Invest Like the Best with Patrick O'Shaughnessy - Henry Schuck - Building ZoomInfo - [Invest Like the Best, EP.330]

Episode Date: May 23, 2023

My guest today is Henry Schuck, the founder and CEO of ZoomInfo. I’ve gotten to know Henry over the past year by virtue of him being on the board of Tegus, where I’m a board observer. I meet a lot of people and Henry is one of my favorites. His energy is unmatched and he knows his business down to the tiniest details. He has tenacity and curiosity in spades. ZoomInfo is a go-to-market software and data solution for B2B sales. Henry founded the business as DiscoverOrg in 2007 and bootstrapped it for the first 7 years of its life. Today, it’s an $8.5 billion public company with a database of over 140 million business contacts. We delve into the science of great sales, Henry shares some awesome stories, and we talk about his business philosophy more broadly. Please enjoy my great conversation with Henry Schuck. ZoomInfo Business Breakdown Founders Episode 136 - Estee Lauder Founders Episode 288 - Ralph Lauren For the full show notes, transcript, and links to mentioned content, check out the episode page here.  ----- This episode is brought to you by Tegus. Tegus is the modern research platform for leading investors, and provider of Canalyst. Tired of calculating fully-diluted shares outstanding? Access every publicly-reported datapoint and industry-specific KPI through their database of over 4,000 driveable global models handbuilt by a team of sector-focused analysts, 25+ industry comp sheets, and Excel add-ins that let you use their industry-leading data in your own spreadsheets. Tegus’ models automatically update each quarter, including hard to calculate KPIs like stock-based compensation and organic growth rates, empowering investors to bypass the friction of sourcing, building and updating models. Make efficiency your competitive advantage and take back your time today. As a listener, you can trial Canalyst by Tegus for free by visiting tegus.co/patrick. ----- Invest Like the Best is a property of Colossus, LLC. For more episodes of Invest Like the Best, visit joincolossus.com/episodes.  Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here. Follow us on Twitter: @patrick_oshag | @JoinColossus Show Notes (00:03:19) - (First question) - The story of Henry’s famous email about building a championship team (00:07:01) - Dealing with pressure in business (00:09:14) - Applying pressure from the top down as a CEO (00:10:28) - How ZoomInfo’s C-suite was constructed and how it operates (00:13:17) - A high-level picture of their product philosophy (00:19:29) - Rating the effectiveness of the average B2B go-to-market engine (00:21:25) - An anecdote about meeting with the head of commercial banking at one of world’s largest banks (00:23:06) - What separates the good from the great B2B go-to-market strategies (00:27:30) - Specific questions for screening potential salespeople; characteristics to look for (00:31:39) - The story of bootstrapping his startup (00:36:05) - His view on the process of pricing (00:40:54) - The importance of M&A in building the business (00:47:01) - The story of how ZoomInfo was acquired (00:50:06) - The ever-shifting goal posts of mergers and acquisitions (00:53:15) - Anecdotes of hustling in the early days (00:59:34) - Another story from the early days of selling (01:03:40) - Using information to influence a potential lead into a sale (01:04:57) - How companies can prepare for the advent of generative AI (01:12:10) - The stages of what it means to be a CEO (01:13:15) - Learning how to execute M&A (01:16:43) - What it means for a company to work in unison at scale (01:18:26) - His advice on M&A, company core values, and corporate communication (01:26:57) - Tips for going public with a company (01:28:33) - Lessons learned from leading a public company (01:34:47) - The kindest thing anyone has ever done for him

Hello and welcome, everyone. I'm Patrick O'Shaughnessy, and this is Invest Like the Best. This show is an open-ended exploration of markets, ideas, stories, and strategies that will help you better invest both your time and your money. Invest Like the Best is part of the Colossus family of podcasts, and you can access all our podcasts, including edited transcripts, show notes, and other resources to keep learning at join colossus.com. Patrick O'Shaughnessy is the CEO and founding partner of Positive Sum and the CEO of of O'Shaughnessy asset management. All opinions expressed by Patrick and podcast guests are solely their own opinions and do not reflect the opinion of positive sum or O'Shaunacy asset management.

This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions. Clients of positive sum or O'Shaunacy asset management may maintain positions in the securities discussed in this podcast. My guest today is Henry Shuck, the founder and CEO of Zoom Info. I've gotten to know Henry over the past year by virtue of him being on the board of Teagueis, where I'm a board observer. I meet a lot of people, and Henry is one of my favorites. His energy is unmatched, and he knows his business down to the tiniest details.

He has tenacity and curiosity in spades. Zoom Info is a go-to-market software and data solution for B2B sales. Henry founded the business as Discoverorg in 2007 and bootstrapped it for the first seven years of its life. Today, it's an $8.5 billion public company with the database of over 140 million business contacts. We delve into the science of great sales. Henry shares some awesome stories and we talk about his business philosophy more broadly. Please enjoy my great conversation with Henry Shuck. So, Henry, this is a unique one because we have the benefit of having done an episode with you already before on the business breakdowns podcast.

I didn't do it. Jesse Poogee hosted you. And it was comprehensive. I thought it was like an incredible overview of the history of Zoom info. We'll talk on some of those. elements, but I highly encourage people if they're interested in the business to also check that out. So I'll try to make them really complimentary with this conversation. I want to begin somewhere kind of fun, which is with an email that you wrote to your team soon after the business went

public. And the topic of the email was about what it means to be a championship team. And I've read the email. I really liked it. It seemed like, especially at the time, like in stark contrast to some of the other similar communications you might see from a CEO to a large team. Can you describe what the email said, the gist of the message and why you wrote it? The gist of the message was we're building a championship team here at Zoom Info. And not everybody is cut out for a championship team. And I use the analogy of the Pittsburgh Pirates and compare them to the Boston Red Sox. And I said, look, the Pittsburgh Pirates, there are a bunch of Major League Baseball players on the Pittsburgh Pirates.

And every year they show up and they play the game and they're never in the hunt for a championship title. And they never show up expecting to be in the hunt for the championship title. So they show up, it's a nice place to work. They make pretty good money. They finish the year and they're very mediocre or submediocre. And then there are other teams like the Boston Red Sox or the Yankees

who every year, year in and year out, are focused on building a championship team. And they're always in the hunt for a title. And those teams just operate differently. And someone can be really successful on the pirates, and they're never going to make it on the Boston Red Sox. And what I told our team is, look, we are building a championship team here. And if you look around and you feel like it's hard or it's not for you

and you don't want to give the discretionary effort to Zoom info, there are lots of companies that aren't, a championship team. There are lots of Pittsburgh pirates out there that you could go and have a really comfortable existence at and not feel sort of this everyday drive to be the best to win a championship. And Pittsburgh Pirates are good people. And you could go work at that company and you won't feel the pressure of what we're trying to build at Zoom Info. But if you come in every day and you think that you're going to have the Pittsburgh Pirates and win a championship, it never happens. I wrote it like four days after the IPO or something like that, seven days after the IPO in

2020. And what I really wanted to reset was a couple of things. One, people felt really great about the IPO and the outcome of the IPO. But it had to be really clear that the IPO was just one step in a much bigger journey. And that if we got so caught up in how great we were, we we were when we IPOed this one little moment in time that we'd forget that there's a much longer road in front of us where we have to continue to perform and continue to win championships. And look, I think there are places for lots of different types of professionals in business, but you should align yourself to the kind of team that you want to be on. Do you want to win a championship?

And do you want the pressure and the performance management that comes along with winning a championship? because that's what you're going to get here, and it may not be what you get somewhere else. You've used the word pressure, I think, three times, like a really important word. I'm curious here because this is a universal principle that can be applied to investing companies or anyone else listening. What does pressure feel like on the receiving end of it? What have you learned about effectively applied pressure? Yeah, I think what it feels like on the receiving end is there is an expectation for perfection

or at least near perfection, which really means we expect projects to move quickly and be thoughtful along the way. So when you show up ready to execute on a motion in the business and you're at the gates and we're looking over the project, there is a performance plan that's expected and a goal that we're expected to reach. There are metrics that we're going to follow and that we're expecting you to hit. And then we're going to come back every week and go, hey, you launched this project. What is it looking like? Is it hitting the metrics that we said? Why or why not? Let's make changes. Let's make improvements. Come back the next week. Did it hit those metrics? Why or why not? What did we learn? How are we fixing it? I think pressure means there's this constant iterative

process to improve whatever you're doing. Nothing is in stasis. So if you feel really great about something that you built here at Zoom Info, for sure, we're coming after it in the next quarter or the next couple of months to go, how do you tweak it? How do you make it better? How do you turn the screw on that? So it's a little bit better and a little bit better all over the organization. So there's this constant pressure to improve. How do you make sure that continually happens from the top down? I happen to know you in this case to like, it's not surprising that this works at Zoom info, but is this just something that can only work if the CEO of the business is personally like this and just naturally wants to apply this sort of pressure? Or is this something that can be

learned, quote unquote? One of the things I've started doing today is when I'm involved in a project or I'm involved in the execution of something, what I do is I'll explain why I'm there. And I think it breaks down to three things, competence, reliability, and motive. So when I show up and I'm involved in something, I might be involved in a website redesign. And I come in and I'm in those meetings. And then at some point, I go, listen, I want to tell you guys why I'm here so that you can get me out of this meeting. And it's one of these three things, CRM. I either think you guys are not competent to actually deliver this.

And that's because the last three things you delivered were off here or off there or off here. I might not think you're reliable because we have to hit a deadline on this and the last three things you didn't deliver on time. Or I actually think your motives are wrong. Like you actually want a pretty website and I only care about a website that performs really well. So I'm coming here to make sure that all of our motives are aligned. Your pathway to getting me out of these calls because I don't want to be here either is to close the gap on one of those three things, CRM. And I think if the leaders at the organization also drive that

level of transparency and communication, then you can drive performance in those organizations because you're just constantly aligning to the most important metrics that you're going to track. Does that mean that your senior most team end up looking like facsimiles of you to be able to propagate this? I think mainly yes, certainly around performance management, yes. I think, I think people on my executive team have different perspectives about things that don't come naturally to me that are valid perspectives and help the organization run better operationally. But I tie that all back to performance. I'll give you an example.

Our chief revenue officer came in and went, listen, we have no golden customer journey at Zoom Info. We don't know what a perfect customer looks like. what is their experience in sales, onboarding, implementation, the first three months of usage, provisioning, integrations, what does the perfect customer look like? And then operationally, what do we do when a company doesn't look like one of these perfect customers? What is the operational motion around that?

People have been telling me about golden customer journey for, I don't know, a decade. And every time I hear it, I just feel like it's just like something that customer success people think is important to do, and it doesn't actually create any value in the organization. And first of all, I'm listening to him. I'm paying attention to why he thinks this is a good idea, and ultimately it comes down to you can't expect to operate and execute perfectly if you don't know what that journey looks like and you don't actually coordinate the motion. Otherwise, you have situations where you go, okay, when a customer doesn't come out of onboarding the right way. What do you do? And then that's like, oh, someone in customer success is going to call.

Product marketing is going to send a message. Customer marketing is going to send a message. We're going to put a pop up in the platform that says like, hey, log in more, get your users provision. The AM responsible for the account is also going to call in and call the MPOC. And now there's a bunch of uncoordinated motions happening at the company. And I care now about the golden customer journey because I see the operational improvement that it can drive. And until that ties off, it's really hard to get momentum in the business around any initiative until the business really understands the performance metrics that some initiative is going to improve.

So in that way, everybody becomes a little bit of a facsimile of me. But in the ideas, they're not. There was no universe where I was going to show up and say like, hey, we need a golden customer journey. That was never my jam, but highlighting that we can't be operationally excellent unless we have that, that's the piece that everybody gets their head around.

I'm also interested in the other side, which is, okay, great, you've got an amazing performance management culture and system, but that means you have to pick the strategy. You've got to pick the direction. Maybe you can describe at the highest level, like what the Zoom info product philosophy is. In a simple way,

You could imagine if you run a business, you're selling to other businesses, a perfect world would be like, I just get a feed every morning of here's your most likely buyer. They're ready to buy today. Here's their email. I've told them about you. Give them a call. Are you working backward from that perfect outcome? Is that how you think about it?

Maybe just describe it if there's more to it than that. Here's the hard part about being a seller today is that there's all sorts of information and insights about accounts that you should be selling to. Maybe a company in your territory visited your website and viewed the pricing page five times. Maybe a company in your territory has been researching on the web your products and solutions. Maybe a company just hired a new chief information officer and they came from an existing account. Maybe they had a good quarter or a bad quarter. The CEO mentioned your types of solutions in an earnings call.

They're all of these really unique insights and signals that are happening in your territory. you, but today, a seller has to personally triangulate all of those different things to decide who is the right company for me to go talk to today and use my resources in the best way. The future, and I think actually generative AI helps a lot with this, the future is being able to take all of those insights and all of those things that are important and predictive around who you should be talking to today and probably what you should be saying to them and then deliver that to you every single day.

These are the 15 companies and then the 15 people at those companies you should be engaging with today. Click a button to see all of those reasons. Intent, visited your website, new CIO, good quarter, whatever that might be. But I think what you're working backwards from, Patrick is exactly that.

Let me deliver to you the exact, the exact companies and the exact people you should be engaging with today based on all of the proprietary data and insights that we've collected. We share a board in Teagueis where we talk a lot about two concepts, the value of unique data and the importance of embedding that data in useful workflows at the customer level. Can you talk about the interplay of those two concepts and what you've learned about building a business, which is basically the intersection of those two things. You sit on top of all this data that's really hard to get, and then you've built more and

ways to automate the use of that data, I guess is the cleanest way to say it, for sellers. But I'm interested abstractly at the higher level, the interplay between unique data and workflow and why that's a powerful way to think about building a business. When we think about unique data and workflow, I think about it a lot in the concept of go-to-market plays. How do you help a customer go to market in an automated way? And by the way, most companies are nowhere near this utopian state. But what you really want is if I go walk across the sales hall today here at Zoom Info,

and I grab the three best account managers and the three best account executives on our staff, and I ask them, hey, tell me what you do to source a new opportunity that works the best, they'll tell you exactly what they're doing. They'll say, you know, I look at companies that just got funding and I see if the chief revenue officer used to work at a company that was one of our clients. I go search job postings and I look for companies that are hiring account executives or sales development reps and I go reach out to them and tell the chief revenue officer, whatever that might be.

What we think is that it's really just been a failure of imagination to be able to capture all of those key things that your best sellers are doing. doing and then automate a motion behind those. So it requires unique data. You have to have that sort of, oh, which job postings mention account executives or SDRs, which companies are getting funding, which companies are spiking on intent. And then you need to marry that to the rest of the unique data. So, okay, I know which companies. And then I need to go which contacts, who are the people that I talk to? And then how do I build workflow around that so that instead of these things happening in an ad hoc way is automated and scaled all across my organization. So that every time

one of these triggers happen, we automatically launch a go-to-market play behind them. We're sending an email to the right people. A sales development rep is calling them. We've got display ads going against the individuals on social media and on the display ad network. In the future, they're getting an ad on connected TV or on Twitter. And so every time you find one of these key, moments that indicate that you should be in front of those clients, an automated motion runs behind it. That's what makes data really sticky, whereas today, if I tell you like, oh, here's all the data on your total addressable market, you know, log in and read it or find your own list or whatever, that's a really painful way to extract value out of Zoom info. If instead I start

with a set of triggers that indicate a company may be interested in your products and services, and I let you build a downstream workflow and you build 50 of them, now all of a sudden, you come in and you, instead of looking for information, you have a command center that tells you, we're talking to these five companies because of this trigger and these 10 companies because of that trigger. And we already sent out the emails and the display ads are going on these companies and the SDRs are calling them, orchestrating that motion that starts with. with the trigger and Mary's company and contact data really drives that workflow part of the platform. And it is what turns data into workflow and software. If you think about sophistication

levels across the, I'll call it like the big cap universe, let's just say there's every company that sells an expensive product B2B publicly traded or something, a few hundred of those or whatever. If you went and did a personal assessment of the sophistication of their go-to-market engine, One through 10, how sophisticated do you think they are? On average? Yeah. Four. And why is it that low?

What is most unsophisticated on average? It is interesting. What you see in the super enterprise is actually often exactly what you see in the super SMB. So you have account executives. They get a territory and they have the data in their CRM and they're told to go generate more business. and that's kind of it.

Here's your CRM data. Here's your territory. Good luck, sell more. I talked to a large multinational enterprise company just the other week. They told me one of the biggest pieces of value that they got from Zoom Info was they were able to take the accounts in Zoom Info, compare them to the accounts that they had in Salesforce, and then realized that in any given territory, there was a 40% delta in between the accounts that were in Salesforce, which effectively make up their territories and the accounts

that were in Zoom Info, which are the actual universe of accounts in their territories. The head of sales was like, this totally changes the game for us. All of a sudden, my sellers have 40% more accounts to go after in Salesforce. That is on the spectrum of maturity way, way early in the process. But it creates this immense amount of value for that company because there are businesses that should be buying their products and services that they don't even know exist during our IPO. I met with one of the biggest banks in the world. And I met with the head of commercial banking at that bank.

And he goes, I want to grow in these 15 regions, Salt Lake City, Denver. And I couldn't tell you within a 50-mile radius of any of our main branches, how many businesses there are that should be customers of ours. And I've got like 200 people in India trying to like, Like pull that information together for me. And again, it's like the most basic. Those get a one on the ranking. Literally don't even know who they could sell to.

Literally don't even know who they could sell to. So you see a lot of that in the super enterprise. In the tech companies, the more modern cloud-based tech companies, their frame of mind is how do I take all of this data, get it into a data lake, and then start making the right propensity to buy decisions. But what ends up happening, what I see really often, not really often, but in the super enterprise I see fairly often, they go, oh, we're going to build our own unique paint of glass for this.

We're going to go run a project with probably our worst internal developers, and we're going to have them build basically Zoom info internally for a super enterprise company. We're going to take Zoom info data. We're going to take other data, our own data, Mary and our reps are going to have the perfect sales intelligence platform. And I've never seen that project succeed. But it does show that there is a meaningful appetite for leveraging this type of data in a different, more sophisticated way.

But companies have not figured out how to deliver that. Are there tens on that spectrum? There are definitely eight and nines. I don't think there are tens. there's definitely eight and nines. Can you describe, you don't have to name them, but can you describe what those places are like in the way you describe the ones? The way those places work is kind of like that last example, but essentially they go,

listen, we have a huge total addressable market and we need to make sure that our field is going after the companies most likely to buy our products and services today. And so they go out, they pull product data into Snowflake or Google BigQuery or wherever. They pull in product data. They pull in their data from Zoom info. Maybe they also subscribe to some unique data point about healthcare companies or oil and gas businesses or whatever. They pull that into.

They pull in any engagement data that they have. Have we talked to the customer? Have they ever been an opportunity? they pull in conversation intelligence data. Have we talked to them? What did they say on the calls? They bring that all together in one place. And then they score it.

And then they send it out specifically to each of their account managers, account executives, and sales development reps as a ranked list of who you should be engaging with every day. So it is like driving towards that utopian. How do I know who to exactly run after? and they're doing it by bringing all of their data into one place. Data scientists are behind that driving the scoring of how important is it if they visited our website? How important is it if they hired a new CIO?

And then that list is constantly being ranked and then shipped out on a daily or weekly basis. I like the idea out there of everyone listening to this and thinking about the Henry scale and trying to plot like where they are and challenge their teams to get better. Obviously, like a lot of that is infrastructure like you just mentioned, but it's people too. In your experience, if there are universal

characteristics of really great salespeople, what are those characteristics? And I'm also curious if those things differ at the stage of a company. So they definitely differ at the stage of a company. It's funny you ask that I'm literally right now building what I'm calling an anatomy of a great account executive, account manager, and customer success person at Zoom Info. But if we go to the startup stage and talk about that. In the startup stage, what we found, and I struggled a lot with this, but what we found during the startup stage was people with basically high cognitive ability perform the best in a startup stage. And I was trying to hire account executives for two years. I'd hire six and one would stay. I'd hire four and one would stay. And it was this painful,

painful existence. And at some point, we started giving a mix of personality and aptitude tests to our account executives to try to get a feel for where they fall on those spectrums. And is that like a test that we could use for future hiring? Ultimately, we found that at the startup stage, the best performing account executives were the ones with the highest cognitive score on these tests. That was really valuable for us because then we were able to go out and hire people. We were able to use that as a screen up front. It's like the Wonderlich test. This one was called the Omnia. Same sort of concept. And then that lasted until we were about 1,000 employees and at 1,000 employees broke down. It didn't actually track to the best account executives and account managers anymore. There

were different criteria that made sense. People with really high cognitive ability were being outdone by those who had lower cognitive scores. It just didn't matter once you got to size. And in a startup, obviously, you have to figure out a whole bunch of stuff on your own. You don't get enabled. There aren't tools and systems and battle cards for every situation. You're just kind of figuring things out as you go. And a lot of it is left on you to figure out.

As you get bigger, there's all sorts of scaffolding around an account executive or an account manager. So all of a sudden, things are being driven for you and you don't have to figure everything out yourself. When I was thinking about what makes a great salesperson, I wrote down these things. Do you understand who our customers are and how they leverage our solutions? Do you understand our products? Do you connect the dots between the value our products offer and the pain points the customer is trying to solve for? and do you follow a structured process that the customer agrees to that drives to a decision? That also means you're going to show up to the calls prepared.

It's going to mean you understand business context during the calls. So you're not just going through the motion, but you're legitimately trying to understand what the customer sells, why it's important who they sell it to, how their systems are set up. You follow up really well. So you follow up with values and key case studies. You look at intent for their products and services. You send interesting use cases that they may use Zoom info for. And you leverage reference customers in the sales cycle.

And then there's an attitude component to this. And so you're competitive. You fight for every deal. You hate to lose. You think strategically about each opportunity. you understand how to solve problems for customers. You really know the product inside it out, and you hustle. You hustle in every deal.

You never lose because you get outworked. That's kind of how I think about what makes a really great rep. One of the things you've taught me is just how lazy everybody is, not just sales. Like everyone is just lazy. Like you had me go look at the last 20 cold sales emails that I had received. And you said, I'll bet you there's not one that has like anything. custom about you, anything. And sure enough, I went through 20, like, there was only a few that that even, like, had my real name in there. There's just tremendous laziness. And you've taught

me to think past that laziness. So I want to hear examples that one that comes to mind is before people knew what your company was. You'd show them custom org charts, like walking the floor of trade shows on an iPad, maybe tell that story. And really, I just want to put some colorful examples to what scrappy, hustling, customized, hardworking salespeople do. Totally. So, So when we were a startup, we still do this today. But when we were a startup, we had really great product market fit with salespeople at technology companies. We knew they were our best segment of customers.

They closed the fastest. They paid the most. Our data lined up perfectly with what they were doing. And so what I figured out at some point was I didn't need to buy a booth at a conference, like a big tech conference. And in fact, it didn't make sense for me to buy a booth. because the people walking the floors were technology decision makers, CIOs, VPs of IT. I didn't want to talk to them.

Who I wanted to talk to were the people who were manning the booths at all of these conferences. And so all I needed to do was get like a free pass to the exhibitor floor, show up and go talk to the most target-rich audience that existed for our business. This is so far out of my comfort zone, by the way, to show up at a conference. conference and walk booth to booth to booth where people are willing to engage with you because they think you might be like a potential buyer of their products and services, only to find out 20 seconds in that you're actually trying to sell them something. But it was too good of an opportunity to pass up. So I would get on a flight in the morning. I'd go to Las Vegas, mainly,

or San Francisco, I'd bring an iPad where I could show an organizational chart of a company's IT department, and I'd go booth to booth to booth. And I'd show up, no one knew who we were. And I'd say, hey, have you heard of Discover org? They would say, no, which was the precursor to Zoom info, and say, hey, would it help you if you had IT org charts for all the companies that have come to this conference? And let me show you one. Here's General Electric.

This is the CIO, his phone number, his email address. here are the people who report to him. And instantly, that visualization of our product was so powerful that they immediately got it. One of the things at the time was you didn't need to implement any sort of like change management to get the value out of Zoom info. You just were doing something really poorly and we plugged right into that process to make it more efficient, more effective, give you a view of the world that you didn't have that you needed. First time I did this, Patrick, I sweat when I get nervous. I just start sweating. And so I went to the first booth.

It was dibled the company. And I show up and I tell the guy, I do this feel. And he is just like not connecting with me at all. And I just starts sweating. I was like nervous and sweaty. And so I finished the thing. And I walk away for a second. And I'm just like, okay, get yourself together.

This is the first booth you went to. and you spent $700 coming to this thing. You took a day off of work. You need to get through the rest of this conference. And so I was like, what do I do? And it was in Vegas. And there was a bar like on the way into this place. And so I walked out.

I took two shots of tequila. And I walked right back in. And I just went like booth to booth to booth to booth to booth the whole day and just got over it. And then the trick. there is at some point I needed to get somebody else to be doing that. But I think ultimately, like getting over those really anxiety-driven moments by doing them over and over again is really how you build muscle in business. It's like running towards discomfort. Totally. This happened to me again with our enterprise business. All of a sudden, we got to a place where we were serious

about our enterprise business. And part of the way that we can drive enterprise businesses, having me connect with Chief Revenue officers, Chief Executive Officers, and the first few times that I did that, it was really uncomfortable because I didn't really know what they cared about. I had like an idea and I brought a deck that we could talk through, but I would show up and I throw a bunch of stuff out. Oftentimes none of it hit and it would be really uncomfortable. And I just kept telling myself like once you've done this 15 times, you're going to really understand what people care about and your pitch will be much more suited for every one of those calls. And so by the 15th time, now I do understand and I can show up and it's really comfortable.

And we both have like a pretty good time on the conversation and we get what we need to move a deal forward. But the first 15 times were they were just learning. They were learning that was kind of like munged up with really uncomfortable conversations. Just the story itself contains this interesting idea, which is ask yourself, what is the place with the most density of buyers that I could go to? And what is something I can show them visually that will have them understand my thing in 30 seconds? My guess is basically no one's ever done that exercise. Yeah, yeah, yeah. It probably led to a lot of your early business. It's not rocket science, but it's hard to do and uncomfortable. And that alone is a great lesson. I'm curious if any other

anecdote like that comes to mind just to really finally drive home this point of the sort of scrappiness and discomfort it can take, whether that's a salesperson and something you saw them do inside of Zim Info or someone that sold you in a way that I'm curious, like, what you felt was like the best receiving end of a sales process ever. Anything that that brings to mind? Yeah, two things. And I'll give you one example of just like a really great sales process. There was a guy who was at the time, it was a business called ClearSlide. And he had sent me emails. He had called me. And then he saw that we were doing an event. in San Francisco, which was right down the street from him, he had sent me multiple emails,

called me multiple times. And I show up at this event and he shows up. He's like just an A.E. At a small tech startup, he wasn't trying to sell me there. He just showed up and went like, hey, I saw that you guys were doing this event. I just wanted to come and say hi. It looks like a really interesting event that I can learn a lot from. But like, I'm the guy in your email.

Dang. Nobody else was there trying to pitch me at the time. he was the only person there who was interested enough to not only track me, but also track the business to know we were doing this event and then showed up. And I was like, all right, all right, all right. I'll get you to all of the right people at the company to help the deal go forward. The other thing that I think about is we bought Rain King in 2017. It was sort of our next closest competitor. And when you put two companies together and they then kind of, of become the leader in the space, a vacuum opens for second place. And so inevitably,

someone's going to come into second place and challenge your business. They might not do it one month in or two months in, but you don't get an unlimited runway of being leader without any real competition below you. But right after we acquired Rain King, it became also really clear that Zoom info was going to fill that void. And so we were Discover org. There was Zoom info. pre-acquisition. And Zoom Info had 100 million contacts, and we had 5 million contacts. And in our universe, trying to sell to buyers to explain quality at the time was really hard to do. And people would gravitate towards quantity because it was this objective metric. And so I could say, hey, we have 5 million contacts. The next person has 2 million. You know, of course you would go with us.

And now we were in the universe where we were saying, hey, we have five million contacts and Zoom Info has a hundred million. And how do you compete now when that's such this objective metric? We thought about it. We thought about it. We thought about it. And then we found out that Zoom Info had directory pages where they had a whole bunch of people's names published on the web. And there were people who were in their database that was then published on the web. And so we went through it and we found like Abraham Lincoln was one of the people that was published. And the guy who is the commissioner of major league baseball who died like 20 years ago was published. But Sealing or something.

Older than Bud Sealing, the guy before that. And so we put all of these things together. And then we showed up in the sales process and we would be like, do you really want to go through like Abraham Lincoln and this dead commissioner for every deal that you go out to? You want to send emails that are going to bounce and call. call people who are not going to work. This is just like throwing more sand in the gears of your sales motion. And it worked. And you think about in that business what you actually have to do to change course because those things are being published by a team on the technology side.

And so you have to get enough noise coming from the sales team to go over to the CTO and go, hey, you've got to figure out how to take these pages down. And then you're talking about like months for them to like identify which ones are Abraham Lincoln and the dead MLB commissioner and which ones are actually like real people we want to keep published. And so we have like months where you could just like hammer them on this play before they ever really like could react to it. That just required a whole bunch of scrappiness.

This one's a good one. Before we acquired Rankin, we found out that on their Twitter, they had just started following 700 new people. And if you went through the list of the people they were following, they literally went alphabetically through their customer list and added every single customer A through Z. And we're like, okay, well, now we know who all of their customers are and we can run really targeted motions directly at their customers. That's incredible. It reminds me of an experience I had the same thing where if you can find a weakness that sows distrust in a competitor solution, you can just sort of say one thing. I'm not advocating, like make the shit up, of course.

It's got to be real. But if you can sow distrust, like you don't have to say much more. And then the customer's mind starts to reel. Right. And it's so powerful. Totally. 100%. And we were selling quality.

And so when we showed up to a call, our whole stick is this is, this is really. really high quality because we have people calling because of the way that we gather information. There are a bunch of lower quality providers out there, but you don't need low quality. You need really high quality. And if they go, hey, Zoom info, we go, well, look at like you want to call Abraham Lincoln. And it's like, oh, my goodness, these guys are right. Quality does matter. When you were coming up and the unique history of Zoom into us, probably worth like, at

least highlighting here, it's full of a lot more M&A and changes and everything. Evolutions than I think probably most companies of similar product style would have had by this point in their history. And it's 16 years old. It's not a brand new thing either. So there's been time. And I think the first seven years or something like that were bootstrapped with no outside investing. Then you tell the story of that bootstrap period like from day zero to year seven. What were those steps? What was happening during that period of time? Day zero, I just finished my first year in law school, and a friend of mine and I decide we're going to start a business that was similar to a business we worked at in college.

So the first six months was really building a product, and that meant gathering that unique data. So figuring out at the time, who are the decision makers in the IT department of, you know, we were going to launch with 800 companies or something like that. just brute force. It's like you did a little bit of online research. You'd find out who the chief information officer was at an account. And then you'd call the company and you'd say like, hey, can you tell me who the people underneath the chief information officer are? And they'd tell us. And then we go like, okay, can you tell me their phone numbers or their emails? And we did that over and over and over and over again. On Skype, I was studying abroad that summer. And so we would get up

early in the morning. We'd make a whole bunch of calls into companies. We'd put all the data in a spreadsheet. I'd hired a third-party contractor to go build the actual front-end interface. We were sort of just handing data over to him and saying, okay, this is the data that needs to show up inside of the platform. Six months in, we sold our first deal. It was a $14,500 deal to a publicly traded staffing company. It was called ComSys. And I remember being on Christmas break at my mom's house in Los Angeles and calling into

procurement at the company and saying like, hey, are you guys going to send us money? And they're like, yeah, it's in the system. The check should cut in like a week or something. I was like, okay, great. This is going to be an actual thing. So we'd spend 50% of our day gathering data for the product and then 50% of our day basically gathering data to market to our potential customers. One of the benefits of where we started was it was a pretty niche. And so you knew exactly who your potential customers were, like the type of business was really specific. And then the type of person at the company was really specific. So the value proposition landed every single time. There was never a call where you got on and somebody said,

we would never use this. I have no painful memory of not having product market fit. it was more about learning to sell. You knew you had a product that every customer could use that you were talking to or got a call with, but how did you get them to a point of decision? How did you negotiate price? How did you get to power? How did the decisions actually get made at these companies? So it was really sort of figuring all of that out because you knew you had a great product and it was really like how do you run a sales process that regularly gets you to a decision and figuring that out. Hired my friends because those are the people I knew. My first high school friend finished college, packed up all of stuff in two duffel bags and

showed up at the airport in Columbus, Ohio to be our first salesperson. My second college roommate showed up a year later, quit his job, came to Columbus, Ohio to be our second salesperson. We signed some big clients right away. Adobe was one of our first clients in the first year, we had a real pipeline of leads that were coming through, asking for appointments. And so we would generate as many leads as we could. We'd fill the calendars of the people that we had capacity for on the sales side. And then once they were at full capacity, we'd bring on another salesperson, another salesperson, another salesperson. And that's basically the way the business ran for the first seven years. And so we went from 300,000 in our first year, 800,000, 1.7 million,

2.7 million, 5 million, 15 million, 25 million, 35 million. It was kind of the first however many years that was. And when the business was about 30 million of run rate, this took seven years, was at a $30 million run rate. It was profitable because there was no venture capital for us to go get in Columbus, Ohio. Yeah, in 2007, we brought on our first institutional investors in 2014. You mentioned the exploration around how to price something and how to get power. And I'd love to ask about each of those two things. Pricing is something that I ask a lot of people about because I find it confounding.

I find it incredibly hard, like too hard, bizarrely hard to go from, like you said, a product that clearly would be useful to figuring out how the hell to price the thing. So we'll start there and then go to power. What have you learned about pricing? What are you still learning about pricing? Value is everything. And so you have to align the value. If someone shows up at Zoom info as a lead and I go, oh, you're looking for company and contact information? Great. We have 260 million contacts at 100 million companies with 100 million mobiles and 200 million email addresses. It's $25,000. They'll be like, no, that's not what I want. That's way too expensive. It should be $5,000 or $2,000. So, really the way that we got at pricing in the early days and today is to really try to understand what we're going to deliver from a value perspective to the customer. And that should be

an order of magnitude more than what you're going to price the product for. So really getting your customer to look at what the outcome of the product is going to be and then getting to pricing from there. In the early days, today, you're talking about how do I increase the productivity of every account executive and account manager. I'm leaning into fear, uncertainty and doubt. And so I'm going, did you know that these 20 Fortune 1,000 customers were researching your competitor this week? These are opportunities that disappear. They're going to sign a three, five-year contract with your competitor. You're never going to get back into that account. But you can be in front of that. Did you know that these companies,

are currently in market for your products and services. And, you know, the website feature that we have in our product, which is like, of 100 people who visit your website today, two of them are going to identify themselves. And the other 98 just disappear into the ether. What if they're your best, most likely next customers? And you actually have no idea that they were so interested in your products and services, they visited your website, they looked at your pricing page. That's just opportunity that you worked for.

You spent money on. You brought your marketing team together against, and you finally drove them to your website, and you have no visibility into that. And so the fear of loss tends to be a bigger driver than an upside opportunity. And so showing you how much you're missing helps anchor when you show up to give you what the price of the product is.

So originally we had like a flat pricing, gave you unlimited access to Zoom Info. Over the years, we added different tiers and sort of a good, better, best model for pricing. And really because our total addressable market opened up. And so now you had super enterprises that you could create ratcheted usage pricing. So you could get more out of that end. And then you had really small companies that wanted some access to Zoom info, but really couldn't, hey, for the full feature and functionality that an enterprise would get. And so then we build models around that.

What's good, what's better, what's best, what's in each of those packages? How do you price it? What are the discount floors? We always had some level of discounting built into our go-to-market motion. That's one of those. Hey, what did you figure out, drove you to a decision in every sales process? Introducing a discount always helped move a deal through the cycle. Now, having boundaries on that is really important.

So you have discount floors and approvals that have to get set today. But in the early days, it was like, hey, if I could pull a deal forward by discounting 5%, 10%, I'm going to do that. If I can push payments out, I'm going to do that. So payments matter. So look, you can buy it today and I won't charge you for the first 60 days. And we were always a super cash flow positive business. So we had that flexibility. The notion of power is really interesting to me because I lived so many examples of,

for a long time, I was working in a long-only investment management company. And what we were selling was these open-ended investing strategies. When I think of power, I think of like, I control a desirable scarce resource. And we're talking about how you can get it. That sounds like a position of power to me. And that's where I went later in my career to try to build control of that scarce supply. But that was like the only real thing I ever intuitively thought. Like, here's how I get power.

Like, I collect something other people need or want and then have some power. But it was hell on earth selling these strategies where it's like, there's really no catalyst for like, why you need to do it now. It was really, really challenging. If you had pulled me through my career, like the first chunk I would have said, we have no power. It just seems random. People like us or they don't. And sometimes they hire us. Sometimes they don't.

Talk about the generation of and control of power in business because I've got like one flavor of it, but I'm sure there's lots of flavors. So first, I think that is right. I control a scarce asset that is valuable. That is the first part of power. Maybe the more important part is how do I get you on the other side to appreciate the value of that scarce asset? and then get to a place where you realize that not having access to that scarce asset actually hurts you personally, professionally, and your business.

And that's really where we drive. By the way, that's true, too. Give me two companies, one that uses Zoom info, one that doesn't. The one that uses Zoom info is always going to outperform the one that doesn't. because they just have a meaningful head start into their go-to-market motions. So I want someone to appreciate that they're missing out on their potential by not having access to this scarce asset. That's what we're trying to show you in the sales cycle.

That's what we're using social proof to show you. That's what we're bringing case studies in to highlight. That's why it's so important to understand the customer's pain point because when people say, identify the customer's pain point, you're really going, identify where they're not going to meet their potential. And people don't want to not reach their potential just because they didn't make the right decision on what to buy or who to partner with. So giving them a view of what their potential could be and then a price to reach that potential for themselves, for their company, I think that's the way that we articulate that. In addition to the unique seven-year bootstrap,

non-VC-funded period of company's history. The other thing that really stands out is the amount of an importance of the M&A that you've done to build what is now Zoom Info, which was originally called something different and adopted a name of a company you acquired. And there's been all sorts of interesting, cool stories big and small on the M&A front. So you've got like more capital allocation experience than a lot of software CEOs do that built some product and scaled the product. Why did that happen? What did you learn during the process? What was the motivation for doing all this and how should others think about it? Let me take you through our first two big acquisitions because I think those highlight how we thought about MNA and then I'll

highlight a few others after that. So the first big acquisition we did was of a close competitor, a company called Rang King. And we're both selling the same end market, had very similar customers, very similar data sets, and we're going to market really similarly. We'd see them in a lot of our deals. They had a really similar product, little tweaks, but pretty much the same thing. Now, what put us in a position to buy Rain King, because we both started the same day of the same year, and they should have won, actually, because that was a company that started with $4 million of venture financing. They brought in a team of executives who had built a data company before. We started with like my friend and I and my law school dorm and $25,000 on our credit cards.

And I remember finding out that they were a business and being like, oh, my God, I can't believe that I just wasted $25,000 of my money because these guys are just going to crush us, which, by the way, is a great endorsement for getting to a business with a really large total addressable market. and we were in a huge total addressable market. So most of the time, it didn't even matter that they were a business that existed because there was a huge market to go after. Fast forward, 10 years, and we had the opportunity to acquire them.

And why did we have the opportunity to acquire them? It wasn't just because at that point, we had built a bigger business. At this point, we were an $80 million business and they were a $40 million business. But it was because we were operating that business so much. more efficiently than they were. So we had all this room actually to raise debt to do the acquisition. So we didn't have to dilute any of our shareholders. And we also didn't have to go raise more money from our private equity sponsors to be able to make this acquisition. Because the business was run so efficiently, we were able to go out, raise debt, make a really meaningful offer to buy the

business and the whole idea was, okay, here's this $40 million business generating, call it, $5 million of profitability and growing similarly-ish to us a little slower. Can we take that business and instead of $40 million top line and $5 million bottom line in one year, can we make it a $50 million top line and a $25 million bottom line? And effectively, like, significantly increase the value of that business in one year. And we were in a position where we could do that because at the time the Discover org business turned into Zoom Info was run so much more effectively and efficiently than the ranking business. Why was that just as an interlude there? What drove efficiency? Our go-to-market motion was way more efficient. We just acquired customers

in a much more efficient manner than they did and then kept them at a higher rate. So I often tell people, usually when you think of strategic differentiators, people think about their product. Like, my product is a competitive or strategic differentiator or this thing that we do in the product is the strategic differentiator. But if you just zoom out a little bit, there are lots of places in your business that can be strategic differentiators. For us, at that point, it really was the go-to-market motion that created the strategic differentiation that allowed us to make these acquisitions. So we bought ranking, we put the businesses together. I remember having a panic attack the day before because we would put all of this money above us from a cap table perspective,

right? The deck goes in front of the equity holders. I was like, is it going to work? And you kind of felt like a pretend executive. I think I was 34 years old. And I remember flying to DC to make the acquisition. And I felt like I was playing like pretend business. And we made the acquisition. The next morning, I came into the office and the office was like on fire. Everybody was on their feet. They were like calling their customers. Discover org bought us yesterday.

We got to get this deal closed. It's the end of the month. Everybody bought in. And it was like, okay, this is going to be amazing. It's going to be really successful. Now, anytime you do an acquisition when you have a small grouping of companies that are focused on a space, you create a vacuum. that creates a very obvious number two to come into.

So immediately after the Ranguing acquisition, I went, okay, Zoom Info is going to be the number two. No question about it. They're going to zoom into that position in the number two spot. And I wrote the board of memo and I said, if I was CEO of Zoom Info, I would crush us. And this is exactly how I would do it. I would make this acquisition. I would sell it this way.

I'd position it this way. And then I said, okay, well, that aside, here's what we have to do to win, how we have to position the business to win and what we have to do from a product perspective. We met with the board eight months after the Ranking acquisition and we went, we have to go out and buy in Zoom Info. And Zoom Info had just gotten acquired by a private equity firm five months earlier. And we're like, well, what if we just pay them a forward multiple on the price that they paid as if they held it for three years, and everything went really well over those three or four years, we'll pay them that outcome. We'll do it seven months into their hold period on the business.

Also, there's a guy on our board from TA Associates who is like great at dealmaking. And so he led a lot of the conversations with the private equity firms. But what he told me during the ranking process and the Zoom info process was, hey, it's in private equity's hands. And so there's a number that works. There's always a deal to get done. when these businesses are owned by private equity.

When it's just a founder-led business, that's like a more complicated onion to peel. But when you're owned by private equity, your job is to buy and then to sell businesses. And so if we show up and say, hey, we're going to pay you a 6x return on that asset seven months into your hold, it's very hard to say no to that decision.

And actually, the 6x return for them was probably more like a 15x return because there was debt on the deal and they didn't buy the whole business. So we came in, bought Zoom Info. That was just about an $800 million acquisition that we did. It ended up being like 13 months after the Rankin acquisition. How did you fund it? Same thing, debt, which that was really interesting because then we ended up with a lot of debt at that point in the business because the business was efficient. You know, Zoom info was a similar story. We were at that point about a $170 million top line business running at call like 50% margins. Zoom Info was a $100 million business running again at like 10% margins. Now you had some history.

So you could say like, hey, look, this is what we did at Rain King. And that's what we're going to do at Zoom Info too. The trick about Zoom info was it was growing faster than us. And so the playbook that we used that Rain King wasn't going to work. Because we went in Rain King. And we went in Rain King. And We cut 55% of the staff on the first day we showed up. We were transparent about it. We gave people severance. And we told them we can't have these duplicative resources anymore. Now, in any business, cut 55% of the staff, stuff's going to slow down.

So the Zoom info purchase, we're like, okay, this is a business is growing faster than us, has a ton of momentum. If I come in and run the same playbook that I ran a ranking, I'm going to crush the thing that we want to buy, which is like this momentum. I still have to drive efficiencies in the business, but here's how I'm going to do it. I'm going to do it and go to market. I'm going to do it by getting rid of duplicative costs from a branding perspective and an SEO perspective. I'm going to consolidate some functions, but it's not going to be the same playbook that we use that Rankin.

Probably not a lot to talk about the M word too much. But from a corporate strategy concept, what is the goal? Is it consolidation of all companies serving a specific TAM? Like as you get bigger and bigger and bigger and even now today, how do you think about, okay, well, what strategy is going to drive the potential next acquisition or the potential next big capital allocation move? It's a great question because up until 2020, the plan was how do we build or buy the best possible company and contact data asset?

And when we made the Zoom Info acquisition, one of our problems was, we were really niche. We had 5 million contacts at 250,000 companies. Zoom Info had 100 million contacts at 15 million companies. And so our total addressable market was just like much more niche than if we had this much broader data asset. So number one with the Zoom Info acquisition is we want to open up the aperture into a much larger total addressable market. So that happened right away with the acquisition, which was great. And then we said, okay, what? What are the other pieces that make up a world-class data asset? We needed technographics, so technology is a company use.

We went and acquired that. We needed intent data. We went out and acquired that. And then we needed a broader set of company data, and we went out and acquired that. And when we were done with that, we were like, okay, yeah, let's just keep going on this acquisition strategy. Who's the next contact data provider? I spent the back half of 2020 taking pitches from every other contact data provider in the marketplace

going like, hey, this great successful motion, let's just keep it going. And what we realized was there wasn't a worthy next contact or company data acquisition to make. The companies that existed out there, they had low quality contact data. They didn't have the same data collection methods that we had. They had no unique strategic differentiation in the way. they collected data. So I wrote this memo at the end of 2020 that said like, hey, everything just changed. And I've gone out and talked to every contact data provider out there. And there is not a compelling place for us to make another acquisition from a company or contact data perspective.

And if I look out into the future, what we really need to do is to build a workflow and application layer above that contact data asset so our customers can get the maximum amount of value on top of the data that we have. And so what are the companies where if our data is integrated into those software packages, that those software packages become so competitively differentiated that it doesn't matter what the next feature or functionality is on that software, the data is driving that differentiation. And then that changed the way we thought about M&A for the future. Yeah, it's a fascinating sequencing problem. And it's basically just always like What's the next thing? It's not going to be the same as the last thing. It's basically just

that story over and over again. So what do you think now you've been in this data world for a long time? You've mentioned generative AI earlier. You've used tons of data tooling your company's whole history. So you're a good person to ask. One of our portfolio companies, Prefect, has this phrase that they're toying with, what does it mean for a company to be ready for AI? Asking every company asking themselves that question, like, are you ready for AI is really interesting to me. And I'm curious what you think it means. For companies out there and for Zoom Info, what does that spark in your brain, that simple question? So the first thing I think about is we've been using AI at Zoom Info for the last five years to help us make decisions about data.

I think the question actually is more, are you ready for generative AI? Are you ready for large language models to be put into place? And for me, The way I think about that is two ways. Number one, the most valuable companies in a universe where generative AI is ubiquitous are companies with proprietary data sets. And what I see for us in the future is that we become the source of truth for company and contact information to get plugged in to any LLM. I watched Salesforce announced their Einstein.

GPT product. And in the example, they actually show the generative AI going into CRM and capturing the best buyers and then sending a personalized email out to them. There isn't a company in the universe that would trust generative AI against their CRM data set. There isn't one. And so what we've been advocating for for a long time has been, hey, look, for you to get the most out of your CRM system, you have to have accurate data on companies and contacts in that CRM system. The problem with that argument for us for so many years has been only the most sophisticated companies understand where Sand gets in the gears when you don't have great data in your CRM system. But what gender of AI does is it just shines a bright light on all of the things that you can't do with CRM data because your CRM data is really inaccurate. And it puts us in a really great spot there. So number one, if you have a proprietary data asset, think about where that plugs into downstream use cases where your data becomes really valuable for what companies want to do with generative AI.

Our customers, every go-to-market teams want to identify the best companies. They want to automatically generate the emails to them. They want to automatically generate the responses to them. They want to pick the right people to engage with. And you need a really proprietary data asset on company and contacts in order to deliver that. And then I think about the triangulation problem, which I think you see in medicine today in the way that people are talking about what generative AI can do in medicine, which is take a whole bunch of different disparate data points and bring them together in a way that would take

a human much more time, much more expertise to be able to do. And I think about how do I bring that triangulation capability to my customer. So instead of them doing the triangulation, you know, this company's in my territory. It's big enough. It uses this technology. It has this many employees, it's based in this location. How do I use generative AI to wipe out any of that pre-thinking to try to find the right companies and just have it be prompt-based where I can say, you know this about me, who are the best companies I should talk to today? And General of AI does all of the triangulation for me. You say a bit about the major stages of evolution that you've had as a CEO in terms of almost like a philosophical level, the things.

things that you think matter for you to do personally with your time and attention, what those stages have done? I think the hardest one is at the early stage, you go from being an execution machine, like you're responsible for execution and you're responsible for generating an email campaign that turns results or closing 10 deals in the month that generate revenue. Shifting from that to being more of like an actual director of the emotion is really a tough transition, because you have calculated your value to the firm by the execution of tasks. And when that changes, it's hard to shed. Obviously, you have to do it. But being conscious about how you make that move and not keeping your hands in everything is the first evolution.

I had to learn how to do M&A. I didn't really know how to do M&A. In fact, the very first M&A we did was actually of the company that I worked out in college, which was the precursor to eye profile or something, right? Eye profile, yeah. That was an acquisition where we paid $300,000 for $1.2 million of ARR. It was like the last company in the fund, they had to get out of it. It had languished long enough.

And I remember the lead partner at TA saying, just go learn on this one. And I was like $300,000, just like buy me a $20 book and I'll learn from it. And they're like, do the acquisition. You're going to learn a lot about how it works and how you bring the team together and all of that. And it'll put you in a better place to do something bigger later. That was a great learning experience for how to do M&A. The ranking acquisition, there was this moment.

in the ranking acquisition, we had just finished a whole day of meetings with their leadership to kind of understand the business and the best salespeople. And when that finished, we're, I think, 30 days to closing the deal. And our investors got panicked or something. And they were like, have you brought Deloitte in? Like, as Ernst & Young reviewed the whole plan? And I was like, no, we're going to set up a call in one hour with Deloitte to review everything. you've done and ask you questions on it. Like, all right, great. So we get on with Deloitte and they ask us a bunch of questions.

We have all of the answers. We've already thought through everything that they had been asking. And I remember when we hung up that call, I was like, okay, we know what we're doing. We're actually going to do this thing. Right. And so learning what M&A meant. And then there was this period of time where M&A was incredibly important to the platform we were building. So being really precise about what the M&A playbook was and how we run it and

how we vest shares after or create retention bonuses for people and having that codified in a way that we could run that repeatedly was really important. When we made the Zoom Info acquisition, I wasn't much of a corporate communicator. And at 500 people, I didn't really have to be. I kind of like ran into half the company every week. I didn't. I didn't have to think about how I communicated with the company, how I was transparent with the company. I was in meetings with everyone. Everyone. Yeah. And all of a sudden we're 1,000 employees, 200 are in Israel, 400 are in Vancouver, 400 are in Boston. And communication became really important. And people weren't going to have a direct personal relationship with me.

So they needed to understand the direction I was taking the company and why I was taking the company in that direction. So I had to get really good or better at communicating with the broader set of the company. That had to be a priority of mine. Today, we're close to 4,000 employees pretty dispersed. Some are remote. Some are in office. And what I realized today, if you asked me three years ago, hey, Henry, what are the corporate objectives for the business? What are the value principles of the company? I would be like, I don't know, do you ask somebody else here who came in and articulated for you? What I realized today at this scale is that if you don't have an overarching objective, if you don't have a strategy under that objective, and initiatives and

metrics that people are running to that ladder up into that objective, you end up with a bunch of people doing things in silos, and you never get the benefit of the orchestra playing in unison. You have the violinists playing something, and the celloist playing something, and the piano players playing something. And if you're lucky, every once in a while, they're playing the same song. When you put those corporate objectives in place, you articulate it across the business, you can get that orchestral effect of the entire business. And the bigger, the bigger, you are, the more important that becomes. And I realize today that I'm actually behind where I should be there. And so I am catching up as fast as I can doing the methodology that I used to learn. So I'm reading

books about this and then applying it to Zoom info and also telling myself, you know what, if corporate objectives are going to work at this business, if company values are going to get through the entire business, you have to lead that. That has to be your thing, Henry. When HR shows up and wants to talk about company values, everybody just turns their ears off. If I show up and want to talk about company values, people are leaned in and listening and thinking about how that applies to their team and the upside they're going to get from it. So that is my responsibility and I have to own it. And I recognize today more than ever how important that is. If you think about one pointer for each of those last three stages of evolution that pops most immediately to mind. I'm curious what

those three are. So one each for M&A, corporate communication and the business system concept that you're establishing now. Okay. So for M&A, I would say planning is critically important. So knowing what you're going to do before you sign on the dotted line in every part of the integration is really critical. For corporate communication, I would say, get really used to repeating yourself because repetition across the company creates understanding and people will gravitate towards that messaging and it'll feel exhausting to say the same thing over and over and over again. But that's the only way that you can get alignment across key points across the company. And then on this nascent one, I would say, do not overestimate.

the ability of the leaders underneath you to create alignment without a framework for that alignment. It just doesn't happen organically. It is a top-down command and control function. Yes, it is a top-down command and control function. You have to create the objectives and drive it through the organization. A theme of the whole Zoom info story has been, it's and your evolution. in this next chapter, what do you and the company most have to prove, do you think? The other day, I wrote this when I'm 80 years old and I'm reflecting on what my career at Zoom Info has been,

what gave me the biggest sense of fulfillment and winning? And I actually think the answers of that answer this question, which is, number one, winning, create a bigger category here than anyone has ever believed. was possible. And as a piece of that, that means we have to build and deliver a great unified platform around that data. So that's number one. Number two, I want to do it with great and good people. So if I'm looking back, the people at Zoom Info have to be intellectually bright, intellectually honest. They have to push their own and their team's boundaries. They have to be a pleasure to disagree with. They have to put the company's best interests ahead of their own.

They have to operate with a performance mindset. They have to be the best individual professionals in their given area. And then they have to be great collaborators and team players. And if we get those people in the room, then anything is possible. I want to do something unique in the way we run the business than no one else has. And I think that that breaks down into great growth and great profitability. I think we can innovate around how we can support both enterprises and SMB businesses. I think that's a really unique opportunity for us. And then finally, I want to consistently grow the value of the company. As we start to wind down, I want to just throw some hypotheticals at you just to get your savant-like sales mind going, just to drive home

some of these points. So you and I both like electronic music a lot. My son loves electronic music. young, wants to be a DJ. So let's say that I was his like manager, right? There's a lot of DJs. It's sort of like a red sea of competition for DJs. How would you recommend I think about a problem like that? I'm trying to dock his product, good music, with like a distinct and unique audience and grow him. I'm trying to get intentionally away from business here. How would you think through a problem like that as a manager? So I think of that in sort of two buckets. The first one I think about, there's just easy stuff, right? Like your son goes to a school.

He's probably involved in some teams or extracurricular activities. Those places are going to do father or daughter dances and sock hops and a school play or whatever. I would go to the school and say like, my son, he's a DJ now. And you should use him for all of these events. And he'll be really inexpensive and it'll be a great experience for him. and he can work through all of your constructs. Plus he's going to bring super high-end equipment

because we bought him all of this super high-end equipment. That's one. That's just like easy. The second is if you relate this back to business and channels that you go to market against, partnerships matter. And so if I'm thinking like how do you take DJ Navigator and make him like a household name, I think about how do you partner up with somebody who's out there

that he can open for? or be a quick act at the front end of a show. And I think that that is probably how you get him much broader engagement. In both those examples, it's like latching on to an existing system versus trying to like wholesale dump some new system into the world. Totally, 100%. And I'm also thinking like there are probably, if he wants to go out and direct market himself, I would be thinking about like what are the events or businesses?

where a young kid DJ would be really interesting or fun to have. And could they offer it as a service for a birthday party? Wherever they're a birthday party, there's a kid zone, like a trampoline park. Could you go to them and say, offer DJ services for the party for an extra $100 and we'll split it and DJ Navigator will show up and play music at the thing? So are there places where you can plug into really easily? Yeah, for the listener, that Henry's not making that. name up. That is my son's working DJ. I'll continue to be max selfish here. So in my position,

one thing that we obviously think about is the ideal podcast guest for this show. You know, we have our sites at the highest levels. What motion would you recommend or motions would you recommend I run, how I would think about closing the Bezos of the world or for someone that says no to just about everything, especially as it relates to their time? What would you say to me about to bend my mind and improve our close rate? This one's really hard to eat. I don't know. I'm trying to think.

I'm asking you. So this is how you do it, Patrick. I'm just going to sit here until you figured it out. Yeah. So these investor conferences, they bring big name CEOs. Like the last conference I spoke at, Bob Eiger spoke before I spoke on the same stage. And so we would have crossed paths in the back before we went on. And so the biggest CEO names are.

at these conferences. So one of the plays that we're running is I'm sending an email out to all the other CEOs who are there who are customers of ours. And I'm just saying, hey, I'm here. I'd love to just introduce myself five minutes. You guys have been a customer for 10 years. It would just be great to just put a face to the name and say, hello, I have no agenda. And I'm getting great responses from that from Fortune 500 CEOs who are like, yeah, I am here. Here's my cell phone number. Text me. I may have five minutes to connect. And that's really all I need is a connection like that. So that, the future if there are opportunities for us to expand a relationship. I have a contact there that I can connect with who's met me, who's met me in person. So if you want the best CEO names,

you're an investor. J.P. Morgan and Morgan Stanley invite you to all of these things. They do. I say no all the time. I would show up at those things with the list of people you're trying to get on your podcast and then figure out a unique way into having that discussion with all. I hate your damn answer because I say no to these things all the time because they all want me to come to interview somebody. And I'm like, oh, I don't want to do this. And back to my point about everyone's lazy, me too. You know what? That's your target rich audience, by the way. You show up at that place. Those are all the people you want on the podcast. You can sit in the main room and just like when they open for Q&A, just ask them if that's your podcast.

Talk about something that makes me feel uncomfortable. It's so funny how you make excuses. Like I think of myself, I'm mainly focused on investing with my time. So I'm like, oh, you know, I can't do this. I got other things to do. And you gave you the answer. God damn it. I shouldn't ask. What about when going public?

I think, you know, I went through this period. I was talking to lots of CEOs that were taking their companies public and they all sort of dread it. And I think your view is that this is just yet another opportunity to build brand, make sales, et cetera. So for the CEOs out there listening that are going to go through that process or about to go through it or whatever, any advice you'd give them? Yeah, look, I think you have multiple jobs as the CEO during an. IPO process. And one of them has to be thinking about how you leverage that moment to drive as much awareness and branding and validation for your business as possible. And so the NASDAQ or the New York Stock Exchange, they're going to offer you branding opportunities and commercial

opportunities and marketing opportunities. You want to make sure you are getting as much out of those as possible. You want to have this like in the minds of your buyers as much and as often as you can because it is a really great validating motion for your business. If you can invite your biggest customers to the bell ringing ceremony, that's a big deal. People want to come see that. It creates lifelong relationships for you. The New York Stock Exchange has the secret bar in one of these back rooms in the New York Stock Exchange, every big deal happened there. You should be leveraging that space with your biggest buyers. Creating unique experiences out of the IPO for people who are important to your business, you want to take as much advantage of as possible.

Now that you've been public for a little bit, what lessons have you learned about relating to public markets investors? Because there's lots of opposing philosophies. Some people will say, like the best companies never talk to investors and they rarely post anything publicly like they just execute and let the results take care of themselves. And then others think that's insane that especially for someone that might use their shares to acquire companies or something that like cost of capital matters and having great relationships with the investor base matters. Where do you fall on the spectrum? What lessons have you learned there? Yeah. So first I would tell you that investors come on a spectrum of value additive or not value additive. Many of them

show up. They have really unique perspectives. They've done research on your customer base, on your competitor set, and they show up with really interesting insights that you can then leverage inside of your own business. Then there are investors who just show up and then they articulate every risk in the business and they want to know your answer to every risk in the business. These are painful meetings for a number of reasons. And ultimately, they're also the ones that eat away at you because inevitably one of those risks is going to come true. Like you know that, they know that. There's 50 risks. They tell you every single one of them. And then you go like, well, here's the optimistic answer to any one of those risks or the honest answer to any of those

risks. And you're kind of working on any of those 50 risks at one time. Inevitably, one of them is going to drop. And then you're going to go, you know what? They told me that that was a risk in the business. And now it's showing up. And it's a. And it's a. an incredibly frustrating event for you. And you just have to keep in mind that there were 49 other risks that they brought up that you managed really well that never actually came into fruition. So number one is figure out the investor base that's adding you value and get value out of them, like tell them to share their customer interviews, their analysis and insights with you so that you can do something in the business with them. The risks that the investors are going to

bring up to you, those are real risks. You should understand them and then figure out which ones are the most meaningful risks and what you're doing about them in the business. And then I think the third thing I would tell you is, and this is very similar to how you communicate with your employees, if something happens in the business, employees are going to create their own narratives around it. They're going to go out and they're going to say like, oh, this person left because of blah, blah, blah, blah, blah, blah, the worst possible narrative you can think of. If you switch directions from one product to another product and you shift resources, employees will come up with the worst possible narrative for why you did that. And it is your obligation to get your narrative out to your

employee base so that when they start spinning on something, that there is another narrative that's found its way into their minds that they look at and go like, okay, yeah, that's probably what it is. It's not this like crazy thing that I'm making up, or at least when they're articulating it to their other counterparts. There's somebody who's like, no, but that's not what it is. Like Henry said it was this or that. That is also your job with public company investors, I think. They are going to come up with narratives, good and bad, and you're going to have to show up

and put your narrative out into the world so that when they are circling on these different narratives, that your narrative is also sitting right beside those. Because if you don't, then you leave your entire company narrative up to a bunch of investors who don't really know your business. You are responsible for articulating the narrative to the public market so that when they articulate their own, that there's somebody out there who's read your narrative and understands it and can refute whatever the other narrative is. That answer brings to mind a final question I have for you today, which I realize is a question I've never asked anybody, which is always a unique thing for me because

I ask a lot of frigging questions. How in control of your company do you feel? And I ask this because of any CEO I know decently well, I feel like you understand and know your business about as well as anybody, like down to the one inch level. And so you're the perfect person to ask this question. As a big public company with lots going on, how much do you as one person feel like you actually control the business? One is like chaos. It's the relationship between inputs and outputs.

One is you want something to happen and you just can't make it happen. 10 is every single thing you say happens exactly as you say it or as you envision it. And there's a spectrum in between those two things. I would say I probably feel something like a seven and a half to eight. And the big part of my job today is first articulating very clearly what we're going to do. What is important and what's not important? What are we doing? What are we not doing?

and then saying, based on this, I want to see resource allocation lined up to this. I want to see product and engineering resource allocation. I want to see go-to-market resource allocation. I want to see marketing resource allocation. I want to see support and productivity resource allocation lined up to these four things. I want every initiative that we're running at the company to line up and metric to these four things. And then I throughout the quarter, throughout the year, have to show up and make, make sure that people are aligned and that that is actually happening.

So what 10 would be, I just set that, boom, everyone's just like going and it's all aligning. The reason why it's like a seven and a half or eight is that it often isn't aligned. And I have to show up and go like, no, no, no, no, no, that doesn't line up to our strategy and our goals and you have to fix that. Or I'll go look at the metrics and the goals that they're rolling up. And I'll go, well, that metric and goal doesn't make any sense. it doesn't align to these four things. Go fix that. And so once I've set that strategy, I put the people in place to execute it. My job is to go make sure that resource allocation

and the work that we're doing align to those things that I care most about. I love that answer. And I think that's a question I'll think about now because sometimes you see CEOs, especially when they're not the founder, which is obviously an advantage that you have with all that context, looks like they're not in control. Even though when they say they want something like different, there's so much force up against them, powerful executives, tenured executives that are hard to move. So I think it's a really interesting answer. I think you know my traditional closing question for everybody. What's the kindest thing that anyone's ever done for you? My mom gave up most of her youth to raise us, my sister and I, and that meant for her working three

jobs as a nurse to be able to pay rent, buy us clothes, buy us food, and gave up probably the most impactful years of her life for us. And those years, I know, were very hard on her. So I think that selfless kindness where she put us in front of herself, that has to be the kindest thing. Anyone's done for me. What a wonderful, awesome answer. I've learned like an insane amount from you in like a very short period of time. across a small handful of board meetings. And my goal with this conversation was really to, like, recreate some of that for everyone's benefit, just to hear from your pretty unique experience, building a really big company at a fairly young age. Really appreciate your time today and also

the willingness just to like talk through it all very openly, as you've always done. Thanks so much for your time, Henry. Yeah, thank you, Patrick. If you enjoy this episode, check out join colossus.com. There you'll find every episode of this podcast complete with transcripts, show notes, and resources to keep learning. You can also sign up for our newsletter, Colossus Weekly, where we condense episodes to the big ideas, quotations, and more, as well as share the best content we find on the internet every week.