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In 2001, the corporate attorneys had organized a gathering with RIAA and MPAA—huge groups of attorneys flying in from the East Coast to fulfill of their attorneys’ workplace in Beverly Hills on a Friday. On that Wednesday, they discovered an inner memo leaked from the organizations they had been supposed to fulfill that referred to as them “Public Enemy No 1 working offshore.” The memo stated “it was crucial to make an instance of us,” he recollects with a slight smile.
Courtesy of Atomico
“As a substitute of going to the assembly, we had been driving round and round whereas the attorneys had been doing their factor. Later within the night, after we went to our attorneys’ workplace, we switched garments with two attorneys on their workforce to keep away from being served. After that, we moved from one shady motel to a different, night time by night time, paying in money till we purchased tickets on the airport an hour earlier than we departed, as we had been positive they had been monitoring our bank cards.”
Zennström and Friis bought Kazaa for a mortgage be aware of €600,000 on the finish of 2001 (about $600,000 by as we speak’s trade charges). Then, in 2003, utilizing Kazaa’s P2P backend, they based Skype, an app that allowed customers to make a name by instantly connecting with one another. However the early days of Skype appeared to disclose one thing surprising—that European VCs weren’t occupied with innovation.
“We bought turned down by everybody,” he says merely. “We wished to disrupt the worldwide phone community with this peer-to-peer know-how, and that’s a giant ask. A number of them had been burnt by the dotcom crash. The mannequin they most well-liked was to take one thing that labored within the US and do it in a neighborhood market.” He pauses and smiles. “In fact, we had been additionally concerned in a large, billion-dollar litigation …”
However, Skype would quickly turn into one of many first European startups to problem the hegemony of American web giants within the early 2000s. Zennström confronted an important resolution when, in 2004, one of many huge Sandhill Street VCs provided to fund the corporate, however provided that it moved to the US. “At that time, we had already constructed up a world-class workforce in Tallinn, London, and Stockholm, and I didn’t need to go away my workforce,” he explains. “We knew then that we had been dedicated to constructing Skype as a globally profitable know-how firm primarily based out of Europe.” He declined the supply.
One yr later, Skype went on to turn into a unicorn—eight years earlier than enterprise capitalist Aileen Lee coined the time period—after being bought to eBay for $2.6 billion. It was the world’s largest tech M&A because the dotcom crash and dwarfed eBay’s $1.5 billion acquisition of PayPal in 2002.
All of this led to Zennström’s subsequent transfer—to disrupt enterprise capital with the launch of Atomico in 2006. European VCs weren’t taking dangers. Founders had been coming to him and asking for recommendation. VC funds had been inviting him onto their boards to make themselves look good. “In the meantime, the one place on the planet that had a functioning tech ecosystem was Silicon Valley—and I like being opposite and breaking monopolies, so we got down to break the US VC tech monopoly with Atomico,” he says.
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