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June 28, 1999

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'Starting a Company Is Like Having Sex'

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Madona Devasahayam in Washington DC

This Baby Bill is smarter than papa is. So the media said when he quit Microsoft in 1996 to start his own venture, Infospace.com, Inc, after working for Bill Gates for seven years.

Naveen Jain Naveen Jain, 39, founded InfoSpace four years ago after serving Microsoft as a group manager. He had realized he could take the OEM model that Microsoft had for computers and extend it to the Internet. He built InfoSpace with the idea that he was not going to make people come to InfoSpace; instead, he was going to take InfoSpace everywhere where people normally went. That place could be MSN, The Wall Street Journal Interactive Edition, Lycos or any one of hundreds of sites.

Naveen Jain is today the chairman, CEO and founder of the leading provider of private label solutions for content and commerce to portals and Internet appliances. Based in Redmond, WA, InfoSpace.com's content is used by top portals, including MSN, AOL, Lycos, Netscape, and NBC and CNET's Snap.

"It was never easy to leave Microsoft. It is a great company to work for. But, one gets tired of making billions for Bill and we think why not make billions for ourselves," Jain told Rediff On The NeT in a telephone interview.

Jain founded the company with the vision of delivering real world content on the Internet - anytime, anywhere and on any device. He became interested in this field when he noticed that the Internet failed to provide people with the useful and relevant real world information they needed. That vision has been core to the success of InfoSpace.com.

Simply put, Infospace.com finds out addresses and phone numbers, gets directions, weather forecasts, books hotel rooms, provides services for chats and instant messaging and the like. The company customizes the service for each affiliate and the users tend to believe that the site they are on is offering the services. "Infospace.com is a portal in a box, providing the sorts of services that high traffic sites would rather buy than build," he says.

"We provide information that is used in everyday life. When a user keys in a query on a site, it gets transferred to us and we do the search for him and provide him with the information. Almost 85 per cent of all Internet users use Infospace.com," says Jain.

According to a 1997 article in The Seattle Times, like hundreds of other former Microsoft managers and programmers who have struck out on their own, Jain brings to his new business an approach that he learned on Bill Gates' corporate campus.

"Like Papa Bill, Jain has figured out a marketing strategy for his Internet directory service that relies more on alliances with larger firms than on mass marketing," the article says.

InfoSpace.com signed 37 new affiliate agreements during the first quarter of 1999 including companies such as US WEST, OnHealth, Snap and Sprint/RH Donnelley. InfoSpace.com also added NBC's Snap as an affiliate, joining the ranks of ABC, CBS, Disney and Paxson. Also during the quarter, the company announced an expanded relationship with Lycos.

Jain's business philosophy goes thus: "Have lots of fun. Kick some butt. Make lots of money. We've done all three. We've kicked our competitors. We've crushed them like gnats. Like Microsoft, there is no room for two players. If we enter the market, it is ours to own."

Sure enough, Infospace.com is the only company in the marketplace offering the services and products it does. Competition has yet to happen. "I would love to have a competitor and see myself crushing it. I still get seven hours of sleep every night. I don't yet have a competitor to keep us awake," he says.

"He (Jain) is a fireball, thinks very fast, is damn smart, a smart cookie, very passionate about what he does and always gets involved," says Kevin Marcus, development manager for content integration, Infospace.com.

Jain puts in 18 hours of work (fun according to him) a day, seven days a week. He is so passionate about his "baby" that he hardly has time to pursue other life's interests. "We took a vacation this February after four years and now we want to do it once every year. But it is difficult to take time off. When Naveen started the company, it was hectic," says Jain's wife Anu who is also vice-president, project management and customer service, Infospace.com.

"This is something I would do all over again. It is like retirement -- when you do all the things you have wanted to do. I am doing that now," Jain says.

"One admirable quality he (Jain) has which is valuable in the Internet world is that he understands both technology and business. He can analyze both the pictures instantly and I hope I am able to pick that trait up some day. I am good in the technical side but not with business," says 24-year-old Marcus.

Naveen Jain came to the US from India in 1982 and joined Microsoft in 1989. He started out as a program manager on OS/2 and then worked on MS-DOS, Windows NT, and Windows 95, for which he holds two patents. He then moved on to become a group manager and launch Microsoft's online service, The Microsoft Network.

Before coming to the US, Jain obtained a Bachelor of Science degree in engineering from the University of Roorkee and a Masters Degree in Business Administration from St. Xavier's School of Management.

Naveen Jain Jain has come a long way since he landed in the US. He went back home just once, in 1991. "That's because I don't have any immediate links in India. Both our families (his wife's and his) are in the US. And I don't follow Indian events and politics very closely. However, I am interested in knowing what is happening in the Indian subcontinent with respect to the Internet," Jain says. For this reason, he is going to India in September to participate in InternetWorld, as a keynote speaker.

Jain was voted a finalist by Ernst & Young in the category for "emerging entrepreneur" for 1998; honored in the July 1997 issue of Red Herring as one of "Top 20 Entrepreneurs"; and named one of "The most influential people in Yellow Pages in 1997" by Directory World.

"I have enjoyed working with Naveen. Now, we have both work and kids in common. Before Infospace.com was started, we had two separate lives. Now, we share everything. We are able to discuss work-related issues and the kids who are watching their father working hard and succeeding. Our son (nine-year-old Ankur) would be a great entrepreneur himself. I couldn't work anywhere else now," Anu says.

Jain did not take the venture capital route to start his company. Instead, he funded it himself. Revenues for the first quarter of 1999 were $5.14 million, an increase of 406% from revenues of $1 million reported in the comparable quarter of 1998.

The net loss for the quarter was $705,000 or a loss of $0.03 per share compared to a net loss of $12,000 or zero per share for the same period in 1998. "I am not in the business to make money. I have a passion and aggression for succeeding and that's what I keep telling young people who want to be entrepreneurs. Starting a company is like having sex. We should enjoy the process and not concentrate on the end goal," Jain says.

But this business makes him rich anyway. And no better way to explain that than the analogy he makes: "Infospace.com is the underlying set of tools and services for structuring the Internet. We are the brand behind the brands.

"During the gold rush, the gold diggers weren't the ones who actually made the most money. It was those who provided the shovels, picks and jeans to the diggers. We are the shovels and picks of the Internet," he says.

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