Founders at Work.pdf

18 Founders at Work
look at other things. The Internet was just unfolding, so I started spending
more and more time on it, and it was interesting. It was exciting to see these little
companies get started. Two of my colleagues from Stanford had gone on to
start Yahoo, and I thought, “Wow. This is just a list, a directory which tells you
what is where. And somebody put $1 million in them.” I mean, that was huge.
So I thought, “This Internet thing is here to stay,” and I started playing around
with it and came up with the idea to do a simple-to-install database at the back
end. Then you’d use the browser as the front end. It could store any piece of
information at the back, but the browser would be used to display it. So people
could just look for it and be able to create a personal database of anything: contact
information, phone numbers, special files, or whatever it is that you would
do on a local PC.
So I wrote a business plan and didn’t know what to do with it. I was the only
guy, so how do you build a company? I knew Jack and knew that he was a great
software and hardware engineer. So I shared this idea with him. He read the
business plan and said the next day, “This is great, where do I sign?”
So we started and I said, “The next thing we need to do is go raise some
money and try to figure out how to hire more people and take this to the next
level.”
Livingston: Had you quit your jobs?
Bhatia: No, we were actually both working, so we decided to spend all of the
time on the weekends and evenings building this product. Then it came to a
point that one of us had to quit our job to focus full-time on it, so I told Jack,
“I’m single and don’t have a family. Why don’t you quit and start working on this
and I’ll give you half of my salary?” So at least he could support his family. I didn’t
need that much money.
We started building the product and then started looking around for funding.
We went to a number of VCs and many of them turned us down because
they were like, “How are you going to make money if you are going to give it
away for free? What’s the revenue mechanism?” We said we would capture
detailed demographic information about people and that detailed quality of
information on individuals would help us advertise to them. But of course
advertising was not a proven revenue model at that time.
Livingston: How did the JavaSoft idea morph into Hotmail?
Bhatia: While we were putting the business plan for JavaSoft together and
were working at FirePower Systems, they installed a firewall around our corporate
intranet that prevented us from dialing out to our personal email accounts.
I had an account at Stanford and Jack had one at AOL, so we would dial out and
email each other. But we couldn’t do that anymore because the firewall prevented
us from accessing our personal accounts. So we ended up exchanging
information on floppy disks and on physical pieces of paper. That’s when it
occurred to us, “Wait a minute, we can access any website in the world through
a web browser. If we made email available through the web browser, that would
solve our problem.”