saw our growth from hundreds to thousands to tens of thousands, and that’s
when they said, “Even we ourselves cannot get these kinds of registrations on
our website. We should do email.” So they decided to do email and that’s how
they came up with Rocketmail.
Livingston: Were you pissed?
Bhatia: They are also funded by Draper Fisher Jurvetson. So Draper was seeing
two of its own companies create two different email systems.
We felt bad that they had done it, but we couldn’t go to Draper and say anything.
It was...

business development people, lawyers, accountants, all of them.
They gave a presentation about how much they liked the company and this
and that, and they said they wanted to buy us and placed an offer of $160 million.
I knew that that was the opening shot and I said, “Thank you very much
for making an offer. We really, really like your company and like the fact that
you like us so much. We’ll go back to our board and discuss this and get back to
you.”
And the CFO said, “C’mon, is...

Bhatia: Once you’ve got a lead in terms of a subscriber base, that is unassailable.
It can’t be replicated easily. So I knew even if they started developing the
product—I have no doubt in my mind that they could have developed it, so
many engineers and smart people in Microsoft. At that time they had something
like 16,000 engineers, and I had a total of 60 people in the company, only
14 engineers, so it would have been easy to pick 15 guys from 16,000 and build
this product. But I knew we had...

finish. Those kinds of things don’t happen very often; from the time you start to
the time you see an exit in less than 2 years. That’s what shocked me. And I have
not been able to replicate that kind of meteoric growth and success yet.
I was lucky also; I was at the right place at the right time. I have been thinking
about new ideas and new companies in the last 5 years and have been working
on some really exciting things. But I don’t think that any one of these will
...

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...