start up.

by phil on Sunday Feb 1, 2009 12:50 PM
call to action, mainfeed, optimism, principles

... A garage start-up of today will unseat a giant tomorrow.

In the late 90s, Sabeer Bhatia, co-founder of Hotmail, was given a tour of Microsoft's campus. Bill Gates pointed to one building and said, "That's Microsoft Word." Then he pointed to another building and said, "That's Excel." Then he pointed to another building and said, "That's Outlook." The point was to make Sabeer scared that even if Hotmail decided against selling out, Microsoft could just make another building and devote it to webmail.

Sabeer wasn't scared, and against the pleas of his board, he turned down a $250M+ offer.

Because at the end of the day, what the Bill Gates's, Michael Dell's, Steve Jobs's, and Sergey Brin's of the world know deep down inside, is that the little guy in the garage start-up is the one they have the most to fear.

Microsoft came back with a $400M offer, and finally Sabeer accepted.

I think the reason why it's so easy for a garage start-up to unseat a big boy, is that simply put, the way people do things is always changing, and big companies are systematically slower to adapt. As time marches forward, the rate at which change happens will be increasing, and so agility will be more favored in the future than enterprise.