The Zoho Success Story: How Zoho boostrapped its way from a startup to a multi-national corporation

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Internet is such an ingrained part of our collective lives that it is hard to imagine a time without it. But just three decades ago – in the 1990s – the internet was just endless possibilities. The dot com boom of the Silicon Valley had brought out giants including Amazon, Apple, Paypal, and many others.

While everyone knows about these western tech giants, there is homegrown Indian tech company whose work and path to success has been a source of inspiration and awe. So, let’s get to know Zoho better.

Starting Strong and Steady

Zoho was founded as AdventNet in 1996 by brothers Sridhar, Kumar, and Sekar Vembu along with Tony Thomas. The upper management was in a state of flux for the first few years. Thomas left the position of CEO in 2000 to Sridhar Vembu, who became responsible for the company’s incredible growth.

Born to a middle-class family in Chennai, Vembu was a bright academician, taking a bachelor’s degree from IIT Madras, and then an MS and PhD from the Princeton University. He had worked for Qualcomm for a few years but had the yearning to create something of his own.

AdventNet’s first product, WebNMS, was quickly lapped up by network leaders such as Cisco. By 2000, the company had revenues of 10 million dollars. By this time the company had gained a firm footing in the emerging market of internet, selling software products to businesses increasingly turning to the digital sphere.

Zoho Centre at Chennai
‘Why Loose the Freedom?’

Building a business is an expensive affair. When one is dabbling in an emerging industry that has new breakouts and breakdowns almost daily, it becomes an even more dangerous game. Many tech companies across the world have time and again relied on external investment to keep them going. Not AdventNet. In 2000, AdventNet had an interested investor who was ready to put down 5 million dollars in the company. But this money would have meant losing control over decisions and directions. In a shocking decision, Vembu turned down the offer – and all others that came after that.

The timing could not have been more unfortunate. The dot com bubble finally burst after excessive speculation of internet companies. Hundreds of tech and internet companies across the world failed and shut down, others lost almost all they had built. But AdventNet managed to survive the storm without any helpers.

What Makes Zoho Work
Zoho CEO: Sridhar Vembu
Zoho CEO: Sridhar Vembu

Since 2005, the company has taken a number of steps in the right direction that have made it into the tech giant that it is today. These include –

  • Firstly, the company continues to be private even after twenty years in the field and more than ample opportunities to go public. Those in control of the company, including CEO Sridhar Vembu and his sister, majority stakeholder Radha Vembu have priced independence and innovation over big sum payouts.
  • Predicting market trends, the company realizes that businesses no longer wanted to buy expensive software, but keep the benefits of digitization. The company thus began to launch cloud-based apps from 2005. Zoho writer came out in 2005, followed by Zoho creator in 2006 and begins to build a comprehensive online suite.
  • One big way the company has won over clients is by keeping things private. Zoho is one of the few online suites to not allow advertising, even in their free versions. In doing so, they showed that they cared about customer privacy and independence as much as their own, hence putting weight behind their business decisions.

In 2009, AdventNet changed its name to Zoho, the name under which its cloud apps were developed. The change signified the dawn of the new tech era, and a company that was ahead of the curve.

Doing Things the Right Way

So, who makes these pathbreaking products at Zoho? There are, of course, many with diverse backgrounds and degrees from preeminent schools. But there are many others too, just as talented.

In 2005, the Vembu family began an ambitious project. Young talent from lower socio-economic strata were trained and hired for the company. Now, almost fifteen percent of the company comprises of such talent. Limited by their economic conditions and society’s assumptions, they have been given the chance to show their talents and lead a better life.

Another radical agenda on Sridhar Vembu’s list was to decentralize his company’s workings. Tired of the city life, Vembu himself moved to a village in Tamil Nadu during 2020, teaching Math and Science to the students along with environmental morals. As the Covid-19 Pandemic forced India and the world to shut down its cities, Vembu encouraged his engineers and developers to work from their hometowns.

Vembu’s ideal is to reignite communal village living, a combination of community and harmony with modern conveniences and technology. The CEO plans to adopt similar models in Japan, Mexico, and Texas.

The Lessons

The biggest lesson that the Zoho Corp can give anybody is its existence itself. Time and again Zoho corp has gone against the grain, and stood for what it felt was best for itself, its workers, and the communities it serves. And time and again, it has shown that it is possible to be a successful and profitable company while doing all that.

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