Listening Post

Tien Tzuo, Co-Founder and CEO of Zuora, tells me how he tells his company’s story when he pitches to customers and investors and how to scale up to $1 billion.

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Tien’s book

https://www.zuora.com/subscribed/author/

Zuora prepares for its IPO

https://www.cnbc.com/2018/04/11/zuora-prices-ipo-at-14-per-share--valuing-the-company-at-1-point-44-billion.html

Tien’s daughter rings the opening bell

https://www.cnbc.com/video/2018/04/12/opening-bell-april-12-2018.html

Tien’s interview with NYT where he mentions his dislike of one-on-ones

https://www.nytimes.com/2017/01/06/business/tien-tzuo-of-zuora-dont-expect-me-to-manage-you.html

Tien’s “climb to $1 billion” strategy

https://www.zuora.com/guides/climb-build-billion-dollar-run-rate/

Tien discusses his three room structure

https://www.zuora.com/2017/09/14/3-questions-for-tien-tzuo-ceo-founder-of-zuora/

Blair is struck by how creative businesses have trouble applying their creativity to their revenue models, so he and David discuss some of the best ways firms can get paid.

Subscribed: Why the Subscription Model Will Be Your Company's Future - and What to Do About It by Tien Tzuo

The Membership Economy: Find Your Super Users, Master the Forever Transaction, and Build Recurring Revenue by Robbie Kellman Baxter

The Automatic Customer: Creating a Subscription Business in Any Industry by John Warrillow

2Bobs Episode 31: "Mastering the Value Conversation"

2Bobs Episode 25: "Pricing Creativity"

Pricing Creativity: A Guide to Profit Beyond the Billable Hour by Blair Enns

We don’t buy music we subscribe to Pandora, Spotify or iTunes. We buy less and less cars because we use Uber. We rarely if ever buy software anymore as we use it on the cloud with brands like Salesforce. Maybe one day we might not even buy our house but subscribe to the idea. 

Tien Tzuo is one of the founding parents of the subscription economy and was employee number eleven at Salesforce. His New York TImes and Amazon bestselling book Subscribed is as much a management strategy book as it is a future history perspective on the future of the global economies. In a wide-ranging conversation from Arbnb to Caterpillar he talks about the underlying dynamics that are driving the idea of subscription to the forefront of customer’s demands and the strategy for companies in banking, media and beyond. If your business does not embrace the ideas behind the subscription economy, then it might not be embracing the digital currency of the future.

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You’ve finally built the company of your dreams. You’re not yet public, but you’re not in startup mode anymore and are hungry for more. So how do you navigate this next stage of growth? How do you refine your leadership skills, and successfully expand into global markets? In this episode of Zero to IPO, Tien Tzuo, founder and CEO of Zuora, and Jeremy Bloom, co-founder and CEO of Integrate, discuss management styles (in the context of Olympic skiing and pro football), international expansion, and how to keep building during these not so normal times. 

We used to buy things. Remember that? Hard drives, hit singles, our favorite movies. But for now at least, the hot trend is subscriptions.  

Instead of buying hard drives, we subscribe to cloud storage from Amazon, Google, Microsoft or Dropbox. For music there’s Spotify. For movies there’s Netflix. And it seems a new subscription service is born every minute.  

They say that during a gold rush, the surest way to strike it rich is to sell picks and shovels. That’s what Tien Tzuo is doing in this new subscription economy. His company, Zuora, is the engine that powers the subscription process for companies like Box, SurveyMonkey and TripAdvisor.  

I talked to Tien Tzuo about how he founded Zuora, and grew it into a company that’s raised nearly a quarter of a billion dollars and is pushing for more growth. He’s got some unique ideas about managing people, and stepping out on your own.  

Shep Hyken sat down with Tien Tzuo to talk about the subscription model and how companies like Salesforce, Uber, and Caterpiller are helping to make it the future of business. 

Top Takeaways:The subscription economy is a phrase coined to describe the idea that people don’t have to buy products anymore to meet their everyday needs or to get from Point A to Point B. It allows companies to switch from selling products to selling a service that consumers can use while transforming an industry for the better.The subscription model is a win-win for customers and businesses. For businesses: It scales better, is easier to run, and guarantees recurring revenue. For the customer, it’s less expensive and more convenient.To jump into the subscription economy, start with a view of what your customers are doing with you and track all of the usage and interactions. This allows you to understand how you can broaden your footprint with the customer and create a more meaningful relationship.Anybody can take your product, reverse engineer it, and offer a clone to their customers. If your competitive advantage isn’t based on your product but instead your knowledge of what your customers are doing and the relationships you have with them, that is a much stronger position to be in.About:

Tien Tzuo is the CEO and founder of Zuora. Previously, he was the 11th employee of Salesforce working as the Chief Strategy Officer and CMO for eight years. He’s also the bestselling author of Subscribe: Why the Subscription Model Will Be Your Company’s Future and What to do About It.

Shep Hyken is a customer service and experience expert, New York Times bestselling author, award-winning keynote speaker, and your host of Amazing Business Radio.

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*This episode was filmed prior to the occurrence of the COVID-19 pandemic.

Topics covered in this episode

This is a ProfitWell Recur Studios production—the first media network dedicated entirely to the SaaS and subscription space.