Tien Tzuo, CEO and Founder @ Zuora

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Guys and girls, this week's episode goes deep with Team ZuO, the founder and CEO Zuora, a company that's been a driving force in the subscription economy for over 15 years and was recently acquired by Silver Lake and GIC for $1,700,000,000 Teen started his career at Salesforce as the 11th employee with Benioff literally being in a room when the idea of Zuora is conceived and has quite literally shaped how companies think about monetization in a world of it shifting from ownership to usership.

This episode explores working with leading minds like Benioff, whether the business was too early to subscription management, working with Benchmark Index, Greylock, how going public has changed your strategy, and so much more. What's way at sea in 2025? Ladies and gents, this is team. All indications, coming in, to the control center at this time indicate we are go, go, go.

Lift off. We have a lift off. So, team, thanks so much for joining us. We've obviously been really looking forward to this.

Absolute pleasure to have you on. We're speaking to you at such an interesting time given the last 2, 3 weeks news. Firstly, massive congrats. You're employee number 11, I think, at Salesforce.

Correct me if I'm wrong. And you also had early days at Oracle. Those are some big names to start off career with. How did those experiences shape your overall vision for where you are now and, I guess, leadership style?

Oracle Salesforce during its era were was probably the most, innovative as well as dominant enterprise software companies. Right? And then and the journey certainly wasn't a straight line. When I joined Oracle, it was a highly competitive environment.

There were companies like Informix and Sybase and Microsoft and and IBM with DB 2. My biggest takeaway is I really enjoyed, business enterprise software. I found myself to be, you you know, a business software person. I like building, understanding, and and deploying, working with customers, business customers.

Number 2 probably is, you know, those 2 companies are really, really good at identifying what was the big shift or trend at the time that's invalidated the past and created a new future for Oracle. It was the shift from from this is going long time ago, like computers and mini computers to this new desktop IBM PC Max. Right? And for Salesforce, it was the Internet that allowed, this cloud software category to emerge.

Both companies have spent a lot of time understanding it and explaining it to the world. Right? Explaining it to buyers, customers, press. And and so that was certainly a formula that we brought into Zuora.

What is the big shift that's going on? Those 2 companies were transformational in in shaping how I approach building my company today. So for sure, we we always talk about people in careers at the moment. Marc Benioff has been a big pivotal figure within tech.

He was actually in the room when Zora was conceived. Can you tell us just super quickly about Marc's impacts on your overall career, your journey? What was it like having him there, I guess, like, at the very beginning of your foray into software? I don't think it'd be an understatement to say I wouldn't be here today if If there wasn't for Mark, I'm going to be eternally grateful.

He has always pushed me into new things in new roles, a few wicked Salesforce. I was the 1st chief marketing officer in in in that was a crazy idea. I'd ever thought of myself as a marketer until then. I I built the the product with Parker as the head of product management, did a whole bunch of acquisitions and took on a general chief strategy officer title the last 3 years, right?

And new initiatives going the app machines and all these other things. And then when I went with him, knew this idea that says, look, you know, in that meeting we had a couple months ago, you and and the co founder of Webex kept on talking about Billy as a category and how Billy was really, really hard and no one really should do it themselves. And so I said, look, what do you think of you're going to pursue that idea? I thought he was in the day he can't go, but he was very encouraging getting his endorsement and blessing saying, hey, look, this this sounds like it's a good idea.

We'll certainly give me a confidence boost in in terms of going to do this myself. What makes Mark Benioff tick in your opinion? I think a big part of my tenure at Salesforce and and probably many others is trying to figure out what he's seeing. He's got the ability to see, you know, around corners far to the future.

I always thought like the formula I had in my head was look, Mark can look into the future. If I can sort of align with him, you can look maybe 3 to 5 years into the future. I could look 1 to 2 years in that direction, and then I can guide the company or whatever part of the company I was working on towards that, then then, you know, that the alignment was really, really important. A lot of it was trying to figure out what you would see.

He came back. It was me with Steve Jobs. One day, I was supposed to go, except I think I was in in Europe at the time. It's probably one of my biggest disappointments.

Missed an opportunity to meet a legend. I should have gotten on a plane and just threw back. I would talk to him. But he came back and he said, look, it's gonna be about what what is it I'm trying to remember.

But essentially, it led to our whole thing of AppExchange. And Steve must have had this idea of an app store in his head already. And Mark sort of described this future that just didn't exist. Right?

None of these app stores ever existed. And so we just, you know, try to really visualize what it was. I built a few prototypes. And ultimately, we launched launched the app exchange and it was the first predacy app store.

Right? Apple's app store. So it was one of the first marketplaces for applications. I think the only thing that was close at the time was probably shareware sites, c net hats, a big old download.

You You guys are too young for this. So a lot of it was that. Even the initial idea of you won't believe in the Internet, but his ability to articulate but it didn't do himself. There's a group of people.

Bruce Campbell was the guy that came up with some of these phrases, but really pushed the the environment to come up with this no software phrase that just captured people's imagination as to where this internet thing could go when it comes to enterprise software. And really just watching that learning that and and saying, okay, there are some principles here that you can learn and apply and using the generalized purpose. You were ahead of the curve on the subscription economy, right?

Even before like big players like SAP, Oracle, I mean, what was the moment that made you realize this model was the future? How did it click for you? Maybe you can share more about that. Surely, your your background helps, right?

I worked with telecom companies when I was at Oracle. I was part of the telecom sales team. I worked with, you know, at the time it was it was it was 9 x New York telephone Young until it's down Verizon. Right?

MCI. So where's MCI? I think that's part of Verizon now too. Right?

So this is this is during the deregulation time where the government was splitting up, the phone companies, but I worked with AT and T and so on and so forth. So I kinda always knew that the telecom business model was very, very different And that their back end infrastructure was very, very different. So when we started Salesforce, then it was late nineties. So telecom was still all the rage.

The bubble hadn't burst yet. And so we saw ourselves as a telco. We said, look, this is a service provider model. Right?

You don't buy anything. It's just on the network, in the cloud, if you will. We didn't have these words. So we probably use the word network at the time instead of cloud because that's what telecom companies think of.

We always knew that with our back end infrastructure had to be very different. We built a billing system, day 1, and then realized that, you know, 8 years later that this you should never build your own billing system. The telcos all realized that just don't build your own billing system is probably the lesson. And so the leap was to say, okay, I get the need, But is this a worldwide global trend?

Or is it just something specific to Salesforce and a few other software companies? Like, at the time, there's probably only by less than, like, 200 so SaaS companies. They're not like it is today. Right?

There's no SAS stock. There was no SAS drug. It wasn't like every company was a SAS company. Most companies are still perpetual software, on premise software companies.

But the big leap for us was any company in any industry could do this. And so we looked at, a company called Zipcar because there's no Uber yet. And it was a subscription. You walk up to the car, swipe the card, start driving on your done, you put it back and pay by the mile or hour.

And we looked at Netflix, which was just sending out DVDs, but there was probably about a 1000000 people that were never gonna buy a CD or a DVD again. They would just subscribe to Netflix and get DVDs mailed to them. And for like $20 a month, so we took this can actually be anything. Any company can do this, or any industry can actually do this.

At the time, we probably thought a startup would be the company just like Salesforce that would disrupt an industry, but it turned out that large established companies, big customer bases were able to do a transition. Microsoft did it. Adobe did it in tech. We started seeing general motors launching subscription services.

We started seeing Caterpillar launching subscription services. We started seeing media companies saying you can actually charge a subscription. And in a way we went. So that was the the big idea that this subscription business model is actually a better business model for any company.

Eventually, all companies will move to this model. Did you always think that you'd end up as a CEO or how did that naturally evolve over time? I've been involved in this research project with Rich Hagberg, and we've been studying founders almost as a species. And and more importantly, we we've been studying which founders succeed and which founders blow up because he's a coach.

He does all these interviews. He's got like, you know, a lot of data, right? Like like like probably millions of data points. We've been trying to distill it down to say, well, what are the personality characteristics that differentiate the 2 things?

What are the skill sets like successful founders learn? Because the thing about founders is you don't, you don't really come at it right after like a 30 year career at like GE and now like you've got all the skills at your disposal You just gotta go into it But the defining characteristic of founders probably is they're kind of lone wolves And I would say, you know, I I'm like that. And so while I never was like other founders saying, look, founders are bust. I gotta be a founder.

I gotta start something. I gotta be a CEO or my life is incomplete. I don't think I went all the way there, but I definitely had this loner streak that would steer me towards doing my own thing. Even at Salesforce, I tended to be the guy that started a new project inside of Salesforce.

And so I think looking back, maybe the career certainly was there, but I I wouldn't say my twenties or thirties, I was like, I gotta be a founder. It was a journey that just naturally that led to this place. Yeah. Absolutely.

You spoke about only the big 4, big 5 enterprise companies driving subscription revenue at the very beginning, but then you spoke about was shipped perhaps to more consumer side in the sense of Netflix mailing out DVDs, etcetera. How slow was the uptick in adjacent distribution motions in the very beginning? How much of a educational sell was it to companies to implement subscription revenue, or was it very much timed at an appropriate time where the market was just shifting and it was all up into the right hockey stick curve?

But what was kind of the early early learnings from the kind of early sales channels you went through? There's a lot of lessons to SaaS that apply to us, but a lot of lessons to SaaS that probably don't. A lot of the SaaS category is taking to the existing concept, you know, procure it HR or something like that and taking the old version of bringing it into the cloud. And certainly that was Salesforce formula and other companies are super successful.

We are very industry specific. And so just because one industry shifts to subscription doesn't mean another industry does as well. And so we monitor industries really carefully. Our initial set of customers were SaaS companies.

Right? That's how we started working with Box and Zoom and Zendesk and all these other companies are small and continue to to, you know, we continue to grow with them. So we have a sense of scale. Right?

We know that, look, if you're a $30,000,000 SaaS company, these are all the problems that you're gonna hit when you're 70, a 100, a 200, 250, and and we got your back across all those different, phases. Right? So if you have an ambition to be the next Zoom, we can help get you there. But when it comes to media, we did a lot of noise.

We just thought, hey, there's no reason that these newspaper sites shouldn't have paywalls and subscription. And so, you know, it was it was probably more marketing, right? Because the product is still the same, but we packaged up Azure for media and just, you know, went to town on it. Just really talked about it and and and and got our our small set of media customers and issue media customers to talk about how list this is how a pay wasn't at work, and this is why it can all go work.

And that that was really, really successful. We also tried for Facebook because Facebook was talking about letting, like, app developers. This is during Facebook's, like, app development ecosystem phase. But that didn't really take off probably because Facebook app developers didn't really take off.

And so we tried a bunch of, you know, Zorfer Facebook Bing. This is circuit 2011, right, when Facebook was still small, still private. And, that didn't work. So you tried different things.

We started working with General Motors, one of the first car companies. They had this thing called OnStar, the subscription service. Which totally made sense. They were using a telco billing system that was old and clunky and wasn't good for this fast moving digital world.

And so we started working with them, but then we made a lot of noise about car companies. And today I think we work with, you know, 12 of the top 15, car companies around the world. And so you just try to be a little bit more targeted, but that was unique to our space. But you had to talk to people, companies in their industry.

This is what's going on in your industry. So it was more of an educational point then. It wasn't like an moment. It was just a general shift where the likes of General Motors, for instance, were charging on a regular basis and really wanted to implement more flexible pricing into their products.

So, yeah, I I completely get that. Sure. Leading a company through such a big shift to the subscription model must have brought a lot of unique challenges. If you had to say 1 or 2 of the biggest obstacles you face along the way, what do you think that would be?

Look. Every one of these companies has enormous challenges. When I meet with founders, either same size, bigger, smaller, right, you look at the journey and it certainly feels especially in the early stages, all you're doing is lurching from crisis to crisis every week, every day is a new crisis What challenges haven't we faced? So what what was the most, memorable one?

You know, it all kind of blurs together But certainly different phases of the company, you're gonna hit different things Right I talk about the big themes that all companies face Usually, there's something around organizational size and layers of management That's a big theme that's come up for me over the years and talking to other founders. I talk about it in terms of transitioning from 2 tier, 3 tier, 4 tier, 5 tiered organization. This is just a standard growth thing. And it's amazing how your whole company changes because the nature of leadership, the nature of communications, the nature of decision making just gets more complicated as soon as you add a new layer of management.

That's why you see all these people try to keep this flat as possible. Right? But that has its challenges as well. So be cognizant of companies that they go through transitions and and help manage through that transition and and have, you know, having the the the courage to go through those transitions.

And so, you know, every time there's a new management team, a new layer that has to be introduced, you gotta work through the management team. Right? And since some people thrive in the next layer and sometimes you need new folks, product market fit, I like to have a phrase now, this product market fit is never done. Right?

If it's done, then you're probably, you know, have a saturated market. It's probably not growing as well. Yeah. Gone through 15 years to the company, we easily have the broadest product capability, our category, the deepest product capability.

And our customers are still wanting all these things. The tentacles of our space tends to go really, really broad, in terms of other applications. And so then you have to really rethink that. What does that mean?

And so you you see that if you read our press is is, acquiring companies, m and a, right, tuck ins. And it's one great way of expanding that technology expanding the product footprint. And how do you understand how to do that well? That's another big challenge.

You mentioned Sastair and other large communities built on the back of daily innovators. Jason Lemkin, who I'm I'm sure you know, said recently when the news came out of of Zawar's decision to go back to private, was a business that was kind of maybe too early to subscription management. Touched upon what we previously discussed. Do do you agree with that?

I think we should pull him on the call. We should call him up right now and ask him. I remember talking to Jason a lot because he was at EchoSign when I started. And he might have been talking about the fact that we had a lot of skepticism when we talked about the subscription to cotton.

So around what though, specifically? Oh, people didn't believe it. This idea that everything would be a subscription, that people would stop buying stuff. It's just so weird to think of now how it was just sold on a license basis.

Like, we've grown up with paying a monthly yearly annual fee for We've got a few a few years of software. Yeah. I mean, still emerging markets, you know, consumer subscription or even subscription in general is in the early innings. Right?

So Yeah. I think you see it. The PG sector is still learning. We we we see the manufacturing sector.

It's not all or nothing in manufacturing. They still sell products, but they have this huge family of digital services that they can now innovate and create. When we started Salesforce, there was no such thing as DSL. We didn't have high bandwidth in the house.

And when sales reps went to hotels, right, it was a it was a it was a dial modem. Right? They had to unplug the song and play it into their compact brick, and then you hear the buzzing noise and all that. The idea that people would use the Internet for software was not obvious.

When we started, there was no Spotify. Spotify was a game changer for people's understanding of subscriptions. Netflix was interesting, but it was a bit of a niche in terms of how many people use, but Spotify was a game changer. When Spotify came around, look, the first couple of years, we tried this phrase subscription economy and it bombed.

I mean, it just did not work. It was probably 2 years into the company when we just off that turn, so let's try again. And to look back, I'm guessing Spotify has started coming up. Spotify was out there.

You get a new bandwidth was such that video streaming wasn't really possible yet, but music streaming was possible. Spotify took off and and helped the world understand because even Apple, right? Apple was like 99¢ a song. And Steve Jobs was adamant that music should always be 99¢ a song He didn't believe the subscriptions It was Spotify that forced, Apple to launch Apple Music It's the guy that helped do that is is over at Ford right now trying to get Ford into the digital subscription age So it's just funny how these things sort of twist and turn.

But Jason I remember pitching to Jason. Jason's like, yeah. This subscription thing, really? Come on.

Where is it gonna go? Who I'd have been talking about that. That's awesome. They're really interesting stories.

I completely agree with you in regards shifting consumer sentiments if if Spotify being the 1st innovator and the 1st mover. On on the kind of contrary side, because obviously within the ecosystem, like, you now see this, like, almost unbundling and the real move towards consumption usage based per seat type pricing really changing the landscape. Which company do you immediately look up to in regards to doing that really well, almost in the same sense as you were at the very start of the kind of subscription economy?

I guess I what's your overall view on, I guess, alternative usage based pricing models on top of subscription models? How do you see it evolving? So we've always had this our first customer was, Coremetrics, and it was a it was like an amateur Adobe, and, they had a consumption model. They had a crazy consumption model where if you didn't use it, you can roll over.

And they were, you know, enterprise. And so some customers would buy, like, monthly limits that roll over quarterly, annual. If you roll over after 12 months, you couldn't. And and classic situation, right, where the salesperson dream up new things as they're working with customers because they see that they can get a deal, you know, in this way and the customer's like, hey, I kinda want that.

We ourselves use a consumption model. Right? We tried all sorts of things, number of invoices, dollar volume, number of customers. We still offer multiple values because we we didn't have any users.

We have maybe 5 users in in a company. So the per user pricing model just didn't work. Same with marketing analytics. There wasn't a lot of users.

The way to express the value of what we do was not a user based pricing. Probably 20% of our customer base over the years have always been in that situation. User pricing is the default imagination, but it just doesn't work. It doesn't work.

We've been working with customers on usage based pricing models for years, not because of AI and other things. Developers used to say, finance, do whatever you want. I remember it's a company called big gravity. And the way they did their usage model is somebody in finance, Renee Tilly, if you're out there listening, would polls, go to some, like, website that the engineers build, download some file.

Right? And actually, you know, calculate, like, how much in every invoice should be, which was crazy. But now that it's sort of built in the the the engineers are now saying, look, okay, look, we should be doing this. Right?

This is the usage information in our system, in the service system. There's a whole category called metering. Right? That's not really billing.

It's sort of front ends billing. You can rate it, so you can, like, sort of put it in the dollar amounts. But then, like, you stuff it into some other system like us or NetSuite or something like that. Right?

And so we we said this is actually a really important space. Developers need a tool. It's not just a problem for the business. That's why we announced that we were doing a product.

We are engineers think they could build everything in like 2 days, right? I was like, look, you're building a really good product, but if you look at the pace of innovation, you know, so we found these guys, tow guy, they had a fantastic team. And then we said, look, you know, take our code, take some of our people and and really build out this metering product and that's really, really well Leaders often evolve in defining moments If you look back, is there a moment or 2 when you felt like you'd really changed as a leader?

Maybe you can share 1 or 2 moments The premise of the book or the research that we're doing is that founders are ticking time bombs. So all the things that make founders like, Joe, like like what they do at the at the early stages, you move fast, you have a vision, blows up when the company's at scale. And at some point you just can't be, it's not a deleverdictatorship anymore. It just doesn't work.

And all this founder mode stuff that's going on right now. If you really listen to what Brian is saying, he's basically saying, look, don't lose sight of being in the details because as a founder, you have the capability of aligning a large organization and getting them rolling the same direction. If you lose that capability, then it doesn't feel right anymore. Right?

This is where you feel like your company's at war with each other and everything's hard. Whenever I talk to a founder, I could see it in their eyes. Right? If and and there's, like, I am losing control of my company.

Everyone's fighting and I don't know what to do. And what we see founders do, which is a wrong thing, is going to founders mode. Like, go back to the small company, boss everybody around, and it just doesn't work. Right?

And at some scale, you gotta learn how to work with people and get getting people work together. And there's elements of the founder's personality starting with the the the the extreme confidence in themselves, the lone wolf nature, right? That just doesn't work. And you hear the same stories over and over again.

Again. Rich Hagberg was one of the guys that that helped me realize this. We were probably about a 120, a 150 people, and the company was falling apart. I realized that I had to change in order, that everything I was seeing in the company was reflection of of, not my personality.

I don't think that's right quite right, but the way that I was leading, the way I was managing. And so by the way, that's not a one time thing. Right? That happens over and over again as you grow in the You've gotta learn.

I saw Mark many of do this. I I saw him transform before my eyes over and over again. He almost has a a thing where every year he's gonna retransform himself. And I was like, okay, if that's the game and and you wanna take this long term, you gotta learn how to do that.

So this research we're trying to do is, is there a way to to create a framework or a formula or a recipe with a set of stories that can help founders go through the same journey? That makes sense. We've had some great founders on the pod, right, who have raised from tier 1 VCs. One of our guests said firms are great, but partners matter.

Do you agree with that? Especially working with benchmark, Greylock and index. I mean, has those funds helped shape, I guess, you are today, the way the company is today? Or maybe you can, yeah, share more about that?

Yeah. Look, as a founder, one of the single most important things you can do is your your funding partner. Absolutely. It does come down to the person because that is a person you're interacting with a day to day basis.

Right? You know, most VCs, you gotta do a little bit of right? But you can go and meet the other partners and there's other resources in in the company and in the firm. So I'd say the firm still really matters.

Right? And an early stage investment is a founder. You might not realize because you're so convinced of your own company, but you gotta see it from the other side, right? How do you know these things are gonna be successful?

All the data shows even in my angel investing, I look back and and it's the classic, you know, portfolio mix where, you know, there's 2, 2 companies out of like 20 that really just exploded And the others just struggled Some of them folded and some of them paid out one x in hindsight It was still incredibly fun to work with the founders And that's why I do it I did enjoy doing that But you look at the math and you just don't know And so when you now look at follow on investments and and things like that, it's hard it's hard to be a VC.

It's hard to be investor. Right? You're taking these bets with with a lot of unknown information. So the reputation, the signaling is really, really important.

But if your early round is with a a good solid name, it is gonna make your subsequent rounds much, much easier. If your early round is with somebody that's had a track record of picking winners, it is gonna make your subsequent rounds much, much easier. And we saw this all the way through the IPO. So, you know, I had to, you know, Peter Fed and I'm benchmark.

Sometimes I joke that that then I call him almost a cofounder. Right? He actually brought me and my cofounders together and and had the idea that building things should be big. He had the instinct and and help craft a a team in the early days.

And so, but that was really, really valuable. And even, like, I think about my IPO. Right? And and just just public investors knowing Peter's track record certainly, you know, gave him a boost of confidence.

Yeah. For sure. And and you've referred to Paul Graham's essay before. When he started with those early funding rounds, is it difficult to admit board members' loss of control, and what makes a board member extremely value add and good for you?

Well, what what are the kind of best characteristics you've seen throughout multiple funding rounds? Well, let me just view the the big problem I I I avoided. Thank god. But as a naive founder, you're thinking about votes.

Right? You're thinking about control. You're thinking like, hey, you know what I do with my B rounds? I remember naively thinking, let me get another person that's as strong as Peter and maybe get them arguing a little bit because I could play one off the other.

Right. I would have been really, really stupid. You don't want weird dynamics in your boardroom. In hindsight, I think what I did well, and I I don't know.

I was I can't claim like, you know, prior knowledge. I probably stumbled into it. It's just craft during a group of board that's complimentary and creating an environment of open dialogue and really listening to them. My series b around Jason was really operational.

Peter was very strategic. Like, Penny off, you can see him to the future. Tim Haley was an incredible people person. He was a recruiter right before he he he did the IBP in their bed point.

And he has his whole history with with with Reed Hastings too across like 2 or 3 companies. So he understood the founder journey as well and the psychology of it all. Mike Volpi was sort of a great company at scale, new M and A usual, so incredible strategic mind. Right.

But he can scale up and down in terms of big companies like Cisco, all the way to startups. And so the dialogues that we had was really, really rich, really good. And you you just have you have to create that environment and to be sensitive to their job. Their job is to put a bet here, shepherd that bet, but they're not in the company.

So, how do you help them navigate that? How do you give them the information that's important? Right? How do you be transparent?

How do you not overload them with too many details? Then how do you use their skills? What I found with the VCs are because they are picking people, they turn out to be really good judge or people. So I pull them a lot into my recruiting process.

Right. Other people say, if you hire an executive, maybe you put them in the interview process at the end to approve it. I put them all the way in the beginning. I was like, guys, I'm gonna I'm gonna flood you with candidates.

Just know that and I'll put like 6 or 7 candidates to the early stage And I'll say, well, tell me what you see And when I started doing that, I got a much richer perspective of people with hiring, especially executives Do I believe this person? Do I trust this person? Can I break down their character? It was just a much, much richer set of information than that I could get myself.

So, you know, 1 hour interview. Yeah. Sure. I always say VCs are kind of part time psychologists, so 100% agree.

So you go. That's easy. Yeah. I agree with you on that one.

Just to be quickly, how big was the first round, and was that led by benchmarks? It was a different world back then, but there was no seed round. It it it it just kinda gets to a series a. Yeah.

So, you know, again, it's just the time and place. Right? Amazon was just getting started, so it wasn't as easy. You could you know, it was just 2 developers built around for Amazon.

There's no Y Combinator, any of that stuff. So you would've you just went right into the a. Our first mile was 6 and a half 1000000. Okay.

But for a in a first institutional round, that's still pretty ridiculous even by today's standard, at least in the UK, perhaps less so in the US. What was your immediate feeling in terms of the resource allocation? Do you know exactly how to spend that money, or did it feel like a lot more than was initially needed? And I guess, like, looking back, what were some of the biggest mistakes that you made in regards to resource allocation in the early days?

I I tell a founder this contrarian advice. You tell a big story during the funding round, a, b, c, d, whatever. And, I need all this money. And the day after the term sheets aside or the thing is closed, rip that up.

Don't worry about it. At least you never believe in it anyway. Right? And then just ignore it all.

I'm gonna rethink and and I do it. Don't spend the money. Yeah. You know, don't spend the money.

I mean, what you are, oh, we're gonna grow to like 50 salespeople right away. It's not the number one rule of a startup is by far don't want their cash Any founder that gets themselves in a position where they're running their cash It's not good I mean, it's over Right? And are seeing people pull off miracles that certainly is possible, but it's just tough The whole dynamic changes So never run out of cash Just try to stay alive I guess in early days I mean building a company like yours takes serious dedication What keeps you going especially after all these years?

Because they're across the globe. When you're in Silicon Valley, everything around you is tech. You go to a coffee shop and the table next to you is some somebody fits you with some scallard or some VC. And so you guys started.

Which is wonder which is wonderful when you're starting something. Yeah. I won't end up moving back here to New York a few years ago. It was a little more balanced even when you're out there in the popping shop.

And when you see, when you talked out folks in other industries, we're just really lucky. We're an amazing industry, but we get to think about big ideas and feel like we're changing the world in in our small ways we are. Right? We're creating innovations the world has never seen.

And we're well compensated for it, but we've got the ability to create outsized outcomes. The shoot is just fun. It's great. There's a camaraderie to it, right?

When when, you know, it's hard, certainly, you know, there's ups and downs and and but that's part of this part of life. It's part of the sport. And so, you know, what what what what's I can complain about? We got a big idea.

We're working with some great customers. It's not easy, but we wouldn't be doing that if it's easy. And that's what keeps us going. Yeah.

Absolutely. And and how low were the lows throughout that particular journey? I heard Ivan, who's a founder of Notion, for instance, speak the other week at a conference. He said that near 3 or 4 times, they nearly ran out of cash within a day or 2 days notice.

They completely pivoted the product when it is now about 6 or 7 years down the line and started to immediately realize great value. I guess, were you ever at a low point where you thought it's just not gonna work? Mid probably get into how to close goals, or was it always kind of The other at that point very sustainable? The other interesting thing about founders is they index incredibly high in resiliency.

And so, you know, and so the challenge at scale is you burn out people, and you gotta you gotta learn sort of balance them and not everybody is like you. I remember, you know, our largest customer in the early days, you know, CEO called me and said, look, we're going with your competitor. And I remember like, oh, God, right? And I think I just wound up sitting on the floor, you know, it was just sort of okay, sort of process it.

I probably more even keel than a lot of folks. I tend to mute the highs and mute the lows. That's probably more of a personality thing, but you do wanna create that stability, right? Especially as the organization grows, you don't amplify the highs and lows overly, like amplify the highs, but don't amplify the lows too much or at all But look, there's gonna be lows You got an outage in the early days and you're an hour in and still don't know how to bring the system up You got a really good employee that leaves and it feels like they don't believe in Right And you gotta go through all those emotions I tend to feel like the emotions for me were strongest when, a customer leaves or an employee leaves.

And I've had to learn to sort of process all that. Everything else operational, I figure we can always work through it. But if there's a, hey, I don't believe in you anymore. Right?

I probably took that a little bit more personally, like versus other things. But, you know, we were fortunate enough that we didn't run the cash, but look, in the early days, like, even at Salesforce, Salesforce, we were probably facing down 6 months of cash in a really tough funding environment. We didn't have a lot of early stage branding because I think Benningoff just uses his personal network in in Larry Ellison. That's when the board member, Matt Naleda came up and said, look, why don't we charge customers a year upfront?

Which was completely against our principle of the pay as you go. But that saved the company that turned us cash flow positive within, 2 or 3 quarters. You just don't realize that I remember Salesforce in the early days, there was 1 quarter where we were net ARR was 0. And we didn't, you know, we didn't have the language.

We just measured subs, pay subs. When you start the quarter, you add subs, you lose subs, and you want them at the same level, maybe a little bit lower. We had a year where 50% of our customers didn't go live, with 50¢ on the dollar, I should say. It's like, okay, look, we gotta take a step back.

Every SAS company is gonna go through something around customer success, business model, or product market fit. And if you're successful, you're gonna probably do that multiple times. You just gotta work through it, but that's why we do what we do. Yeah.

Absolutely. You spoke before about hiring the right people and using your board members and investors to help you scale. I guess, from what I've read online, Zuora has, like, this incredible kind of sense of mission that permeates throughout its whole employee base. How do you keep that alive and at front of mind?

What are the top priorities as a business scaled so aggressively over time? And I guess, like, instilling company culture at such a big organization, like, just speak to us about that and how that was achievable on your end. There's certainly principles and formulas. Right?

My my starting point is I like to visualize, I call it in the phrase CEO, we we say is CEO. I like to visualize an individual contributor far removed from headquarters. It could be an engineering. If it's sales, I like to, you know, you're gonna ever listens to this.

Right? And I think about Yuriko because he's sitting in Berlin. Right? Or one of my Japanese team members.

If it's customer support, the person doing collections and they wake up and what drives me, right? What is the company doing to make them feel charged up motivated? And when they go home, whether it's their siblings or their spouse, their kids, their family, how do they talk about what it is that they do? Right?

And help them work that out. You wanna give people a sense of, hey, look, you know, my company does billing software. Okay, well, you know, what is that? And I, yeah, you know, my company that tells power, right?

You that your entire subscription that you just, you know, we power that. The general motors on source thing, we power that. Right? We power the important component of it.

And then you gotta bring the customer in. When the companies talk about their customers, it does give everybody a sense of purpose. Right? And then you gotta put in some of the context of, okay, at this moment in time, what is the big challenge that we have as a company?

And then they gotta listen to it. Does it resonate with what I'm feeling on a day to day basis? Does it make sense? And then what are we doing about it?

Right. And how can I contribute to it? When those elements are in place, you can feel it when they're out there talking to folks. Okay.

Well, I I had a bunch of sessions, brat Smith, there's 2 bratsmiths out there. So this is the ex CEO of Intuit, an incredible guy. And he was incredibly generous at this time. I took advantage of it quite a bit until he got his new job.

He used a formula for a lot of stuff, but he had a formula that says, look, we put together an annual planning process. We lay out the strategy, and then he he starts going site to site, city to city department department. And he says he just listens. And he categorizes everybody into 3 levels.

Level 1 is the low one, right, which is their victim and top mindset is what he said. It's they're just complaining about stuff and no no judging. Right? He's just analyzing.

And, you know, they're not bought in. Level 2 is they're completely bought into the strategy, but they're still trying to figure out what it means for their group, their department, their location. And level 3 is, like, are they full of ideas in terms of how they contribute and so on. And then he meets with the leader of the department, the location.

He just talks it through and says, well, depending on where the team is, there's different things that you can do to address the issue and solve the problem, help the team get to that level 3 point. I've had this mental model in my head too that says, look, that's where I'm trying to sense. And then when you do that, the culture will emerge. Culture to me is something that emerges.

Right? And and if you just try to focus on building it directly, it doesn't always work. You gotta focus on these fundamental things and the right culture will emerge from all that. Couldn't agree more.

Last question before we move on to a quick fire. Taking Zuora public, like you mentioned, was a massive milestone for a company built around a new business model, a really unique offering at the time. Going into that, what were your expectations? Did that meet the market expectations?

Going public? What changes after that? Did that kind of change your approach to strategy to running the business? It would be great to hear more.

Yeah. So, you know, unless in any reality, there's a bunch of factors. Right? And, certainly, if you just look at the pure stock price, it's hard to claim that we were, you know, a huge runaway success as a as a public company.

Of course, it was a in a really, really weird time, right, in in the public markets for tech, especially mid to small cap tech, which we sit in. So it's up 2,000,000,000. There was sound like COVID, the boom and tech recession, wars around the world and and so on. It's been a really uncertain time in the tech, bubble prick pricking.

It's not really it's just deflating a little bit. It's not quite like the dotcom era. It's certainly part of the whole mix as well. But I'd say, look, if you transcend that, the thing that if you were VC backed and and had private investors is investors can leave at any given time.

And that's just the way the system is set up. So there's no right or wrong of it. And internally, we all benefit from that in our personal lives, knowing fantastic capital market system, resource allocation at a macro, right, market level, and and all that is really good. Because of that, it's not fair to ask the investors to look out 2, 3 years.

I think that's what Eric Reese was trying to address with his long term stock market idea. The system is set up where you wanna deliver quarterly numbers, right? For us, when we were saying we wanna make some more bets, some changes, and we want a flexibility to to to not pivot, but, you know, but but change more strongly as it's just but you can do it in the public market, but it's just different. Right?

Because the expectation of the investors are different. It's been a really great episode. Just kind of moving on to a quick fire to finish off. Yes.

Super quick answer. One thing that you know now that you wish you had known at the start of your career? The start of the career Look, when I talk to folks probably early, like, 22, 23, 24 The lesson I look at example after example and I think the environment that you put yourself in is actually the most important thing, right? Like we all have believed that it's always up to us.

It's how we do in that environment, but putting yourself in an environment that allows you to grow, putting yourself in an environment that pushes you and challenges you, Right? And putting yourself in an environment with the expectations of just that the people and so on, it it is is just different and higher is gonna shape who you are. It's just really pick and choose that early in your career. When you talk folks later in their career, you can trace it back.

You can see what they learned in their twenties, the job they had, the kind of environment they were in, the company they were in, it's still stuck. If you're a consultant for Deloitte, 20 years later, you're still a consultant for Deloitte. I still have this Twitter talk meeting inside of me, right? I did sales for, like, 3, 4 years, which was unexpected It wasn't something I planned But that environment is really important So pick your environment, pick your job, right?

And because that's it's gonna shape you That's very interesting. What is something contrarian you believe in your field? Maybe, like, it could be vertical specific that no one else does believe. In our space?

Personal space. Or in general, we're known as billing, but we're much broader than that. Now the company grows, you're much broader, but you're used to have the identity for the future. We work on that.

People underappreciate, how different the the billing infrastructure is and how hard it is to build. It's hard to do that until you experience it yourself. The billing space in the telecom sector is very different than, you know, the European under enterprise software. It's on its own world almost.

Right? And so we're trying to build a very different world. And people try to pigeonhole us back into traditional SaaS. What's interesting about us is that this is a space that's gonna evolve over decades, not years.

This is what we wanna do and is our mission. Companies are not gonna switch industries. Right? GM is really excited about their subscription service, but they're selling a lot of cars.

They're not gonna stop selling cars for 10 years. So it's gonna take time for their subscription business to grow. And will it ever reach the point where the cars are just driving around and you're subscribing to it? Maybe, maybe, but it's gonna be an evolution.

Right now, they're excited about their subscription business. We have to think about it from more of a a long term perspective. The nature of our space is really gonna shape who we are and and drive what we're doing on a day to day basis. Wow.

Yeah. Absolutely. You mentioned a variety of different software godfathers. Right?

What's your go to favorite individual, most impressive individual that you've worked with, and why? Everyone's gonna be very different. Right? Plus some people you get to work deeply with.

I I know Benny on a different level, and I'm gonna know a lot of the other other icons. I know him as a human being, and and I had dinner with him and, you know, and and so I know his psychological, you know, makeup and and his style just a little deeper, his techniques. But you try to draw lessons from everyone. And look, I'm not a big believer.

I worry sometimes that that our society puts us there's too much idol worshiping going on. At the end of the day, these really successful people are just people, Right? They've got ideas. There's always an element of luck to what they do.

So you just sort of extract out what's amazing about them. And and there's amazing stories out there. Like my sessions with Brad Smith, I saw a type of leadership that I was like, okay, I understand why that made them successful and and doesn't necessarily all apply to me, but there are so many principles that apply really, really well. With Benny off, the one that's always gonna stick is storytelling and and big ideas and trying to simplify it down to what is the positioning of the company.

I don't really know Satya, but, you just try to unpack. That was a company that was stuck, and they had a cadence of the company that made it really inflexible. And I don't know how he did it, but he he chose it with less than a year to something completely different He fast and so you step back to what are the techniques? I don't really have to worry about that because we're not Microsoft size Right?

But you try to look at, well, how how did this leader go shape their company or even I had a chance to hear talk about Broadcom He took that over when it was like a 1,000,000,000 and a half, maybe like a 2, 3,000,000,000 market cap And now it's like an $800,000,000,000 market cap And so, like, well, how exactly did he do it and what were his techniques and what are the learnings and then you extract the lessons that really apply yourself It's an absolute pleasure to have you on.

Thanks very much for the time. Much appreciated. Thanks for having me. Wow.

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