And 600 in India.
Read this phenomenal story in Forbes about Sridhar Vembu, the Founder and Chief Executive of AdventNet, the company behind powerful startup Zoho.
Zoho, a productivity suite for personal consumers and enterprises a like, provides everything a typical Microsoft Office package does — for free. Free for individuals, and at a low cost for enterprises. It’s Customer Relationship management is $10/ user/ month in comparison with more popular web-based SalesForce, which charges users $65/user/month for the enterprise edition.
To be fair, the statistics the Forbes article are only partly true, SalesForce offers cheaper packages for its thriftier (and smaller) customers. For example, I set up SalesForce for my company (the 2000 version of ACT just wasn’t cutting it for our 2000+ customer database) for a mere $600 for one year with five user accounts.
That is $10/user/ month to save you from doing the math.
Apparently, Marc Benioff, SalesForce’s CEO, is so afraid (or envious of Zoho’s low costs) that he made a private offer to Vembu, which was turned down.
And to top it off, Sequoia’s Mike Moritz is breathing down his back.
At $1 million profit per month, who can blame them
And with a work force of 600 in India working at affordable living wages (and as the dollar declines it only gets better for them).
I won’t lie, I didn’t get Zoho when I analyzed the different products because the interface is horrible, and my boss is not to technologically-savvy, to say the least.
Some famous bloggers go on the defense when anyone attacks the Silicon Valley culture, but hey, apparently you can start a profitable business from outside the valley after all.
And for those who care about “social entrepreneurship,” Vembu’s bold strategy of hiring high-school grads from poor families seems to be working out.
Not only that, in India Vembu’s operation does not hire engineers with highflying degrees from one of the prestigious India Institutes of Technology, thereby squeezing his cost advantage.
“We hire young professionals whom others disregard,” Vembu says. “We don’t look at colleges, degrees or grades. Not everyone in India comes from a socio-economic background to get the opportunity to go to a top-ranking engineering school, but many are really smart regardless.
“We even go to poor high schools, and hire those kids who are bright but are not going to college due to pressure to start making money right away,” Vembu continues. “They need to support their families. We train them, and in nine months, they produce at the level of college grads. Their resumes are not as marketable, but I tell you, these kids can code just as well as the rest. Often, better.”
An awesome treat to begin this fine Sunday.
Oh, and the article’s author — you might want to add her blog to your reader.
Very interesting, I’ll have to keep an eye on this as my employer uses Salesforce to manage leads and contacts, very interesting.
You know what would really kickoff Voho? A built in system to migrate leads and contacts from Salesforce :-X
That’s good post. Even I got inspired by his story. Robet Scoble blogged about him here – http://scobleizer.com/2007/05/04/my-parental-heroes/ In that poist last but two paragraph is very touching.
Saith — that’s a great post by Scoble.