August 26, 2025 • 53 mins
In this episode of Inside the Network, we sit down with Jay Chaudhry, founder and CEO of Zscaler, one of the most valuable cybersecurity companies in the world with a market cap of over $40 billion and $3 billion in ARR.
Jay’s journey is unlike any other. Raised in a remote Indian village with no electricity, no running water, and a two-and-a-half-mile walk to school, he went on to build five companies and pioneer the modern Zero Trust cloud security model. Zscaler, his most iconic company, was launched in 2007 with $50 million of his own capital and no VC investment - a bold bet in the middle of a market downturn, at a time when few believed enterprise security could move to the cloud.
This episode is packed with powerful lessons from a founder who’s played the long game. Jay talks about the mindset he carried from his early years farming with oxen, how working alongside his wife Jyoti gave him unmatched focus and alignment, and why startups should be “a foot wide and 20 feet deep.” He explains how Zscaler rewrote not just the playbook for go-to-market in security, but also the TCP/IP stack, and the early challenges of selling Zero Trust well before the term even existed. He also shares his wisdom on why most founders pivot too late when their sales motion fails. Jay provides his view of the future of cybersecurity and the Internet itself, from why the private corporate network is dying to why firewalls will eventually go the way of mainframes.
Throughout it all, Jay shares a rare combination of conviction, humility, and self-discipline. Whether you’re a first-time founder or running a $10 billion company, this is an absolute masterclass in how to build enduring companies and stay grounded in the process.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Sid Trivedi (00:04):
Welcome to Inside the Network. I'm Sid Trivedi.
Ross Haleliuk (00:08):
I am Ross Haleliuk.
Mahendra Ramsinghani (00:10):
And I am Mahendra Ramsinghani. We have
spent decades building,investing, and researching
cybersecurity companies.
Sid Trivedi (00:19):
On this podcast, we invite you to join us inside the
network where we bring the bestfounders, operators, and
investors building the future ofcyber.
Ross Haleliuk (00:31):
We will talk about the hard parts of the
founder journey, launchingcompanies, getting to product
market fit, raising capital, andscaling to an exit.
Mahendra Ramsinghani (00:42):
And, yes, we will also be talking about
epic failures.
Sid Trivedi (00:46):
But, Mahendra, we're here to make the founder
journey easier.
Mahendra Ramsinghani (00:50):
That is correct, Sid. But we cannot make
it too much easier becausestartups are hard, and of
course, you already knew that.
Ross Haleliuk (00:57):
Alright, you two. And now, let's get started with
this week's episode.
Mahendra Ramsinghani (01:05):
Growing up on a small farm in a remote
Indian village, no electricity,no running water, the nearest
school is a two and a half milewalk. From there to building a
$40,000,000,000 publicly tradedcybersecurity company is an
extraordinary journey of ourguest today, Jay Chaudhuri. Jay
(01:27):
and his wife, Jyoti, who is anMBA graduate from the
prestigious IIM, IndianInstitute of Management. It's
the equivalent of the HarvardBusiness School.
Both of them decided to quittheir stable jobs, pool their
life savings, and went all in ontheir first startup. This was
the late nineties, just as theWorld Wide Web was at an
(01:50):
inflection point. That bold betpaid off in two years as their
company was acquired byVeriSign. Since then, this
dynamic duo has founded andexited four successful startups,
riding the waves of multipletechnology revolutions from the
dawn of the web to webapplications to mobile and the
(02:12):
cloud. After four exists, mostmight have retired to a vineyard
or a golf course, but theydoubled down again.
This time, they staked$50,000,000 of their own capital
to start Zscaler. Today, thistrailblazing zero trust security
platform generates over$3,000,000,000 in annual
(02:35):
revenues, commanding a marketcap of over $40,000,000,000. As
Zscaler approaches its twentiethanniversary, Jay is not slowing
down. He's already chargingahead into the AI revolution,
envisioning how it shapescybersecurity threats, defenses,
and redefines our entiretechnology world. In the world
(02:59):
of rap, there is only one j z.
In the world of cybersecurity,there is only one j z. Welcome
to Inside the Network.
Sid Trivedi (03:10):
Jay, welcome to Inside the Network.
Jay Chaudhry (03:13):
Thank you, Sid.
Sid Trivedi (03:14):
Well, you know, we wanna talk about a bunch of
different topics, but let'sstart with your early childhood,
growing up in rural India andmoving to The US in the nineteen
eighties. You've spoken aboutgrowing up in Pano, which is a
village in Himachal Pradeshwithout electricity, without
running water until your teenageyears. I believe you walked two
(03:35):
and a half miles to school, andyou've also mentioned that you
studied under a tree. We've hada lot of immigrant founders on
this show, but that does notsound like an easy childhood.
How did those early experiencesinspire your entrepreneurial
journey?
Jay Chaudhry (03:50):
Action is a fun childhood. That's all we knew.
We played. We had fun together.It was a wonderful life.
So I really never thought it wasa tough, tough life. So it tells
me it's all relative. It's allstate of mind. But one thing I
did learn at that time was thathard work is good. I saw my
(04:13):
parents working hard.
I work with them in the fields.You know, I had tilled using
oxen in my early days, so Idon't think very many founders
have the unique distinction oftilling their farm with oxen.
But I like to say, if you'veseen life where you have to work
hard, then hard work is nolonger hard work. It's part of
(04:36):
life. Too many people inadvanced countries are too
pampered.
They think hard work is bad. Tosome degree, a sense of
entitlement sits in SiliconValley. And, ideally, I think
people who come from having seensimple life, hard work life,
they do very well in life. Andthat's how I became what I
(05:00):
became. My parents taught mehard work, honesty, and
integrity, and they have beenpart of my life.
And the biggest thing I've doneor I try to do is impart the
same thing to my children.
Mahendra Ramsinghani (05:13):
Thank you, Jay. I think that perspective of
hard work and honesty andintegrity is clearly a set of
values that your parentsinculcated in you. Share with us
a couple of stories growing upin in that farming backdrop. You
know? One of the things that I Irecall about farmers is that,
you know, you're subject toweather conditions.
(05:35):
You know? You're also you know,you cannot yell at the crops if
they're not going fast enough.Right? So share with us some of
those lessons that you bring toyour modern day cybersecurity
life.
Jay Chaudhry (05:46):
Yeah. What you said is really true, especially
at the time in India and in mydistrict where there's no
irrigation system. In manyareas, irrigation system takes
care of things. When there's noirrigation system, you depend
upon rain and whatever thenature does. So one of the
things I learned from my mother,she would say, do your best and
(06:11):
leave the rest to higher powers.
You know, I get asked manytimes, how do you deal with
pressures of the job? I thinkback and say, work hard. I do my
best. Then I don't worry aboutthe rest. This is probably one
of the very important lessons Ibrought along with me for my
(06:31):
childhood.
But thinking of some earlychildhood days, I recall when I
went to my primary school. Firstthing in the morning, they will
ask for three or four studentsto go to a village well and
fetch water and get their waterin a little water tank so the
students could drink it for therest of the day. And by noon,
(06:53):
that water was pretty hotsitting in this little tank,
though it didn't feel too bad inthose days. But later on, after
I went back from The US, I felt,man, that must have been very
tough. So the first kind ofgiving back project I did for
India, for a number of schoolsin my district in Himacho, was
(07:14):
to deploy a bunch of watercoolers.
Because now they had runningwater, but the running water
won't be running all day long,and they'll fill it up in tanks,
and they'll it'd still be hot.So water coolers. So it's a
little bit of perspective of howyou look at things. But I'm a
big fan of happiness as state ofmind. Everything is state of
(07:35):
mind.
Your mind is so powerful. If youmake up your mind and you push,
you build conviction, you drive,and you don't look at it as a
way of sacrificing things.Sometimes people think, gee, I'm
sacrificing so much to do mystartup. If people think startup
is a sacrifice, they shouldn'tbe doing a startup. If you have
(07:56):
a conviction, you enjoysomething.
And you can look at life in twoways. There's a challenge and
here's a problem. If you take itas a challenge, human beings
like challenges. I likechallenges. So if we take the
next level of challenge, youdrive, things happen, and it's
no longer work.
It's no longer sacrificing.
Ross Haleliuk (08:16):
That is a good a very, very good perspective. And
and it also leads into the nextquestion. So, Jay, moving from
rural India to The United Statesin nineteen eighties for
graduate school at theUniversity of Cincinnati was a
very bold step. All four of uson this podcast are immigrants.
We have moved to The UnitedStates in search for greater
(08:36):
opportunities, and many of ourlisteners have essentially done
the same.
What was the most unexpectedcultural or personal challenge
you faced during that transitionas you made the move? And how
did it shape your perspective onrisk taking?
Jay Chaudhry (08:51):
Yeah. You know, for me, the bigger shock was to
move from my village to IIT,then moving from IIT to The US.
Frankly, massive move. Becauseat IIT in India, we all talked
about going to The US formasters. So we kinda knew what
to expect.
Now having said that, once youcome here, obviously, things are
(09:16):
quite different. The food,dealing, all that kind of stuff.
I do not think that actuallykind of changed me or surprised
me a whole lot. I've beengenerally focused on learning
most of my life. I have a onepriority was studies, a two was
(09:36):
health, and everything elsedidn't really matter.
Those two things were veryimportant for me. But I tell
you, impressions of America wasamazing. When I came, I took a
bus from JFK to Cincinnati,Ohio. The bus they they changed
the the bus in Columbus, Ohio.And when I reached Cincinnati, I
(09:59):
realized that one of the twobags I had, one was in my hand,
second was with my clothes, thesecond bag got lost.
They did not move it. So when Icame to my UC Cincinnati, a
teacher said, oh, you lost yourbag. Don't worry. I'm gonna call
Greyhound bus. I'm gonna findout when your bag comes.
I'm gonna take you to theGreyhound station, pick up your
(10:23):
bag, bring it back. I have seenso much of, really, hospitality
in in The US, especially in theMidwest. That was very moving.
In terms of learning, going toschool, it wasn't that hard. In
India, you're always good atmathematics and sciences because
they actually taught that stuffextremely well.
(10:45):
So that was never a problem.Yes, computers, science,
programming was a little bitnew. I picked up pretty quickly.
The key thing probably from mypoint of view in learning was I
finished my master's. I had asummer job after my first year
as an intern in one of the smallstartups in Cincinnati.
(11:05):
And they told me, finish yourdegree and come and work for us
and we'll sponsor you for agreen card. Right? What else did
you want? At that time, you wanta green card. And I did.
The the big change came into mycareer. When from that software
development job, I moved to IBM.And that was a change to the
(11:25):
business world, to sales world.Because I realized that I could
do better customer engagementand that happened because of
literally by an accident.Because one day when our sales
engineer called in sick, theonly sales engineer in the
company, they wanted me to do ademo.
I did the demo and demo wentvery well. The first demo in my
(11:48):
life, the first customerinteraction in my life, okay,
that changed. And that's when Isaid, I have more fun doing this
than writing code. That'sprobably one of the big things
in my career that happened. If Ihad been doing software
development, I'm not sure if Iwould have started a company.
Working for IBM and sales andmarketing gave me some of the
(12:09):
experience and whatnot. So Ithink the the point I'll make is
what has helped me is takingchances at trying new stuff. I
would have said I've been atrained engineer. Why should I
go there? I would have to staythere.
But really, falling a little bitoff your guts and kind of
pushing beyond the comfort zonehas naturally been kind of
(12:34):
something I had done all along.I do not know where it came
from, but I I've always hadchances, had tried the new
thing, and and set the new goalsand the next level and the next
level. Right? What you attaintoday is good, but it's not good
for tomorrow. And America is awonderful country to try all
(12:54):
these things without worry abouthow society will look at me.
Sid Trivedi (12:58):
Well, you know, you talked about trying new things,
and we certainly wanna talkabout you starting multiple
companies. I think many peopleknow you for Zscaler and will
certainly get to Zscaler. Butyou started four companies
before Zscaler. So let's startwith company number one, Secure
IT. Almost three decades ago,you and your wife, Jyoti, took a
huge risk.
(13:19):
You quit your jobs and youinvested your life savings into
starting your first company,Secure IT. And for context for
our listeners, Secure IT was thefirst pure play Internet
security services company. Takeus back to that pivotal moment
that convinced you to beteverything on starting this
company.
Jay Chaudhry (13:37):
Yeah. And especially when there's no DNA
of entrepreneurship in my familyof small scale farmers, right?
It's like thinking aboutopportunities and trying them. I
think sometimes people get toological. Sometimes people start
doing too much analysisparalysis.
I believe that the deeper youanalyze the stuff, the more pros
(13:59):
and cons you're going run into.And you're going say, well,
let's not do this. For secureIT, it is fairly simple. In '95,
'96 timeframe, when Netscape hasgone public, right, Marc
Andreessen was kind of a bigrole model at that time. And I
believe that Internet will takeoff.
(14:21):
If it did, every company will beconnected to every other
company. And you have to worryabout cybersecurity. And so I
saw that an area that companieswill have to worry about. Then I
got inspiration from MarcAndreessen and said, if this
young guy who recently graduatedfrom UIUC Irvana Champaign, if
(14:41):
you could do a startup, whyshouldn't I do a startup? Here's
a crazy question I asked my wifeand she and I debated for a
little bit.
And that's what really led tosaying, let's give it a shot.
And I said, I have a technicalbackground. I have sales and
marketing background. Why not?And then we stumbled across
couldn't raise funding.
(15:02):
The choice was give up or take achance by putting in life
saving. There were only twochoices there. And there, the
notion was, will I be repentingand saying, I wish I had done a
start up? That's a notion thattook us to let's give it a shot.
It was a tough decision.
I won't say it was simple. Butwe did not sit on it for weeks
(15:24):
and weeks. We literally spentprobably a week, week and a half
or so. And eventually we kind ofsaid, what's the worst thing
that can happen in life withthis thing? Company fails, we
lose our savings.
And the next thing was, can wefind a job? And we means because
Chyoti and I both were quitting.And the answer was, we have tons
(15:48):
of confidence that we can find ajob. What made it simpler was
our lifestyle was simple. Imean, I wasn't buying the
fanciest car and the fanciesthouse out there.
We have a simple car at thattime. I had a 1984 Honda
Prelude. This is '97 time frame.And in Atlanta, we had a simple
house with $800 per monthmortgage payment. Said, what can
(16:11):
go wrong?
Let's give it a shot. And that'sreally what happened. But the
key was not really taking arisk. Key was we focused on a
new focus area and fast moveradvantage was important. I
looked around.
There's no company out therethat is doing security services.
No one knew how to deployfirewalls and the like. It's
(16:34):
totally new phenomenon. So Isaid, if I do it, I'm a fast
mover. And I want to do furtherfocus on it and do firewalls and
firewalls only.
No networking, no switching, norouters, and the like. So we
became good at it. In fact, onething deeper I went and said,
there used to be half a dozenfirewall companies out there.
(16:54):
And we said, Am I going to learnabout all of them and give a
choice to customers like some ofthe other VARs and services
companies used to do. I went theopposite way.
And I would say we are onlygoing to work with checkpoint
software. Period. And when mycustomer will say, what other
options do I have? I would say,we have looked at all of them.
(17:17):
Here's the best technology.
We are the best at deploying it.That's what you should choose.
The competition would say, hereare six options. You tell me
what you like and I'll give youwhat you want. That's a big
difference.
Once you get focused, we got sogood at the area we focused on.
We were far better than a lot ofthese other competitors who were
(17:40):
kind of genetic VARs doing somenetwork, some this, some this.
So if you get focused, at thattime, I would say, startups are,
say, a foot wide and 20 footdeep. Don't get too wide. Go
deep.
Become the best. I recall oneday we were dealing with this
large Atlanta company. It's apower company. We're trying to
(18:03):
deploy firewalls. We're givingthem some security services.
And this person, this leader,security leader said, what
you're asking for for rate ismore than what IBM charges. And
I said, look, we are the heartsurgeons of security. If you
care about your heart, you talkto us. If you don't, you should
(18:25):
talk to journalists. And webacked it up because we knew our
stuff cold.
If you focus, you know it betterthan people who go and do 20
different things. That's why Ilike to say, if you want to do a
startup, don't just go in a newarea. You need to have some core
competency, some background tobuild upon. In .com days, so
(18:48):
many entrepreneurs will say, I'mgoing to build a website in this
retail area. You say, whatexperience do you have in this
market?
None. You need some experienceor you bring a partner to join
you who comes with certainexperiences. And if the two
skills are complementary, itbecomes easier. If I had no
sales and marketing background,I needed a partner to start with
(19:12):
me. Fortunately, I have been tothe both sides, so I was able to
go and figure out the idea anddrive it, which actually helped
in many ways.
If you can do that, it's apositive.
Ross Haleliuk (19:25):
That is such a fantastic story, Jay. I would
love to ask so many follow-upquestions, but for now, we'll
stick to a few that we had wehad in mind. So, Jay, very few
founders build companies withtheir spouses. We had Ron Gula
on the show who was talkingabout his experience of working
with his wife Cindy to buildTenable. How was it for you?
(19:48):
How was it to cofound a companywith with your wife? And and how
did it influence your leadershipand your approach to balancing
the company life and the familylife?
Jay Chaudhry (19:58):
It was actually wonderful and unfortunate
because there could be so manytensions and things in the
system. Fortunately, it workedout extremely well. Now why? A
few things. My wife is MBA infinance for IIM Calcutta.
That's like Harvard BusinessSchool in India. And she got a
(20:19):
master's in information systemsat University of Cincinnati. But
she has very complementary skillset. In finance and numbers, she
is 10 x better than I am. So Idon't even attempt to figure out
the finance.
Like, I have no idea what afinance is even figuring out how
(20:40):
to draw money from an ATM. It'sgreat because you can delegate.
I don't have to think aboutthings and you find a partner
who can take care of that kindof stuff. That is one part. You
know, the other part is why itwas good was.
And I kid around, but I I meanit. If you want a happy family
(21:00):
life, get your spouse involvedin a startup. Okay? Because
she's out there with you. She'sactually understanding what it
takes, And you're working allday long.
You're going back home in theevening. Both of you are tired
together rather than the wifeready to say, come on. Let's go
for dinner now. So I think thisis this worked out very well for
(21:22):
us. Now, fortunately, we had ourparents to take care of our kids
and help the kids that was veryhelpful.
Otherwise, it would have createdone more area to worry about.
You know, the other thing thatworked very well with us was I
am a risk taker, as I said. Mywife is very conservative. So
we've to balance each other. IfI get excited, I'm ready to jump
(21:45):
off a cliff and she can pull meback and say, hold on, slow
down, this is not needed.
The other aspect I'll see is ifboth spouses are overly
ambitious and competitive, thenprobably they could have tension
between the two, which won't begood. Fortunately, I'm the
ambitious and driven kind. Mywife is pretty contented, if I
(22:08):
may say spiritual type. She infact, I don't I say I don't have
attachment for money. She haszero attachment for money.
She doesn't want to be the kindaoutspoken person. In fact, she'd
rather shy. She would rather notbe in the media or any
interviews. It just workedextremely well. I think it's
(22:30):
overall a good thing.
Now, it's also true that shedidn't want to be part of the
large company management team.So she would work for the first
two or three years, then we'llbring in professional management
together and go from there. AtZscaler, she spent about four
years. In other companies,somewhere from two, three years.
(22:51):
It was a wonderful thing.
And, by the way, our kids learnto see how we're working hard.
So the best way to teach kidsabout hard work is be an old
model. When they show you seeyour parents working hard, they
work hard.
Mahendra Ramsinghani (23:04):
And then they work like yin and yang.
Like you said, the two sideswork so well together. Indeed,
it is a it's a blessing of akind where you can build that
that both that relationship aswell as the productiveness of
building many companies. Nowgoing back to the fact that
neither of you are attached tomoney, but still, if you have
(23:26):
your first exit, Secure IT wasacquired by VeriSign just two
years later after you startedit. And since then, you have had
multiple exits.
Zscaler stock is up, like, 70%this year, and you're already
just in month seven or eightnow. So talk to us about the
lessons you've learned inbuilding multiple companies, and
(23:47):
also talk to us about the art ofexits.
Jay Chaudhry (23:50):
Right. First of all, if you don't have
attachment money, you make theright decision. When secure IT
success was happening prettyrapidly, I was getting a bunch
of calls from potentialacquirers. And at that time,
sitting in Atlanta, I had noidea about any of this,
literally. I mean, none.
(24:11):
I had no VC friends. I had noinvestment bankers I had ever
dealt with. So, in fact, Irecall in one conversation, this
one CEO tried to put a lot ofpressure that if you don't sell,
I'm gonna wipe out your companybecause when you get into this
space, you'll be gone. If I wereworried about money, I would
(24:35):
have taken this thing and runwith it. Okay.
I did not. I said no. I walkedaway from it. So if if you are
overly worried about money as afounder or entrepreneur, you're
you're gonna do make someshortcuts. You're taking
chances.
Might as take some more chancesout there. But that's really
linked to how much businessconviction do you have. In my
(25:00):
style of business, I am outthere in front of customers. I'm
fairly tech savvy. I understandtechnology products.
So a pretty good understandingof what the strengths and
weaknesses of my businesses are.So that allows you to make the
right call at the right time. Ithink there's an opportunity you
(25:21):
need to think through. There aremany times you'll say you didn't
sell the company, right? Youwere hanging on it for too long.
And sometimes you sell tooearly. That's not good either.
None of us have a crystal ballto see what the future looks
like. But, you know, there areangles out there At there are
(25:42):
some times, for example, when Ihad this company called Core
Harbor, it was e procurementcompany using Ariba software as
an ASP. ASP is applicationservice provider.
That means this is single tenantarchitecture. We took Ariba, we
put it in a data center, adatabase server and application
(26:03):
server. We ran, we managed itfor our customers. Those early
days, this was ninety nine, twothousand timeframe. And .com was
pretty hot.
The Alibaba was very hot. Andthen we could see things cooling
down. And there was the rightopportunity. I got a call from
this other division that companyhad acquired to say, we want to
(26:23):
acquire your business. And itwas a timely thing.
I I could have said, no. I wantto make it bigger, but I could
see the market cooling down onsome of this area. I made the
call. I let it go and move on. Ithink not having attachment to
your companies is very importantas well.
The way I looked at it isentrepreneurs make a difference
(26:46):
in the world. They're kind ofchanging the world. That's the
sense that drivesentrepreneurship, at least for
me. So rather than beingattached to this company, you're
looking at how do you make thebig difference in the world. And
if you're able to think throughthat and if you could say, this
area is not likely to grow muchbigger, then you move on.
(27:08):
You do an exit and move on. Takeyou to give you another example.
Air Defense was a fascinatingcompany. I mean, it had nothing
to do with Air Force. It wasdefending your ear waves.
This is wireless securitybecause Wi Fi's were beginning
to come up. So we came up withthis very novel idea, first
(27:29):
mover. No one had done anythinglike this. I'm gonna monitor the
air waves and find out if somebad guys are trying to connect
to your WiFi and the like. Butthen I realized that it is it's
a good start up.
It's a narrow product linethat's never going to become
hundreds of millions of dollarsworth of business. This business
(27:49):
need to be integrated with theWiFi companies. So when the
right time came, we accepted anoffer. You know, if we if there
are entrepreneurs listening toit, you need to make sure you
have conviction in yourbusiness. When air defense
acquisition was happening, Irecall without naming these
(28:10):
companies, they would say, gee,we figured out if we are ready
to do the deal.
Then they came back and theysay, No, no, no. We want to
reduce it by x million dollars.What do you mean? I mean, we
thought we had a they changedand I walked away from it. And
they came back after four weeks.
(28:31):
Then they said, okay, we agree.We'll do the deal. A lot of this
happens in this, I guess, world.So you if you are comfortable,
you're strong in your business,you can withstand. If you don't
have strength, obviously, thenyou'll be more desperate.
But I've seen the same thinghappen in the VC world too. So
(28:51):
entrepreneurs need to have someconviction to drive the stuff
rather than cave cave in.
Ross Haleliuk (28:57):
Jay, let's talk about the biggest the biggest of
your place. Let's talk aboutbuilding Zscaler. So in 02/2007,
you went all in again andinvested 50,000,000 of your own
money into Zscaler to tackle theemerging challenge of cloud
security, a market that at thetime wasn't yet mature. Maybe we
(29:19):
cease would have gladly writtenyou a check due to respect to my
cohost, which both are VCs. Whyare you allergic to to
investors?
Why did you choose to shape thecompany this way and and how did
it impact the company culture?
Jay Chaudhry (29:35):
Look, I love VCs and investors. They can give a
lot of wisdom. But this is whatI was driven. When I want to
take a big risk, I feel morecomfortable with my own money
than someone else's money. Iwould be thinking about, if I
mess it up, what happens?
So truly, the number one factorwas ability to drive things the
(30:00):
way I want to drive by takingbigger risks. That is number
one. Number two was since theidea was fairly bold, I felt
like investors are going to say,Che, this is crazy. Don't do
this. Do this.
Don't do this. I did not wantanyone interfering in my
(30:22):
conviction. I want to be able togo and try things. Those were
the biggest drivers.
Sid Trivedi (30:28):
Talk about the early days of Zscaler. So you
started this company in 02/2007.Did you struggle with market
uncertainty? I mean, wasobviously market uncertainty
that was the macro economy. Imean, we were Yeah.
By the 08/00/2009, things werelooking pretty dangerous, and
I'm sure you you felt worried.But then there's also certainly
the uncertainty of building acompany in the early days. And,
(30:49):
you know, you had people likeKailash who was your, you know,
chief architect. You had ManojApte who was an early employee
and was helping you on sales.You had Michael Sutton who
joined relatively early.
But there were these, you know,there was this team camaraderie
of a few folks you had kind ofbought on board. Give us a sense
of what it was like in thoseearly days.
Jay Chaudhry (31:07):
Right. So part of the reason to do it at that time
was the market was slow. Theysaid, we aren't going to sell
for the next couple of years. Wearen't raising money. Let's just
double down and build products.
So timing felt good, actually.Okay. Time is bad if you want to
raise money. If you don't, thetiming is good. That's how we
(31:28):
looked at it.
I think I was fortunate. I hadsome very, very good leaders who
became very good friends,lifelong friends, who started
early on. And Kalash would comeup with some brilliant ideas. If
someone said, I want to make it20% better, he said, no, no, no.
We need to make it 20x better.
That level of thinking waswonderful. That's how we drove.
(31:52):
And sure, we were fairly frugalin doing things. Unlike, I
raised $100,000,000. Let me moveto this fancy, whatever, class
five building.
We've got basic stuff. All weneeded was simple cubes and
Internet connectivity and abunch of laptops. So the goal
(32:16):
was let's build an architectureof the future, multi tenant, and
no shortcuts to be done. I mean,we did some big things. We wrote
our own TCP IP stack.
Very few companies have done it.It was done to build a multi
tenancy at the TCP packet level.We wrote our own distributor
(32:36):
architecture. Some amazing stuffthat got done. So we had a great
time building it.
And since I couldn't write code,I did a little bit of product
management and I did hiring. AndI would go and take my
PowerPoint deck and run it bysome customers I knew. Would you
(32:56):
buy this? Would you do this? Andyou know what I learned from
that?
Was you shouldn't talk tocustomers when you're building
something disruptive. You shouldonly talk to customers if you're
only incrementally improving thetechnology. Because when it's a
disruptive idea, most of thecustomer will say, not sure. Why
(33:19):
would I move my security will bethe last thing I'll move to the
cloud if I do so. But there'salways a positive thing to learn
from every interaction.
You know, when I talk to acustomer, I may disagree with
this customer's four things hesaid because it's old thinking.
But there are two things that Imay pick up and embrace two
(33:41):
ideas that become part of thethings I need to drive.
Technology, while it is veryinnovative, disruptive, actually
happened pretty well the wayKalash and team talked about. I
used to worry a little bit. Iwould say, man, these teams are
talking about big, bigperformance issues.
Then I said, even if theydeliver 50% of the throughput,
(34:04):
I'll still be miles ahead. Andit was very good. The challenge
I faced at Zscaler was on the goto market side. That's where I
went through a few iterationsand learning. On technology, we
worked as planned.
On the go to market, the firstthing I tried to do was I would
try to go and talk to thesemanagers who are security
(34:29):
managers managing firewalls andproxies or network managers and
the like. And they won't beexcited. And I would kind of
say, what an exciting idea. Andthen one day, one of them said,
if I bought Zscaler, what will Ido? And then the light bulb goes
on and says, I'm talking towrong people.
(34:51):
Because at Zscaler, we want tobuild not a blue coat type
proxy. We are building theentire Outrun DMC. When you go
out to the Internet or SaaS, youshouldn't need to buy anything.
We are your proxy. Are yourantivirus.
We are your advanced threats. Weare your sandboxing. We are your
DLP and everything. So then Istart to go to CSOs and show
(35:12):
them. And CSOs, early on, mostof them will say, Crazy idea.
But a few would say, Good idea.But they're not ready. And I
would only need one out of 10 or12 people to say yes. And if I
looked at the numbers andpercentages to gauge the market
opportunity, I would say 90% ofthe customers said no. Stop it.
(35:37):
And I looked and say, This onevery smart, large enterprise is
so excited about it. And I canonly serve so many customers at
a young stage of my life. Justthat's one out of 10 was
wonderful. Think of theperspective. You could say 90%
market doesn't want it, thenlet's stop it.
And you could say, no, no, no.These smart customers want it.
(36:00):
The one who don't want it are alittle bit too old school. Over
time, they'll come along. That'show these things work.
And then we had to adapt earlyon. I would hire salespeople who
came from selling securityappliances, the kind of
appliances I sold at CipherTrust and Air Defense. We sold
(36:21):
boxes. The right way to sellsecurity used to be security
appliances. Then I realized thatthe salespeople are hiring,
coming from selling boxes, thewrong kind of people.
So I I went through somechanges. Then we would go to
VARs who are selling boxes. Wefound that VARs don't like to
sell cloud security. They wantedboxes, deployment, all that kind
(36:42):
of stuff. So, these were some ofthe iterations we went through.
So, the lesson is get out there,learn, try, figure out what's
working. So one of my mantras istoo many entrepreneurs and CEOs
build a product, they take greatpride in it, and if the product
fails, they blame sales. Right?I like to say, if you are the
(37:05):
founder and CEO, if you can't goand sell the product, nobody
else will be able to sell it. Sogo and figure out, get out
there.
You also get a goodunderstanding in the market and
you get good at it. And that'show we led it.
Mahendra Ramsinghani (37:20):
It's remarkable, Jay. As a as a
technical founder who's now soadept at selling and spending so
much time with customers, Talkto us about how your leadership
style has also evolved over theyears. You know, when you look
at Secure IT, your firstcompany, then you look at Cypher
Trust, Air Defense, each ofthese companies probably had
(37:41):
different size and scale.Zscaler is clearly the largest.
So share with us how yourmanagement style, leadership
style has also evolved.
Jay Chaudhry (37:49):
It's work in progress. It's changing and
evolving. Look. When you comefrom a start up start up
background, you know, doeverything. You know everything.
Till I hired the first CFO, wewere very close. Now Jyoti was
involved doing all the stuff,wouldn't she? But as we hired
(38:10):
the great CFO, I pulled out ofspending time. I would spend
only 5% time in finance and letCFO do the job. I think the key
is having great leaders whoactually are hands on, who take
interest, then pulling outbecomes easier.
Most of the time, entrepreneursand founders get into
(38:33):
micromanagement. I get blamedfor being into micromanagement
because I dig, I ask questions,I go deep. I can't go deep in
all areas. I don't. But in in incertain areas, from time to
time, I'm gonna ask lots ofquestions to understanding the
conviction of the person.
I'm understanding how well theyunderstand or they're sitting at
(38:54):
30,000 foot level makingdecisions. But to me, everything
is changing. We need to changeand adapt. I I ask myself often,
how differently am I runningthis company today than I did a
year ago, a month ago, or sixmonths ago? So the one lesson I
learned to scale is hire thebest of the best people.
(39:18):
Then delegation becomes easy.Business scales. But the harder
part is when you have a c playerin a leadership role, it's easy
to move them out. If it's aplayer, it's wonderful. The
problem is when you have bplayer.
They're good enough but not goodenough. How do you move them out
(39:38):
and how often? That's always achallenge. I kind of believe
that most time when people movesomeone out in leadership,
they're six to twelve months toolate. So I question myself from
time to time.
Are you sitting on it? Would yoube six to twelve months late in
making this change? Or are youkind of facing the situation and
(40:01):
taking care of it? I think thoseare the tough decisions that
need to be made. You need toquestion yourself.
You need to challenge yourselfand say, are you doing the right
thing? Should you be doing theright thing? And the other thing
I think that happens is, this isprobably my learning that other
entrepreneurs can learn. You arerunning a 50 person engineering
(40:24):
team. You bring someone as aseasoned leader who can scale,
who is running a 5,000 personengineering team.
It's rare that that person willsucceed. The delta between there
and here is too big. They justwon't be able to adapt because
when they're running 5,000person engineering team, they
got VPs and directors andmanagers, so many layers
(40:45):
underneath. They they just can'tget close to it. So making those
decisions becomes prettyimportant.
And we get some right, we getsome wrong. The one we get
wrong, we try to adapt andchange. But introspection is
important. Probably one of thebiggest thing I learned in my
(41:06):
life is to be self confident andself critical at the same time.
Confidence and conviction areimportant to drive forward.
But if that stuff goes to yourhead, you really become
arrogant. You kind of be lost.So having a bit of self
criticism, which means to beable to look and say, what am I
(41:28):
doing wrong? What could I dobetter? It's very important.
In my reviews with the meeting,I like to say we're going to
spend first ten minutes to paton the back for wonderful job
you did. And the remaining fiftyminutes will be poking holes and
figuring out where things wentwrong, why, what can be done to
(41:50):
make them better. I think thatlevel of scrutiny and thinking
has been very helpful to buildand scale Zscaler.
Sid Trivedi (41:59):
Now we're, you know, seven years post the IPO
of Zscaler, the company isapproaching 3,000,000,000 in ARR
and you serve over 40% of theFortune 500. That's definitely a
testament to your role inleading the last major IT
transformation, thetransformation to the cloud.
Today, we're entering anotherera defining stage with AI. As
(42:21):
someone who was early to thecloud, back in 02/2007, you made
this bet well in advance of mostmost others. How do you view the
potential of AI?
And how do you see it reshapingthe future of cyber?
Jay Chaudhry (42:32):
Any other changes don't come close to it.
Literally, it's almost like theindustrial revolution. It's far
bigger than what Internet hasdone for us. Right? So it's not
a matter of AI company.
It's a matter of AI as part ofevery company, everything you
do. You know, in 9697, we usedto say, I'm building an Internet
(42:55):
company. Okay? Everything isInternet. So we have many
aspects of all of ourtechnologies getting enabled
with AI.
And and you some of them arealready out today. A number of
new products are evolving andcoming. AI can do some amazing
stuff, some very dangerousstuff. For example, you can ask
(43:19):
AI chatbot and say, tell me allthe firewalls and VPNs for
company x that have certainvulnerabilities and give me in a
nice tabular format. In thirtyseconds, it's there.
Now, they may build some guardsaround it so you can't ask this
question about a specificcompany. You can frame that
(43:39):
question a little differently.You get the same information. So
it's becoming very dangerous.What are we doing with AI?
One of the things we're doing isall the cyber related threats
and data loss. So a lot ofanomalous kind of things that
happen when this thing happen.Figuring out some anomalies,
anomalous stuff. Chen AI does avery, very good job. We are
(44:02):
leveraging it big time.
We got a very exciting projectcalled Breach Predictor. Imagine
if I could predict a breachbefore it happens. That's a
wonderful thing. We have overhalf a trillion transaction logs
and we got multi trillion eventsand telemetry. And AI is able to
(44:24):
actually pass through some ofthat.
We can we're able to trainagainst that. It can figure
things out. For example, wetrained our AI model with 10,000
attack kill chains. Now it canpredict a new kill chain on its
own. Isn't that powerful?
The power is amazing for cyberprotection and data protection.
(44:46):
And the new thing, we all knowabout agentic AI is coming very
rapidly. It may be immaturetoday, but it's a matter of
time. It'll mature prettyquickly. Today's Zscaler focus
is zero trust communication,which means don't trust anyone
fully at all.
Give them this little trust so auser can only access application
(45:09):
a or b, only nothing else. Youdon't put them on the corporate
network the way these firewallcompanies do. That's why we're
disrupting these firewalltechnologies and bringing true
Zero Trust. But think of ZeroTrust agent communication. How
many agents?
Whose agents should be talkingto your agent? What model should
(45:30):
we be able to reach? So ourfocus is to be the exchange, the
switchboard for agenticcommunication. And we are
investing very heavily in thatarea.
Ross Haleliuk (45:41):
Jay, for years, the major players in
cybersecurity largely stuck totheir core domains. Right?
Zscaler in in cloud and cloudnative network, CrowdStrike in
endpoint, Okta in identity. Andwith Zscaler's recent
acquisitions of Avalor andespecially Red Canary, it looks
like you're stepping into theSOC space. Is this the Zscaler's
(46:05):
Palo Alto moment where youexpand beyond the core and start
evolving into a full spectrumsecurity platform that covers
everything?
Or is this something else?
Jay Chaudhry (46:17):
Look, I won't speculate about others, but we
don't believe in going on abuying spree and think that we
bulk up revenue by doing that.Right? How many vendors have
done in the past twenty years?The numbers get muddied up
because you did four or fiveacquisitions, whose number,
what, where. But the music stopsat some stage.
(46:40):
Then a lot of these acquisitionsget sold at a fifth or tenth of
the price. We are verymethodical about what we need to
do. People, you may think thatwe have been sticking at the
zero trust, but we started withzero trust communication for
users. That was number one. Thenwe expanded to zero trust of
branches.
No branch can talk to eachother. That's a big opportunity.
(47:03):
Then we moved and advanced tozero trust of workloads.
Workloads are somewhat likeusers. They talk to internet.
They talk to each other. OurZero Trust Exchange works
beautifully and it eliminatesthe need for those North South
virtual firewalls and East Westvirtual firewalls. And now we
are doing Zero Trusted devicesso only certain devices can talk
(47:24):
to certain devices withoutputting any software on them.
This area has become massive. Imean, our total market
opportunity in this space aloneis somewhere a little shy of
$100,000,000,000 kind of stuff.
So but this is not the originalmarket. Original market was user
to Internet access. No. Zerotrust everywhere is what we are
(47:48):
talking about. That's whycustomers are buying Zscaler.
As they embrace this cloud thisworld, the firewalls disappear
or the entire network securitysegment disappears. Sometimes
people say Zscaler is a networksecurity company. They don't get
it. We believe that youshouldn't be securing the
network. There's nothing tosecure in a network.
(48:10):
The packets are flowing. They'reflowing. But they're encrypted.
We need to secure data. Datasits with application, with
servers, with endpoints bymaking sure right party talks to
right party is what we're doing.
Now, we had one North Star forall these fifteen years. Be the
switchboard, be the exchange foreverything. And that story is
(48:31):
not done. Agenetic AI is thenext big phase of it. But with
trillions of events and signals,our customers are saying, why
are you giving it to anotherparty?
They charge me for those logsand all. You should be really
giving me more value, moreinformation out of it. So
Avalara gave us a jump start tobuild data fabric. And Red
(48:54):
Canary has very advanced agenticAI technology to do security
operation in a faster fashion.So, yes.
Now we are not only having zerotrust communication. Now we can
do all the operational part forsecurity and IT and give a
closed loop feedback. Today, ifyou discover something in Splunk
or any of the systems, it takesdays or weeks to feed it back. I
(49:19):
want to feed it back in secondsor minutes, and that's what my
customers are looking for.
Mahendra Ramsinghani (49:24):
In fact, that leads us to our last
question, Jay. You know, youtalk about integration of
systems. You talk about a visionof building data fabrics and
secure agents. Take a look intothe crystal ball. What do you
see five, ten years from today?
And also, how do you see your own legacy
shaping up in this next phase ofyour career?
Jay Chaudhry (49:45):
Yeah. If I start with related areas, today we all
know applications areeverywhere. My data center, my
application, all that is alreadyhappening. My AI model, large
language model, small languagemodel, they'll sit wherever they
need to sit. That's alreadyhappening.
The big thing we are doing atthe next level is kind of
(50:07):
changing the network. Today,network is private. It's like
having private roads connectingyour headquarters to five
cities. When national highwaysare built, you shouldn't be
building private roads.Companies still have private
networks.
They shouldn't Internet is thecyber highway. But for security
(50:28):
reasons, they kind of keep itthat way. With Zscaler, you can
use Internet as your cyberhighway. It's a matter of time.
Think of it.
Tens and tens, hundreds ofbillions of dollars are spent on
private network for enterprises.If we help those companies save
all of that money, half of thatmoney, it's going to make a big
difference. So that's one areawe are driving towards. The
(50:50):
second is security today isbeing done as network security,
securing the network. As I said,there's nothing to secure in a
network.
I see the world in not in toodistant future when firewalls
become like mainframes. Theywill still be there somewhere
sitting in some corner, but zerotrust has to happen. And AI is
(51:12):
bringing the biggest thing outthere. And I think securing your
AI model, securing communicationis offering it's it's disrupting
many, many of the players whohave done things in the past.
But AI doesn't change zero trustcommunication.
You still need to make sureright party talks to right party
(51:33):
and we play an important role.With AI, we'll have more
intelligence to figure out isthe right party talking to the
right party, what all is goingon. All this offers tremendous
opportunity for entrepreneurs aswell as businesses. I think it's
a matter of grabbing onto it andjumping on. Last word I'll leave
(51:54):
for entrepreneurs is if you'retrying to do a startup to get
rich quick, you'll bedisappointed.
We look at one example of onecompany and say, wow, that's
what happened to WhatsApp orthat's what happened to but
there are thousands of companiesthat can then do anything out
there. So just build conviction,have fun, and things will
(52:18):
happen.
Mahendra Ramsinghani (52:19):
Very well said, Jay. Here you are
approaching almost yourtwentieth year of anniversary in
2027, not too far away from it.And clearly, it's not been a get
rich quick journey for you, buta very inspiring one coming from
a very small village in HimachalPradesh to a company that is of
global scale. So we thank youfor your time. Thank you for
(52:39):
your inspiration, and wish youthe very best.
Jay Chaudhry (52:42):
Thank you for having me over.
Mahendra Ramsinghani (52:44):
It took us almost one year to lock in a
time with J. Chaudhary. Thiswould not have been possible
without the help of Raj Judge.Raj, as some of you know, has
recently joined Zscaler as EVPof corporate strategy and is on
the board of this company. Thankyou, Raj, for helping to make
(53:06):
this episode happen, and moreimportantly, helping bring out
this inspiring story.
Sid Trivedi (53:12):
Thank you for joining us inside the network.
Ross Haleliuk (53:16):
If you like this episode, please leave us a
review and share it with others.
Mahendra Ramsinghani (53:20):
If you really, really liked it and you
have some feedback for us, wrapit on a bottle of Yamazaki and
send it to me first.
Sid Trivedi (53:30):
No. Don't do that. Mahendra gets too many gifts
already. Please reach out byemail or LinkedIn.
Welcome to Inside the Network. I'm Sid Trivedi.
Ross Haleliuk (00:08):
I am Ross Haleliuk.
Mahendra Ramsinghani (00:10):
And I am Mahendra Ramsinghani. We have
spent decades building,investing, and researching
cybersecurity companies.
Sid Trivedi (00:19):
On this podcast, we invite you to join us inside the
network where we bring the bestfounders, operators, and
investors building the future ofcyber.
Ross Haleliuk (00:31):
We will talk about the hard parts of the
founder journey, launchingcompanies, getting to product
market fit, raising capital, andscaling to an exit.
Mahendra Ramsinghani (00:42):
And, yes, we will also be talking about
epic failures.
Sid Trivedi (00:46):
But, Mahendra, we're here to make the founder
journey easier.
Mahendra Ramsinghani (00:50):
That is correct, Sid. But we cannot make
it too much easier becausestartups are hard, and of
course, you already knew that.
Ross Haleliuk (00:57):
Alright, you two. And now, let's get started with
this week's episode.
Mahendra Ramsinghani (01:05):
Growing up on a small farm in a remote
Indian village, no electricity,no running water, the nearest
school is a two and a half milewalk. From there to building a
$40,000,000,000 publicly tradedcybersecurity company is an
extraordinary journey of ourguest today, Jay Chaudhuri. Jay
(01:27):
and his wife, Jyoti, who is anMBA graduate from the
prestigious IIM, IndianInstitute of Management. It's
the equivalent of the HarvardBusiness School.
Both of them decided to quittheir stable jobs, pool their
life savings, and went all in ontheir first startup. This was
the late nineties, just as theWorld Wide Web was at an
(01:50):
inflection point. That bold betpaid off in two years as their
company was acquired byVeriSign. Since then, this
dynamic duo has founded andexited four successful startups,
riding the waves of multipletechnology revolutions from the
dawn of the web to webapplications to mobile and the
(02:12):
cloud. After four exists, mostmight have retired to a vineyard
or a golf course, but theydoubled down again.
This time, they staked$50,000,000 of their own capital
to start Zscaler. Today, thistrailblazing zero trust security
platform generates over$3,000,000,000 in annual
(02:35):
revenues, commanding a marketcap of over $40,000,000,000. As
Zscaler approaches its twentiethanniversary, Jay is not slowing
down. He's already chargingahead into the AI revolution,
envisioning how it shapescybersecurity threats, defenses,
and redefines our entiretechnology world. In the world
(02:59):
of rap, there is only one j z.
In the world of cybersecurity,there is only one j z. Welcome
to Inside the Network.
Sid Trivedi (03:10):
Jay, welcome to Inside the Network.
Jay Chaudhry (03:13):
Thank you, Sid.
Sid Trivedi (03:14):
Well, you know, we wanna talk about a bunch of
different topics, but let'sstart with your early childhood,
growing up in rural India andmoving to The US in the nineteen
eighties. You've spoken aboutgrowing up in Pano, which is a
village in Himachal Pradeshwithout electricity, without
running water until your teenageyears. I believe you walked two
(03:35):
and a half miles to school, andyou've also mentioned that you
studied under a tree. We've hada lot of immigrant founders on
this show, but that does notsound like an easy childhood.
How did those early experiencesinspire your entrepreneurial
journey?
Jay Chaudhry (03:50):
Action is a fun childhood. That's all we knew.
We played. We had fun together.It was a wonderful life.
So I really never thought it wasa tough, tough life. So it tells
me it's all relative. It's allstate of mind. But one thing I
did learn at that time was thathard work is good. I saw my
(04:13):
parents working hard.
I work with them in the fields.You know, I had tilled using
oxen in my early days, so Idon't think very many founders
have the unique distinction oftilling their farm with oxen.
But I like to say, if you'veseen life where you have to work
hard, then hard work is nolonger hard work. It's part of
(04:36):
life. Too many people inadvanced countries are too
pampered.
They think hard work is bad. Tosome degree, a sense of
entitlement sits in SiliconValley. And, ideally, I think
people who come from having seensimple life, hard work life,
they do very well in life. Andthat's how I became what I
(05:00):
became. My parents taught mehard work, honesty, and
integrity, and they have beenpart of my life.
And the biggest thing I've doneor I try to do is impart the
same thing to my children.
Mahendra Ramsinghani (05:13):
Thank you, Jay. I think that perspective of
hard work and honesty andintegrity is clearly a set of
values that your parentsinculcated in you. Share with us
a couple of stories growing upin in that farming backdrop. You
know? One of the things that I Irecall about farmers is that,
you know, you're subject toweather conditions.
(05:35):
You know? You're also you know,you cannot yell at the crops if
they're not going fast enough.Right? So share with us some of
those lessons that you bring toyour modern day cybersecurity
life.
Jay Chaudhry (05:46):
Yeah. What you said is really true, especially
at the time in India and in mydistrict where there's no
irrigation system. In manyareas, irrigation system takes
care of things. When there's noirrigation system, you depend
upon rain and whatever thenature does. So one of the
things I learned from my mother,she would say, do your best and
(06:11):
leave the rest to higher powers.
You know, I get asked manytimes, how do you deal with
pressures of the job? I thinkback and say, work hard. I do my
best. Then I don't worry aboutthe rest. This is probably one
of the very important lessons Ibrought along with me for my
(06:31):
childhood.
But thinking of some earlychildhood days, I recall when I
went to my primary school. Firstthing in the morning, they will
ask for three or four studentsto go to a village well and
fetch water and get their waterin a little water tank so the
students could drink it for therest of the day. And by noon,
(06:53):
that water was pretty hotsitting in this little tank,
though it didn't feel too bad inthose days. But later on, after
I went back from The US, I felt,man, that must have been very
tough. So the first kind ofgiving back project I did for
India, for a number of schoolsin my district in Himacho, was
(07:14):
to deploy a bunch of watercoolers.
Because now they had runningwater, but the running water
won't be running all day long,and they'll fill it up in tanks,
and they'll it'd still be hot.So water coolers. So it's a
little bit of perspective of howyou look at things. But I'm a
big fan of happiness as state ofmind. Everything is state of
(07:35):
mind.
Your mind is so powerful. If youmake up your mind and you push,
you build conviction, you drive,and you don't look at it as a
way of sacrificing things.Sometimes people think, gee, I'm
sacrificing so much to do mystartup. If people think startup
is a sacrifice, they shouldn'tbe doing a startup. If you have
(07:56):
a conviction, you enjoysomething.
And you can look at life in twoways. There's a challenge and
here's a problem. If you take itas a challenge, human beings
like challenges. I likechallenges. So if we take the
next level of challenge, youdrive, things happen, and it's
no longer work.
It's no longer sacrificing.
Ross Haleliuk (08:16):
That is a good a very, very good perspective. And
and it also leads into the nextquestion. So, Jay, moving from
rural India to The United Statesin nineteen eighties for
graduate school at theUniversity of Cincinnati was a
very bold step. All four of uson this podcast are immigrants.
We have moved to The UnitedStates in search for greater
(08:36):
opportunities, and many of ourlisteners have essentially done
the same.
What was the most unexpectedcultural or personal challenge
you faced during that transitionas you made the move? And how
did it shape your perspective onrisk taking?
Jay Chaudhry (08:51):
Yeah. You know, for me, the bigger shock was to
move from my village to IIT,then moving from IIT to The US.
Frankly, massive move. Becauseat IIT in India, we all talked
about going to The US formasters. So we kinda knew what
to expect.
Now having said that, once youcome here, obviously, things are
(09:16):
quite different. The food,dealing, all that kind of stuff.
I do not think that actuallykind of changed me or surprised
me a whole lot. I've beengenerally focused on learning
most of my life. I have a onepriority was studies, a two was
(09:36):
health, and everything elsedidn't really matter.
Those two things were veryimportant for me. But I tell
you, impressions of America wasamazing. When I came, I took a
bus from JFK to Cincinnati,Ohio. The bus they they changed
the the bus in Columbus, Ohio.And when I reached Cincinnati, I
(09:59):
realized that one of the twobags I had, one was in my hand,
second was with my clothes, thesecond bag got lost.
They did not move it. So when Icame to my UC Cincinnati, a
teacher said, oh, you lost yourbag. Don't worry. I'm gonna call
Greyhound bus. I'm gonna findout when your bag comes.
I'm gonna take you to theGreyhound station, pick up your
(10:23):
bag, bring it back. I have seenso much of, really, hospitality
in in The US, especially in theMidwest. That was very moving.
In terms of learning, going toschool, it wasn't that hard. In
India, you're always good atmathematics and sciences because
they actually taught that stuffextremely well.
(10:45):
So that was never a problem.Yes, computers, science,
programming was a little bitnew. I picked up pretty quickly.
The key thing probably from mypoint of view in learning was I
finished my master's. I had asummer job after my first year
as an intern in one of the smallstartups in Cincinnati.
(11:05):
And they told me, finish yourdegree and come and work for us
and we'll sponsor you for agreen card. Right? What else did
you want? At that time, you wanta green card. And I did.
The the big change came into mycareer. When from that software
development job, I moved to IBM.And that was a change to the
(11:25):
business world, to sales world.Because I realized that I could
do better customer engagementand that happened because of
literally by an accident.Because one day when our sales
engineer called in sick, theonly sales engineer in the
company, they wanted me to do ademo.
I did the demo and demo wentvery well. The first demo in my
(11:48):
life, the first customerinteraction in my life, okay,
that changed. And that's when Isaid, I have more fun doing this
than writing code. That'sprobably one of the big things
in my career that happened. If Ihad been doing software
development, I'm not sure if Iwould have started a company.
Working for IBM and sales andmarketing gave me some of the
(12:09):
experience and whatnot. So Ithink the the point I'll make is
what has helped me is takingchances at trying new stuff. I
would have said I've been atrained engineer. Why should I
go there? I would have to staythere.
But really, falling a little bitoff your guts and kind of
pushing beyond the comfort zonehas naturally been kind of
(12:34):
something I had done all along.I do not know where it came
from, but I I've always hadchances, had tried the new
thing, and and set the new goalsand the next level and the next
level. Right? What you attaintoday is good, but it's not good
for tomorrow. And America is awonderful country to try all
(12:54):
these things without worry abouthow society will look at me.
Sid Trivedi (12:58):
Well, you know, you talked about trying new things,
and we certainly wanna talkabout you starting multiple
companies. I think many peopleknow you for Zscaler and will
certainly get to Zscaler. Butyou started four companies
before Zscaler. So let's startwith company number one, Secure
IT. Almost three decades ago,you and your wife, Jyoti, took a
huge risk.
(13:19):
You quit your jobs and youinvested your life savings into
starting your first company,Secure IT. And for context for
our listeners, Secure IT was thefirst pure play Internet
security services company. Takeus back to that pivotal moment
that convinced you to beteverything on starting this
company.
Jay Chaudhry (13:37):
Yeah. And especially when there's no DNA
of entrepreneurship in my familyof small scale farmers, right?
It's like thinking aboutopportunities and trying them. I
think sometimes people get toological. Sometimes people start
doing too much analysisparalysis.
I believe that the deeper youanalyze the stuff, the more pros
(13:59):
and cons you're going run into.And you're going say, well,
let's not do this. For secureIT, it is fairly simple. In '95,
'96 timeframe, when Netscape hasgone public, right, Marc
Andreessen was kind of a bigrole model at that time. And I
believe that Internet will takeoff.
(14:21):
If it did, every company will beconnected to every other
company. And you have to worryabout cybersecurity. And so I
saw that an area that companieswill have to worry about. Then I
got inspiration from MarcAndreessen and said, if this
young guy who recently graduatedfrom UIUC Irvana Champaign, if
(14:41):
you could do a startup, whyshouldn't I do a startup? Here's
a crazy question I asked my wifeand she and I debated for a
little bit.
And that's what really led tosaying, let's give it a shot.
And I said, I have a technicalbackground. I have sales and
marketing background. Why not?And then we stumbled across
couldn't raise funding.
(15:02):
The choice was give up or take achance by putting in life
saving. There were only twochoices there. And there, the
notion was, will I be repentingand saying, I wish I had done a
start up? That's a notion thattook us to let's give it a shot.
It was a tough decision.
I won't say it was simple. Butwe did not sit on it for weeks
(15:24):
and weeks. We literally spentprobably a week, week and a half
or so. And eventually we kind ofsaid, what's the worst thing
that can happen in life withthis thing? Company fails, we
lose our savings.
And the next thing was, can wefind a job? And we means because
Chyoti and I both were quitting.And the answer was, we have tons
(15:48):
of confidence that we can find ajob. What made it simpler was
our lifestyle was simple. Imean, I wasn't buying the
fanciest car and the fanciesthouse out there.
We have a simple car at thattime. I had a 1984 Honda
Prelude. This is '97 time frame.And in Atlanta, we had a simple
house with $800 per monthmortgage payment. Said, what can
(16:11):
go wrong?
Let's give it a shot. And that'sreally what happened. But the
key was not really taking arisk. Key was we focused on a
new focus area and fast moveradvantage was important. I
looked around.
There's no company out therethat is doing security services.
No one knew how to deployfirewalls and the like. It's
(16:34):
totally new phenomenon. So Isaid, if I do it, I'm a fast
mover. And I want to do furtherfocus on it and do firewalls and
firewalls only.
No networking, no switching, norouters, and the like. So we
became good at it. In fact, onething deeper I went and said,
there used to be half a dozenfirewall companies out there.
(16:54):
And we said, Am I going to learnabout all of them and give a
choice to customers like some ofthe other VARs and services
companies used to do. I went theopposite way.
And I would say we are onlygoing to work with checkpoint
software. Period. And when mycustomer will say, what other
options do I have? I would say,we have looked at all of them.
(17:17):
Here's the best technology.
We are the best at deploying it.That's what you should choose.
The competition would say, hereare six options. You tell me
what you like and I'll give youwhat you want. That's a big
difference.
Once you get focused, we got sogood at the area we focused on.
We were far better than a lot ofthese other competitors who were
(17:40):
kind of genetic VARs doing somenetwork, some this, some this.
So if you get focused, at thattime, I would say, startups are,
say, a foot wide and 20 footdeep. Don't get too wide. Go
deep.
Become the best. I recall oneday we were dealing with this
large Atlanta company. It's apower company. We're trying to
(18:03):
deploy firewalls. We're givingthem some security services.
And this person, this leader,security leader said, what
you're asking for for rate ismore than what IBM charges. And
I said, look, we are the heartsurgeons of security. If you
care about your heart, you talkto us. If you don't, you should
(18:25):
talk to journalists. And webacked it up because we knew our
stuff cold.
If you focus, you know it betterthan people who go and do 20
different things. That's why Ilike to say, if you want to do a
startup, don't just go in a newarea. You need to have some core
competency, some background tobuild upon. In .com days, so
(18:48):
many entrepreneurs will say, I'mgoing to build a website in this
retail area. You say, whatexperience do you have in this
market?
None. You need some experienceor you bring a partner to join
you who comes with certainexperiences. And if the two
skills are complementary, itbecomes easier. If I had no
sales and marketing background,I needed a partner to start with
(19:12):
me. Fortunately, I have been tothe both sides, so I was able to
go and figure out the idea anddrive it, which actually helped
in many ways.
If you can do that, it's apositive.
Ross Haleliuk (19:25):
That is such a fantastic story, Jay. I would
love to ask so many follow-upquestions, but for now, we'll
stick to a few that we had wehad in mind. So, Jay, very few
founders build companies withtheir spouses. We had Ron Gula
on the show who was talkingabout his experience of working
with his wife Cindy to buildTenable. How was it for you?
(19:48):
How was it to cofound a companywith with your wife? And and how
did it influence your leadershipand your approach to balancing
the company life and the familylife?
Jay Chaudhry (19:58):
It was actually wonderful and unfortunate
because there could be so manytensions and things in the
system. Fortunately, it workedout extremely well. Now why? A
few things. My wife is MBA infinance for IIM Calcutta.
That's like Harvard BusinessSchool in India. And she got a
(20:19):
master's in information systemsat University of Cincinnati. But
she has very complementary skillset. In finance and numbers, she
is 10 x better than I am. So Idon't even attempt to figure out
the finance.
Like, I have no idea what afinance is even figuring out how
(20:40):
to draw money from an ATM. It'sgreat because you can delegate.
I don't have to think aboutthings and you find a partner
who can take care of that kindof stuff. That is one part. You
know, the other part is why itwas good was.
And I kid around, but I I meanit. If you want a happy family
(21:00):
life, get your spouse involvedin a startup. Okay? Because
she's out there with you. She'sactually understanding what it
takes, And you're working allday long.
You're going back home in theevening. Both of you are tired
together rather than the wifeready to say, come on. Let's go
for dinner now. So I think thisis this worked out very well for
(21:22):
us. Now, fortunately, we had ourparents to take care of our kids
and help the kids that was veryhelpful.
Otherwise, it would have createdone more area to worry about.
You know, the other thing thatworked very well with us was I
am a risk taker, as I said. Mywife is very conservative. So
we've to balance each other. IfI get excited, I'm ready to jump
(21:45):
off a cliff and she can pull meback and say, hold on, slow
down, this is not needed.
The other aspect I'll see is ifboth spouses are overly
ambitious and competitive, thenprobably they could have tension
between the two, which won't begood. Fortunately, I'm the
ambitious and driven kind. Mywife is pretty contented, if I
(22:08):
may say spiritual type. She infact, I don't I say I don't have
attachment for money. She haszero attachment for money.
She doesn't want to be the kindaoutspoken person. In fact, she'd
rather shy. She would rather notbe in the media or any
interviews. It just workedextremely well. I think it's
(22:30):
overall a good thing.
Now, it's also true that shedidn't want to be part of the
large company management team.So she would work for the first
two or three years, then we'llbring in professional management
together and go from there. AtZscaler, she spent about four
years. In other companies,somewhere from two, three years.
(22:51):
It was a wonderful thing.
And, by the way, our kids learnto see how we're working hard.
So the best way to teach kidsabout hard work is be an old
model. When they show you seeyour parents working hard, they
work hard.
Mahendra Ramsinghani (23:04):
And then they work like yin and yang.
Like you said, the two sideswork so well together. Indeed,
it is a it's a blessing of akind where you can build that
that both that relationship aswell as the productiveness of
building many companies. Nowgoing back to the fact that
neither of you are attached tomoney, but still, if you have
(23:26):
your first exit, Secure IT wasacquired by VeriSign just two
years later after you startedit. And since then, you have had
multiple exits.
Zscaler stock is up, like, 70%this year, and you're already
just in month seven or eightnow. So talk to us about the
lessons you've learned inbuilding multiple companies, and
(23:47):
also talk to us about the art ofexits.
Jay Chaudhry (23:50):
Right. First of all, if you don't have
attachment money, you make theright decision. When secure IT
success was happening prettyrapidly, I was getting a bunch
of calls from potentialacquirers. And at that time,
sitting in Atlanta, I had noidea about any of this,
literally. I mean, none.
(24:11):
I had no VC friends. I had noinvestment bankers I had ever
dealt with. So, in fact, Irecall in one conversation, this
one CEO tried to put a lot ofpressure that if you don't sell,
I'm gonna wipe out your companybecause when you get into this
space, you'll be gone. If I wereworried about money, I would
(24:35):
have taken this thing and runwith it. Okay.
I did not. I said no. I walkedaway from it. So if if you are
overly worried about money as afounder or entrepreneur, you're
you're gonna do make someshortcuts. You're taking
chances.
Might as take some more chancesout there. But that's really
linked to how much businessconviction do you have. In my
(25:00):
style of business, I am outthere in front of customers. I'm
fairly tech savvy. I understandtechnology products.
So a pretty good understandingof what the strengths and
weaknesses of my businesses are.So that allows you to make the
right call at the right time. Ithink there's an opportunity you
(25:21):
need to think through. There aremany times you'll say you didn't
sell the company, right? Youwere hanging on it for too long.
And sometimes you sell tooearly. That's not good either.
None of us have a crystal ballto see what the future looks
like. But, you know, there areangles out there At there are
(25:42):
some times, for example, when Ihad this company called Core
Harbor, it was e procurementcompany using Ariba software as
an ASP. ASP is applicationservice provider.
That means this is single tenantarchitecture. We took Ariba, we
put it in a data center, adatabase server and application
(26:03):
server. We ran, we managed itfor our customers. Those early
days, this was ninety nine, twothousand timeframe. And .com was
pretty hot.
The Alibaba was very hot. Andthen we could see things cooling
down. And there was the rightopportunity. I got a call from
this other division that companyhad acquired to say, we want to
(26:23):
acquire your business. And itwas a timely thing.
I I could have said, no. I wantto make it bigger, but I could
see the market cooling down onsome of this area. I made the
call. I let it go and move on. Ithink not having attachment to
your companies is very importantas well.
The way I looked at it isentrepreneurs make a difference
(26:46):
in the world. They're kind ofchanging the world. That's the
sense that drivesentrepreneurship, at least for
me. So rather than beingattached to this company, you're
looking at how do you make thebig difference in the world. And
if you're able to think throughthat and if you could say, this
area is not likely to grow muchbigger, then you move on.
(27:08):
You do an exit and move on. Takeyou to give you another example.
Air Defense was a fascinatingcompany. I mean, it had nothing
to do with Air Force. It wasdefending your ear waves.
This is wireless securitybecause Wi Fi's were beginning
to come up. So we came up withthis very novel idea, first
(27:29):
mover. No one had done anythinglike this. I'm gonna monitor the
air waves and find out if somebad guys are trying to connect
to your WiFi and the like. Butthen I realized that it is it's
a good start up.
It's a narrow product linethat's never going to become
hundreds of millions of dollarsworth of business. This business
(27:49):
need to be integrated with theWiFi companies. So when the
right time came, we accepted anoffer. You know, if we if there
are entrepreneurs listening toit, you need to make sure you
have conviction in yourbusiness. When air defense
acquisition was happening, Irecall without naming these
(28:10):
companies, they would say, gee,we figured out if we are ready
to do the deal.
Then they came back and theysay, No, no, no. We want to
reduce it by x million dollars.What do you mean? I mean, we
thought we had a they changedand I walked away from it. And
they came back after four weeks.
(28:31):
Then they said, okay, we agree.We'll do the deal. A lot of this
happens in this, I guess, world.So you if you are comfortable,
you're strong in your business,you can withstand. If you don't
have strength, obviously, thenyou'll be more desperate.
But I've seen the same thinghappen in the VC world too. So
(28:51):
entrepreneurs need to have someconviction to drive the stuff
rather than cave cave in.
Ross Haleliuk (28:57):
Jay, let's talk about the biggest the biggest of
your place. Let's talk aboutbuilding Zscaler. So in 02/2007,
you went all in again andinvested 50,000,000 of your own
money into Zscaler to tackle theemerging challenge of cloud
security, a market that at thetime wasn't yet mature. Maybe we
(29:19):
cease would have gladly writtenyou a check due to respect to my
cohost, which both are VCs. Whyare you allergic to to
investors?
Why did you choose to shape thecompany this way and and how did
it impact the company culture?
Jay Chaudhry (29:35):
Look, I love VCs and investors. They can give a
lot of wisdom. But this is whatI was driven. When I want to
take a big risk, I feel morecomfortable with my own money
than someone else's money. Iwould be thinking about, if I
mess it up, what happens?
So truly, the number one factorwas ability to drive things the
(30:00):
way I want to drive by takingbigger risks. That is number
one. Number two was since theidea was fairly bold, I felt
like investors are going to say,Che, this is crazy. Don't do
this. Do this.
Don't do this. I did not wantanyone interfering in my
(30:22):
conviction. I want to be able togo and try things. Those were
the biggest drivers.
Sid Trivedi (30:28):
Talk about the early days of Zscaler. So you
started this company in 02/2007.Did you struggle with market
uncertainty? I mean, wasobviously market uncertainty
that was the macro economy. Imean, we were Yeah.
By the 08/00/2009, things werelooking pretty dangerous, and
I'm sure you you felt worried.But then there's also certainly
the uncertainty of building acompany in the early days. And,
(30:49):
you know, you had people likeKailash who was your, you know,
chief architect. You had ManojApte who was an early employee
and was helping you on sales.You had Michael Sutton who
joined relatively early.
But there were these, you know,there was this team camaraderie
of a few folks you had kind ofbought on board. Give us a sense
of what it was like in thoseearly days.
Jay Chaudhry (31:07):
Right. So part of the reason to do it at that time
was the market was slow. Theysaid, we aren't going to sell
for the next couple of years. Wearen't raising money. Let's just
double down and build products.
So timing felt good, actually.Okay. Time is bad if you want to
raise money. If you don't, thetiming is good. That's how we
(31:28):
looked at it.
I think I was fortunate. I hadsome very, very good leaders who
became very good friends,lifelong friends, who started
early on. And Kalash would comeup with some brilliant ideas. If
someone said, I want to make it20% better, he said, no, no, no.
We need to make it 20x better.
That level of thinking waswonderful. That's how we drove.
(31:52):
And sure, we were fairly frugalin doing things. Unlike, I
raised $100,000,000. Let me moveto this fancy, whatever, class
five building.
We've got basic stuff. All weneeded was simple cubes and
Internet connectivity and abunch of laptops. So the goal
(32:16):
was let's build an architectureof the future, multi tenant, and
no shortcuts to be done. I mean,we did some big things. We wrote
our own TCP IP stack.
Very few companies have done it.It was done to build a multi
tenancy at the TCP packet level.We wrote our own distributor
(32:36):
architecture. Some amazing stuffthat got done. So we had a great
time building it.
And since I couldn't write code,I did a little bit of product
management and I did hiring. AndI would go and take my
PowerPoint deck and run it bysome customers I knew. Would you
(32:56):
buy this? Would you do this? Andyou know what I learned from
that?
Was you shouldn't talk tocustomers when you're building
something disruptive. You shouldonly talk to customers if you're
only incrementally improving thetechnology. Because when it's a
disruptive idea, most of thecustomer will say, not sure. Why
(33:19):
would I move my security will bethe last thing I'll move to the
cloud if I do so. But there'salways a positive thing to learn
from every interaction.
You know, when I talk to acustomer, I may disagree with
this customer's four things hesaid because it's old thinking.
But there are two things that Imay pick up and embrace two
(33:41):
ideas that become part of thethings I need to drive.
Technology, while it is veryinnovative, disruptive, actually
happened pretty well the wayKalash and team talked about. I
used to worry a little bit. Iwould say, man, these teams are
talking about big, bigperformance issues.
Then I said, even if theydeliver 50% of the throughput,
(34:04):
I'll still be miles ahead. Andit was very good. The challenge
I faced at Zscaler was on the goto market side. That's where I
went through a few iterationsand learning. On technology, we
worked as planned.
On the go to market, the firstthing I tried to do was I would
try to go and talk to thesemanagers who are security
(34:29):
managers managing firewalls andproxies or network managers and
the like. And they won't beexcited. And I would kind of
say, what an exciting idea. Andthen one day, one of them said,
if I bought Zscaler, what will Ido? And then the light bulb goes
on and says, I'm talking towrong people.
(34:51):
Because at Zscaler, we want tobuild not a blue coat type
proxy. We are building theentire Outrun DMC. When you go
out to the Internet or SaaS, youshouldn't need to buy anything.
We are your proxy. Are yourantivirus.
We are your advanced threats. Weare your sandboxing. We are your
DLP and everything. So then Istart to go to CSOs and show
(35:12):
them. And CSOs, early on, mostof them will say, Crazy idea.
But a few would say, Good idea.But they're not ready. And I
would only need one out of 10 or12 people to say yes. And if I
looked at the numbers andpercentages to gauge the market
opportunity, I would say 90% ofthe customers said no. Stop it.
(35:37):
And I looked and say, This onevery smart, large enterprise is
so excited about it. And I canonly serve so many customers at
a young stage of my life. Justthat's one out of 10 was
wonderful. Think of theperspective. You could say 90%
market doesn't want it, thenlet's stop it.
And you could say, no, no, no.These smart customers want it.
(36:00):
The one who don't want it are alittle bit too old school. Over
time, they'll come along. That'show these things work.
And then we had to adapt earlyon. I would hire salespeople who
came from selling securityappliances, the kind of
appliances I sold at CipherTrust and Air Defense. We sold
(36:21):
boxes. The right way to sellsecurity used to be security
appliances. Then I realized thatthe salespeople are hiring,
coming from selling boxes, thewrong kind of people.
So I I went through somechanges. Then we would go to
VARs who are selling boxes. Wefound that VARs don't like to
sell cloud security. They wantedboxes, deployment, all that kind
(36:42):
of stuff. So, these were some ofthe iterations we went through.
So, the lesson is get out there,learn, try, figure out what's
working. So one of my mantras istoo many entrepreneurs and CEOs
build a product, they take greatpride in it, and if the product
fails, they blame sales. Right?I like to say, if you are the
(37:05):
founder and CEO, if you can't goand sell the product, nobody
else will be able to sell it. Sogo and figure out, get out
there.
You also get a goodunderstanding in the market and
you get good at it. And that'show we led it.
Mahendra Ramsinghani (37:20):
It's remarkable, Jay. As a as a
technical founder who's now soadept at selling and spending so
much time with customers, Talkto us about how your leadership
style has also evolved over theyears. You know, when you look
at Secure IT, your firstcompany, then you look at Cypher
Trust, Air Defense, each ofthese companies probably had
(37:41):
different size and scale.Zscaler is clearly the largest.
So share with us how yourmanagement style, leadership
style has also evolved.
Jay Chaudhry (37:49):
It's work in progress. It's changing and
evolving. Look. When you comefrom a start up start up
background, you know, doeverything. You know everything.
Till I hired the first CFO, wewere very close. Now Jyoti was
involved doing all the stuff,wouldn't she? But as we hired
(38:10):
the great CFO, I pulled out ofspending time. I would spend
only 5% time in finance and letCFO do the job. I think the key
is having great leaders whoactually are hands on, who take
interest, then pulling outbecomes easier.
Most of the time, entrepreneursand founders get into
(38:33):
micromanagement. I get blamedfor being into micromanagement
because I dig, I ask questions,I go deep. I can't go deep in
all areas. I don't. But in in incertain areas, from time to
time, I'm gonna ask lots ofquestions to understanding the
conviction of the person.
I'm understanding how well theyunderstand or they're sitting at
(38:54):
30,000 foot level makingdecisions. But to me, everything
is changing. We need to changeand adapt. I I ask myself often,
how differently am I runningthis company today than I did a
year ago, a month ago, or sixmonths ago? So the one lesson I
learned to scale is hire thebest of the best people.
(39:18):
Then delegation becomes easy.Business scales. But the harder
part is when you have a c playerin a leadership role, it's easy
to move them out. If it's aplayer, it's wonderful. The
problem is when you have bplayer.
They're good enough but not goodenough. How do you move them out
(39:38):
and how often? That's always achallenge. I kind of believe
that most time when people movesomeone out in leadership,
they're six to twelve months toolate. So I question myself from
time to time.
Are you sitting on it? Would yoube six to twelve months late in
making this change? Or are youkind of facing the situation and
(40:01):
taking care of it? I think thoseare the tough decisions that
need to be made. You need toquestion yourself.
You need to challenge yourselfand say, are you doing the right
thing? Should you be doing theright thing? And the other thing
I think that happens is, this isprobably my learning that other
entrepreneurs can learn. You arerunning a 50 person engineering
(40:24):
team. You bring someone as aseasoned leader who can scale,
who is running a 5,000 personengineering team.
It's rare that that person willsucceed. The delta between there
and here is too big. They justwon't be able to adapt because
when they're running 5,000person engineering team, they
got VPs and directors andmanagers, so many layers
(40:45):
underneath. They they just can'tget close to it. So making those
decisions becomes prettyimportant.
And we get some right, we getsome wrong. The one we get
wrong, we try to adapt andchange. But introspection is
important. Probably one of thebiggest thing I learned in my
(41:06):
life is to be self confident andself critical at the same time.
Confidence and conviction areimportant to drive forward.
But if that stuff goes to yourhead, you really become
arrogant. You kind of be lost.So having a bit of self
criticism, which means to beable to look and say, what am I
(41:28):
doing wrong? What could I dobetter? It's very important.
In my reviews with the meeting,I like to say we're going to
spend first ten minutes to paton the back for wonderful job
you did. And the remaining fiftyminutes will be poking holes and
figuring out where things wentwrong, why, what can be done to
(41:50):
make them better. I think thatlevel of scrutiny and thinking
has been very helpful to buildand scale Zscaler.
Sid Trivedi (41:59):
Now we're, you know, seven years post the IPO
of Zscaler, the company isapproaching 3,000,000,000 in ARR
and you serve over 40% of theFortune 500. That's definitely a
testament to your role inleading the last major IT
transformation, thetransformation to the cloud.
Today, we're entering anotherera defining stage with AI. As
(42:21):
someone who was early to thecloud, back in 02/2007, you made
this bet well in advance of mostmost others. How do you view the
potential of AI?
And how do you see it reshapingthe future of cyber?
Jay Chaudhry (42:32):
Any other changes don't come close to it.
Literally, it's almost like theindustrial revolution. It's far
bigger than what Internet hasdone for us. Right? So it's not
a matter of AI company.
It's a matter of AI as part ofevery company, everything you
do. You know, in 9697, we usedto say, I'm building an Internet
(42:55):
company. Okay? Everything isInternet. So we have many
aspects of all of ourtechnologies getting enabled
with AI.
And and you some of them arealready out today. A number of
new products are evolving andcoming. AI can do some amazing
stuff, some very dangerousstuff. For example, you can ask
(43:19):
AI chatbot and say, tell me allthe firewalls and VPNs for
company x that have certainvulnerabilities and give me in a
nice tabular format. In thirtyseconds, it's there.
Now, they may build some guardsaround it so you can't ask this
question about a specificcompany. You can frame that
(43:39):
question a little differently.You get the same information. So
it's becoming very dangerous.What are we doing with AI?
One of the things we're doing isall the cyber related threats
and data loss. So a lot ofanomalous kind of things that
happen when this thing happen.Figuring out some anomalies,
anomalous stuff. Chen AI does avery, very good job. We are
(44:02):
leveraging it big time.
We got a very exciting projectcalled Breach Predictor. Imagine
if I could predict a breachbefore it happens. That's a
wonderful thing. We have overhalf a trillion transaction logs
and we got multi trillion eventsand telemetry. And AI is able to
(44:24):
actually pass through some ofthat.
We can we're able to trainagainst that. It can figure
things out. For example, wetrained our AI model with 10,000
attack kill chains. Now it canpredict a new kill chain on its
own. Isn't that powerful?
The power is amazing for cyberprotection and data protection.
(44:46):
And the new thing, we all knowabout agentic AI is coming very
rapidly. It may be immaturetoday, but it's a matter of
time. It'll mature prettyquickly. Today's Zscaler focus
is zero trust communication,which means don't trust anyone
fully at all.
Give them this little trust so auser can only access application
(45:09):
a or b, only nothing else. Youdon't put them on the corporate
network the way these firewallcompanies do. That's why we're
disrupting these firewalltechnologies and bringing true
Zero Trust. But think of ZeroTrust agent communication. How
many agents?
Whose agents should be talkingto your agent? What model should
(45:30):
we be able to reach? So ourfocus is to be the exchange, the
switchboard for agenticcommunication. And we are
investing very heavily in thatarea.
Ross Haleliuk (45:41):
Jay, for years, the major players in
cybersecurity largely stuck totheir core domains. Right?
Zscaler in in cloud and cloudnative network, CrowdStrike in
endpoint, Okta in identity. Andwith Zscaler's recent
acquisitions of Avalor andespecially Red Canary, it looks
like you're stepping into theSOC space. Is this the Zscaler's
(46:05):
Palo Alto moment where youexpand beyond the core and start
evolving into a full spectrumsecurity platform that covers
everything?
Or is this something else?
Jay Chaudhry (46:17):
Look, I won't speculate about others, but we
don't believe in going on abuying spree and think that we
bulk up revenue by doing that.Right? How many vendors have
done in the past twenty years?The numbers get muddied up
because you did four or fiveacquisitions, whose number,
what, where. But the music stopsat some stage.
(46:40):
Then a lot of these acquisitionsget sold at a fifth or tenth of
the price. We are verymethodical about what we need to
do. People, you may think thatwe have been sticking at the
zero trust, but we started withzero trust communication for
users. That was number one. Thenwe expanded to zero trust of
branches.
No branch can talk to eachother. That's a big opportunity.
(47:03):
Then we moved and advanced tozero trust of workloads.
Workloads are somewhat likeusers. They talk to internet.
They talk to each other. OurZero Trust Exchange works
beautifully and it eliminatesthe need for those North South
virtual firewalls and East Westvirtual firewalls. And now we
are doing Zero Trusted devicesso only certain devices can talk
(47:24):
to certain devices withoutputting any software on them.
This area has become massive. Imean, our total market
opportunity in this space aloneis somewhere a little shy of
$100,000,000,000 kind of stuff.
So but this is not the originalmarket. Original market was user
to Internet access. No. Zerotrust everywhere is what we are
(47:48):
talking about. That's whycustomers are buying Zscaler.
As they embrace this cloud thisworld, the firewalls disappear
or the entire network securitysegment disappears. Sometimes
people say Zscaler is a networksecurity company. They don't get
it. We believe that youshouldn't be securing the
network. There's nothing tosecure in a network.
(48:10):
The packets are flowing. They'reflowing. But they're encrypted.
We need to secure data. Datasits with application, with
servers, with endpoints bymaking sure right party talks to
right party is what we're doing.
Now, we had one North Star forall these fifteen years. Be the
switchboard, be the exchange foreverything. And that story is
(48:31):
not done. Agenetic AI is thenext big phase of it. But with
trillions of events and signals,our customers are saying, why
are you giving it to anotherparty?
They charge me for those logsand all. You should be really
giving me more value, moreinformation out of it. So
Avalara gave us a jump start tobuild data fabric. And Red
(48:54):
Canary has very advanced agenticAI technology to do security
operation in a faster fashion.So, yes.
Now we are not only having zerotrust communication. Now we can
do all the operational part forsecurity and IT and give a
closed loop feedback. Today, ifyou discover something in Splunk
or any of the systems, it takesdays or weeks to feed it back. I
(49:19):
want to feed it back in secondsor minutes, and that's what my
customers are looking for.
Mahendra Ramsinghani (49:24):
In fact, that leads us to our last
question, Jay. You know, youtalk about integration of
systems. You talk about a visionof building data fabrics and
secure agents. Take a look intothe crystal ball. What do you
see five, ten years from today?
And also, how do you see your own legacy
shaping up in this next phase ofyour career?
Jay Chaudhry (49:45):
Yeah. If I start with related areas, today we all
know applications areeverywhere. My data center, my
application, all that is alreadyhappening. My AI model, large
language model, small languagemodel, they'll sit wherever they
need to sit. That's alreadyhappening.
The big thing we are doing atthe next level is kind of
(50:07):
changing the network. Today,network is private. It's like
having private roads connectingyour headquarters to five
cities. When national highwaysare built, you shouldn't be
building private roads.Companies still have private
networks.
They shouldn't Internet is thecyber highway. But for security
(50:28):
reasons, they kind of keep itthat way. With Zscaler, you can
use Internet as your cyberhighway. It's a matter of time.
Think of it.
Tens and tens, hundreds ofbillions of dollars are spent on
private network for enterprises.If we help those companies save
all of that money, half of thatmoney, it's going to make a big
difference. So that's one areawe are driving towards. The
(50:50):
second is security today isbeing done as network security,
securing the network. As I said,there's nothing to secure in a
network.
I see the world in not in toodistant future when firewalls
become like mainframes. Theywill still be there somewhere
sitting in some corner, but zerotrust has to happen. And AI is
(51:12):
bringing the biggest thing outthere. And I think securing your
AI model, securing communicationis offering it's it's disrupting
many, many of the players whohave done things in the past.
But AI doesn't change zero trustcommunication.
You still need to make sureright party talks to right party
(51:33):
and we play an important role.With AI, we'll have more
intelligence to figure out isthe right party talking to the
right party, what all is goingon. All this offers tremendous
opportunity for entrepreneurs aswell as businesses. I think it's
a matter of grabbing onto it andjumping on. Last word I'll leave
(51:54):
for entrepreneurs is if you'retrying to do a startup to get
rich quick, you'll bedisappointed.
We look at one example of onecompany and say, wow, that's
what happened to WhatsApp orthat's what happened to but
there are thousands of companiesthat can then do anything out
there. So just build conviction,have fun, and things will
(52:18):
happen.
Mahendra Ramsinghani (52:19):
Very well said, Jay. Here you are
approaching almost yourtwentieth year of anniversary in
2027, not too far away from it.And clearly, it's not been a get
rich quick journey for you, buta very inspiring one coming from
a very small village in HimachalPradesh to a company that is of
global scale. So we thank youfor your time. Thank you for
(52:39):
your inspiration, and wish youthe very best.
Jay Chaudhry (52:42):
Thank you for having me over.
Mahendra Ramsinghani (52:44):
It took us almost one year to lock in a
time with J. Chaudhary. Thiswould not have been possible
without the help of Raj Judge.Raj, as some of you know, has
recently joined Zscaler as EVPof corporate strategy and is on
the board of this company. Thankyou, Raj, for helping to make
(53:06):
this episode happen, and moreimportantly, helping bring out
this inspiring story.
Sid Trivedi (53:12):
Thank you for joining us inside the network.
Ross Haleliuk (53:16):
If you like this episode, please leave us a
review and share it with others.
Mahendra Ramsinghani (53:20):
If you really, really liked it and you
have some feedback for us, wrapit on a bottle of Yamazaki and
send it to me first.
Sid Trivedi (53:30):
No. Don't do that. Mahendra gets too many gifts
already. Please reach out byemail or LinkedIn.
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