Sabeer Bhatia

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Sabeer Bhatia, started his carreer with a small stint at Apple, and then Firepower Systems Inc
which he left to co-found HoTMaiL (HotMail, written such as upper-case letters form HTML
) with Jack Smith. The idea of free email is due to Jack Smith. Hotmail’s first employee was
Richard Burright. Hotmail was sold to Microsoft for over $400 million.

After Hotmail, he founded Arzoo.com which failed in Dotcom burst. Sabeer also founded
Blogeverywhere.com, Live-Documents.com and Sabsebolo.com

http://www.crunchbase.com/person/sabeer-bhatia

A little more than a year after he sold his company Hotmail to Bill Gates' Microsoft
Corporation, 30-year old Sabeer Bhatia has said goodbye to Gates to start yet another
company.

A little more than a year after he sold his company Hotmail to Bill Gates' Microsoft
Corporation, 30-year old Sabeer Bhatia has said goodbye to Gates to start yet another
company.

There's no firm idea for a company yet, Bhatia says. He will only reveal this much: Along
with a few friends from Stanford University, where he earned a masters degree in electrical
engineering, he is working on a plan for an e-commerce company.

"There's a lot of potential and excitement in the e-commerce space," he says. "I've got a slew
of raw ideas."

The raw idea he had for a free email company led to the foundation of Hotmail over four
years ago. But soon he would stun the industry by selling his start-up company, one of the
most visible success stories in America, to Bill Gates.

After overseeing the merger of his company with Microsoft's online network about a year
ago, Bhatia became the new general manager of strategic business development for
MSN.com.
Right now he has just a "small office in Fremont (in California) and a scratch pad."

Not that Bhatia is phoning up his friends or family for investment. At the end of 1997, he sold
his company for about $390 million in Microsoft stock and kept more than $75 million of
that. And since then Microsoft stock more than doubled, his holdings are worth substantially
more today.

Microsoft has sought to minimise the impact of Bhatia's departure, claiming the parting was
amicable. "People go elsewhere and we hate to see that, but we try very hard to keep people
challenged and keep them here," says Tom Pilla, a Microsoft spokesman.

For Bhatia, clearly there are not enough challenges at Microsoft. He is excited to talk about
his new venture, though he does not want to divulge many details, and about his satisfaction
and frustration at Microsoft?

Microsoft is not a "two-person company", Bhatia adds. Though he is proud of the

performance of Hotmail under Bill Gates' regime, Bhatia says he felt the insatiable urge to do
something uniquely his own.

"Also I did not want to be embarrassed by the Silicon Valley cliché 'What have you done for
me lately?' Hotmail is still my greatest achievement to date," he continues, "But I am not the
kind of person to sit back and rest on my laurels. I still have a burning desire and passion to
challenge the way things are done and innovate in areas where I find opportunity. It is this
passion to innovate coupled with the rush and excitement that I get from creating new
companies from scratch that have caused me to take yet another plunge into the exciting
world of entrepreneurship."

He has a definite timetable. "I am hoping that our new products are ready for primetime by
the end of this year. There are a number of technological, marketing and branding challenges
that will have to be overcome for this new venture to become successful," he says.

He left Microsoft partly because he thought it was not fair to think of the new project on
Microsoft's time.

Was it a difficult decision to leave Microsoft?

"I did not really agonise on the decision to start a new venture as the e-commerce space is
really exploding with creative ideas and tremendous opportunities."

What was his biggest satisfaction and disappointment at Microsoft?

"The biggest satisfaction is that Hotmail is now well integrated into the core of the Microsoft
Network. It has crossed the 40 million subscriber mark and continues to grow at over 200,000
new subscribers daily under the auspices of Microsoft."

"There were really no disappointments at Microsoft. The only drawback for me was that I am
a start-up kind of guy who enjoys a high-energy, fast paced dynamic environment that
Microsoft was unable to provide me. It is because Microsoft is not a two-person company and
so probably does not have the edge of being a high-energy, fast paced start-up."

The risk-taker

Sabeer Bhatia likes to joke about his gambling instincts.

"The best piece of advice someone gave to me was that the biggest risk in life is not to take a
risk at all," he often tells his friends.

He was 27 when he decided he was not going to work for others. He says he was making
"obscene money" working for others but he wanted to make much more than that by working
for himself.

Before Hotmail was launched, Bhatia worked for Apple Computer, and then a start-up
company, FirePower Systems. Jack Smith, his founding partner at Hotmail, was his colleague
and buddy at the two firms.

The idea for a free email company did not come out of the blue, Bhatia explains.

For over a year Smith and Bhatia toyed with the idea of a Web based database server and
tried to interest venture capitalists in their first venture, JavaSoft.

However, realising that the response was lukewarm, Bhatia and Smith were looking for
another idea when they hit upon a Web based email server rather than a database server.
He feared that had he continued working for others, he might not have had the guts to start
something of his own. So, with Jack Smith, he decided to chase what many people in the
Silicon Valley thought was a crazy idea, a free email service.

Together, the two men raised about $300,000 for their venture.

While soon other free email services jumped in, Hotmail remained at the top because it was
markedly different from competitors. One didn't need to download software and install it in
the computer to access the email.

It was so revolutionary that in less than two years of founding it, Bill Gates, whose Microsoft
had its own email service, bought Hotmail.

While it took America Online over six years to build up its customer base, Hotmail grabbed
over 11 million subscribers in just two years.

"Our strength was that we solved the problem that other companies created," he had said in
an earlier interview. "We did not restrict people to access their email from just the computer
on which the software was installed."

"And because we were not restrictive, there was global access for Hotmail accountholders.
They could do it as easily in India as here in California or any other country in the world."

Selling his company to Microsoft was yet another gamble for Bhatia. And getting out of
Microsoft and planning yet another venture is another daring step.

Chandigarh born Bhatia came to America as a student to study at Caltech and Stanford. Back
home he had graduated from the Birla Institute of Technology in Pilani.

"In the long run, it boils down to a simple fact," he says. "How much of faith does one have
in oneself."

Bhatia says he is not particularly a religious person. "I was raised a Hindu and in a way, yes, I
am a Hindu but I don't believe blindly in destiny. I try to make my own destiny."

Bhatia says he is not particularly a religious person. "I was raised a Hindu and in a way, yes, I
am a Hindu but I don't believe blindly in destiny. I try to make my own destiny."
www.trcb.com/.../why-did-sabeer-bhatia-hotmail-founder-walk-away-from-bill-gates-
7388.htm

Sabeer Bhatia, the man best known as one of the pioneers of online emailing after he co-
founded Hotmail.com (and subsequently sold it to Microsoft [ Images ]), is on another mega
project. One that just has the potential to steal the software giant's thunder.

The Live Documents service offered by the Bhatia-promoted InstaColl is already a big
success in India [ Images ], especially among the education fraternity. "This one is really
hot," says Bhatia, demonstrating the Live Documents' capabilities to Business Standard.

He was on a visit to India to sign a contract with the Visvesvaraya Technological University
(VTU) for Live Documents. The company has also signed up with the Karnataka [ Images ]
government, which will implement the use of Live Documents in all 300,000 personal
computers in government offices across 30 districts.

"Live Documents does to 'Office' what Hotmail did to email. Earlier, email resided on your
computer, but you needed specific software on your computer to send and receive messages
and email. We took it to the browser so that all your data is stored online. Then, from any
browser in the world, you could send or receive email. Live Documents does the same thing
for all your documents now. I can create my documents wherever I am through a browser; I
can edit them; I can send them," says a very confident Bhatia.

A rough ride...

Of course, while he may be known for his aggressive thinking now, Bhatia was not always a
success. He was perhaps one of the early birds to understand the concept of cloud computing
when he launched his second venture – Arzoo.com – way back in 1998, a little before the
dot-com bust.

"Yes, it was little early for its time. It was not just us. Every other Internet company spent a
lot of money initially and without proper revenue flows, many of these companies imploded
in the dot-com bust," reasons Bhatia on his initial failure in Arzoo.com, which was supposed
to be a real-time marketplace for technology-related solutions and support. In 2005, he
converted Arzoo into a travel portal. It is now the third-largest travel portal in the country.
Arzoo did not succeed like Hotmail, but it laid the framework for his next two ventures that
centre around cloud, effectively competing with Google, Cisco and Microsoft (the last one's
Office suite is considered the most successful software application with revenues of over
$100 billion). In fact, Bhatia's fourth venture – Sabse Technologies, which has come out with
a cloud-based software product, Cloud Telephony or Cloud PBX – is set to bring an end to
the era of physical PBX, with an addressable market of $25 billion a year.

In this particular service, instead of a caller calling to a landline number that hits the PBX and
later routes the call to the designated extension number, all extensions are managed through a
web browser, which will determine what number the call should be forwarded to.

A desi suite

Now, according to Bhatia, InstaColl's Live Documents is not just a great product because of
its user interface and finish – and, of course, collaborative technologies due to the use of
cloud – but it is also a great Indian product. The product was developed with the help of just
30 people. "This is a remarkable achievement because Microsoft employs 12,000 engineers
in their Office division. And we have done the same thing (Office substitute) with only 30
people — all Indians, and all based out of Bangalore," says Bhatia, who considers Apple co-
founder Steve Jobs his hero.

At the core of InstaColl's Live Documents is Adobe's Flash technology, the reason why it is
perhaps the only company in Asia to get nominated for the Adobe Max Awards, expected to
be announced sometime this year. Interestingly, the company's initial focus was to build a
collaborative layer around MS Office in real time, to help Microsoft sell its products.

However, the company faced a hard time in the initial years in selling the product as it was
just an addition to the core Office product. This prompted InstaColl to work on its own
application, which was not too easy. InstaColl's office productivity suite runs on both - an
Internet browser (cloud) as well as on the desktop. The Live Documents is integrated with
Web 2.0 with 100 per cent feature compatibility with Office.

Reasoning why it makes sense for organisations to have Live Documents, Bhatia says:
"Microsoft Office costs about $250 (about Rs 10,000 in India), whereas someone using Live
Documents needs to pay just Rs 200 a month with access to the latest version of the software.
It's a question of operational expenses versus capex."
Bhatia does not want to stop here. He is also working with a couple of "cool" product ideas
for Sabse Technologies. Sabse already has a free video conferencing platform in the cloud,
called SabseBolo. Besides, the company's consumer application 'jaxtr', which enables one to
make free calls internationally from any mobile phone, is expected to be in direct competition
with the likes of Googles and Skypes.

http://business.rediff.com/special/2010/oct/11/spec-sabeer-bhatias-next-mega-project.htm