A lot of startup CEOs say they want to change the world. But Zuora CEO Tien Tzuo has a pretty persuasive plan for how he's going to do it.
It starts with cloud computing, and ends with a world where factories aren't just churning out disposable widgets.
If Marc Benioff is the god of cloud software, then Tzuo is his No. 1 disciple.
Tzuo was employee No. 11 at Salesforce.com and worked his way up to chief strategy officer.
With Benioff's blessing—and some of his money—Tzuo left in 2008 to launch Zuora, a cloud startup which does for invoicing and billing what Salesforce did for sales.
With Zuora, Tzuo wants to change the way big companies think about how they treat their customers.
His big aspiration: "To go back to the way that it used to be," when companies built their products to last.
"The product-based business model is just not sustainable," says Zuo. "You cannot have factories pound out pens and cars and laptop computers and have all this stuff just sit in a landfill. Companies just see their business model as a never-ending production of widgets—it doesn't make any sense."
Cloud-based software from the likes of Zuora and Salesforce.com is different. Also known as software as a service, or SaaS, these firms' products make money by keeping customers happy enough to keep paying for it every month.
But Zuora is also a tool for creating what Tzuo calls "the subscription economy." This is a world where people don't buy products—they buy services.
Zuora tracks things like monthly recurring revenue and customer lifetime value.
As he changes the way companies think about business, Tzuo sees the old school—namely Oracle and SAP—withering away.
"We really want to go change the world," he says. "Here's an idea that can eventually displace SAP, displace Oracle—well that's a big idea, it's a multibillion-dollar idea."
Others are starting to see what Tzuo sees. Zuora is on an IPO track with a goal of filing in about 18 months. Tzuo helped Salesforce.com go public and he sees an IPO as a beginning, not an exit.
"We're focused on the big goal, which is to displace SAP and to displace Oracle, and when we're big enough, an IPO is going to be a natural step in our evolution," he says. But the real wealth creation will come later. He notes that Salesforce.com opened at $17 and now trades for about $140.
Zuora has been making enough progress that we named it on our 17 Enterprise Startups To Bet Your Career On. It's grown to 220 employees, signed 10 deals of over $1M in revenue in the last 18 months, has over 400 enterprise customers, including Dell, HP and Qualcomm.
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