Running a profitable Zoho Corp since the day he founded it, CEO Sridhar Vembu always takes a long, hard look at opportunities, opting for those he understands well. In a crisp conversation with Outlook Business, he talks about Zoho University, his company’s open door policy, plans to uplift Bharat through rural centres and why he is elusive to metaverse. Edited excerpts:
Zoho has been profitable since day one. How have you worked towards that? What is your advice to new-age start-ups—most of whom are dependent on rounds of funding from investors?
When we started building products and getting customers, we invested that money into R&D to build better products. We never needed to go for any funding. We were frugal in our approach and built a profitable organisation with the products being our backbone.
My advice to today’s start-ups, particularly in the current scenario when VCs have become increasingly restrained in investing, is to take it slow and steady and keep their expansion and expense in check. They must focus on building high-quality products rather than on raising the next round of investment.
Zoho University—the company’s internal training programme—has helped scores of young individuals join the company. Any plans to scale it into a full-fledged educational platform, particularly to bridge the industry-academia gap?
We are expanding the strength of the Zoho School of Learning by hiring more faculty and taking in more students. But we are not going to change the model itself as it is not focused on the degree but on providing skills to be employable. It is also an antidote to the extreme obsession with degrees. We want to stand for real skills, real employment, real employability and debt-free education. We are going to expand it in more domains, including hardware or mechanical engineering, mechatronics, along with other software courses.
Zoho’s rural centres work towards tapping rural talent. Where do you plan to open the next set of such centres considering these can be game changers in north and northeast India?
Currently, we have five hubs—Madurai, Coimbatore, Thanjavur, Tirunelveli and Tenkasi. We are scouting for one location in the north and may have something to show in the next few months. But we would like to start cautiously with one and expand as we gain footing.
Over the years, you have created a distinct culture in Zoho. How do you plan to help the entire industry evolve to that kind of culture?
We are hiring more people. We are training them and providing them exposure to how we operate and that naturally creates a lot of talent. That is helpful for the whole ecosystem and not just us as these ideas then slowly percolate. The effort is to create more jobs which is the pressing need in our country right now.
When you created Zoho, what kind of company did you really want to build apart from making world-class products?
When we started, there was a focus on the long haul. I knew early on that we were not here to make quick money. The idea was to build a durable company. I looked up to Japanese companies and have always mentioned Honda as an inspiration. Even after about 80 years, they still make good cars. That is the kind of company we want to be known as 50 to 75 years down the road.
How difficult has onboarding and retaining talent been for you?
Hiring and retaining talent was always difficult—for everyone. Even if you go back to the ’90s, the focus was on IT services. Those were the only companies that were considered as real software companies. The product company notion was an alien concept, at least in India. Ours was a small company which had no VC backing and we were not famous for anything. So, it was very difficult ever since the early days for us.
Companies bigger than us in IT services used to take most of the talent in IT services. That created a DNA of creating our own talent and induced the ‘create your own talent’ ethos. That is what is keeping us going.
What kind of HR policies do you stand by as far as employees are concerned?
We do not look for fancy credentials apart from talent, skill, potential and passion. That is one important value of our HR. Second is that we give a lot of importance to keeping employees happy. We have an open door culture—any engineer can approach me, or anyone else from the top management, for any problem. Even though we now have over 10,000 employees, we try to keep the culture open. Periodically, we conduct townhall sessions where all employees participate and we allow them to ask a lot of anonymous questions. These things keep the two-way dialogue going about the latest concerns of employees.
Zoho is a true-blue Indian company which is making products for the world. What is the one thing you would like your Indian employees to imbibe from their western counterparts?
We have to create world-class products and make a commitment to that. And, it is not just in software. It can be electric cars or household products. The focus has to be that we have to build products that stand up against the best in the world. Our entrepreneurs, engineers and employees have to make a commitment to that. Only then can you hope to be a prosperous nation.
Are there any future products that you would like to mention? Anything specific to the metaverse?
No, we do not have plans for the metaverse because I do not even understand what it stands for. You can brand this entire meeting also as metaverse (chuckles).