Skype, The Product Of One Ambitious, Ex Basketball Player
There's no doubt - technology changed our lives to the point where there's no turning back. Now that we know what a single computer and an Internet connection can do for us, we don't want to live otherwise.
The young Niklas Zennström had the same idea - he wanted to get richer thanks to the Internet!
But in the early 2000s, it wasn't as easy as it is now.
Niklas endured his challenges even though, for a second, it seemed like Skype would never see the light of day.
This is a story about one super-tall man and his partner, and their revolutionary idea that would bring the world closer together.
Niklas's childhood could be summed up in few words: nothing out of the ordinary. He was born in 1966 in Skälby, a small Swedish village by a lake north of Stockholm. It was all a child could ask for - he had all his friends close by, just a bike ride away.
However, when he turned 12, his family moved to Uppsala, a city near Stockholm. It was all due to his parents changing career paths and becoming teachers: his mother became a professor at Uppsala University, at the Department of Textile Studies - and his father taught art history and drawing. With these artistic souls as parental examples, he was quickly on his way to greatness.
Niklas' desires were geared towards the practical way of living - he wanted to become an architect. In school, he was one of the best basketball players who loved to party, but education still remained Niklas's primary goal, and being a straight-A student was his top priority.
Soon, this paid off: he received a full-year scholarship for the University of Michigan in 1983, before he came back to Uppsala and finished his studies there. He has two degrees - one in Engineering Physics and one in Business Administration. There was no doubt that Niklas was going to make something great of himself - but he didn't do it alone!
What Inspires Niklas To Become An Innovator?
It was 1991 and it was time for Niklas to get his first job in the IT industry. He managed to get a job as an executive assistant in Tele2, one of the most popular telephone operators in the Nordic European countries. He worked there for nine straight years, learning every detail about the industry.
During his time there, he met his future co-founder, Janus Friis. In 2006, Janus was hired to work in a customer support department and that's how the two of them bonded. Even though he was a high-school dropout, Janus didn't let that determine his future and define his goals in life.
They first started to launch some smaller websites, just to get a bit of a taste of the entrepreneurial world. But in 2000, it was time to make some major changes. Both of them resigned from Tele2 and moved to Niklas's small apartment to launch Kazaa.
Kazaa was an application that allowed the peer-to-peer transfer of files, a revolutionary move for that time. It turned out to be mega-successful, becoming the most downloaded software globally for 2003! However, Kazaa's success didn't last long, due to lawsuits from musicians and producers, and soon, it was time for Niklas and Janus to launch a new product or service.
However, this was one of the worst times possible - the dot.com crash had just happened, and Niklas was starting to feel like he had missed his chance to become rich out of the Internet.
Luckily, he remembered one long-lost idea of his - the telephone market. During his time in Tele2, he learned a lot about the telephone market, prices, and the service in general, so he knew one thing's for sure - the price for international calls was way too high. He started to collect phone bills from his friends around Europe to prove his theory and soon, he did!
The problem was obvious: the telecom companies charged way too much for long-distance calls. The solution? Niklas wanted to look for one, and Janus was on board immediately.
They weren't alone though - three of the developers who worked for them for Kazaa joined in too - the Estonians Jaan Tallinn, Ahti Heinla, and Priit Kasesalu.
The Beginnings Of Skype
The story behind Skype happened unintentionally, but Niklas's ambitions were completely the opposite - he wanted to become rich from the Internet by all means. So, he focused all his energy into finding a solution to this newly arisen problem - long-distance calls were simply too expensive! Niklas felt like everyone should have the right to interact with their loved ones regardless of their location, and he was determined to help fix it.
He and Janus started from the beginning - existing VOIP solutions. It didn't take them too long to realize that they weren't the best choice - they were poorly designed and offered a bad user experience. But Niklas and Janus had a joker in their hand - their previous company Kazaa. With Kazaa, they witnessed the success of a peer-to-peer connection and used the same technology to develop Skype as well.
At first, Skype was named Skyper, from Sky peer-to-peer, but as it was busy, the duo decided to remove the 'r' and named it Skype. The first people to test Skype were their closest ones - wives, sisters, mothers - anyone from their close family was the QA of this project!
Once Niklas and Janus saw the results from their alpha version, they were ready to let the public in on their innovation - but they needed money. As luck would have it, on January 1st, 2003, the duo was able to collect $250,000 money from angel investors!
They had the money in their bank accounts and they were ready to launch the official beta version of the software.
The date was set - 29 August 2003! They chose Luxembourg as the place to set the headquarters and Niklas and Janus were ready to take on the world with their product!
The Fast Growth Of Skype
Once launched, it didn't take long for everyone to get in on this software.
The biggest bonus Skype brought to the market? It was completely free! Niklas and Janus wanted to make it accessible to everyone. On top of that, the application was easy to use and navigate, a fact that made Skype even more popular among users.
Soon, Skype started developing at the speed of light. Two years after Niklas and Janus started the company, they sold it to eBay for an astonishing $2.5 billion dollars. Niklas and Janus became millionaires practically overnight with this move, but alongside them, also their employees. Everyone benefited from this deal!
Niklas remained the CEO of Skype until 2007. During this time, he was able to reach a goal of 305 million registered users, only in the first years of existence!
In 2009, another major change occurred at the headquarters of Skype - multiple venture capitalists firms announced their acquisition of 65% of Skype from eBay, for $1.9 billion dollars. The companies were Canada Pension Plan Investment Board, Silver Lake, and Andreessen Horowitz and with their share of the pie, they managed to increase Skype's market value to $2.92 billion!
In 2011, another tech giant acquired Skype - Microsoft, offering an astounding $8.5 billion!
Although Niklas and Janus are no longer part of the organizational structure of Skype, one thing remains clear - they manage to bring closer millions of people around the world. With their innovation, we're able to interact from anywhere in the world with only an Internet connection. Both of these men work hard to reach such success, and it was worth it, as 300 million people all over the world use their product today!