5 ms·

Zoho: Thriving Amid the Giants

94 points by terpua 17y ago

deleted 17y ago
[deleted]
- deleted 17y ago
  [deleted]
edw519 17y ago
Part of the opportunity for Zoho lies in differentiation. It has 19 online productivity and collaboration applications, including customer relationship management, project management and invoicing. So it only competes head-to-head against Google with five offerings. So what exactly differentiates Zoho? The breadth of its product line? That doesn't sound like much of a differentiator. Or is there more that this article doesn't mention? Any special processes, APIs, or features? It's relationship with VARs? It must have a great differentiator to have $50MM in revenue without funding. It's just unclear from this article exactly what that differentiator is.
- sp332 17y ago
  I think by "differentiation" they meant "diversification."
- terpua 17y ago
  Looks like they have 2 other product divisions. What would be nice to know is how much of the $50M can be attributed to zoho.com. http://www.zohocorp.com/ http://www.zohocorp.com/
- SamAtt 17y ago
  We use Zoho and while I can't speak to the author's intended meaning I can tell you the two factors that keep us with them. 1. Zoho's APIs are more mature. Especially the Remote API which allows you to use the Zoho tools but keep the data on your own servers. That's something Google has no competitor for (last I checked). 2. The customer focus. The company has always been responsive to our requests and there have been occasions where they actually added a feature pretty soon after we asked for it (in fairness others might have asked for it earlier, I don't know) It boils down to Zoho being focused on creating a great product for their customers while Google seems more interested in proving a point about online software.
- onreact-com 17y ago
  It means you get a lot of different apps under one roof without the need to switch to other vendors for different tasks.
ryanwaggoner 17y ago
But Zoho, a company based in Pleasanton, Calif., that offers similar services, is solidly profitable, with revenue of more than $50 million a year. And it has never taken a cent in venture capital or bank loans. I would love to hear from someone more in the know on how Zoho was able to pull this off. Conventional wisdom seems to be that bootstrapping a product company to tens of millions is near-impossible. Is Zoho just a random aberration or do they offer lessons to others trying to do the same?
- inovica 17y ago
  I think the problem these days is that there is a lot of talk, on sites such as this, that VC is the way to go. I don't think that Zoho are unique in being able to do this - I think with software/web there are a good number of companies that have managed to quietly build their business and get great revenues.
  - SamAtt 17y ago
    I could be wrong but I suspect most small companies in the United States are funded by business loans not VCs. If you have decent credit and real faith in your idea it makes sense not to give the valuable shares away.
    - eru 17y ago
      And if you do not need millions of dollars.
  - webwright 17y ago
    Zoho quietly did it by getting funding from a source other than VCs. Growth like this generally requires cash.
    - ryanwaggoner 17y ago
      Zoho quietly did it by getting funding from a source other than VCs. Source? Or is this just conjecture on your part?
inovica 17y ago
I think its great that these guys appear to be genuinely interested in building a company rather than building it quickly to sell it. I haven't used any of their products, but this article has prompted me to give them a go
- zzzmarcus 17y ago
  Over the last few years I've tried their products out now and then. I'm always disappointed with how little unification there is when moving from one app to another. The design (both UI and UX) always feels a sub-par to me as well. I've never been able to stick with any of their products for longer than a month or two without giving up in frustration. Apparently a lot of people feel differently though.
  - onreact-com 17y ago
    Yeah, that's why I use Zoho only occasionally, but I still prefer them compared to Google for privacy reasons and Microsoft (for the high price and annoying interfaces) products and even the bloated Open Office suite.
  - sridharvembu 17y ago
    We plead guilty to having a fragmented suite - that was the price of rapid evolution. But they are coming together nicely now. Check in on us every few months (seriously!). We hope to surprise you.
zaidf 17y ago
Very 'on message' piece: it's clear to HN crowd that most of Zoho's monkeymakers are non-web2 tools yet it is also clear Zoho wants more focused media for their web2 stuff and they are getting it.
sridharvembu 17y ago
I am in India now, so was sleeping as this thread happened :-) I hang out at Hacker News a lot, in fact, almost everyday I send an article to someone or other in the company. I strongly recommend it internally - I love HN (thanks, pg!). To answer some of the questions: Zoho Corp used to be known as AdventNet. It was bootstrapped from the beginning (1996). Zoho is the latest and the fastest growing division; while we do not reveal our revenues, all I can say is that we are very happy where the Zoho division, as well as the whole company, has gotten. We have solid profits, which we invest in doing interesting new things. Bootstrapping works, but you have to be very patient. It has taken us 13 years to get here. The fun part is that we now have the human capital as well as the financial capital (the first part is more important) to do a lot of interesting things, and we don't have to worry about VCs or Wall-Street (not that there is anything wrong with them ;-)) On the product side, Zoho has been evolving rapidly, reaching that polish and maturity in stages. If you had tried us 2 years ago, I wouldn't blame you for giving up on us. We are far, far better today - one proof point is that our company, of about 1000 people, has moved to Zoho almost entirely. There are some small bits and pieces that are not on Zoho, but by end of 2009 everything should move. The tools we use extensively within include Mail, Office suite, CRM, Project Management, Meetings, Creator ... just to give an example, we run well over 100 web meetings a day on Zoho Meeting ourselves. We used to pay WebEx about $25-30K per month, and our usage on Zoho Meeting would cost us about $3-4K if we were to charge ourselves. I say that to explain why we have paying customers. Why the diversified suite? It is not only diversification, it is also a source of differentiation. We believe we can create very compelling integration scenarios that bring substantial productivity increases. One recent example is our Zoho CRM + Mail integration, which has sold over 1000 customers in the 8 weeks or so it has been released. You will see many more such things rolled out, partly addressing the criticism that it has been a fragmented suite. So how do we do it? Silicon valley style flexible culture mated with Japanese style patient engineering. There are huge lessons to learn from Japan's post-War leap. As one example, Japanese companies (the giants of today) always had a train-your-own-talent policy. Their colleges most certainly didn't do it - for the most part, college in Japan is considered relaxation time before the real work begins. We dispense with what I believe to be non-essential parts of Japanese experience, like the rigid discipline, substitute it with silicon valley style flexibility. The one achievement I am proud of is not a product or technology: it is our "University" (as we call it) where we recruit and train 17 year olds - the typical school leaving age in much of India. About 100 of our 1000 employees have come from that program now, and it is growing fast. Longer term, we should get 30-50% of our talent pool directly out of high school. I have written extensively about it. Let me summarize: I do not believe in college. I believe most real education happens in the work-place, an observation Peter Drucker made originally. I regret going to college myself - we would have been 10x bigger if I hadn't gone to college, so that is my opportunity cost. I probably wouldn't have if I had grown up in America. Sorry for the long comment. I wanted to answer all the posted questions in one shot.
sridharvembu 17y ago
It is worth elaborating on bootstrapping. When we started, the hottest tech company in the world was Netscape, and Yahoo was still an infant. So you can see how long it has taken us - nothing much happens to you in 1 year, 2 years and so on. The only thing we had going was patience. It helped that I was educating myself about Japan. We didn't set out with the mission of bootstrapping. It was sheer necessity: we had no big ideas (only some little ideas), and had no way of impressing anyone to put money on us. Our very first product was this: http://www.webnms.com/snmp/ http://www.webnms.com/snmp/ - the amazing part is we still make money on it! But sexy it isn't - a VC who stumbled on us told us "Why are you focused on such a tiny market?" By the time money was offered to us, we didn't need it, and we were having too much fun building stuff to even bother pitching to VCs. We came close to a VC round once in 2000: a term sheet was offered. There were things there I didn't like and I was too lazy to negotiate with them, so I simply let it die.
- senthil_rajasek 17y ago
  "It helped that I was educating myself about Japan." What was the motivation and can you elaborate and share with us on how you did this?
  - sridharvembu 17y ago
    I was always fascinated by Japan, particularly in the context of India . After we started, I started looking closely at Japanese companies as role models. They had figured out stuff over the years that is unbelievable. Even today, there exist some technologies that pretty much only the Japanese do well (and not only in well known industries). Take a look at this company for example: http://www.uniontool.co.jp/english/product_index.html http://www.uniontool.co.jp/english/product_index.html They make drill bits for printed circuit boards, drill bits finer than human hair, drill bits you cannot even see with the naked eye. The magic is years and years of patient, painstaking work, with occasional inspired leaps. That was good to know, particularly when we tended to get bored or tired.
rams 17y ago
Sridhar, What does Zoho mean ? Folks here in Thiruvanmiyur don't seem to know.:-)
- deleted 17y ago
  [deleted]
- sridharvembu 17y ago
  We were hunting for a domain in 2003 for our new initiative. We tried variations of SOHO (small office home office). Zoho happened to be up for sale. I was reluctant to shell out the $5K (I am cheap), but Raju Vegesna, persuaded me we should buy it. He was right.
kalyan 17y ago
I am not sure if dissing (college) education all together makes sense. I am sure you can claim to have learnt a lot of allied "subjects" during your education including teamwork, competing, leadership, analytical thinking, synthesis of data, risk taking (maybe) etc. But I do agree that education (whether American or Asian) should give students room to develop the above while learning core subjects for it to be holistic. It should not purely rely on it being rote based.
- deleted 17y ago
  [deleted]
techhacker 17y ago
Here is another interview of vembu (from India perspective) http://www.pluggd.in/indian-startups/interview-with-sridhar-vembu-founder-of-zoho-indian-startups-590/ http://www.pluggd.in/indian-startups/interview-with-sridhar-...
fredthecat 17y ago
Shouldn't have gone to college... and proud of it... even though you went. You, sir, are a fucking idiot. You would have made it either way. But at least you were exposed to arts and letters and knowledge beyond just what's needed to make money; any criminal could teach you that. No, our youth shouldn't be exposed to anythink but raw, unfettered capitalism. That's what it's all about, right? Well, I've done very well in the tech industry despite having dropped out of school in the 9th grade. How I wish to this day that I had a formal education. Once again: you, sir, are an idiot. Lack of education is NOT A GOOD THING!

94 points by terpua 17y ago

deleted 17y ago

[deleted]

deleted 17y ago
[deleted]

edw519 17y ago

Part of the opportunity for Zoho lies in differentiation. It has 19 online productivity and collaboration applications, including customer relationship management, project management and invoicing. So it only competes head-to-head against Google with five offerings. So what exactly differentiates Zoho? The breadth of its product line? That doesn't sound like much of a differentiator. Or is there more that this article doesn't mention? Any special processes, APIs, or features? It's relationship with VARs? It must have a great differentiator to have $50MM in revenue without funding. It's just unclear from this article exactly what that differentiator is.

sp332 17y ago
I think by "differentiation" they meant "diversification."
terpua 17y ago
Looks like they have 2 other product divisions. What would be nice to know is how much of the $50M can be attributed to zoho.com. http://www.zohocorp.com/ http://www.zohocorp.com/
SamAtt 17y ago
We use Zoho and while I can't speak to the author's intended meaning I can tell you the two factors that keep us with them. 1. Zoho's APIs are more mature. Especially the Remote API which allows you to use the Zoho tools but keep the data on your own servers. That's something Google has no competitor for (last I checked). 2. The customer focus. The company has always been responsive to our requests and there have been occasions where they actually added a feature pretty soon after we asked for it (in fairness others might have asked for it earlier, I don't know) It boils down to Zoho being focused on creating a great product for their customers while Google seems more interested in proving a point about online software.
onreact-com 17y ago
It means you get a lot of different apps under one roof without the need to switch to other vendors for different tasks.

ryanwaggoner 17y ago

But Zoho, a company based in Pleasanton, Calif., that offers similar services, is solidly profitable, with revenue of more than $50 million a year. And it has never taken a cent in venture capital or bank loans. I would love to hear from someone more in the know on how Zoho was able to pull this off. Conventional wisdom seems to be that bootstrapping a product company to tens of millions is near-impossible. Is Zoho just a random aberration or do they offer lessons to others trying to do the same?

inovica 17y ago
I think the problem these days is that there is a lot of talk, on sites such as this, that VC is the way to go. I don't think that Zoho are unique in being able to do this - I think with software/web there are a good number of companies that have managed to quietly build their business and get great revenues.
- SamAtt 17y ago
  I could be wrong but I suspect most small companies in the United States are funded by business loans not VCs. If you have decent credit and real faith in your idea it makes sense not to give the valuable shares away.
  - eru 17y ago
    And if you do not need millions of dollars.
- webwright 17y ago
  Zoho quietly did it by getting funding from a source other than VCs. Growth like this generally requires cash.
  - ryanwaggoner 17y ago
    Zoho quietly did it by getting funding from a source other than VCs. Source? Or is this just conjecture on your part?

inovica 17y ago

I think its great that these guys appear to be genuinely interested in building a company rather than building it quickly to sell it. I haven't used any of their products, but this article has prompted me to give them a go

zzzmarcus 17y ago
Over the last few years I've tried their products out now and then. I'm always disappointed with how little unification there is when moving from one app to another. The design (both UI and UX) always feels a sub-par to me as well. I've never been able to stick with any of their products for longer than a month or two without giving up in frustration. Apparently a lot of people feel differently though.
- onreact-com 17y ago
  Yeah, that's why I use Zoho only occasionally, but I still prefer them compared to Google for privacy reasons and Microsoft (for the high price and annoying interfaces) products and even the bloated Open Office suite.
- sridharvembu 17y ago
  We plead guilty to having a fragmented suite - that was the price of rapid evolution. But they are coming together nicely now. Check in on us every few months (seriously!). We hope to surprise you.

zaidf 17y ago

Very 'on message' piece: it's clear to HN crowd that most of Zoho's monkeymakers are non-web2 tools yet it is also clear Zoho wants more focused media for their web2 stuff and they are getting it.

sridharvembu 17y ago

I am in India now, so was sleeping as this thread happened :-) I hang out at Hacker News a lot, in fact, almost everyday I send an article to someone or other in the company. I strongly recommend it internally - I love HN (thanks, pg!). To answer some of the questions: Zoho Corp used to be known as AdventNet. It was bootstrapped from the beginning (1996). Zoho is the latest and the fastest growing division; while we do not reveal our revenues, all I can say is that we are very happy where the Zoho division, as well as the whole company, has gotten. We have solid profits, which we invest in doing interesting new things. Bootstrapping works, but you have to be very patient. It has taken us 13 years to get here. The fun part is that we now have the human capital as well as the financial capital (the first part is more important) to do a lot of interesting things, and we don't have to worry about VCs or Wall-Street (not that there is anything wrong with them ;-)) On the product side, Zoho has been evolving rapidly, reaching that polish and maturity in stages. If you had tried us 2 years ago, I wouldn't blame you for giving up on us. We are far, far better today - one proof point is that our company, of about 1000 people, has moved to Zoho almost entirely. There are some small bits and pieces that are not on Zoho, but by end of 2009 everything should move. The tools we use extensively within include Mail, Office suite, CRM, Project Management, Meetings, Creator ... just to give an example, we run well over 100 web meetings a day on Zoho Meeting ourselves. We used to pay WebEx about $25-30K per month, and our usage on Zoho Meeting would cost us about $3-4K if we were to charge ourselves. I say that to explain why we have paying customers. Why the diversified suite? It is not only diversification, it is also a source of differentiation. We believe we can create very compelling integration scenarios that bring substantial productivity increases. One recent example is our Zoho CRM + Mail integration, which has sold over 1000 customers in the 8 weeks or so it has been released. You will see many more such things rolled out, partly addressing the criticism that it has been a fragmented suite. So how do we do it? Silicon valley style flexible culture mated with Japanese style patient engineering. There are huge lessons to learn from Japan's post-War leap. As one example, Japanese companies (the giants of today) always had a train-your-own-talent policy. Their colleges most certainly didn't do it - for the most part, college in Japan is considered relaxation time before the real work begins. We dispense with what I believe to be non-essential parts of Japanese experience, like the rigid discipline, substitute it with silicon valley style flexibility. The one achievement I am proud of is not a product or technology: it is our "University" (as we call it) where we recruit and train 17 year olds - the typical school leaving age in much of India. About 100 of our 1000 employees have come from that program now, and it is growing fast. Longer term, we should get 30-50% of our talent pool directly out of high school. I have written extensively about it. Let me summarize: I do not believe in college. I believe most real education happens in the work-place, an observation Peter Drucker made originally. I regret going to college myself - we would have been 10x bigger if I hadn't gone to college, so that is my opportunity cost. I probably wouldn't have if I had grown up in America. Sorry for the long comment. I wanted to answer all the posted questions in one shot.

sridharvembu 17y ago

It is worth elaborating on bootstrapping. When we started, the hottest tech company in the world was Netscape, and Yahoo was still an infant. So you can see how long it has taken us - nothing much happens to you in 1 year, 2 years and so on. The only thing we had going was patience. It helped that I was educating myself about Japan. We didn't set out with the mission of bootstrapping. It was sheer necessity: we had no big ideas (only some little ideas), and had no way of impressing anyone to put money on us. Our very first product was this: http://www.webnms.com/snmp/ http://www.webnms.com/snmp/ - the amazing part is we still make money on it! But sexy it isn't - a VC who stumbled on us told us "Why are you focused on such a tiny market?" By the time money was offered to us, we didn't need it, and we were having too much fun building stuff to even bother pitching to VCs. We came close to a VC round once in 2000: a term sheet was offered. There were things there I didn't like and I was too lazy to negotiate with them, so I simply let it die.

senthil_rajasek 17y ago
"It helped that I was educating myself about Japan." What was the motivation and can you elaborate and share with us on how you did this?
- sridharvembu 17y ago
  I was always fascinated by Japan, particularly in the context of India . After we started, I started looking closely at Japanese companies as role models. They had figured out stuff over the years that is unbelievable. Even today, there exist some technologies that pretty much only the Japanese do well (and not only in well known industries). Take a look at this company for example: http://www.uniontool.co.jp/english/product_index.html http://www.uniontool.co.jp/english/product_index.html They make drill bits for printed circuit boards, drill bits finer than human hair, drill bits you cannot even see with the naked eye. The magic is years and years of patient, painstaking work, with occasional inspired leaps. That was good to know, particularly when we tended to get bored or tired.

rams 17y ago

Sridhar, What does Zoho mean ? Folks here in Thiruvanmiyur don't seem to know.:-)

deleted 17y ago
[deleted]
sridharvembu 17y ago
We were hunting for a domain in 2003 for our new initiative. We tried variations of SOHO (small office home office). Zoho happened to be up for sale. I was reluctant to shell out the $5K (I am cheap), but Raju Vegesna, persuaded me we should buy it. He was right.

kalyan 17y ago

I am not sure if dissing (college) education all together makes sense. I am sure you can claim to have learnt a lot of allied "subjects" during your education including teamwork, competing, leadership, analytical thinking, synthesis of data, risk taking (maybe) etc. But I do agree that education (whether American or Asian) should give students room to develop the above while learning core subjects for it to be holistic. It should not purely rely on it being rote based.

deleted 17y ago
[deleted]

techhacker 17y ago

Here is another interview of vembu (from India perspective) http://www.pluggd.in/indian-startups/interview-with-sridhar-vembu-founder-of-zoho-indian-startups-590/ http://www.pluggd.in/indian-startups/interview-with-sridhar-...

fredthecat 17y ago

Shouldn't have gone to college... and proud of it... even though you went. You, sir, are a fucking idiot. You would have made it either way. But at least you were exposed to arts and letters and knowledge beyond just what's needed to make money; any criminal could teach you that. No, our youth shouldn't be exposed to anythink but raw, unfettered capitalism. That's what it's all about, right? Well, I've done very well in the tech industry despite having dropped out of school in the 9th grade. How I wish to this day that I had a formal education. Once again: you, sir, are an idiot. Lack of education is NOT A GOOD THING!