Skype at 10: How an Estonian startup transformed itself (and the world)

In one rather turbulent decade, Skype transformed itself from a rowdy Estonian startup to a multibillion-dollar Microsoft asset. Skype has significantly changed the way the world communicates, obliterating the notion of distance, whether it’s a soldier using Skype to experience the birth of his child, an explorer speaking to a classroom of children from beneath the ocean, or pair of young lovers who leave Skype running as they fall asleep hundreds of miles apart – but still together.

By Jennifer Warnick

Chapter 1: Skype is ‘like, really the future’

Estonian for jellyfish, the Millimallikas is so-named for the tentacle-like effect that comes from pouring Tabasco sauce into a shot glass of Sambuca and tequila. Knock it bravely down the hatch, experience a burning sensation, and only then are you officially a Skype employee.

Every technology company has its curiosities, rituals and legends. Skype’s is the Millimallikas.

“It’s this drink they only serve in one bar in the old part of the city,” says employee Tomas Rehor, who faced his Millimallikas in 2007.

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Down a cobblestone street, in the front door and past the Valli Baar’s colorful locals, and to the counter. There, with the gentle stylings of a live accordion player as a soundtrack, new Skype employees are inaugurated.

“What really stays in your throat is the Tabasco. It’s a cruel ceremony, but every Skype employee who joins has to go through it,” Rehor said.

Even Microsoft CEO Steve Ballmer was successfully initiated on a trip to Tallinn after Microsoft purchased Skype in 2011.

Once the little Estonian company that could, Skype celebrated its 10th birthday not with Millimallikas, but with cupcakes and champagne. In a decade, the rowdy little startup attracted more than 300 million users worldwide, becoming an international phenomenon – and a multibillion-dollar asset at Microsoft.

Millions of users are drawn to Skype for its simple but revolutionary concept: If you have an Internet connection and a computer, phone, tablet, TV or game console – on any platform – you can talk to anyone anywhere in the world for as long as you want.

What we now take for granted was, in its first few years, a novel concept. This is evident in a 2005 holiday segment on the “Today” show. In it, Robyn Moreno, then an editor with Woman's Day magazine, tells anchor Matt Lauer how there’s a new product that is “really big in Europe” and just catching on in the U.S..

Lauer marvels at being able to use your computer to talk to friends and family.

“This is, like, really the future,” Moreno agrees.

Once the future fully arrived, Skype didn’t just change the way people communicated – it unraveled the very concept of distance.

"Sometimes people use Skype for nothing special, just a window on life."
- Lisa Gerould , director of Skype’s Brand and Campaign Research

“People trust Skype for some of their most intimate, personal conversations and moments,” says Mark Gillett, Microsoft’s corporate vice president for Skype and Lync. “They look through Skype into the eyes of the people they care most about. It’s a pretty awesome responsibility, and it builds a degree of connection with those who use the product and the great team of people who build it.”

Skype stories are as diverse as the people experiencing them – the momentous milestones, the pleasantly mundane and virtually everything in-between. A soldier stationed overseas can’t make it home for the birth of his first child, but can still watch his daughter come into the world. A couple discusses, debates and selects finalists from paint and carpet swatches. An ailing man can’t leave his hospital room but still gets to watch his son marry. A traveling mother and her child brush their teeth together before bedtime. A young couple in love eat dinner, then leave the video call running as they fall asleep hundreds of miles apart – but still together.

People have used Skype to experience births and deaths, weddings and anniversaries, the silly and the profound. Skype users have moved from using a laptop in their home to connecting from more places than ever – from the kitchen, to the top of a NASA launch platform, to the depths of the ocean.

Lisa Gerould, director of Skype’s Brand and Campaign Research, knows better than anyone the Skype habits of modern man. She’s talked to thousands of people about how and where they use Skype, and how it could better serve them in the future.

“When I think about how to summarize the stories, there is a basic theme – people being able to do things together when they’re apart and strengthen and build their most important relationships,” Gerould says. But she’s also seeing some fascinating, curious new uses develop.

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There are practical uses, like tutoring, elder care and daily decision making. Skype users are also taking their friends and family with them to doctor, hair and tattoo appointments. Parents, instead of plopping their toddlers in front of Saturday morning cartoons, are setting up Skype play dates for their kids to get screen time with other little ones – far-off cousins or friends. Gerould’s daughter, a college student, even uses Skype to study with her best friend who attends a different university.

“They’re not even talking so much as they’re studying; they’re just not being alone, as if it’s the old days doing homework together,” Gerould says. “Sometimes people use Skype for nothing special, just a window on life.”

On the other side of the mountain (and at its peak as well), Skype is also being used in more epic ways than ever before.

In August, musicians and playwrights Michael de Roos and Jody Christopherson debuted their work, “The Skype Show or See You in August” at The New York International Fringe Festival. The show, which features an actor on stage and another on a live Skype call, is billed as “a testament to how technology can transcend boundaries, uniting artists and their audience.”

In November, Fabien Cousteau – grandson of explorer Jacques-Yves Cousteau – will spend 31 days in an undersea marine habitat 63 feet beneath the waves. Through Skype in the Classroom’s Exploring Oceans lessons, students will get the opportunity to experience the beauty of the ocean alongside the world’s leading marine experts.

“The trends are changing as people have more mobility with Skype,” Gerould says. “We’re seeing people sharing not only precious life events, but adventures – seeing things for the first time and wanting to share.”

Like what? Gerould opens her Excel spreadsheet containing thousands of unique stories. One Skype user taped his mobile phone to his hand to let his friends “ride” a roller coaster ride with him. One duo took Skype into their respective Starbucks simultaneously to see whose barista was faster. Another encountered a bear while hiking in Wyoming, which led to live Skype video of the chase.

Meanwhile, others have made Skype a traveling companion when traveling to remote and far-flung parts of the world. British explorer Mark Wood, for instance. For six years, Wood has used Skype and a satellite to connect to his loved ones (and to school classrooms and executive board rooms) from Antarctica, the Arctic Circle, Alaska (along with his dogsled team), the Himalayas and even while crossing the U.S. on a bicycle.

"Skype is very clever, in that it’s allowed us to open doors, windows if you like, to the world."
- Mark Wood , British explorer

“I was using Skype anyway in my own life, and I could see how effective it could be with expeditions,” Wood says. “It has this tremendous way of connecting people. After a while you kind of lose the screen. I’ve had 200 students in Australia on the other side, and you just lose the screen and connect directly with them.”

After becoming an avid user of Skype himself, Wood walked into London’s Skype office and asked the company to help set up Nepalese school children with Skype. His idea: Create a cyber café with solar panels where Himalayan tourists can pay a little to make Skype calls home, and then use the earnings to give local schoolchildren access to Skype. Wood wanted to connect kids living at cloud level in the shadow of Mount Everest to the rest of the world, and he did.

One of the most poignant results of this came two years ago as the Nepalese students prepared to connect with some kids in Japan. The students in Japan had recently been hit hard by a tsunami, and had even seen victims’ bodies at their own school. Wood spoke to the children about the importance of coming together, and sat back to watch as the children connected. The students talked about the tsunami that day, but lots of other things as well.

“When I was a child, we sometimes had speakers come in, but now we can have children connect directly with an explorer right up on top of Mount Everest,” Wood says. “Skype is very clever, in that it’s allowed us to open doors, windows if you like, to the world.”

He’ll be taking Skype – and loads of school children, by extension – on his next expedition to the Geographic North Pole to research climate change. With strong winds, arctic temperatures, melting ice and “the added interest of polar bears,” it promises to be a perilous but educational journey. And thanks to Skype, young people all over the world will make it with him.

“It’s a very powerful tool,” he says.

Skype has helped make innumerable important moments possible for millions around the world. It’s perhaps only fitting, then, that in its first decade – from its Estonian birth to its rowdy startup days to settling in at Microsoft – Skype has lived an engrossing story of its own.

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2: Welcome to Estonia