Sridhar Vembu, Zoho CEO, who Built a Multi-million Dollar Business without External Funding
The Padma Shri awardee Sridhar Vembu is an Indian billionaire businessman. He is the founder and CEO of Zoho Corporation which provides an online Zoho office suite and many other enterprise applications. Vembu established the multi-dollar Zoho corporation from the ground up and refused every external capital he was offered. Now, his company Zoho Corporation competes directly with big companies such as Microsoft, Oracle, Google, and Salesforce.com. In 2021, Forbes declared him 55th richest person in India with a net worth of $3.75 billion. Let’s know how he did this wonder.
Quick Facts:
Sridhar Vembu
- Nationality: Indian
- Net Worth: USD 3.75 billion as of 2021
- Education: Electrical Engineering from IIT Madras, PhD from Princeton University in New Jersey
- Occupation: Businessman
- Designations: Founder & CEO of Zoho Corporation
- Date of Birth: 1968
- Age:54
- Place of Birth: Tanjore, Tamilnadu, India
- Marital Status: Married
- Spouse’s Name: Pramila Srinivasan
- Children: only a son- Aditya Rajendran
- Spoken Languages: English, Tamil, Hindi
- Hobbies: Gardening
Early Life:
Sridhar Vembu was born in a small village called Thanjavur in Tamil Nadu, India. He comes from a very modest middle-class family. His father worked as a stenographer in Chennai’s High Court, and his mother was a homemaker. Sridhar, a very talented student, received his primary education in a government-sponsored school with a Tamil-language curriculum before taking admission in the IIT-Madras for his undergraduate studies. After that, Vembu earned his PhD at Princeton University in 1989.
Career:
Having earned the title “Dr” and possessing the tag of IIT and Ivy League, Vembu began working at Qualcomm as a wireless engineer in California. During that time Vembu’s brothers Sekar Vembu and Kumar were establishing a bootstrapped business in their Chennai apartment India. And Tony Thomas, a co-founder of Zoho, was working on an extremely technical product in New Jersey called an SNMP API protocol. At the end of 1995, Vembu introduced his brothers to Tony and they merged their businesses and started working together. The main outcome of this collaboration was the software for the SNMP protocol.
Vembu had been primarily acting as a supporting character up until this point. He moved to Silicon Valley in 1996 after leaving Qualcomm, living solely off of his savings. He gave making hardware a shot and failed miserably. He started working as a contractual programmer for a few businesses after blowing through all of his savings. In the meantime, Tony was searching for new ways to promote the SNMP protocol software.
He invited Vembu to accompany him when he arrived in Silicon Valley to promote this software at the Networld+Interop trade show in Las Vegas. Vembu made the decision to try his hand at sales because neither he nor Tony had any experience. He got some “VP of Marketing” business cards printed and reached the venue. Vembu’s raw sales skills literally translated to a long pitch about the software’s technicalities while he forgot to ask the customer for money. But fortunately, they succeeded in getting some sales. Vembu became AdventNet’s first salesperson in this manner. The business crossed the $350K sales threshold shortly after, at the end of 1997. They haven’t yet paid themselves though.
The entire sum was reinvested in the business to develop WebNMS, their IoT platform. They continued to operate as two distinct wings. the US sales team and the Indian R&D company. They were expanding incredibly quickly at the time. Their revenue surpassed $1 million in 1998, and by the year 2000, it had risen to $10 million. In 2000, Vembu was also appointed CEO.
Their guiding principle of concentrating on cash flow and profitability while creating a sustainable business helped them survive the dot com bubble in the 2000s. For Zoho, being debt-free was a blessing, and ever since, they have continued on this path. However, a new issue had emerged during this time. At $10 million, the market for the WebNMS product was fully saturated. Vembu was also aware that a change of course was necessary.
They, therefore, started working on their next product ‘Manage Engine’, in 2001–2002. Basically, it was a collection of digital tools for better business management. Along with Manage Engine and WebNMS, AdventNet expanded in 2005 to include Zoho Corp. Zoho is fundamentally an R&D company. They moved to the online business, cloud, and productivity space as they became more adept at creating products.
After releasing Zoho Writer, Zoho Sheets, and Zoho Docs, they decided to concentrate on CRM after Google entered the market with Google Docs and Sheets. Vembu believed it would be more advantageous to compete with Salesforce than Google. After numerous reinventions, Zoho now offers a full line of business software with more than 50 products.
Social Work:
Sridhar Vembu is renowned for bringing software and product development tasks from urban areas to rural Indian villages. His company, Zoho, specifically set up its offices in the Andhra Pradesh suburb of Renigunta and the Tamil Nadu village of Mathalamparai, Tenkasi district. At this time, he relocated from the Bay Area to Mathalamparai.
In order to offer rural students a vocational education in software development as an alternative to a traditional university education, he founded Zoho Schools in 2004. According to a statement from the company, 15 to 20 percent of its engineers are not college graduates but have completed their vocational training at Zoho Schools. He announced a “rural school startup” with free primary education in 2020.
His Philosophy:
- Do everything in your power to close the first sale to earn your first dollar without worrying about the process.
- “Shamelessness” is a crucial trait for start-up founders. It can even be a significant superpower in the beginning.
Awards and Honours:
- Vembu received the 2019 Ernst & Young “Entrepreneur of the Year Award.”
- He received the Padma Shri, the fourth highest civilian honour in India, in 2021.
- Also, in 2021, he was chosen to serve on India’s National Security Advisory Board (NSAB).
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