I was recently interviewed on Fox Business News. The anchor Liz Claman told me one of the things that interested them about Zoho/AdventNet is our recruitment model. It is a subject I am passionate about -in fact, I spend about as much time on it as our products or technology. After all, AdventNet has about 700 people, and we are hiring at a steadily increasing pace, so recruitment, motivation and retention are important topics for us.
I was talking to a partner at a successful venture capital firm a few weeks ago (no we are not raising money!), and the subject turned to recruitment. I told him we don’t really value fancy degrees and famous schools. He was surprised - perhaps because of my own educational background. I asked him “Consider all the partners in your own firm and similar firms like yours, how many of them come from fairly unremarkable academic backgrounds?” I stressed that my argument was not that every partner comes from unremarkable background, but enough of them do, making academic background a poor way to screen for partners in venture capital. In fact, the reality of venture capital, as with any demanding field of human activity, is that most of what you learn you learn by doing. As the management philosopher Peter Drucker has observed, “Our most important education system is in the employees’ own organization.” Paul Graham has made similar observations about the academic backgrounds of founders of Y Combinator start-ups - in fact, Paul makes a stronger point that people coming from humbler schools seem to try harder to succeed.
The trouble has been that while most people understand, even readily accept that observation, they have trouble formalizing it, and more importantly, acting on it. In our own case, this observation dawned us slowly over the years - one of the benefits of being in business for a long time is you have the time to learn obvious things slowly.
Our company in India always faced trouble recruiting, because most college graduates, particularly from well-known colleges, would prefer big-brand-name firms. Simply out of sheer necessity, we started to disregard the kind of college a person graduated from, and the grades they obtained. In India, that task was made even easier, because much of the Indian industry is boringly conventional, and job advertisements that specify things like “Must have a minimum of 80% average in college” are fairly common (so if you got only 79%, don’t bother to apply). As a result, we get a lot of the arbitrarily-cut-off category applicants. What we found over time was that there is a lot of really good talent in that pool, which the industry had overlooked. Based on a few years of observation, we noticed that there was little or no correlation between academic performance, as measured by grades & the type of college a person attended, and their real on-the-job performance. That was a genuine surprise, particularly for me, as I grew up thinking grades really mattered.
Over time, that led us to be bolder in our search for talent. We started to ask “What if the college degree itself is not really that useful? What if we took kids after high school, train them ourselves?” I talked to a lot of people internally, and one of our product managers introduced me to his uncle, a college professor, who he thought might be interested in hearing me out. As I shared our observations on recruiting, he shared his own experience in over twenty years teaching Mathematics and later Computer Science. It turned out we shared a common passion. He joined us within a month to start our “AdventNet University” as we very imaginatively called it. This was in 2005. He went to schools around Chennai to recruit students. So as not to distract anyone from their existing plans, we waited till the school year ended, went to several schools to ask for bright students who were definitely not going to college for whatever reason (usually economic). We then called on those students and their parents, and explained our plan. We started with an initial batch of six students in 2005, who were in the age range 17 or 18.
That proved to be an outstanding success. Within 2 years, those students would become full time employees, their work performance indistinguishable from their college-educated peers. We have since expanded the program, with the latest batch of students consisting of about 20, recruited not just from Chennai but smaller towns and villages in the region.
One question that comes up often: if you don’t look at formal credentials, what do you actually look at? This is a surprisingly difficult question. In fact, doing full justice to it would take me a series of posts, and take me into some deeply philosophical territory, which I will attempt some other time. At one level, the answer is very simple (”go by gut feel, i.e use your human gift of judgment” - yeah, I know, what a cop-out), but at another, it is exceedingly hard. The difficulty comes from the simple observation: any formal rule-based system involving human beings is very easy to game and will be gamed. More on that later.
Sridhar got interviewed for FOX Business’ special series, ‘ Three Days in the Valley’.

From the interview,
Claman asked Vembu of his recent decision to turn down an offer from SalesForce.com to acquire Zoho.
“I see a big potential in this, so we really are not selling anything,” Vembu said.
When asked if the company was making more than $1 million a month, Vembu replied, “It’s a lot more than that. We don’t disclose numbers, but it’s a lot more than that,” he said. With regard to an IPO, Vembu said, “It’s not something we are focused on right now. We are focused on building and serving the customers right now. When asked about selling the company, he replied, “Never say never in business, but we are actually in this for the long haul.”
Three Days in the Valley: Liz Claman Sits Down with Sridhar Vembu
We are delighted to announce that Zoho is part of PC World’s “The 100 Best Products of 2008“. Thanks to PCWorld’s editors & readers! We stand 49th on the list.
We were also included in similar list last year. Zoho was also included as one of The 25 Most Innovative Products of the Year from PC World late last year.
Past awards won by Zoho.
We are happy to announce the second beta of Jaws 0.8.0 (What we do in life echoes in eternity). And as you know... this is a release which 'should' work better than beta1 but NOT be used in production systems.
As usual, we provide three tarballs:
You can get these tarballs from our site.
Now, some notes about this version before you start using it:
What's new in this version?
NOTE for translators: we are going to release another beta (the second one), maybe that will be the last beta so please hurry up with your translations!
Enjoy this release and report your bugs.
Lately, I have been thinking about advertising - no, not as a business model for Zoho, advertising and work-oriented software don’t mix, in my opinion - but from the point of view as an advertiser ourselves, again not primarily related to Zoho. AdventNet, the parent company of Zoho, uses a variety of marketing channels, ranging from trade shows to search advertising, to popularize our software products. What we have noticed is that the ROI of internet advertising, outside of search, has been dismal and getting worse. I was reminded of this when I read the post by Jason Calacanis on falling advertising rates in social networking sites.
But this trend extends far beyond social networking. As a WSJ Online and NY Times online regular (30 minutes a day), I can safely say that I don’t recall any of the ad impressions on those sites in months. No doubt they have always been there, but I just can’t recall any. In contrast, I have watched CNN perhaps a total of 1 hour in the last 2 weeks and yet, I can recall at least a couple of ads from CNN. What makes TV advertising so effective is that it is so intrusive. In the other end of the spectrum lies search ads on Google, which has access to the most distilled form of user intent available, making it possible for ads on Google to almost become content.
Where in the spectrum do other forms of internet advertising lie? By their nature, intrusive ads on the internet don’t work - the user simply clicks away. Even when the prospect of some form of compelling content forces the user to stay (pre-roll ad on internet video, for example), pretty quickly users figure out they can switch to another browser tab until the ad runs itself out and the content becomes available.
Personalization and micro-targeting are thought to be the answer to this problem, but I am not persuaded. Let me give an example: let’s say I list reading & economics as my interests in my profile somewhere that is available to advertisers. Let me be even be more specific and list Austrian School economics. So could a publisher micro-target me to try to sell me a book? Here is the problem they would face: there are a number of specialized blogs that offer outstanding content on these subjects, and I am very likely to hear about books from these sites organically. People who post on these sites (both authors and commenters) are likely to be far more relevant than any computer algorithm could ever be in targeting my interests. So a prospective book publisher in these topics is better off providing real content to these sites to seed user interest than to run banner ads all over the place. In fact, in at least one case, the publisher of such books runs a fairly active content site, and I end up buying the books because I like the content offered in the site.
So here is what is going on in a nutshell: targeted advertising is competing for attention with targeted content, and content would win that contest every time, as long as intrusion is not possible. The only way for targeted advertising to win is to actually become content itself. That explains why Google search ads are so effective: they are a form of content.
We are happy to announce the first beta of Jaws 0.8.0 (What we do in life echoes in eternity) released. This is a release which 'should' work but NOT be used in production systems.
You can get these tarballs from our site.
Now, some notes about this version before you start using it:
What's new in this version?
Enjoy this release and report your bugs.