Leveling the Technology Playing Field for Small Business: A Candid Conversation with Zoho President Raj SabhlokRamon Ray
Small businesses enter the commerce arena at a clear disadvantage to large corporations with deep pockets. Limited resources and funding force them to get incredibly creative with their business efforts to compete for customers. It also forces them to find solutions that level the technology playing field and allow them to perform like an enterprise, at a fraction of the budget.
Zoho understands the struggle of the small business and has focused their business on answering the much-needed call for not only offering technology solutions that help with a myriad of business functions but also integrating those solutions to help automate processes and make business more efficient. I recently had a chance to speak with Raj Sabhlok, President of Zoho, about several topics including their impressive history, the advantages of bootstrapping a business, how they view the small business market and where their focus is as a growing company. You can listen to our full interview and read highlights below.
This History of Zoho
Zoho is a twenty-year-old privately held company that focuses on creating beautiful software that solves business problems. They employ roughly 4,000 people and run one of the largest public cloud systems in the world with eight data centers located around the world. There are currently 25 million users on the Zoho platform, they have around 300,000 paying customers and have grown 35% year over year for the last five years.
But those are just the statistics – not the heart of who Zoho really is.
Best known for their CRM software, an accomplishment they are extremely proud of, Zoho is a company focused on creating robust tools that customers need and want to run their business and offering them at a good value. Over the last many years, they have been extremely focused on developing a suite of technology tools and software that can serve as a full operating system for businesses. This includes tools for finance, HR, sales, and marketing. Most importantly, their tools all integrate with one another – something that greatly empowers small business by allowing them to more easily share data across the business and automate processes – all of which saves time and money.
Zoho: Not Your Average Tech Company
Even though Zoho is a tech company born and raised in the Silicon Valley, they are nothing like many of companies we have seen come from the area. First of all, they are a privately held and bootstrapping company, which forces them to take growth and profitability seriously. Bootstrapping also forces them to stay disciplined and focused. As Raj shared in the interview, they make decisions on spending like it is their own money (since it technically is!) – a complete contrast to most investor funded businesses.
Twenty years ago when we started [Zoho], we focused on creating strong tools that customers needed and wanted to offer them at a good value, which we believed would allow us to start making money fairly quickly,” says Raj. “This enabled us to become profitable pretty close to inception.
Additionally, unlike many of their counterparts who focus on developing one product and then pouring unlimited funds into the sales and marketing of that product, Zoho pours the bulk of their resources and efforts into the development of the many tools they believe will most greatly benefit a small business operation. And many of these tools are offered as a ‘Freemium,’ or free tool. When we asked Raj about their freemium model, he explains that they come at it from an extremely different point of view than most companies:
We do not bank on a conversion in any ‘x’ amount of time when someone comes on using one of the free offerings. What we want is to provide solutions for all sizes of companies – startups, freelancers, etc. – who have a very limited budget. Our solutions work, and we want to cater to them. We feel there is some good karma there and as their businesses grow they will continue to use, and possibly pay for additional Zoho services.
Leveling the Technology Playing Field for Small Business
As Raj points out in the interview, there has been a massive boom over the last 5 to 10 years of accessible technology for small businesses. There are thousands of solutions to choose from, and small businesses are quickly adopting them. However, this vast availability comes with peril: while there are many solutions, not many of them connect or ‘talk’ to each other to create a cohesive business solution. Because small business does not have the deep pockets or IT sophistication of their larger competitors, who have been integrating operation solutions for years with products like SAP and Oracle, Zoho saw an opportunity to develop a fully integrative suite of products for their platform. They went from department to department in a business to decide what tools needed to be developed to offer a full-fledged system. The result is their business operations system, which allows a small business to integrate all of their solutions, so data flows seamlessly from application to application.
In addition to integration between their own tools, Zoho has gone through great pains to develop open applications that can easily pull data from or push data to any other application that wants to share information with a Zoho application in a secure way. In the Zoho Marketplace, which was introduced last summer, you can find a listing of all the popular applications, such as MailChimp, Zendesk, and GoToWebinar, that fully integrate with the Zoho environment.
The democratization of these applications makes them available to all classes of customers, thus leveling the technology playing field for small businesses.
Raj’s Advice to Small Business
In closing our interview, I asked Raj his one bit of advice for small business. His response:
I applaud all small businesses. They have embraced and been extremely willing to adopt new solutions and try cloud apps and DIY technologies. Many of the technologies we have talked about can be the great equalizer – giving small business the same power as many large enterprises with more resources. My advice [for small businesses] is to continue to adopt and automate to stay on course and empower yourselves.
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