How this pioneer built a SaaS hub in Chennai from scratch without VC money

Sridhar Vembu, founder and CEO of Zoho, in his Guduvanchery office. Photo credit: Aravind Natarajan

The banyan is India’s national tree. Its branches drop aerial roots, and older trees can look like they have several stems as they spread out over a large area.

Zoho, whose SaaS suite serves 20 million users around the world, has a large banyan tree in its campus just outside Chennai in southern India. Sometimes outdoor meetings are held in its leafy shade, as sages would do in ancient India.

At one such recent meeting, an oft-repeated question came up: why doesn’t India produce a Facebook which got a billion users in just 10 years?

VCs that aim for exits in five to eight or ten years don’t create durable companies.

“Facebook is like one of the trunks of this banyan tree,” Sridhar Vembu, founder and CEO of Zoho, told the gathering. “The banyan tree has to exist for the trunks to grow.”

His banyan tree metaphor was for the broad foundation of Silicon Valley which had been built up over decades. Facebook, Google, and others are like the trunks of the banyan tree.

“Even though Facebook is a new company, the talent it drew was already established,” he explains to me. “Sun gave rise to Google in a way, because a lot of Google engineers came from Sun. So it takes time to build a foundation and companies on top of that.”

The Zoho mafia

We’re on one of the higher floors of a massive, bucket-shaped building rising like a colossus in a rural, agricultural area outside the capital of Tamil Nadu. Zoho, which employs over 4,000 people, bought the building from L&T which had originally designed it for use by multiple software companies.

The Zoho building in Guduvanchery outside Chennai rises like a colossus over the countryside. Photo credit: Zoho

Sridhar, geekily attired in Bermuda shorts, points to the construction work going on below. He wants the Zoho campus to be a place for “collaboration and contemplation.” Tree-lined streetscapes and buildings no taller than three or four storeys will be designed for that purpose.

His banyan tree metaphor comes to mind in a different context. It strikes me that we’re in the trunk of what has grown into one of the world’s leading SaaS hubs.

Zoho was the first to spot the opportunity to make cloud-based software products out of Chennai for global customers, back in 2005. Since then, a number of SaaS startups have emerged in Chennai, several of which trace their roots back to Zoho.

Make in India

Three stages of evolution

The future