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Home > Business > Interviews

The Rediff Interview/Sabeer Bhatia, entrepreneur

'There will be tremendous growth in the Internet in India'

March 08, 2006

Sabeer Bhatia says he has been "a lifetime entrepreneur." It's hard to disagree. After all, not many would have opted to continue after an overwhelming success like Hotmail, but he simply hasn't stopped.

Born in Chandigarh, Bhatia moved from the Birla Institute of Technology and Science, Pilani, to the California Institute of Technology, where he received his Bachelor's degree. After a Master's degree from Stanford University, he worked on portable computers for Apple before becoming one of the original employees at Firepower Systems. Then, in 1995, he founded Hotmail along with Jack Smith, selling it to Microsoft in a $400 million deal that made him a tech poster boy across Asia.

There were all kinds of accolades. Entrepreneur of the Year (1997), TR100 award (presented by MIT), ten most successful entrepreneurs (1998) and People to Watch in international business (TIME, 2002).

After Hotmail came Arzoo! Inc, which shut down, followed by projects like Navin, a travel web site, and his latest, BlogEverywhere. For the moment, however, Bhatia is in Mumbai to launch VoiFi -– a Voice over Internet Protocol (VoIP) software that combines technologies such as Session Initiation Protocol (SIP) and Peer-to-Peer (P2P) to give users everything from Internet telephony and conferencing, to instant messaging and even games like Teen Patti.

The interesting bit is, he says it has been created to provide the highest level of quality while optimising our current bandwidth resources, making it possible for users to communicate worldwide without the necessity for the latest computers or software. Will it work? We'll have to wait to find out.

Dressed casually, in a lavender shirt and tie, Bhatia appears confident. With the Indian Ocean stretching out behind him, he sits at the Taj Mahal Hotel, Mumbai, in conversation with Senior Features Editor Lindsay Pereira.

Is India competent to handle this kind of product, in terms of infrastructure? Even WiFi is still a rather alien concept.

I think it is a great market, one of the best in the world, for two reasons. One, there is potential. Two, the market is very cost-sensitive. So, if you offer something where you can make phone calls or play games for free, I think there is tremendous opportunity.

I believe India is the second largest market for soft voice-over IP technologies, after China. And because we have local partners for termination needs, we hope, in a short span of time, to enable users to call any landline or mobile phone for as little as Rs 1 a minute, from anywhere in the world!

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How does the telecom industry deal with technologies like these? Does it perceive them as threats?

We are not causing them damage; we are providing another avenue from which people can make phone calls. What we are proposing to them is not to view this as a potential threat, as competitive, but to embrace and grow from it. If you embrace it, you will be able to open up another channel or revenue stream for your own subscribers. They can use our product to offer their customers more. It is a chance to expand their reach to the desktop as well.

By when do you foresee this happening?

Over the next three to four months. Our user base is small at the moment, but we expect it to grow very soon.

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If you were asked to take over as India's telecom minister, are there specific changes you would like to make?

Yes, specific things with reference to VoIP technologies. I would encourage the government to change the ADC (Access Deficit Charge) charge they currently have for any calls that originate on an IP network.

Assuming boom and bust cycles occur every five years or so, are you worried about investing in an online firm?

Absolutely not. It's not about riding a wave, it's about providing a valuable service to your end customers, and to offer them so much value that they stick with you through lean times. But, given the way the world is moving, we can safely predict that there is going to be tremendous growth in the adoption of the Internet in India. Prices of PCs are going to fall, and there will be better penetration of broadband. These trends are very global and they are very positive.

What is it about the Internet that has always made you want to work with the medium in some manner?

That's a very good question. If you solve a problem for two people on the Internet, you solve a problem for a billion, potentially. That is the beauty of the Internet. Everybody connects through the same browser interface and gets information from different sources. So, if you solve a problem or provide a useful service or useful piece of software for even two people or a group, you could potentially be doing this for a billion people. That is an instant market of a billion people. Where else in the world can any individual make such a difference?

Was there any particular technological development, in all these years, that made you sit up with excitement?

It doesn't just happen one morning. It's a constant challenging of existing norms, constantly testing the limits of what is possible that leads you to creating new products. You need to ask questions. It's a process. From all that questioning, one relevant query may lead to a great idea.

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I have been speaking to a number of entrepreneurs, who say that the difference between them and businessmen is that the latter feel the need to simply create wealth, while they get an adrenaline rush that drives what they do…

I agree. It's about making a difference, not just about making money. There are lots of ways to make money -– you could buy land, build apartments, open coffee shops -– all legitimate businesses. Those are interesting, but it's not what a hi-tech entrepreneur does. A hi-tech entrepreneur thinks of creating products that have never been created before. Of offering a combination of services to the user in such a manner that, over time, there is a potential to make profit.

The good thing about being a hi-tech entrepreneur is that, if you get it right, you get it so right that, forget real estate and coffee shops, you can hit the ball out of the park. That's the grand prize. Nirvana. And once you achieve it once, you want to again and again.

You were around when Silicon Valley appeared invincible. If asked to describe that period today, how would you? It's a bit like asking someone if they were at Woodstock, in a sense.

That was a crazy time. It was heady, of course. But it's over. I'm glad I learnt a lot from it. We are now far more prudent, we spend money far more judiciously, we reel people back in when they look to spend this money, and we have become stronger as a result of it. That's what's positive. It would be no fun if we never made any mistakes in our lives. The key is to learn from every one of them.

Do you think Woodstock will come back ever again? No, but there will be a lot more parties in future. Let's look at what happened and learn from it so we don't repeat mistakes.

Do you foresee yourself continuing to invest in the technology sector?

Technology is vast. There's everything from routers to switches to a lot more. It's huge. Even in software, there's VoIP, search email, archiving. So, no, I don't plan to get into construction or open coffee shops (laughs).

The favourite word of 2005 was 'blog'. What do you think the word of 2006 will be?

Blogs have been around since 1999; it's only in 2005 that they became popular. As for what will happen in 2006, we'll only know by the end of the year.

Do you have a blog?

I'm releasing a product called Blog Everywhere. It's a huge blogging platform that will let users blog on any page on the Internet at any time.

I think blogging is hot. I think it will change public opinion in India, because India has yet to realise its full potential, both from a corporate point of view -- to get real time information on brand value, feedback on new products -- and in influencing the opinions of people on the Internet.

The day Indian companies realise that, and the day Indians realise they have a say in how the world works, and how companies behave and react to what they have to say, you will see a lot of world class Indian bloggers too.

What advice would you give young Indian entrepreneurs?

I've been a lifetime entrepreneur. The advice I would give them is, first of all, believe in yourself. Hire the best people. No one can win a war on one's own; a general is only as effective as his army. So, make sure you build a great army. It needn't be the largest army in the world, but it has to be the most effective.

Entrepreneurs should be able to think on their feet constantly. Markets change, technologies change, competitors change. But, to be able to react to that, to be able to constantly think about products, and constantly innovate them, is what will ultimately be responsible for success.

If you kill the innovation goose, you can never win. When you constantly have a mindset of improving whatever you have, that's the only path to success.

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Number of User Comments: 3

Sub: This is great to read

Sabeer the hotmail guy, nice work!! Nice to know that he is coming up with a telephony service called voifi. Great, best is Re.1 offer ...

Posted by Jack Baker

Sub: Making Waves in News

Was Bhatia sitting in Taj Mahal Hotel Mumbai facing India Ocean or Arabian Sea? Possibly the firangi journalist thought every sea front in India is ...

Posted by Partha Sarathy

Sub: To know more about blog latest product in India

I would appreciate, If you kindly send more info about flagship product Blog and wish to set up All India Distribution Network in India the ...

Posted by PC Dadhich



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