Subscribed 2013 San Francisco: CEO's Keynote

The World is Moving to a Subscription Economy

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HIGH TECH

SAAS

CLOUD

MEDIA

DEVICES

TELECOM EDUCATION

HEALTH CARE

FINANCIAL SERVICES

CONSUMER

Can we show a globe with dots represen2ng the ci2es (or countries

colored in) where we have customers? Or even include past customers. Or even

include pipeline.

Also keep the quote

No reason to list # customers, I’ll speak to it

Zuora Receives £36m For European Expansion

It’s Spreading Around the Globe

It’s Invading F500 Boardrooms It’s Invading F500 Boardrooms

You are the Face of Innovation today

You are the Unstoppable

1 New Product Created Every Hour

On Average …

10X transaction growth in 12 months

10,012,288

1,536,533 AUG 2012

AUG 2013

20 Billion

Contracted Invoice Volume

Staying ahead of the Unstoppable Staying ahead of the Unstoppable

25X 10X 60X Faster Syncs Faster bill runs More capacity

Exponential investments in

customer success

2012 2013

100

90 93 91 95 98

94 96 97 97

0

25

50

75

100

Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 Sep-12 Dec-12 Mar-13 Jun-13 Sep-13

“Matt replied in moments and I am happy with how he handled my issue”

Kristi,

“I love Zuora support. You guys really do a great job”

Harsh,

“Cesar was awesome. Very thoughtful and helpful”

Alan,

So What’s Next?

“What is the best way to price?”

“How do I reduce churn?”

“How should I compensate my sales force?”

“How do I reduce the number of failed credit card transactions?”

“Should I charge a setup or implementation fee?”

“How do I account for multi-year contracts?”

“As I expand internationally, what payment or tax issues will I encounter?”

“Should I offer monthly or annual billing periods?”

“I wish there was a blueprint”

What if We Could Create a Blueprint

We analyzed 6 years of data

You are trying to Price Acquire Bill Collect Nurture Account Measure Iterate Scale

Price 11%

Acquire 12%

Bill 14%

Collect 12%

Nurture 11%

Account 11%

Measure 9%

Iterate 11%

Scale 9%

Support Cases Categorized By 9 Things


Introducing the 9 Keys to Success in the Subscrip2on Economy


Simple per-unit pricing

Infinite pricing options

2220000000

? A new way to think about pricing

Increase Cash Flow

Drive Down Cost of Sales

Outflank the competition

Grab Market Share

Increase Loyalty and Retention

Pivot into a new segment

Expand Internationally

The Ability to Price in support of your business goals

is the first Key for Success in the Subscription Economy

It sounds easy

Billing

Gateways

fulfillment

provisioning

Immediate or delayed payment

Connect to CRM

Notify

Connect to accounting

Self service vs assisted flows

But it’s Harder Than It Seems

We live in a B2Any world

B2C B2B

The Ability to Quickly Acquire Customers in a B2Any World

is the second Key for Success in the Subscription Economy

Andrew Lam-Po-Tang

Billing used to be simple

Ship Bill

$10

new customers

Existing customers

Pro-rate Usage

Ship Bill


Confused customers

Weeks to generate bills

Billing Errors

Lost Revenue

1

2

3

4

Every bill is an interaction with your customer

“But I signed up for the $100/month plan”

The Ability to Create Accurate, Clear Invoices at Scale

is the third Key for Success in the Subscription Economy

Electronic payments Non-electronic payments

Credit Cards Debit Cards Wire transfers

Catch exceptions

Multiple card types Country specific

banking rules

Retries Card updaters

Manual Lockbox

Receive payment

Notify delinquents

Write off payment Reconcile Suspend service

The need to automate

ACH

Handling of Exceptions

The Ability to Tame the Complexity of Payments

is the fourth Key for Success in the Subscription Economy

Bill Plummer

Build Valuable Relationships

The Secret: Give Customers Control of the

Relationship

Remember the 2nd Key: Acquire?

Subscribe

That Was Just the Beginning

Subscribe

Renew

Suspend

Add-on

Upgrade

Sign up

Validate CC Validated

Create Bill Process Payment

Create Account

Link Account

Confirm Sign Up

Welcome Email

Create Subscrip2on

Provision Service

WEB

SITE

BILLING

CRM

PLAT

FORM

The Ability to Nuture And Develop Deeper Customer

Relationships is the fifth Key for

Success in the Subscription Economy

Andre Pimentel

“I’ve got this massive spreadsheet I use to track Revenue”

“It’s Taking Longer and Longer to Close My Books”

“It’s becoming harder to harder to reconcile financial info across all my

different systems”

“The IT department used to be known as Dr. No …. But now, it’s the finance

department”

There’s no accounting for subscriptions

Booking

Subscription

Billing

Cash

Revenue

The Ability to Easily and Quickly Account for

Bookings, Billings, Cash and Revenue is the sixth Key for


You used to track these metrics

Revenue $100 COGS (30) Gross Profit 70 Opera2ng Expenses S&M (20) G&A (10) R&D (20) Total Op Ex (50)

Net Income $20

Now you track these metrics

ARR $100 Churn (10) Net ARR 90 COGS (20) G&A (10) R&D (20) Recurring Profit 40 Growth (40) Net New ARR 40 Ending ARR $130

Your current applications don’t give you the metrics you need

The Ability to Instantly Access

Subscription Economy Metrics is the seventh key for


Chuck Best

Pricing iteration is crucial to support growth

You can’t afford this …

“The next available engineer will see you in 6 months”

The ability to Rapidly Iterate On Your Pricing and

Acquisition Strategies is the eighth key for


Why build all this into your service?

Pricing

Payments

Taxation

Billing

Rev Rec

Secure

Mission Critical

Scalable

Rating

When you could do this?

Integrate with an ecosystem that supports your service

Customer support

Inventory

Fulfillment

EnDtlements

Website

Provisioning

Commerce

Billing

Finance

Payments

GL

quoDng

orders

invoices

checks

events

account status

account balance

metrics

The ability to Run on a Scalable, Reliable, Mission

Critical Infrastructure is the ninth key for


Cathy MacDonald



There have been moments where we took a leap forward in our understanding of the

world

1789

1215 1687

1905 1980

2013

Today we are taking a leap forward, together, in our understanding of the

Subscription Economy

Mike Pearl, PwC AJ Bernstein, Acxiom



We are wrapping everything we do at Zuora around these 9 Keys

Our Second Announcement

Why Are We Here?

Why is the Subscription Economy an Unstoppable Force

There is a Better Way of Doing Business

Win / Win Relationships

Transfer of Assets

not

Stable Recurring Revenue Built on Loyal Customers

Massive investment of capital with unpredictable outcomes

not

Efficient use of resources

More Pens, More Cars, More Phones, More Landfills

not

Subscription Business Model

Is The Better Way

Today, businesses must focus on •  Deeper customer relationships versus one-time

transactions

•  Fair, value-based pricing versus fixed, cost-plus pricing

•  Efficient, consumption-based services versus shipping unit after unit

•  Sustainable, forward-looking revenue versus backwards-looking financial reporting

If You Believe in a Better Way to Build a Business

Join the Revolution

Sign the Manifesto

Subscribed 2013 San Francisco: CEO's Keynote

Economy & Finance

proprietary information

intended audience

simple ship bill

new way

new product

new segment

zuora support

nurture account measure