Tech CEO’s Inspiration From Farming. Zoho Founder On the Lies of Cloud, Startups Funding and more.Ramon Ray
Everytime I hear Sridhar Vembu, cofounder of Zoho speak, I get goose bumps and chills. I attend many tech focused events, hearing from tech executives and founders sharing their view of the world. Most of the talk is focused on products, politics, culture or other topics that aren’t necessarily NEW or inspiring.
Sridhar’s presentations are part TED Talk, tech talk, history lesson and economics dissertation and are inspiring and new.
Sridhar lives some of the time in a small town in India, in a simple home.
He’s surrounded by potatoes farmers. In working with them, he’s realized that they work so hard to earn a living. Yet what they get in return is so little. In fact he shared when they sell potatoes the buyers dictate the price. When they go to buy farm supplies, the sellers name the price. They have little leverage. Not only does Sridhar want to help them, but he’s inspired to help the world.
This got Sridhar thinking about business, Zoho customers and the market overall.
Costly costly inputs and commodity outputs.
Sridhar wants to ensure that using Zoho is NEVER a costly input for Zoho customers. That it is always affordable. Many of Zoho’s tools are free, all of them are affordable and priced for the region of the world they’re sold in.
Cloud computing is expensive
Cloud computing is all the rage. However the “hidden secret” is that at a certain scale cloud computing gets VERY expensive. Zoho’s solution is that they’ve built their own cloud, which is cheaper than hosting it on Amazon, Azure, Google cloud. They can pass these savings onto their customers.
Digital marketing is expensive
Digital marketing can get very expensive. It’s easy to swipe your credit card and spend money on Google Ad words, however that can get very expensive. Sridhar feels that investing in “people” instead of “bots” is a better option. Hence Zoho invests money on meetup groups and meeting its customers and prospects in cities around the world.
Education and health care
Zoho University is Zoho’s own education system to train people and give them a job. If they’re hard working, honest and can be trained, Zoho can teach them programming and others skills. Education should NOT be a costly input. A similar model is being developed for health care.
Failures of VC funding
Venture capital funding is all the rage for just about every startup. However, Sridhar sees a growing trend that VCs are getting tired of funding startups and in fact startups are seeing VC funding as an expensive option. As competition has lowered margins and technology makes barriers to entry lower and lower the journey of building a successful company is easier and easier. See this blog post from popular investor Fred Wilson.
Fred writes in part
The massive experiment in using capital as a moat to build startups into sustainable businesses has now played out and we can call it a failure for the most part. Uber popularized this strategy and got very far with it, but sitting here at the end of the 2010s, Uber has not yet proven that it can build a profitable business, is struggling as a public company, and will need something more than capital to sustain its business. WeWork was a fast follower with this strategy and failed to get to the public markets and is undergoing a massive restructuring that will determine the fate of that business. Many other experiments with this model have failed or are failing right now. When I look back at the 2010s, I see a decade during which massive capital flowed into startups and much of it was wasted chasing the “capital as a moat” model.
One of the most innovative concepts Sridhar is to have more and more Zoho employees become farmers, especially those based in India. They can use a portion of their time creating their own small farms and helping other farmers. Zoho employees are paid well and will be an asset in communities who need their support. Not just financially but by simply being good neighbors in their communities.
I asked Sridhar if this could work in Brooklyn, where I grew up. Maybe more and more professionals who have good jobs and skills can do MORE in their local communities.