Sabeer Bhatia of Hotmail is back with a Bang! Mention the name Sabeer Bhatia and it evokes memories of startups, the excitement and frenzy of the dot-com era and more. Sabeer Bhatia is a well known name for pre-millenial Indians who all grew up on the dreams of having a startup and exit like Sabeer did with Hotmail.
Sabeer and his co-founder arguably kicked off the dot-com boom. The $400+ Million acquisition of Hotmail by the then pre-eminent company Microsoft opened the eyes of entrepreneurs, investors and industry watchers to the possibility of what the internet could bring.
Sabeer was the first in a long line of entrepreneurs that tasted success with the ventures they built. Having tasted this success, they went on to try their hand at various other ventures. Sabeer did the same. He tried to recreate eBay in India calling it Aarzoo and he tried at other ventures.
Ever the dreamer, Sabeer is back with a bang with an idea that on paper is likely to give goosebumps. He is in a mission to unleash millions of entrepreneurs just like the millions of email accounts that he unleashed with Hotmail 25 years ago. The vision is audacious but seems practical and timely. Listen to the episode to understand his story and how he plans to achieve this daring vision. I think we will say Sabeer Bhatia of Hotmail is back with a Bang!
Automated Transcript – Errors May Exist
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Krishna Jonnakadla, Sabeer Bhatia
Krishna Jonnakadla 00:39
Everyone Hey, listeners, this is your host Krishna from Maharaja of scale. And by today, I have the privilege of hosting someone on my show, who perhaps set off what we call as the.com. Boom. And I still remember, I don’t know if it was 97 or 98. I remember walking into this internet cafe we didn’t have that much you desktops back then. And the first email that I got from myself was was can you hear me? Okay?
Sabeer Bhatia 01:30
I can Yes, I can. Okay.
Krishna Jonnakadla 01:33
Okay. And I still remember my friend and I, my classmate and I were sitting next to each other, we logged in and created a mail ID, and that was Hotmail. And I still remember, it was those days where the other people that we knew didn’t have an email address. And I’m like, Okay, what’s the use of having an mailbox where somebody is not going to send you mail? And there were all these newsletters. I remember signing up to 23 of them. And that was when and I would log in every half hour to see how full is my inbox? how full is my inbox? And today, we have on the show Sabir Bhatia, the founder is the co founder of Hotmail. And perhaps I honestly think he is the one who kicked off the.com boom with the Microsoft acquisition. Sabir, it’s great to have you on the show. Welcome to the show.
Sabeer Bhatia 02:24
Thank you. Thank you very much. It’s my pleasure to be on your show.
Krishna Jonnakadla 02:27
Great to be so severe there is there is a lot of ground to cover. Maybe we’ll talk we’ll talk about Hotmail, I think we’ll talk about Arzoo as well. We should we should try it in India. And then now now showreel. Not necessarily chronological order. But I want you to talk about some of your, your Hotmail story, the Hotmail race, I know, we’ll come to showreel I heard a story from a friend of mine in Atlanta, and he used to live in the US that when you started Hotmail, you were you were you were still in college went, you
Sabeer Bhatia 03:02
know, I was actually working at a company called firepower systems. And I had already worked at Apple computer for a year.
Krishna Jonnakadla 03:11
Okay. Okay. So the story, at least this person gave me was that either you were in college, or maybe while in college, use, you thought about all the things that were going to come at you after you graduated. And you said, I’m not going to get caught up in the rat race, I need to stay above the rat race, and therefore, I need to buy myself out of this system. And that’s one of the stories that he said, you know, went into you creating Hotmail. I don’t know how true that is. But I would love to hear some of that. I know there was a point in time you possibly ran out of money for service space as well, because back then we didn’t have AWS and we didn’t have any of this cloud computing. Talk about this initial days and all the ups and downs of that story.
Sabeer Bhatia 03:57
Yeah, no, no, there was never, I think that is exaggeration that I, you know, wanted to get above the rat race. But what I did have, what did happen to me was, I went to school at Caltech. And from Caltech when I came to Stanford, my goal was to actually get a PhD, and go back and work in research in academia, and do something either teach at Caltech or, you know, work at one of the kinds of labs like JPL or another because that was the, the big. Almost everyone from Caltech did that. So that was the trend. You can kind of think, similar to your peers. Right? My professor at Caltech, told me that you know, you already have got a good education and undergrad from Caltech. Go someplace else. Go, don’t get your Masters and PhD over here, you will get too comfortable with this place, go to a place like Stanford or Berkeley. And that’s what I did. I prompted me to go to Stanford. And at Stanford, I took a course called business for electrical engineers. It was like a shortened MBA. Okay? They use the case method to teach us you know about business and how companies think and how they come up with innovative products. And that what motivated me to be an entrepreneur because I saw people like Vinod Khosla, and Fred Gibbons and Scott McNealy come and tell us their stories of how they started their companies. So I give up the whole PhD and research and becoming a scientist idea, and I say, you know, what, I want to be an entrepreneur, I don’t know what I’m going to do, but I want to be an entrepreneur. And so join industry and I want to learn about how to be an entrepreneur in industry. And, and that’s how I, you know, I left, I finished my master’s from Stanford, to a PhD in and then went to work for Apple Computer. And then I had this opportunity of joining a startup called firepower systems, which is what I did, and that you know, after that, I found my co founder and partner, Jack Smith, and we co founded Hotmail,
Krishna Jonnakadla 06:51
Scott, and we know they’re not yet big names back then. Right? They had just started up some micro.
Sabeer Bhatia 07:00
Because at least in the valley, they may not be very big. outside, outside, but within the valley, everybody heard of Sun Microsystems, we used to use sun computers, both at Caltech and at Stanford. Stanford, in fact, stands for Stanford University Network, that’s how the word sun, okay comes about. And so we were using their computers. And, you know, we, they came and told us in those days, the company was not as big as it is today, or was today before they got sold to Oracle. But there was still a fairly large, you know, 100 $200 million company. And, you know, that was a big number for us when we were students. At Stanford, but you know, it just the simplicity of the idea of how they wanted to create a company that was meant for scientific computing, you know, because the PCs were not powerful enough, they had to use massive computers that could do massive amounts of data crunching and numbers that was ideal for the scientific community. And that’s how Sun came came about. But over time, what happened is the PCs caught up and do the processing power of, you know, the workstations that were based on Unix. And you started running Unix on low cost Linux boxes. And that eliminated the need to have you know, computers like sun workstations, it was all
Krishna Jonnakadla 08:44
in sort of a small niche niche set of users where scientists son ended up powering every other PC because every other PC just became as powerful a lot of people started using them. So it became much much bigger things right.
Sabeer Bhatia 09:03
And so this is what goes on in the whole computing world. I mean, Intel was at the top then today AMD has surpassed Intel, and Apple has come with its own M one chip, which for graphics is even superior and lower cost lower power consuming than the either the Intel or the AI AMD processors. And of course it’s using it for its own line of computers and phones. It’s amazing. So this thing is all based on how people use the computers like today, majority of people are using it for video like our conferencing and stuff. So for videos speed Christmas power consumption, the M one chip which may not be as powerful as The Intel processors but it’s ideal. It’s low cost, and it’s running on arm. And price point, it’s, you know, it has it will replace the Intel based computers. It’s amazing. I mean, that’s technology. It’s always moving. It’s like the moment you step off the gas. Right? You lose the race, you got to keep.
Krishna Jonnakadla 10:25
Yeah, and then there’s arm as well.
Sabeer Bhatia 10:27
Yeah, now arm is what m one is all based on multiphonic like over on.
Krishna Jonnakadla 10:33
Right, but you still have arm as a separate entity, which still powers a lot of other devices, I think Texas Instruments and a whole host of players, you use arm as well as
Sabeer Bhatia 10:46
mobile space, right? Whether it’s you know, phones or tablets, or low cost computing devices, everybody’s using arm and now ARM based processors are even making it to desktops and soon they’ll make it to data centers.
Krishna Jonnakadla 11:08
Yeah, that whole discussion of how arm itself as opposed to the previous let’s just do first in first out method of computing versus taking the entire 8020 rule of looking at allocating processing power Yeah, and itself is a very fascinating discussion.
Sabeer Bhatia 11:28
Yeah, so low power I mean access low power because on mobile devices you need low power and an arm you know a simple processor even almost zero power almost zero power available. Right that’s what I need it for. That’s what is today the whole world majority of the world especially in the emerging markets uses phones mobile devices to access the internet. They’re completely skipped the whole desktop or the laptop generation.
Krishna Jonnakadla 11:57
Right, right. So and then that’s where you found Jack Smith.
Sabeer Bhatia 12:01
I found Jack and I we worked at Apple together and we joined Firebat firepower together.
Krishna Jonnakadla 12:07
Okay, so you had both first worked in Apple first or you met Jack at Stanford in the in the program at Apple at Apple and then and then from Apple to firepower. Yes and this this was this was pre Steve Jobs days at Apple was read before
Sabeer Bhatia 12:28
Steve Steve Jobs this was
Krishna Jonnakadla 12:31
John Sculley days. No, no, no but John Sculley.
Sabeer Bhatia 12:33
John Sculley had already left Apple, there was another gentleman,
Krishna Jonnakadla 12:40
right, his doctor something, isn’t it?
Sabeer Bhatia 12:43
No, no, he was a German fellow who was running apple at that time. There was
Krishna Jonnakadla 12:49
just a interlude a couple of years. I think John Sculley left 96 something and then a couple of years, and then that’s when Steve came back. 99 was when Steve 98 or 1998
Sabeer Bhatia 12:58
was when Steve Jobs came back. Yeah. Right. Right.
Krishna Jonnakadla 13:03
Okay. And then firepower and how did Hotmail happen?
Sabeer Bhatia 13:09
So, at firepower, I had an idea to do a web based database on the web. And I wrote a business plan for it. And I recruited Jack Smith to come and join me. And when putting, you know, brainstorming on how to put this company together, I we started exchanging information through my personal email account, which [email protected] and he had an open an [email protected]. And the company put a corporate firewall around the corporate internet that made it is impossible for us to access our email accounts. Okay, for him to access the AOL account and for me to access the stanford.edu account. That’s when he came up with the idea of what if we made email available on the web, that would solve our problem? I’m like, wow, okay, be great, because there is no web based email that to that’s free. Okay. So that was the genesis of the idea. And we started the
Krishna Jonnakadla 14:24
Stanford and so AOL and Stanford where they were not web based at that point in time, you didn’t use a browser to access the No, no,
Sabeer Bhatia 14:32
no. Oh, they were all based on a specific you had to use an Outlook Client. Alright. Okay. Client, a client to access your email. Right? Right. Okay. And then that’s when we’ll log into Stanford. You know, how to remote do a Telnet, FTP, that kind of stuff. And then I got my email in the form of a text based email.
Krishna Jonnakadla 14:57
Okay, okay. So the
Sabeer Bhatia 14:59
Webster’s view And we were the rightest, you know, web based email company.
Krishna Jonnakadla 15:06
Right? Right. And then you very rarely see a pioneer. At least that’s normally what what happens pioneer becoming the poster child for success and really taking off. Usually, pioneers are the ones that in a way, kind of open the door, prove that there is a market. And then they make a few mistakes, because they’re the ones that are going first they don’t know where the where the potholes are, they don’t know where the booby traps are. And then once they go past them, the people behind them look at it, and then say, okay, oh, I know how not to do this, I know how to do this. And they go on and succeed. Not exactly every single case. But in most cases, pioneers are not the ones that end up being the most successful ones. But in this case, obviously, Hotmail was, you know, very different.
Sabeer Bhatia 15:56
I listened, I got lucky, you know, luck plays a huge role, being at the right place at the right time with the right team, right group of people. And to make it successful. I mean, it’s, I have to thank the big guy for putting me in a situation where all of the things just happen. Timing is the most important thing.
Krishna Jonnakadla 16:20
It’s not something that you can orchestrate, isn’t it you can, like Steve says, in his infamous address, you can only connect the dots looking back, you can never say, Okay, this is the right time, I’m going to do it, it is going to succeed,
Sabeer Bhatia 16:32
do not do that, you cannot do that, all you can do is actually, once again, now going back to the Indian philosophy of the Gita, right? It’s so true. All you can do is put in your best effort. And once you put in the best effort, by mistake by chance, if you become successful, try not to claim any piece of it. So you know, attribute it to somebody else. That is true happiness. Well,
Krishna Jonnakadla 17:03
I think you’re getting philosophical here. So we’ll get back
Sabeer Bhatia 17:06
to that. But it’s stressful. Life is like that. It’s It’s surprising that philosophy in my life is coming about in that it’s unfolding like that. And I’m very fortunate that, like I said, all I did was I wanted to do something I wanted to be an entrepreneur, as luck would have it. Very first foray into technology was a good one, you know, and it was right team of people and right things.
Krishna Jonnakadla 17:33
Right, right. And then how long was it from inception to the Microsoft buyer?
Sabeer Bhatia 17:40
Very quick, 20 months, 20 months, from the time we got funded to the time we sold, we got funded on 14th of Feb. 1996. And we sold on the 38th of December 1997.
Krishna Jonnakadla 18:01
Yeah, and I still remember, I think, post the.com Bust Bill Gates had was giving an interview where companies, a lot of companies had gone under because they all they had was just a fancy website and a business plan. And they’d raise millions and hundreds of millions of dollars. And, and then you had the next set of companies that just had traffic, they had eyeballs. Whether the engagement was high or low was anybody’s guess, because not a lot of that was measured back then. And I still remember Bill saying this whole notion that traffic equals value is something I’d like to debunk. And I still remember that very fresh in my mind. And I said, Dude, what are you talking about? You’re the you’re the one actually that kick, kick the whole thing got? You. You said Hotmail it’s got these hundreds of millions of subscribers and then there’s traffic and I’m gonna put in 400 million, wasn’t it? Yeah, and I’m gonna buy it out for 400 million. Now that you got your share of the pie and you’re going around town telling everyone that your traffic’s not what you’re supposed to be, you know, valuing. So it kind of felt like this odd thing that you use a means that to get in and then you’re telling everyone that needs to get in. I kind of felt that. So what what was it like? Negotiating with well, and then eventually, it becoming did you stay on at Microsoft for some time? Or was it just an acquisition?
Sabeer Bhatia 19:34
I just stayed there for one year. Okay. And and then you know, moved on and, like, did my own thing. But, like, yeah, it was a great experience with being at Microsoft. And
Krishna Jonnakadla 19:58
how does it work? working through with Bill and how did how did that thing happen?
Sabeer Bhatia 20:05
No, it was excellent. It like I said, you know, we the we it was a little bit of a discussion, we were leaders in our space. And initially it was you know, they made us an offer for about 140 million. And then, you know, obviously, we went back and forth, and we’re able to get whatever the number is. But all of it took place between October and December of, you know, 9990 9797.
Sabeer Bhatia 20:53
And so, go gone. And it was, you know, that was the, it was a very good negotiation, that was the right thing at that time, you know, we were had we not partnered with Microsoft, we would have had to face them as a competitor, because they were going to get into this space on their own. And it made sense for both companies. So it was the right thing to do it.
Krishna Jonnakadla 21:28
In a way you both needed each other at that point in time.
Sabeer Bhatia 21:31
Yeah. And you know, till today, initially, we thought that advertising was going to be the means to generate revenue till today. Email is a loss leader, it does not generate revenue, per se, from advertising itself, just like WhatsApp does not generate any money for Facebook. But WhatsApp has maybe two or 3 billion users, the usage is phenomenal. The stickiness is very high loyalty is very high, very strong. user traffic, and, but not not easily monetizable. And I think that’s the that’s the thinking on the web. That not just web, web and mobile companies as well, that, you know, you don’t have to always worry about generating revenue upfront, you have to solve a problem. And solid for a lot of people, you will figure out the monetization with, like, look at Google, fantastic example, for six years, didn’t make any money. You know, it’s, they had a lot of traffic, they didn’t make any money. But when they did make money, you know, today, they’re trillions of dollars worth. So that’s so I have
Krishna Jonnakadla 22:57
a, I have a hypothesis around that. I’ll come to that in a second. But but but that’s great. I do have a question, though, which is, you know, when I wrote on my list of questions, I had this thing that when you when we look back today, in a way, every product needs some sort of a beachhead use case, right? If you’re going to launch, let’s say, a new VCR, unit, you’re going to require some fancy content that everybody wants to watch, just like you had Nintendo, and then Nintendo needed Donkey Kong and some of those games that people badly wanted, which is why when they came up with a Gameboy, they had all of these adaptations or the famous titles that were popular on the arcade games. So similar to that, would you say in some sense, Windows was quite ubiquitous, and all the PCs and the desktops. And in order to jumpstart into that internet, you needed a way to connect people to the browser while Netscape was already out there. And then you had Internet Explorer inching on the heels of Netscape. They needed something which was much more connecting which was going to engage people bring them into the fold, and in some sense, that’s what Hotmail ended up doing for Microsoft kick started all of that engagement would it be an exaggeration to say that the eventually internet domination and all of the space domination that Microsoft ended up doing was in no little measure spot by heart man?
Sabeer Bhatia 24:41
No, no, I wouldn’t go that far. But yeah, it in those days, and for a long time, a large portion of the internet traffic came by way of Hotmail because just the browser alone was not good enough. Even though it was handled with the windows. There was a Famous antitrust case with Netscape and Microsoft, but I think real. Yeah, the real issue was what was the source of raw traffic to Microsoft sites? And Hotmail was the beachhead? Absolutely.
Krishna Jonnakadla 25:18
Right. So in a way, the eventual browser domination and what happened? The, you know, burial of Netscape was a spot, so maybe not the entire thing. But in in some sense, the fire was lit by hardware in a way.
Sabeer Bhatia 25:34
Not that so much. I wouldn’t say I wouldn’t go that far. I would say that okay. We’re independent, you know, Netscape, because Netscape did not know how to monetize the browser. That’s why Netscape, you know, had a device. But for for Microsoft, Hotmail was just a pure traffic generator. And the two are not I didn’t use Hotmail, push the browser is where I’m going to say,
Krishna Jonnakadla 26:08
I know, I got that. But in some sense, I, I’m not trying to retrofit the whole thing. But I’m still saying it’s yes. Great. I have a great it’s like I have, I have a great car, but I need a place to go. So in some sense, this becomes one of those. So once I get people to see this, and then I can then take care of other things. Right. So just like WhatsApp, you, you first connect people, once you connect people once you’re in the, in their conversations in their head. Once you have that mindshare, that’s the next thing is okay, I have all of this raw mindshare. What do I do with all of this? What is the next step? And you have to be if you see WhatsApp for neck experimentation, it’s not easy. I mean, it’s it all in discussions, it all sounds easy that once you have the engagement, and once you have the traffic, you can figure it out. But it’s easier said than done. Right? Yeah. And then so still 9097 You had the exit? And then you’re sitting on this pile of cash? And then and then how long did it take for you to do Arzoo? What what did you do in the interim? Interim?
Sabeer Bhatia 27:19
No, I started immediately working on some ideas, you know, different versions of Arzu first was trying to do, I think I made the wrong step in jumping into the whole internet space, without really thinking through, you know, what I wanted to do? And so, yeah, I think part of it was, maybe I wanted to, I was too confident with the success of Hotmail. And I thought too highly of myself. And, you know, I should not have done it so quickly after. You know, there are some things that you just, you know, I think this is what life teaches you as well, that you’ve got to find the right set of people with the right motivations to do something, you shouldn’t just do it just because you somebody has an idea or you think you have an idea, and you jump into it too quickly. You have to, there has to be an underlying, very strong motivation to do something. And sometimes that motivation, that inner voice that comes to you should be larger than making money or hitting another, you know, getting another experience. Like, it’s what I say is, intention is one of the strongest forces in the universe. And I’m hoping that my experience with showreel will, will prove that because the intention is to really help humanity and to make a difference and to make a difference in a way that changes people’s lives. And for me, the motivation to doing this now is not one bit about making money. It’s more about you
Krishna Jonnakadla 29:35
already. You already check that check that box on your list to a certain extent even
Sabeer Bhatia 29:41
check that box have been there done that it’s useless. It’s, it’s what they call Maya. It’s not. And I think it’s more about how can I leave nonpreferred it’s not even about leaving a legacy anymore. It’s about I don’t even care If right exceeds or doesn’t, for me, it’s more important that I’m doing something that every single moment every single day internally makes me happy. And I know I’m making a difference to people’s lives. And if it is, if my vision plays out correctly, I’ll make a difference to the lives of 80 million people. And not by providing them a product that they can use, but actually making a difference to their lives. That’s what motivates me to do this.
Krishna Jonnakadla 30:39
Very interesting. So we, so let’s talk about so this was the post Microsoft time that you’re talking about? After you after the one year of Microsoft? How many experience experiments are how many ventures did you try your hand at?
Sabeer Bhatia 30:57
A number of them 345. Okay, all didn’t work out. Some worked out, kind of most of them didn’t work out. And I’m, like I say, I spent I spent the last three years thinking why did they not work out. And I think I figured it out. I’m a terrible businessman. To tell you to do business, I am the worst on the freakin planet. I can’t do numbers I can’t do I can’t monitor spreadsheets balance sheets, look at this. Where’s the money going coming out and people that cheated me big time left, right and center. So it doesn’t matter. That’s also part of life. It’s an experience. But what I learned from that is what motivates me is imagining a future that does not exist today. And making it happen. Those are the ideas that drive me. Okay. And I think my instincts tell me, and I may be wrong, but My instincts tell me that what I have now could be one of those ideas that are part of the web 3.0 thinking. And so
Krishna Jonnakadla 32:21
next evolution of the web.
Sabeer Bhatia 32:23
I am I’m still working out all the pieces of the puzzle, I think I have got three major chunks done. And if my instincts are correct, this will change a lot of things. And I will make money people ask me I still don’t. But I know I’m gonna change, change the way people think about the world. And especially people developing countries.
Krishna Jonnakadla 32:53
Right. So I know, I read up about all the things that you said about how the problem is more acute in places like India and places like developed developing countries. And in some sense, the whole hiring process itself is so archaic. It’s just so and I think with the use of AI screening tools, it’s it’s only getting worse. I don’t know if you watch this movie called dollar trips, which was shot by an Indian guy. Telugu director called shaker Kamala, he was a techie. I don’t know if he worked in a value or not. But I know he worked in the US. And it was it was shot literally like a docu drama. And this is moment in that movie, where and this is still either post y2k or pre y2k When there were boatloads of Indian engineers that were required by all the tech companies. And there are all these three groups of three or four people who’ve traveled to India to screen hundreds of applicants within four or five days to pick them up. And there’s this kid that shows up and they asked him for a resume his resume, and he shows the resume. And I don’t remember what exactly it was a skill set. It goes something like this. He is good in dotnet. The resume that he’s just submitted, says java.net and the recruiter, the lady on the other side tells him Oh, you know what, we’re not recruiting for dotnet. We are actually actually recruiting for Java. He says, Don’t worry about it. I’ve got a resume for Java two. And so she laughs at me. And then she asks him, dude, if you’re not getting it, we want a person who can actually code Java. So that kid thinks all he needs to do is code resume, or create a resume that just speaks to his Java skills, which he really doesn’t have. And then that’s how he’s going to land the job. And today, if you see hiring, a lot of hiring happens that way, doesn’t it? You AI tools are trained to actually pick the keywords that you match with maybe potentially what? You know, the job description is looking at, or trying to filter out and you plug in many of those. It’s all like, what do you do with search engine optimization? What are people searching for, and then you put in all the words, and then you’re boom, your resume shows up, you still have to go to the eventual process. But But then, in some sense, it’s dumbing down of the whole thing. And it’s because of the quantity of candidates that you get, you don’t know how to screen them. A lot of the screening itself is being done by people very, very junior, who barely have experience, even understanding some of the experience of the people on the resume. So then, I was thinking about it. A couple of four or five months ago, when I was hearing the fellow entrepreneur build a tool to make this, this AI a lot more human. And I was always thinking. And if you sift through a lot of user feedback, the user feedback says, get me in front of some. If you get me in front of someone, I know that I can make an impact. Screw that as you may. I know, I can talk through my experience. And I know that I can make an impact. In some sense, I think showreel is doing that. Because what it’s what it’s doing is giving people this ability to articulate their entire experience. It’s the answer to this. It’s the multi paragraph answer to this question. Tell me about yourself, and what have you done? And you know, they they use this in the form of that, in some sense, a video resume, but much more richer experience. Would you agree with that?
Sabeer Bhatia 36:47
No, I yeah, I would agree with all of that. You’re saying I have moved on from trying to help people find jobs? And I’ve asked that. That is, that is a big lie. The problem is there are 300 million people, for example, in India that are unemployed, right? How many jobs would I be able to help them find even if I start dialing for dollars and get Infosys and Wipro and all the big guys, they have their own hiring processes? Right? This new app that can give them all, they just, you know, get their own folks. So I have a different idea. I will create a million jobs of my own by funding a million entrepreneurs. Awesome. And seed funding a million entrepreneurs. Okay, like I said, I am I’ve moved on from the jobs and saying after jobs that are no 80 million manufacturing jobs that you can, no government in the world could create. They’re lying to their people that they say they want to get manufacturing, making India do this, do that. None of that.
Krishna Jonnakadla 38:03
Right. Right. Right.
Sabeer Bhatia 38:05
Even if you have making India today, you have robots doing stuff. You know, a Tesla factory you lay take a look at the latest factory that has maybe 500 people employed. Now everything is being done by robots, heavy machinery like painting the old cars being built by robots with just a robotic engineers watching everything and making sure that it’s it’s functioning properly. So manufacturing, what China did 20 years ago is gone, we can emulate that model. The concept of a job is broken. Today, the youth of the world does not want a job. youth of the world wants to work at a startup or have their own idea. I’m saying if I can find a million entrepreneurs, hopefully each of those companies will create 50 6070 jobs will create 70 million jobs. And those are the jobs of the future. Entrepreneurship is the future. So you will see a main you’re probably one of the first podcasts to hear about this. Like I said, thinking is just continuous. It’s not one time one product one at one this thing, it’s every day you keep thinking and you keep growing and you keep changing your model. The newest model is hopefully, I will fund a million entrepreneurs. So if there are entrepreneurs, that’s the focus, download the shorty lab, answer the entrepreneurship question and maybe I’ll fund you. And if your idea is good, I will fund you for sure. And I want to find a million such people.
Krishna Jonnakadla 39:52
Amazing. So you’re pivoting from the jobs or you already pivoted from the jobs to let’s power entrepreneurs.
Sabeer Bhatia 39:59
Yes. In my mind, I’ve already pivoted. Your jobs are old, old fashioned Joy job was created in the 1920s. During the Industrial Revolution, when, you know, workers had to go to work nine to five, work in a factory pandemic, so you can work from anywhere. Right? Who wants to which of your friends wants to go and work in a factory nine to five? Everybody wants to do their own stuff and work in a startup. All right, yeah. Let’s think now. Why should there be only you know, 100 200 startups that get funded in some of the cities in India, like, you know, Mumbai and Bangalore and Delhi? And why can we not find people in middle of nowhere? Middle of middle of Kanyakumari? Where, you know, they got a good idea.
Krishna Jonnakadla 41:03
How much money do they get? Do you? Do you have some sort of,
Sabeer Bhatia 41:06
like, I think it’s the I’m going to follow the Y Combinator model. So the secret funding, five to $10,000. Take a small sum, come up, but you got to come up with a good idea. The idea is to pass the test is, in some
Krishna Jonnakadla 41:24
sense. So in some sense, no doubt, no due diligence, nothing. It’s just to pitch
Sabeer Bhatia 41:30
on your show. I listen to the original font, the idea,
Krishna Jonnakadla 41:36
God. So in some sense, you’re taking what Dave McClure did with 500 startups, and you’re saying 500 stops startups is passe. And I’m going to do maybe 50,000 100,000 or 5 million startups. One is 1 million, 1 million startups and because that’s where the world is headed. That’s it. And the risk reward ratio is that I’m only putting in five or 10,000, I’m really just putting in seed, and there are going to be out of quantity comes quality. Is that the notion somewhere?
Sabeer Bhatia 42:12
No, I hopefully i’ll put a quality control on every one of them. But I will do if I open the funnel through an app where anyone can do an interview. And if you can answer the 10 questions that I ask of any entrepreneur, maybe that is a good idea. Maybe it depends on how well you articulate yourself, how well you articulate the problem. And if you are great at articulation, you have a unique solution to a unique problem. You describe the problem, you describe the solution, you describe what you need, how many people you need to do this. Hell yes. 10,000 bucks go do it.
Krishna Jonnakadla 42:53
Interesting. So I’ll come back to my earlier the Fang, the Facebook, Apple, the Google ad, the hypothesis of Iran, about how these companies approach product building. When you look at, for example, Google Pay, or Gmail, or any of these tools. They don’t have a lot of bells and whistles. They have, they do one or two things, maybe or maybe three or four things at best. But they do it really, really well. And it’s a universal, near universal problem. Like messaging is a universal problem. Just paying something is a universal problem. If you put if you look at the investment industry, the CIO for instance, Sequoia talks about how payments is so broken, and there are a whole host of things that exist as 2 billion, 3 billion, 4 billion opportunities. But the fangs and the Googles are really going after global opportunities and sounds like shorting has some of that thinking would do. Would you agree?
Sabeer Bhatia 44:09
I don’t know. It’s my thinking. And all I’m saying is my deep down. Goal is to solve the unemployment problem. And I thought I could solve the unemployment problem by getting video resumes of people and help them find jobs broken, it’s outdated. Java is outdated, to create jobs of our own and fun million entrepreneurs.
Krishna Jonnakadla 44:38
And in some sense, it’s like instead of universal basic income, it’s like universal basic investment.
Sabeer Bhatia 44:45
If your idea is good, yes, I want to change the dialogue in all of the developing world from talking about saffron or green color or you know, Kashmir files or All bullshit, they talk about to talk about this a great idea. We should fund this. Great, he got funding, so and so got funding. So it’s about funding the green idea, right? Teach all the young kids think about ideas, my friend, don’t think about the jobs, think about ideas. Not everyone can make it, either you have an idea. And you get funded, or you join an idea that you like.
Krishna Jonnakadla 45:26
Okay. So what happens after you get funded
Sabeer Bhatia 45:31
a blockchain contract, smart contract, where we take a small percentage, every 345 percent of your company, okay, 95 is yours. Correct. And you get to earn it, you get to know who the founders are co founders are, you know, we create an agreement. And that’s it, we, you, you set the targets for what you will do with this money. You know, you tell us with this money, I’ll be able to get five customers, so much in revenue, or this, I’ll be able to set up, you could be a chaiwala. And you have a interesting way of bloody making the user get automated t this thing I can do and I can do on 10 stations, and I have 50 people and do make a franchise out of it. Fine, do it. Six months later, one year later, whatever your target is, this is what you said you want to achieve. What of these have you achieved if you’ve achieved it? Series A no problem.
Krishna Jonnakadla 46:36
Interesting. So in some sense, you’re talking about the factory system, which sort of was coming into its own in the 1920s. And other paddle thing was also happening in the 1920s, which I think was very similar. There wasn’t Sabir Bhatia to orchestrate something of that sort. But I think a lot of small businesses and medium sized businesses were born back then you don’t have you didn’t have the large corporates of today. But every single one of them, in fact, when I used to live in Chicago, and I used to travel, what school would travel across what’s called as the Rust Belt, Ohio, Michigan, and Indiana, their whole home to all these manufacturing companies, right? Almost every single one of them, unless they’ve shut down can trace the roots back to a very small enterprise that started in one of these villages. Right? So and eventually manufacturing grew and innovation happened. And that’s been the real engine that drove the American economy 70s 80s And then eventually, you know, large global companies. And just like how the world the many happenings in the world happen in cycles, there are some there are the asset bubbles happen in every decade long cycles, you have a ticket of past and you have a ticket of boom. But when you look at massive human level changes, they happen I think, once in a century. So it’s exactly what I’ve had this notion that hey, I think we are headed towards another round of unbundling large corporations are not going to be there they are going to exist, but you’re going to have millions and millions of smaller businesses. And as the world metamorphosis again, into something more different, you’re going to have all of these smaller businesses that are going to start they’re going to be a seed and then become larger, and looks like your bank in the middle of it.
Sabeer Bhatia 48:43
Listen, like I said, What I’m doing is not anything truly innovative. All I’m doing is exporting America’s way of thinking to the restaurant world. America is built on an entrepreneurial spirit, where people don’t want to take a handout. They will say we will work and we will do it on our own. We will create a business on our own. I have seen such amazing innovative businesses come up in the last two years of the pandemic. Airline Pilots accountants. People who worked in finance have quit their jobs and are creating tiny little things like for example, the other day my sons with for their birthday, we went to a small place that had it has a cooking class for two to three hours for young kids to teach them how to cook to be chefs make a little pizza, put the pizza in the oven. Make it a three hour thing. It’s a fancy asked a birthday gift to my son and his friends. And they had such a blast for two and a half hours. That is innovation. It’s a small business. Somebody created it by, you know, renting a small place and said, You know what, this is what we’ll do, we’ll never become a big business. But people are happy that teaching kids actual work and kids love it. hands on experience of being a little chef, they watch all these chef shows on television, right? Who wants to be a chef who wants to do this? That’s an idea. Somebody had an idea and the whole community supporting it, some person in, in a village in north India says, You know what, I have a way to solve the pollution problem, I will go and pay every because I know the village system, I will pay every village, you know, certain number of repeats, and I’ll take testable. And I’ll put it into, you know, into an energy making factory or a small plant and convert it into energy. There won’t be any pollution in north India. Hey, you know what? Why should these that idea come from an IIT graduate? Or from an array or an MIT girl, you should come from their own local village? What is what is missing is encouragement. And capital. I’ll give them I’ll give them the encouragement through my app and capital. Right? I’ll give them the mentary. I’ll teach them.
Krishna Jonnakadla 51:36
So I think in essence, you’re going to put the whole Jugaad culture on steroids in the sense that God is all right. So I have a parallel that I that I want to share with you in the year 2002. I invested way back then what was $15,000 about five lakh rupees of my own money into a company called renovations, was called Rural rural innovations. And one of the hero products, which are already succeeded back then, was this sprinkler system. So I don’t know if you know, most modern sprinklers, maybe they’ve undergone a change way back then waste about 40 to 45% of the water. It has not spread out. So in India’s sprinklers called rain gun. So a normal farm farmer calls it the Rinka. And I still remember the name, this was called Chandra proper rain gun. So this villager I think, in Khumba code near Kumbakonam, in Tamil Nadu, had done made a small change to it. Because water is scarce. It’s not like America, you don’t have abundance of water. And so he needed to conserve water. So he couldn’t afford losing 40 to 45% of water. And he made a change and it was working on his farm. And he had helped I think about 2025 other farmers. And somebody gave him the idea that dude, this is impactful, and you should actually spread it out. So rural innovations was a firm that had gone into the hinterland, to scout for entrepreneurs like them, and they needed only four or five lakhs. You have the smaller layouts and the fabs that will do a little bit of the modeling for you. It doesn’t it doesn’t have to be a fancy, you know, Guangdong or Wanzhou Chinese factory that will do the you know this thing for you though the fabs and seals for you. But it was a small Indian company. And then I still remember that started generating money for the farmer on the side, in addition to the farming business that he had. So I can relate to that. We were still very early. The Indian market itself was very, very small back then, eventually that company folded folded up, but that I can relate to what you’re saying right now in terms of the paddles. But I think if this pans out the way you’re thinking about it, I don’t even think you need any distribution. I mean, the million guys are going to fund it’s another fact that you need what 100 billion dollars to fund every one of them if you end up giving
Sabeer Bhatia 54:18
Krishna Jonnakadla 54:21
5 billion for your funding a million guys right?
Sabeer Bhatia 54:23
million times 5000 10,000 10 billion
Krishna Jonnakadla 54:27
million times 10,000 10,000 million. 10 billion 10 billion. Yeah, so 10 billion. So I’m presuming you’ve already arranged for the funding somewhere. Dun, dun, dun, dun. And the 100 million guys themselves are a market on the app. There you go. Right. You have your captive distribution, and I
Sabeer Bhatia 54:51
will give them access to 100 million, possibly a billion people on the app itself. I’ve got a plan. Write a bigger plan. I can’t share every detail with you right now. But at least the fighting thing that I can share with you. And at least the goal is to fund a million entrepreneurs and change the world.
Krishna Jonnakadla 55:14
Where are you on the journey right now? How many have you funded? Or is it
Sabeer Bhatia 55:20
I want to get the whole system, maybe we’ll start funding the first companies by the fourth quarter of this year. We’ll all process you know, just like you, when you set up a VC fund, there’s a process there’s a process to doing this, too. You know, I just come in, there’s a vetting process. I use some AI to vet the right ideas. But it’s all coming, my friend. It’s all coming.
Krishna Jonnakadla 55:46
Interesting, interesting. Awesome. So it’s not
Sabeer Bhatia 55:48
all jobs, I have left that drain. And I said, To hell with it to hell with old fashioned jobs.
Krishna Jonnakadla 55:55
Sure, a lot more exciting than jobs, million
Sabeer Bhatia 55:58
youth in India, and hope the rest of the world a different way of thinking, and I’ll fund them all.
Krishna Jonnakadla 56:07
Right, right. No, I think it sounds great. I’m already getting goose bumps, just thinking about the possibilities. And I mean, imagine powering a million dreams, you go somewhere that some some right, somewhere around there are going to be heroes. The whole VC model itself is based on the fact that let me make 100 investments, that’s sort of sound plausible. One or two of them are going to be mega successes. Now you take the 100, and you’re now multiplied eight or 10,000 times to get a billion. And now you’ve just at least in the realm of statistics, and the world of chance you were you should have the same 100 times the outcome that a normal VC has. There you go.
Sabeer Bhatia 56:56
Right, and I’m going to I’m going to do this not just for the few elite, the few super well educated in the big cities that have access to VC networks. You said Sequoia or Lightspeed or XYZ. I mean, like a farmer already Lightspeed your farmer who came to you and you gave him five lakhs? Will you go right speed, no chance, right? The network connection will never happen. I’ll make it
Krishna Jonnakadla 57:24
up. He doesn’t even know lightspeed. He doesn’t even know lightspeed. Now,
Sabeer Bhatia 57:27
can you imagine? In every city town, village, Zilla, Panchayat unknown place, somebody has an idea. Okay, democratic, any kid, rather than them going to school and mugging up crap. The whole Indian education system is broken, in my opinion, my humble opinion. In my humble opinion, the whole Indian education system that is based on rote is broken. Now we give them the ability to think you can think if you have a good idea, test it out with us, no problem. We’ll give even money to go and start. You could be a high school kid. You could be a 65 year old man who has done all his life research and said you know what? I always had this idea but I didn’t do it. I don’t know how to do it. Because the will give me money. I’ll give you
Krishna Jonnakadla 58:21
an A 10 grand us which is close to eight lakhs here. And it’s it’s a lot of money. It’s not a it’s it’s not a drop in the ocean. It’s definitely they can make
Sabeer Bhatia 58:32
they can make it make it last like it’s $100,000 in America. Right.
Krishna Jonnakadla 58:37
Right there. Yeah, I can certainly see that happening. And I think you pick the right market. It looks fantastic. And another experience because for me, there are two things that I see happening here. One is I hate the old boy network. There you go. I’m not an IT. I’m not it. And then I whenever I go fundraise, I can see the odds are stacked against me, because I’m not a batchmate of the guy who’s sitting on the other side of the table saying I tell him don’t know, correct? Forget Hlo we’ll pass it on. So that that doesn’t happen. And I have to earn my stripes. Yeah. And in again, in the 2000 era, I built a tech product. And in order to fund the tech product, one of the things that we did, it was a nonprofit initiative called Drona was to help. Computer grads in tier two and tier three towns in South Andhra Pradesh become employment ready in Bangalore. So I saw we did road shows in about 20 colleges and ended up helping about 2000 of them. And every single time I go into many of those places, I’m amazed at the kind of energy they have. They got a kind of innovation that they can bring. I think one is destroying the old boys network kind of funding. And the second one really Democratizing Innovation and access to see capital, which is I think what you’re doing.
Sabeer Bhatia 1:00:02
And not just that one other, you know, added thing to this is another way of thinking about this is Muhammad Yunus started the micro lending program? Yeah, this is micro VC program or micro Equity Program. Think of it as that completely online blockchain. Right. Fricking we’re going to change the world. And I’ve got amazing, I’ve got great support from the UNICEF guys. They say you do this well in India will take you to 60 countries, which is always
Krishna Jonnakadla 1:00:40
okay. Yeah, no, I think I think I think you are on to phase two severe. You read phase, you kicked off phase one with Hotmail, I think you tried your hand at it for a moment when you went all philosophical. I was thinking, oh, boy, looks like I’m having a Deepak Chopra and Wayne Dyer kind of have a session here. And then I think this show really is what animates you. I can see that. And I think the entrepreneurial and the I don’t want to call it altruistic, but it’s a different a good version of altruistic. Yeah. Economic altruism, let’s call it that. Right. Economic.
Sabeer Bhatia 1:01:23
Do they fund good idea? I feel good about it. They change the world and they make money. Right, like our parents and say, Yeah, let’s do it. 4 billion for 7 billion people give access to 7 billion who don’t have access to Silicon Valley, who can’t come to Silicon Valley to them?
Krishna Jonnakadla 1:01:45
Right, right. Yeah. Amazing. And then, like Y Combinator, I’m assuming at some point, through the app, you’ll have mentorship you have you’ll have market only
Sabeer Bhatia 1:01:54
people marketplaces, opening the market opening for engineers. So that’s where the resumes come in. Also, the media, companies will need to hire engineers will need to hire managers to come give you a few don’t have an idea. Give your interview. Show us give us your professional this thing. So I’ll create a whole ecosystem of employing people but employing by startups, not big companies, not all world companies. It’s a whole Metaverse, I’m creating. Yep, I’m not gonna call it meta because meta is somebody else’s taken. It’s okay. Yeah, it’s my own shoulders, shoulders.
Krishna Jonnakadla 1:02:35
Well, that’s meta worse. This is real worse.
Sabeer Bhatia 1:02:37
This is real worse.
Krishna Jonnakadla 1:02:39
That’s that’s what I would say. I’m not a big fan of Metaverse, by the way,
Sabeer Bhatia 1:02:45
is up way so you can sell more Oculus devices.
Krishna Jonnakadla 1:02:49
The third one will be one more 3d One more world domination. One One more world domination. And we’ve seen Second Life Second Life was there a long time ago, right. So just like it’s a different version of Second Life, it’s just that he’s got the scale and the size to that
Sabeer Bhatia 1:03:07
good idea. No problem. Fantastic on for Power Price one we’re going to do for all those people who are connected. And for whom even a small amount of money makes a huge difference. If we didn’t find a million dreams and create 80 million jobs, I will go to sleep happy at night.
Krishna Jonnakadla 1:03:31
This is this is this is fantastic. So wait, I think you’re onto something. And so before we wrap up, looking back, what are some high points and low points? You know, that sort of keep you going? Everything
Sabeer Bhatia 1:03:46
in life has to be considered as an experience everything. Learn from it. That are good experiences that are bad experiences that terrible experiences. You cannot try to insulate yourself and I did this I did some dices all my investments were successful. I’m like you have a freaking live life. Yeah, what have you done? You cherry pick the best ones. Life is a journey for all of us. It’s not how many times you fall down. It’s how you get up every time you fall down. Right. Right. And this is my my, my vision now and I’m loving every minute of it every second of it. And yeah, I throw in some philosophy, but it actually will. It’s all making sense. Yeah, but it’s not I’m not going to go loose goose Caboose on you and you know, wishy washy. This is real shit. I want to change the lives of a million people and indirectly 80 million jobs or 100 million jobs created by funding a million entrepreneurs.
Krishna Jonnakadla 1:04:58
Now Yeah, Well, I Well, I think if you’ve got the funding lined up, and then if you figure out
Sabeer Bhatia 1:05:06
everything, don’t worry, everything will fall into place. When you see an unfolding, it will all fall into place. Beautifully. That’s
Krishna Jonnakadla 1:05:15
fantastic. That’s fantastic, fantastic, awesome. Survey, this has been a eclectic and interesting conversation. I touched upon Hotmail because you’re still known as that guy. And a lot of our listeners may, or very young people who are 1819, who were born, after Hotmail was created after a lot of the.com bust happened, they may not know about you. So we covered a little bit of that ground, and what, what really is severe when he’s not an entrepreneur, what’s he like, as a person,
Sabeer Bhatia 1:05:52
I’m a Family Guy, I’ve got three little kids, I love playing with them. We’re doing all of this for them. It’s their world. We are making a difference not to our lives, I have lived majority of my life, I have maybe another 2030 years to go. But what what drives me is we have to make their world. And you know, and I get inspiration when I take them to school, like my kindergarten kid who’s in first grade now, his on one of his school buildings, I think is the motivation that I take with me. It’s not enough to change the world, you must make it better. I’m drawing inspiration from an elementary school. I love it. Because we lose our basics, we lose the basics, they don’t grow up, as we grew up with a cat two encountered with this license, and this one will do this. And this guy knows this. And that guy knows that. Now, I think freely, just really open your mind. Imagine that you can do anything. Yeah, yep.
Krishna Jonnakadla 1:07:10
Yesterday I was, there’s an Indian film now that’s making waves called kgf. To it’s a color film. And I don’t know. If you know, the guy who’s that it’s on track to make 1000 crores which is I think about 150 mil, shortly. It was edited by a 16 year old kid who’s not a professional editor. He was a fan of the film. And this is a sequel to the first one which came out about three years ago. And when that movie came out, apparently he put together a fan edit. I’ve seen a lot of them. But the director was so impressed. And you know, talking about this guy going to film school and editing school and all of that. And then that’s where many of these guys are going to come. And I think the next wave of entrepreneurism, wealth creation is going to come from this part of the world. I think Gio is correct. The philosophical moorings are correct. And I think you’ve got all the brass tacks figured out. We’ll actually sure you’re going to conquer many more peaks. In this journey, I think that’s bound to happen. And honestly, as soon as you pivoted from jobs to this entrepreneur thing, that’s when you know, I was like, all excited that that was great. But I think this is a million times more exciting and more fun.
Sabeer Bhatia 1:08:38
And two other doses that I can share with you just yet. But if we do this in about six to eight weeks, you will see the grand vision is even bigger. Everything is just working out beautifully, like a beautiful symphony in my brain. And God willing, I’ll put it to put it to, to actual deploy it. And I’m having the time of my life during this loving it every single second.
Krishna Jonnakadla 1:09:08
Awesome. So we will come back and talk to you maybe in about six to eight months. Once you’ve had your first first 10,000 guys. Yeah, and I know that’s going to be one hell of a conversation.
Sabeer Bhatia 1:09:18
Sounds good. Excellent. Thank you. Yeah.
Krishna Jonnakadla 1:09:22 Thank you for listening. If you enjoyed listening to the show, and want to help support our show, please leave us a review by visiting our website Maharaja subscale.com forward slash reviews. It helps other people like you discover the show. I totally appreciate your support. If you’re a founder or an entrepreneur, or anyone interested in or working with startups, this show is where you see discussions in depth about founders stories, their playbooks and learn more about growth strategies. Visit our website for regular updates, or wherever you get your podcasts and discover more awesome episodes. I’ll see you on the next episode. click on the bell icon and hit subscribe to get the latest episodes