Scaling Without Funding: The Zoho Story

Scaling Without Funding: The Zoho Story
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Hey there, it’s Basil Igwe and today I want to share with you the closing part of the incredible story of Zoho, a small company from rural India that became a global software giant.

What makes Zoho unique is its ability to offer a wide range of services at affordable prices. To achieve this, Zoho needed a large team of engineers. By 2007, Zoho had 600 engineers, while Salesforce, the market leader, had only 100. That’s impressive, right?

But what’s even more impressive is how Zoho addressed the shortage of engineers. They established the Zoho Schools of Learning, which provided training in the skills necessary for software development and paid students to attend. This model has been incredibly successful, with over 1,400 students graduating from Zoho Schools and joining the Zoho team.

One of Zoho’s most successful experiments was the Tenkasi experiment. Zoho established a rural office in the Tenkasi district of Tamil Nadu, and the Zoho Desk was launched in 2016 with more than 150 people working from Tenkasi. Today, this software, which was developed in rural India, is used by more than 50,000 businesses worldwide.

Following the success of the Tenkasi experiment, Zoho established another office in Tirupati district in 2018. Today, the Tenkasi office has more than 500 people, with Sridhar Vembu himself moving there in 2019 to work from the rural office. This is a great example of how technology can help bridge the urban-rural divide and create opportunities for people in underserved areas.

Zoho’s business model is centered around “Marketing through Engineering.” Zoho invests around 50% of its profits in new projects and spends less than 5% of what its competitors do on marketing. This is because Zoho allows people to use their applications for free initially and then charges specific fees for premium upgrades. This is a great way to build trust with your customers and establish long-term relationships.

Despite not raising any external funding to date, and its sole acquisition is ePoise, which was acquired in 2019, Zoho has seen tremendous growth, with a 22.3% increase in operational revenues from 2020 to 2021. This is a testament to the power of perseverance and innovation.

So, what can we learn from Zoho’s story? Firstly, we need to invest in talent and provide opportunities for people to learn new skills. Secondly, we need to think outside the box and experiment with new ideas. And finally, we need to focus on quality and build long-term relationships with our customers.

If you want to be inspired by more stories like this, make sure you subscribe to my email list by using the form below. Let’s learn from the best and build great things together!

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