The Zoho Crisis; What can other other startups learn from this?


The Zoho Crisis; What can other other startups learn from this?

So Zoho was in a bit of serious shit last evening. The domain was blocked and it hurt not just Zoho, but Zoho’s customers too..who collectively lost a good chunk of money as none of the systems were working.

First: the backstory.

And the customers? Well, they were losing money.

Was it completely Zoho’s fault? Well, they did receive spam alert reports from the registrar, but didn’t act on it.

Lessons startups can learn from this Zoho crisis?

A lot of back-end decisions taken in the early days of your business tend to continue as changing them makes no business sense.

Your Infrastructure

In this case, Zoho (which does $350mn ARR) could have changed its domain registrar long time back (and moved to a better registrar with much better customer support) – but then, such decisions mostly take a back seat as there is no valid business case for it.

The bigger question is: post this chaos – will customers trust Zoho? Will customers continue to stick with the company (so far, there isn’t a single email from Zoho regarding this issue to its current customer base*) ?

Given that Zoho is seen as a full business suite, there are many SMEs who are fully dependent on the system for their business,  Zoho definitely needs to own the mistake (and not point fingers at their domain registrar/other entities).

While the CEO, Sridhar Vembu is actively sharing the details (which is totally awesome) on twitter/other forums, what are other teams doing? You visit the homepage and there isn’t a single mention of the issue (and the fix going forward)**.

Your vendors pretty much define the strength of your business.

One bad decision and the business is seen in a bad light. But then, actions gotta speak equally louder as words and frankly, I am not sure if Zoho has actually lived up to this.

If you are a business which is now figuring out scale, maybe a good idea to list down all those ‘cheap’ decisions you took at infrastructure level and put a roadmap to fix them?

Go checkout all the major single point of failure and list them all. And fix before it’s too late.

And maybe, have an emergency communication team process already setup, especially when you are dealing with serious money?


*We are a Zoho customer.

(Pic credit)

**: Here is the official response from Zoho.

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