THE INTERVIEWS ISSUE
The week of June 7, 2015

Pavel Durov: The most interesting man in the encryption wars

By Dylan Love

Pavel Durov knows what it’s like to hold the reins of a tech superpower.

At 26, the tech entrepreneur developed a Facebook-style social network in response to Facebook’s growing global domination, and Durov’s VKontakte (that’s Russian for “in contact”) is now consistently more popular than Facebook on the Russian-speaking Internet. Durov gained political notoriety when he declined the Kremlin’s request to shut down VK pages belonging to political opposition leaders, planting the seeds of a tension that ultimately saw armed police banging on Durov’s door in 2011. While that encounter ended without incident (he simply declined to open the door until the men left), his days leading a social network free from the Kremlin’s input were numbered.

In what amounts to a joke gone quite horribly wrong—Durov resigned on April Fool’s Day only to take it back a couple days later—he was removed from his position as CEO of VKontakte at a time when it was politically convenient for the rest of the leadership to do so. He found himself in a position where 88 percent of his company was controlled by Putin supporters. Freshly out of work and running low on political allies, he and his brother struck off on their own with some VK engineers in tow to build a new big business. It’s called Telegram.

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Telegram is a messaging app that the Durov brothers built together for their own personal use near the end of Pavel’s stead as CEO of VK. As their thinking doesn’t gel with contemporary Russian politics—they are for liberty and transparency no matter the cost—the brothers wanted a reliably secure way to keep their communications with each other truly private and away from the eyes of prying governments. Durov’s brother, Nikolai, is a remarkably accomplished mathematician and engineer and the brains behind MTProto, Telegram’s wholly original encryption mechanism. Now they’re giving it to the world for free.

The app puts the brothers’ values on full display: It is an open-source, easy-to-use messaging app that makes use of wicked encryption to keep your conversations as secure as possible. It presently boasts 62 million users worldwide—despite being born of their own smaller, more immediate need.

Since making Telegram his full-time focus, Pavel Durov has left Russia, potentially for good. He’s been on the move around the world since 2014, saying that his native country “is incompatible with Internet business at the moment.” (When I asked him where home is now, he simply said that “Paris is nice.”) As roams the globe, he stays in touch with friends, family, and the Telegram team—how else?—via Telegram.

In the company’s present state (and in its yet-to-come monetized future), it is “a different kind of organization,” says Durov. It leans heavily in the nonprofit direction, with the company’s goal seemingly being little more than to build something that operates at parity, with every employee well-paid and happy. That’s possible in the short term because Durov is bankrolling the entire operation from his personal wealth, taking on the expense of $1 million per month until such a time as more money flows into the operation than out of it. But even then, if and when the company turns a profit, Telegram will “absolutely” be free to the end user. It comes across as a philanthropic pursuit: Citizens of the world ought to have a way to communicate privately.

“We started Telegram as a project for personal use. It was not our intention to make it public and global.”

Durov caught up with us in the Daily Dot’s New York office, clad in his standard all-black attire, to walk us through the specifics of his latest pursuit and his storied political happenings.

This interview has been edited for context and clarity.

Why attack the messaging app market? Isn’t it too crowded for anyone to make a serious impact?

We started Telegram as a project for personal use. It was not our intention to make it public and global. My brother and I were trying to solve a personal problem of secure communication. It became obvious that we needed a solution, because by December 2011, we were already in a very difficult situation. All the scary stories about armed police. Of course you want to be sure you have a secure means of communication. [Authorities can know] your location precisely—any time, any second. If you carry your SIM card, they just know in real time. It’s like Find My iPhone, but for citizens. “Find My Citizen.”

I heard a lot of stories about people in the [Russian political] opposition that have their communication intercepted, and they were put into situations to make tough decisions. All their bank accounts, all of their business and private life, everything was available to the authorities. I didn’t want that to happen to me and my brother.

What do Edward Snowden’s revelations mean to you?

In spring 2013, it turned out that the NSA was spying on U.S. citizens, and there were new articles that kept being published based on Snowden’s leaks. By mid-summer 2013, it became evident that this problem is global—it’s not just us in Russia who are suffering from surveillance. It’s everybody. Especially in Europe, it was a big concern that there were Americans spying on them.

This made us think we should release [Telegram] publicly. We started a competition for developers to build an Android version, and we opened up the APIs that we use ourselves. I think there were two winners—in the beginning we had two Android versions competing with each other. It was pretty fun.

You famously offered Snowden a job at VKontakte. Did anything ever come of that?

I know from his lawyer that he considered the job offer. I think he had to eventually refuse because of the security concerns. VK was too public—everybody knew where the office was, and he’d be there. Or I would get questions when I visit the U.S., like, “Where is Edward Snowden?” For us, it would’ve been a huge gain at VK. We think Edward shares our fundamental values, he’s the same age, and he has the courage to speak his position. It’s obvious that if you bring a tech celebrity of that scale on board, people will notice.

What were the actual circumstances surrounding your departure from VK?

I wrote a letter of resignation for April Fool’s Day. On April 3, I informed the board it was a joke and took my letter back, cancelled it. A few weeks after this, I said some things about the Ukraine protests, and they didn’t like it at all; they were furious about that. The other things I made public were not accepted very nicely by the shareholders and the government. So they let me know that I’m actually not the CEO of the company, because they said, “You signed a letter of resignation and took it back, but you didn’t take it back in the proper legal way.” It was so strange because I took it back exactly the way I resigned. I did both things the same way, but one was legal and the other was not.

If you spend some time in Russia, there are things like this happening every day. They think about how things will be accepted and they minimize risks. The situation in Ukraine is not too different. There’s something actually going on, and then there’s how it’s shown on a screen.

How has open source made Telegram better?

Since the source is on Github and everyone can look through it, we get very valuable feedback from external engineers. Recently someone let us know we could save three megabytes of space by compressing the graphics inside of the app. We thought, “Great, we’re already one of the smallest apps, but now we can make it even smaller.” We were grateful, and we keep getting this valuable advice from the community.

“It’s not just us in Russia who are suffering from surveillance. It’s everybody. Especially in Europe.”

We’ve been online for almost two years. In that time we’ve launched three competitions to break our encryption. First we asked people to intercept traffic and try to decrypt it. One of the participants did not achieve the goal of the contest, but still found a potential vulnerability in the way we encrypt data. Potentially we as Telegram, not a third party, could see secret chats. That guy got $100,000 from us. His finding was outside the scope of competition, but we thought it was so valuable that we should encourage such feedback.

So there’s a community attached to the app already?

If you go inside the settings of the app, you will see a special place where you can ask us a question. Write anything you want, and it goes to the support team, which processes all the feedback. We understood very early on that we couldn’t handle it all, so we had to invite volunteers. These are people who like Telegram and have some spare time and want to use their spare time to help other people understand what Telegram is about. We don’t invite just anybody. If someone wants to volunteer, he has to pass a test and answer our questions first, and they are some tricky questions. What exactly makes Telegram different from other messaging apps? It’s not obvious. It’s a deep question with several layers.

How has the app grown in the time since you’ve made it public?

It’s so different compared to what we used to have at VK. When I started VK, the growth was very predictable. We started the first day with 50 signups. The second day, 60 signups. Then gradually 200 signups daily—400, 1,000. Gradually it grew to the point where we had 100,000 signups daily.

Telegram was so different because the distribution channels are not the same. If there is some hype around your app in a certain market for some reason, it will get to the top of the App Store and get a crazy amount of signups per day. In early September, when we only had an iPhone app, we saw a huge spike in signups—over 100,000 new registrations in a day from Saudi Arabia. We were No. 1 in their App Store within the second or third week of the project. I was very happy.

[This success] was a bit different from VK. At VK, 95 percent of our users were Russian-speaking. We know these people. We understand the language, the culture, the way they think, how they were educated, everything. Now we see people using Telegram and we don’t even understand their language. It’s difficult for you to even start translating the app into Arabic because that language is written from right to left—you have to redesign the whole app. And it’s a totally different culture. Some things are frowned upon that you might not even understand.

We had to learn a lot about these new markets. It was fascinating, because in Russia, Ukraine, Belorussia, we got used to the feeling that we are No. 1. We conquered the Russian-speaking Internet. You get used to good things very quickly. If you add users from other parts of the world, it’s a different feeling—a feeling of excitement, achievement, that something new is going on.

Then we started growing heavily in December and January in Spain for no obvious reasons. I think it could have something to do with WhatsApp asking most of their users in Spain to pay for subscription. They did not cut them off from the app, but kept sending this notification, “You should pay for this.”

Why is Telegram free?

Telegram is a new type of organization. What you have now are nonprofits and for-profits. For-profits have shareholders, and their aim is to get as much money as they possibly can. Nonprofits are completely different; they raise money through donations and spend all of it. We are very similar to a nonprofit in a way that we want to spend everything we would earn at some point. At the same time we want to be financially self-sustainable. So the biggest question a lot of our users ask is: “Great product, it’s free, I like it, but what happens in a year, two years, five years when you become extremely popular and your expenses rise?”

When WhatsApp and Viber reached this point, they had to sell. Their expenses were too great, and they did not find a way to monetize. WhatsApp has that subscription model, but if you look at the results of 2014, they earned $25 million and spent $280 million. It was completely not sustainable.

We don’t want to burn money for eternity, and we don’t want to get more money than we can spend. We want to earn as much as we need for traffic, equipment, and salaries. If you look at our team, these are the best engineers in the world. Some of them were the best engineers at VK and left for Telegram after I left the company. They receive offers from Facebook, from Google. We can’t offer motivation in terms of stock options because this is not a private company intended to sell. So we have to pay them really competitive salaries, otherwise we would have no engineers.

“We think Edward [Snowden] shares our fundamental values.”

We’re not sustainable right now; we’re just burning my own personal money. We want the company to be able to cover our salaries in the future because it’s not fair otherwise. And I agree that’s where we’re going, what we’ll do eventually—come up with a sustainable business model. I think we’ll start experimenting with it very soon. It will not involve paid options, subscription model, or ads. Telegram will always be free to the user. Our monetization will most likely involve a platform for third-party developers and revenue-sharing.

 

Why does this approach seem so uncommon when it comes to building a business?

I was in a very unique situation when I managed to build a business in Russia. Then I had to sell it, and I got some money—I didn’t have to attract investors. I suspect that this is not a very uncommon situation. If you look at Telegram today, every month it burns over $1 million. It might seem that it’s just going nowhere, but if you want to come up with business model, you need to get to a decent size first. We have 62 million users at the moment, which is enough userbase to attract third-party developers to create products on top of your platform. You can’t do that from day one. It’s difficult.

So in order to grow, you need to have money, but where will you get money? You can’t go to a venture capitalist and say, “I have this altruistic idea, I have this humanitarian goal.” You can go to the government or another authority that’ll give you money for free, but no government will give you $1 million for free. They would like to have some sort of control over it, which would destroy the whole idea. We’re just lucky to be in this position.

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When will the average citizen start to care about encrypting everyday communication?

I think that’s starting to happen. We saw a lot of interest for Telegram in the United States. More and more users install it for privacy reasons, and of course the situation in the U.S. is not as bad as in Russia.

In Russia, if you speak over phone, every conversation is recorded. There are two factions to this thinking: Some say the government will turn recorders on and off, capturing every conversation that happens within that timeframe. Others think there are too many signs that all conversations are being recorded all the time for everybody. [Now-prominent opposition leader Alexei] Navalny’s recordings were made at a time when he was nobody. He didn’t even have a blog back then. He was just a regular guy in a political party, one of thousands. You couldn’t see the future—“We might need this conversation in 10 years.” I personally think that everything is recorded. Some might think it’s an issue with storage space, but the quality of these recordings are very poor, very low. You don’t really need a lot of space, especially if you have the government’s money. It’s logical.

Why would the Russian government record all phone calls?

The country is run by a person from the intelligence services. He understands that it makes perfect sense to have something on everyone, just in case. Information is power, especially in the 21st century. If you have more information, you have more control. If someone can expose what the government is trying to do, just as Edward Snowden exposed the NSA, the media will report it and public opinion may rise against it.

But at the end of the day, Apple and Google still control the two biggest platforms. They could theoretically have access to everything that happens on your device, to everything you see on your screen. If they somehow started helping the government, game over.

Photo via TechCrunch/Flickr (CC BY 2.0)