Henry Schuck, we are live. I have the founder, chairman, and CEO of ZoomInfo. Welcome to Liftoff.
Awesome. I'm glad to be here. Thanks, Keith.
Henry, it's great to have you here. I've been waiting to chat with you for a little bit. I mean, you're just such a fantastic story from the SaaS world, from a great startup story all the way to IPO, which is sort of every founder and entrepreneur's dream. So, on top of category leader and now the transition to AI, I hope you don't mind me not starting in chronological order, just jumping into this crazy world. We go from SaaS and that whole amazing rise in companies and that birth of a new generation of software companies and that transition into this thing that we're hearing about called the SaaS apocalypse. And you transition into the AI tidal wave. How are you doing in all of the ups and downs of all this? A lot of it may be media attention, but certainly some of it's real. How do you see things today?
Yeah, look, I think a couple of different ways. Lots of places to start here, but let's start with the difference between a data company and a traditional SaaS seat-based company. So, ZoomInfo has two businesses effectively. One is our core sales intelligence platform where a customer buys a seat and they get access to ZoomInfo and their sellers, their SDRs, their account managers get access to ZoomInfo or they could go look up information on their customers. They could use AI to build them an account plan to summarize the interactions they've had with the customer to find out who the CEO or CFO or CRO is and get their phone number and email address. It's kind of like a traditional SaaS application, but it's built on top of our data foundation, which is the world's best go-to-market B2B data. It's 500 million contacts, 100 million companies, billions of signals that we see every month, worldwide data asset. And so the other side of our business, which is about a fifth of our revenue, we're about 1.25 billion in revenue, a fifth of our revenue growing 20 plus percent a year, is our data business. That data business is I want to take your APIs and I want to enrich data in my CRM. I want to enrich data in my marketing automation system. I want to enrich data in Snowflake or Databricks or BigQuery, wherever I am that I have a go-to-market workflow. I want ZoomInfo's data plugged in there so that I have a clean look at the universe. That business is not seats. It's consumption-based. It's using our data to build and cleanse your own data or your own apps. And so when you think about where the world is going from an AI perspective, if I had just the seat business and no data foundation underneath it, that's a very difficult platform to use to get any uplift from what's changing in AI. If I had just seats, I was like any of these sort of collaboration platforms that are undifferentiated. The difficulty with those platforms is what benefit do I get from AI? Outside of the fact that I have a built-in customer base and I've built them products with the data. The big advantage we see today is it's very extensible and people are building new applications internally. They're building new go-to-market workflows internally. And so yesterday I went to Claude and I built an enrichment application. I was just like I've never coded. I don't know how to code. I mean, I didn't know how to code. I guess in today's world that you do know how to code if you could just chat back and forth with Claude. And I said, 'Okay, I want to build an app where I drop in a CSV.' You then go to ZoomInfo's APIs. By the way, I've never coded to an API. You then go to ZoomInfo's APIs. You enrich it with company information and then you find my buying committee, CRO, VPs of sales, chief marketing officers, demand gen people. Bring that back. Give me their funding information. Give me any signals that might be interesting to me as well. I pointed Claude to the API documents and then we went back and forth a couple of times and ran into a couple of issues with authentication that we resolved by going back and forth and then I had an application that did enrichment and that's a very different world than existed a year ago where now companies are going to be able to build purpose-built applications for go-to-market for their customer base to understand their customer base to understand the campaign they're going to go after but every time they do that they should be calling ZoomInfo data to deliver that data that they need for any go-to-market workflow. That data piece is very extensible in the world of AI. So where historically I had the seat business and you access ZoomInfo data through a seat that had a SaaS interface. Today we're seeing many more surface areas where go-to-market work is being done. It's being done in the LLMs. It's being done internally in applications that they're building. They're vibe coding a bunch of different stuff. It's being done in Databricks and Snowflake and BigQuery and their CRM and their marketing automation tool and so the opportunity for us is to free our data from this historically difficult SaaS interface and make it available anywhere go-to-market work gets done and that's our opportunity and it doesn't exist for a standard SaaS vendor but it's really unique for ZoomInfo and so when I look out to the next two and three years our job is to execute on what is a much bigger opportunity than ever existed at ZoomInfo.
Can I dig into that for a second and give you just a sec to take a sip? I feel like you started off as an application and then went into this whole platform of B2B intelligence. You became the brand name that everyone knew and in terms of my B2B lead gen activity, it was we need a deal with ZoomInfo and then there were a whole bunch of new players that arrived on the scene and did bits and pieces of what you were doing. But you were the database of source and you didn't see that as your business, but now you do. Now you are a data intelligence repository. It's not necessarily a flattering word, but I meant to say it's like a data vault in a way that you're now opening up and giving people access. And what does that look like now? Are you a marketplace? Are you an app? Are you a platform? How do you start to in your executive level conversations? How are you building this company for the next two or three years?
Yep. So there's two things here. One, the data foundation has always been the most important foundation. So the one thing that's different is we actually started as a data company giving you data on the people and the companies that you should be engaging with. That's where we started and then we sort of added on additional data attributes, first-party data, we merged it in, we added in intent data and then project data, job posting data, earnings call data and so the data has always been the foundation but the place where we became an app company or a software company is how do you take advantage of that data. In the pre-AI world you take advantage of it through an interface that we build for you. We're opinionated about that interface, there's filters, we try to think through what the sales rep wants to see, what a marketing person wants to see, the activities that they would want to do and so we built a very opinionated front end for our customers to take advantage of that data. Inevitably, when you do that, you don't cover every use case perfectly. There are a bunch of edge cases. There's a different way that a customer wants to see data that we didn't think of. Oh, I'm a media company. I want to see your ad spend data front and center in the interface. Well, it's not flexible like that. And so but when you have that data foundation then you can kind of build whatever you want on top of it. And so the way that I think about it is historically we had one interface for a million users and in the future what is actually happening is that there will be millions of interfaces for millions of users and each of those can be really custom-built when you have that data foundation at its core. The other thing that is real in the age of AI, particularly in go-to-market, is I don't just want ZoomInfo data. I want a whole bunch of other data. I want my CRM data. I want my call data. I want my email data. I want my product data. And then I want that all stitched together so that when I go write an account plan for an account that I'm working, I don't just get my CRM data, but I get all this interesting ZoomInfo data married to it. And I get all the call data married to it as well. So that when I build the account plan, I have that full context and where the GTM universe is going is a robust go-to-market context graph that then you build on top of that requires ZoomInfo data and that requires your first-party data and those two things have to be stitched together in a seamless way that you could take advantage of it. That's actually much less trivial than it sounds because like oh yeah just bring my person third-party data stitch it together. Well, open up any company of scale CRM system and you'll probably find 20 different Cisco records and which one is the real record and there's Cisco, there's Cisco WebEx, there's Cisco AppDynamics and what you really need to do is take 20 Cisco records, understand that those are all one, consolidate that and then marry it to the third-party Cisco data and then you can start building on top of that and get an account plan or a prospecting email or whatever it is you want to try to automate or build agents on top of.
Is this still a GTM platform with intelligent layer and then now we're going to be adding agents to the platform or how does this continue to get realized as you build this business?
Yeah, exactly. So I think there are a couple of things. One, we've built interfaces for our customers to take advantage of that data foundation inside of ZoomInfo. You can take advantage of it in our GTM Workspace application. You can take advantage of it in our GTM Studio application. You can build audiences, push them to your sellers. You could do it inside of ZoomInfo. And so there are a lot of companies who are like, listen, I'm not going to go build my own interface on top of ZoomInfo data. It's cool that you did it in two hours with Claude. We're not doing it. And so we want an out-of-the-box solution that we can put in front of our sellers. That's actually the vast majority of the market. I was talking to my chief product officer yesterday. I was like, I built this enrichment app with Claude code with ZoomInfo's APIs. What percentage of our target audience, our customers have done that? And if you're on my X feed and you're on my LinkedIn feed, you would think the answer is like 60% of the marketplace has already done that. But if you take a step back, it's actually not 60%. It's less than 1%. And so we have to also appreciate that it's very, very early for these solutions. And most professionals are not leveraging them yet. And they're not going to build their own interfaces. They're not going to interact with the API the way that a top 1% go-to-market practitioner is. But look, it's our job to build for the future. And so we're building the flexibility for that while also understanding that even 5 years from now, many of our customers are not going to be building their own solutions in Claude code. They're going to want a simple, easy to use interface to take advantage of. But we also want to make that interface really flexible. And so in ZoomInfo, where we're going is the ability to vibe code that interface. We'll give you a standard interface, but if you want it changed so it doesn't look like that or brings in a different data point or it does something else for you, you should be able to vibe code the interface, the front end.
That creates some really interesting balancing acts for you, right? Keep pushing the front end, the wild frontier even at 1% or 2%. You want to maintain leadership, but at the same time taking care of that enormous installed base that always has its own set of needs and inquiries both from a marketing sales product standpoint.
There is definitely a battlefront in two places today. There is a battlefront for an interface for AEs, AMs, and SDRs. And you see a lot of companies getting funding to go try to build that. You could see like a Day.com or a Rocks or a Monaco or a Common Room or a Pocus or on and on, HockeyStack and Unify and it goes on and on and on. There is a battlefield around an interface for a sales rep to do work and I think that's largely driven from the expectation that that's not going to be CRM anymore or it's not going to be Salesforce, it's not going to be HubSpot anymore that the place where GTM teams do work is going to be somewhere different and a lot of people are fighting to have that interface, us included. And then there's this other kind of train of thought that says well interfaces are all going to go away. Everything's going to be interacted with through an LLM or through a vibe coded application that somebody built themselves. And so the thing that you want to make sure that you have in that universe is proprietary data that makes itself available in all of those different places. And if all you have is the interface and you're licensing data from a bunch of people and trying to cobble together a data asset, it's a very difficult place to be. If you have the data asset, then you can kind of fight the battle in both places. Look, I'm not smart enough or Nostradamus enough to tell you that 5 years from now, one of these places, one of these ways is going to win. One example that I think about is video editing applications. At the beginning of the release of the LLM, there was this big push where people said, 'Look, video editing is going to go away. It's all just going to be edited through a back and forth chat with an LLM that edits your videos.' But then what we found out was no, that's actually more difficult and more cumbersome than using the standard filtering and aspects of a video editing software. Video editors don't want to just chat with ChatGPT. They want control of the vision in their mind coming out on the screen and they don't want an intermediary doing that. And so all of these things kind of went back to an interface that allowed more control. And so I don't know if that's what's going to happen in go-to-market land, but for now we are largely fighting the battle in both places.
Henry, I'm going to hit pause on the future frontier models and go back to the early days because as I mentioned, I have a lot of early founders and doing some crazy things here that want to hear about the early days of ZoomInfo and when if you start to think about reverse engineering the success here. What were the one or two decisions that you made or that you faced and that were pivotal? What were those and how did that turn out? Would you do anything different?
Yeah, so a couple of different things here. One, we bootstrapped this business to 30 million in revenue before we took any outside funding. And so the business had to be, from day one, it was $25,000 for me and $25,000 for my co-founder. That was the startup capital. And so you had to be really efficient. And that DNA still exists at ZoomInfo. ZoomInfo does $450 million of free cash flow. It's a 38% margin business. It's run really efficiently. What that gave us the ability to do is because we were far more efficient than our competitors at running the business, it allowed us to go acquire our competitors and acquire our competitors with debt instead of diluting the shareholder base because we had profitability and they didn't have profitability or they had a little bit of profitability. And so we had a number of acquisitions where because we were running a really efficient business and winning it gave us an opportunity to consolidate the marketplace a bit. Then every business kind of has two sides. It has a go-to-market and then it has a product side like someone is building the thing and or some group of people are building the thing and some group of people are selling the thing. And a lot of times early founders, it's actually changed a bit today, but historically early founders spent all of their time on the product and engineering side and very little of their time on the go-to-market side. And we spent, I was the first seller of ZoomInfo. I sold it for six years. I was on the front lines. I was talking to customers. I was in the lead queue. And so I really understood the pain that a seller would have on a call and what questions the customer would ask. Oh, do you do this? Do you do that? Our competitor is saying that they do this, do you do that? And so then all of the product build was coming from my frontline experience with the customer. And the way I think about it today is there is a bunch of friction in a sales process. Whatever, even if you're PLG, right? There's friction. Something happens. If it was like you log in with your Gmail, okay, that's friction. If you could just not log in and everybody could click it in and get in, that's a piece of friction you could take away. In the sales process and in the PLG process there are a whole bunch of points of friction and I always viewed my job from a go-to-market perspective to take out as much friction in the sales process as possible. Do you integrate with Microsoft Dynamics? If the answer is no that's friction and I need to start thinking about should we, when should we, how many customers are saying that. Do you have data in Europe? Okay we don't, that's friction so how do I start solving for that friction. Your competitor does this, do you do that? Okay that's friction either I'm going to build that thing or I'm going to have a really great talk track around why that thing doesn't really work or that you could actually get at it this other way inside of ZoomInfo. And so I think one of the reasons why we were able to run such an efficient business is that we were really focused on taking all the friction out of the sales process. And then that really drives win rates. It gives you happier account executives. And then a lot of that is because you're feeding that back into the product and then you're getting a better product out that customers want and that the customers are asking for. And then that takes friction away from both the renewal side and the new business sales side.
Anything on that early journey, Henry, that stands out as like a sore spot for you? Like the transition you missed or the opportunity? There's so much success we could point to, but I mean there's always a couple things, right?
Yeah. I mean this usually almost always this question is about people and whether they scale with you. If your company is growing fast, you're either you've either done a really great job, you're super well funded, so you bought people like you were able to get people who were ahead on the scale arc so that when you met the scale that they were used to, they were able to sort of accelerate past it. I would tell you there were points of time building ZoomInfo where I just had the wrong people. Like I think of one point in time where I had the wrong product and engineering folks and I didn't realize it fast enough. They were really great for the period of scale right before they were really bad for the next period of scale. And like the period of scale that they were really great in really drove the business and they were incredibly valuable.
I'm thinking of the saying hire slow, fire fast kind of a thing.
Yeah, that's definitely true for any founder's journey. And I think what ends up happening again is kind of exactly that they're really important and valuable to you for one stage of scaling the business and you feel super indebted to them for that and then all of a sudden they're just not there anymore. And there's a thing that Ben Horowitz or Marc Andre says is that when there's a doubt, there's no doubt. And that's right. As soon as you have a doubt, there's probably no doubt that you're right about that.
Could be a little harsh, but that's your prerogative as a founder. You got to make those tough decisions. We see it in sports. We see it in life. We see it in...
Definitely see it in sports. Yeah, sports does an incredible job of that. Better than any other industry or type of company.
It's in your face all the time probably. Hey, what about you personally? How did you evolve when you were a startup founder out of law school all the way to, oh, we're a public company now. Oh, wait, we're a billion dollar unicorn. Now we're taking on the next frontier and I'm 13 years into this, 14 years into it. How do you personally evolve in that process?
Look, I'm constantly trying to learn and learn new things and not assume that anything that I did before is sacrosanct. Like when I think about the business, there are probably a lot of things that were really important to the way we operated the business a year ago that are just not very important to the way we're going to operate the business next year. And so I'm constantly trying to learn what the next frontier is and then take apart the things that we're doing at ZoomInfo today and modernize them for what the next leg of growth is. One interesting example here is the talent profile for a great new business account executive is very different than the talent profile for an enterprise sales account manager. And I didn't appreciate that. I thought if you're great at new business sales, you're going to be great at enterprise account management. So, I started moving my great new business sellers into the enterprise account management role. I was like, I don't think these account managers in enterprise are any good. You guys are amazing. You're selling all of these deals. I'm going to move you into the enterprise account management role and you guys are going to crush it because you're technical and you understand customers and you know our product really well. Turns out that in the enterprise, your job is so much more than just understanding the product. That's very important, but it is not what gets large enterprise expansions done. It's building relationships and trust with your customer. It's solving problems for them in real time. It's navigating the organization when they have a problem. It's getting them collateral that they could use to talk to their organization about ZoomInfo. There's all these other elements of being great at account management that don't map really well back to new business account executives. And so I had to go through that learning process where I was like, there's no way that person can be good. They don't look at all like my new business account executives. And then you sort of learn through that. But so it is questioning your assumptions and your experience constantly.
So let me play off of that then and ask if you're the difference between a good and a great founder. Is it something that's more a skill, a habit, a mindset, a personality trait? When you start to identify that from a leadership perspective, a founder perspective, what do you think you would lean on the most?
So I ended up, I have a group of founders that gets together two times a year from large publicly traded companies, fast growing private companies. There are a couple of things that make it so that we all get along and have successful businesses. I would say the first one is these guys, they're all, I don't know if there's a second of their day that goes by where they're not thinking about their business. They're not thinking about how to improve their business. They're just obsessed with their businesses. And then each of them has a superpower. Like one is really great at product, one is really great at go-to-market, one is really great at inspiring and recruiting a team, one is really great at analytics. And so when we get together, the coolest thing to watch is that everybody's trying to steal a little bit of the other person's superpower in the moment. So that goes back to you're a really great learner and you're always looking for opportunity in any situation to apply it back to your business. I wrote about this a couple of weeks ago. I called it the ownership tax. And the ownership tax is like this constant voice in your mind that's like, is this the best use of your time? How is this going to add value to ZoomInfo? Should you go do that? If you do it, are you going to find something valuable for ZoomInfo? And I think great founders have a really high ownership tax. They're constantly thinking about it. But when I wrote about this, it dawned on me because I got jury duty. And so I tried to get out of it. I was like, 'Oh, I'm a very important man.' They were like, 'Yeah, good story. It's a one-day trial. Is it really going to cause an issue for you to go to this one-day jury trial?' And I was like, 'No, it's not.' And I was like, 'I'm a lawyer, too. Maybe that can get me out of it.' And he was like, 'Yeah, no, you're still going to jury duty.' The judge, okay, fine. And then I realized during jury duty, it was the first time in years where my mind was completely free of ZoomInfo. There was nothing that I was going to do. I was a slave to the state for two days. There was no value I was going to be able to extract from that jury trial that I was able to bring back to ZoomInfo. But in almost every other moment of my day, I am looking for value to extract in ZoomInfo. So it's a combination of obsession and constantly learning, constantly looking for opportunity for your business.
