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Building A Billion Dollar Data Company: World of DaaS interview with ZoomInfo CEO, Henry Schuck

July 14, 2021
Auren Hoffman

New podcast with Henry Schuck, CEO of ZoomInfo (NASDAQ:ZI). Our conversation is available everywhere (Apple Podcasts, Spotify, YouTube, etc.). Please subscribe, follow, and review.

I am a really big fan of ZoomInfo. SafeGraph is a customer. It’s a fantastic product, and it’s one of the only billion dollar data companies that have been created in the last 20 years. I was super excited to dive into and share what made ZoomInfo so successful. 

Here are some highlights from my conversation with Henry Schuck.

ZoomInfo’s value proposition is super simple.

ZoomInfo sales cycle is less than 30 days. Sometimes they’re same day deals. How? ZoomInfo provides salespeople with high quality contact information for their prospects. It's a simple tool. Customers instantly know the value that they're going to be able to get with the data. When it works, they gladly pay for it because it will make their sales process easier. 

ZoomInfo first focused on high quality, but a small amount of data.

At ZoomInfo’s start, there were a lot of companies selling contact information for B2B leads. A lot of it was stale and outdated. Quality was ZoomInfo’s differentiator -- they promised to deliver data that is 95% accurate. They started in a niche market by collecting information on IT decision makers. By narrowing their focus, they were able to maintain the highest quality data. 

ZoomInfo started as a data company but now is also an application company.

Yesterday, ZoomInfo announced it will buy sales intelligence tool Chorus.AI for $575 million. ZoomInfo has a long history of acquiring companies. Henry’s company DiscoverOrg actually acquired ZoomInfo in 2019. Henry believes there's going to be a decent amount of consolidation in the marketing software landscape. If a company is working on something ZoomInfo might have ambitions to be a part of, they try not to do a BD deal. Instead they embrace acquisitions.

ZoomInfo takes every opportunity to make an acquisition with debt.

ZoomInfo has a long history of acquiring companies. And when possible they’ve used debt instead of equity because it dilutes less. ZoomInfo has been a profitable company acquiring other profitable companies. When looking to raise debt, they demonstrated how they would increase margins and continue to grow sales with the combined businesses.

As a data business, you can have a winner-take-most market.

Solutions and applications rarely gain 50% market share. But as a data company, you can serve the majority of a market. ZoomInfo is the dominant leader for business contacts.

ZoomInfo’s secret to starting a contributory network: start with exhaust data.

ZoomInfo first asked their customers to share bounced and confirmatory emails. Their customers said yes because nobody cares about this email-related data, and ZoomInfo explained it would make the whole community better. After building trust and improving the network, they moved on to more sensitive information. They also acknowledged not everybody had to become a contributor to make the network really valuable.

Hope you enjoy this episode of World of DaaS — would really appreciate it if you subscribe and review Apple Podcasts, Spotify, YouTube, etc.).

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