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Photo: G.P. Sampath Kumar

Calculated risks: Sabeer Bhatia’s Hotmail made e-mail access ubiquitous.

After graduation when I wanted to continue at Caltech, my professor advised me to move since I had already learnt whatever I could here. I took his advice and started my Masters and Ph.D. programme at Stanford.

There, I took a course on Business for electrical engineers and met industrialists like Steve Jobs who started Apple Computers and Vinod Khosla who started Sun. When I met them, I felt that they were just like you and me.

The Indian system of education is “knowledge-based”, while in the U.S. it is “inquiry-based”. The former encourages rote memorisation, whereas in the latter students are encouraged to ask questions. In a fast-changing world, where knowledge is becoming obsolete every few months, it is more important to have “thinking” individuals who ask questions and create new products/processes than individuals with a lot of knowledge. The other aspect of U.S. education is that educational institutions attract the best and brightest from all over the world. So, you get a very competitive environment, which brings out the best in one. The mantra of “meritocracy” extends beyond education. As a result, you have great companies where merit and ability are more important than seniority. Institutions in India tend to value experience and seniority over intellectual ability and creativity.

People focus on the “deal” we made with Microsoft. More important is the hard work, effort and risk that made the deal possible. We (Jack Smith and I) started our company with a simple idea — to make e-mail access ubiquitous by making it available on the browser. In the first six months, we had one million subscribers and, at the end of the first year, five million. When Microsoft came to us, we knew that we had a tiger by the tail. The strength of our subscriber base, its growth and the technological solution of providing e-mail to five million subscribers allowed us to negotiate and get a good value from Microsoft. We took calculated risks all along — whether it was to start the company or to reject offers multiple times — and, in the end, we got what was due to us. I agree that most Indians choose the time-tested but safer road of working for multinationals but, as India progresses, more Indians will strike out on their own. This mindset of becoming entrepreneurs, rather than employees, is what is needed to create the millions of jobs that India needs in the next few decades.

The value of the rising rupee will affect those companies whose sole advantage is cost. Entrepreneurial companies will figure out ways to create products rather than rely on service revenues. I firmly believe that many of these companies should already have embarked on a product strategy — better late than never.

People call Arzoo.com my entry into hard-core travel; it is, in fact, all IT. Our core strength is our ability to lookup multiple flight and hotel reservation systems and come up with the best price for the end-consumer electronically. We invest heavily in R&D such as CRM (Customer Relationship Management) software, call-centre management software and telecom infrastructure to make it the best and most efficient company. Had it not been for the IT, we would not have entered this area.

India has a long way to go before it can call itself an IT power because we have yet to create a world-class IT product such as Microsoft Office or Google Search. This is because we have yet to master the skills necessary for product innovation (from concept to completion). This involves enormous risk-taking because nine out of 10 products fail but the one that makes it more than makes up for the previous losses.

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