Founding a company in 2007 with the Great Recession looming could easily have spelled doom, or at least a major pivot or two.
But that’s not Zuora’s story.
Some startups have defining moments where they’re hanging on to a month’s worth of cash. Again, that’s not Zuora.
Between its launch 11 years ago and its IPO today, the company never pivoted. Yes, it made significant decisions along its journey, but the company we invested in a decade ago is very much what Zuora is today — only a lot bigger.
Zuora’s team, led by co-Founder and CEO Tien Tzuo, scaled the subscription management SaaS company and relentlessly defined a new marketplace — the Subscription Economy. It’s the stuff that founders dreams are made of.
At Shasta, we describe our commitment to founders as an unwavering partnership, and we think of ourselves as service providers to those entrepreneurs. When we invest, we do it for the long-haul. We’re steadfast — we show up to help make hard decisions and we tell the truth without being jerks about it.
When we invest, we look for specific qualities in a company — an epic product (one that delights and satisfies the needs of its users), passionate founding teams and category-defining markets. And we look for brilliant, driven founders we respect and from whom we can learn.
Zuora exemplifies all that and more.
An Elegant Product for a Complex Process
Subscription billing and invoicing software is a hard business. For starters, billing is complicated. It touches a lot of mission-critical systems — from the general ledger to payment systems. It has to be flexible and manage a lot of complexity. And because it’s how companies get paid, it has to work all the time.
Building a product that can navigate those minefields isn’t easy. Zuora’s founders — WebEx alumnus K.V. Rao, BeyondWork co-Founder Cheng Zou and ex-Salesforce CSO Tien Tzuo — along with executives including CFO Tyler Sloat, President Marc Diouane, General Counsel Jennifer Pileggi, SVP Engineering Brent Cromley, SVP Products Tom Krackeler, SVP RevPro Jagan Reddy, SVP Employee Success Karen Gaydon, SVP Customer Success Todd Pearson, and all the ZEOs around the globe deserve credit for doing just that.
Zuora created an elegant system for a complex process. It provides actionable reporting back to a company as well as best-in-class expertise with how to bill. It works with all your backend systems. Its super power? It turns your pricing into a competitive advantage.
Zuora is becoming a must-have for companies like General Motors, Caterpillar, Ford, Salesforce, Box, HBO, Financial Times, among other Fortune 100s, 20s and 10s. Today, nearly a decade after Shasta led a Series B round, Zuora is a public company.
When we invested in Zuora, the company was still early in product development but the brilliance of the leadership, whom we trusted, to take this product to market was evident.
A Force of Nature
Tien is maniacally focused on product. Today, Zuora has over 900 employees but Tien will still go into some sales meetings and do the product demo. The point isn’t that he is doing all the product demos, the point is that he is still so deep in the product that he can do the demo! He’s product-driven and customer-centric. He is brilliant — a force of nature — and one of the main reasons we invested in the company.
Tien surrounds himself with a great team and works closely with the Board to grapple with strategic issues and make important decisions. But what’s more impressive is his deep understanding of his customer, something that stood out when I first met him ten years ago. He defines product roadmaps based on customer needs.
A Category-Defining Business
A decade ago, we believed in Zuora’s leadership and the promise of its early product, but there’s another piece here, too. We, also, believed strongly in the market that Tien was addressing with Zuora: the Subscription Economy.
Today, we take the idea of the subscription-based payment for granted. After all, millions of Americans are Netflix subscribers and traditional companies like Caterpillar are now offering subscriptions for equipment and software.
But Zuora was founded before the boom in the Subscription Economy. They succeeded because its founders recognized the shift in the economy before anyone else did.
Legacy billing systems weren’t created with the idea of selling a subscription. They were built with the notion of selling a product so offering a subscription service creates a massive headache. Zuora understood that the old systems wouldn’t make the transition easily and with the impending massive shift in consumer preference for subscription-based services, they would struggle. Tien understood the extent of the problem and defined an entirely new business category with the Subscription Economy.
The ride with Zuora from our early investment in 2008 through its IPO today has been amazing. I feel privileged to work with Tien and the team at Zuora and am honored to continue to support the company as a Board member. Tien continually sets the bar high and I’m thrilled to partner with him and all the ZEOs at Zuora.