Zuora is one of the world’s leaders in delivering software-as-a-service (Saas) for the subscription economy, founded 8 years ago by former Salesforce executive Tien Tzuo.
The company has since raised over $US250 million in capital, with a total valuation of around $US1 billion. This has included a $US6.5 million series A in 2008 all the way to a $115 million series F in May last year lead by Silicon Valley heavyweights BlackRock.
Since founding, Zuora has expanded heavily globally, with a solid Australian operation that counts Fairfax Media, Deloitte and Zendesk as customers.
But you don’t just get to this point overnight, which is why we thought Tzuo would be perfect to ask for his best advice for startups looking to raise capital in both Silicon Valley and Australia:
Most people think of raising money as where you get a business plan and then you walk up and down Sand Hill road. Then you just knock on doors until someone falls in love with you.
I kind of compare raising money to selling a house.
If you have a house you’re trying to sell you don’t go from buyer to buyer, knock on their door and say ‘would you like to buy my house?’.
You have got to craft your house so it’s something you’d want to live in.
You have got to run a process where multiple people would like to live in your house, get to take a look at it and eventually put in an offer to buy the house. Successful sales of a house are people that are able to portray their houses as something that’s worthwhile.
That’s how you have to psychologically look at your startup.
So the first thing you got to do is make it into something that people want to be in. Here’s something that’s interesting and exciting, it may not work, but if it works, gosh, we’re going to change the world together – do you want to be a part of that? Then you have to run a process to allow multiple people who are interested.