My Conversation with Zoho CEO, Sridhar Vembu
A couple of days ago, I had the opportunity to talk with Sridhar Vembu, CEO of Zoho Corp, a strong player in the SaaS software market. The company’s corporate headquarters are in Pleasanton, California and the majority of it’s about 1000 employees are based out of India and China. These and other characteristics make Zoho and Sridhar, who has spent half his life in India and half (presently) in the states, an excellent model for digital innovation in Latin America.
First off, what really struck me about Sridhar after our chat was the balance of three key characteristics of his personality that came across: 1) His passion for the “people aspect” of building a business, 2) his practicality and incisive thoughtfulness and, finally, 3) an underlying, intense pride (in his people, what they’ve accomplished, etc.) and competitiveness. Incidentally, my own opinion is that this type of open personality, high level of intelligence, balanced outlook and strong personal drive will be key leadership traits for achieving success in the coming years, but that’s a topic for another post.
I won’t go into a ton of detail about the company because there’s a wealth of information on their site and in other articles. If you want to delve deeper into the company’s history and Sridhar’s unique (and, in my mind, spot on) thinking about digital innovation in today’s context, check out Sramana Mitra’s excellent interview. In a nutshell, Zoho bet on cloud computing and the SaaS delivery model early and are just now really hitting their stride in the market with about 2M users. Also, as a recent article in BusinessWeek Magazine states, Zoho competes with behemoths such as Google, Microsoft and Salesforce.com. All this from a point in 1999 when, as Sridhar mentioned, they had one key goal: survival. Now that’s a goal many small business people can identify with, but particularly, those in emerging countries such as in Latin America where capital is in even shorter supply.
So what happened after 1999 to garner them so much success? It had nothing to do with getting Venture Capital (VC) funding since they’re a private company which has bootstrapped itself since the beginning. Sridhar mentioned that their strategy has focused on depth of functionality, breadth of offerings, integration and support. The integration focus is a boon to usability because they are able to integrate key functionality from their applications into the work processes of their customers. Through “contextual information integration” things like email (even Gmail) are integrated with the CRM product so that customers can get their work done faster.
In terms of support, at least one person I referred Zoho to here in Latin America, has had an incredible experience in this regard. Sridhar mentioned that part of their engineers’ training entails alternating time on the support lines as well as monitoring the support database helping them into the customer mindset from the outset. In order to execute such a strategy, Sridhar mentions a trait that the company must possess: patience. Patience to develop employees straight out of high school into productive professionals, patience to solve what Sridhar describes as the small business “IT problem” and patience to build an organization for the future.
What a terrific model for Latin American companies to follow. There’s a ton of talent down here and, Sridhar and Zoho’s journey can be a lesson for many. As he mentioned, Sridhar himself looked to a number of Japanese companies such as Honda as models to follow. After WWII, Japan was a developing country (like India or all of Latin America) and through patience and dedication, they were able to achieve the economic and technological feats we take for granted today. It’s important to note that modeling yourself after someone doesn’t mean cloning them and Sridhar has certainly adopted some characteristics of the Japanese model, but not all.
This last point is an important one. Just this week I was in a meeting with some entrepreneurs when someone asked me if Colombia’s path to success was, among other things, in finding an instantiation of a Stanford University (the context of the conversation was the lack of an ecosystem in these countries such as exists in Silicon Valley). I feel that Zoho’s example shows that you don’t need a carbon copy of another country’s ecosystem, you need to build on the strengths you have and, in Zoho’s case, that was patiently sticking to their strategy and building their organization.
Sridhar made a great point about the fact that in Silicon Valley there’s quite a bit of talent to choose from no matter what expertise you need. It seems to me, Sridhar has taken a disadvantage in emerging markets (scarce talent pool with world-class expertise) and converted it into an advantage. By giving young people without a college degree a chance to successfully prove their mettle and compete with international powerhouses such as Google and Salesforce, Zoho benefits from the resulting highly committed, passionate and dedicated group of employees it is nurturing. Aside from this, such a highly motivated group of collaborators injects much energy into the company and, according to him, “keeps [him] young”
In tomorrow’s post, I’ll delve further into Sridhar’s vision and philosophy and its applicability to Latin America.