Born and raised in a tiny village in the foothill of the Himalayas in northern India.
Electricity after I finished my 8th grade.
And water after 10th grade.
The teacher would send some students to go to the village well and fetch water, so the rest of the students could drink for the rest of the day.
You look at those things and say, man.
Welcome to The Logan Bartlett Show.
On this episode.
What you're going to hear is a conversation I had with founder and CEO of Zscaler, Jay Chaudry.
Jay and I talked about a number of different things, including building Zscaler into a 30 billion business and the opportunity he took to build a disruptive technology company, capturing the trends of the move to the cloud and going all in on that.
Customers are good to validate when you're building incremental stuff.
When you're building disruptive stuff, you shouldn't talk to your customers, because you are really changing everything.
We also talked about Jay's initial founding of his first company, which included him putting his entire life savings and him and his wife quitting their jobs to start the business, which ultimately proved really successful and allowed him to self-fund Zscaler for a number of years.
We also talk about the value of family and how Jay has been able to keep his kids grounded despite his immense success with Zscaler, as well as his prior endeavors.
You'll hear that conversation with Jay now.
Well, thanks for doing this.
Thank you.
Yeah.
San Jose.
These are HQ for Zscaler here as we sit.
So how many people are local to California for you?
In this office, somewhere in the 600 to 700 people.
And total employees is?
7,500 to 8,000, somewhere there.
Yeah, depending on the day, depending on...
Well, normally I don't like to, I'll jump around a little bit, but I think your background and story is so interesting.
So this is your fourth, company fifth fifth company excuse me uh and uh maybe give for a little bit of background for people maybe give quick snapshot of of upbringing and i think it's it's an impressive story of coming to the united states well it's a story of america you know it's it's wonderful um Only in this country, you can do whatever you want to do.
And that's true.
I wonder sometime about my life, born and raised in a tiny village in the foothill of the Himalayas in Northern India.
I reflect on it.
Electricity after I finished my eighth grade and water after 10th grade.
So eighth grade electricity, 10th grade water, and you got your camera.
The first time a camera came around was when
First picture?
Oh, high school group picture.
I mean, it's like a crazy like to be here now starting a 30 billion plus technology company and that to be your child.
It's kind of crazy.
It's unbelievable.
I look back.
My sister and I will fight over who is going to clean the kerosene lamp, because we would study that.
In that lamp.
In school at the start of the day the teacher would send some students to go to the village well and fetch water, so the rest of the students could drink for the rest of the day.
You look at those things.
I'm sure your kids feel like walking uphill both ways.
You know in the snow sort of the old adage of parents telling their kids how hard they had it.
But you've had to walk a fair ways to get to school actually.
Yeah, yeah.
And my kids have been back.
I take them to prove, like, no, these aren't just dad's adages.
But also to kind of help them appreciate life, what it takes, because America sometimes seems like a bubble.
And your first flight was to the US?
Flight was US.
And what year was that?
1980, when I did my bachelor's in IIT-BHU and came here to do my master's.
And what was the draw of coming to the States?
Was it just education?
Yeah, IITs are some of the best schools in India.
And somehow everyone thought that the best place to get master's degree in engineering was America.
So actually probably more than half of IIT students will come to America to do master's.
And that's what I wanted to do as well.
So take me from there to, I guess, starting your first business.
Yeah.
You know, a lot of these things that happened to me was not part of the plan, because I didn't even know IITs existed.
I just stumbled across them.
I didn't know that I could be a great engineer, just that I heard that medical and engineering are two great professions.
Since I didn't want to deal with blood, engineering was a good thing.
And even picking up the discipline of engineering was kind of accidental.
They asked me to fill, which choice do you want?
And I looked at the list and said electronics engineering sounds cool because electronics have to deal with television and radar type of stuff.
But once I got to my IIT, then I knew a lot because it was the best of best students.
So I probably had a bigger shock to come from my village to IIT in India than coming from IIT to the US.
So I came here for a typical thing.
Let's go and do masters in the US.
And once I did that at University of Cincinnati And I selected them because they offered me a tuition scholarship.
Without that, there's no way I could do anything.
And I started doing software development just like most of the Indian students would do.
And it's funny how I moved to the business world.
Once I graduated, This company where I had done summer internship, they offered me a job.
It was a very small software startup.
And I wrote these software systems.
And one day our sales engineer called in sick.
And my boss said, you wrote the software, why can't you do a demo?
I never done a demo to a customer.
I never talked to a customer so well, opportunity presented and i did a good demo and as i drove home that night i said wow, that was a lot more fun than writing code all day long.
There was the spark and say should i change my career and move into sales and marketing?
And I thought about it.
I felt better.
I read a little bit more about sales, marketing, customers for the first time in my life.
The pull was there.
And then I called IBM office in Cincinnati itself.
And they said, oh, you come from engineering background.
You're competing with HP and digital equipment.
So we need people with technical background.
They hired me in sales.
So perhaps if I had not gone from engineering to IBM, I may not have started any of these companies.
IBM was the best sales training.
Having done that, I moved to marketing at NCR because I realized at IBM that I had a flair for creating good message, good presentation, and I would do it for my customers.
Then other sales reps from IBM will say, could you present this to my customers?
And I say, huh.
I started having fun creating message, refining the message.
And that's why I went to NCR.
There was good learning ground, international marketing and the like.
Went to NCR.
There was a bigger jump where I ran sales and marketing for the software products division.
So it was good exploration for a large company.
And that took you to Atlanta?
No.
Headquarters was Philadelphia Blue Bell, right outside Philadelphia.
So that was there.
And that's where I saw bigger companies, but I also saw that at a VP level, some of these large companies are so internally focused.
And I was always focused on customers, customers.
And then I came across the CEO of this small company called IQ Software in Atlanta, who liked my ideas and sessions and worked on me for six months to have me quit Unisys and join his company as the number two man in Atlanta.
So now I had a broader exposure beyond sales and marketing, some of the other areas.
And I worked there for a couple of years.
This was 94, 5 timeframe.
Yeah, I joined them probably in late 93, early 94.
And company did quite well, actually.
Even outside Silicon Valley, I joined that company at $10 per share.
And when I quit after two years, it was $22 per share.
So some of the savings, of that company actually helped me start my companies.
But that's where I got into startup literally by accident.
And I guess, as you look back, I mean, it's such a crazy journey from the electricity and the water to IIT, to Cincinnati.
And as you paint the story, it sounds elements of of luck and i'm sure if you i'm sure you're being modest in that, but as you reflect on it are there.
Are there lessons that you would impart to people that are listening and thinking about their career, or how to create the opportunity for luck, things that you feel like you did uniquely well?
So the biggest thing I had was I love to learn and read.
So I was good in figuring things out, reading, figuring out.
For example, in IBM, funny story, I joined sales.
I thought sales will be easy.
You talk to customers, I realized that sales isn't easy.
Getting those purchase orders.
Selling takes a lot more.
So I want to, I was competitive all along.
I want to get ahead.
I want to be number one.
That desire somehow was there all the time.
And I also realized that you don't get ahead unless you work hard.
That was somehow instilled in me.
In IBM, I found that in sales, man, I was struggling for some time.
And other salespeople who were born and raised here.
They had lots of buddies drinking beer buddies and watching football games and baseball.
I wasn't into those things.
And I felt, how do I get ahead?
So I talked to him and I said if I am good technically at solutions, I start spending my Saturdays for three, four hours every Saturday to learn everything about IBM solution.
In six months, I knew IBM solutions better than most of the people in my office.
So it is a lot of work, but I really loved being out there learning, figuring out.
Then opportunities presented themselves.
Then I essentially jumped on them with both feet. to make sure I take.
And there's an element of, I guess, I mean, going all in in that, right?
If you're going to do it, I'm going to learn the solution all the way to its end and state and all of that.
I mean that brings to your first venture as well.
Quite literally went all in on that.
Maybe for people that don't know.
Can you tell the story of the original financing?
Yeah, so far I was on a corporate path in this company, IQ Software, a small public company, but I was number two man doing pretty well.
But I love to read everything.
And I was reading about intranet, the world where web had just evolved, and reading about Netscape, Mark and Reason, and Mozilla browser.
The more I read about it, the more I fell in love with it.
The logic was wow.
For the first time you could access information without having a special software on your PC, just a browser.
So again, this is your logical thinking without a lot of IDC or Gartner data behind it.
If it is so easy to access information in this model, this technology should take off.
If it does, then every company will start setting up their websites.
Then they'll start connecting to the internet, which is like a cyber highway.
That means bad guys can also start coming in.
That means cybersecurity should become an important area.
So that's what took me the line of cybersecurity.
I had no background in cybersecurity before.
It's an interesting framework of how to think that through, where I think eventually we'll get to your existing very successful business.
But you kind of took something and extended it to its fullest.
And then what are the derivative considerations that hang off of that?
Because I guess in technology, as you know far better than I just doing the incremental thing, competitors are going to copy or be able to keep up.
And so you almost need to go all in to the end state.
And maybe in a different area.
It may be in a different area.
Right.
Where the big guys aren't.
Yes.
Lots of companies want to build web servers and all that kind of stuff.
Because that was one derivative.
Okay, the internet's going to happen.
Let's build the websites.
And a lot of people were going into it.
Exactly.
I think technology that's main mainstream, if every big guy is coming in, you have a hard time.
But if you start in a given area, that's a little bit different.
Establish yourself and there's enough runway for you to become big and there's disruptive technology, you have a far better shot of being successful.
Too many entrepreneurs like to say, I have better technology, but it's incrementally better.
If it's incrementally 10, 20, 30% better.
No, they're gonna come and catch up with you.
So this is where I think I have been looking for disruptive trends all along.
And to me, disruptive is disruptive technology.
I'll give you examples, right?
Secure IT was probably the first pure place security services company.
Which is your first business?
My first business.
Before that, this used to be services company.
I'll do a little network here, this here, this here.
I honed on and said if cyber is a big issue could be a big issue.
Let's do nothing but become the heart surgeons of cybersecurity services deployment.
How do you design, architect, sell, deploy, and support firewalls? was the starting point.
And the VCs were exactly clamoring to back you in Atlanta.
So you had to put in basically your entire life savings, right?
So a lot of credit goes to your wife for participating in this endeavor.
Without her, it won't get happened.
Yes.
In fact, she also quit her job.
So you guys are literally all in, life savings, both employments.
And it was logical because if Shannon quit her job, I would have hired someone for finance and all this stuff.
Sure.
Hiring her, we didn't have to spend money.
So it worked, but the goal was there wasn't much expertise out there.
I talked to Check Point Software at that time.
In 96, Check Point Software had done, if I recall it right, about $25 million total in sales.
And so then I went in as a partner with them. to deploy firewalls, all that kind of stuff out there.
And our business took off because we're so focused in this area.
And the other lesson I think people can learn is there were half a dozen firewall companies.
And other guys will come and say, Mr. Customer, which firewall do you like?
I carry all of them.
And I would go in and say, we have looked at all.
This is the best firewall, and we are the best in deploying it.
We know it better than anybody else. and work with us.
And since we did that, Check Point will send all the leads to us, because Check Point knew that this company was only focused around it.
So having some level of focus, tight partnerships.
That's interesting.
I've heard phrasing that like startups, you need a force a choice and not a comparison.
If you're comparing things, it's too incremental.
You need to have someone make an independent decision on something.
And so you got to be the best at doing that thing if people didn't want to do it.
Yeah.
Funny story.
One day, this was, I think, Home Depot in Atlanta.
I was offering some of the services.
We were doing deployment, pen tests and the like.
And we were charging at that time over $2,000 per day.
And this guy said, hey, even IBM doesn't charge that.
They are worth $1,000 a day.
And I said, look, If you want a heart specialist, you come to us.
If you want a journalist, you go to IBM.
It's a choice.
That's what we do.
It's forcing the decision.
So I think those decisions are important.
And I always try not to do incremental technology.
So I want to skip ahead to Zscaler here in a second, but I guess I'd be remiss.
You had exit options along the way for Secure IT.
At one point someone came to you and I read the story and they were maybe a little arrogant in how they presented the option.
Yes.
Yes, he said, if you don't sell me, we'll wipe you out.
And that didn't happen.
It was tough.
It was a tough decision.
Now, sure, I mean, I like to say I don't have a lot of attachment to money.
And I really don't.
And luckily, my wife doesn't either.
So we just happened to coming from that mindset okay.
But then someone said hey, here's an offer, take it or leave it, and i don't know any bankers, anybody out there, to figure out what to do, and when i kind of depended on my gut, a lot of decisions got made.
And sometimes, I think, the good decisions.
You need only certain amount of information.
Too many people.
The deeper you go, the more analysis paralysis you go.
The more you slow down this, this.
You need some amount of information.
Then you make a call, you move forward with it.
You may have to course correct.
And what was that framework at that moment in time?
That did you just feel hey this, I mean minus guy, kind of being a jerk, but like did you just feel that there was more to be had and there would be a fairer value in the future?
Or was it simply his attitude to you?
I was having fun building.
I was having fun.
I wasn't thinking about selling at all.
And then if someone asks and they are really arrogant and like this, so obviously you have no intentions and someone is arrogant, you walk away.
And then ultimately, when you decided to sell what was like the considerate, did you stop having fun or did
No, we were doing actually very well.
We literally, had gone from 5 million to 16 million.
First year was $5 million with 20% pre-tax profits.
And then it was moving very well.
So then a sale happened to VeriSign.
The CEO there was a great gentleman.
He actually talked, called me a few times and I said, no.
And one day I had a call.
He said hey, you're saying no, but don't you think we should sit and talk and then you should say no?
Pretty logical.
So then I sat down and talked and his logic was, so you're Trying to build a bigger company?
Yes.
You'll go public?
Yes.
He said, why don't you go public through me?
I just went public.
And they had.
And there'll be pooling of interest.
You have all the shares in this company.
And you run it as a service business.
He used, this was Stratton, Sclafos.
He was a great guy.
And so we did the deal.
It was a good thing, actually, because I turned on all the other companies out there who would call.
And Verizon's deal was done at $26 per share.
And I know approximately when I left, but it's about 15, 18 months.
It was 256 after two splits.
So, I mean, my employees had 20% of the equity.
I had the remaining, there's no outsiders.
And it was like, wow.
You made a lot of millionaires.
Lots of millionaires, 70 or maybe more. looked at the spreadsheet.
There was a going away party they gave to me when I left.
And they published these t-shirts.
It's so kind of emotional for me too.
The t-shirt said, thank you for securing our future.
That's great.
That's super cool.
Yeah.
I went home that night.
I looked at the spreadsheet of options they had multiplied by the stock price, but 70 of the 80 employees had their options over a million dollars, kind of stuff.
It was extremely, extremely satisfying.
I'm sure that was extremely gratifying.
So skip ahead.
So you had three other businesses you started after that, maybe all at once or within a short period of time.
Staggered.
Staggered.
And good success along the way.
But then I guess I'm curious when you get to Zscaler, going all in on uh a technology, i heard that mark benioff was an inspiration and you wanted to build something that was that was super enduring, and so i i guess i'm curious how did you land on the idea of what zscalers become and you also picked up and you moved uh the business here.
So can you take me through the yeah, how you thought about what your next act was gonna be?
So just a little summary, the three companies happened because I made so much money.
I thought I can only put so much in one company.
Let's do multiples and stagger them and thinking that the young will need more time, the others will need less time, like kids.
But that's not true in business.
So I realized that there's a lot of work needed and you can't just say this is go hire a CEO, this will run on its own.
So even though all three worked out quite well it's wonderful I did realize that it's not a good thing to do multiple projects.
So when I came to Zscaler, I said, I won't do anything else, not even invest, nothing, no boards.
I want to put 200% focus in Zscaler.
So it was the opposite of doing multiple.
Now, a starting idea was pretty simple.
I thought about it over actually a fair amount of time.
It wasn't that one day suddenly the idea clicked.
I was in cybersecurity.
I was in intranet all along.
I was so familiar with what's intranet.
I was familiar with the risks of intranet and all that kind of stuff.
The idea this time was, how do you build something that's lasting long?
So I want to pick a bigger thing.
Previously, I was looking for narrow and deep.
Here, I want to go wide.
Which narrow and deep and cyber is a decent way of selling companies.
A lot of businesses sell for 200 million bucks these days.
It's good to be narrow and deep.
The chances of success with narrow and deep go higher.
Yeah.
You have fewer competitors.
Don't raise a lot of money.
There's a lot of good buyers out there.
And that's essentially what I did my previous company.
This I want to change because there's no fun in doing it one more time the same way.
Yeah.
So what was the?
I mean, I'm curious the motivation itself.
Was it building something that lasted and went public?
Yeah.
Climbing a next big, big mountain. to something like Salesforce.
So my first slide was, can we build the Salesforce of cloud security?
So it was security focused.
And the Salesforce of cloud security in your mind was something that endured and encompassed a bunch of different considerations.
Salesforce was successful.
It had done quite well.
It would go into new space.
It wasn't trying to do Siebel better.
It was disrupted cloud native multi-tenant technology.
So when I looked at it, I said so.
The notion was if application moved to cloud, because even in 2007 8, when I was working on it, internet was the biggest source of applications.
I have been using Salesforce and NetSuite since year 2001, when each of them was under 10 million in annual sales.
So I loved SaaS.
I believe that more and more applications will become SaaS.
And in 2007, AWS had just launched this compute and storage as a service.
And Apple had announced their iPhone.
So I could see mobility and applications all over.
The simple notion was any new technology starts.
It starts as a cottage industry and eventually it has to become as a professionally managed service.
In my simple mind, compute as a service, just like water as a service, electricity as a service.
It should be done that way.
I looked at it and said, this trend will take some time, but it has to go that way.
And getting inspiration from Salesforce, what they had done, why shouldn't security be sold as a service?
Applications are everywhere.
We are everywhere.
So two notions we reimagined.
One was, why should we build private networks when internet is evolving.
It's almost like why would you build private roads as a big, large company when nation has already built highways?
So in my world, I want to make sure internet is your corporate network.
Two was if applications are everywhere, users are everywhere.
Where are you going to put your firewalls?
Where is the moat?
None.
So we're going to think outside.
We won't build a firewall.
Everyone's untrusted.
We are an exchange, a switchboard, a policy engine connecting things to things, people that don't.
Traditionally you sort of had the concept of a, of a moat what's inside the castle is secure and what's outside the castle is bad.
Now we're moving to a world of you know.
Everything could be good, could be bad.
Your employees are down the street, they're in india, they're in atlanta, whatever it is, and you don't.
What do you do in the world where you're not sure what to trust?
And applications are out there.
Salesforce is not in your data center.
So everything is untrusted.
We became the policy engine that says I will connect user A to application B after I check identity and a few other policy constraints.
That was really literally outside the box thinking.
And for that, since the notion was I want to do something big and I'll put whatever amount of money it takes and we'll focus on innovating new technologies.
And I found this great team that had built Netscaler load balancer.
This team knew how to handle packets at high speed, sitting in line figuring out what needs to be done.
And that's what actually brought me here.
If the core team is here, I need to be here as well.
I mean even going back to the secure IT days.
It's a similar thing of taking something to its conclusion and assuming what it could be if this is the path that it's on.
I find this in the venture world a fair amount of like.
Some of the best investments we make are tiny markets.
They just happen to be tiny markets that are on the path of being huge markets.
Facebook was Harvard's little social network and then it just happened to be something that extended along the way and i think you you need to really build conviction around those things i mean one of the thing i do is i do fair amount of color research but not library research reading articles But Zscaler, before I started the company, I actually met with scores and scores of customers sharing the ideas.
And most of them said, not really.
Just because it was so fundamentally different.
Fundamentally different, yeah.
They all agreed they need to do this.
They won't agree that it needs to be done in the cloud.
Would I let my security go to the cloud?
So most of the validation was negative.
But the notion that things should become a utility service felt so powerful.
And I said, if we really build a serious technology, It should happen.
I was ready to really make this big bet.
And presumably you found some people that validated the idea.
Was it that they were so effusive in their validation that you knew other people would come along?
Or you knew you could build a big enough business around the people that really believed it and inevitably some other people would join you?
One or two out of 10 would say it's a good or reasonable idea.
But I felt like the customers are good to validate.
When you're building incremental stuff, when you're building disruptive stuff, you shouldn't talk to your customer because you are really changing everything for them.
So that's really the notion I went in with.
If I had been going the notion that customer validation is happening, then I wouldn't have done this business, because then the number is just not supporting it.
It's a profound perspective.
I think that almost all the super disruptive technologies probably have some element of that.
I also imagine the businesses we've never heard of that burned out have some element of that too.
Sure.
Which one you're on, only time will tell.
Everything is not a success.
As you know, the startup, the other thing I thought about is first mood advantage is very helpful.
But if you're too early, you starve.
So many first mover, potential first mover fail.
You never start on the exact right day.
Exactly.
And, but if you are late, you're late and catching, it becomes hard.
Which were you?
So for almost everything I'd done, It's essentially first mover.
He's gonna maybe a couple of years sooner, but not a whole lot sooner than that.
Yeah, so you were maybe a little too early to it, but you survived through that.
A couple of years, but I think we'd end a tight business.
We did not kind of say, I raised $50 million, $100 million from this VC firm.
Let's go and burn it.
I think sometimes, when money becomes easy and companies raise too much money, the discipline just disappears.
It's not a good thing, even if you want to save it.
Everyone in your team says, man, the $200 million sitting.
Let's go.
And you can't go faster sometimes.
There's a level where you can go fast.
Beyond that, you're actually burning money and you're not really getting some ROI.
So those factors have to be kept.
Yeah, there's only so much you can will the market. to move faster than it naturally is.
And so there's like a requisite of survival that comes.
If you're too early, your job is to survive until the market ultimately gets there.
And there are a lot of perverse incentives with venture capital.
And once you start viewing it as a validating factor of your progress, employees start thinking the same thing.
How long, so you started at 07-08 and then your first outside capital, when did Lightspeed invest?
So that was an interesting investment because I had no plan to take any money, because The notion was what I'm doing is fairly crazy.
And I can do that better with my own money by taking risk by being crazy than someone else's money.
That's clearly how I believe.
I think Lightspeed and EMC came by accident.
I wasn't looking.
In fact, Ravi from Lightspeed had talked to me several times.
But EMC, NSA security CEO was after me to put some money in.
I kept on saying, no, no, no.
Finally he had Pat Gelsinger who was kind of head of ventures at EMC.
Talk to me and also I think they put what?
Some 25 million.
Those two invested.
So that was 13, 14? something maybe 12 or 13.
And at that time I was trying to have them go away by telling them no.
And they wanted me to name the price and I named very high and they still came in.
So the deal got done with EMC, but I didn't want just one institutional company to be the investor, kind of looks like.
EMC company, I wanted another independent party.
So I called Ravi, Lightspeed, and say, here's an opportunity to put in a few million dollars.
Oh, got it, interesting.
And then ultimately you raised more along the- For getting ready for IPO.
Getting ready for IPO.
How did you, as you reflect on, I guess, what you did differently across your from your fifth venture back to your first?
Obviously your ambition changed in what you're going after, but are there other ways you felt like you really evolved as a leader or things that you did different beyond, like the size of the pie maybe you're pursuing?
Of course, many, many changes.
Any that stand out most notably?
First, it was to start thinking bigger, being able to make bigger investments in R&D.
I mean, I put somewhere about 50 million into this company without even worrying about who to go, because I just was fully in.
Sales teams, for example.
When I felt good about we're ready, I was the first sales guy.
Manoj Aptia, head of products, was my SC.
We would do all the selling.
I believe that if every CEO should go and sell the first number of deals, if they can't sell off your product management leaders can't sell, they shouldn't be in the business.
And what do you think?
Is that?
Just how much of that is making sure you understand the nuances of the product in the early days versus.
You are the biggest evangelist, and so if you can't communicate it, no one else can.
Yeah, second part is probably more important.
So when a higher product manages that C-scale Say for your product, you got to sell the first 5 million, 10 million and five, 10 customers.
If you can't, you have no right to tell the field to sell.
You should be able to do that.
So that's kind of standard practice at Seaskiller.
But the things I did differently, I hired about, 30-person sales team in one shot.
Wow.
At C-scale, okay.
Pretty global team.
We had done a handful of deals in the US and validated the stuff.
And we went big.
And half of the team was outside the US.
So it worked well.
Actually, it took my business to half international, half U.S. pretty quickly.
That was a good lesson learned.
It's a little bit bold move.
And you've been a solo founder-ish.
I mean, your wife has been involved intimately.
Yeah, the brilliant guy is Kalash. who was the chief architect.
He was at Netscaler.
He was Netscaler.
He was the technical, technical brain behind.
What helps me is being an engineer who has done software development.
I'm technical enough to figure out the areas that I need to do.
If I had not come from engineering background, I couldn't really do what I've done before.
And if I had been an engineer and hadn't been exposed to sales at IBM of the world, I probably wouldn't have taken a chance.
That experience, which kind of wasn't part of the plan, it just evolved, has been very helpful.
But you do need brilliant people.
I had a great team, the first 10 people we hired, they all came from Netscaler.
About half of them in India, half of them here.
And that was a brilliant team.
And most of them are still with us here.
As you now hearing the Z-Sailor story, you were fairly visionary or forward thinking about where things were going.
At some point, I assume, you've started taking more feedback from the customers around different products and areas to go into?
When did that shift happen?
And I guess, how do you balance today that visionary element of where you think the world can go with the practical element of X customers calling you up for Y thing?
So you do both.
For example, at Zscaler, the first product was how do you access internet and SaaS applications securely?
And that was the platform replacing the entire internet gateway.
That was a big, big undertaking.
And mostly focused on the IS.
Were you selling to ISVs or were you selling to the- Enterprises all along enterprise business?
And that's my training for IBM.
I always like enterprises.
SMB gets a little tricky enterprise level sale.
Then we want to make sure customers can access internal applications in your data center, AWS and wherever else.
So for that we pioneered this Zero Trust private access technology, totally disrupted, nothing to do with anything in the world.
So that was a disruptive move.
On internet access, we kept on evolving and taking feedback from customers.
Because once you set it up, customer says, you got this, give me this, give me this.
So you're rounding out the product.
But the second product came as private access and that got rounded out.
That's really the foundation of zero trust has evolved and done amazingly well.
Everyone is trying to copy C-Skill private access, but now it's evolving.
Big idea, evolution, we had to evangelize it for quite some time.
Then you're the next level.
There are many innovations in then taking the same technology from users to applications, to workload to workload communications.
Workloads assemble like users.
They talk to internet, they talk to each other.
Why shouldn't they talk through our zero trust switchboard technology?
Then taking the same idea to IoT communications.
How should they talk?
Where do they talk?
We have taken the same core technology, taken it to multiple markets.
It's pretty exciting.
So we are combining both incremental improvements and some of the disruptive, but you don't do disruptive every day.
X years, you have disruptive ideas, then you go to the next.
I guess as we sit here, it's 2025, and there's this artificial intelligence thing that's going on.
Obviously, implications for every single business.
I would assume it's making the ability to proliferate new types of attacks and all that pretty meaningful.
So maybe you speak a little bit about for people that aren't in the weeds of security what's going on and what does that mean for Z-scale edge business.
So AI is amazing.
I mean, it can do wonders for you. for goodness, for badness.
Now, what's badness?
You can say chat GPT tell me all the firewalls and VPNs of this company that have security vulnerabilities and give it to me in a tabular format.
Now, JetGP is trying to put some inhibitors so they don't answer a specific company query.
But you can break the answer in three questions and you get it.
It's so easy to find the attack surface to attack companies.
Things that were taken weeks, not done in seconds.
So it's dangerous stuff.
Once, for example, you get into the company through VPN.
Now the chat GPT, these GenAI technologies can help you find some of the critical applications.
Automation for sake of doing damage.
So it's dangerous, but it's also very powerful.
It can allow you to do things you couldn't do before.
Now for that.
We are very excited because think of it 45 of the Fortune environment companies have the traffic go through Cisco.
We are the communication hub like an international airport.
There's some 50 million users who go to a cloud every day.
They generate over 500 billion transactions.
Every time you go to Salesforce email, Google, whatever, 500 billion, right?
Now those communication logs also have reconnaissance activity going on.
Imagine being able to feed these large language models with all that private data.
It's high quality data, it's vast quantity I should be able to answer, get any kind of questions about risks this, that these kill chains, attack chains and all that kind of stuff.
Those are some big projects we are working on.
And I think we are in a very good position because of the data.
Now, if I can find all that stuff, I can feed that information back to my exchange, to real-time loop, to give you far better security.
Those are some big, big opportunities.
Do you think the net benefits of AI to companies like yourself able to do some of the things you just outlined versus the net benefit to attackers and their ability to proliferate?
Do you think in five years time we're talking about more hacks because the hackers are now enabled through all this, or are we talking about more protection because companies like yourself are able to leverage it?
I think that so many smart companies like Zscaler who actually can do far better with AI.
The problem is not that hackers are smarter or they're better.
But there's a problem.
The problem is inertia with large enterprises.
Hackers have no inertia.
I see so many companies, everything takes longer.
They need to move a lot faster.
If they do, we'll be in better shape.
That's one.
The second part is I think the reason we are all getting attacked is because the foundation of security is you get on the network, you're inside the castle.
Once you're in, Lots of damage get done.
We got to move to zero trust architecture, which means you're not on any network.
You're always untrusted.
You are connected to a given application with the least privilege, nothing more than that.
Unfortunately, This world, all these enterprises are spending, have spent so much money on firewalls and VPN.
They are no longer able to keep up.
Talking about Castle and Mort.
They were very good when you only had armies with arrows and whatever.
Once cannons got invented, Air Force got invented, you can't do these castles and moats.
Too much money is getting spent.
I see so many customers, they got breached.
Purse opens up.
They have 500 firewalls.
They buy another 500 to do what?
Create another moat, another moat, another moat.
I think the world has to move.
Inertia needs to be taken over.
Technology is hard, but inertia is harder.
Human beings, job security, all that stuff is what we are finding.
My number one challenge to sell is not competing against other competitors.
It is inertia mindset change.
And for people that maybe aren't as deep in this field, I mean the analogy, I guess, of zero trust.
I'll use this building.
Once I got checked into this building, Theoretically, I could go walk around and do whatever I want.
Okay, Logan got into the building.
He's fine.
Let's go let him do whatever I want.
Your building rightfully has different doors that I can go into.
There's zero trust assumption that I am a good actor, so let's make sure Logan's gated.
You'll be escorted to a given role.
Yes, and there'll be cameras up around and all that.
Escorted back.
Let's assume that Logan's a bad actor probably a safe assumption.
But it's the world that you know who knows right.
All these things could be happening.
That's what we pioneered.
Now the challenge is when new technology comes and incumbents are threatened.
They all incorporate that wording.
So lots of customers are confused.
They think that somebody is spinning up firewalls in the cloud and VPN in the cloud.
It is a zero trust thing.
Unfortunately, it's a false sense of security.
And we have to educate our customers in this area.
Security is an interesting market in general to me.
And I'm fortunate enough to be an investor in a handful of cybersecurity companies that are doing well.
But at times, it can be difficult to assess efficacy of it.
And in some ways, you're buying some element of security, like mental security, where it's hey well, I think my partner told me this.
My friend told me this.
And he's a CISO at a big company.
And therefore I should trust it.
I'm sympathetic to the job most.
Most jobs are um, you either need to adopt innovative technology, but you can't get fired for it, or you don't need to adopt it uh, but you can't.
You don't need to be early adopter, but you can get fired for it.
Security's sort of this weird box, and so it's hard to make these decisions.
I guess how would you counsel people that are trying to think through their security posture?
The biggest advice I give customers is technology incrementally changes all the time, but you need to look at some of the disrupted technology to get some benefits out of it.
And when you look at it, you're going to face natural inertia.
Inertia is less at the sea level.
The lower you go down in the organization and the bigger the change, the bigger the discomfort.
So actually we work with CIOs and CISOs.
They try to find change catalyst people who are actually forward thinkers and get them on board.
And the rest of the team gets on board, because in large enterprises You just can't say this is being done.
So bringing mindset change, cultural change, is part of the job that successful CIOs and CISOs do.
So I'm curious.
Zscaler has been around now 16 years.
At different points in time, I'm sure you felt like the pure disruptor in totality, versus needing your company not to feel complacent about the position and hey, we still need to keep going after all this stuff.
I'm curious as you reflect on Descaler and its own journey and trying to change culture at different points in time or evolve the culture.
I'm curious how you've been able to communicate, being a change agent within the org or effectively made people want to attack a different hill, or something like that.
I mean, the bigger you become, the harder the job becomes.
Sure.
So the biggest thing I try to do is, when we are hiring leaders in the next level, to make sure these people have the passion and fire and desire to do something.
So when I look for hiring people, irrespective of what the job is, I look for three things at the highest level.
Number one, do they have passion and fire and desire to do something to make a difference?
They're not just looking for a job.
Because once people have that, they actually make things happen.
Number two people who are sharp, quick study, curious to learn because things are changing all the time.
Whatever you knew till last year is okay, but if you aren't curious and quick study, you're gonna fall behind.
So that's number two.
The number three people who are willing to adapt change, try new things, fail and pick up and change and move on.
If you have made no mistake, you're playing too safe.
And you're playing too safe, you're never going to get anywhere out there.
So we encourage people to take risks.
These are the kind of things we try to do.
And if I have my direct leadership aligned to have full conviction area and we do the next level and the next level, Hopefully things carry on.
So there's the passion, there's the curiosity, and then the risk-seeking ability to change evolve, all of that.
Does that tie?
I assume your interview process or the questions you ask are some derivative questions of that.
Do those then tie to the cultural values of the organization in some way or is that?
Absolutely.
So for most of the leadership roles at director levels and higher up, Brandon Castle, who is our head of HR, and I are largely looking for these attributes.
I don't need to interview someone, how good are you in sales or engineering?
But we are looking for these kind of stuff, the cultural fit.
We're very proud of our culture, right?
We are all about teamwork, open communication, innovation, passion, as well as customer obsession.
Customer obsession is one of the key things.
It makes it so wonderful when a customer says, see Scalar.
You have changed and done so much for us.
Our customers are proud of the amount of Money they save by disrupting all these old products, the cyber posture and business agility and productivity.
We are viewed as a more mission critical application than even Office 365 and the like, because everything works through us.
So it's a big responsibility and we take it seriously.
We have the maturity and experience to handle the biggest of the biggest companies out there, but we work hard to make it happen.
So you guys went public in 2018.
And as we were talking before, the stock's done quite well since the IPO.
There's been an element of reticence I would say certain Silicon Valley or technology companies to go public.
And obviously the market's been a little murky over the last couple of years.
I'm curious do you feel that being in the public markets has made Zscaler a better business in certain ways?
Or is it just something that you guys, it was just the next step along the journey?
So I have run the business the same way post-IPO and pre-IPO.
We are always prudent.
We want to invest in technology and go to market.
We want to minimize our overhead investment.
Overhead means other areas, administration, finance, all that kind of stuff.
Having done that, we had the freedom to keep on investing.
So nothing has changed in the area.
What has changed?
The biggest surprise to me was the brand actually went up significantly.
A lot of these large companies.
They actually wanted to know that you are a public company and we know your numbers and everything.
It has been good.
I think, companies.
It's good to go public, but obviously you need to make sure your products and technology are ready.
You need to deliver consistent results.
I know you're not motivated by the money element of all this and you've continued to go all in on each venture.
Zscaler's been personally lucrative for you and your wife and family.
I'm curious.
You don't need to keep doing this.
I don't think financially.
I think you could retire and hang up somewhere.
What keeps you motivated today and enjoying the job that is running a 30 billion 8000 person organization.
Well, to me, your life is very precious and life is made of time.
And if you want to really make something of life, you don't waste your time.
You do something to make a difference in the world.
Zscaler for me is not a business, it's a mission.
I mean, think of it, the whole world runs online, interconnected.
The feeling that United Airlines and Siemens and GEs of the world are actually secured by Zscaler employees and Zscaler technology is very satisfying.
It's wonderful.
Otherwise, you know, different people have different priorities in life.
I have always. like to learn and do something.
My wife and I talk about it sometime and say, I wonder if I, what will I do?
I mean, I get bored sitting at home.
And this is a fun thing for a great team, great customers, great friendship, great relationships.
It's just exciting, isn't it interesting that uh, i'm sure that the ipo itself there's there's a picture here for for people that can see it there's uh, you know about the, the ibo offering over there.
I'm sure that was a particularly gratifying, fulfilling moment, but it's a cliche, uh.
But i think it's true that, like It's a point in the journey.
It's not the end of the journey.
I'm sure that was a fun day for you and all your employees.
But there's no point.
I assume for you that if you didn't enjoy the process, there's no day you're working towards in all of this.
That's right.
I think it's all in your mind.
I think human mind is so powerful. the attitude, the positivism.
Sure, it comes from success, but success breeds success too.
But success doesn't happen unless you focus, you go the extra mile, you make it happen.
That's how I take it.
And also, to me personally, I wanted to be a role model for my kids and my wife and both.
They are good kids.
I take more pride in having a great family life than business life.
When I would Do my lawnmower in my backyard.
My two sons will be with me learning, figuring out.
That's how life needs to be.
I think those are good things.
I'm curious.
A lot of people I've been fortunate enough to talk to had different measures of financial success.
It sounds like you've done a bunch of things to try and make sure the family wasn't overly influenced by the financial elements of that.
I guess I mean you don't need to give all the tactics, the J school of parenting and all that, but are there, besides making them join you on the lawnmower, are there one two, three things that you sort of reflect on and you're like boy.
I'm really glad that I did this so that my kids weren't exposed to things that we wouldn't have or just anything that sort of stands out.
I mean, I want the the Jay parenting tips.
I have a I have a son on the way here, so I want to make sure I do it right.
I think Kids follow parents early on.
So trying to lead a normal middle-class family life so they appreciate what the life is all about was one of the basic things, but then also spending time with them doing things so they have interest in learning and education.
That is important part of it.
I think those were the type of things, spending time.
I know startups are hard.
Sometimes people say, oh, you're spending all the time, the startup.
We invented, my wife and I, these bonding walks in the evening after dinner.
Family goes together, spends 30, 40 minutes to get to know.
All those things are important.
But role model is important.
Kids are particularly observational, right?
It's not what you say so much as what they see you do.
I think that's a great place to end, Jay.
I really appreciate you doing this.
The lessons that you have about building companies, as well as parenting and all that.
I think they're super applicable to a lot of entrepreneurs out there.
Yeah, we all learn from each other.
Yeah, I guess one before you hop Anything, if you were thinking about starting a new company today that wasn't within Zscaler.
Is there anything that you find particularly interesting?
I think AI is going to fundamentally change everything in life.
So a lot of those businesses will be around those.
Take it to the fullest extension.
But don't go and compete with Open AI and Google of the world.
Find an area where you have better expertise and understanding and build something around it.
And go all in.
Go all in.
Jay, thanks for doing this.
You're welcome.
Thank you.
Thank you for joining this episode of The Logan Bartlett Show with founder and CEO of Zscaler, Jay Chaudry.
If you enjoyed this conversation, we'd appreciate it.
If you subscribe to us on whatever podcast platform you're listening to us on, as well as shared with anyone else you think might find it interesting.
It really helps us continue to grow the show and find new listeners.
We'll see you back here next week with another great guest on The Logan Bartlett Show.
Have a great weekend, everyone.
