Editor’s note: This article was first published in May 2011, and Atomico’s figure of 35 projects is from 2011. eBay bought Skype in 2005 for about $2.6 billion, and Microsoft announced it would buy Skype for $8.5 billion on 10 May 2011, a week after this post.
I’m quite sure that for many of you the name Niklas Zennström means little or nothing. But if we mention the founder of Skype and the creator of the famous download program Kazaa, it will start to ring a bell.
We’re featuring this tireless entrepreneur because he is a living example of someone who entered a market already dominated by the internet giants. We’re also featuring him because he ran into the main problem most entrepreneurs face today: he couldn’t find funding for his projects, either from the state or from private investors. Even so, Zennström is known for having taken part in a considerable number of projects.
Here is the story of this entrepreneur, who is now looking for new talent and innovative projects to fund.
Niklas Zennström comes from Sweden, a country where support for entrepreneurs is just as scarce as it is in Spain.
He studied business administration (or its equivalent) and also took a degree in computer engineering. As he tells it, he was lucky enough to learn about the web 2.0 business when he started working at Tele2, an offline company that decided to embrace new technologies and move onto the internet. Zennström learned everything he could there, always with a view to starting his own business one day.
In 2001, Zennström had his first business idea: a program that would let people share and download files, whether music, films or documents. This was the Kazaa software (P2P file sharing). What began as a dubious experiment ended up becoming the most downloaded software in the history of the internet.
Zennström knows first-hand that when you achieve success you have to be ready for attacks of every kind and, above all, be strong enough to fight off everyone who will try to bring you down.
Kazaa was the first program to receive hundreds of lawsuits for copyright infringement, something Zennström hadn’t counted on. He had no choice but to sell the program cheaply to another company, since it was the target of hundreds of lawyers in the United States.
According to Zennström, despite the program’s success he lost money and time, and some might even call it a failure as an entrepreneur. But the truth is that it was after this experience that Zennström was really forged as an entrepreneur. He had learned his lesson, and once a project doesn’t turn out as you expected, that’s when you’re ready to start another.
The making of an entrepreneur
Once you have tasted failure and the problems of pursuing your own business idea, far from feeling let down and crushed, you learn that the fall has made you even stronger. It’s time to analyse the market again and spot a consumer need. It has to be something free and global, with the option of buying a premium service.
At a time when the famous Messenger was all the rage online, it still couldn’t make video calls, so Skype would meet that need.
That’s when Zennström got to work on his greatest creation, Skype: a very complicated, very expensive project that needed time. Because he was known for his supposed failure with Kazaa, nobody wanted to invest in the new project. In fact, Skype could have been ready in three months, but without funding the program drifted along for a year.
It was Bill Raper, a well-known investor, who decided to back the idea, and the rest is history.
Recently, the giant eBay bought Skype for 2.1 billion euros. A profitable business for Niklas Zennström.
Today Zennström has embarked on another project whose aim, besides being a profitable business, is more of a social contribution to the new web 2.0 entrepreneurs. His new project is Atomico, a firm dedicated to investing in new technologies, where Zennström picks out innovative internet businesses.
So far, Atomico has funded more than 35 projects and hopes to keep going, because, as Zennström rightly says, investing in new projects is like starting your own, since you become part of their growth.
Zennström is without doubt a clear example of persistence and… of having real guts.
As a message for new entrepreneurs, we’ll leave you with a saying attributed to Confucius:
They can take an army away from its general, but never a man’s will.
Further reading
- The mindset of an entrepreneur: Donald Trump
- The 15 commandments of the entrepreneur
- The man who had to start a business to save his children’s lives
- Got a business idea? 10 tips to make it happen
Featured image: Joi, CC BY-SA 3.0, via Wikimedia Commons.
