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A company run from a minuscule village is ready to expand in Latin America: an interview with Indian billionaire, Sridhar Vembu, founder of ZohoCorp

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Indian billionaire Sridhar Vembu gained visibility as a corporate figure in his country, ironically after he decided to move more than a year ago to a sort of voluntary seclusion in Mathalamparai, a 2,100-inhabitant village. This agrarian settlement is 2,700 kilometers south of Delhi and just 120 kilometers from Indias’ southernmost edge.

Since 2019, it is easy to find Vembu walking to teach a math and science class to high-school students, barefoot and in an unassuming t-shirt-and-jeans outfit.

Vembu is a low-consumption person, but he is not living village life just to prove his virtuous frugality. He is developing a socially responsible business idea. He wants to recover rural areas taking software engineers back to their places of origin. “Now people can stay in their hometowns and help revitalize those areas,” he told Latin Trade. Vembu will probably soon take this idea to Querétaro in Mexico.

Sridhar Vembu, founder of ZohoCorp, a software company that sells $500 million per year, completed a Ph.D. in electrical engineering at Princeton University, worked at Qualcomm in California, and then returned to his native India to start AdventNet, along with two siblings and three friends, a business which became Zoho in 1996.

In a different direction to most of its competitors, ZohoCorp sells software that drives all functions for businesses from sales to finance (CRMs and ERPs) pricing basic packages affordably, at $1 per employee a day. Grounded on that low-cost idea, ZohoCorp sells in more than 180 countries, an operation that now Vembu runs truly remotely from Mathalamparai.

In Latin America, ZohoCorp has offices in Florianopolis, in Brazil, and Querétaro, in Mexico, but once the countries recover from the COVID-19 pandemic, he plans to execute a plan postponed in 2020 to open shop in Colombia, Argentina, and Chile.

This is the complete interview with Latin Trade:

How has your operation changed during the crisis?

The planet is going through possibly the most critical moment of the last decades. The measures that different governments have had to embrace to contain the COVID-19 pandemic are severely affecting all commercial activities. Quarantines and mobility restrictions have bankrupted many organizations, especially smaller ones.

In many ways, Zoho is fortunate to be in this industry and to have developed such diverse business tools. “We eat our own dog food,” as used to be said, so when the crisis started we were able to get all of our staff, more than 8,000 workers around the globe, to remote work quickly and early, while using our tools to collaborate, develop, and strategize.

We understand that while certain of our products may be impacted in the short term, others—those that help businesses and workers telecommute—are useful now.

This experience has also helped us to find the best ways to use our products to help and support the communities where we are.

We launched several initiatives to help companies during that time, including Remotely, a set of applications for communications and collaborative work; ESAP, a program to help small businesses that use our products, and the Vertical Aid Plan, focused on all the organizations that are working hard to face the COVID Crisis. We believe we can make a difference in this challenging time.

Is your experiment of taking engineers in Tamil Nadu back to their hometowns working?

Last June, we started an experimental program to open feeder offices in 10 villages of Tamil Nadu, in India. The results have been outstanding. At this moment, 200 of our engineers are collaborating and building software for the world from those spaces, which are situated 20-30 kilometers away from their hometowns.

Everyone says rural talent is not world-class. But I am sure they don’t realize that everyone comes from smaller towns and villages to work in cities, including engineers. Now, an engineer working on global projects can sit out of his village and support global companies. Once this happens, imagine how people can save more, remain healthy, and maintain a work-life balance. Remember, living close to family and friends is also good for mental health. So these feeder centers of Zoho will get people together and will ensure that there is a chance to work for a global company

Will you implement the model soon in Querétaro, Mexico?

Once the work in the first 10 villages gets underway, similar models will next be adapted in two villages in Kerala, and one in Andhra Pradesh.

If successful, this model would be replicated not just in India or México, starting in Querétaro, where is based our operation for Latin America, but in the U.S. and Japan. One just has to go and visit the Bay Area and see how people are living at places closer to their hometowns. The pandemic has shown us that people will want to be close to their families and friends.

Will we see Zoho offices in Argentina, Colombia, and Chile in 2021?

Zoho has had a growing presence in the Latin American business market for more than a decade. Although we were born in 1996 in India, we quickly entered the United States market, from where we began to serve clients throughout the Americas, thanks to the fact that we offer cloud software services that can be used by organizations from the place they need them and through the Internet.

Our plans have not changed since then. We want to provide organizations with the best technology that adapts to their own business culture, and that empowers them to enable their businesses. We are motivated to support that growth, as we see it as the basis for a better society.

We have very ambitious plans for Latin America, where we want to continue consolidating our operation in the coming years. To achieve this, we already have a network of partners who have helped us grow from their great knowledge of our tools, combined with the one they have of their own markets. They have been our face in the region.

We want to reinforce this strategy with a more direct presence in each country. We have opened offices in Florianopolis, to overview the Brazilian market, and Querétaro, in Mexico, from which we provide support to all our clients and associates in the region.

For 2020, we had planned to open offices in Colombia, Argentina, and Chile. However, the crisis generated by the COVID-19 pandemic made us postpone these plans. Now, we are analyzing how each country develops its own economic recovery plans and how they’re dealing with their own vaccination strategies. We are ready to restart our plans in those countries as soon as possible.

What would you say are crucial elements to manage global teams?

As a company, our priorities are customers and employees. You don’t exist in business if you don’t take care of the customer first. And you cannot have any employees if you don’t have customers. So customers come first in everything. We are always looking for how we can give them better software, better support, and charge them less. That’s what I’m constantly looking for.

But also, you cannot take care of customers if you don’t have employees who trust the company long term. If you don’t have continuity, you don’t have software quality.

Now, from the perspective of our offering, I think that the cloud is not only a delivery channel for software, cloud has a bigger purpose. It enables us to work or to study from anywhere and that liberates us from constraints.

I see this now in terms that are not purely technology, but its sociological implications that it can revitalize rural areas. It can retain talent, it can even attract talent back into rural areas because rural areas have suffered a talent drain for a long time, talent will be simply upper leaf. But now people can stay in their home towns and help revitalize those areas. So all these are possible today.

I actually work now mostly from rural India. I connect with video with people in Austin, London, Delhi, or Tokyo every week. That’s what technology has enabled now. And this actually has startling implications for where the jobs are to be and what the incomes can be and the identity of people.

In other words, if someone is a rural citizen and they have skills now they can actually have a job that pays a meaningful wage, that affords them a dignified life and they also could be change leaders in their communities. And all of this is possible today that was never possible.

How do you strike a balance between hope for the future and business realism?

Zoho believes in having boots on the ground. The COVID-19 pandemic will make for a stern test for the present-day valuations of SaaS companies and lead to some extent of consolidation across the ecosystem. Valuations will take a beating and the immediate impact is that everyone will end up losing revenue, while the long-term will see consolidation happen.

I think we’re in the right way for that consolidation. We’re a company with good balance sheets and not too many cost overheads. So, we at Zoho will continue to innovate and we will see a few more innovations in the next 5 to 6 months.

We’ve added new offices in regions around the world and expanded our partner network globally so that we can more effectively reach businesses in regions, like Latin America, that have distinct needs. Spurred on in part by the COVID-19 crisis, we will be pushing a hub-and-spoke model for how and where our teams work, meaning not only smaller teams spread out across different regions and offices but also an emphasis on remote work.

How will schooling change in the future?

In the next few months, we’re going to see a change in our educational systems. As the COVID isn’t going to disappear suddenly, schools are obligated to change and integrate virtual environments into their curriculum in a permanent manner. The new students will take advantage of the best of the two worlds.

Virtual education has its big challenge in replicating the experiences of a classroom. From here is where we must identify the needs of teachers, students, and school administrators before we focus on finding how to fill those gaps creatively.

For example, all our tools have centered on taking care of privacy, so the data of students and teachers are fully protected from bullies or criminals. But now, in order to replicate a classroom, we are looking at how to create spaces where students feel free to socialize and create friendships with each other safely. We have to be creative to integrate new functions without compromise our value promise.

Teachers must be as good educators as always. Like whiteboards or books, technology in the classroom should be seen as another tool that they can use to achieve their goal of educating children properly. They only have to learn some operative clicks to conduct their classes. In the end, teachers will use technology based on their own knowledge in pedagogy.

How do you understand the concept of social justice, and what role should it play in business?

Zoho believes in democratizing software such that businesses at any stage of their growth and in any market can access and utilize the tools they need. In a region like Latin America, those tools need to be affordable, easy to use, and exhaustive in the areas of business they touch.

Our solutions address these needs and are therefore uniquely positioned to help businesses in Latin America grow. What’s more, Zoho’s developer tools allow for businesses to easily and quickly build custom solutions tailored to their distinct needs, which vary by region and industry. Low-code application platforms are one way to move regions like Latin America forward, technologically.

I want to run a technology company that goes deep down into every aspect of what we do, so we can provide well-being to the communities in which we work. Our company provides technology to activate all the vertical business and social sectors that make communities grow. We are talking about education, healthcare, construction, or rural businesses, for example.

 

 

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