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The only VC who backed us to beat Microsoft…used to work for Microsoft

online collaboration online collaboration
Photo credit:

Thomas Hawk

Subrah Iyar recalls the early struggles of WebEx, and tells us about his new adventure, Moxtra.

When Subrah Iyar visited investors to seek support for WebEx in the late 90s, virtually all of them rejected him.

They had one huge objection. And it seemed an obvious one.

WebEx was software for doing online collaboration – and Microsoft had just started bundling its own solution, NetMeeting, free into every copy of its browser.

“We were mocked by everyone,” remembers Iyar. “They all said – haven’t you heard of NetMeeting and Windows and Explorer – and that it costs nothing to use?”

Well, of course he had. But he also knew how useless NetMeeting was.

He says: “Because Microsoft was so powerful, there was no innovation in the online collaboration sector. Microsoft had destroyed the market with its press releases, but there was minute usage of the solution itself.

“I’d tried using it and I couldn’t. Everyone thought the game was over. But I believed people wanted something better and that they would pay for it.”

Iyar and his team set about building the WebEx online collaboration tool. It took two years. But that, insists Iyar, was his big advantage.

“Time is the ultimate friend of the entrepeneur,” he says. “In a world of large corporations with lots of money, you have to pick problems where all the money in world can’t make time go faster.”

Even after WebEx won customers, the market remained dismissive.

“We had deals with companies like AT&T who were willing to resell it and even preserve our brand. Yet investors still told us: Microsoft will sort out online collaboration and you’ll be history.”

Iyar wondered of he could find an investor to back his hunch.

Then he met a VC who used to work for Microsoft. This guy got it instantly.

“He became very interested because he’d been a Microsoft exec and he knew they would never improve NetMeeting. It was no brainer for him.”

Iyar says the reason Microsoft couldn’t improve NetMeeting was that it was designed to further the MS agenda rather than make online collaboration better. It was ‘client software connecting to client software with nothing in the middle” conceived to put all the intelligence into Windows.

As history shows, Iyar’s hunch was right. In the end, he sold his company to Cisco for $3.2 billion in 2007.

Now, he has a new project: Moxtra.

Iyar describes it as an online collaboration tool designed for mobile. In that sense, it’s a bit Pinterest, a bit Evernote, and a bit Facebook.

Moxtra is attempting to solve the problem of how many different users can collaborate on one project, and do it painlessly on small mobile screens.

These users could be salespeople in an enterprise, families planning a trip – the list is endless.

Needless to say, it’s all complicated by the fact that they could be sharing emails or photos or videos or presentations. Again, it’s a long list.

Last November, Moxtra raised $10m and is now pushing ahead with its vision of skewing different versions of its mobile online collaboration product for specific verticals.

Iyar is enjoying his new adventure, though he admits things are pretty different this time round.

“Mobile is a whole new ball game. It’s changed the paradigm. We saw the switch from mainframe to PC and then to internet and SaaS – mobile is the next big shift. We’re seeing new price points for software and new ways to go to market. All of which means much more competition.

“But at same time, the opportunity is almost 10x because of the number of potential users.”

* Subrah Iyar reveals his leadership secrets with Hot Topics here

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