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November 18th, 2009 by Tien Tzuo, cofounder and chief executive officer, Zuora

By Tien Tzuo, cofounder and chief executive officer, Zuora

I spent nearly a decade at Salesforce.com, eventually as chief strategy officer, and I learned first-hand what it takes to build a $1 billion company. (In fact, I’m trying to do it again.)

[Editors' Note: Zuora was named a Rising Star in CRM magazine's 2008 CRM Market Awards.]

We’re really looking forward to Dreamforce 2009. Our company has grown significantly since last year’s event, and we’re eager to catch up with the Salesforce.com community. I’ve worked closely with the AppExchange partner community, while at Salesforce.com and now Zuora, and I’ve seen it grown to 500+ companies. And still, every company wants to learn how to run its business like Salesforce.com.

The market for cloud computing is $160 billion, according to a report by Merrill Lynch. Every major software company in the world has launched a software-as-a-service (SaaS) initiative to become part of this cloud-computing phenomenon. And they’re all trying to achieve the success seen by Salesforce.com.

The fact is, it took Salesforce.com 10 years and 111 plays to reach $1 billion, 60,000-plus customers, and 1 million-plus subscribers.

And on top of that, it was expensive. Salesforce.com had to raise $65 million in capital, hire and staff more than 3,000 people, and build its own systems to support its growth.

So, how did Salesforce.com grow in less than a decade from a start-up in a rented apartment into the world’s fastest-growing software company?

In his new book, Behind the Cloud: The Untold Story of How Salesforce.com Went from Idea to Billion-Dollar Company — and Revolutionized an Industry, Marc Benioff reveals 111 “plays” for starting and running a successful business. I want to share my top 5 strategies for implementing these plays:

1. Multiple Editions: Salesforce.com offers multiple product editions, so they can easily target different customer segments, verticals, and markets. For example, companies with small sales departments can get up and running with Group Edition, while others might select Unlimited Edition to get their entire company on board. Either way, Salesforce.com can easily attract new business from a wide variety of potential customers.

2. Free trials: When you visit www.salesforce.com, it’s hard to miss the offer for the free 30-day trial. Free trials have always played a big part in Salesforce.com’s customer-acquisition strategy, and it’s easy for trial users to become customers: They can automatically convert their trial into a paid subscription with a few clicks.

3. Compliance: Salesforce.com has always played by the rules when it comes to compliance. Seek out vendors who make it safe for you to do business, especially when it comes to payment processing. Gateways such as PayPal, CyberSource, and Authorize.net are trusted payment gateway names.

4. License management: If you’ve ever purchased Salesforce.com licenses, you know that Salesforce.com manages upsells, upgrades and renewals better than most companies. Salesforce.com has tools in place to automate renewals, notify reps when trials expire, and alert them of a potential upsell. The sale is never final. You need tools to help you manage the entire lifecycle of your business, from the initial order to renewals, upgrades, and upsells.

5. Metrics: Know your numbers and you can plot your next move. If you’ve ever listened to CFO Graham Smith rattle off net new subscriber revenue and monthly recurring revenue (MRR) on Salesforce.com earnings calls, you know that the company is metrics-driven. You need full visibility into key subscription metrics — such as MRR, churn, and renewal rates — in order to make real business decisions.

By implementing these core Salesforce.com plays, you can really drive your business to the front of the pack. Attempting to build these capabilities yourself eats up precious time and resources you could be spending on your core products.

Take Marc’s advice in Play #8: Work only on what’s important. See you at Dreamforce!

Widely recognized as a thought leader in the software-as-a-service industry, Tien Tzuo cofounded Zuora after 9 years at Salesforce.com. Zuora’s platform provides pricing and packaging flexibility, support for free trials, credit-card orders with PCI compliance, subscription lifecycle management, and metrics. While holding various executive roles at Salesforce.com, he built that company’s original billing system, and oversaw the vision, direction, and design of the first 17 releases of the company’s award-winning product line. In 2004, Tien was named CMO of the Year Finalist by the CMO Council and BusinessWeek Magazine.


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3 Comments

[...] This post was mentioned on Twitter by Josh Weinberger and Good CRM, destinationCRM. destinationCRM said: dCRMblog: GUEST-BLOG: Former Salesforce.com Exec Picks Benioff’s Top Plays #df09: By Tien Tzuo, cofounder and chi… http://bit.ly/22CrmA [...]

Pingback by Tweets that mention CRM Magazine Blog » GUEST-BLOG: Former Salesforce.com Exec Picks Benioff’s Top Plays #df09 -- Topsy.com — — November 18, 2009 @ 5:01 pm

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Comment by info@evapt.com — — December 1, 2009 @ 8:32 pm

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Comment by kalpesh — — January 7, 2010 @ 5:56 am

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