Share This Article
Sridhar Vembu’s achievement is simply hard to overlook. If his name sounds new to you then there can be only two possibilities: either you are new in the world of Indian startup ecosystem or have been simply too ignorant all these years.
To give a faint idea about his achievements then Vembu has been at the helm of an IT Saas company that has remained profitable for almost 21 years. While this in itself is an achievement, but his greatest achievement is that his company till date has not taken a single external borrowing.
Simply put, Vembu’s company Zoho Corporation is one of India’s most successful bootstrapped Companies. Undoubtedly, this is a good enough reason for all the entrepreneurs out there to lend their ears and earn some entrepreneurial wisdom from this man.
Below we’ve brought extract of Sridhar Vembu’s recent interview with a reputed online startup publication. Through these extracts, readers will come to know some of the key lessons that Sridhar learnt while maintaining ZOHO Corporation’s profitability intact for every single years for over two decades.
Collapse of Dot com bubble and lessons learnt from it
Incorporated in 1996, back then Chennai based Zoho Corporation (previously known as AdventNet inc) was among thousands of tech companies founded during the famous dot com bubble. Those were the boom days when even small and medium size I.T companies made fortunes. Although Zoho must have been through hiccups in the initial years, the dot com bubble did help the company in giving a solid foundation.
But then every bubble has to bust some day and so the dot com bubble busted in year 2000. The two to three years that immediately ensued after the dot com bust caused immense hardship for small companies like Zoho.
“Those were very educational moments for Zoho,” claims Sridhar, who now remember those tough times with a smile on his face. He adds that “you should never take the good times for granted. There will be hard times, and you will have to go through them.”
During those tough times, Zoho decided to focus aggressively on the cloud space and eventually acquired the domain Zoho.com in 2003. It also launched Zoho writer in 2005. These product launches helped to stabilize company’s profitability.
Sridhar claims that one thing that Zoho has been consistent with is to keep series of products up its sleeve. The gritty entrepreneur claims that this helped the company in constantly reinventing itself and also to never fall out of the competition. Of course, his company would not have been able to achieve this without considerable amount of investment in R&D.
Zoho takes on Salesforce to avoid competition with Google
When a big fish enters the sea, a small fish has two options: either he can pursue self-defeated battle against the big fish or can choose different path to reach his destination. Sridhar chose to settle for latter option when Google, a giant fish in its own right, entered online office suite space.
We realized that having them (Google) as direct competition in the office suite was going to be a losing proposition,” Sridhar says.
The critical realization propelled Sridhar and his team to explore for newer areas with more level playing field and realistic competition. Their search led them to CRM (customer relationship management) space where it was pitted against upcoming company Salesforce.
Sridhar says “I remember thinking that it will be tough to compete with Google but not tough to compete with Salesforce. That’s when we moved into CRM, which became the blockbuster of our success.”
Zoho’s tremendous success in CRM space helped the company to enter into high growth phase. If today this company is the only bootstrapped company to boast unicorn tag then it is partly because of company’s phenomenal success in the CRM space.
However, Zoho today probably would have been a struggling entity if it had continued to compete with Google. Sridhar’s entrepreneurial intuition not only managed to save the day for his company, but also gave it a new direction.
The one lesson that entrepreneurs can draw from Zoho’s success is the importance of knowing one’s strength and keep reinventing according to market’s needs.
Please note: The interview was originally published on Inc42.com. Although some of the quotes of Sridhar Vembu has not been changed, rest of the interview has been rewritten to avoid copyright voilation.
