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  • Writer's pictureAditya Sudhakar

Tien Tzuo's approach to building Zuora

  • The IPO process: It takes 3 yrs of telling the story you told in your Series A. Last 6 months are intense. Last 2 week roadshow. Finally fly into NYC.. Wall St... check into a hotel.. Bring the whole company as part of the process on Slack. 

  • Fundraising and roadshows: They're binary. Either they believe it or not. The way to swing it in your favor is to simplify the story. In Zuora's case, the world is going subscription. Investors will then self select. 

  • Finding product market fit: What is the discontinuity that invalidates the incumbents. For Zuora it was the business model of subscriptions. It started with software, but could see it in transportation (Zipcar), media (Netflix). 

  • Power of mentors: When you spend a lot of time trying to figure out what the CEO is trying to do and figure out a way to execute it, you become this execution machine, you deliver value, and they become a mentor. You help them take an abstract concept and break it down. Problem solve, synthesize. As a result, Benioff made him the CMO which he kept for 2.5 years. 

  • What is marketing: It comes down to realizing that people have choices. The 3 room structure: Room 3 is what the product does (accounting, billing, upgrades), but don't jump there. Room 2 is what the customer pain is (designing subscription billing) but why do they need you. Room 1 is why your thing even matters (the world's moved to subscriptions).

  • Managing a large team at SFDC to a small team and back to a large company: The difference between hypergrowth companies (25%+) and the rest (5%) is break points fly at you. Complexity follows the power law. 

  • Finding growth and managing it: Think of break points by span of control, and tiers: 1-tier org: 1 boss, span of control is 7. Total 8. Generalists, dialogue, inspiration driven. 2-tier is 57, Departments, specialists, broadcast, data driven. 3-tier is 400. You're past the Dunbar number. Switchbacks are a good metaphor. You don't freesolo halfdome. At each stage you switchback. You can also think of breakpoints in 1s and 3s: Your milestones are $1mm, $3mm, $10mm, $30mm, $100mm... 

  • How a CEO manages their time: Shrink working in the business to 10%. That leaves you 90% to work on the business. Benioff would overcome time sinks by calling people "so what's going on in the business... cool, what else is going on... cool what else is going on". 

  • Culture: Culture's a manifestation, it arises from people coming into the org, and connecting with other people. Does a collection of people make you feel better. Bad culture happens when someone's excited about working on something, but the rest of the org is mandated to work on other stuff. That's demoralizing.. bad culture. "The violence of startups": Peter Fenton. Like waves crashing against rocks. 

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