With Telegram, A Reclusive Social Media Star Rises Again

Durov’s speech contains big news about his two-and-a-half-year-old company’s rocketing growth: Telegram has just hit 100 million monthly active users. Those users are sending some 15 billion messages per day, according to Durov. And 350,000 new users around the world are signing up on for the service every day.

Telegram specializes in encrypted messages, but there is nothing hidden about Durov’s goal in Barcelona: He wants everyone to know that his new company is now a serious player in the digital world.

To celebrate the milestone metrics, Durov is also planning a blowout, late night bash after his speech for 500 people—a challenge, he confesses, given his fairly solitary nature. These days, he stays mostly out of the public eye and on the move, with no home base either for himself or his company. But he’s determined to pull off an attention-grabbing event in Barcelona. That explains the constant monitoring of his phone.

“I just need to check the invitations,” he says, tapping on his iPhone 6S as he messages a colleague about the arrangements for the part. The Grammy-award DJ Mark Ronson and the star magician David Blaine are flying in to perform—and a mystery star musician is still under wraps. “We want to be less formal and have more fun,” says Durov.

One can hardly blame him: It could be Durov’s last chance to party for a while, as the roiling controversy over encryption heats up, spurred by Apple CEO Tim Cook’s recent refusal to decrypt an iPhone for the FBI. Durov’s startup is caught in a global fight over whether companies should offer customers tightly encoded communication services, in an era when terror groups have seized on social networks to fuel recruitment and plot attacks. Indeed Telegram’s most high profile moment until now was the revelation after the attacks in Paris last November that ISIS members were using Telegram to communicate.

Though miniscule in size compared to Apple (AAPL), Telegram’s future hangs in good measure on how the issue is resolved—and the fight is not likely to fade away during the months ahead. “The political solutions proposed against encryption are not going to work against terrorism,” Durov says in one of two exclusive interviews before the Mobile World Congress. “If you block sites like Telegram, the terrorists will not even notice.”

For Durov, the global debate is unfolding a long way from where he started. Just 10 years ago, he was a college student sitting in his bedroom in his family apartment in St. Petersburg, Russia, frantically working on a prototype for the country’s first social network. He was racing to beat other Russian programmers, all trying to replicate the new Silicon Valley startup that everyone was suddenly talking about: Facebook (FB).

Durov’s creation, which he named VKontakte (“in touch” in Russian) and which looked a lot like Facebook, even down to its blue color scheme. With the help of his mathematician brother Nikolai, Durov grew VK (as it became known) into a $3-billion company, and it remains Europe’s biggest social network. Predictably, the site earned Durov—a bookish teetotaler who has old-world manners—comparisons to Zuckerberg.

Just like his American contemporary—both were born in 1984—Durov found himself hugely wealthy long before his 30^th birthday. But unlike Zuck, Durov found himself in an intense standoff with his country’s security services and, by proxy, with President Vladimir Putin.

In December 2011, Durov woke to find armed Russian security forces outside his St. Petersburg apartment, threatening to bash in the door unless Durov shut the VK account of Russian opposition leader Alexei Navalny. Durov refused, and posted news of the government’s actions online, surprising many Russians and boosting support for VK.

“The normal practice in Russia is to keep this very, very quiet,” says Andrei Soldatov, a Moscow journalist and author of the book The Red Web about Russia’s high-tech surveillance. He says he initially regarded Durov skeptically, regarding him as arrogant. Yet Durov’s actions persuaded him otherwise. “Durov decided to do something completely different, by going public. That was a real shock.”

For Durov, the battle lines were drawn. In December 2013, under pressure, he sold his remaining shares in VK to a business partner of Alisher Usmanov, the billionaire Putin loyalist who has a controlling stake in Mail.ru. Mail.ru now owns 100% of VK.

After Russia’s war with Ukraine erupted, Durov again refused government orders—this time, in April 2014, to hand over the personal data of Ukraine’s opposition leaders from their VK accounts—and then posted fiery comments online. On April 21, 2014, he was fired as CEO of VK and, shortly after, left Russia.

“It was painful,” he says, sitting in his London hotel suite. “But now looking back, I do not feel sorry at all.”

Durov working on his first company, VK, in St. Petersburg in 2011.Photo courtesy of Pavel Durov

With an estimated $300 million in cash in the bank—now securely stored in dollars in Switzerland, according to Durov—the entrepreneur and his brother Nikolai started over. First, they bought themselves citizenship of the Caribbean island of St. Kitts. (For a $250,000 donation to the country’s Sugar Industry Diversification Foundation, an individual can get a passport that allows visa-free travel around Europe.) Then they began to focus on building their new company: Telegram.

The new venture was a side project that began with an encrypted messaging system Durov and his brother cobbled together in order to communicate between themselves without the Russian security services snooping on them. By packaging it as an app, Durov figured, they could offer people around the world a means of easily sending encrypted messages that their governments or enemies could not intercept. They had put it out in August 2013 with no formal announcement.

Safeguarding privacy is a guiding principle for Durov. Even the working habits of Telegram’s core team—the Durov brothers and three engineers—seem slightly surreptitious. Though Durov almost never speaks by phone, he says he keeps three different phone numbers, which he changes frequently “like personal hygiene, like changing your toothbrush,” he says.

Durov originally based Telegram out of a small Berlin office, but the staff now works out of a series houses and apartments rented mostly on Airbnb.com, or out of swank hotels like the one in London; in the summer they might be found in a rented house on a lake in Finland. After a month or two at any one place, they move on. Durov describes his team as “nomads.” He says Telegram is registered in several countries including the U.K.

Durov explains the peripatetic lifestyle as a way of preventing the company from becoming embroiled in the politics or economic ups and downs of any single country—a lesson he says he learned from the turmoil in Russia that upturned his life and lost him his first company. “I did not want to make the same mistake of relying on a single jurisdiction,” he says. “No matter how good a place looks, you don’t know what crazy new regulation they will introduce.”

His company is certainly at the center of a heated debate. Since NSA contractor Edward Snowden revealed the U.S. government’s mammoth secret surveillance programs in 2013, tech companies—including Facebook, Google, and Apple—have raced to install default encryption on their devices and platforms. That is partly a buffer against government pressure to hand over the data of specific people, a practice Snowden described as common in the U.S. until 2013.

And for global companies, encryption has also become a key strategy for growth, with customers far more focused on how to protect their private data, and as governments debate the issue. Last October, the E.U. canceled the so-called Safe Harbor agreement with the U.S., that for years had allowed U.S. multinationals to store European customer information outside Europe—a common convenience for tasks like purchasing items online. E.U. officials argued that the U.S. government had shown itself incapable of protecting people’s data.

Throughout 2014 and much of last year, it seemed that the tech industry’s move towards tighter encryption was unstoppable. Then came the Paris attacks. On Nov. 13, 2015, approximately 10 gunmen (the final figure remains unclear) opened fire outside sidewalk cafés and in the Bataclan concert hall in the French capital, killing 129 people in France’s worst massacre in decades. The attackers, aligned with the Islamic State, or ISIS, had apparently plotted the operation for months, partly online.

Many critics quickly singled out Telegram as having unwittingly enabled the ISIS plotters to communicate. French intelligence officials dispute that, saying that at least some of the operation seems to have been planned without encryption. But ISIS had apparently embraced Telegram’s user-friendly platform as a means to communicate and spread propaganda.

Although it is probably far from ISIS’s sole outlet, Telegram’s simple encrypted messaging system, Secret Chat, has been pinpointed as a possible way for terror groups to plot attacks. For ISIS, another attraction was Telegram’s “public channels” feature, which Durov launched last September, enabling users to broadcast messages to hundreds of people with little outside detection.

A week after the Paris attacks, Durov scrubbed 78 ISIS channels from Telegram’s servers. Yet encryption experts—Durov included—believe those efforts will work only temporarily. “After Telegram shut down the ISIS channels, a lot of them reconstituted and redeveloped” on the service, says Aaron Brantly, a counterterrorist analyst at the Combating Terrorism Center at West Point, who monitors terror groups’ communications on Telegram and other platforms. Of all the sites those groups use, he says, “Telegram is one of the top three.”

Banishing bad guys is not as simple as it might seem. “Just as when Twitter takes down ISIS-supporter accounts they quickly come back up with slight variations,” says Brantly, “the same sort of behavior is occurring on Telegram. It becomes a game of whack-a-mole.”

Over lunch one day in January in Paris—just a short walk from where the attacks occurred—Durov tells me he is still deeply sad about the terrifying violence. Despite that, he says that it is technically impossible to scrub ISIS from the encrypted parts of the platform.

“We do not read private information and private messages,” he says, slowly picking at a plate of Russian blinis and salmon. Durov is a small eater.

The VK profile page of Pavel Durov from his time as CEO of the social network.Stanislav Krasilnikov—ITAR-TASS/Zumapress.com

When I ask whether ISIS is still communicating secretly on Telegram, he says, “Probably, but we have no way to check that.” Durov argues that the real problem is “inefficient, lazy, incompetent” government agencies. “Never in history have authorities had so much information on their hands as they do today,” he says. “And they still complain about groups ‘going dark.'”

As anxiety over terrorism grows, so too does the conflict between tech execs and government. Politicians have ramped up efforts to weaken encryption since the Paris attacks, further increasing their push after a couple, who were apparently supporters of ISIS, shot dead 14 people in San Bernardino, Calif., in December. The U.S. National Security Agency director Michael Rogers told an interviewer in mid-February that the Paris attacks “would not have happened” without encryption.

Then on Feb. 17, Apple‘s Cook refused to comply with a federal court order ordering the company to unlock the San Bernardino shooter’s iPhone for the FBI. Cook says he regards the FBI’s demand as a critical prelude to weakening encryption—building so-called “back doors” for government access. In a statement, Cook said that would “hurt only the well-meaning and law-abiding citizens,” while “criminals and bad actors will still encrypt.”

When I meet Durov in London the morning after Cook’s decision, the Apple-FBI battle is leading the news. “He is doing the right thing,” Durov says when I arrive. Yet the conflict could impact Telegram too, possibly boosting efforts in Congress to prevent tech companies from building watertight encryption.

“Even if the FBI loses this case, what they have won is ammunition,” says Nate Cardozo, staff attorney at the Electronic Frontier Foundation in San Francisco. “They will take that loss to Congress, to say ‘we need to mandate back doors by law.'”

Cook’s defiance has eerie echoes to Durov’s experience, in another country and another time. This time, Durov is determined to keep control of his company—and to see it grow massively. He says he is convinced the 100 million users is “only the first major milestone.” Telegram’s 100 active users monthly is a fraction of the one billion people using Facebook-owned WhatsApp. But Durov points to the rapid pace of Telegram’s growth as a telling sign of its momentum. A year ago, new signups to Telegram were about 100,000 a day; now that number is 350,000 a day. It’s hard not to remember that WhatsApp was acquired by Facebook for a stunning $19 billion in 2014, though the messaging service has struggled to develop a business model to support its purchase price.

For now, Telegram is not for sale—or even open to investment. Durov says “the most famous” Silicon Valley venture capital firms have approached him with offers of financing, though he will not name them. With the VK scars still fresh, he prefers to spend his own money and keep a small team of close allies, comprised of ethnic Russians. “We do not need the money,” he says. That is true—for the moment. Telegram is burning through more than $1 million a month of Durov’s personal savings, a sum he says is “bearable for the foreseeable future”— but not forever.

Durov says he is beginning to explore ways for Telegram to make money, perhaps by letting developers build services on top of Telegram’s platform, with the company taking a cut of the profits. WhatsApp, for comparison’s sake, recently said it would begin experimenting with a business-to-consumer function as a way of generating revenue, but not advertising. Durov will take his time developing a plan to monetize Telegram’s exploding user base.

“We still have a few years,” he says. “But it would be responsible for us to come up with a business model within a year or two from now.” Until then, Durov will celebrate a little, and move on to the next location.