Google's Secret Email Offer Was 100 Times Better, and People Thought It Was a Joke
Investor Gokul Rajaram says his years at Google taught him to look for products that are 10 or 100 times better, not just better marketed.
20VC with Harry Stebbings · Gokul Rajaram: How to Analyse for Durability and Defensibility in a World of AIIn 2003, Gokul Rajaram joined Google and kept hearing an odd codename around the office: Caribou. Rajaram, who worked in product at Google and later became an investor, remembers thinking, what the hell is this?
Caribou was the internal name for Gmail, a web email product Google was building in secret. The plan was to give users one gigabyte of free storage. At the time, Yahoo Mail, the leading service, offered 10 megabytes. Google was proposing 100 times as much, for free. Rajaram recalls thinking there was no way it was possible.
The episode became a key test he still uses for startups. Google, Rajaram says, taught him that "the best companies have a remarkable product at their core." His philosophy was, in Rajaram's words, "build it remarkably and they will come." Getting a product to market was not Google's specialty, and sometimes that work succeeded and sometimes it failed. What endured was the product itself.
That belief shapes how he judges founders now. In Rajaram's words, "if there is not a remarkable product all the go to marketing distribution in the world will not save you." Rajaram says he looks for what is remarkable "in the core product or value proposition," and asks whether it is 10 times or 100 times better than the alternative.
Caribou was that kind of leap. When Google released Gmail on April 1, many people thought the one gigabyte promise was an April Fools joke. A free offer that large sounded unbelievable.
It was real. Rajaram describes it as Google taking something that seemed unbelievable and making it reality. Rajaram says that is the kind of product he likes, "something remarkable something unique something powerful," and the measure remains whether it is 10 times or 100 times better than what came before.
Questions people ask
Why did so many people think Gmail was an April Fools joke?
Google announced Gmail on April 1, a day it was already famous for playful pranks. The offer of one gigabyte free, when rivals offered a tiny fraction of that, sounded too generous to be serious. Many users assumed it was another gag until Google showed the product was real.
How could Google afford to give away so much storage?
Storage costs were falling, and Google already operated massive data centers for search. It could spread the cost across millions of users, many of whom would never fill the full gigabyte. Later, the company paid for Gmail with targeted ads shown next to email, and then with paid business and storage plans.
Does a remarkable product always beat better distribution?
Not always. A much better product can still lose if people never hear about it, cannot easily switch, or if a rival copies the key feature. Rajaram's point is narrower: distribution alone will not save a startup for long if the underlying product is not clearly and durably better.