of that $10 billion be spent on Project Y.

The problem in that hypothetical isn’t the $1 million earmark, it’s the $10 billion appropriation.

The problem with the real numbers isn’t $15 billion in earmarks, it’s $4.5 trillion in federal spending.

If Congress has $9 million to spend on a fruit fly quarantine program and $3 million to blow on bad loans to ship buyers (among 2019 earmarks), Congress has too much money to spend on, respectively, Agriculture and THUD (Transportation, Housing, and Urban Development).

Congress DOES have too much money — money it takes from all of us via various tax schemes, and money it borrows in our names on the promise to bond-holders that it will beat us out of it, with interest, later.

Earmarks could be part of the answer to that problem.

If Congress specified in greater detail where and how EVERY dollar of EVERY appropriation must be spent, instead of just handing the dough over the executive branch under broad categories, we’d have a much better idea of where it was going — and be better prepared to protest, and bring pressure to bear against, wasteful spending.

It would also clarify “separation of powers” violations, such as President Donald Trump’s illegal and unconstitutional “emergency” misappropriation of  Treasury and Defense Department funds for his pet “border wall” project, making it easier to rein in presidential misbehavior.

Silly earmarks are fun to point out, but concern over them comes at the expense of addressing the bigger problem: The spending is too damn high.

Open This Content

In Sync: How Business Responds to Gratis Government

Whenever people criticize government provision of a product, clever analysts often demur that private suppliers who compete with government have exactly the same problems.  Part of Helland and Tabarrok‘s case for the Baumol effect in education, for example, is that prices have risen at the same rate in both the public and private sectors:

Prices are much lower at public than at private institutions. The vertical scale is a ratio scale, so equal slopes mean equal rates of growth. Thus, although prices are lower at public institutions, the rate of growth in prices has been similar at private and public institutions. Between 1980 and 2015, real prices more than doubled.

OK, let’s step back.  Picture a typical government service.  The price: gratis.  The quality: mediocre.  Private competition, however, remains legal.  Should we expect the private part of the market to look just as it would under laissez-faire?

No way.  Unless the government rations the free mediocre product, consumers have virtually no reason to ever pay for products of mediocre or lower quality out of their own pockets.   At minimum, then, government’s gratis products kill private production of all products of equal or lower quality – a textbook case of predatory pricing.

That’s not all.  Gratis production also effectively kills private provision of products of moderately higher-than-mediocre quality.  After all, if you can get a C+ product for free, who wants to pay full price for a B- alternative?  With gratis public provision, private providers must convince consumers that the marginal quality improvement is worth the total price of the product.  A tall order.

What does this mean?  Well, if public schools add more low-value services, private schools must keep pace in order to compete.  If public schools add more sports, more specialized teachers, or more courses, private schools that fail to keep up will lose their customers.  The first rule of private competition against gratis government is: Always keep your product quality well above the government’s.  This remains true even if the government adds services that consumers value well below cost.  If you can get them for free from the government, why pay extra for a private school that refuses to offer them?

The lesson: When government supplies free (or highly subsidized) products, we should expect private suppliers to supply gold-plated versions of the standard government-issue.  As a result, their prices and costs will be closely synced.

There are admittedly some exceptions: If government is spending money for no gain at all, private competitors needn’t bother.  If government supplies numerous expensive low-value services, private competitors might decide to just outshine the government on other dimensions.  Most realistically, if government refuses to provide some cheap, highly-valued options (such as religious education), then private competitors can win customers by filling the gap.

Yet overall, when there is a dominant public sector with a private fringe, we should expect the Helland-Tabarrok pattern – without or without a Baumol effect.  Given the pathologies of the public sector, it’s nice to have a private option, but don’t get too excited.  The private options will generally be extravagant, because gratis government strangles budget-friendly alternatives.  Tragically, this in turn sustains the illusion that in the absence of government, only the rich would be able to afford whatever the government now provides.

P.S. Another reason to expect public and private education to closely resemble each other is that both are almost always non-profit.  Morally, yes, there is a major difference between public and private non-profits.  Economically, however, they’re very much alike, because both give managers flimsy incentives to raise value or cut costs.

Open This Content

More Charter Schools Translates to Fewer Homeschoolers, Study Says

It’s hard to compete with free. More charter schools in a given area could reduce the number of homeschoolers, new research finds. In their study published this month in the Peabody Journal of Education, scholars Corey DeAngelis and Angela Dills looked at the impact of school choice options on parents’ homeschooling decisions. They found that homeschooling rates decline after charter school laws are passed in a given state, particularly the longer those laws are in place.

Opportunity Cost in Action

Parents want more education choice, and mechanisms that lower the cost of alternatives to one’s assigned district school are sought-after. Even though many families homeschool on a budget and more parents work and homeschool, there can be both real costs and opportunity costs to homeschooling. DeAngelis told me in a recent interview:

These are the first empirical findings on the subject, so we definitely need to research the topic further. However, our results tend to suggest that expansion of charter schools decreases homeschool market share by enticing homeschool families to switch to the “free” option.

It makes sense that the prevalence of free public charter school options may encourage families to choose a charter school over homeschool. The top motivator for today’s homeschooling families is “concern about the school environment, such as safety, drugs, or negative peer pressure.” A nearby charter school gives parents the choice of a different school environment at no additional cost, with homeschooling taking a back seat.

DeAngelis and Dills also explored the impact of voucher programs on homeschooling rates. Could voucher programs lead to more homeschoolers if vouchers were available to homeschooling families, thereby reducing homeschooling costs? Or would voucher programs decrease the cost of private schools and prompt more homeschooling families to enroll their children in a private school? Additionally, might a voucher program act as “Trojan Horse,” inviting more government regulation of private schools that accept voucher money and therefore leading more families toward the freedom of homeschooling?

Choice Is Choice

The researchers found that unlike charter schools that can lower homeschooling rates, the results from vouchers are less clear. Their analysis revealed either statistically insignificant outcomes of vouchers on homeschooling prevalence or slight decreases in homeschooling once the voucher program was in place for a while. According to DeAngelis and Dills, Liberating more parents and children from a mandatory district school assignment is a positive step toward educational freedom for all.“The mixed results for vouchers may be a result of private schools moving away from supporting homeschooling in the wake of the adoption of a voucher program.”

While homeschooling proponents might lament the potential decline in homeschooling rates when charter schools become more abundant or when voucher programs are around for a few years, the overall trend toward more parental choice in education is something to celebrate.

Liberating more parents and children from a mandatory district school assignment is a positive step toward educational freedom for all. Still, DeAngelis adds that “homeschool families should consider the loss of educational freedom when switching to public charter schools,” and they should generally support Education Savings Accounts (ESAs) over charter school expansion.

Click here to sign up for my weekly education and parenting email newsletter!

Open This Content

If the University of Alabama Doesn’t Need Hugh Culverhouse, Jr.’s Money, it Doesn’t Need Yours

Last year, Florida attorney and philanthropist Hugh Culverhouse, Jr. donated $26.5 million to the University of Alabama. The university, grateful for its largest private contribution ever, reciprocated by naming its law school after him. Hugh and UA, sittin’ in a tree …

On June 7, the UA’s board of trustees voted to return his donation (and presumably rename the school). Love-hate relationship, I guess.

Why?  They claim it’s over an argument as to how they spend the money,  but he says they’re lying and the reason he offers is a lot more believable given the timing.

His discussions with the school over the uses his donation are put to are ongoing. But last week, he said something they didn’t like. Specifically, he publicly urged students to boycott the school in protest of Alabama’s new abortion law.

Agree with him or not — on abortion, on the specific law, or on how students should respond to that law — Hugh Culverhouse, Jr. is a private citizen with a right to say anything he pleases.

Agree with the board of trustees or not on what Hugh Culverhouse, Jr. should say, the University of Alabama is a “public” institution that expects taxpayers nationwide to pick up a substantial portion of its operating costs.

The university’s financial report for 2017-18 notes nearly $45 million in federal grants and contracts and another $213 million in student loans funded by the US Department of Education through the Federal Direct Student Loan Program.

Check your voicemail. Any calls from the board of trustees asking whether it’s OK for them to keep taking your money while refusing Hugh Culverhouse, Jr.’s? I didn’t think so.

If you call up the university and start trying to tell them how to spend your money, or put out a press release urging students to cheer for Tennessee at the next Crimson Tide – Volunteers game, do you think they’ll send you a refund check? Feel free to try it and see what happens, but don’t hold your breath.

If the University of Alabama is so flush that it doesn’t need Hugh Culverhouse, Jr.’s money, they’re getting way too much of yours.

A federally funded university which turns down a private donation over the donor’s constitutionally protected speech should have the full amount of that donation subtracted from its federal funding for the following year.

And by the way, remember to cheer for Tennessee at the next Crimson Tide – Volunteers game.

Open This Content

100 Reasons to Homeschool Your Kids

This is my 100th article for FEE.org, so here are 100 reasons to homeschool your kids!

  1. Homeschoolers perform well academically.
  2. Your kids may be happier.
  3. Issues like ADHD might disappear or become less problematic.
  4. It doesn’t matter if they fidget.
  5. YOU may be happier! All that time spent on your kids’ homework can now be used more productively for family learning and living.
  6. You can still work and homeschool.
  7. And even grow a successful business while homeschooling your kids.
  8. Your kids can also build successful businesses, as many grown unschoolers become entrepreneurs.
  9. You can be a single parent and homeschool your kids.
  10. Your kids can be little for longer. Early school enrollment has been linked by Harvard researchers with troubling rates of ADHD diagnosis. A year can make a big difference in early childhood development.
  11. Some of us are just late bloomers. We don’t all need to be on “America’s early-blooming conveyor belt.”
  12. Then again, homeschooling can help those kids who might be early bloomers and graduate from college at 16.
  13. Whether early, late, or somewhere in the middle, homeschooling allows all children to move at their own pace.
  14. You can choose from a panoply of curriculum options based on your children’s needs and your family’s educational philosophy.
  15. Or you can focus on unschooling, a self-directed education approach tied to a child’s interests.
  16. Homeschooling gives your kids plenty of time to play! In a culture where childhood free play is disappearing, preserving play is crucial to a child’s health and well-being.
  17. They can have more recess and less homework.
  18. You can take advantage of weekly homeschool park days, field trips, classes, and other gatherings offered through a homeschooling group near you.
  19. Homeschooling co-ops are growing, so you can find support and resources.
  20. Homeschooling learning centers are sprouting worldwide, prioritizing self-directed education and allowing more flexibility to more families who want to homeschool.
  21. Parks, beaches, libraries, and museums are often less crowded during school hours, and many offer programming specifically for homeschoolers.
  22. You’re not alone. Nearly two million US children are homeschooled, and the homeschooling population is increasingly reflective of America’s diversity. In fact, the number of black homeschoolers doubled between 2007 and 2011.
  23. One-quarter of today’s homeschoolers are Hispanic-Americans who want to preserve bilingualism and family culture.
  24. Some families of color are choosing homeschooling to escape what they see as poor academic outcomes in schools, a curriculum that ignores their cultural heritage, institutional racism, and disciplinary approaches that disproportionately target children of color.
  25. More military families are choosing homeschooling to provide stability and consistency through frequent relocations and deployments.
  26. While the majority of homeschoolers are Christians, many Muslim families are choosing to homeschool, as are atheists.
  27. Homeschooling has wide bipartisan appeal.
  28. More urban parents are choosing to homeschool, prioritizing family and individualized learning.
  29. Religious freedom may be important to many homeschooling families, but it is not the primary reason they choose to homeschool. “Concern about the school environment, such as safety, drugs, or negative peer pressure” is the top motivator according to federal data.
  30. Fear of school shootings and widespread bullying are other concerns that are prompting more families to consider the homeschooling option.
  31. Some parents choose homeschooling because they are frustrated by Common Core curriculum frameworks and frequent testing in public schools.
  32. Adolescent anxiety, depression, and suicide decline during the summer, but Vanderbilt University researchers found that suicidal tendencies spike at back-to-school time. (This is a pattern opposite to that of adults, who experience more suicidal thoughts and acts in the summertime.) Homeschooling your kids may reduce these school-induced mental health issues.
  33. It will also prevent schools from surreptitiously collecting and tracking data on your child’s mental health.
  34. Your kids’ summertime can be fully self-directed, as can the rest of their year.
  35. That’s because kids thrive under self-directed education.
  36. Some kids are asking to be homeschooled.
  37. And they may even thank you for it.
  38. Today’s teens aren’t working in part-time or summer jobs like they used to. Homeschooling can offer time for valuable teen work experience.
  39. It can also provide the opportunity to cultivate teen entrepreneurial skills.
  40. Your kids don’t have to wait for adulthood to pursue their passions.
  41. By forming authentic connections with community members, homeschoolers can take advantage of teen apprenticeship programs.
  42. Some apprenticeship programs have a great track record on helping homeschoolers build important career skills and get great jobs.
  43. Self-directed learning centers for teen homeschoolers can provide a launchpad for community college classes and jobs while offering peer connection and adult mentoring.
  44. With homeschooling, you can inspire your kids to love reading.
  45. Maybe that’s because they will actually read books, something one-quarter of Americans reported not doing in 2014.
  46. Your kids might even choose to voluntarily read financial statements or do worksheets.
  47. You can preserve their natural childhood creativity.
  48. Schools kill creativity, as Sir Ken Robinson proclaims in his TED Talk, the most-watched one ever.
  49. Homeschooling might even help your kids use their creativity in remarkable ways, as other well-known homeschoolers have done.
  50. With homeschooling, learning happens all the time, all year round. There are no arbitrary starts and stops.
  51. You can take vacations at any time of the year without needing permission from the principal.
  52. Or you can go world-schooling, spending extended periods of time traveling the world together as a family or letting your teens travel the world without you.
  53. Your kids can have healthier lunches than they would at school.
  54. And you can actually enjoy lunch with them rather than being banned from the school cafeteria.
  55. Your kids don’t have to walk through metal detectors, past armed police officers, and into locked classrooms in order to learn.
  56. You can avoid bathroom wars and let your kids go to the bathroom wherever and whenever they want—without raising their hand to ask for permission.
  57. Research shows that teen homeschoolers get more sleep than their schooled peers.
  58. Technological innovations make self-education through homeschooling not only possible but also preferable.
  59. Free, online learning programs like Khan Academy, Duolingo, Scratch, Prodigy Math, and MIT OpenCourseWare complement learning in an array of topics, while others, like Lynda.com and Mango, may be available for free through your local public library.
  60. Schooling was for the Industrial Age, but unschooling is for the future.
  61. With robots doing more of our work, we need to rely more on our distinctly human qualities, like curiosity and ingenuity, to thrive in the Innovation Era.
  62. Homeschooling could be the “smartest way to teach kids in the 21st century,” according to Business Insider.
  63. Teen homeschoolers can enroll in an online high school program to earn a high school diploma if they choose.
  64. But young people don’t need a high school diploma in order to go to college.
  65. Many teen homeschoolers take community college classes and transfer into four-year universities with significant credits and cost-savings. Research suggests that community college transfers also do better than their non-transfer peers.
  66. Homeschooling may be the new path to Harvard.
  67. Many colleges openly recruit and welcome homeschoolers because they tend to be “innovative thinkers.”
  68. But college doesn’t need to be the only pathway to a meaningful adult life and livelihood. Many lucrative jobs don’t require a college degree, and companies like Google and Apple have dropped their degree requirements.
  69. In fact, more homeschooling families from the tech community in Silicon Valley and elsewhere are choosing to homeschool their kids.
  70. Hybrid homeschooling models are popping up everywhere, allowing more families access to this educational option.
  71. Some of these hybrid homeschool programs are public charter schools that are free to attend and actually give families access to funds for homeschooling.
  72. Other education choice mechanisms, like Education Savings Accounts (ESAs) and tax-credit scholarship programs, are expanding to include homeschoolers, offering financial assistance to those families who need and want it.
  73. Some states allow homeschoolers to fully participate in their local school sports teams and extracurricular activities.
  74. Homeschooling may be particularly helpful for children with disabilities, like dyslexia, as the personalized learning model allows for more flexibility and customization.
  75. Homeschooling is growing in popularity worldwide, especially in India, Australia, the United Kingdom, Israel, and even in China, where it’s illegal.
  76. Homeschooling grants children remarkable freedom and autonomy, particularly self-directed approaches like unschooling, but it’s definitely not the Lord of the Flies.
  77. Homeschooling allows for much more authentic, purposeful learning tied to interests and everyday interactions in the community rather than contrived assignments at school.
  78. Throughout the American colonial and revolutionary eras, homeschooling was the norm, educating leaders like George Washington and Abigail Adams.
  79. In fact, many famous people were homeschooled.
  80. And many famous people homeschool their own kids.
  81. Your homeschooled kids will probably be able to name at least one right protected by the First Amendment of the US Constitution, something 37 percent of adults who participated in a recent University of Pennsylvania survey couldn’t do.
  82. Homeschooling can be preferable to school because it’s a totally different learning environment. As homeschooling pioneer John Holt wrote in Teach Your Own: “What is most important and valuable about the home as a base for children’s growth in the world is not that it is a better school than the schools but that it isn’t a school at all.”
  83. Immersed in their larger community and engaged in genuine, multi-generational activities, homeschoolers tend to be better socialized than their schooled peers. Newer studies suggest the same.
  84. Homeschoolers interact daily with an assortment of people in their community in pursuit of common interests, not in an age-segregated classroom with a handful of teachers.
  85. Research suggests that homeschoolers are more politically tolerant than others.
  86. They can dig deeper into emerging passions, becoming highly proficient.
  87. They also have the freedom to quit.
  88. They can spend abundant time outside and in nature.
  89. Homeschooling can create strong sibling relationships and tight family bonds.
  90. Homeschooling is legal in all 50 US states and has been since 1993, but regulations vary widely by state.
  91. In spite of ongoing efforts to regulate homeschoolers, US homeschooling is becoming less regulated.
  92. That’s because homeschooling parents are powerful defenders of education freedom.
  93. Parents can focus family learning around their own values, not someone else’s.
  94. Homeschooling is one way to get around regressive compulsory schooling laws and put parents back in charge of their child’s education.
  95. It can free children from coercive, test-driven schooling.
  96. It is one education option among many to consider as more parents opt-out of mass schooling.
  97. Homeschooling is the ultimate school choice.
  98. It is inspiring education entrepreneurship to disrupt the schooling status quo.
  99. And it’s encouraging frustrated educators to leave the classroom and launch their own alternatives to school.
  100. Homeschooling is all about having the liberty to learn.

Click here to sign-up for my weekly education and parenting email newsletter!

Open This Content