A few days after the call with my sister, I’m sitting in a small set of offices in a renovated Soviet-era factory in Tallinn, the capital of Estonia. I’m visiting Ahti Heinla and Jaan Tallinn, a cheery and startlingly tall pair of programmers who helped Zennstrm and Friis by doing much of the coding behind Kazaa and were called in again to help complete Skype. Heinla’s personal office is hardly a dot-com wonderland of multigigahertz processors and fancy flat-screen displays: it contains just one standard desktop computer.
“I’m thinking about buying a laptop,” Tallinn says with a capricious smile. Heinla doesn’t have a laptop yet either, but he does say he bought his first home computer a few months ago. He didn’t even have a cell phone until two years ago-shockingly late in this Baltic state where cell phones are next to ubiquitous. These guys firmly oppose investing in unnecessary equipment. “We’re into technology, but we’re not gear freaks,” Heinla asserts.
The aversion to buying your own hardware when you can use someone else’s is at the core of Skype’s strategy. Both Zennstrm and Friis had been working for a Swedish telecom company when they decided in 1999 to break free and try something more daring. They settled on creating a peer-to-peer file-sharing network, turning to the Estonian programming team to come up with a system that would allow users to find files such as MP3 songs on one another’s computers, even if no single machine contained a master list of the files’ locations. In other words, Zennstrm and Friis wanted to let users exchange music but didn’t want to maintain a centralized server to manage the network.
Within months, the Estonian programmers had found an approach that fit the bill, and their system, Kazaa, turned into a major smash: the free software has been downloaded more than 300 million times. But it also led to legal headaches for Zennstrm and Friis, as music publishers tried to fight back with piracy lawsuits. The pair eventually sold Kazaa in 2002 for an undisclosed sum. Their next big career move was logical. They wanted to create a service that would also be peer-to-peer but this time find an area of unquestionable legality. Their choice: Internet telephony.
Zennstrm says he had already “learned how telephone companies work, and that in their business model it’s extremely costly to acquire customers, and secondly very costly to operate each customer in terms of the billing system, customer service, and network.” Recruiting members into a peer-to-peer network and sending calls through members’ computers, he and Friis realized, would mean they wouldn’t have to build their own network, or even a billing system, since the calls themselves would be free.
Skype might operate much like Kazaa, but there is a twist. “Kazaa was a much simpler technology than Skype,” says Zennstrm. “With Kazaa, you’re not usually searching for something that is unique. You’re searching for things that are usually duplicated”-like a popular Madonna song owned by hundreds of people on the network. With Skype, however, “you need to find a unique person. If you want to make a call to me, for instance, then you need to find me and not someone who’s similar to me.” This time around, there would have to be a master list-and the trick would be creating it without resorting to an expensive infrastructure of centralized computers.