Measuring the Subscription Economy with Zuora's Tien Tzuo

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Tien Tzuo

How do you build a long term sustainable startup? Well, people just don't realize is is change takes time. And so there's just limits to how much change can happen in one, two or three years. I mean, as consumers, we feel it happening fast, but with a lot of stuff tend to build up over time. And so Salesforce been doing this for 20 years, and I saw some stat that says, you know, the vast majority of software, 50 60% of software is still sold into a perpetual license model.

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Tien Tzuo

And it feels funny because we're buying SaaS predominantly, right? But there's just there's a lot of inertia, there's a lot of history. Yeah. That that takes time to change. Just for 20 years. And Celsius is past their 20th anniversary and it's still like this. And so you need time to, to, to, to, to change things. And so if you can find a big idea that takes time to change and build a startup against that idea.

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Tien Tzuo

Right then, then then you've got that runway. Right. So I kind of find the biggest wave so that you can serve the longest period of time. And then your job is just to kind of stay on that wave, right. And not fall off from profit.

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Ben Hillman

Well, recur.

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Ben Hillman

It's Protect the Hustle, a show about those in the trenches actually doing the work. I'm Patrick Campbell, and I'm UGA PSI. And on today's show, how a subscription titan.

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Ben Hillman

Tien XL drove Zuora to become the Cadillac of the subscription economy.

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Patrick Campbell

Subscriptions are all about relationships. And we say that a lot here at well, because it's such a fascinating time where it's the first commerce model in the history of humankind where the way that you make money is based directly into the relationship with that customer, where it's not just converting and selling them a gallon of milk or selling them a newspaper or selling them, you know, a perpetual license piece of software.

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Patrick Campbell

It's all about not only acquiring that customer, but retaining them into the long term. And if that relationship goes sour, all of a sudden they're not going to be there and they're going to churn out and subscriptions have basically taken over our world. There's all types of subscriptions. I'm sure you have some weird ones. You have any I shouldn't say they're weird, but do you have any kind of subscriptions that you wouldn't have imagined existed ten.

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Neel Desai

Years ago, ten years ago? Well, I definitely like my subscription podcast, but I think my most favorite is my subscription underwear.

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Patrick Campbell

Oh, you've got to be meundies.

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Neel Desai

Or yes, there's a few of them out there. But I like me and is the most.

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Patrick Campbell

Why is that?

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Neel Desai

Well, first of all, the experience is phenomenal, right? You got a great selection, great mobile, you know, interface. Every month I've got this delightful package to look forward to. And over time, I've, you know, accumulated a few pairs. And it's just a good community.

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Patrick Campbell

It's a community. Yes. Your underwear, subscriptions.

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Neel Desai

You won't understand, Patrick.

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Patrick Campbell

I bought Internet just like. Okay, Boomer. Meaning? I just happened. Okay, I. I want to spend an hour talking about what you just said, but we have more important things there. And that in particular is to learn from Tim Zo, CEO, founder of Zuora, who I'm just going to put it out there is quite literally the godfather of the subscription economy, not only because Zuora basically defined that term, which we're going to find out in a little bit here, but also because Zuora rode the market and defined a lot of the market when it comes to the subscription economy through Zuora, a subscription management system and work with, you know, a lot of the Fortune

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Patrick Campbell

500 in terms of their subscription transformation, but, you know, hundreds and now over a thousand different customers in the world of B to B, B to C or DDC now have or were defining that as well as media and a lot of other worlds of subscriptions and some pretty weird, I'll put in quotes, subscriptions that we're going to find out in a little bit.

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Patrick Campbell

But what I'm most excited to learn from Tien today is really the fact of how well he's been able to position Zuora within the incumbent wave. And I think he learned a lot about that from his early career at Salesforce. He's employee number 11, I believe, right around there, basically doing sales calls with Benioff as well as, you know, kind of hanging out and really developing not only the sales and marketing motion there, but ultimately the positioning as well.

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Patrick Campbell

And so if you can't tell I'm super excited about this, but I think there's there's so much to learn. I mean, even wrote the bestselling book on the subscription economy. You wrote the book on subscriptions called Subscribed, which if you want to get your own free copy of subscribe, make sure you listen to the end here. We'll tell you how to actually do that.

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Patrick Campbell

But with that, I think the first place to start is really to understand where team comes from, you know, where he came from in terms of what was his upbringing, where that career kind of came from working at Oracle, Salesforce, a bunch of other places, and then ultimately learning, you know, his approach to, you know, creating such a powerful brand and a powerful product and Zuora.

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Neel Desai

So let's jump in.

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Tien Tzuo

I grew up in New York City and call it the seventies and eighties, right? So a little different. New York than then and these days, pre-internet, pre tech pre computers. And so I was probably one of the part of the generation that discovered the PC as a kid. And started playing with it and kind of fell in love with technology from there.

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Patrick Campbell

I think we have a mutual acquaintance, Bob Allman Rich on the full armor. Like was that your first job back in the day or was that.

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Tien Tzuo

Yeah, taking it back to so so that was probably one of the, you know, one of the first exposures to entrepreneurial roots. A bunch of us went to Cornell, Cornell University. I was in the engineering school and, you know, which was in the hotel school and I got to make fun of Rich for that. But he had an entrepreneurial streak, and so a bunch of us actually started a software company, and Danny came in, I the guys where the developers, programmers, Rich and Bob actually went door to door on Wall Street trying to sell it.

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Tien Tzuo

And you know, this is pre-Internet, right? So so sales were primarily literally door to door. So they went around Wall Street trying to sell security software on on an IBM PC three windows. It was it was his. It was him, his DOS, the software product actually made files disappear. And so you can, you know, store about your files in your five and a quarter inch floppy disk run our software and the files would disappear and people wouldn't know exist within our software.

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Tien Tzuo

We would put it back together. And so it was as a piece of security software.

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Patrick Campbell

What happened after that? What was the next step after that?

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Tien Tzuo

You know, Richard, here with it, he still running the company successful 50 years and years later, decades later. You know, I decided I wanted a little bit more exposure to corporate environments. And I won a bet at Oracle Software, joined Oracle in 1990 in New York City, Oracle, Salesforce. Laura, in many ways, you know, Benioff Salesforce is is the son of Oracle.

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Tien Tzuo

And so so we're probably the third generation.

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Patrick Campbell

I'm sure, Larry, that you just described better, actually. Yeah. Yeah. What was it like in the early, the earliest days? Because a lot of people I mean, it wasn't necessarily the first, you know, SaaS company was the first one to like just get huge, right? Like, well, what was it like in those early days when it was like, you know, 11 of you like going on sales calls?

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Tien Tzuo

Could it was nice about Salesforce. It's not unique, but we all the shared singular vision. Yeah the first 3000 employees right we we all were disillusioned by enterprise software. We all love this. The new thing called the Internet. It was brand new. And we were all trying to figure out right how to how to use the Internet to change.

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Tien Tzuo

We didn't like about enterprise software. And so it became a singular focus and allow us to sort of weather the storms that happened afterwards. Right. So the dot.com bust, you know, but like, you know, we're still delivering what we're doing, We're still delivering value. And so we were kind of shielded from that. A lot of the industry was pressuring, you know, the early software, the service companies or whatever they were called back then to allow the customer to install it on premise.

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Tien Tzuo

And that just didn't make sense to us. Right? That wasn't part of the vision, That wasn't part of the mission. And so was easy for us to reject that option. I don't know how many sales people came to us and said this Fortune 500 company would buy the software if we let them install it and up and down the chain, including support for Mark, we were like, No, you don't really want to do that.

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Patrick Campbell

How do you maintain that like relentlessness about these certain aspects?

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Tien Tzuo

You have to take it back to, to, to the vision, to take every conversation back to a cohesive vision. You know, it's not easy. And, you know, with our decisions that Salesforce that we made that that probably we regret it because it was went too far. Yes. Decisions were made as we're that we regret that probably went too far.

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Tien Tzuo

Yeah. But but it's a iterative process and you want a feedback loop and taking every decision back to hey, is this going to advance? Our vision is going to allow us to get closer to our vision. Or as you're taking this offer, our vision is, is, is a fundamental question.

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Neel Desai

Can you imagine what it must have been like that early at Salesforce hanging out with Benioff?

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Patrick Campbell

No, I want to I want to say, yeah, sure. But no, I can't imagine. I mean, these are the godfathers and godmothers of our of our industry. You know, these folks were that early at Salesforce and yeah, there are other SaaS companies, you know, constant contact actually was founded very, very similar timeframe. And you know, there's a bunch of other, you know, industry heavyweights that came out of that period.

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Patrick Campbell

But if you look at folks like Tien and other folks who were early at Salesforce, like those were the men and women who basically pushed this entire industry forward. And frankly, what I was most fascinated by, what Tienager said was this insane, singular focus. Yeah. You know, not coming to, you know, having the sales folks come and basically be like, hey, we need to do this on premise thing.

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Patrick Campbell

We need to sell in a perpetual way. That's where I could close this Fortune 500 company. And then I'm going, No, that is one of the core things that we are trying to destroy. We will not bend on that particular piece and going through the dot com bust and still having that singular focus and that vision, I think that we can't say enough about how important that is.

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Patrick Campbell

And I think for a lot of companies and obviously for the success of both Zuora and Salesforce.

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Neel Desai

Totally, and I think that's where you see this birth of like the subscription economy really come, right? Yeah. And I mean, as.

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Patrick Campbell

You're about to find out.

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Neel Desai

Here at all the time we talking about it.

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Patrick Campbell

We hear about it from Zuora Yeah. Oh time right? Every single thing they publish subscription economy, subscription economy screwed. They actually trademarked subscription economy a long time ago. It's one of those things that there's just such a singular focus on it. And I think that we appreciate it. US being in this industry. We're like the next generation of company.

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Patrick Campbell

That's yeah, the subscription economy. Obviously this is where everything's going. Therefore, we should, you know, kind of latch on to it. But I don't think we appreciate Zuora being around for ten or so years now. Just how much in thousand and 2009 and before that, this whole concept of the subscription was so new. It was very similar to this whole SaaS thing that Salesforce was trying to do back in 1999 2000 ERA.

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Patrick Campbell

And so what I love to do and there's just so much on the vine here that we're going to be able to hear from Tien about. But the first jump in and like what is he define as a subscription economy? Why is it so important that ultimately go into practically what Zuora did in order to kind of push this market forward or ride the wave of this particular market?

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Patrick Campbell

So let's jump in and hear from Tien about what is the subscription economy, which I know seems obvious, but there's some good nuance here. Yeah. And what exactly I mean, subscription economy, you guys talk a lot about this obviously do evangelizing understanding what that is like. What is it, you know, for folks who don't know, for folks who don't understand like the concept, like give it give it to us here?

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Tien Tzuo

Well, you feel in your personal life, right? You probably if you just pause and think about it, you are actually buying less and less stuff, right? You don't need to buy cars or CDs or TVs or newspapers anymore when you have needs your entertainment or were or food or transportation. More and more, we're just reaching for our phones and we're accessing our favorite services.

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Tien Tzuo

Maybe it's Netflix, maybe it's it's it's Salesforce, maybe it's Spotify, maybe it's Uber. And so we call the shift a shift from a product economy, which is really dominated, you know, the business world, if you will, to our own world for the last 150 years to something new. And we call that a subscription economy. And it's really the delineation between the first and the second is really this whole concept of the end of ownership that you don't have to own things anymore.

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Tien Tzuo

Instead, we prefer to use our favorite services.

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Patrick Campbell

Yeah, and that's kind of where where we are and where we're we're definitely, like, amplifying.

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Tien Tzuo

Yeah.

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Patrick Campbell

What do you think really drove that? Like, if we go back, you know, the eighties, you had sort of subscriptions in some cases and we've had subscriptions for like hundreds of years. If you really look at like some retail products and things like that. But like what do you think really pushed us from going from, you know, on prem perpetual software, you know, one time purchases in a store to like this world where we don't own anything.

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Tien Tzuo

Well, if you look at it, what pushed the software sector to really going from selling products to selling services or services in the cloud, so to speak, that we just simply point a browser to and subscribe to. And it is the Internet, right? The Internet is is is at the root of so many changes in our lives. But when things are connected, right, when when, when you can connect to cloud based services, it makes more sense for companies or software companies to deliver it in a centralized service.

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Tien Tzuo

And everybody to take advantage of everybody is is just a much, much better economic model. Right? You don't should people shouldn't have to buy servers just to run idle. You could have an whole i.t department. People used to say that 60, 70, 80, 90% of the it budget which has been keeping the lights on. Right. And that's because of all the servers and all the backups and all the databases.

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Tien Tzuo

And that's just all, all gone away. And, and this is starting to apply to sector after sector after sector. Now, the first wave where I would say were the digital sectors, right. The information economy. So so publishing as an example. Right. Really, really had this transformation. Why buy a book, just access it online. The general media industry, whether it's news or movies or TV shows or songs, music, write, really, really went this route as well because it made a lot of sense.

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Tien Tzuo

But the reason we're so excited about this is we're about to see we're seeing right now the whole physical world being transformed as well. Well, so so if you buy a washing machine today, chances are it's connected to the Internet, right? Chances are you can you can see what your washing machine is doing right now, right back at home.

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Tien Tzuo

If your garage door opener is right, cars, every car is coming off the assembly line. Virtually every calendar 2020 model is going to is going to be connected to the Internet. Right. And enjoy centered up. We're seeing we're seeing ball bearings. We're seeing porta potties. We're seeing medical devices, we're seeing floors. We're seeing floors and tables and chairs really are all connected to the Internet as well.

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Tien Tzuo

And so that's seeing things going to happen where where if it's connected the Internet and is collecting all this data and is sending the data to some cloud based service, then you can see the engineers all of a sudden are going to put their focus right on developing cloud based services to take advantage of all these smart devices.

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Tien Tzuo

And so we think our world has been transformed, but we we ain't seen nothing yet because when every physical product really just becomes part of a broader service that's delivering you food or entertainment or transportation, you're going to see a completely different world.

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Patrick Campbell

Yeah. One thing I've always admired about Zuora is like the evangelism of the subscription economy, because I think that there's a lot of people who are like, Oh, like, oh, this evangelism seems so obvious now. It's just like when Zuora started, this was not as obvious at all. Like, talk a little bit about, if you don't mind the transition, especially to, you know, why this over.

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Patrick Campbell

I'm sure there's tons of opportunities you can either joined after Salesforce or that you could have started yourself after Salesforce.

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Tien Tzuo

Well many ways Is this this idea was a continuation extension of Salesforce, right? And Salesforce. Now we always talk about two transformations and mark out of the third, which was the philanthropic side, right? And you can see that pretty important. And then he's he's, he's very focused on that these days. But he talked about a new technology model, right, what we now call cloud computing.

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Tien Tzuo

Right. And before that we call the software the service. So closed off as a service. And there was a whole collection of terms in the early days before we landed on these things. But we also talked about a new a new business model, right? In the business model was subscriptions. And so the nine years of Salesforce was evangelizing both those things, right?

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Tien Tzuo

It was it was, you know, technology, cloud, multitenant, right. And metadata driven customizations. Right. All the words are stuck in my head. Right. But but why does the pay as you go model made sense? And especially when we went public to Wall Street with Wall Street to Wall Street, no understanding of this. It's like, well, why would you, you know, sort of taking $1,000,000 of front take money over time?

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Tien Tzuo

It doesn't make any sense. You just can go out of business. Of course, we're not seeing that these days. Right. They they understand the model and so in many ways, it was taking the evangelism of really both things and saying, you know, we've been evangelizing for the software industry. What if we can evangelize this for every single company?

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Tien Tzuo

Right. And that has been to continue with its chapter two of the work of part two, of the work, if you will, which which is now, we evangelize this in the media industry. We invite Angelides into the manufacturing industry. Health care is being changed from utilities are being transformed. We're seeing a lot of signs that financial services right is being disrupted.

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Tien Tzuo

You know, we're sitting here October 2019, and just in the last 30 days, both Fidelity and Charles Schwab have announced, you know, no fee transactions. Right? I mean, you were around in 1999, 2000, some of this stuff is is coming back. But but but there's a permanent shift that's going on. And and it's all because of this this this this shift in consumer behavior of wanting, you know, not wanting to buy products and simply wanting to be sort of.

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Neel Desai

So obviously, I buy subscriptions. Right. Our entire business is predicated on.

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Patrick Campbell

Subscription you both by subscriptions and by the notion of a subscription economy. Right. Neil buys a lot of subscriptions.

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Neel Desai

I'm just going to throw the podcast to highly recommend it, but I wonder if it's Zuora that's sort of forced to market or if this was something that was going to happen anyway.

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Patrick Campbell

Well, that's an age old question, right? Can you force a market or is it something that just kind of you're actually riding a wave? And I think that really just gave us insight into the answer to that, which is he saw the shift or he and others saw the shift where he talked about, you know, Salesforce. There was, you know, two big aspects.

00;17;47;17 - 00;18;16;27

Patrick Campbell

And then ultimately this whole payments concept is is really the concept that pushed things forward. And I think that that's that's something that is really, really hard to understand, is that I think that Zuora certainly spent a lot of money to advertise what was coming. And so they might have had some power in pushing the market forward, but less around pushing the market forward and more around defining what the market is and defining all of the things around the market.

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Patrick Campbell

Educating you on this is why a subscription or a recurring revenue or some sort of business with a value metric makes more sense than a perpetual license. Hey, this is what's coming and this is how you should define your income statement. This is how you should define your pricing. This is how you should define some of these things inside the market.

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Patrick Campbell

But I don't think that any company has the power to truly create the market. And I know that's a little bit of a controversial thing and it's a little bit of a chicken or the egg. But I would argue and I don't know if Tina agrees with this, I think based on what he said, he would agree with this, that they're really defining the market, not necessarily creating the market.

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Neel Desai

Interesting. So when we think of like category creation, you're saying the category given, given the infrastructure costs and given how easy it is to start SaaS subscriptions would have happened anyway. Zuora Sort of defined, yeah.

00;19;05;25 - 00;19;28;21

Patrick Campbell

Because if you if you really think about it I think category creation it define it's your positioning in the context of a market that's being like coming coming to fruition. Right. Okay. This is a very like capitalist view of the world, I'm sure. But it's one of those things where you're defining your positioning in the context of that market, and then you're fighting to be the definition of certain things, right?

00;19;28;26 - 00;19;56;04

Patrick Campbell

So Zuora was fighting, at least in my opinion, to define what it means to be a good subscription management system. And I'm honestly like defining the things around that, like what you should measure, how you should measure it, all of these different things. That's what Zuora was fighting to do, but Zuora wasn't fighting the market. They may have been a bit little bit early, but this is also why they needed to raise a ton of money, is because they were in the early stage of the market and then they were basically buying the mindshare and the positioning within that market as we're going to find out in a bit.

00;19;56;16 - 00;20;17;29

Patrick Campbell

But I think this is really, really important to even go deeper on because if you really think about the subscription economy, where it comes from, and Tim kind of alluded to this before, is really the measurement. So if you think of like the shift from perpetual software to kind of cloud based software and this, you know, for some of us even you like, you don't remember petrol software, I barely remember perpetual software.

00;20;18;11 - 00;20;44;25

Patrick Campbell

And it's one of those things where that was a huge shift that it took technology like we didn't have a WAC, we'd have like we had an IWC version. IBM even had that back in like the eighties, but it was so astronomically expensive. It was only used by governments and, you know, very, very big, large institutions. But what ended up happening is basically, you know, Salesforce and that kind of SaaS 1.0 world basically was like, cool, we now don't have to, you know, sell in this particular manner.

00;20;44;25 - 00;21;03;13

Patrick Campbell

We can sell and build this type of product. Now, over time, we basically have been able to start measuring things properly. We can measure the ball bearings, we can measure the amount of miles you're going on a car and we can very easily get that data into the cloud or get that data back into the billing system and then we can actually charge on those particular things.

00;21;03;21 - 00;21;20;27

Patrick Campbell

And so that's where, yes, we're in the middle of that market kind of being created and we're still, you know, are maybe past the infancy, but we're in the adolescence. Right. And there's going to be some products where we're like, that's a subscription, really. And you're hearing all these people kind of complain about, Oh, I have too many subscriptions.

00;21;20;27 - 00;21;33;18

Patrick Campbell

Is there going to be too many Disney Plus and Netflix? Like, no, because what's going to end up happening, at least in my opinion, is you're going to be able to kind of see that more transparent, like you're going to get the more receipts your bank is going to make it easier for you to see these.

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Neel Desai

As tools, the manager subscriptions, there's.

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Patrick Campbell

Tools and.

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Neel Desai

Encryption systems.

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Patrick Campbell

That pop up. This can be all these different things, but that doesn't it's not the subscriptions.

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Neel Desai

Fault, right? You actually.

00;21;42;01 - 00;21;43;14

Patrick Campbell

Are like the subscription because you.

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Neel Desai

Don't buy subscription fatigue.

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Patrick Campbell

No, I don't buy a subscription fee at all. Interesting. I think I think there will be fatigue. Yeah, I think it's going to be. But I think it's one of those things where to give you some context, like we're even thinking beyond subscriptions at this point because, you know, you think of the Black Mirror episode as one of the first ones where you buy the individual piece of toothpaste in order to brush your teeth that day, Right?

00;22;04;03 - 00;22;19;19

Patrick Campbell

Like that. That's where the world is going. And you see this in DevOps products, right? And you can kind of see that market develop over time where, you know, it's not necessarily going to be a subscription, but it's going to be predictable revenue. Now it's going to take another, you know, couple of decades for that to, to be, you know, super prevalent.

00;22;19;19 - 00;22;35;14

Patrick Campbell

But that, you know, in light that's kind of a subscription because you're probably not going to like actually swipe the credit card every single time you use it. You're probably going to, you know, batch that into a monthly, you know, subscription that's just going to fluctuate over time. And that's where I think, you know, Zuora is writing that wave of subscriptions being created.

00;22;35;14 - 00;22;55;07

Patrick Campbell

And there will be a little bit backlash because there will be a couple of things that maybe the subscription isn't set up properly, but there should be a true subscription. And then all of a sudden the measurement and the transparency is going to come and and that's going to help us get over the fatigue. But I am I am not Tien I am not the godfather of the subscription economy because that's really who he is.

00;22;55;11 - 00;23;16;07

Patrick Campbell

So I'd rather hear his opinion than my opinion on this, particularly because I think that he has seen some fascinating subscriptions and he actually, at some of his events and dinners, has a really fun game where, you know, people try to stump him on things that should or shouldn't be a subscription. And then he always has an analog of, oh, here's this subscription that you might not know about.

00;23;16;14 - 00;23;45;28

Patrick Campbell

And he'll reveal those a couple of those in a second here. But let's go over to Tiens to not only define, you know, is there subscription fatigue and what are all the crazy subscriptions out there, but also get a few pretty crazy subscriptions. What's kind of your thought on not only like what can or cannot be a subscription, which may be everything can, but also on like what that transition is going to look like when we have some things that maybe just aren't ready for subscription and then eventually they come on.

00;23;46;06 - 00;24;04;18

Tien Tzuo

Well, during Salesforce.com when it was 1999, right, it was about 11 people. Now there's 11 employee and people forget. But just to kind of bring back what, in 1999 was, All right, if you watch TV shows like Fresh Off the Boat and you can kind of see that. But but but no, no one had we fly at home, right?

00;24;04;18 - 00;24;21;12

Tien Tzuo

We had a US robotics 56 K modem was the state of the art. And we would dial into the Internet. There's no wi fi in hotels, right? So Salesforce, we were literally asking, you know, road warrior salespeople to go back to the hotel room, unplug the phone, the cord off the phone, plug it into their compact brick. Right.

00;24;21;22 - 00;24;40;26

Tien Tzuo

And it wasn't it wasn't a mac air. It was a compact brick. And and then you hear the whirling noise as a dial in see the screen scroll down. Right. There was there was no HTML five. There was no there's no access files. Right. Like my product managers would hand code what the pages look like, right in just in HTML themselves.

00;24;40;26 - 00;24;58;14

Tien Tzuo

Right. That's how easy it was. And and so it was it just it was a very, very different world. And the next nine years that I spent in sales was a big part. You know, my role, whether in product or marketing or strategy, was was evangelizing the idea. And we heard all sorts of stuff, right? This stuff is not secure.

00;24;58;14 - 00;25;16;21

Tien Tzuo

Like, why would I trust putting my customer data into your service, right? I prefer to keep it on my servers. Right. Or it can't be customized or I can't integrate this. How am I possibly going to integrate this with my my sap, my oracle, whatever my, my internal systems were? And so we just heard objection after objection after objection.

00;25;16;21 - 00;25;34;14

Tien Tzuo

This thing is only going to be for small businesses. All this thing will only be for tech companies. Right? The government's never going to use it. Right. And so and you just see that it plays out. These are all solvable things. And so so we had to solve how to integrate, but we did and we had to solve how to make the cup the product much more customizable than we did.

00;25;35;12 - 00;25;53;23

Tien Tzuo

We you know, we obviously had to sell security. And because of the centralized nature of it, you know, we can invest so much more in security than any individual company. And so, you know, when the world eventually realizes this and then the adoption really, really starts to shift to subscription fatigue. Right. I think we're just in a state of change and people are trying to process the change.

00;25;54;04 - 00;25;58;27

Tien Tzuo

Right. But but none of this is changes the underlying factor that this this is where the world is going.

00;25;58;29 - 00;26;02;20

Patrick Campbell

I heard you sometimes at dinners have a little bit of a game of stumping.

00;26;02;21 - 00;26;05;08

Tien Tzuo

Yeah. Subscription subscriptions. Just dump the chaff.

00;26;05;10 - 00;26;20;08

Patrick Campbell

Yeah, There you go. What's the most, like, ironically successful subscription, You know, that you've seen, like one that you were just like, I like. It's weird. No one would expect this is a great subscription. And then all of a sudden it's like, you know, a great business.

00;26;20;25 - 00;26;40;10

Tien Tzuo

Well, I mean, our minds have been blown over and over again. I mean, every quarter out here, two or three stories we wrote a book called described your bestseller out there. And what inspired us to write the book. Where do these stories I mean, we do you see mind blowing stories of companies really, really, really taking advantage of the subscription business model, both your startup disruptors and existing?

00;26;40;10 - 00;27;14;00

Tien Tzuo

You know, we're we work with companies that are 200 years old that are transforming into into subscription businesses. And we you know, we wanted to put these stories together as an inspiration, but also draw out the common elements of it for everybody. Learn so so subscribed, you know, recommend a book at Amazon.com and all that. But but if you think about it, should thinking through history you know we used to think industrial equipment or a big heavy tractors you know four ton five ton ten ton things and then Caterpillar came along and it's been a just a huge success story with connecting, you know, 2 million assets to the masses in the field.

00;27;14;00 - 00;27;27;16

Tien Tzuo

And today or virtually all of them are connected the internet we should talk about, you know, remember the first meeting when the recount teams came in and talked about a flooring company for us? Right. And containers were hot at the time. I was like, okay, containers, this must be a new technology for us. And it turned out, no, no, no.

00;27;27;20 - 00;27;49;00

Tien Tzuo

They sell physical floors, smart floors, right? Sensors underneath the floors. You know, a few quarters ago, we had a company that made porta potties and is like, well, is that a smart porta potty? But it turns out right, that that that this business model is actually a long running customer relationship, a long running contract with lots and lots of changes, with lots of add on products like, like like showers and fences.

00;27;49;00 - 00;28;05;01

Tien Tzuo

Right. Because they're selling the parks and things like that. There's also a usage based component, right? Because, you know, the thing is is used. Right. And can be measured. You know, this quarter we've heard about ball bearings, right? Apparently, there's a company out there with 2 million smart ball bearings that are detecting load and vibration pattern. Yeah. Yeah.

00;28;05;01 - 00;28;13;15

Tien Tzuo

I mean, at first I was like, so are you buying like ball bearings by the batch? That's what I was just thinking. What exactly? You know, they're smart ball bearings and, you know, it's possible that you can make a little metal ball.

00;28;13;17 - 00;28;15;22

Patrick Campbell

So I guess like friction, you know, knowing of the.

00;28;15;22 - 00;28;28;29

Tien Tzuo

Friction, vibration and load who's going to do big things. And they want to get the 50 million smart ball bearings. And so, you know, if you think middle balls out there can be smart and collecting data and throwing it out there into the cloud, then anything could be.

00;28;28;29 - 00;28;30;10

Patrick Campbell

Nanobot subscription.

00;28;30;16 - 00;28;39;16

Tien Tzuo

Nano file. Yeah, nanobots, subscriptions. Yeah. Iron Man. I can't wait.

00;28;39;16 - 00;28;46;22

Neel Desai

So I think this makes sense, right? Like, over time, the ability to measure things have gotten better back in the day. We can measure ball bearings or caterpillar.

00;28;46;22 - 00;29;04;11

Patrick Campbell

So to say the caterpillar thing, I can kind of believe. Right, Because it's such heavy cost equipment. Yeah, but, but, but the ball bearings thing, I mean, I can't even I want to look into that, but I don't know. And the porta potty thing I think made a ton of sense as well because it's like I don't, I don't want to buy those things.

00;29;04;11 - 00;29;22;19

Patrick Campbell

And my, my only thing is like, what's the difference between renting and subscription? And frankly, I think a lot of Zuora is kind of cheeky positioning is, you know, it's it's not different like it's the same thing, but it's always whenever I see the cars like there's, there's a lot of cars. Now BMW actually says.

00;29;22;28 - 00;29;24;15

Neel Desai

Well, is it now or is it a subscription?

00;29;24;15 - 00;29;28;03

Patrick Campbell

Yeah, it's not a lease. So what is the difference there? I think it maybe comes down to the contracts.

00;29;28;07 - 00;29;32;16

Neel Desai

Where it's like the default end to it. Right? When you're renting is going to be a term length or something like that.

00;29;32;17 - 00;29;50;11

Patrick Campbell

Yeah, yeah, something like that. So that was kind of fascinating. But, but I think ultimately this, this is basically the point I was trying to make, which is, you know, there's there's so many things based on the measurement now and Zuora as a product, that's where the measurement comes. But I don't want to shift things a little bit because I think it's fascinating.

00;29;50;11 - 00;30;14;01

Patrick Campbell

Obviously, it's cool that Zuora put this together or at least kind of rode the wave here and is continuing to define all those pieces around the wave. But one thing that I think that people don't appreciate about Zuora, it is one of the best, if not the best enterprise sales teams on the market, really one of the best people talk about their decks, people talk about their sales processes and it is not an easy product to sell.

00;30;14;01 - 00;30;22;29

Patrick Campbell

I would argue something like a CRM is a hell of a lot easier to sell because your TAM, your total addressable market is, you know, just like not any business, but a lot of different types of businesses.

00;30;22;29 - 00;30;23;19

Neel Desai

And people get it.

00;30;23;24 - 00;30;45;07

Patrick Campbell

A subscription management slash billing system, that is something that's super, super hard. And so they have one of the best sales teams, I think even though even though they are an enterprise B2B company, their marketing and their positioning is just brilliant. And I think it's one of those things that they they really focus on the go to market and they really focus on all that positioning.

00;30;45;07 - 00;31;06;15

Patrick Campbell

And so what I love to do is learn from Tien on how we in our respective markets, not only us as profit well, but also any other company that's listening, any anther executive that's listening can actually learn these lessons from Zuora about how to define a market, how to push a market and define all of those pieces around the market because I think that's really where we can, you know, earn our stripes today.

00;31;07;05 - 00;31;12;29

Neel Desai

So Stephen.

00;31;12;29 - 00;31;30;02

Patrick Campbell

When you think about your role, like either, you know, as an executive salesforce or here like how do you market, how do you go to market? Like if you were teaching a course on this, like what's the syllabus in terms of like what you have to focus on, what you have to care about and like, how do you you know, in, in those markets?

00;31;30;05 - 00;31;48;13

Tien Tzuo

I think there's two things, right? There's one aspect of it, which is how do you build a long term sustainable startup? What people just don't realize is, is this change takes time. And so there's just limits to how much change can happen in one, two or three years. I mean, as consumers, we feel it happening fast, but with a lot of stuff tend to build up over time.

00;31;48;27 - 00;32;06;18

Tien Tzuo

And so Salesforce has been doing this for 20 years. And I saw some stat that says, you know, the vast majority of software, 50, 60% of software is still sold under a perpetual license model. And it feels funny because we're buying SaaS predominantly, right? But there's just there's a lot of inertia, there's a lot of history. Yeah. That that takes time to change.

00;32;06;18 - 00;32;33;16

Tien Tzuo

And so we're 20 years and Celsius is past or 20th anniversary and it still like this. And so you need time to, to, to, to, to change things. And so if you can find a big idea that takes time to change and build a startup against that idea right then, then then you've got that runway, right. So kind of find the biggest ways so that you can serve the longest period of time, and then your job is just to kind of stay on that wave, right, and not fall off.

00;32;33;28 - 00;32;57;14

Tien Tzuo

And so there's that aspect now in the day to day details of what do you do from a marketing perspective? I think marketing is is ultimately about positioning, right? And what is positioning. And so you're going to be school. And the simple classic thing is, is, you know, price and, you know, cost and value cost efficiency. Right? And there's some curve that you're trying to put in.

00;32;57;14 - 00;33;17;13

Tien Tzuo

That's just a simple model, right, with two dimensions. Reality is there's an infinite number of dimensions that we're making choices against, and marketing is understanding those dimensions and trying to highlight to the customer which dimensions are the most important, right? And so Salesforce, it's like you can spend all this money on Siebel, but that's just a waste of money, right?

00;33;17;13 - 00;33;35;08

Tien Tzuo

What you really want is you really want ease of use, you really want convenience, you want you want agility, Right? Right now we're going through a phase where SAP and Oracle might be good for scale, but they're not good for agility. Right? And so you can see we're trying to define two dimensions and put us on the map right.

00;33;35;08 - 00;33;56;28

Tien Tzuo

In terms of positioning. Those guys are about scale or volatility. Which one do you want? Seems like the modern world really requires you to be agile. That is the essence of marketing. And then good marketing then is able to bring that out through storytelling. Right? And so how do you how do you communicate these things in stories? Because as people, as human beings, we absorb things primarily through through stories, right?

00;33;56;28 - 00;34;00;19

Tien Tzuo

And yes, we need facts and figures, but the facts and figures have to support a broader story.

00;34;00;29 - 00;34;18;03

Patrick Campbell

When you were at Salesforce or even with Zuora Scale versus Agility, like how do you how did you pick that? Is it, you know, arguing with the team, researching, finding ideas like how do you how do you find like that's, that's the thing and it probably changes to like, how do you know when to change?

00;34;18;08 - 00;34;34;20

Tien Tzuo

So, you know, when somebody is in marketing, when as a marketing mind, when, when it's something I had to develop myself, I don't know that I was born with it or because I was trained by it. You know, early my career is they're constantly testing. They're constantly testing because they're looking for input. They're looking for a lot of data.

00;34;35;04 - 00;34;51;18

Tien Tzuo

And so I remember, you know, one of my stories is this is like two or three months into Salesforce, are still a small company, less than 30 people. Ma comes out and says, going on a sales call, who wants to go with me? Right? Points of me and said, okay, so I'm like to see you on the sales call, do the product demo and all that.

00;34;51;19 - 00;35;09;22

Tien Tzuo

And I was like, I'm going on a sales call with a guy who has a reputation of being a great salesman. So it's like, Let's go check it out. It's my first, you know, my first sales call with them ever, you know, lots and lots of follow. But I remember him going to the meeting and I had expectation that he would he would pitch right like salespeople.

00;35;09;25 - 00;35;23;03

Tien Tzuo

Here's why our product is great. And he would, you know, and he didn't do that. He spent the whole time asking questions. And and it was just bizarre questions to it's like, what do you think of the color? What do you think of the color scheme? What do you think the taps what do you think of the name?

00;35;23;03 - 00;35;42;27

Tien Tzuo

What do you think of Salesforce.com? Is that the right name? You know, what do you think of this thing about like making it as easy as buying a book on Amazon? What do you think the word accounts, context, opportunities. It's the whole time he was just asking questions and just bombarding and at the end of it he was like, okay, so we'll give a demo now.

00;35;42;27 - 00;36;00;20

Tien Tzuo

And so so it was a different approach and you could just see he's constantly asking questions, probing and trying to understand what's going on out there. And so you eventually start to form a picture in your head that requires you just to kind of ask a lot of questions and explore what's out there.

00;36;00;20 - 00;36;13;05

Patrick Campbell

And do you as asking those questions and kind of like figuring out, hey, it's agility versus scale or whatever it is, like is there a point? There's a point where there's it's not always like one thing or it's like rare.

00;36;13;05 - 00;36;26;11

Tien Tzuo

It's well, you try I've test 50, 60, 70 things, right? And you see the ones that resonate. And you also try to interpret, you know, and they're not going to say the words to you. It's like, okay well, what do they really say? What do they really need? Right. And you just you just constantly test.

00;36;26;21 - 00;36;27;22

Patrick Campbell

How do you figure out if you're wrong?

00;36;28;18 - 00;36;51;14

Tien Tzuo

Well, you'll know. I mean, the customer's in one resonate. I mean, another. Clarence. So he's still at Salesforce. I remember he was one of the early product marketing. You mean product marketing. And we were launching Enterprise Edition and you know, first ask company, right? You know, ever to launch multiple editions and now it's standard practice. And we were trying to figure out how to do that.

00;36;51;14 - 00;37;08;07

Tien Tzuo

And I remember he, he pitched the first 50 customers wouldn't let the salespeople pitch like let me get on the phone with them and talk about Enterprise Edition. And he try this and try this and try this. And it's probably 50 pitches, but 3 to 4 weeks later he came back and he's like, I think I've got it right.

00;37;08;07 - 00;37;28;26

Tien Tzuo

I said, Well, what is it? It's I think it's about customization, integration and security. And, you know, and I'm taste testing. I was like, That sounds right. That sounds right. You've distilled all our conversations down to two or three things. Another story, you know, it's out there. But when when we started, how did the words subscription economy come about?

00;37;28;27 - 00;37;54;25

Tien Tzuo

Is the question. I guess sometimes, you know, we trademark it. It's it's our thing. You know, I had this fuzzy story of disruption in Salesforce disrupted Siebel. Zipcar is going to disrupt GM. Right. And, you know, took Uber to do that. Right. But the story is still the same. Netflix was disrupting Blockbuster at the time, right, because of still DVDs and the emailed out and and so I spent 50 minutes told a reporter friend Tom Tolley right Tom if you're out there right.

00;37;54;25 - 00;38;13;22

Tien Tzuo

And Tom came back I wrote an article and the headline was Powering the Netflix economy, right? Because he associate Netflix with subscriptions. As soon as we saw that headline, I was like, That's that's it. You know, he brought it down to a simple, simple headline. And we were just yeah, we struck a little bit of like, well, call it Netflix, we're going to get sued.

00;38;13;22 - 00;38;23;01

Tien Tzuo

Right? So, so, so so we played around with a bunch of things that eventually landed on subscription.

00;38;23;01 - 00;38;35;28

Neel Desai

I think that was really fascinating. Specifically how he talked about positioning Zorro in the early days, right? Because like, it's not easy, but it sounds pedantic now looking back. But the subscription economy was, I think, really powerful in the way that that defined it.

00;38;36;10 - 00;39;08;07

Patrick Campbell

Yeah, but I think that the way that they defined it and he used a couple of anecdotes there from both Benioff and Salesforce as well as the reporter who kind of coined Netflix Economy. Then they then kind of took a subscription economy from where it really came down to that building, that long term startup. I think what ends up happening a lot of organizations is that you essentially have like a founder, mission oriented maybe investors or just a founding team, and then all of a sudden things start to kind of snowball forward and you lose some of that core.

00;39;08;08 - 00;39;32;15

Patrick Campbell

Yeah, you're like, Hey, this is exactly what what needs to happen. And then just you expect everyone to kind of like take that on. I think the experimentation that kind of talked about, which is really finding that core essence and then making sure that with that core essence that everyone is executing in the same direction and then it comes down not only making sure that everyone is aware of it, but also having the right team and that team kind of executing things forward.

00;39;32;15 - 00;39;39;24

Patrick Campbell

And it comes back to, you know, a very, very common theme that we see when we interview these folks, which is, you know, people, people, people being like so, so important.

00;39;39;24 - 00;39;51;11

Neel Desai

I mean, I think that alignment is even more important because in order for Zuora to have the their place in the subscription economy product core sales, everyone needs to be bought in to this mission. Yep. For them to get there right.

00;39;51;11 - 00;39;52;25

Patrick Campbell

Yeah. 100%. It's all about that people.

00;39;53;00 - 00;40;03;26

Neel Desai

The one thing that I may challenge though is that like the first 100 people are bought into the subscription economy, right? It's hard for me to see that. They all saw that at that time. Really? Yeah. I mean, like, let's say I'm.

00;40;04;28 - 00;40;19;26

Patrick Campbell

Not really that they that they because I don't I don't know if they coined the subscription economy in the first hundred people you know you kind of talked about that where you need to kind of focus on that but you don't think the first hundred people saw this whole oh, we're we're focusing on this shift, whether the words were a subscription economy or not.

00;40;19;27 - 00;40;39;26

Neel Desai

I think maybe I think it was it's hard it's easy to say in retrospect, like how it was all perfect. Right. I would I'm sure it wasn't perfect as a as the first product person that Zuora I don't know if it was that that clear that that shift was happening in the world and they were going to power thousands of subscription businesses but they know years later.

00;40;39;26 - 00;41;13;17

Patrick Campbell

Well, I don't think I don't think Tina is saying, oh, the first hundred people have to know you're going to be a success, because I'm sure Tien like every founder had days where he was like, Oh, this is going to be successful. But I think his point is more the first hundred people have to be on board. And I think that's a really, really important thing where whether they realize that just naturally from their previous roles or they buy into the mission based on the interview process, the onboarding, etc., I would argue that more companies would be successful like Zuora if they had their first 100 people all on board with the mission of where

00;41;13;17 - 00;41;29;26

Patrick Campbell

things are going. And I think that you see a lot of companies where, you know, they kind of flounder because they just have the wrong people. And it's a very common story where people get to $10 million, which is roughly around where you might have, you know, 70 to 120 people depending on your funding structure and your revenue and these types of things.

00;41;30;08 - 00;41;58;27

Patrick Campbell

And then all of a sudden they just flatline. And there's a lot of reasons that they flatline. But one of the big reasons that they flatline is because you now have a situation where the CEO and the founding team can't be the ones evangelizing things. They need those hundred people. And so I'm not saying it's easy, I'm not saying it's perfect, but I'm saying that his advice around those first hundred people is probably very, very prescient to create a really successful company, especially one that was on the VC warpath and everything like that.

00;41;58;27 - 00;42;12;24

Neel Desai

I think that speaks to his leadership, right? I mean, he saw the first wave of that, not only at Oracle, but then again as it was for his own, he knew what he was up against. I think creating that alignment and culture of that mission from the early days really went a long way.

00;42;12;24 - 00;42;33;26

Patrick Campbell

Well, and I feel like there's it's very rare that a CEO like maybe Benioff, you know, like Benioff is a super boisterous, charismatic guy. Tien is his he's charismatic, but he's not boisterous. Right. And I think that even Benioff you know, I wasn't there team was obviously there. There are other people there. Like if there was only, you know, one Benioff and everyone wasn't on board, like Salesforce wasn't going to be.

00;42;33;26 - 00;42;37;08

Neel Desai

Success, do you think you have to have a leader like that if you're trying to define a category.

00;42;37;15 - 00;42;57;01

Patrick Campbell

As super tough? No, I don't think I want to say you don't. If you have the right mix of people. I think King obviously was a good like voice and a good like mouthpiece or however you want to define this for Zuora. But I think that their marketing team, the book that they wrote, all of these different things, like really push things forward.

00;42;57;01 - 00;43;09;05

Patrick Campbell

If you look at a lot of companies, or at least as someone who's kind of out there, Entercom has does drift had Gerhart a little bit of DC not to use like clear competitors, but there's a lot of different companies that have that.

00;43;09;05 - 00;43;10;23

Neel Desai

Slack is a good example of some of that.

00;43;10;25 - 00;43;28;22

Patrick Campbell

As Stuart was out there. But I think I think you have it's also a liability, right? Like we're trying this year to get me less in front of the camera and other people more in front of the camera. That's why you're here. Just to kind of diversify the brand a little bit. But I think that it's not a good question, not that it wasn't good, but it's not like a really good question because I don't think it matters.

00;43;28;24 - 00;43;45;20

Patrick Campbell

I think it's more around having those people like push things forward. I think a lot of what they push forward was having an amazing sales team and that sales team and moving that pitch. And that's one thing that I don't think a lot of people realize is this Tien at at the end of the day, I think is one of the best marketing CEOs out there.

00;43;46;09 - 00;44;04;28

Patrick Campbell

I'm not sure I don't think Zuora has a CMO. I'm pretty sure they don't have one. It's team and he has a huge crop of people, not only product team, but also on the marketing team and even on the content team who are fantastic at kind of not only coming up with that vision with him, but also executing on that vision around positioning that they've had for a good ten years now.

00;44;05;07 - 00;44;13;14

Patrick Campbell

And I think that's that's more important is those people that execution. And that's why I think what you said about 100 people not being important is dumb.

00;44;13;19 - 00;44;19;28

Neel Desai

No, I mean, I think, you know, I think it goes a long way to show that the discipline has carried through.

00;44;20;02 - 00;44;42;13

Patrick Campbell

100%. Well, and I think the discipline is the most important part. And that's what Tiens about to tell us, is that, yeah, having this positioning like that's cute now. But really, if you don't have a discipline, if you don't have 100 people, that's where things break down. And so let's jump back in and learn a little bit about what Tien talks about of having that execution and having the right people and the DNA of the company be so mission oriented.

00;44;42;22 - 00;44;54;09

Patrick Campbell

And how do you then flesh out the story to then basically push things forward into the best sales stack out there, the best sales team out there, some of the best enterprise B2B events I've ever been to, and so on and so forth.

00;44;54;25 - 00;44;55;07

Neel Desai

So when.

00;44;59;29 - 00;45;05;25

Patrick Campbell

Like what do you call a subscription economy? Is it like overarching like it's a brand, it's more just like a.

00;45;07;00 - 00;45;08;12

Tien Tzuo

Most important trend of our time.

00;45;08;18 - 00;45;29;06

Patrick Campbell

There you go. There you go. One thing I really admire about Zuora is like execution, especially in the sales and marketing side is is is amazing. Like when you go to is or event doesn't matter I've been through plenty at this point doesn't matter if I'm in New York, Sydney, San Francisco, same look, same field, same language, same like similar content, you know, that's tailored to the audience, stuff like that.

00;45;29;06 - 00;45;40;27

Patrick Campbell

Like, how do you how do you make sure that execution like down market because you're not a small company, you know, you're a public company and like, how do you how do you make sure that the execution kind of goes after that particular message or positioning or going after?

00;45;40;27 - 00;45;59;16

Tien Tzuo

Well, it's built into is built into our DNA. And so I think every employee is at the company because they believe in the subscription economy. I mean, a lot of startups in early stage folks or anybody really, really make a mistake of trying to go too fast to to to to the tagline. You can't really do that, right?

00;45;59;16 - 00;46;14;05

Tien Tzuo

You want to flesh out the whole story first and then you have a tagline, because behind the tagline is the full story, right? And so you hear the tagline, but then you go, Okay, what do you mean by the subscription economy? And then there's a 30 word version, there's 100 version, and there's, you know, there's the book, right?

00;46;14;06 - 00;46;31;11

Tien Tzuo

Which is, you know, whatever that is, 9000 words or something like that. Right? But no more than that. And so the story has to evolve over time. Right. And the tagline, the 30 word, 100 word, the book, they all have to line up. But when they do, everyone gets it. Then. Then it all starts to make sense. Right?

00;46;31;11 - 00;46;43;22

Tien Tzuo

And if you're telling the story in a way that resonates with us as people versus as a company trying to trying to explain a product, then then it ends up being easy to absorb and it's easy to propagate.

00;46;43;28 - 00;46;55;14

Patrick Campbell

What are those elements of like a good story? Because I think you you've there's been a lot written on like the Zuora Pitch, just very meta articles on like how powerful it is and how good it is, what are the good elements of, of that story.

00;46;55;29 - 00;47;11;00

Tien Tzuo

You know, I read an article once that says if you boil down all the movies in the world, there's really only like four or five plots. Right? And you know this watching the movie, you know, like, okay, this is the plot, but you still enjoy it, right? Because it's it's it's it's the it's the art of how they put it together.

00;47;11;18 - 00;47;30;17

Tien Tzuo

And I'm sure there's some exceptions. There's some art, you know, artsy movies that violate, you know, basic plotlines. But that's the essence of it. And so so, you know, I could boil it down to two. There's got to be some arc. There's got to be some plot. Right. We talked a lot about if we have customer speakers, we talk a lot about the the hero's journey.

00;47;30;26 - 00;47;47;28

Tien Tzuo

Yeah, right. The hero's journey is always, you know, to hell and back, right? There's always some kind of, you know, where there's Greek myth or modern stories, right? If you look at the arc of the industry chapters, the first few chapters, and this is a great book, they really all have the same pattern. It's just it's a decline and rise pattern, right?

00;47;47;28 - 00;48;08;23

Tien Tzuo

Where we're pre subscription subscriptions. The world was going to crap subscriptions really saved it Now you know the technology industry is further along in that the manufacturing industry is really but they all have that feel but they're all told in a way that's specific to to that industry. Right. This is just a general simple pattern of storytelling that you kind of anchor on.

00;48;09;10 - 00;48;24;12

Tien Tzuo

The work is not that the work is trying to find the essence of the story right. Funny essence of the plotline. But if you look at our marketing meetings where we're trying to figure a lot of our messaging out, we'll reference a lot of pop culture just because, you know, it's all around us right? The pop culture, storytelling.

00;48;24;27 - 00;48;33;15

Tien Tzuo

And so it's easier to draw from these type of common climate stories that we all have in our heads.

00;48;33;15 - 00;48;35;02

Neel Desai

Really like what he said about stories there.

00;48;35;17 - 00;48;52;07

Patrick Campbell

Yeah. And again, it's something I'm sure we've read or heard before, but the whole concept of there's, you know, you have your positioning. Yeah. Getting the right team with the right DNA to kind of execute on that. And then when it comes to the story, there's only a couple of formats to choose. Put your positioning inside those stories.

00;48;52;10 - 00;48;57;01

Patrick Campbell

Call it a day. Right. Which I know is hard. But that's that's essentially what's happening here.

00;48;57;02 - 00;49;07;23

Neel Desai

Totally. And there's a five second version of that story, a ten minute version and an hour long version. Right. And I think that's something really cool about Zuora and Tiens specifically is like you can adapt that positioning to the context needed.

00;49;07;27 - 00;49;25;22

Patrick Campbell

No totally And that's that's when people ask they do a lot of speaking and a lot of writing when they ask like going how do you put, you know, an hour talk together? Well, you don't start with the hour. You start with the 32nd version, and then the ten minute version, then 30 minute version. And then really from the ten minute version, you're just kind of filling in the gaps at that particular point.

00;49;25;22 - 00;49;56;17

Patrick Campbell

And so, yeah, I think I think storytelling is one of the most underutilized pieces. And I struggle a lot with this as a team because I think that we think storytelling is just a creative thing, right? Well, I have to be creative and it's like, yeah, probably to create the greatest story of all time, but to create a decent, solid story, I think it just takes practice and we don't have a lot of things within our, you know, kind of there are opportunities within our working lives to really create those stories.

00;49;56;17 - 00;50;17;12

Patrick Campbell

And I think that Zuora, again, quote unquote, even though they're an enterprise B-to-B company and I say that in quotes because like every company should do this and normally you don't have enterprise company that has such a strong storytelling, you know, base to it. I think Zuora has done a phenomenal job at this. And, you know, I don't know where Tien exactly picked that up.

00;50;17;12 - 00;50;38;26

Patrick Campbell

If it was from Salesforce, if it was from, you know, just his background, if it's just his love of, you know, stories, positioning and branding and marketing. But I think it's a pretty phenomenal job just in terms of, you know, what they've been able to do, not only with the subscription economy, which is, you know, synonymous with Zuora, but also just with, you know, building a company in a wave that was coming.

00;50;38;26 - 00;50;40;15

Patrick Campbell

And the way that they've defined a lot of.

00;50;40;15 - 00;50;45;12

Neel Desai

Right. I'm honestly pumped for the future of like enterprise marketing because when everything looks like a Nike ad.

00;50;45;24 - 00;51;05;29

Patrick Campbell

Yeah, that's what's coming. I mean, you know, you've been subscribed, I believe, Right. You know, and looking at all the fun stuff that they have and you're walking in and yeah, it's not, you know. Yes. You know, but it's because it's very focused as a, as a user conference for Zuora. But it's one of those things where it's just kind of fascinating to see what they've done in terms of the branding.

00;51;05;29 - 00;51;18;28

Patrick Campbell

And it's it's somehow is playful but not unprofessional. So it's still very, you know, blazer and, you know, kind of enterprise sales, but it's not it's not kind of stodgy and, you know, you know, up your nose.

00;51;18;29 - 00;51;19;19

Neel Desai

At no, no.

00;51;19;28 - 00;51;25;01

Patrick Campbell

Kind of a weird, you know, weird kind of enterprise type sale. What do we learn today?

00;51;25;01 - 00;51;26;02

Neel Desai

Ownership is declining.

00;51;26;22 - 00;51;28;27

Patrick Campbell

Yeah. The subscription economy is here.

00;51;28;28 - 00;51;31;29

Neel Desai

Is is surprise. But we've got a long way to go.

00;51;32;06 - 00;51;57;18

Patrick Campbell

Yeah, a long way to go. And I think that the the biggest thing that I kind of took away from this there was a lot of little missives is is for one positioning is super super critical and positioning is what gives everyone within the organization when they're on board with the mission, basically the glue or the vocabulary or the knowledge to, basically execute in all of the different things that they're doing on the front line.

00;51;58;03 - 00;52;14;10

Patrick Campbell

And I think that Zuora, even if they came up with a concept, if they didn't have that other piece around execution, wouldn't have been able to do this. And I think that's the biggest takeaway. And then that's also the hardest thing around alignment. And the people that you hire is making sure everyone is on the same page. I mean.

00;52;14;10 - 00;52;25;11

Neel Desai

I think for me it's like this recurring theme that seems to come up in every one of these episodes as people write it. Like not only do you have to hire the right people, but aligning them and making sure we're all marching towards the same mission is the most important.

00;52;25;12 - 00;52;44;29

Patrick Campbell

And that's ultimately discipline, right? So, you know, Tien talking about the discipline that Salesforce had not to build, you know, on prem, perpetual software and Zuora, I'm sure you know, I'm sure it wasn't easy when Shopify, you know, is growing so regularly interest sitting there strictly focused on subscriptions and that's why, you know, it's a long term play, right?

00;52;44;29 - 00;53;03;28

Patrick Campbell

And now they're the now the one public, you know, subscription kind of management. I don't know if it like that phrase, but so be gentle with me Zuora Zuora folks. But you know, it's one of those things where they're they're the first, you know, public one and they're the they're the Cadillac in the market. Like I like to say, they're the kind of the gold standard, which I think is pretty cool.

00;53;04;02 - 00;53;23;29

Patrick Campbell

Absolutely cool. Well, that's all for this week on Protect the Hustle. If you enjoyed this episode, if you like this episode, we always appreciate a like subscribe or make sure you're signed up at Protect the Hustle dot com. And if you're listening to this and you want Tiens bestselling book subscribe which is something that we make everyone who is onboarded at Profile will actually read.

00;53;24;05 - 00;53;24;22

Neel Desai

Our onboarding.

00;53;25;03 - 00;53;37;28

Patrick Campbell

In our onboarding. It's such a good primer. Make sure you make a five star review on Apple Podcasts and send an email to Patrick at Whatcom with the screenshot, and we'll make sure that you get a copy of Tien's book for free.

00;53;37;28 - 00;53;38;13

Neel Desai

Definitely.

00;53;38;16 - 00;53;41;06

Patrick Campbell

We'll see you next week.

00;53;43;22 - 01;02;01;28

Neel Desai

This has been a recurring studios production, the fastest growing subscription network out there. If you find use for this show, subscribe for more like it at profit WorldCom slash recur.