SABEER BHATIA

Rags to riches - the Biography of the man who created hotmail and is oneof the richest man in US..... take time off to read this...May be feelpretty lengthy and too personal ...Even then worth to read..

Summoned to Microsoft's command bunker in Redmond, Washington state,he was deposited on the new acquisitions conveyor belt. Round and roundthe Microsoft campus he went. All 26 buildings. At every stop, Bhatia'sguide helpfully pointed out the vastness of the Microsoft empire. Theprocession ground on until it reached Gates's office. Bhatia wasushered in. Bill liked his firm. He hoped they could work together. Hewished him well. Bhatia was ushered out. "Next thing is we're takeninto a conference room where there are 12 Microsoft negotiators,"Bhatia recalls. "Very intimidating." Microsoft's determined dozen putan offer on the table: $160 million. Take it or leave it. Bhatia playedit cool. "I'll get back to you," he said.
Eighteen months later Sabeer Bhatia has taken his place amongSan Francisco's ultra-rich. He recently purchased a $2-millionapartment in rarified Pacific Heights. The place looks like a banker'slair, and Bhatia acknowledges that the oak panelling and crystalchandeliers might have to go. He hurries over to picture windows thatrun the length of the room and raises the blinds. Ten floors below,the city slopes away in all directions. The Golden Gate Bridge,and beyond it the Pacific, lie on the horizon. "This is me," he says. "Ibought it for the view." A place with a view for a man with a vision.A month after Bhatia walked away from the table, Microsoft ponied up$400 million for his start-up.
Today Hotmail, the ubiquitous Web-based e-mail service, boasts 50million subscribers - one quarter of all Internet users. Bhatia isworth $200 million. He is already working on his follow-up: a"one-click" e-commerce venture called Arzoo! And Bhatia is lookinghomeward with an ambitious plan to wire India. Bhatia was born andraised in the southern Indian city of Bangalore. His father, who helda high post at the Ministry of Defence, and mother Daman, a seniorofficial at a state bank, placed great value on education. Their onlyson did not disappoint them. "On parent-teacher days they would justsay 'Sir, why did you come? You don't have to come! We tell Sabeer tosolve the questions on the blackboard for us,'" says Bhatia senior.Once Sabeer came home crying after an exam. He had not done badly; hejust hadn't had time to write down everything he knew. Like manyIndian parents, Balev and Daman hoped their son would secure a lifetimeposition with a big multinational firm. Sabeer had different ideas."I was pretty entrepreneurial even as a schoolboy," he says. When acollege opened nearby, he decided to open a sandwich shop and drew uphis first business plan. "Then my mom said 'Stop thinking about thesethings and go and study.' But that's the culture in India."Maybe mother knew best. In 1988, Bhatia won a full scholarship tothe California Institute of Technology, in Pasadena. When his planetouched down that fall, 19-year-old Bhatia had $250 in his wallet andbutterflies in his stomach. "I felt I had made a big mistake," he says."I knew nobody, people looked different, it was hard for them tounderstand my accent and me to understand theirs. I felt prettylonely." Ten years later you can still catch a glimpse of the innocentabroad. The Westcoast accent retains the sing-song cadence of hisnative Hindi. The CD collection features Bollywood soundtracks anddance remixes of traditional Indian tunes. Yet Bhatia wears hisAmerican-style success easily, comfortable with his wealth yetunconsumed by it. His confidence and boyish modesty is an attractiveblend that lends Bhatia serenity and presence, sending friends andassociates into rapture.
People say when Bhatia enters a room he owns it. "I call him theHindu Robot," says Naveen Singha, Bhatia's friend, mentor and proudowner of the third-ever Hotmail address. "He is persistent, focused,disciplined. He's a superior human being." Others say he glows with abeatific, otherworldly air. On our way to his office, Bhatiaattempts a U-turn in his midnight-blue Porsche Boxster, stallingthe slick little roadster across two lanes of traffic - and in thepath of a garbage truck. "I'm not superhuman," Bhatia says. Rather, hehas joined the ranks of the over-hyped Silicon Valley celebrities heidolised.
Doing his masters of science at Stanford, Bhatia attended lectures bysuch legends as Steve Jobs of Apple and Scott McNealy and VinodKhosla of Sun Microsystems. Listening to them speak, Bhatia "realisedthey were human. And if they could do it, I could do it too." AfterStanford, Bhatia found work as a hardware engineer at Apple. "I think myparents expected me to stay for 20 years," he says. Bhatia lasted ninemonths. In his cubicle, he read about young men starting up for peanutsand selling out for millions. Bhatia pondered what the Net could dofor him, and what he could do for the Net. Then he had an idea.It was called Javasoft - a way of using the Web to create apersonal database where surfers could keep schedules, to-do lists,family photos and so on. Bhatia showed the plan to Jack Smith, anApple colleague and they got started. One evening Smith called Bhatiawith an intriguing notion. Why not add e-mail to Javasoft? It wasa small leap with revolutionary consequences: access to e-mail fromany computer, anywhere on the planet. This was that rare thing, anidea so simple, so obvious, it was hard to believe no one had thoughtof it before. Bhatia saw the potential and panicked that someone wouldsteal the idea. He sat up all night writing the business plan. "Thenwe wrote down all variations of mail - Speedmail, Hypermail,Supermail." Hotmail made perfect sense: it included the letters "html" -the programming language used to write Web pages. A brand name was born.Bhatia had $6,000 to his name. It was time to find investors. Drivethrough San Francisco today and every other billboard touts someInternet company or other. It was not always like that. "Four years agoit was a hard story to sell," says Bhatia. "Few people believed the Netwas real. They thought it was a fad, like CB radio." By the time hereached the offices of venture capitalists Draper Fisher Jurvetson, 19doors had slammed behind him. Steve Jurvetson and his colleagues quicklysaw the potential and put up $300,000. Bhatia and Smith stretched themoney all the way to launch day, July 4, 1996. By year-end they weregreeting their millionth customer. When Microsoft came knocking, 12months later, they'd signed up nearly 10 million users. But whatwere 10 million subscribers worth? Was it $160 million asMicrosoft said? More? Less? Bhatia polled his investors. DougCarlisle, whose firm Menlo Ventures had pumped $1 million into Hotmail,guessed $200 million. Bhatia chided him for giving the lowest estimateand joked that he might hold out for a billion. Carlisle promisedthat if Bhatia made $200 million he would erect a life-size, bronzestatue of him in Menlo Ventures' foyer.
Bhatia didn't know how to sell a company. But he did know how tobuy onions. "In India you've got to negotiate for everything," hesays. "Even buying vegetables, you've got to negotiate." When thebargaining started, Bhatia felt right at home. "They came in low with$160 million, so I came in at $700 million! And when they said: 'That'sridiculous! Are you out of your mind,' I knew it was just a ploy."Bhatia wouldn't budge and Microsoft's representatives kept walking out.Or rather storming. And shouting and swearing and hurling insults.But the Hotmail team had been warned of Microsoft's tactics. "It waslike a record being played," says Jurvetson, "which we thought waspretty funny. It gave us a real sense of strength." That andBhatia's unshakable faith in the product. During the negotiations, hehad bumped into a British backpacker in Prague. Bhatia asked him howhe kept in touch with family and friends. Hotmail, of course. Bhatiawent back and told Microsoft: "If that is the brand we have built inone and a half years, imagine what it will be in 20 years. Hotmail willeasily be bigger than McDonald's."
At $200 million, Doug Carlisle started looking for a sculptor. At$350 million, Hotmail's investors agreed: Sell. Bhatia returned to thetable, alone, and once more said: "No." The contract was inked on Dec.30, 1997, Bhatia's 29th birthday. The price: some three millionMicrosoft shares - worth $400 million at the time and twice that now.Today Hotmail users are signing up at the rate of 250,000 a day, andthe firm is valued at some $6 billion. "I'm pretty sure Sabeer and Jackregret selling," says Jurvetson. "Who knows what might have been?"Bhatia shrugs: "When we sold, it was considered an outrageous amount.In hindsight, yes, we sold too low. But I don't regret it because atthat time it was considered a great deal."
Fremont Business Park is a complex of low-rises as gray inside as theyare out. By most reckonings, this isn't even Silicon Valley. Yet itis here that Bhatia launched Hotmail and it is here that he hopesonce again to transform the Internet with Arzoo! - his latestbrainchild. The company is only six weeks old, and the offices arestrewn with boxes that once housed computers, monitors - and a pingpong table. "Stress relief," Bhatia explains and challenges me to agame.
He's a stern competitor with a wickedly curling serve. I note that hisgame has taken him to third place on the office scoreboard. "Oh! Thathas to change," he says, starting for the board. "I'm No. 2 now."Bhatia's office is monastic to say the least. There are no works of art,no priceless antiques, no backslapping photos of "Me and Bill."(Along with Gates, Bhatia has met Clinton at the White House. "He'ssuch a charmer. You want to believe everything he says.") He extendshis "cheapo" desk with a folding table. There is a mere sniff of luxuryin the black leather swivel chair, but all staff get one of those. Inthe office kitchen is a cartoon entitled: "How to form your very ownSilicon Valley start-up." You shake a tree until a venture capitalistfalls out and hands over a wedge of cash. Today Bhatia is a mover, nota shaker. "Venture capitalists call me up and say: 'Take my money! Idon't need to know what you're doing, just take it!'" he says. DraperFisher Jurvetson parlayed their $300,000 Hotmail investment into $180million. No one wants to miss the sequel - including a Stanfordclassmate who made the mistake of not joining Hotmail in the early days.All this despite Silicon Valley's Sophomore Jinx: get-rich-quickgeniuses are doomed to spend the rest of their lives trying to duplicatetheir early success. Bhatia seems not to have heard of it. "Arzoo!is another big, revolutionary idea like Hotmail," he gushes."Another 'Gosh! Why hasn't anyone thought of this idea before?'."Ever paranoid of competitors, he will say only this: "E-commerce portal.. dramatically enhance the user experience ... one-click buying..launch in November ..." And then:"Half of all Net users could beusing it within the next couple of years." Hotmail is one of thegreatest Internet success stories yet. And here is Bhatia casuallysaying Arzoo! ("passion" in Hindi) will be twice as big. As he discussesthe future over sodas and animal crackers, his enthusiasm fills theroom. I see why Jurvetson describes him as "infectious, unquenchable -almost hallucinogenic."
Not that Bhatia is swept away by his own PR. "I could very well fail,"he says. "The fun is trying and finding out." Yet even Arzoo! cannotkeep his mind fully occupied. Bhatia is lining up a project to throwhimself into once his new baby can walk unaided. He wants to wireIndia. Or rather wire India, create the conditions for asocio-economic revolution and lift the nation out of poverty. You can'tfault the guy for aiming low.
Hotmail has sizzled in India (the seventh-largest market) and notonly because the boy from Bangalore invented it. In a country wherethere are more than 50 people for every handset, sending e-mail iseasier than using the phone. Bhatia was convinced India was ready foran Internet explosion, but how to get everybody online? His answer: alink-up with cable TV. One in four households has a tube - andalmost all of them can get cable.
Bhatia planned to plant an information pipeline from London to Bombay,rope in some of the country's 600,000 cable operators, and sell a cheapset-top device to turn the TV into an Internet gateway. Total cost:$200 million. Then he got wrapped up in New Delhi's red tape."The task is not technologically difficult, physically it could bedone in a couple of years," he says. "But the laws are so against you,the business practices so archaic, that when I went in, I saw itwould take 10 years. That disappointed me."But it did not deter him. Bhatia has adopted a more subtle approach.He sits on the board of an Indian firm called Homeland Networksthat is collecting India-specific content for the nation's growingnumber of Web surfers. "We're capturing eyeballs," Bhatia explains. Itis the first stab of a two-pronged offensive. First, build up a userbase. Second, lobby government to put the laws in place that willfoster an information revolution. Once the public is ready and thelawmakers have clicked, says Bhatia, "I'll branch intoinfrastructure." Bhatia recently sponsored and spoke at a conference atStanford, inviting "all the people who can influence [Indian] policy."The message: On the World Wide Web, geography means nothing. Thenext Hotmail could emerge from Bangalore, not California. Bhatianever did get a life-size bronze statue.Doug Carlisle was as good as his word: After Bhatia managed to pushMicrosoft above $200 million, they found a sculptor and Bhatia wentfor the first sitting. When he got home he called his mother to tellher all about it. "She hit the roof!"Carlisle recalls. "In India you don't get to have a sculpture orstatue unless: a) you're dead, or b) you're really incredibly famous andhave done something great - like Gandhi or Buddha!" There was no secondsitting.
You can take the boy out of India, but you can't get him away fromhis family. Bhatia keeps in regular contact by phone and (of course)Hotmail.
His sister, 26-year-old Sameena, will soon join him in the U.S.,undecided between starting an MBA or launching her own start-up -a recruitment service to place Indian personnel in Silicon Valley.Big brother is advising the latter, "being a serial entrepreneurmyself." As for his parents, they will be happy once he getsmarried. "My mom says: 'You're getting old, you're getting fat,you're going bald. You'd better get married or you'll run out ofoptions,'" Bhatia laughs. The first time Balev Bhatia visited his sonin the U.S. it was on a mission from his wife to find out why Bhatiawas still single. He soon got his answer when he saw his son buzzingfrom dawn to dusk signing up thousands of Hotmail users. Little haschanged.
With the house, the cars (his other auto is a Ferrari Spyder), thesuccess and the nice-guy persona, Sabeer Bhatia is a candidate formost eligible bachelor in Silcon Valley. Many men in his position areparading a trophy wife to society balls. Isn't he tempted to join them,if only to quiet his parents' nagging? "Trophy wife?" he howls. "She'dgive me a headache! Gosh, I would be tense at work all the time."Indeed, there is much to be done. Destinies to change. I ask him toexplain how he plans to wire India and he lunges for the white board."Here I'll show you! So here's India. We talk to Hughes, set up asatellite network . . ." Pen in hand Bhatia gets that gleam in his eyeand I get the feeling that maybe he'll be needing that statue after all.