"India Should Not Specialize In One Thing, We Need To Do It All": Zoho CEO

Pankaj Mishra in Tenkasi, Tamil Nadu

Sridhar Vembu, running his bootstrapped company Zoho, which has over $1.5 billion in annual revenues, is a rare symbol of entrepreneurial freedom in an ecosystem where founders often own only minority stakes in their companies, unicorns or not.

But Vembu's uniqueness is not just his freedom but also what he chooses to do with it.

Free from the pressures of venture capital or external shareholders, Vembu invests in ambitious, nationalistic goals, embraces experimentation and failure, and backs founders from small towns far from India's urban tech hubs. For Vembu, everything he does is aimed at one central mission: helping India achieve true sovereignty economically and technologically.

Sitting in the small town of Tenkasi, Sridhar Vembu is using his entrepreneurial freedom to seed bold experiments far beyond the conventional frames of a technology or software company. His manufacturing experiment in Mathapuram, where he set up a factory to assemble tools with a rural workforce, exemplifies his commitment to decentralizing industrial growth.

Meanwhile, in Madurai, he's backing a drone startup founded by engineers who returned from the Netherlands to their hometown, building world-class prototypes. These ventures, rooted in local talent and global ambition, are part of Sridhar's larger vision of fostering India's technological sovereignty from the grassroots.

In an exclusive interview with NDTV, Sridhar Vembu laid out a striking vision for India's future, deeply rooted in self-reliance and national pride. For Vembu, India's large population isn't a burden but an untapped asset waiting to be harnessed. "We have so much talent being born here. You can see it as a burden. I see it as an asset," he said, rejecting the idea that India should limit itself to one sector. Instead, he believes "India should be doing everything," from building cars to innovating AI, software, and 5G. Vembu's opinions go beyond just business.

He's also frustrated with India's global standing. Talking about the United Nations, he didn't hold back. "For any other power to say this vast country is not in the Security Council... It's a continuous insult," he said. He went further, even suggesting that India rethink its role in global institutions like the UN. "If it were up to me, I'd leave the United Nations," he added. For him, sovereignty isn't just political-it's technological. "The only way to earn true sovereignty is the ability to stand on our own feet," Vembu explained, stressing how critical it is for India to develop its own technology to avoid foreign dependencies.

His views on foreign direct investment (FDI) are equally blunt. While he's not against it, Vembu doesn't see FDI as the solution to India's challenges. "It's not the job of foreigners to save us. It's our job to save ourselves," he said, emphasizing the importance of building domestic capital and local entrepreneurship. In fact, Zoho, his own company, is a testament to this philosophy. Despite generating $1.5 billion in revenue, Vembu still considers Zoho a small player compared to global giants like Microsoft. But his ambitions stretch far beyond software.

From assembling tools in Tenkasi to developing 5G chips, Vembu envisions a decentralized model of growth, where each of India's 831 districts becomes its own economic hub. "Each district should be its own engine. Tenkasi for power tools, another district for drones," he said, sharing his long-term vision for how India can grow from the ground up.

Excerpts from the interview have been edited for clarity and brevity.

Pankaj:Sridhar, when you look at India's population growth, especially compared to other countries, what does it mean for our future regarding jobs and economic growth?

Sridhar: You have to understand our numbers first. India is down from the peak of 27 million babies born annually, maybe about 8-9 years ago. Compare that to China, which has only 9 million babies now. So, India is still producing more babies than 2 Chinas combined! We have so much wealth in terms of human talent being born here. And that's the opportunity. We shouldn't limit ourselves to just one or two sectors like services. India as a whole has to be involved in everything: technology, manufacturing, medicine, AI, rockets, and even MRI machines. We have the people to do it.

Because of many problems, we must be in every area of manufacturing, technology, software, medicine, and everything else. Singapore can specialize, but India as a whole cannot. Maybe a district of India can specialize, but not the entire country. All of India should be doing everything: from firing rockets to inventing MRI machines to innovating robots to making cars to next-generation medical care to AI.

Pankaj:You've mentioned innovation in smaller districts like Tenkasi rather than relying on big cities like Bangalore or Delhi. How do you see that playing out for India's future growth?

Sridhar: If I get this right, there will be a prolonged boom in India for a sustainable 20-25 years, but it can't happen just from places like Bangalore, Chennai, or Delhi. Innovation has to come from smaller districts like Tenkasi. If we focus only on our big cities, they will become unlivable. Bangalore, for instance, has grown from 3-4 million people to 13-14 million in 30-40 years. If we keep growing at that rate, by 2050, it could be home to 40 million people. Is that what we want? We have enough numbers in smaller towns, and if there are no opportunities for them, half of these people will leave, making our cities even worse.

India's innovation and growth can't be concentrated in our major cities alone. If we do, our cities will become unlivable. Bangalore's population, for example, has already jumped from 3-4 million to 13-14 million in the last 30-40 years. Do we want it to reach 40 million by 2050? The only way forward is to drive innovation from places like Tenkasi. If we create jobs in these smaller districts, we can prevent people from migrating en masse to big cities, worsening their conditions. Tenkasi has 20,000 babies born here every year. What can we do with that potential? Every district in India should be treated as its own economic engine. We have 831 districts-each should be seen as 831 locomotive engines driving India's growth. The key is to solve local problems locally and then stitch those solutions together at a national level.

Pankaj:You've often expressed skepticism about Foreign Direct Investment (FDI) being the solution to India's growth. Can you elaborate on that?

Sridhar: I don't have a deep inclination toward FDI. It's not the job of foreigners to save us; it's our job to save ourselves. While I'm not opposed to FDI, it's not the key to all our problems. We must build domestic capital, develop our own entrepreneurs, and invest in capital building. That's the key. Many startups are applying Silicon Valley game plans in a completely different context here, and it doesn't work the same way. The trick isn't to say it doesn't work-it's to make it work. That's what entrepreneurship really is.

Pankaj:As a nationalist with many problems to solve, do you feel tempted to tackle everything? How do you restrain yourself and stay focused?

Sridhar: Discipline has to be imposed. If I have to buy my way to solve a problem, I won't do it. You have to pay for it to create that emphasis. So the check and balance-it's an intra-day thing.

If I can't solve a billion-dollar problem with what I have today, I won't try. We work on what is within reach, like a 5 million or 10 million dollar problem. Anything bigger will stretch us too thin and lead to failure. So, it's about focusing on what's achievable.

There's something called 'reachability.' Can I see a pathway to crack this problem? If someone says, 'Why don't you fire a rocket to the moon right now?' Well, that's a much tougher, billion-dollar problem. I focus on what is within reach-problems we can solve."

Right now, the R&D problems we focus on at home might cost 5 million or 10 million dollars-maybe 15 million. Those are within our reach.

I always ask, can we withstand a few failures on the way? If we assume we'll always be successful, we're going to doom ourselves. Warren Buffet said, 'If you take care of the downsides, the upsides will take care of themselves.' That's the approach we take.

It's not about diving into everything. Even as a nationalist, I understand we can't solve everything at once. We need to be realistic about our resources and capabilities. Otherwise, we risk losing sight of what matters.

Pankaj:What's your approach to failures? How do you deal with setbacks, especially in the context of innovation?

Sridhar: I always ask if we can withstand a few failures. If you go into anything assuming you'll succeed, you're going to doom yourself to depression.

Warren Buffett once said, 'If you take care of the downsides, the upsides will take care of themselves.' I believe that. If something like Curvy [a project] fails on the first or second attempt, we'll go back to the drawing board and give it another 5 million. But only if it's within reach.

On the other hand, if I try a billion-dollar problem and fail, I'll lose millions. That's why you have to choose the scale of the problem carefully-if it's within reach, we can handle a few failures. If not, it's not worth the risk.

Pankaj:Tell me more about the Mathapuram experiment where you're trying to manufacture products locally.

Sridhar's: It has come to completion. We have our own manufacturing factory to assemble our own products. And we have trained our force. We have started assembling. It's still small. But we have designed a few of the handled tools, and we are going to expand it. And then, the lessons learned, for example, from building a product to compete with the world-class products to meeting the quality-price expectations in an unfriendly market, and with all rural workforce, and with marketing distribution challenges-that's all we are figuring out slowly. And we have patience.

We are patient about this. It will take 2-3 years to stabilize things and figure things out, and maybe it will take 10 years for us to be a real force in the market. But that's what we can do in 5-10 years easily. And then, if it takes root, it will bring capital goods in the broad sense.

Pankaj: How did you decide on what to manufacture? Why the power tools?

Sridhar: One of our Zoho customers, Mr. Abdul Gaffur, is from Kerala and is a businessman in the Middle East. He is actually a very passionate Zoho customer. So, his business is actually the distribution of electrical or electronic goods. He is a distributor, primarily in the Middle East. He said, 'Why can't I do this in India? Why can't I build in India?' I said, 'I don't know anything about tools.' He said, 'You keep talking about R&D.'

I said, 'I know R&D in software, but I don't know R&D in this.' He brought this whole bunch of tools, which he gifted me. He said, 'This is catalog...you try this...and feel free to mail me.' I talked to my engineers and discussed everything from noise to durability to battery...everything is reliable and promising.

So, it took them some time to build the prototype. It's a small effort, maybe 4-5 people, but they made a lot of prototypes, made them, broke them, gave them to people, kept tinkering, and finally, we were convinced we had a product we believed in. So we said we would try it in the market. Tenkasi is a small area, so we need a lot more like this.

Pankaj:What will it take to scale? What are you learning about that?

Sridhar: See, at best, if you are very successful, maybe you can impact 20 or 30 districts? You have to be modest. You can't scale like that in India. We are too huge. No company can do it alone at the level of India's scale. It's not a one-company problem. See, if you are very successful, you will have 1 Lac or 2 Lac or 3 Lac employees-but that's about it. That's not going to solve the problem again. 24 Lacs employees! That's what I am saying. It's not just the 3-4 Lacs in numbers.

You have to take the current consumption and convert it into the production of jobs. Today, if you take any technology in the room, it's definitely not made in India; it's made in China. Maybe, at best, somebody assembled it in India. All those Wi-Fi, the LED, and all that. This fan may be made in India, but the winding machine may not be. And I am thinking, that winding machine may be creating 500 jobs. That Wi-Fi router might be 500 jobs. Think of lenses. You see everywhere, jobs, jobs. That's what you should be thinking. That's what I am thinking about. We have the talent and all.

Pankaj:So, for battles like picking a map or a chip?

Sridhar: We can actually design a chip. We are actually doing the single chip-5G and all that. Those are, again, the kind of 10 million or 15 million kinds of problems, not the 1 billion problems. So you always see what is the size of that problem? The financial equation is only one part of the equation. What are your talents and brainpower? Can we create, nurture, and retain talent to complete the 5G chip? Can I get the drone done? Can I get this MRI machine done? That's not a money question; that's a cultural question. Can I make them continue doing that? Can they sustain their talent? All of it. Those are the second-level questions, but both are interconnected: Do you have the resources? And can you constantly nurture the talent?

Pankaj:Let's talk about the map battle, Sridhar? A lot of people talking about Google Maps...and why India needs its homegrown map.

Sridhar: Whatever Google or Sundar Pichai may say, the control is just not with them. It's with the state. Can we guarantee that in the next 20 years, the US will never sanction India? They did sanction us. It's very offensive as an Indian that they sanctioned us. They go on doing all their adventures; who is sanctioning them? Why I am saying this today is that it is the reality. If you don't figure it out, the US can sanction India one day, and it will be a problem. If you know how to stand on your own feet and have your own technology, even the temptation to sanction India will not be there. In other words, the only way to earn true sovereignty is the ability to stand on our own feet.

Pankaj:What about the Indian sovereignty?

Sridhar: We are already a vast nation with enough resources. India alone, standing alone, is viable. But in Africa, the same questions arise. They have to come together to stand up for themselves, right? In Latin America, it's the same thing. But India is already together. So let's use this opportunity and grow together so that we have... see, we want to participate in world affairs as equal participants. Let's be very clear-we are not equal participants today. [For example] Security Council-for any other power to say that this vast country is not in the Security Council...!! In fact, left to myself, I would actually leave the United Nations. Switzerland, for example, is one of many countries which're not part of the UN. They say, 'We will form our own body. Whichever countries want to join us, we will partner.' We should be thinking more like that."

Pankaj:What will Zoho become in another 10 years?

Sridhar: See, we are only $1.5 billion. Microsoft is a $200 billion company. So, we still have a long way to go. I still consider Zoho to be a small player. We are India's largest, but on a global level, we are small. So, we still have a lot of work to do.

Pankaj: What will it mean for you? What is the 25-year target we are talking about-2047?

Sridhar: I don't know. See, a lot of things have to go right. The product has to be right, the technology right, the sales right, distribution right... a lot of things can be assumed, but not all of that can be guaranteed. Maybe we work hard and invent, and some of those things go in that direction. Maybe $100 billion, maybe $200 billion... That's what I am saying; from $1.5 billion to $200 billion is not a realistic target. We are not yet a challenger to Microsoft. You have to be real and realistic.

Pankaj:And everything else you are incubating, Zoho as we know it today, will it be different 25 years from now?

Sridhar: Well, these are all different standalone companies. Of course, there will be a common shared philosophy like Zoho-like you have to build competence, you have to build capability, world-class technology, and create well-paid jobs... those are all common traits, but they will be different companies. One in semiconductors, one in sorting machines... well, we have three companies in Bangalore, one in Trivandrum. We have one startup in Thanjavur district that is making drones. So, each of them will continue their own journeys. Which one will make it big? We can't predict. That is the fun part of entrepreneurship.

Pankaj:You sound fascinating. You sound like an engineer. You do things...

Sridhar: I don't do things.

Pankaj:You find people who will do it.

Sridhar: I don't find people who will do it. It's an illusion to say that I found people; they found us. They came to us saying, 'We want to work,' and we said, 'Okay.' Like this drone business, they came back from the Netherlands to India, their hometown, and they built the prototype... so I said, 'Okay. The part which you are doing is good. Continue doing that.'

Pankaj: Sridhar, there is such a rush for IPO... a lot of startups are coming back, domiciling. Is that a homecoming? How do you see that?

Sridhar: See, what happens in the VC ecosystem is different, but transactionally, they are connected. What does the VC ecosystem think? As part of their global portfolio, they want to invest in India. But it's not the Indian perspective. It's the perspective born in London, New York, or Silicon Valley, where India plays a role. That is the difference. The world looks different sitting here. The world does not care if India should be in the (UN) Security Council because they are sitting in New York. They should not, but we care. We are sitting here.

(Pankaj Mishra is the AI Editor at NDTV. He shapes stories and conversations that help explain AI in India and how it influences people's lives and work)