From Yaroslav Goncharov to his 40 years quite a resume — he has worked on Windows Mobile for Microsoft, founded the company SPB Software, which bought “Yandex” for $38 million But its biggest success is associated with a tiny company FaceApp. Leading the team of 12 people, he created the most popular (and probably most controversial) app in the world that uses filters based on artificial intelligence to change the gender or age of people in a selfie.

Last week, the FaceApp application became the most downloaded Android and iPhone. Millions of people followed the example of celebrities like Daiana Wade, Drake and Iggy Azalea, joining the so-called FaceApp Challenge. Challenge was simple: take a picture, put sostarivayut filter and put a picture of myself to Instagram, Twitter or anywhere else.

But as soon as the fever FaceApp peaked, beginning to grow concerned about the origin and motives of the creators of the application. Initially, there were fears (which later proved groundless) that FaceApp have access not only to the uploaded photos, but your entire image library in the phone users. Later began to worry about where the images of the faces of Americans, and Senator Chuck Schumer even called the FBI to initiate an investigation in respect of the application.

Goncharov, which promises to provide a greater level of transparency with the updated privacy policy have been shaken. “Last Thursday, I tried to count how many times I called. I counted two hundred calls about three hours, he says. We could not work”. He gives his first interview to an English publication from its headquarters in St. Petersburg after his small company spent a week in a “crisis mode.”

Goncharov told Forbes, how it plans to cope with the scandal surrounding the confidentiality of data. According to him, in the new user agreement FaceApp are likely to be removed references to the rights which the company had previously received images of people. The current version of the agreement provides FaceApp almost full right of ownership on uploaded photos and allows her to use, modify and sell them as the company deems appropriate without any compensation to the user. “People are scared because they think that we are doing everything what we say in this agreement that, of course not,” he says.

Goncharov said that the agreement was so broad, because earlier he planned to turn FaceApp in “the social network”. “To develop this product, our privacy policy is supposed to be very similar to the policy of Instagram. Now our policy is very similar to the conditions of Instagram… but no one blames Instagram, because it is Instagram,” he adds.

“Now the priority for me personally, the task is to fix our privacy policy and user agreement”, — says Goncharov. According to him, he will be working on this over the next month.

Founder FaceApp said that the company deletes the pictures after 48 hours, pointing to Google and Amazon, are running FaceApp, automatically erasing the data that remained in the system during this time. He also notes that images are not used for any commercial purposes. Why the company stores images on the server for 48 hours? Goncharov explains that users don’t want to upload a photo each time when they use a new filter. So the image needs some time stored on the server.

Now every time you start the application, you receive the notification that asks users to confirm that they do not mind uploading images to a remote cloud storage. In addition, potters claims that users don’t need to worry about FaceApp, and all other applications they already use. “There are so many other apps that collect a lot more data, he says. We don’t do that”.

From Windows Mobile to neural networks

In the early 2000s, working in Microsoft, potters felt what might be the future, where everyone is obsessed with smartphones. He was a developer of Windows Mobile long before iPhone and Android. He thought that creates the first major open mobile operating system. “I was sure that I build the future,” he recalls time spent in Redmond.

But the temptation to work on a startup in his hometown, St. Petersburg, was too great. The potters joined the SPB Software as technical Director and became one of three partners along with Vasily Filippov and Sebastian-Justus Schmidt. The company began with the development of alternative home screens for the Windows Phone platform, with which the potters were already well acquainted through its work in Washington state. However, the SPB had to dramatically change course, when Windows started to cede ground to competitors — Apple and Google. Potters regretted that after his departure, Windows tried to compete with Apple creating a closed system instead of prefer an open platform that focuses on partners, as did Android.

In 2011, shortly after the SPB switched to Android, came to the relationship “Yandex” and offered $38 million Founder FaceApp refused to disclose how much he earned on the deal. “Let’s just say I had enough money to start my own company and not worry about additional investments,” he said.

During her work at Microsoft, and then in “Yandex” Goncharov was fascinated by neural networks, equipment and programs that are trying to learn and process information like the human brain. Partly he was attracted by the idea that the algorithm could generate a person on the basis of specified characteristics like sex or hair color. “Quality at the time was terrible, but something magic was still there”. He said that after six months of improvements to the quality of the images, which provided him with neural networks, is much better than what was available before.

When the potters left “Yandex” in 2013, it undertook the development of its own products. One of the first testing tool of hotel Wi-Fi networks. In 2016, set a goal to create a product based on the algorithms of generation of persons, he began work on FaceApp. The launch of what potters call a beta version, took place in 2017. But even the basic version of the app was “viral” — it filter of “attraction” makes people nicer.

When millions of users have fallen in love with the app, Goncharova needed to quickly come up with a business plan. His idea was that people would pay for an automated photo editor. So he added the option to pay a subscription to remove the watermark and annoying ads and also get access to some premium features. The idea Goncharova, in the end FaceApp had to replace editors PhotoShop artificial intelligence.

FaceApp brings millions

According to Goncharov, the idea paid off. “We are successful, but this extraordinary success,” — says Goncharov, which owns 100% of the company.

Without going into detail, he argues that FaceApp began to make a profit from the very beginning when “good” indicators of revenue and growth. “We are very profitable, he says. — I could easily attract investments in Silicon valley, but we have enough organic growth.” While Goncharov don’t need investors from Silicon valley, other market participants of the photo app hold major rounds of funding or sell the company. In 2015, Snapchat swallowed Looksery for $150 million, and in 2018 — Teleport for $8 million to increase its base filters based on artificial intelligence and the lens from Auckland VSCO has raised $90 million in two rounds.

FaceApp earning only by paid subscription. However, the founder refused to disclose the size of the company’s revenue or number of paid subscribers. He does not call current number of users.

Goncharov, however, said that paid subscription gets about 1% of users. But if you look at the number of downloads on Google Play, it appears that more than 100 million Even if we assume that the number of users on Android and iOS is 100 million, and only 1% buys premium for $3.99, this means that the company earns at least $4 million a year. In addition, you can pay $20 for yearly access to the premium service or $40 for lifetime.

If to speak about prospects, on the horizon is the advent of video. Companies like Snapchat, allows to apply filters on the video, however, potters do not want to release something that will not be at least “magic”. He hoped that the scandal around privacy will not destroy the magic.

Translation Natalia Balabanchevo

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