Hotmail founder Sabeer Bhatia is one of India’s tech heroes. Born in Chandigarh to a middle class armed forces family, Sabeer was a brilliant student and made his way to Caltech and Stanford University. After a short stint at Apple, he thought up the brilliant idea of Hotmail which launched in 1996. Microsoft bought Hotmail for $400 million and the rest is history.
One of early investors in Sabeer Bhatia and Hotmail was American Venture Capital firm Draper Fisher Jurvetson who pumped in $300,000 before it was launched in 1996. When Microsoft paid hundreds of millions for Hotmail in late 1997, Sabeer Bhatia became a super star in India. He was feted by powerful politicians and linked to movie actresses. Hotmail investors made a killing as well.
Sabeer is a man of good ideas and deep pockets. He launched a number of other products and applications like Arzoo, BlogEverwhere, Live Documents - which though are great ideas never had the same commercial success like Hotmail.
American Jessica Livingston is a founding partner at Y Combinator, a seed-stage venture firm based in Cambridge, MA, and Mountain View, CA. She was previously VP of marketing at investment bank Adams Harkness. In addition to her work with startups at Y Combinator, she organizes Startup School. Jessica is perhaps best known for her book ‘Founders at Work’ which is a collection of interviews with tech founders like Steve Wozniak (Apple), Caterina Fake (Flickr), Mitch Kapor (Lotus), Max Levchin (PayPal), and Sabeer Bhatia (Hotmail).
While being interviewed by Jessica, Sabeer Bhatia told her that the VC firm Draper Fisher Jurvetson (DFJ) actively worked to prevent other VCs from investing in the fledgling hotmail. And that Hotmail co-founder Jack Smith had the idea of putting a Hotmail ad at the bottom of the email to promote it.
Jessica’s book ‘Founders at work’ has sold well and is read by most people who start tech companies. After the book was published, Sabeer contacted her to request that some of his comments about DFJ be censored from future editions.
Yesterday, Jessica Livingston has blogged that some of the things that Sabeer Bhatia told her were false. Jessica wrote: “I received evidence yesterday that some of the things Sabeer Bhatia said in his interview in Founders at Work were false. The evidence indicates that (a) Tim Draper rather than Jack Smith had the idea of putting a Hotmail ad at the bottom of emails sent by the service, and (b) that DFJ didn't disparage Hotmail to other VCs interested in investing.”
As you can imagine, Jessica’s recent post has generated much debate and heated discussion in the American tech world. Some are critical of Sabeer, others not happy with the Venture Capital firm. Controversy is cash and this book will sell many more copies.
Sabeer will always be an Indian tech hero who founded hotmail, but one with some flaws like most of us.