Sridhar Vembu is one of the country’s most successful entrepreneurs, who has shown how solid businesses can be developed by being modest, staying away from the valuation game and not chase private equity funding
“He is accountable to no one. He is a man with lots of chutzpah. He has shunned venture capital. He entertains no plans to take his company public and couldn’t care less about the Wall Street. He dares to take on big players like Microsoft, Google, and Salesforce.com – and he does this with products built in India.”
“Starting a company is like falling in love, but running one is like being married. There is passion and excitement in starting a company”
Wireless Systems Engineer
Qualcomm, Inc. in 1994
AdventNet, Inc. in 1996
Founder – Chief Executive Officer
Zoho Corporation since 2000
Member of Advisory Board
B.Tech, Electrical Engineering
Indian Institute of Technology Madras
Ph. D., Electrical Engineering
Sridhar Vembu, CEO, Zoho Corporation, is a man very few would have heard of, and one who has kept everyone warned. Unlike many of his start-up peers who toast high valuations, interviewed by media quite often and private equity investors queue up with funds, Sridhar Vembu is a maverick CEO. In fact, at a time when start-up entrepreneurs always look for outside funds, Vembu runs away from investors and fund managers. With many start-ups that die and get buried in the blazing competition of Silicon Valley, Sridhar was determined not to be among them. His determination to succeed has made Zoho is known for its business, productivity and collaboration applications at prices that show his nerve to take on competitors.
Rising up the stairs
Sridhar grew up in a family of very modest middle class in Chennai. His father was a stenographer in the High Court. Neither his father nor her mother went to college. He went to a school with the help of the government. He studied electronic engineering at Indian Institute of Technology, Madras, and Ph.D. in Electrical Engineering from Princeton University. All thoughts and beliefs of his student days began to take shape when his brother Kumar, who was also in the US, suggested that he return to India and make a software company. His success is self-made and is a leading way for many young entrepreneurs who want to make it big by focusing on core values.
The Eleven Lessons from a serial entrepreneur for young entrepreneurs
- Starting a company is like falling in love, but running one is like being married. There are passion and excitement in starting a company—it is an act of falling in love. That’s why we do it, and some of us even do it again and again! But passion and excitement alone are insufficient to run a company well, just as that initial romantic spark has to become an enduring love in a happy marriage.
- Too often, we over-romanticise starting a company, but we are not prepared for the rigours, the day-to-day pressures and, yes, even the occasional boredom of actually running it. So go ahead, fall in love, but also be grounded in reality! My first venture was to build a hardware network device. After spending my life savings trying to build it, I discovered there was a fundamental flaw in the third-party semiconductor chip we were using as the foundation of our hardware.
- No one would remember that failure because I was even more of a nobody then, but it did teach me useful lessons—I learnt I should stick to software and to never run out of money! Practically all entrepreneurs start as nobodies. No one is going to pay attention to our ideas. No one is going to return our calls. That thought may sound distressing, but it can be very liberating.
- It means no one is going to pay attention to our failures or mistakes either. We get to experiment freely until we succeed. You must pay attention to the oxygen tank as you go for that deep dive! Running out of money is the proximate cause of death in companies.
- There are two variables here: how much money you take in and how much you spend. You don’t have a lot of control over the first part, but you do control the other. Cut your burn rate, be frugal, but don’t skip the essentials. Also, do not assume all the talent in the world wants to work for you.
- This is particularly relevant for people who leave a job in a famous company to start on their own. They may be tempted to assume they would have access to the same kind of talent pool that a big company has, but the opposite is true.
- A key part of entrepreneurship is to identify overlooked talent. It is also the act of persuading talent. That act of identifying overlooked talent was how Zoho University was born; today it has become a strategic asset for us, proving again that necessity is truly the mother of invention.
- Whatever you call yourself, you are a salesman. I started out as an engineer. I still work closely with our engineering. Yet, in the first couple of years of my entrepreneurial journey, my primary role was to be the salesman, as my co-founders—who were also engineers—took care of creating the product. I wasn’t a born salesman, but I improvised, and that turned out to be crucial for the company.
- Just as the case with Zoho, a lot of companies are started by engineers, whose self-image is that of product creators. Yet, from the first day, your sales skills matter just as much as your engineering skills. You have to persuade people to work for your fledgling non-entity. You have to persuade people to invest money.
- Ultimately, you have to make that first sale—if starting a company is like falling in love, getting that first purchase order from a real customer is the consummation. One common mistake rookie entrepreneurs make is to assume there is no competition to what they do. Their idea is so unique, so out-of-this-world, no one has thought of it before. This is rarely, if ever, true, as I have discovered from repeated personal experience. There is always competition—drill that thought into your head.
- In fact, in the rare case where there is indeed no competition, you have to wonder if there even exists a market for what you offer. Even if you cannot identify direct competitors, keep in mind there are always substitutes—after all, customers lived without your must-have product all this while! Customers don’t have to spend money with you; they can spend their money in alternative ways that ultimately have the effect of turning those alternatives into competitors. But most important is to never forget to have fun!