Satish Dharmaraj on Zimbra

The biggest revelations that led to the formation of Zimbra were:

How the web based consumer mail offerings at that time (Yahoo mail .. this is before Gmail launched) offered a better experience than enterprise desktop mail clients.

The feeling that Linux will make its presence felt in backend servers inside of data centers. So writing back office applications to run on Linux was an opportunity that we felt was compelling.

That building open standards and protocols will lead to an ecosystem. Hence, our web services based API for extending the mail platform. The revelation here was all information (e-commerce, meetings, phone calls etc..) flows via email – so why not allow third party developers to write connectors (Zimlets in Zimbra) to the platform.

The evolution of rich interactive web applications. Zimbra was one of the first AJAX applications (before AJAX was even coined). The idea here was that we felt the browsers were at a place where we could build a desktop like experience on the browser thus allowing anytime anywhere access for the most important application inside a biz – email.

Well, the biggest challenge that we faced was that Sand Hill road was littered with dead bodies of companies that tried to compete with MSFT (this was late 2003). So we had to find investors who were bold enough to believe that there will be a non-MSFT future in data centers and a non-MSFT future in desktops. Both proved to be true but it took a certain grit to believe in it. Redpoint and Benchmark believed in us and that was the first obstacle that we overcame which was skepticism in the valley that a small company could disrupt a big market like email.

Then there was the go-to-market challenge.

How do you compete against big company sales guys and not bleed money in cost of sales?

We know that most companies don’t buy after months of trialing and wasting your precious time/money. So we decided to use the open source go-to-market approach. 100% of all of our sales from inception to profitability were all inbound. We never made a single outbound sales call. We would allow people to download our software for free and upgrade it to a paid version if they wanted to avail certain premium features. This Freemium biz model gave us a go-to- market edge over everyone else. People who did not pay us were our biggest marketeers and supporters. And some percentage of them paid. Our job was to make both the free product and the paid product very compelling. At the end of the day, our free product was better than our competition’s paid product. This cycle started working as people started talking in the industry and we built a biz without an outside sales.

Our opportunity evolved a ton after GMAIL and AJAX was born. There was a ton of buzz around web 2.0 and web based applications as opposed to web pages. This is precisely what we started to do. However, a spotlight was shining on it now because of the momentum AJAX gained and because Google was behind it with its mail product and then its maps product. So we did not have to spend marketing dollars on educating the industry on the new web technologies. Instead, we got to ride this massive web 2.0 wave. Timing is everything and we were lucky to have been at the right time with a great product that rode that technology wave.

As a response to Gmail, many service providers wanted to provide an email solution to their consumers that were equal to or better than what Google was offering. This was an opportunity for us to help others compete against Gmail as a consumer based offering.

The MAC desktop was a huge shot in the arm for us. The comeback of Apple played a big role because many many people started buying macs and there wasn’t a credible email solution on the mac for businesses. We were the only solution for a long time and this helped us because all of our employees owned macs. We were an Apple-first company and this helped because the product worked beautifully on a mac.

Finally, the advent of smartphones was a huge win for us. We had a mobile solution that worked without any changes to the phone itself because we talked all of the native protocols to make your mail experience work on a Blackberry or an iPhone.

All of these together with the waning influence on MSFT on the data centers lead us to gain momentum and traction that wouldn’t have happened at any other time in the tech evolution. My lessons – build great, awesome products and focus on being very competitive there. Second – timing is everything.

My Notes:

Satish Dharmaraj explains to how to bring disruptive innovation to market.