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A brief biography
As in 2019
Decades before he joined the ranks of Silicon Valley’s super rich, Jay Chaudhry lived with his parents in a Himalayan village without running water.
The founder of Zscaler Inc is now part of a growing wave of billionaires who have built cybersecurity businesses. Chaudhry, 60, and his family benefit from stakes in the San Jose-based firm worth almost $3.4 billion. He along with six other cybersecurity software tycoons to emerge with 10-figure fortunes in the past year are worth about $10 billion combined, according to the Bloomberg Billionaires Index, and together represent the latest wealth surge among the founders of internet-focused firms.
“I do look sometimes back and say, ‘Whoa,’” Chaudhry, who did his BTech in Electronics Engineering from IIT BHU, said in a telephone interview last month. “My success so far has mainly been because I have very little attachment for money. My obsession is really to make sure that the internet and cloud are a safe place for everyone to do business.”
Fueled by the rapid rise of cloud-based computing, companies are increasingly tethering more and more of their business to online networks. This allows them to gather unprecedented levels of operational information.
Zscaler shares climbed 22% to $60.57 in New York on Friday after the firm reported second-quarter revenue of $74.3 million. That was a 65% increase from a year earlier and beat analysts’ estimates.
Chaudhry, who has masters degrees in business administration, industrial engineering and computer science from the University of Cincinnati and also studied at Harvard Business School, founded Zscaler more than a decade ago after setting up and selling four other cyber start ups.
Even with a huge fortune, Chaudhry says his life hasn’t changed significantly. He still visits the Himalayan village he grew up in every few years, and said rather than passing on wealth, his priority is to pass on the work ethic his farming parents instilled in him. “For me, happiness is a state of mind. And money has very little do with it,” he said.
As in 2021
With a net worth of $16.3 billion and in the Forbes list of 400 wealthiest Americans for 2021, Jay Chaudhry is the richest Indian American. Here is his story
Serial entrepreneur Jay Chaudhry has founded five successful tech companies in the US – AirDefense, a wireless security firm; CipherTrust, the first email security gateway; CoreHarbor, a managed ecommerce solution firm; SecureIT, the first pure-play Internet security service; and Zscaler, a cloud-based information security firm and exited from the first four.
According to Forbes, he and his family own 42% of the Nasdaq-listed Zscaler, which was founded in 2008 and went public in 2018. The magazine put Chaudhry’s net worth at $16.3 billion in its list of 400 wealthiest Americans for 2021, last month, thus making him the richest among the Indian Americans. But Chaudhry, CEO, chairman and founder of Zscaler, doesn’t like to talk about his personal wealth. He prefers to talk about his next goal — using philanthropy to make education accessible to the masses. Born in a village in Himachal Pradesh, Chaudhry’s journey to the US in 1980, to attend graduate school at the University of Cincinnati, was similar to many Indian American entrepreneurs of his generation. Co-founder of HCL and Silicon Valley based veteran Arjun Malhotra, finds it admirable that Chaudhry remains a private person and keeps a low profile. Had it not been for Zscaler’s market cap, few would have known about him.
In an exclusive interview to TOI+, Choudhry speaks on a range of topics from his entrepreneurial journey to his village school and people he finds inspiring. Excerpts:
What inspired serial entrepreneur Jay Chaudhry to form his successful tech companies
Q. You and your wife left successful and comfortable jobs in the US for your first start-up; what made you take the risk?
Yes, there was a fair amount of risk. I have no background of entrepreneurship in my family – my father is a small-scale farmer; while my wife’s parents were in the air force in India. We had comfortable jobs in the US. But I enjoy reading a lot and get deeper and deeper into what I read. Back then I was reading about the first web browser that would connect all households on the information highway from Netscape and its founder Marc Andreessen. It was a small company but there was so much being written about the technology that would change the world. I realised that security would be an important piece to protect homes and businesses from the bad guys. I drew inspiration from Andreessen and got very excited over the idea.
My wife and I discussed how security was important and how firewalls could be deployed. To approach a venture capitalist for funding, we wrote a business plan and took it to a few VCs in Atlanta where we were based. Probably not the best place for VC funding, they all told us to first go and do a start-up and then go back to them for funding.
So, we had to either give up our dream or give up our jobs and put all our savings into the venture. We felt that if we failed, we could find other jobs; but it would be
wonderful if we succeeded. Besides, my background is from a simple family and I don’t think I ever had attachment for money – it didn’t really matter. Being able to give up money wasn’t so tough. My wife had a job at telecom company BellSouth; she is a graduate from IIM-Calcutta and has a finance background. She joined me and we didn’t have to hire anyone for finance. We decided to burn our bridges and not turn back but only move forward; it was a calculated risk. Besides, we had a simple lifestyle with no fancy cars or fancy house with big mortgages; it didn’t feel that bad.
You have been a serial entrepreneur and founder of five very successful companies in America – what have been some of the most exciting moments in your journey?
There are lots of them and I have been lucky. I’ve come across so many mentors and people who have helped me from time to time and I have got so many breaks. An example is in my little village high school where my headmaster spotted that I was good in studies and doing well; in my tenth grade, just a few months before the state level exam, he came to me and said ‘you’re wasting time sitting in the classroom’. He asked me to take my homework directly to him; and that helped me to do better in the exams.
Here in the US, I found inspiration for my start-ups from a number of people. The inspiration for Zscaler came from Salesforce and its visionary CEO and founder Marc Benioff who started a new class of software-as-a-service (SaaS) company long before it became fashionable. I was a user of Salesforce in all my start-ups, even when the company had less than $10 million annual sales.
When I was ready to do Zscaler, I wanted to do something big that would last and had no interest in doing another start-up and selling it. And when I thought about Salesforce disrupting traditional CRM [customer relationship management] systems, I thought why couldn’t I disrupt old- school security systems – the inspiration to think big for Zscaler came from Benioff and Salesforce.
What is your vision for Zscaler in future?
I started with the notion that as applications moved to the cloud and users got more mobile, the traditional and legacy way of doing internet security wouldn’t work anymore. Along with my team, I pioneered a new and disruptive way of doing cloud security for distributed and mobile enterprises. Zscaler has been for internet security almost like Elon Musk [CEO and product architect of electric vehicles company Tesla Inc] has been for the automobile industry.
The company is now approaching $1bn in annual recurring revenue and even at that scale we are growing at 55-60% per year. While 35% of Fortune 500 companies depend on Zscaler for protection, we’re a very international company with 50% of sales from outside the US and customers around the globe. In India, too, the largest companies and banks are our customers. But we’re still early in our innings and feel that there are much bigger opportunities up in front. We hire the best people and give them the opportunity to learn, work hard and achieve personal independence. I have happiness and satisfaction in seeing the dream that I had coming true.
What about Zscaler in India?
I have always thought about challenging the status quo with new ideas – that has been the common theme in all my start-ups. I have believed in new ways to run companies rather than the way it has been done for the past 25-30 years. In 2008, India was being used in a limited way for back-office work and call centres while core functions of technology companies were usually located in the US. However, I wanted to leverage India as an important location for doing business and I actually opened our India office in Bengaluru even before we opened our office in Silicon Valley.
I also felt that there was cut-throat competition in Bengaluru with everyone going there and I did not need to be there for all functions such as finance and customer support. We were looking out for a Tier-2 city with good colleges, and very early on opened our office in Chandigarh; it is less expensive and has worked very well. Overall, 35% of our employees are now in India and of that number over 60% are in Chandigarh with the rest in Bengaluru.
Jay Chaudhry on differences between the second-generation Indian American entrepreneurs
We have also opened offices in Hyderabad and Pune – while the best engineering talent with experience of working in top technology firms is found in Bengaluru it is tough to find talent from different parts of India. But after filtering down, when we find the right people, they are very the best – often what they lack in experience, they make up in energy.
There are several Indian Americans who have started successful companies, especially in the technology space. Do you consider yourself part of that ecosystem?
Yes, we do connect. I consider Kanwal Rekhi [considered to be the first Indian-American founder and CEO to take a venture-backed company, Excelan, public on the NASDAQ in 1982] a mentor and source of inspiration. When I did my first start-up in 1997, there were very few successful Indian American entrepreneurs; Rekhi was the only founder and CEO running a successful company, which he then sold. After my first company was acquired, I reached out to him for guidance and advice on what I should do next. He had started the network of Indian American entrepreneurs, TiE [The Indus Entrepreneurs, a non-profit support network] and was the driving force behind it. He asked me to get involved and I started the Atlanta chapter of TiE and have been deeply engaged with the organisation ever since. It has been a hub for many prominent Indian entrepreneurs who came to the US and started great companies.
Do you see any big differences between the second-generation Indian American entrepreneurs and those like yourself who moved to the US as students and set up successful companies?
There are far more companies started by Indian entrepreneurs now than 20 years ago. Indian Americans now have a lot of connections and much more confidence; there are success stories, mentoring and role models such as Satya Nadella, the CEO of Microsoft; and all that helps to provide context and inspiration.
It’s good to see how well Indian American founders of several companies are doing; 25 years ago, Indians were viewed only as good engineers who can write software. Now there are many more successful companies in Silicon Valley with Indian founders and the perception that they can’t be successful CEOs has completely changed.
You have moved out of Silicon Valley, which is considered to be the hub of technology companies – what are the reasons?
I have not spent most of my life in Silicon Valley. My first 10 years in America were spent in Cincinnati, Ohio, from where I moved to Dayton and then to Philadelphia with different jobs. Then I spent more than 10 years in Atlanta, where I launched four of my five start-ups. Silicon Valley became the headquarters of Zscaler because it is where the core engineering talent is based. Coming from a Himalayan state in India, I love the mountains and moved to Reno in Nevada because of my love for nature and the mountains. My wife, kids and I enjoy the natural beauty here; and we’re also near the beautiful Lake Tahoe. We go hiking in the mountains together on family bonding walks; besides I’m not very far away from Silicon Valley.
Do you still have personal connections in India and do you visit often?
I am part of a large family with many family members still living in India. I used to visit my tiny village, around a three-hour drive from Chandigarh on the road to Jammu and Pathankot, at least once every year; now I visit once in a few years. I have visited my high school in the village several times. I visit our offices in Bengaluru and Chandigarh every year; but the biggest gap has been because of the pandemic. As soon as things improve, I will visit again. Some of the biggest Indian companies are our customers. I am also active in the alumni network of IIT-BHU, Varanasi, from where I did bachelor of technology in electronics engineering. In fact, I plan to launch an entrepreneurship centre there soon. I have lots of friends from IIT-BHU who are now in the US, including the chief architect and co-founder of Zscaler K Kailash, who was my classmate.