Sramana: At some point you did sell your first company to Verisign. What came next?
Jay Chaudhry: I stayed with Verisign for a while. I left in late 1999 after 18 months, although my obligation was only 12 months. I was ready to do more startups. I was driven by a few things. First, I was ready for a bigger challenge. Second, it was great to see my employees become financially independent. Third, I wanted to validate that I could build businesses systematically. My biggest asset is that I have no attachment to money. I think you make better, more balanced decisions that way.
Sramana: In the history of technology, the most successful founders have been missionaries instead of mercenaries.
Jay Chaudhry: I agree. I have always believed that you should go the extra mile. If you really do well, then money will follow you.
I was not worried about keeping money safe, and I was ready for more startups. Since I was only able to invest so much in a single company, I decided to do multiple companies. I staggered them a few years apart. I went ahead and started CoreHarbor. We took Ariba software and hosted their software in our data center. In those days you had a dedicated hardware for a single tenement hardware. It worked quite well, so I became their largest partner. That business worked pretty good. In a couple of years we had acquired a few dozen significant customers who were paying us $30,000 a month.
There was another company out of Maryland that had built four data centers and had tried to grow the business. They were a public company with a lot of debt and not doing well. Then Bain Capital came in and tried to buy them out. They put $100 million into it and told them to consolidate this marketplace. I was the first company they reached out to with an offer to purchase us.
I had already been working on another company called CipherTrust, which was an email security company. One of the rules that I have used for all of my startups is to have the first-mover advantage. Go where others are not yet at.
Sramana: You didn’t really have a first-mover advantage with your first company, although you have had that with subsequent companies.
Jay Chaudhry: We had it to a small degree because there was not a security services provider when we started.
Sramana: True, but you were able to ride a product company to success.
Jay Chaudhry: If you look at it that way, then you are correct. Fair enough.
Sramana: Where does the Zscaler story enter in?
Jay Chaudhry: Having done all of these startups, and having had them all work out well I was ready for the next challenge. I wanted to build something significant, I was not interested in flipping a startup. I wanted to do something that had a lasting impact in the market. I was willing to put a lot of money in to build something that was lasting. With that notion I came up with Zscaler.
I saw a lot of cloud based businesses such as Salesforce, and I figured that security could also be done in the cloud. At that point, the only cloud-based security company that I knew of were email security companies.