I guess you don't imply that Zoho engineers who leave the company to create their own startups were not happy working there.
I was happy.
That was the reason that I ended up working for over 8 years instead of just 2 years in some software company to gain experience and then start out on my own, which was my goal when I joined there from college.
Regarding the secret, I believe it boils down to the work culture. He encourages and respects feedback from every employee.
Anyone can provide feedback/opinion - including about CEO's actions, directly on a company wide forum and have the CEO respond to it. He agrees if he may be wrong and does not mock at you if you were silly. That attitude encourages open culture. So you do not have "Yes Sir, OK Sir" coding-monkeys, but much better engineers who are satisfied with their work.