The first thing that strikes you about Sridhar Vembu, CEO of software products company Zoho Corporation, is basic honesty and zero hyperbole.
Started in 1994 in a room in his Chennai house, with two computers his brother Kumar had brought from the US, Zoho today employs 1,600 people at its offices in the US, Chennai, Japan, China and Europe, and clocks annual sales of $150-200 million.
The son of a stenographer in the Madras High Court, Vembu studied in the Tamil medium, becoming the first from his school to get into IIT Madras. After a B.Tech in electrical engineering, in 1989 he headed to Princeton on a scholarship for a Ph.D. Both at IIT and Princeton, he avoided computer science as “it meant writing software and I felt building was better than sitting in front of a computer.” Interested in maths and economics, he wanted to become a teacher.
But destiny willed otherwise, and just before completing his doctorate he had doubts about his vocation. “The best analogy is that of the Catholic Church; I trained to be a bishop and I started to question God. If you do that, you are in deep trouble,” he laughs.
So he turned down a teaching assignment in Australia and joined Qualcomm, then in San Diego, primarily because its “sunny weather” was much better than the freezing winters in Princeton. “Just like you marry a girl because she looks good… a superficial reason, I accepted the job because of the weather.”
Vembu stayed there for two years, writing codes. Soon he realised that “whatever you design — car engine, camera — everything involved software.” Models were first built, simulated and tested on computers before the real thing was built. He realised that “software is the real essence of everything. It allows you to do things much faster; change things, run experiments.” This hit him even more while building a satellite-based communications system in Qualcomm… virtually on the computer.
Meanwhile, his brother Kumar, a software engineer, had also joined Qualcomm. “Those days the US was short of software engineers and you could literally board a plane and go there.” It was 1994. The two brothers would discuss the future, how India was on the verge of something big in software, “where you don’t need capital, equipment or infrastructure; only your brain. That’s how Infosys started! So should we start something…”
An enterprise begins
Soon the home-sick Kumar left, and with his two computers, started writing software. He asked his brother Sridhar to scout for clients. “I made a few calls, wasn’t very successful, quit, and moved to Silicon Valley in my broken car.” His savings of $20,000 quickly disappeared in five months and his first venture failed. So he worked for three months as a software programmer on contract and “lived very frugally. I still have the same habits, nothing has changed and you can see that,” he grins, pointing to his crumpled T-shirt, ill-fitting jeans and inexpensive sandals.
About six months into his contract work, a senior from IIT, Tony Thomas, sought his help — with marketing his software programs! So Vembu linked Thomas and Kumar, promptly printed a card calling himself “VP–Marketing” of the venture (it wasn’t a company yet) and looked for business. Small orders started trickling in, initially for $2,000 to $10,000. “In principle it was no different from a fruit seller’s work, or you eat what you kill. But we were surviving,” says Vembu.
By 1998 they were making enough money — sales of $300,000 — to pay themselves. Thomas moved to Silicon Valley, the Indian operations were scaled up, and AdventNet was born with Thomas as CEO. In 1999, the sales jumped to $1 million, “and we kept growing to $3 million and then $10 million, and knew we have a successful business.” Thomas insisted that the CEO’s title should pass from him to Vembu as he was the business brain. Vembu dithered for a while but took on the mantle in 2000. After two years, Thomas branched out and formed his own company. In 2009 the firm’s name was changed to Zoho Corporation.
No suit-tie for him!
So, is he planning an IPO?
“Not at all; I like the freedom of doing what I want to do and I have unusual interests.”
Such as? I prod him. “Like dressing like this… I really don’t care how I look, I don’t like to talk to Wall Street or our Dalal Street guys wearing a suit and a tie. I don’t socialise in those circles. I don’t play golf — I’m not interested and consciously avoid all of it. I do whatever I do with passion.”
Also, he hates to talk about his personal net-worth; “that is one of the reasons why I don’t go public, because that will be constantly talked about. I am not defined by the number of zeroes. I am more interesting than that.”
Suddenly, turning serious, he says softly, “You know… to have a lot of money and no vision, is a very sad place to be in. When you have money and don’t know what to do with it, it’s sad. But I have lots of interesting things to do.”
Running a 10-mile marathon is one of them. He doesn’t have a trainer; “you simply have to keep running. I can now go up to 3 miles.”
Today Zoho has over 150,000 customers, half of them in the US, where he spends two-thirds of his time. He got married to Pramilla, who now runs her own company in the US, while at Princeton.
The two of them, “mostly her, home-school our child, who is autistic. He is 13, very good with the piano… my wife is now teaching him software writing too.”
That brings us to the recruitment strategies of Zoho, with 1,600 employees, spelt out in an earlier article (http://tinyurl.com/zohosuccess). While in the beginning, they recruited from lesser-known engineering colleges, as students from better colleges would naturally opt for an Infosys or TCS, Zoho University now takes Plus-Two students and trains them in code writing.
Women don’t take risks
At Zoho, the gender ratio is a little skewed with only 30 per cent women. This is because, being better academic achievers, they “get recruited by bigger companies and go for what they think are better jobs,” says Vembu.
Are women equally imaginative and creative, or are men better at product design and development?
“I don’t want to say that. What I’d say is that you have to sometimes break rules, think different, like Steve Jobs said, but women don’t want to break rules or take risks. They are more cautious and that sometimes hinders… Men are willing to take risks. Men get killed in accidents because they take stupid risks on roads, women are safer drivers. But in product business, you have to take risks. There is no other way to make progress.”
Innovation and thinking differently have been a hallmark of this entrepreneur, who has to his credit the creation of one of the first online office suites (cloud computing). He has been instrumental in broadening Zoho’s software portfolio to include innovative, cost-effective products for the SME sector.
We talk about why our MBAs and other brilliant professionals line up for jobs rather than become entrepreneurs. Is it fear? Vembu’s response: “Actually, these are all big words. Think about the lady who is selling flowers. She is an entrepreneur too; she has no fear because she has no choice.” He quotes Helen Keller: “Security is mostly a superstition. It does not exist in nature. Nor do children of men experience it as a whole. Life is either a daring adventure or nothing.”
With child-like wonder, he adds, “This is the absolute truth; I saw this only recently, but I’ve lived the spirit… that is why I could connect with it. If you give excessive structure, like 9–5 schooling, people will seek security.”
All of 15, he would often wonder about security being an illusion. “Buddhism tells you that you can be rich one day and poor the next. And then everybody dies, and what can be worse than death? So why are we so afraid?”
Thanks to Vembu’s ability to “break rules”, veil-clad Ayisha Shahjehan, a Plus-Two student, earns Rs 20,000 at the age of 20 — “much, much more than what my father makes”.
There’s also Nandini, a railway policeman’s daughter who earns a little more at 21. More than the money, he has given both the girls, and scores of other youngsters, confidence as well as a career. As they chat and joke with him, they don’t know, or care about the zeroes in his net-worth. Neither does he.
Zen and the art of software coding
I’ve never been religious, I was always bored by rituals. These days I’ve become more partial to Buddhism. Buddha never talks about God. Buddhism is what they call the science of the mind, how you find peace within yourself. Like the Dalai Lama says, the whole purpose of everything is to be happy.
I love the movies of Akira Kurosawa, the Japanese moviemaker, and I watch Westerns, the Clint Eastwood kind… they are similar to the samurai movies, and take influences from Kurosawa. They have similar roots. I find Indian movies too long and too emotional. I like understated movies and the Japanese are understated.
Not much, but my wife is an excellent Carnatic music singer; she is world class. She sings occasionally, and we do give home concerts. I don’t know Carnatic music but listen to it. I listen to Yanni — I just love his music.
Growing polarisation on religious lines
I am sad about it. I think we all need to chill out a little bit… take this Vishwaroopam thing… it’s only a movie — why take it so seriously? There is nothing right or wrong... that is Buddhist philosophy.
I mostly like South Indian vegetarian food… and yes, I do know how to cook!
I do a lot of reading, entirely non-fiction. I love travel stories… travelling is a way of finding yourself. I read a lot on travel in China; I’m fascinated by Naipaul’s writing; he is brilliant.
Any peaceful place. I went to my village in Thanjavur last weekend, and was very happy. My parents were there, so we watched the harvest. Our home in the US is in the countryside… a big house in a big farm; my son loves the solitude and so do I. We now have an office in Tenkasi, which is very peaceful and scenic.
Keywords: Sridhar Vembu, CEO of software products company, Zoho Corporation, started in a room in his Chennai house, with two computers his brother had brought from the US, Zoho employs more at its offices in US, Chennai, Japan, China and Europe,