LESSONS FROM A SERIAL ENTREPRENEUR... Sridhar Vembu

LESSONS FROM A SERIAL ENTREPRENEUR 

We Over-Romanticise Starting a Firm, But are not Ready for the Rigours... So be Grounded in Reality

Ensure you have enough money. Be frugal. Hire the right talent and brush up your marketing skills

Starting a company is like falling in love, but running one is like being married. There is passion and excitement in starting a company—it is an act of falling in love. That’s why we do it, and some of us even do it again and again! But passion and excitement alone are insufficient to run a company well, just as that initial romantic spark has to become an enduring love in a happy marriage. Too often, we over-romanticise starting a company, but we are not prepared for the rigours, the day-to-day pressures and, yes, even the occasional boredom of actually running it. So go ahead, fall in love, but also be grounded in reality! My first venture was to build a hardware network device. After spending my life savings trying to build it, I discovered there was a fundamental flaw in the third-party semiconductor chip we were using as the foundation of our hardware. No one would remember that failure because I was even more of a nobody then, but it did teach me useful lessons—I learnt I should stick to software and to never run out of money! Practically all entrepreneurs start as nobodies. No one is going to pay attention to our ideas. No one is going to return our calls. That thought may sound distressing, but it can be very liberating. It means no one is going to pay attention to our failures or mistakes either. We get to experiment freely until we succeed. You must pay attention to the oxygen tank as you go for that deep dive! Running out of money is the proximate cause of death in companies. There are two variables here: how much money you take in and how much you spend. You don’t have a lot of control over the first part, but you do control the other. Cut your burn rate, be frugal, but don’t skip the essentials. Also, do not assume all the talent in the world wants to work for you. This is particularly relevant for people who leave a job in a famous company to start on their own. They may be tempted to assume they would have access to the same kind of talent pool that a big company has, but the opposite is true. A key part of entrepreneurship is to identify overlooked talent. It is also the act of persuading talent. That act of identifying overlooked talent was how Zoho University was born; today it has become a strategic asset for us, proving again that necessity is truly the mother of invention. Whatever you call yourself, you are a salesman. I started out as an engineer. I still work closely with our engineering. Yet, in the first couple of years of my entrepreneurial journey, my primary role was to be the salesman, as my co-founders—who were also engineers—took care of creating the product. I wasn’t a born salesman, but I improvised, and that turned out to be crucial for the company. Just as the case with Zoho, a lot of companies are started by engineers, whose self-image is that of product creators. Yet, from the first day, your sales skills matter just as much as your engineering skills. You have to persuade people to work for your fledgling non-entity. You have to persuade people to invest money. Ultimately, you have to make that first sale—if starting a company is like falling in love, getting that first purchase order from a real customer is the consummation. One common mistake rookie entrepreneurs make is to assume there is no competition to what they do. Their idea is so unique, so out-ofthis-world no one has thought of it before. This is rarely, if ever, true, as I have discovered from repeated personal experience. There is always competition—drill that thought into your head. In fact, in the rare case where there is indeed no competition, you have to wonder if there even exists a market for what you offer. Even if you cannot identify direct competitors, keep in mind there are always substitutes—after all, customers lived without your musthave product all this while! Customers don’t have to spend money with you; they can spend their money in alternative ways that ultimately have the effect of turning those alternatives into competitors. But most important is to never forget to have fun!

Sridhar Vembu
CURRENT DESIGNATION
CEO, Zoho Corporation
FIRMS FOUNDED
Unnamed hardware venture, AdventNet (which later became Zoho Corp)
ONE THING I’D DO DIFFERENTLY
I would start with software and I won’t run out of money
THE MOST EXCITING SPACE TO BE IN
Software for smartphones and tablets