It’s not all on your shoulders. No matter what you feel. I’ve heard people say things like “being a CEO is the loneliest job in the world.” Don’t believe it for a second. You’re surrounded by great people inside your company and it’s a team effort.

I had the pleasure of interviewing Tien Tzuo. Tien is the world’s foremost authority on the “The Subscription Economy.” He is CEO of Zuora (NYSE: ZUO), the leading subscription management platform company, which he founded after 11 years at Salesforce, having served as the company’s chief marketing officer and chief strategy officer. He is the author of the USA Today, LA Times and Amazon best selling book, “SUBSCRIBED: Why the Subscription Model Will be Your Company’s Future — and What to Do About It” and a sought after speaker by the world’s largest companies to present his definitive playbook for thriving in this new business era.

What was the “Aha Moment” that led you to think of the idea for your current company? Can you share that story with us?

In 1999, I was hired as the eleventh employee of Salesforce — which would become the world’s first SaaS company. Salesforce created a new paradigm for enterprise software: the Internet as a platform for delivering software. But it wasn’t just a technology transformation powered by the Internet, it was also about the business model transformation that powered it — “pay-as-you-go” — or what we now call subscriptions.

The idea for Zuora came from a discussion in 2007 I had with Marc Benioff and two employees from WebEx where we were all complaining about how there wasn’t a good billing solution for SaaS companies. At the time, we all had to build our billing solutions manually, and update them constantly. Those two men from WebEx and I wound up founding Zuora based on that “Aha” discussion, and we soon realized that our product wasn’t just for other software companies like ourselves — it was for any company looking to make a shift towards recurring revenue.

What do you think makes your company stand out? Can you share a story?

Our vision sets us apart — it’s of “The World Subscribed,” the idea that one day, every company will be a part of the Subscription Economy.

We work with companies across a number of industries including agriculture, communications, travel, wellness, telecommunications, life sciences, aviation, food and beverage, fitness, gaming and more. But here’s the through line: subscriptions. And subscriptions are by definition relentlessly customer oriented. They also lead to growth. Once customers can get the outcome they want, without having to worry about the physical assets, that’s where the demand goes, that’s where new revenue streams are created. Every sector on the planet has the same potential to latch onto the same kind of growth that the technology industry has enjoyed.

Which tips would you recommend to your colleagues in your industry to help them to thrive and not “burn out”?

The traditional workplace is a thing of the past. Long gone are the days of all employees having a personal phone as well as a work phone. The truth is, millennials have unlocked the natural state of how we ought to work — our work lives and personal lives being intertwined.

As a co-founder and CEO, I’m working and available nearly all hours of the day, as is the expectation of many of my peers out there. However, this affords me the luxury to carve out personal time during what used to be the traditional 9–5 workday. If I have a personal appointment, need to run on the treadmill, or need to pick my daughter up from school, I do so without feeling bad or feeling like I’m not bringing my best self to work. Having the confidence and determination to balance my personal and work life in this new age of the workplace is certainly key to avoiding burnout.

None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story?

Marc Benioff was a significant mentor in my career. I worked for Marc for nine years. Being at his side as we built Salesforce from the ground up — it was an amazing experience. After a month of working for Marc, I quickly realized that pretty much everything I learned in business school was obsolete.

One of the most impactful lessons I learned from him was to never lose sight of your first principles.

Once Salesforce started to scale, as we had new launch events, my team and I would work mightily and proudly to come up with a brand new message, an exciting new angle, a different kind of presentation. Then we would take our shiny new deck in to show Marc, and he would toss it.

Then he would take us back to our fundamental ideas. He would return to the kinds of questions we were asking ourselves when we were just starting the company, like “How does the Internet change software delivery?” or “What if CRM was as simple and intuitive as buying a book on Amazon?” As it turns out, those messages were still relevant! Marc never lost focus of first principles.

Marc taught me the discipline of giving the same message day after day, month after month, year after year. The trick is delivering the same message in a thousand different ways. That’s how you change the world.

Approximately how many users or subscribers does your app or software currently have? Can you share with our readers three of the main steps you’ve taken to build such a large community?

Zuora serves more than 1,000 of the best companies around the world, including Zoom and Pagerduty, Ricoh and Caterpillar, The Financial Times and DAZN.

Lots of people think that success is a linear path. When they look at success, they look at the end result, jumping to the outcome and skipping over the boring, hard stuff that must have happened along the way. But the path to success isn’t straight. Success is achieved through a series of twists and turns, through a series of challenges that must have been solved, not through one brilliant move.

After working with many companies, I’ve come to find it useful to use the ones and threes to mark off the stages of growth, e.g. $1 million, $3 million, $10 million, $30 million, etc. Each time a company enters a new growth phase, it needs to change direction. The three initial steps any company should take in building a billion-dollar company include 1) proving the idea 2) proving the product and 3) proving the market. Once a company has achieved these three steps, they can then focus on proving the business model, vision and more.

Based on your experience and success, what are the five most important things one should know before one wants to start an app or a SAAS? Please share a story or an example for each.

Building a startup is one of the hardest yet most rewarding things you can ever do. If I were to go back in time, I wish someone would have told me the following:

Find an outlet for a balanced life. I was fortunate enough that I started my family. I had a daughter about one year into founding the company. When I’m with my daughter, I’m forced to put my company aside — it gives me perspective of everything we do.

It’s not all on your shoulders. No matter what you feel. I’ve heard people say things like “being a CEO is the loneliest job in the world.” Don’t believe it for a second. You’re surrounded by great people inside your company and it’s a team effort.

You have to have a mission — and everyone around you has to buy in. Startup is about sacrifice. When you have a mission, you transcend yourself, transcend the individual and make it more about the company.

Can you visualize yourself doing what you’re doing in 10 years? This is a piece of advice I got from Marc Benioff, the CEO of Salesforce. He actually asked me a really interesting question, “How old are you? Now add 10 years to that. If you can still visualize yourself doing that, then you’re ready to start this company.”

Enjoy the ride!! There’s going to be great days, and there’s going to be dark days. No matter what it is, make sure you enjoy the ride.

You are a person of great influence. If you could start a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. 🙂

The truth is, the Subscription Economy is a once-in-a-century shift having a major impact on both consumers and businesses alike. Through our newly founded Zuora.org, we’re committed to ensuring the Subscription Economy benefits everyone. That everyone can participate and everyone has access to the new opportunities that are emerging.

Beyond Zuora.org, I’m a board member of Network for Good. Network for Good’s nonprofit donor-advised fund uses the Internet and mobile technology to securely and efficiently distribute thousands of donations from donors to their favorite charities each year. It’s essentially an all-in-one donor management and fundraising platform for companies to reach their fundraising goals effectively.

So, how are things going today? How did your grit and resilience lead to your eventual success?

A few years into the company, we hit our first rough patch with product and customers. But instead of overworking my teams, I helped employees feel empowered. People talk a lot about the importance of creating a culture, a driver of true growth. But if you have the foundations of shared trust, a shared journey, and a shared sense of mission, the culture takes care of itself.

Since the early days of Zuora, we’ve had a number of former employees boomerang back. When we held an offsite meeting for managers prior to going public, one of our long-term investors said to me, “”If I used one word to characterize this company, it is ‘grittiness.’” What did we do next? We downloaded a copy of the movie “True Grit” and watched it. Our employees, ZEOs (CEOs of their own career) are game changers, innovators, and leaders with grit and determination to make things happen — this is how we became a successful public company today.

What is your monetization model? How do you monetize your community of users? Have you considered other monetization options? Why did you not use those?

As a company, we practice what we preach. Zuora offers its platform services at a fee and leverages usage-based pricing for its offerings, a monetization model that we help our customers achieve. In fact, having some element of usage-based pricing helps companies grow faster. Our own research, based on the world’s largest cohort of successful subscription businesses, found that companies using usage-based pricing making up between 1–50% of their overall revenue grew by 28% year-on-year. That is 1.5x higher compared to companies with no usage-based pricing at all, and 1.2x higher compared to companies with more than 50% of revenue coming from usage.

Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lessons or ‘take aways’ you learned from that?

In the early years of Zuora, my CFO Tyler Sloat and I presented a plan for the upcoming year to our board. We were feeling pumped up about our business. Things were going well, and we had an aggressive growth plan that we thought our venture investors would love. We got up there, nailed our presentation, and looked around the room. The reaction was, shall we say, muted. There were several actual frowns. After an awkward silence, one of the board members said “So, let me get this straight. You want to spend more money, in order to grow less? What is wrong with you guys?”

The board agreed to give us sixty more days to present again. Regrouping, Tyler and I realized that we weren’t explaining things the right way. We had delivered the plan using a traditional financial model, a pro-forma income statement that was backwards looking, and couldn’t show the return we would be making on our growth investments. We also realized that we needed better benchmarks. But to do benchmarking right, we needed to be able to use publicly available financial statements.

In the end, we actually came up with a whole new Subscription Economy income statement — something that was well-received from our board.

Can you tell us a story about the hard times that you faced when you first started your journey? Did you ever consider giving up? Where did you get the drive to continue even though things were so hard?

Long before our IPO, we hit an incredible growth spurt. However, our cloud infrastructure wasn’t able to meet incoming demand and our engineering teams weren’t able to keep pace with various features on our product roadmap. As you can imagine, our customers were not happy, some of our first employees left the company and our investors were anxious.

Giving up wasn’t something that ever crossed my mind. Along with the help with my leadership team, we empowered employees to collaborate and remove any existing department silos and facilitated an environment of trust and a shared sense of mission. We pushed through the rough patch and went public in 2018.

How can our readers follow you on social media?

○ Twitter: @TienTzuo

○ LinkedIn: Tien Tzuo

Thank you for all of these great insights!


“5 Lessons I Learned When I Created My SAAS”, with Tien Tzuo and Mitch Russo was originally published in Authority Magazine on Medium, where people are continuing the conversation by highlighting and responding to this story.

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