We all know who is Sabeer Bhatia and why he is so famous, but its worth having a look at this...
Sabeer came up with an idea of web base email system which was named as HotMail. After setting up HotMail.com he invited 7 of his closed friends to join and create a HotMail account. In less than 6 months HotMail had attracted more than 1 million users. As HotMail was originator in web based email and it had huge user base, Microsoft eventually bought HotMail for 400 million dollar in 1997.
Now here is the most interesting part, why did Mircosoft buy HotMail?
Was it because of new concept email? I dont think so, being a pioneer in technology microsoft could have very easily developed better email system than HotMail. Then what is it which attracted Microsoft towards HotMail. Lot of people thought that its not a good idea to pay such a huge amount for just a email website.
But Mr. Bill Gates had some other plans and he was looking one step ahead of normal people. He realized the potential of growing web community, and what he can achieve with that web community. So Mr. Gates bought HotMail.com and setup an e-commerce web site and linked it to HotMail.com . So now he had 1 million users visiting his e-commerce web site msn.com. Even if 5% of the users shop on msn.com with in no time Microsoft would earn more than what it investsed.
Now here is the striking difference in approach and thinking of Mr. Bill Gates and Mr. Sabeer Bhatia. Sabeer did all the hard work to setup HotMail.com and his efforts did pay huge returns, he got 400 million $ from Microsoft but what after that?? To earn more Sabeer had to do more work right??.
Now here is Mr. Gates point of view. He paid 400 Million $ for the web site and the web community. This web community will always visit HotMail.com for free email and also visit msn.com which is linked to it and some of them will shop also. Once msn.com is setup and linked to HotMail.com Mr. Gates had his job done. Now he had huge traffic diverted to msn.com and generate returns which is ongoing and residual. He does not need to any thing extra to earn more money,because he had the web traffic diverted to his site on daily basis.
So what do you feel who was better off? Mr. Gates or Mr. Bhatia.
Let me give one more example.
There is a piece of land available at cheap price and you know that there is a highway going to be built through that land. So what you will do now? As you know price of land will surely increasee once the highway is built, most of us will buy the land at cheap price and sell it at higher price to book the profit.
But here is another approach. You say i dont wanna sell this land but i can let the Highway cross through my land, but i will put a toll booth on the highway and for every passing car you need to pay me 30cents.
So what do you feel which approach is better off?? First one(Mr. Bhatia) or Second one(Mr. Gates)
Sabeer came up with an idea of web base email system which was named as HotMail. After setting up HotMail.com he invited 7 of his closed friends to join and create a HotMail account. In less than 6 months HotMail had attracted more than 1 million users. As HotMail was originator in web based email and it had huge user base, Microsoft eventually bought HotMail for 400 million dollar in 1997.
Now here is the most interesting part, why did Mircosoft buy HotMail?
Was it because of new concept email? I dont think so, being a pioneer in technology microsoft could have very easily developed better email system than HotMail. Then what is it which attracted Microsoft towards HotMail. Lot of people thought that its not a good idea to pay such a huge amount for just a email website.
But Mr. Bill Gates had some other plans and he was looking one step ahead of normal people. He realized the potential of growing web community, and what he can achieve with that web community. So Mr. Gates bought HotMail.com and setup an e-commerce web site and linked it to HotMail.com . So now he had 1 million users visiting his e-commerce web site msn.com. Even if 5% of the users shop on msn.com with in no time Microsoft would earn more than what it investsed.
Now here is the striking difference in approach and thinking of Mr. Bill Gates and Mr. Sabeer Bhatia. Sabeer did all the hard work to setup HotMail.com and his efforts did pay huge returns, he got 400 million $ from Microsoft but what after that?? To earn more Sabeer had to do more work right??.
Now here is Mr. Gates point of view. He paid 400 Million $ for the web site and the web community. This web community will always visit HotMail.com for free email and also visit msn.com which is linked to it and some of them will shop also. Once msn.com is setup and linked to HotMail.com Mr. Gates had his job done. Now he had huge traffic diverted to msn.com and generate returns which is ongoing and residual. He does not need to any thing extra to earn more money,because he had the web traffic diverted to his site on daily basis.
So what do you feel who was better off? Mr. Gates or Mr. Bhatia.
Let me give one more example.
There is a piece of land available at cheap price and you know that there is a highway going to be built through that land. So what you will do now? As you know price of land will surely increasee once the highway is built, most of us will buy the land at cheap price and sell it at higher price to book the profit.
But here is another approach. You say i dont wanna sell this land but i can let the Highway cross through my land, but i will put a toll booth on the highway and for every passing car you need to pay me 30cents.
So what do you feel which approach is better off?? First one(Mr. Bhatia) or Second one(Mr. Gates)
2 comments:
Mast Bhai,
Indeed Bill Gates was better off. There are always two decisions to take whether to buy or to innovate.
I also remember one case which had happened after Pokharan II. We had gone ahead with the Nuclear tests and suddenly a no. of santions were put against us. One of them was on sale/transfer of Cryogenic technology to us, which was required to make a GSLV launch. Russia under international pressure had decided not to provide the technology to us. Then a scientist at ISRO had commented we would be able to develop the technology in house within a couple of years but if we cud get that after paying some price it wud have been good. So indeed buying is a good decision. We have been able to launch GSLV but we were a bit late.
Keep on posting such blogs...
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