A Series of Forbes Profiles of Thought Leaders Changing the Business Landscape: Chandran Sankaran, Founder, Zyme.
There is $5 trillion being sold through indirect channels of resellers, integrators and distributors every year in just the tech and industrial sectors alone, according to Zyme analysts. Some $1 trillion of that equipment sits in inventory waiting to be sold, delivered and installed.
Up until recently, most companies had very poor visibility into their indirect sales channels, creating uncertainty and inefficiencies in their product supply chain. Thirteen years ago, Chandran Sankaran set out to change that. He founded Zyme to help companies see where money is being wasted within the indirect channels and drive 20 to 30 percent efficiency in those numbers.
The Redwood Shores, C.A-based Zyme is a Channel Data Management software platform and services company that serves several of the largest tech and industrial companies in the world offering what the firm positions as an intelligent, self-learning, multi-tenant SaaS platform.
“I chose to start Zyme as a result of a problem that was expressed by a couple of former clients who are dealing with indirect selling. I asked them to describe a problem that’s keeps them awake on the revenue side of their equation. They all described a problem that I could easily connect the dots back to my i2 supply chain days, and with that Zyme was born,” says Sankaran.
Here was the problem: When companies sell directly to customers, they know who they are, how much they’ve sold them and have billing and inventory systems to manage those order. Companies selling indirectly are often blind to the transaction and the relationship with the customer.
“When you build a business with a premise of being blind, you make all sorts of expensive decisions. Massive amounts of money get spent in widely inefficient ways. Not because people are dumb, but because they can’t see. When I saw that, it was a big “aha” moment for me. It struck me as really goofy, that in a world where everyone has ERP systems and communication costs are zero, no one had taken the time to get organised for this space and solve the channel visibility problem,” says Sankaran. Zyme was built to solve that challenge.
Today, the company has 600 plus employees in India, China, the UK and North America. They deal with data from 200 plus countries, work in 52 languages with various partners all around the world and have large global clients like HP, Dell, Schneider Electric, GE and LG. Zyme’s success led to its recent acquisition by Austin, Texas-based E2open for an undisclosed amount.
While the company was created in the heart of Silicon Valley, where everything is measured in months, quarters and investment rounds, Sankaran bootstrapped the company from his own pocket and customer cash, before taking a limited amount of capital. Product success, customer loyalty and retention were essential to survive and grow.
“Based on my previous experience with the roller-coaster ride of the internet bubble, it was really important to build this company with customer money, not external capital. When we started we raised no money. I went out to one of the customers I had interviewed, and I said, ‘you described this problem. How about I solve it for you?’ I assembled a software and data analyst team, focusing on solving this one customer’s problem, and with that we built our platform,” says Sankaran.
Sankaran grew up in India with a very encouraging and creative family. “There was always continuous positive reinforcement of not accepting the status quo. I was encouraged to employ my creative impulse where I saw the gaps in the world, instead of seeing what was already there,” says Sankaran. He points to his Mother going to graduate school at the age of 40 as indicative of the family’s “can-do” spirit. She went to the Wharton School, with kids still in high school and college, though she did attend Wharton the same time as Sankaran’s brother. His father was a CPA and a finance manager in a corporation, then became a small business owner, who, along with his mother, developed a successful printing business.
Sankaran graduated from IIT Madras, one of these apex technology schools that exports many Indians to various other parts of the world. He became part of that diaspora in 1983, when he came to the US to get his graduate degree at Yale in computer science. “After graduating, I had two job offers: one was from HP in the Bay Area, and the other one was from a 300-person company at the time called Microsoft,” says Sankaran.
He took the job at HP because his family advised him to choose the company most likely to help him get a green card. After working at HP for a couple of years (and earning his green card), he went back to India to start up a company that did software development for U.S.-based companies. “This concept was far before it’s time, it was a grueling and a difficult business that didn’t really take off, but the wonderful side benefit was that I met my wife,” says Sankaran.
Four years later, he shut down that company and returned to the U.S. when he was admitted to Stanford Business School in 1990. He was about to move into the graduate student housing there when he accepted a job offer from McKinsey, where he worked as a consultant for the next six years before deciding that he needed to go back to his roots in the tech industry. He then joined supply chain software company i2 as a Vice President and ran their high-tech vertical before getting bitten by the entrepreneurial urge again.
Sankaran started Closedloop Solutions, a financial planning, forecasting and cloud based solution company in 1999. Lawson Software then acquired the company in 2004. “After Closedloop, I had no real sense of what I was going to do next. I was looking at a completely blank slate for the first time in a while. I really didn’t think I was going to do another start up, but then I got the idea for Zyme,” says Sankaran
“Even with all the effort that goes into building a company, I’ve always pursued other interests in my life. I play music at cafes and bars around the Bay Area. I play the guitar and sing, playing covers from the 1950s to contemporary, and I’ve been associated with a couple of theater companies. The arts have been always very important in my life. My wife is a painter, my sister is a successful published author, my brother is a wonderful pianist, and my mother painted and sculpted, my father had a lovely singing voice. For me, entrepreneurship is a creative impulse, not a business impulse. ”
Bruce H. Rogers is the co-author of the recently published book Profitable Brilliance: How Professional Service Firms Become Thought Leaders