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A Serial Entrepreneur’s Journey: Zscaler CEO Jay Chaudhry (Part 3)

Posted on Friday, Jun 21st 2013

Sramana: How big was this new company that you joined?

Jay Chaudhry: They had about 130 people in it and I became the number 2 man handling all the marketing and some of the BD functions. This was a wonderful experience. I was able to put all the lessons I had learn up to that point into practice. We enabled more sophisticated selling. This young company had never engaged Gartner before. The most satisfying thing was that you can see the results in days and weeks. In a large company you don’t know what difference you are going to make.

It was a public company and it was trading at 10 dollars. Within two years of my joining we hit $24 a share. The company itself had some technical maturation to do as well. This was the 1990s and the code was written in BASIC. Windows was emerging and our CEO was very worried about P&L, as any public CEO should be, and started investing in new products and hired new engineers. He was concerned about some of the changes.

I fundamentally believe in making significant moves so that we know what works and what does not work as opposed to tweaking things. When you gently tweak things you can kill your company very slowly. I like to try things in a bold way. If they work, great. Otherwise, you change course. I convinced my CEO to make changes that he was not comfortable with and ultimately I lost my faith in the future of the company as the market was changing.

Throughout all of my years I had felt that I wanted to do a startup of my own. As I was still working through my next move, I started talking about doing a startup again. My wife basically told me to do it or to shut up.

Sramana: What is her background?

Jay Chaudhry: She has a combination of finance and MIS. She had her MBA from IIT and I met her at the University of Cincinnati where she was doing her masters in MIS. She was an SE at IBM and in sales at IBM. In Atlanta she was a business analyst at Bell South. I used her as a sounding board.

As time goes on, your handcuffs get bigger and bigger. Your ability to take risks go down. That was one reason we decided to do it now. We knew we needed to try. I spent a few months working on determining the right area to do a startup. I came from a queried data background. I had done some databases at NCR, so my natural instinct was to do a database services company. This was in 1996 and there were a number of companies where people came from India to essentially establish body shops. It seemed tempting to do that, but then I realized that the market was competing on price. IBM taught me that you should not compete on price. I then looked at a couple of other areas before settling on security.

I knew nothing about security. I knew IT pretty well. I knew networking, systems and system security issues. I could see that the Internet was going to put companies online with very few firewalls. That is when I decided to do a services company in the security space. There were no dominant players in that space. Our focus was to design, architect, deploy and support firewalls via a partnership with Checkpoint.

I then spent three months looking for VC funds in Atlanta. All the VCs would ask me what startups I had done before and because I had not done any then they all told me to come back when I sold something. I did not tell them, but the reality was that if I was selling something then I was probably not going to need them. That is what happened.

This segment is part 3 in the series : A Serial Entrepreneur's Journey: Zscaler CEO Jay Chaudhry
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