The Man Behind the Largest Software Product Company in India The Billionaire Buddha
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Sridhar Vembu's business philosophy has been clear from the start, neither being answerable to shareholders nor investors, only to customers. This has resulted in the company remaining bootstrapped and private resulting in making it a profitable unicorn software company. This independent vision has further resulted in drastic decisions taken by the founder himself, which would have not been possible otherwise.
The simple-looking software-making man Sridhar Vembu who has portraits of God hung at his backdrop wall during our Zoho call is a man who preaches what he practices. Our more than an hour-long conversation over Zoho's app works well for a video and audio conversation. My last conversation with Vembu was three years back wherein he focused on running the entire business on Zoho's apps which are used the world over. Today, when the entrepreneur himself has moved to India I can gauge how true it seems to be running his business entirely on Zoho software while sitting out of Zoho's Tenkasi office in Chennai, India. Sridhar went on to share his vision even before the pandemic changed our lives and work since 2020; the leader was all the more prepared to make work happen from anywhere as he moved back to India in 2019. Few minutes into the conversation with Vembu, I realize it's not only the work that runs over this entrepreneur, he has a greater impact and a personal belief system that runs along.
This entrepreneur of a different pedigree started the rural revival initiative in rural and non-urban areas in the world. This brings me to the fact that when we decided to plan this fifth edition of our annual IP of Tech 25, our idea was not just to capture the machinery part of bringing the best technology to solve bigger problems the bigger aim was to see how the man behind the machine truly creates a bigger impact with his venture. In Vembu, we found a combination of both.
BACK TO THE ROOTS
Technology when utilized well always has a greater impact on humankind. That's where Vembu's foresightedness brought him back to the roots from where he began. He believes why only people have to move to urban areas for opportunities, why can't opportunities be brought to them where they are. This ideology has built a stronger culture at Zoho. A look at various entrepreneurs who were ex-employees of Zoho brings to the fore this entire thought. Whether it's Freshworks, Chargebee, or Facilio, these amazing founders were all part of Zoho once.
In this conversation, Vembu mentions the book he's reading at the moment, "Millions of Jobs" and that's what he has been envisioning to do. Though the Internet even in the rural area works well for him, the power cut makes Vembu swiftly get up to switch on the generator. This simplistic yet hands-on entrepreneur knows when to plug the light in. Talking about the same, he says, "The vision was always to build products out of India so that vision has not changed. What has happened is as we gain capabilities, our products have gained increasing sophistication, more depth and breadth of product portfolio since we have expanded into broader markets."
Zoho's growth story has been an inspiration for fellow entrepreneurs to build products for the global markets. Vembu shares, "When we started, we were in small niche micro-segment, in fact, the entire global market for our offering at that time was probably $10 million. We used the opportunity and then bootstrapped it into other segments. Now we are addressing markets that are maybe $100-200 billion or even bigger global markets so we have room to grow and that is why we are expanding both geographically and in terms of our talent pool."
Started in 1996, in 1997 Vembu moved to the US to build sales and marketing for the then called Adventnet. But Product management and product development for them was always based in India, from the very early days. "We were building the products out of India and that is what is unique about us because we decided from the early days that we will stick it out and build these complex technologies from India. This was the differentiating factor between other companies and us," adds Vembu. From Tenkasi the team has built sophisticated products like Zoho Desk.
Talking about the generation he saw working compared to the current one, Vembu mentions, "The younger generation is exposed to the globe and global products and that also naturally creates aspirations that we must be able to build products like that in India." "When a customer is in say Germany or Canada or the U.S. they don't care if the software is written in Chennai or somewhere else, so it is possible to do these from rural areas," shares Vembu.
The Badshah of Bootstrapping has some great lessons for fellow entrepreneurs on having too much capital. He shares, "Ironically the total flood of capital that is pouring in right now for startups creates challenges because that makes it hard to stand out for any new startup. There are so many competitors from the get-go and so much rush for talent that is one of the challenges that start-up face and the challenge of gaining customers, gaining traction with so many people calling on."
THE MAN WHO PREDICTED THE FUTURE OF WORK
Zoho's rural expansion is a unique project in bringing new talent, creating new talent, and expanding the talent pool rather than fishing in the same talent pool as everybody else. But these projects require long-term thinking and vision of no less than 10 years when they start showing results, which makes it one of the primary reasons for the company to remain private. When asked about his vision, Vembu adds, "We want to be a company that can invest in unusual ideas." With remote collaboration, he has truly reimagined work and brought people back to the roots. When people thought about populating urban areas, nobody thought about the problems that will come when the migration started from villages to emerging IT hubs to work, while leaving families back or making them also shift. What if you could stay where you are and work with colleagues on a global scale? That's what Zoho has been trying to do with its rural initiatives. Though only one company or one man is not enough to bring forward a major change it all starts with just one idea and one belief when others also started thinking in the same direction. The founder's belief is not to raid rural areas but to make them flourish with better opportunities.
"I wake up very early. This morning I was up at 4:30. I spent some time thinking about technological challenges and about the business then I start reading and then I go for a walk and a swim so there are local ponds in which I go for a swim. That is how the day begins and at about 9 I'm ready to work. Then I start making some calls. Afternoons, I take external calls. Morning, I take internal calls. I try to shut down by 6 because I wake up very early then I go for a walk and enjoy the nature, the scenery, and try to go to bed by 9."
Around the world, hundreds of thousands of companies, rely on Zoho every day to run their businesses' sales, marketing, customer support, accounting, and back-office operations, and an array of productivity and collaboration tools. The homegrown multinational gets 90% of its revenues outside of India. Talking about the biggest revenue churner, Vembu says, "Zoho One is now our highest revenue product closely followed by the CRM Suite." Talking about building a globally connected team, Vembu says, "Our philosophy is transnational localism which is why we emphasize the company to be locally rooted wherever we operate at the same time globally connected. So, being rooted is the localism part and the connected part is transnational. That is why you call it transnational localism and that allows us to cross-pollinate ideas. For example, our South African employees, the Middle-East employees, share with us what they see in the market in our tools like Zoho Connect or Zoho Meetings and that is then acted upon on the products in India that leads to a lot of product acceleration."
Talking about his earlier stints in customer interaction, Vembu shares, "In the early days of the company, we were very narrowly focused on some limited segments. In my own experience, I'm very inexperienced. I'm an engineer turned salesperson. Once a customer signed a deal with us, our software bundled with their equipment. We signed the deal and then he told me you are not a very good salesperson, you should hire a salesperson because this deal is worth a lot more money, you could have asked for a lot more money." Even today, Vembu loves building newer technologies which have always remained his focus area whether he lives in the cloud or is back to his roots.
60 million users
Headquartered in Austin, Texas
International Headquarters in Chennai, India
1996: AdventNet Inc. was born.
2001: Expanded International Operations in Japan
2008: Reached one Million user base
2009: Rechristened AdventNet as Zoho Corporation
2011: Zoho opened its first rural office in Mathlamparai with six employees
2015: Reached 15 Million user
2016: 20 Million users
2018: 30+ Million Users
2019: 50 Million users
2021: Zoho Corp completed 25 years
(This article was first published in the August 2021 issue of Entrepreneur Magazine. To subscribe, click here)