Founders at Work.pdf

C H A P T E R
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Sabeer Bhatia
Cofounder, Hotmail
When coworkers Sabeer Bhatia and Jack Smith began working on their first
startup idea—a web-based personal database they called JavaSoft—they were
frustrated because their employer’s firewall prevented them from accessing
their personal email accounts.
To solve their problem, they came up with the idea of email accounts that
could be accessed anonymously through a web browser. This idea became the
startup. In 1996, the first web-based email was born, offering people free email
accounts that could be accessed from any computer with an Internet connection.
Less than 2 years later, they had grown Hotmail’s user base faster than any
media company in history. On New Year’s Eve, 1997, Microsoft acquired
Hotmail for $400 million.
Livingston: Take me back to how the idea got started and evolved into Hotmail.
How did you know Jack?
Bhatia: I met Jack Smith when I joined Apple Computer. We were working on
the same project building PowerBook portables. Our manager left the company
to join a startup in the Valley called FirePower Systems. Jack and I knew Apple
would have given us steady, stable employment, but it wasn’t with grand stock
options. So we decided to leave Apple and join this startup.
We worked very hard, cranking out products: chips that were used to design
PCs that ran on the PowerPC processor. These would run multiple operating
systems, and at that time the idea was that if the insides of the computer were
better and faster, then people would switch because it ran multiple operating
systems, including either the UNIX or Windows architecture. If the processor
was better, obviously that would eliminate the need to get Intel-based processors,
because the architecture of RISC-based systems was better. But what happened
over time is that Intel itself caught up on the price/performance curve.
After 2 years the company really wasn’t doing very much. Our manager who
hired the two of us left and went on his own. So I was kind of looking around to
see what I should do with my life—whether I should go to business school or
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