What I learn form Sridhar Vembu? (ZOHO CEO, Bootstrapped Billionaire)

Sridhar Vembu is the CEO of ZOHO, The company that is the #1 SaaS company from India, which is profitable and reached $1B in revenue in November 2022.

The story is worth listening to as he isn’t the entrepreneur in the business of losing money but making money and in the process being open and helping.

On the same note, Sridhar Vembu is one of 2 people I value and respect as an entrepreneur in India. 

ZOHO reached a 1B dollar revenue making 1st SaaS company from India.

Did you say “Freshwork”, no, they are way fewer customers and revenue! They raised $1.1B in funds after they launched their IPO in NASDAQ. 

Freshwork lies around 57000 customers whereas ZOHO has 80,000,000 customers and reached $1B in revenue.

…

Sridhar started his very first office in Chennai around 1996, the place which is slowly becoming the hub of SaaS in India. 

I went to several companies at Bangalore Tech Summit, and IoT Meetup Bangalore 2022. After meeting many companies from Chennai who came to Bangalore to present their company, I observed that Chennai has a very good culture of innovation. 

They often build products based on problems people face that directly build, unlike zomato or zepto which are trying to solve but turns out people are now going out and purchasing biryani and grocery (including me). 

Back to Sridhar Vembu,

Sridhar is a very down-to-earth personality and has a very clear thinking of the future and building the nation. 

I must say that I believe only 2 people in India and entrepreneurs 

1. Sridhar Vembu (ZOHO Founder & CEO, I met in 2022)
2. Nithin Kamath (ZERODHA Founder, whom I met in 2022)

1. Calm and On Point

Everyone who worked at Zoho was very calm and no one from zho overestimated or estimated Zoho. They talked about what it is and how it is! 

2. Transparency & Communication across the company

Even before I met Sridhar, I saw many of his videos and webinar. And I connect with him.

Someone in the webinar asked, how to retain employees and he talked about 2 very important things.

(Transparency and communication)

If you don’t have a budget to run the company, tell your employee why you didn’t have a budget and show them both paths. 

1. The way the company can sustain 
2. The way the company cannot sustain 

Once you tell this to people, 90%+ people join in to solve the problem. 

3. They credit people for their work

I was quite amused by the presentation done by ZOHO chief engineer director Rajendran Dandapani. He had a big presentation where people that have contributed to the team were mentioned. He went one by one for each of the product contributors, told their story. It was fascinating and pleasing to see a company crediting on the full-scale stage in front of everyone. I personally thought it was a great way to credit people and build a very strong relationship.  

4. Solution-Minded culture 

1. ZOHO builds products that are similar to salesforce but one of the things that I observed and appreciated was they also build products based on problems they face i.e. ZOHO backstage

5. Solution-Focused (very important)

The company builds solutions based on problems they face in real life. Products like backstage has come out after they faced problems in conducting their own event. I have personally used it as an attendee, and It does a very good job.

7. Rethinking the use case of existing products/components and building 

This is something I am observing throughout the industry. ZOHO has a very exact similar version of Google slide but because they have this, they were able to integrate this with ZOHO backstage and deliver a wholesome experience. 

Note that, the Google slide idea was taken from Microsoft Office and Microsoft office took it from lotus(the company you might not be heard of). 

There is nothing wrong, and this is how product and technology innovates.

8. Selling a wholesome product suite 

ZOHO, apart from selling individual products, started packaging the product in a small suite and started offering.

1. Brand studio
2. ZOHO One  (The OS for business)

brands that aren’t sure of Zoho can buy an individual product, if sure, then buy the Zoho mini-suite, or if they trust, can buy whole business one. 

9. Volume over Revenue but profit

It’s easy to target 

10. The best culture I have ever seen in a corporate

1. People who worked there, loved the company even when they exit the company. 
2. Their employee loves Sridhar and doesn’t badmouth behind 
3. Everyone was very much on point
4. Free food in the office
5. Everyone including the security guard eats the same food
6. There are people who don’t quit

I have friends and reference who have worked at zoho and everyone loves zoho while they work there and loves the company even when they leave. This is something I is something I really value. 

11. ZOHO is a good business 

When ZOHO was started, Sridhar was maxing out his credit card to pay minimum salary but today the things he has built is enormou and taking over the market, slowly and steadily.

12. Investing in Engineering and leeting partners do customization

ZOHO now 55+ products, which is a lot. Since 2015, The company has been investing very heavily in engineering and allowed vendors to take care of the customization. 

This way ZOHO will become engineering focused and only support when it’s needed and vendors will focus on implementing for businesses. Implementing for businesses is a time taking process and new businesses continue to come. The best strategy is to let vendors customize and let Zoho team focus on engineering. This is also across the CRM industry, salesforce follows a very similar structure but what salesforce doesn’t follow as per my current knowledge is “building based on problems” which will like make Zoho as the winner of the future in terms of usability. 

There are 2 ways to measure success 

1. Revenue of Zoho and salesforce (Salesforce has 1,50,000+ customers)
2. Usability of the product  (ZOHO as of Nov 1st, 2022 had 80M+ customers)

ZOHO is playing the volume, culture game. And as per the volume, ZOHO is already an inner.

Salesforce wins in terms of revenue, keeping its tech and UI very much on point and building tech after that can increase the revenue of their customer. Example: Salesforce has built an alternative to the google meet feature that “transcripts the text, classifies the word that can increase business, gives a call to action to send a proposal immediately.” The feature is not really very to build with engineering but actually has the potential to increase the revenue of their client. 

12. Sridhar inspires and contributes 

There are individuals and businesses who contribute money to charity, to the PM care fund and etc. 

What Sridhar has been contributing to startups, entrepreneurs, and invaluable? It cannot be measured in terms of money but impact.

He is the only SaaS entrepreneur from India who has built his business and talked about the very core of getting started. 

Sridhar talked about nation-building pointing out that “People made fun of our finance minister but what people don’t realize is the reason why the Rupee has become stronger than the Pound because t the businesses in India is becoming stronger and stronger day by day”. 

13. He goes to the very core of the problem and solves it

Example 1: One the keynote, he talked about an African country that doesn’t have access to dollars but wanted to use ZOHO. All they had was coffee. ZOHO built a solution that exchanged ZOHO with coffee and finally, ZOHO and African countries with no dollar access were doing business. 

This is very interesting. If Sridhar wanted, he could have focused on another country that had dollar access but I think Sridhar also enjoys helping people, and in, this the fun was reaching beyond dollars. 

In terms of technical 

Example 2: ZOHO now takes the whole business core very seriously. It helps them do business with peace. I personally think it’s a good idea to be that.

Many times in the presentation, they show the basic computing architecture showing application, operating system, networking, and kernel. 

ZOHO has built a tech around GPU that helps them optimize databases faster and lower costs. I checked on google if there are companies who have done this before, but all I found were research papers written by computer science scholars and oracle. 

What did I learn from him? 

1. Go to the core of the problem and solve it in your way (process, price, adaptation, implementation)
2. Think beyond the dollar (ZOHO helped businesses in African nation that doesn’t have dollar access with an exchange of coffee)
3. See the other side (The market is saturated in the US, UK, and most of tier 1 countries, he targetted African countries)
4. Invest in people they will invest back

I asked this question to him as I met him personally post his keynote.

How to hire first 10-100 people in village?

His answer way, “Invest in people they will invest back.”

I have done this before and it didn’t work out. I should likely reach to his mail and ask if he can help me find the point where I went wrong. [Add this as task]

As an entrepreneur,

 I was curious to find the reason behind the crazy retention of employees. Employees working for 26 years was no joke. I observed

1. that most of the people were in the age
2. As the office is in Chennai, there aren’t many companies that are hiring for similar roles. That basically means fewer employee takeovers, less hed hunting, and more. It’s a good strategy to retain people for a long time. People have been working with Sridhar for 26 years, way before the time Zoho started. People retain more because of loyalty, but they retain even more if there aren’t other options for them. 
3. ZOHO is about to open its office in Kashi, Uttar Pradesh, or Patna, Bihar. One of the reasons he mentioned what, “The stage Chennai was 20 years ago, I see Bihar and East UP in the same stage”. Chennai is now becoming competitive and Bihar and East UP can be the best place to start the company right now. 

ZOHO Mistake

Thy messed up in “building products that do the same thing but have a few features less or  more in the individual package”. 

Example: ZOHO One has brand studio features but it doesn’t have to save features of social publishing. I think that’s a problem because it creates FOMO in business and forces them to buy 2 different subscriptions. Once they use different products, data synchronization becomes hell. 

Comparison in Salesforce vs ZOHO

To understand which site I would like to take MixComemrce in. 

Sridhar Skepticism

Mu thought: I think it’s fine to have that mindset. I differ myself here and like to keep things private and do open-source contributions too. If not whole software, the software that can help other businesses and without impacting mine.  

1. ZOHO doesn’t have any engineering blog that shows how they build strong engineering products or architecture they use
2. ZOHO doesn’t open source. Someone asked a question, and Sridhar likely answered diplomatically. 

What’s my take? 

I think, CRM and wholesome SaaS business is a very good game to play. We can help businesses solve a lot of their problems and while doing this we will use the latest tech, from the latest cloud to machine learning, data science, biotech, health tech, and things around it.

I will take the volume side(having more customers by charging less) and keep the price low and affordable for SMB s and SMEs. Initially, the product will be made for SMBs and SMEs to gain maturity in engineering and revenue strength, once we reach there. Taking anew problems and solving will them have more freedom(finance and resources) to explore and innovate which will be only around 20 % initially.

In the process, we will build 

1. Free tools 
2. Free resources 
3. Low price products 
4. Free client-side-based products (ie: Business card scanner, etc)
5. Content holding platforms

This will be done to collaborate with the community while building a good product-facing company. This step will also help us create soft power and trust among people.

Why do I write these articles? 

It helps me clear my brain. 

It’s a note for myself that I may refer to in the future.