Success Story  Sabeer Bhatia

Founder of

By: Vadim Kotelnikov

Founder, Ten3 Business e-Coach Inspiration and Innovation Unlimited!



"A good entrepreneur never gives up." ~ Sabeer Bhatia


Sabeer Bhatia's Lessons for Venturepreneurs

"Don't be afraid to tread new ground, but do a sanity test," says  Sabeer Bhatia, co-founder and CEO of Hotmail, the world's number one free web-based email server. "At the core of entrepreneurship lies the desire to solve a problem, and that's really how Hotmail was born."

The problem Bhatia wanted to solve, was how to access personal information, contacts and communications from anywhere in the world. Finding a technological solution was one part of the problem, but the big questions facing Sabeer Bhatia, and Apple colleague Jack Smith, were whether their idea would help others, whether there was a market, and whether they could raise enough venture capital to support the idea.


The pair finally secured US$300,000 and launched Hotmail in 1996. The Hotmail crusade was "To revolutionize and democratize communications." People who went to work for Hotmail didn't join a company, they joined the crusade. They wished to build something that had never been built in return for zero salary or benefits only a small equity stake in the company that can be exchanged for cash only if and when the company achieves success and reaches a liquidity event.

Within six months Hotmail had 100,000 registered users and 20 million clients within 22 months. At that point, Microsoft offered to buy the company. Bhatia refused the offer, until Microsoft came back with an offer of double the original amount. Hotmail was sold for US$400 million.

Bhatia has a sense of optimism and passion for his work. He provides lessons in seeing further and clearer and the role of innovation in speed.

Sabeer Bhatia's advice for young entrepreneurs is to find an idea they are passionate about, write a business plan, and get the plan critiqued by someone with related experience to make sure it passes "the sanity test".

Staying Beneath the Radar of Their Competitors

Hotmail, the first web-based free e-mail server, was built around a simple idea. Sabeer Bhatia and Jack Smith, the founders of Hotmail, realized that before long the same idea would occur to many other people.


They had to raise venture capital without revealing the real idea of their business.

"I turned over every stone looking for money. Anyone who would listen, I'd talk to. I pitched friends, colleagues, classmates, partners, anyone, anywhere, anytime. I pitched a Texas multimillionaire, an oil magnate, a real estate person, and even a venture capitalist who funded gas stations," says Sabeer Bhatia. But he would only reveal the big idea after he was certain he wasn't being rejected for some irrelevant reason: "All potential investors got the same pitch for Java Soft, another program we'd played with. If the person I started to sell started spouting reasons that I believed were silly ones for rejecting us, they never got to hear about the real idea. Eventually only 4 people knew about our real plan."1




Venurepreneur's 88 Winning Habits

Great Innovator: 8 Winning Habits

Do What You Love To Do and Make a Difference

Entrepreneurial Creativity

Innovation Is Love

Entrepreneurial Success

The Deal-Killer Entrepreneurial Personality

Be a Negative Optimist

Great Innovator Quotes

Startup Firm

5 Tips for Internet Startups

Startup Business Plan

4 Entrepreneurial Strategies

Milestone Chart

Start-up Capital Formation Process

What Changes as Company Grows

Venture Management

Venture Management Laws

Venture Management vs. Corporate Management

5 Key Risks Critical to the Survival of New Companies

5 Critical Success Factors for New Ventures

Launching a Crusade

Staying Beneath the Radar of Your Competitors

Case Studies

Steve Jobs

Michael Dell

Coco Chanel

Konosike Matsushita

Jeff Bezos

Charles Schwab: Fast Company

Apple's New Business Models