Careers at Zuora
Zuora’s mission is to help companies be successful in the subscription economy.
Tien Tzuo was the Chief Strategy Officer of Salesforce.com, having started as its 11th employee. In 2007 he was invited to tag along to a meeting led by the company’s founder, Marc Benioff. They would be talking with a founder of virtual meetings firm WebEx, as well as one of its engineers, K.V. Rao. At the get-together, the group got sidetracked conversing about the billing issues they faced as subscription companies. They had to develop billing software themselves and upgrade it frequently.
A few months passed and Tzuo found out that Rao and Cheng Zou, a WebEx alum, had built the prototype of a billing software product for subscription firms. They had also contacted Benchmark Capital partner Peter Fenton about possible funding. Fenton invited the two to give a presentation. It sparked his interest, but he knew his partners would only invest if the venture had a CEO. So he asked Tzuo, who was a rising star, if he would be interested in taking on the role. Tzuo agreed.
Along with Rao and Zou, Tzuo founded a company for their offering called Zuora, a word which is a combination of their surnames. His involvement attracted investors, and in March 2008 it was able to raise $6.5 million in funding, led by Benchmark. This was followed by $15 million in October 2008, a fortunate bit of timing as it was right before the financial crisis hit and investments for startups dried up. To be on the safe side, Zuora made customers pay for 2-3 years of service in advance.
As the economy got worse, some clients left, but the company was able to replace them with bigger ones such as Sun Microsystems and Reed Business Information. In 2008 Zuora unveiled its flagship product, Z-Billing. In 2010 it opened its first office in Europe, and announced it had obtained over $1 billion in subscription revenue. In 2013 it released its 50th product, and raised $50 million in funding. Zuora’s portfolio now includes billing, commerce, and finance SaaS solutions for subscription firms.
Benefits at Zuora
Business model of Zuora
Zuora has a niche market business model, with a specialized customer segment. The company targets its offerings at firms that want to create subscription-based models or manage their existing ones. While it serves all industries, its customers are mostly in healthcare, education, and communications.
Zuora offers three primary value propositions: convenience, performance, and brand/status.
The company offers convenience by providing an end-to-end solution. Its software handles all aspects of subscription management, from commerce to billing to finance.
The company has demonstrated strong performance through positive outcomes for clients. Specific examples include the following:
- Dell used Zuora’s solution to design an award-winning subscription experience and reduce new acquisition deployment time from over a year to six months
- Reed Business Information used Zuora’s solution to to increase subscription revenues by more than 10% by optimizing pricing and upsells, as well as reducing churn
- Mindvalley used Zuora’s solution to enhance the efficiency of billing processes and increase recurring revenes by approximately 25%
- Informatica used Zuora’s solution to increase its customer renewal rate to 95%
- Marketo used Zuora’s solution to increase its revenues by 5,000 percent
The company has established a strong brand as a result of its performance. It has amassed over 700 customers. Also, it has received positive coverage in high-profile publications, including Fortune, Forbes, the Wall Street Journal, and TechCrunch. Lastly, it has won many honors, including placement on the CNBC Disruptor List (2014), recognition as an OnDemand Top 100 Company (2013) and “Company of the Year“ from AlwaysOn (2012), and listing on the FASTech 50 by VentureWire (2011).
Zuora’s main channel is its direct sales team; it also acquires customers through its website. The company promotes its offering through its social media pages and attendance of conferences and other networking events.
Zuora’s customer relationship is primarily of a self-service nature. Customers utilize the service through the main platform while having limited interaction with employees. The company’s website features a ”Content Library” that includes several self-help resources, including white papers, reports, eBooks, videos, demos, webinars, and keynotes. The website also offers platform status updates, access to a monthly newsletter, and answers to frequently asked questions. Furthermore, it provides 80 hours of self-paced and virtual instructor-led classes through “Zuora University“.
Despite this orientation, there is a personal assistance component in the form of phone support and a community element in the form of a forum where customers can obtain assistance from peers.
Zuora’s business model entails designing software solutions and maintaining and updating its software platform for its customers.
Zuora has the following types of partners:
- Global System Integrators – Partners include Accenture, PwC, and Capgemini
- Accounting Partners – Partners include NetSuite, QuickBooks, SAGE, Workday, and Intaact
- Payment Providers – Partners include Chase Paymentech, FirstData, BlueSnap, and Cielo
- CRM and Sales Solutions – Partners include Salesforce.com, Sertifi, and Xactly
- Integration Providers – Partners include Dell Boomi, Flexera, Informatica, and MuleSoft
Zuora’s main resource is its proprietary software platform, which serves over 700 customers. It also depends on its human resources in the form of instructors and service personnel to provide training and customer support. Lastly, as a relatively new startup it has relied heavily on funding from outside parties, raising $242.5 million from 17 investors as of March 2015.
Zuora has a cost-driven structure, aiming to minimize expenses through significant automation and low-price value propositions. Its biggest cost driver is likely marketing and sales expenses, a fixed cost. Other major drivers are in the areas of customer support/operations, also fixed costs.
Zuora has three revenue streams. It charges a one-time set-up fee for first time customers. Once they have signed up, it utilizes a revenue-share model in which it charges 2-3% of the total amount clients invoice each month. Lastly, it charges an overage fee usage outside of set parameters.
info: Tien earned a Bachelor’s degree in Electrical Engineering from Cornell University and an MBA from Stanford Business School. He previously spent nine years at Salesforce.com, where he served as its Chief Marketing Officer and Chief Strategy Officer.
info: Cheng earned a B.S. from Beijing University and an M. S. in Computer Science from Indiana University. He previously served as Co-Founder and CTO of BeyondWork and has held senior development roles at Oracle, Remedy, and Plexus Software.
info: Tyler earned a B.A. from Boston College and an MBA from the Stanford Graduate School of Business. He previously served as CFO of Obopay and Controller of the Emerging Products Group at Network Appliance. He has over 15 years of experience in finance roles.
info: Marc earned a Master‘s degree from the Bordeaux Business School with specializations in Computer Science and Business Automation. He previously served as Executive Vice President, Global Services & Partners at enterprise software firm PTC.
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