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Zoho co-founder Sridhar Vembu.
Zoho co-founder Sridhar Vembu.

Even students in colleges want to join product start-ups today: Zoho’s Sridhar Vembu

Co-founder Sridhar Vembu says Zoho sees massive growth ahead

Mumbai: Sridhar Vembu, who co-founded Zoho in 1996, speaks about the company’s plans and prospects in an interview.

Edited excerpts:

On acquisitions

We don’t look at acquisitions because our culture is very important to us. A target company will have a very different culture. About 80% of acquisitions fail, not because of technology but because of integration issues.

Look at Apple—it does tuck-in acquisitions, small technology-focused buys to acquire a critical piece of technology that a small company has developed. We may do those things but not a big acquisition.

On faster growth

We see massive growth ahead. But we don’t put numbers to it. That is not our culture. Revenue numbers are not a priority since this does not mean you’re profitable. We do not have shareholders to pressure us. Hence an IPO (initial public offering) is not on the cards—at least, not for the next 5-10 years.

On culture

There are many aspects to this. Employees have an easy-going, fearless approach at work. We have no cabins, no cubicles, no separate rooms—including for me. Our seating arrangement is such that anyone can sit anywhere. This reduces ego problems.

Shailesh, who goes by his first name, for instance, does not even own a car. He comes by the company bus or auto. He can afford a car but does not want to buy one. There will be internal dissension, arguments, etc., but we resolve them by ascertaining facts and then someone has to take a call.

Advice to product companies

I’m really excited to see an explosion of product companies in the last three-four years. Today, even those in colleges want to join product start-ups and make a product rather than join a services company. I’ll expect some big successes to come. A lot of these companies will learn. It’s important that a lot of people do this.

Some people will get it right. It starts with the product—you have to have a product that solves a problem. Barriers are in the mind—if you think you cannot create a product out of India, you are wrong. Similar, for selling a product. If you have a long-term approach, it helps.

On venture capital

We also have a long-term outlook and have consciously decided that it is a long journey. Hence, it is bootstrapped. Venture capitalists have to exit since they have a 10-year cycle at the maximum. They want to exit in 6-10 years, so they continue. They also collect a 2% tax, so the business model they have cannot be for the long term.

Even today, you can build a completely bootstrapped company since the cost of technology is low. We are a zero debt company. Our growth is not constrained by capital. A business should be self-sustainable.

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