Founders at Work.pdf

28 Founders at Work
Livingston: Web-based email was one of those big ideas that was waiting right
under people’s noses. Why did you and Jack come up with the idea first?
Bhatia: I don’t know why. Let me tell you one other thing about the Internet:
there are thousands of such ideas under our noses even as we speak. Why
things happen, I just don’t know. Maybe somebody has a need and, in our case,
we had a need. That’s what triggered the idea. Sometimes ideas are born out of
necessity: you solve a problem for yourself, and you hopefully solve it for a
number of other people too.
The one lesson that I’ve learned in my experience while I did Hotmail and
since I’ve done Hotmail is you have got to own the customer. The customers
came to us for free at Hotmail. Even though they were free customers, what
the last 10 to 15 years of my experience of the Internet has taught me is that it’s
OK if you don’t monetize them right up front. Eventually you will be able to.
But having that customer base and being able to tap into that customer base
and upsell them on services, or advertise—you can always make money off
them.
Livingston: Is there any advice you would give to someone thinking of starting
a startup?
Bhatia: The general piece of advice, which is fairly mundane and oft repeated,
is: make sure you write a business plan because it will crystallize your thoughts
to communicate your ideas with somebody else. Make sure that once you have
written your business plan, you have somebody read and critique it and ask you
questions.
It doesn’t have to be a cookie-cutter business plan with glossy pages and lots
of information. Essentially it’s a plan that says what the company is going to do,
what problem it is going to solve, how big the market is, what the sources of revenue
for the company are, what your exit strategy is for your investors, what
amount of money is required, how you are going to market it, what kind of people
you need, what the technology risks are, marketing risks, execution risks.
Those are the fundamentals of what goes into a business plan, and many people
have it in their heads but don’t write it down.
Second is, don’t try to change user behavior dramatically. If you are expecting
people to dramatically change the way they do things, it’s not going to happen.
Try to make it such that it’s a small change, yet an important one. For
example, the reason that Hotmail succeeded was because people were accustomed
to going to different websites. All they had to do was put in their name
and password and a little bit of information and they got an email account. So in
that regard, it was the ease of use of getting online and having an identity.
The other reason why Hotmail became kind of like its own phenomenal PR
was every time somebody sent an email out, it was sent from @hotmail.com.
That’s of huge branding value, to have that moniker in people’s email IDs. So
when people would give a business card to somebody that said @hotmail.com,
it perpetuated the brand.