20VC From a $5,000 College Fund to a $10BN+ Public Company, How to Beat People Who Are Smarter Than You, Why Happier Teams Outperform and How Software Buying Patterns are Changing in 2023 with Henry Schuck, CEO @ ZoomInfo

Summary Notes


In an insightful conversation with Harry Stebbings on 20vc, Henry Schuck, founder and CEO of ZoomInfo, discusses the company's unconventional rise to a $10 billion valuation without following the typical Silicon Valley playbook. Schuck shares his personal journey, from a financially constrained upbringing to spearheading a successful SaaS company, emphasizing the significance of happiness and hard work as drivers for productivity and achievement. He reflects on the challenges of being a public company CEO and the importance of educating employees about stock market volatility. Schuck also offers his perspective on the current market environment, predicting a normalization by mid-2023, and underscores the need for more efficient go-to-market strategies in the SaaS industry. Additionally, he touches on personal values, work-life balance, and the impact of his upbringing on his approach to business growth and frugality.

Summary Notes

The Importance of Happiness in Teams

  • Happiness is a critical factor in team productivity and business success.
  • Happier teams significantly outperform their unhappy counterparts.
  • The concept of happiness as an advantage is emphasized as a foundational premise.

"The big premise is teens that are happier people who are happier, way outperform, unhappy teams and unhappy people. That happiness is actually the biggest advantage from a productivity perspective in business."

The quote by Speaker A highlights the idea that happier individuals within teams lead to better performance in business settings, suggesting that fostering happiness can be a strategic advantage.

ZoomInfo's Unique Growth Story

  • ZoomInfo has achieved significant financial success without following the conventional Silicon Valley path.
  • The company reached over a billion dollars in annual recurring revenue (ARR) and a public company valuation of 10 billion.
  • ZoomInfo's growth story is distinguished by its non-reliance on venture capital.

"This company is scaled to over a billion dollars in ARR, a 10 billion a public company valuation and over 3600 employees. Yet it did not follow the Silicon Valley and venture capital playbook."

Harry Stebbings introduces ZoomInfo's impressive growth and valuation, noting its unconventional approach to scaling without the typical Silicon Valley venture capital model.

The Founding of ZoomInfo

  • Henry Schuck's college experience and early job at a SaaS company influenced the founding of ZoomInfo.
  • The company was started with personal credit card debt and grew without external funding until 2014.
  • The founders saw an opportunity to build a better business model based on their previous SaaS experience.

"So we said, it won't be that hard to be better at the business side than the company we worked at in college. And so we did. We went out and we started building what was at the time Harry called discover, which is probably maybe the worst name in business history."

Henry Schuck explains how the idea for ZoomInfo was conceived, with the aim to improve upon the business model of a SaaS company he worked for in college.

The Impact of Personal Background on Business Approach

  • Henry Schuck reflects on his upbringing and how it instilled a belief in reaching his full potential.
  • The discussion touches on self-doubt and the fear of not achieving one's potential due to navigable obstacles.
  • Henry's modest background and experiences at a resource-constrained startup shaped his frugal and profit-oriented approach to business.

"I always believed that a good business should be run profitably. I also didn't have access to the capital markets in 20 07 20 08 20 09 Columbus, Ohio so there wasn't really an option to run the business in a non efficient, profitable way. That was more the driving factor than the upbringing part."

Henry Schuck shares his belief in running a profitable business and how his circumstances, more than his upbringing, necessitated a resource-efficient approach.

The Benefits of Gradual Growth and Maturity

  • Henry Schuck values the gradual growth and maturity he experienced before receiving outside funding.
  • He acknowledges that receiving a large amount of money early on could have led to poor decisions due to a lack of experience.
  • The conversation also touches on evolving leadership styles and the importance of adapting over time.

"I think the opportunity to evolve makes you more likely to spend that VC money and grow your business wisely."

Henry Schuck discusses how personal growth and maturity over time have better prepared him to make wise investment decisions and lead his company effectively.

Advice to Younger Self

  • Henry reflects on his journey and the importance of confidence in one's unique path.
  • He advises his younger self not to worry about Silicon Valley benchmarks and to trust in the distinct course he was charting.

"Probably the biggest thing I would say is along these lines is don't worry about what the Silicon Valley companies are doing. You're charting your own course. It's unique and it's going to be rewarded. Just have a lot of confidence in."

Henry Schuck offers advice to his younger self, emphasizing the value of self-assurance and the recognition that a non-traditional path can be equally, if not more, successful.

Comparison of Business Growth to Silicon Valley Darlings

  • Henry Schuck reflects on the growth of his business in Portland, Oregon, and compares it to Silicon Valley companies like Box and Dropbox.
  • He discusses the pressure and self-criticism for not growing as fast or as profitably as those companies.

"But it was really easy to look down in Silicon Valley and see how the VCs were funding Box and Dropbox and all of these darlings of the early 2010, and then just look at our business and go, yeah, it doesn't feel like that."

This quote highlights the tendency to compare one's own business progress to the highly publicized successes of Silicon Valley startups, leading to feelings of inadequacy.

Importance of Hard Work and Practice in Family Culture

  • Henry Schuck instills the value of hard work and practice in his family, emphasizing that success is not immediate but requires effort and persistence.
  • He shares an anecdote about his daughter and soccer to illustrate the importance of practice.

"Nothing comes easy and practice is everything."

Henry uses this quote to convey the principle he teaches his family: success comes from consistent effort and practice over time.

  • Henry Schuck discusses the challenges of balancing roles as a CEO, father, and husband.
  • He emphasizes the importance of setting minimum time and involvement standards for each role to ensure he is fulfilling his responsibilities.

"The hardest thing is building a framework that says in order for you to be a great father, this is the minimum necessary time and involvement that you need to be doing."

This quote reveals the struggle to allocate sufficient time and energy to each important aspect of life without compromising another.

Work Culture and Continuous Improvement

  • Henry Schuck translates family values of hard work and practice to the workplace, fostering a culture of constant improvement.
  • He discusses the difficulty of operationalizing culture and the importance of data and questioning in driving improvement.

"The biggest thing about our culture, it is a culture of constant improvement."

Henry highlights that the core of his company's culture is the relentless pursuit of improvement, which is ingrained in the company's operations and decision-making processes.

Performance as a Measure of Safety

  • Henry Schuck agrees with the notion that performance, rather than just trust, creates safety in a work environment.
  • He explains that clear performance expectations and metrics are essential for job security.

"Performance is what creates safety."

This quote underlines that consistent performance is the key to job security, and that employees need to understand and meet the performance metrics set by the company.

Dealing with Underperformance

  • Henry Schuck addresses underperformance by maintaining open communication and working closely with team leaders to address issues.
  • He believes that no one should be surprised about underperformance, as it should be an ongoing conversation.

"No one's ever surprised that they're underperforming. We're seeing that happen."

The quote emphasizes the importance of transparency and continuous dialogue about performance, ensuring that underperformance is recognized and addressed promptly.

The Value of Hard Work from Parents

  • Henry Schuck credits his work ethic to his mother, who worked multiple jobs during his upbringing.
  • He feels a sense of obligation to work as hard as she did and reflects on the disparity between effort and outcomes.

"Just hard work. My mom worked three jobs growing up."

This quote encapsulates the fundamental lesson Henry learned from his parents, which is the significance of diligent work.

Addressing Entitlement and Work Ethic

  • Henry Schuck expresses concern over the growing entitlement culture and the expectation of large rewards without corresponding effort.
  • He believes in working hard to avoid the regret of not having done enough to succeed.

"I really believe that my success is attributed to how hard I worked in the business."

Henry attributes his success to his dedication and hard work, rejecting the idea that success can be achieved without significant effort.

Reflection on Regrets

  • Henry Schuck finds it difficult to have significant regrets given his success and acknowledges that while there are things he could have done differently, he has overall satisfaction with his journey.

"It's hard to have a real regret."

This quote implies that despite the challenges and potential mistakes along the way, Henry has a positive perspective on his experiences and achievements.

Acquisition of the Biggest Competitor

  • Henry Schuck describes the acquisition of their biggest competitor in 2017.
  • The acquisition was a significant focus for Henry, who spent a decade keeping tabs on the competitor.
  • The acquisition felt like a panic attack to Henry due to the uncertainty and fear of making mistakes.
  • Henry expresses a wish that he could have appreciated the moments of success more deeply.

"We bought our biggest competitor in 2017. It's a company that I woke up every day for ten years wondering about."

This quote highlights the significance of the acquisition and the long-term attention Henry paid to the competitor.

The Pursuit of Happiness and Gratitude Journaling

  • Henry Schuck is skeptical about getting off the "treadmill" as a means to happiness.
  • He discusses the importance of gratitude journaling and its impact on happiness and productivity in business.
  • Henry references "The Happiness Advantage" by Sean Acker, a Harvard researcher, which suggests that happiness is a significant productivity advantage.
  • He explains a study where participants who gratitude journaled for 21 days trained their brains to recognize moments of gratitude in real time.
  • Henry has personally experienced the benefits of gratitude journaling.

"If you do that for 21 days, what happens during those 21 days is that your brain actually creates a background screening application."

This quote explains the psychological process behind gratitude journaling and how it can train the brain to recognize gratitude naturally.

Market Dynamics and Buying Patterns in 2023

  • Henry Schuck talks about the change in spending rationalization compared to previous years.
  • He notes the influx of government money into the economy in 2020 and 2021 and how spending decisions have since changed.
  • Henry describes the elongated sales cycles in software businesses due to increased scrutiny and approval processes.
  • He is hopeful for a normalization of the market by mid-2023.

"I think the biggest thing we see today is people are rationalizing spend in a way very different from 2021 or even the end of 2020."

This quote points out the changing patterns in how companies are spending and the increased scrutiny they are applying to purchases.

Impact of Team Size Reductions on Software Sales

  • Henry Schuck discusses how reductions in team sizes affect the usage of their software seats.
  • He mentions that while there may be a focus on seat usage, the tight labor market for software salespeople means that laid-off individuals are often quickly rehired in the industry.

"The chance that the cut actually hits our user base is unlikely."

This quote indicates that despite team size reductions, the core user base for Henry's company's software is not significantly impacted.

Adapting to Elongated Sales Cycles

  • Henry Schuck shares how his company has adapted its sales structure in response to the elongated sales cycles.
  • They have restructured their sales team to sell more advanced functionality and created a renewal team to handle low-touch renewals.
  • These changes aim to maintain efficiency despite the longer sales processes.

"We've made a number of tactical changes to account for that."

This quote summarizes the strategic business adjustments made to cope with the elongated sales cycles.

Predictions for December 2023

  • Henry Schuck expresses optimism for December 2023, predicting a better selling environment due to normalization.
  • He believes that current panic-induced decision-making will settle down by the end of the year.

"At the end of 23, I'm confident it will be a better selling environment than it is today."

This quote reflects Henry's positive outlook for the future market conditions.

Challenges of Being a Public Market CEO

  • Henry Schuck describes the transition from a private company CEO to a public market CEO.
  • He discusses the differences in managing relationships with investors and the increased scrutiny that comes with being a public company.
  • Henry emphasizes the importance of building trust with a broader investor base.

"There's this big constituency to manage that's different from when you're managing just two private equity shareholders on your board as your constituency."

This quote highlights the complexity of managing investor relations as a public company CEO.

Managing Employee Morale in Volatile Markets

  • Henry Schuck talks about the importance of educating employees on stock market volatility.
  • He emphasizes that daily fluctuations should not be a concern and that understanding the broader market trends is crucial.

"First of all, people have to understand what is going on, which they don't."

This quote points out the need for better financial literacy among employees to manage morale during stock price volatility.

Understanding Stock Market Movements and Employee Perception

  • Companies are valued based on growth and profitability over time.
  • Execution of the market strategy is crucial for a company's reward.
  • Employees may not understand market dynamics and attribute stock changes to incorrect causes.
  • Education on how stock valuation works is necessary for employees.
  • Stock movements are particularly noticeable around earnings time when compared to peer groups.

"the market's doing a thing, and I'm not ever going to pay attention in any situation where we're in line with our peer group. It's when we fall outside of the peer group, which is usually around earnings time, where we will either go up or down relative to what the peer group is doing."

This quote explains that the speaker does not focus on stock movements unless they differ from their peer group, which typically happens around earnings reports. It highlights the importance of peer group comparisons in evaluating stock performance.

Impact of Not Meeting Market Expectations

  • Even high growth and profitability can be viewed negatively if not meeting "perfection."
  • The company was the third most valuable software company, creating high expectations.
  • Falling short of perfection leads to adverse market reactions.
  • Communicating the reasons behind stock performance drops is part of managing expectations.

"On a relative basis, we were the third most valuable software company in the world from a valuation purpose. Snowflake, cloudflare us. There is an expectation of perfection. If you show up with anything less than what can be perceived as perfect... This is what happens."

This quote describes the company's high valuation and the consequent expectations for perfection. It implies that not meeting these expectations, even with strong performance, can lead to a negative reaction in the stock market.

Company Recognition and Ego

  • Recognition by the right people is more important than widespread fame.
  • Focusing on the opinions of people who matter can quiet unnecessary noise.
  • There is no benefit in letting ego be affected by lack of recognition.

"There is no benefit in feeling that. The way that I think about it is that the people who matter no can quiet a lot of noise when you get upset about just about anything like that."

This quote emphasizes the futility of letting ego be affected by lack of recognition and the importance of valuing the opinions of those who matter.

Relationship with Money

  • Wealth allows for valuable experiences rather than extravagant spending.
  • Time limitations make certain luxuries impractical.
  • Value-based decisions are more important than spending decisions at higher wealth levels.
  • Money should provide experiences, tempered by values.

"It's very hard for me to square my values with fly back and forth to Boston. It costs $100,000. It's just very tough to say that's the best way that I should spend $100,000."

This quote reflects the speaker's value-based approach to spending money, particularly regarding the high cost of private flying, which does not align with their values.

Personal Preferences and Lifestyle

  • Flying private is not always preferred; commercial first class can be more appealing.
  • Money is not the only factor in choosing how to travel or live.
  • Daily routines, such as exercise and family time, are prioritized over luxury.

"I actually prefer first class and a commercial plane."

This quote indicates a preference for commercial first-class travel over private flying, suggesting a practical and value-conscious approach to lifestyle choices.

Work Philosophy and Legacy

  • Working hard with the right people can lead to outperformance.
  • Being a great person is more important than other forms of legacy.
  • The potential for achievement increases with hard work and commitment.

"If there's a time where I'm not here, I would like people to say he was a really great person."

This quote conveys the speaker's desire for a legacy centered around being remembered as a great person, rather than for material accomplishments or fame.

Vision for the Future of SaaS

  • The current go-to-market strategies in SaaS are inefficient.
  • Growth should not solely depend on adding more personnel but improving processes and systems.
  • The speaker would like to see more sophisticated go-to-market strategies in the future.

"I think that the way companies go to market is really inefficient and that growth is solved by adding more heads and not adding better processes and systems for go to market."

This quote criticizes the current inefficiencies in SaaS go-to-market strategies and advocates for a shift towards more process and system-oriented growth methods.

Personal Development and Reading

  • "The Happiness Advantage" by Sean Acre influenced the speaker's view on happiness and business.
  • Books can change personal and professional perspectives.

"The happiness advantage by Sean Acre? Because it changed the way I think about happiness as an advantage in business and made me a happier person."

This quote highlights the impact that the book "The Happiness Advantage" had on the speaker's understanding of the role of happiness in business success and personal well-being.

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