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As every capitalist knows, sometimes the best ideas are those that are so obvious that everyone else misses them. But HOTMAIL founders SABEER BHATIA and JACK SMITH struck gold with one such basic idea. They pitched a new idea to the venture capital firm: FREE E-MAIL. It was an idea set up as publicity gimmick but look where it got them!!

Originally from Bangalore, Sabeer Bhatia attended BITs Pilani for two years before coming to the US in 1988 to get an undergraduate degree from Caltech. He went on to get an M.S. at Stanford University. While at Caltech Bhatia worked at Apple as a summer intern. After Stanford, he went back to work for Apple for about a year. He then joined a hot new start-up in Silicon Valley called FirePower System. But in mid-1995, the second half of his second year there, the Web revolution was sweeping the world, and Silicon Valley was supercharged with people seeking new opportunities to be a part of this exploding arena. Bhatia, with his entrepreneurial spirit raging inside him, started to look for ideas on the Web – thinking very carefully about the meaning and the functionality of this architecture, and how its impending ubiquity could help individuals and companies. He struck upon an idea of providing an easily publishable personal database on the Web, which people could access from anywhere in the world. With that idea, he approached his colleague at FirePower, Jack Smith, and very soon the two of them started working on the prototype. But while at work, it was hard for them to communicate since they did not want to use the company e-mail accounts for this kind of work, and due to a firewall around the company servers, they could not access their personal e-mail accounts provided to them by their ISPs. During this time, it struck them that if they had their e-mail available on the Web on a server outside the company, they would not face this problem because Web protocols tunnel through firewalls. So they immediately got down to exploring how e-mail servers work and how they could be made available on the Web. They soon found that after quite a bit of programming, e-mail could be made to appear on a Web browser.

Bhatia was a bit scared to reveal their Web-based e-mail idea, fearing that it might get passed on to an existing portfolio company of the VCs. The people across the room gave Bhatia and Smith a verbal commitment that this idea would not leave the room, and Bhatia began to explain the concept to them on the whiteboard. The VCs liked the idea immediately, and within a couple of weeks gave them their first funding of $300,000. And thus began HOTMAIL, in the beginning of 1996. They launched the product on the Fourth of July 1996 and had 100,000 subscribers in just about two months. Each time, they sought only the amount of money they needed to sustain it for the next few months. At the time of the acquisition by Microsoft, the management and the employees owned more than 50 percent of the company, which is quite remarkable for a company that had external funding from the beginning.

Compiled by Raina Bijlani

(B.E. Tele.)

©1999 IEEE VESIT Student Branch  Hits :

Webauthor : Saumitra M Das