Thought Leaders in Cloud Computing: Sridhar Vembu, CEO of Zoho (Part 2)

Sramana Mitra: However, there is also another type of cloud business that has come together that follows more your mode. You’ve bootstrapped your company to scale at this point. You’ve taken your time. You haven’t done it at a VC pace necessarily. I think there are lots of niches from a cloud computing point of view. There are thousands of niches where you can build $2 million, $3 million, and $5 million companies that will not grow at an exponential pace. It doesn’t fit the characteristic of billion-dollar TAM. These are going to be fine. They’re just going to operate for a long time.

Sridhar Vembu: That’s right. We are looking at how we are structuring our own strategy. We are looking at a lot of missed markets to emerge. Part of this operating system strategy is to enable a lot of these companies. The operating system is a horizontal play that applies across every business. Then there are vertical, highly-specialized, domain-specific, or geographic-specific operating systems. >>>

Thought Leaders in Cloud Computing: Sridhar Vembu, CEO of Zoho (Part 1)

Zoho has been a tremendous success story in the cloud. In this interview, Sridhar Vembu discusses his strategy for the next phase of growth, and his general observations about the dysfunctions in the cloud ecosystem. Compelling conversation, must read.

Sramana Mitra: It’s been a while that we haven’t talked. We first did your story back in 2007, was it?

Sridhar Vembu: Yes.

Sramana Mitra: Right when you were getting going. Over the years, we’ve talked many times. Where I want to start today is how do you see the evolution of cloud computing and how are you steering the hole in that context? >>>

Bootstrap First to Exit, Bootstrap Again, Then Raise VC Money ALL from St. Louis: Stephanie Leffler, CEO of OneSpace (Part 7)

Sramana Mitra: As I’m listening to you, I’m thinking that last year, you did over $10 million with 50 customers. I can see that business model going to $40 million to $50 million in the next three years. You’ve told me that you’re switching business models, and your focus is going to be on the SaaS business.

Deal sizes are not going to be of scale. You’re selling software, so your average sales price is going to be a lot lower. The number of customers that you have to acquire is way larger, and people are not searching for freelance workforce management software. You have to find these customers somehow. How do you reconcile that?

Stephanie Leffler: The first thing is, from a price standpoint, I definitely recognize that a lot of SaaS platforms are relatively inexpensive. We have a slightly higher price point for our software because of the value that it does deliver. A customer who subscribes will be paying, at least, $100,000 for our entry-level >>>

Bootstrap First to Exit, Bootstrap Again, Then Raise VC Money ALL from St. Louis: Stephanie Leffler, CEO of OneSpace (Part 6)

Sramana Mitra: It’s, effectively, becoming a competitor to Mechanical Turk and UpWork.

Stephanie Leffler: Absolutely. UpWork also happens to be our partner. We’re fully integrated with UpWork and have an API integration. If you’re hiring freelancers there and you want to scale your project, people will often use OneSpace. UpWork provides people but they don’t provide a software that lets you manage them at scale.

Sramana Mitra: In this mode, what are the metrics of the business? How did the services business ramp up? How many customers and what kind of revenue? Once you switched a few months ago, what are the early metrics of the new format of the business?

Stephanie Leffler: We are so early with the new format that I don’t even have metrics that I can provide you. Our software went into beta two months ago. Our >>>

Bootstrap First to Exit, Bootstrap Again, Then Raise VC Money ALL from St. Louis: Stephanie Leffler, CEO of OneSpace (Part 5)

Sramana Mitra: How long have you sold the service?

Stephanie Leffler: We started in January 2011 – about five years.

Sramana Mitra: Tell me a little bit more about how this services business ramped up. Amazon was sending you people. You were managing their larger Mechanical Turk project using your platform. Did all leads come from Amazon or did you start marketing yourself?

Stephanie Leffler: In the beginning, all leads came from Amazon. We did start marketing ourselves. It’s funny. Thinking through the entrepreneurial journey, we found ourselves in a position where we never understood how good we had it in our first business with people searching online, finding exactly >>>

Bootstrap First to Exit, Bootstrap Again, Then Raise VC Money ALL from St. Louis: Stephanie Leffler, CEO of OneSpace (Part 4)

Stephanie Leffler: I remember Amazon called us about a year into this project and said, “How are you pushing so much work through Mechanical Turk?” We said, “We built this software platform to manage it, so it’s really easy for us to push a lot of work out there.” They asked us to come out and demo it for them. They were very impressed and said, “We’re trying to build a partner channel for this product. We need software providers like this to make our product more usable. Have you guys ever thought about going into business and selling the software?”

At that time we were like, “No, we’ve done the software thing. We’re in this thing now where you can just make money through advertising revenue. You don’t need to have any customers.” Two to three months later, we couldn’t get it out of our head. As our product got better and better, we thought that this is something that could actually impact the future of work. >>>

Thought Leaders in Cyber Security: Leo Taddeo, Chief Security Officer, Cryptzone (Part 5)

Leo Taddeo: We’re going to see more focus on data privacy and protection and controlling access to content in an enterprise. That dovetails with this trend towards using Big Data for business analytics. Here’s what I mean. There’s tension between allowing employees access to data they need and maintaining privacy and confidentiality of data. Those two things need to be balanced.

They’re difficult to balance because classification and access management becomes difficult in a large enterprise. The trend towards allowing our employees to access the data they need for analytical purposes is in tension with our need to maintain privacy and confidentiality of records. I think cyber security vendors who can manage the very fine granularity and tight control of what a person can access will provide real value to a trend that is emerging and developing. That is a trend towards really focused use of large datasets to analyse business problems. >>>

Thought Leaders in Cyber Security: Leo Taddeo, Chief Security Officer, Cryptzone (Part 4)

Leo Taddeo: What some people spend a lot of time on is embrace the return on investment type of calculation. We’ve seen studies where people have put a dollar value on a loss of a data record. It’s somewhere between $80 and $200. Then they count up the number of records that they have, potentially, at risk, and do a simple multiplication.

Then they’ll say, “Our return on investment is in the tens of millions of dollars because we could potentially use all of these records, and they cost a hundred dollars each.” That appeals to a numbers-oriented enterprise but to me, it doesn’t have a lot of value because the numbers are so subjective. It looks like data, but it’s not. It looks like a formula, but it’s not. We see some breaches where the data loss can be very small but impactful. We see other breaches where there’s a lot of data loss and not so impactful. >>>