Sridhar’s thesis around Zoho is to ride on top of the market awareness already created by Salesforce.com, Webex and others around On-Demand / SaaS delivery models for business applications like the Office Suite, CRM, Web Conferencing, Project Management, etc. and simply do a dramatic undercutting based on price. He insists that the amount of Sales and Marketing dollars spent by his competitors is something he will not need to spend, but rather, be able to pass on the P&L savings to his customers.
Having a team of 600 engineers in India, and just 8 people in Silicon Valley positions him in a unique place to be able to potentially pull this off successfully. Ofcourse, we don’t know yet, the next few chapters of this story. However, as an investment thesis, I am with Sridhar, and I actually am quite convinced that this model can succeed. >>>
I have written a few pieces on how the book publishing business needs to / is going to change because of the web. [Book Publishing Moves West? . Will the Digital Era Change Writing? . eBooks Future]. In this interview, I speak with Eileen Gittins, CEO of Blurb, who is attempting to democratize self-publishing by making it economic and convenient, bypassing retailers, publishers, and agents.
SM: Please describe your personal background : Family, upbringing, early career, etc. leading up to Blurb. EG: I am a child of immigrants; my mother’s family moved to New York City from Ireland and my father came to the US from England after World War II. My parents met in NYC, had four children, and moved the whole lot of us out to California when I was in second grade. Education, competitive sports (I was a competitive swimmer), and a strong work ethic were the hallmarks of my childhood. My mother was an avid reader and my father an avid photographer, so I guess I come by my interest in both honestly.
Here we begin to explore the current status of Zoho a bit further. Impressive numbers considering there has been no advertising campaigns conducted. The business model is simple – let users try the service for free, when they are comfortable they will migrate over. Afterwards, they compete based on pricing (less than 20% of the competitor’s price-point). Simple and quite promising. [Our discussion is still around Zoho’s CRM suite, which is in direct competition with Salesforce.com.]
SM: How many customers does 50,000 users translate into? SV: About 3,000 businesses.
SM: In terms of selling into these accounts, is it the IT personnel making the decisions? SV: It is mainly the sales management who are really coming in now. Initially they come over for price reasons.
SM: They are already sold into the on-demand concept. SV: Exactly. I am really not ashamed to compete on price, that is our main strategy. We are going to compete on price. >>>
By Robert Lowry, Unitus, Guest Author
Microfinance reaches fewer than 20% of the people who could benefit from it. Only 2% of microfinance institutions serve more than 100,000 clients. Why is the impact of microfinance, after more than 30 years of effort, still so limited?
A big reason is efficiency—or lack thereof. Inefficient microfinance institutions (MFIs) simply don’t have the operational capacity to reach large numbers of clients. Moreover, inefficiency saddles MFIs with high costs and limits their capacity to offer a wider range of products. To address these problems, Unitus, a microfinance organization in Washington State, created the Unitus Efficiency Project, with funding from the Bill & Melinda Gates Foundation. Formed in September 2006, the project team of five experienced analysts is in the process of identifying obstacles to efficiency, developing solutions and helping microfinance institutions implement those solutions.
BEIJING, July 12 — Zheng Xiaoyu once ranked as one of the most powerful regulators in China. He rose from modest beginnings to help create and lead Beijing’s version of the Food and Drug Administration in the United States.
Zheng Xiaoyu, the former director of China’s State Food and Drug Administration, was executed July 10 for approving untested medicine in exchange for cash. He became the highest ranking Chinese official ever to be put to death. >>>
Interesting comparisons here by Sridhar between the Zoho CRM and the SalesForce CRM products; while SalesForce has a high focus on sales teams (and one of the best telesales teams anywhere in the world), Zoho is simply looking to take a competitive advantage in terms of pricing. According to Sridhar this shows in the construct of the companies – Zoho has more engineers than any other type of employee, while SalesForce has more.. well, sales force!
SM: How can you say SalesForce does not have enough engineers? SV: You can check their R&D and their spending reports. They have 2000 employees, but only 100 are engineers. That in itself is an interesting phenomena, it tells you a lot about their business model. All of these guys have become too marketing-oriented, and not enough engineering-focused. >>>
You have read many of my interviews on this blog. Here’s a synthesis of some of the case studies I have done, in an interview format. These differ slightly from the series that I have titled Role Model Interviews, since in this series, I go into the company and its strategy, market, financing, etc. in more detail, and focus somewhat less on the personal history of the entrepreneur. Nonetheless, these stories are just as enlightening as the others.
* Concur CEO Steve Singh
* TheFind: Lifestyle Shopping
* Wize Up On What To Buy
* Retrevo’s Vipin Jain on Vertical Search
* Job Search Engine Indeed CEO Paul Forster
* Happily Bootstrapping: Zoho CEO Sridhar Vembu
* Web 3.0 & Group Travel: Groople CEO Mike Stacy
* Cracking the Online Video Monetization Nut: Adap.tv CEO Amir Ashkenazi
* Taking on Business Intelligence: Lucidera CEO Ken Rudin
* Re-engineering the Book Business: Blurb CEO Eileen Gittins
* Innovation in Sales Prospecting: InsideView CEO Umberto Milletti
* Sharat Sharan’s On24: Lead Generation Through WebCasting
* Cracking the Very Small Business Market: PayCycle CEO Jim Heeger
* Venky Harinarayan on Kosmix and Vertical Search
* Making SMEs Run Smoothly: Rene Lecarte’s CashView
This series will continue, and I hope you will continue to benefit from the experience of other entrepreneurs who are in the midst of building exciting new businesses.
Meanwhile, here’s an exercise that you can assign yourself. Take one or more of the above cases, and “dissect” it, using the “Clarify your Story” questions, and see what you learn from the process! [If you’re doing an Enterprise/SME facing venture, use this worksheet instead.]
You decided your latest widget from the widget factory needs to go viral. Your “marketing guy” says the best way to reach your youth market on a shoestring is to go about posting a vid on YouTube.
Before that happens, please take some time to consider how to make your new spot relevant to the viewers at home.
Truth be told, YT is a good way for you to stay in touch with the youth of today (and young adults too). But as common knowledge dictates time and again, just because you CAN do something doesn’t mean that you SHOULD. Or, in YouTube’s case, just because you post up the latest hopeful viral extravaganza, doesn’t mean you ought to bother—at least not without some careful consideration beforehand: Be wary, intrepid brand manager, ask yourself a few tough questions before taking the leap.
First, begin by considering this important question: “Is my product relevant in a user-generated sort of way?” >>>