Continuing with the Entrepreneur legendry of Mr. Sabeer Bhatia today let me unleash the story of the hard negotiation Sabeer made with Microsoft biggie Mr. Bill Gates and that too in the Indian style, as he describes.
In the end of year 1997 Microsoft top officials started approaching Sabeer for a buyout. Sabeer at that time had a price of about a billion dollars in his mind but this was not a serious market value he had decided. It was just a jokingly decided price of his company. He was actually unclear of the price at which he should accept the deal. They offered some tens of millions and he refused. Microsoft kept approaching him for weeks after weeks in vain.
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Side by side Sabeer started to evaluate his company’s market value. He approached a venture firm with the buyout deal and was offered a $200 Million. When he refused this also he was told by the head of the Venture firm that if he gets somewhere amount equal to this in the market then he would have Sabeer’s statue in the front lobby of his office. Well, at that time, probably, the Venture capitalist didn’t know he would have to fulfill his promise one day.
Finally the day arrived for the meeting with the stalwart. Sabeer and two others were flown to Redmond where they were scheduled to meet Mr. Gates. Returning from his trip to Russia Gates didn’t waste any time and came arrived for the meeting at lunch. Face-to-face with the smartest businessman Sabeer was a bit nervous. They started asking questions to Sabeer “tell us about your company”. Soon after, Mr. gates, in his Socratic style of finding weaknesses in the negotiator, started grilling Sabeer and his team.
Sabeer recalls that it was this moment when he realized that they were asking the same questions which he was generally being asked by his investors. He realized, in the midst of his nervousness, that Bill Gates was not a superhuman. “He is also a simple human being with flesh and blood”, he says. After this realization Sabeer explained his company’s key features very confidently.
But where is the Indian style in this whole story. Here it comes. As a child grown up in Bangalore, Sabeer had encountered many times the scene of people negotiating with the street vendors. They often said “I can pay you only this much” or “I don’t have more than this, I can’t give you more”. He knew how to tackle such vendors. Microsoft was aggressive and desperate. They started flowing cash on table, $200 Million then $300, $350 Million. But Sabeer didn’t succumb to the offers so easily. There were times when Microsoft negotiators stormed out of the conversation frustrated.
Finally on the New Year’s Eve, 1997, the deal was struck for $400 Million which left all biggies in the Silicon Valley astonished. Sabeer Bhatia was the new name amongst the rich of this Valley. The whole saga of building up of a company and negotiations brought out the real confidence and intelligence that this Indian entrepreneur had. He used every little experience of his life to sharpen his Entrepreneurial skills. There’s a lot to learn from this legend.
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Thanks for sharing this.
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