Zuora Named Top OnDemand “Company of the Year,” 16 Customers Also Honored

by Tien Tzuo, Founder & CEO

 

Today, I feel honored to announce that we’ve been named AlwaysOn’s OnDemand Company of the Year.  

In selecting Zuora, AlwaysOn stated, “With early market entry, strong revenue, and an extremely stable, secure, and useful suite of products, Zuora's success and continued growth is indicative of its ability to launch and monetize subscription-based products and services of any size in any market.”

While we’re excited and humbled by the accolade, the greatest honor is seeing so many of our customers among the list of OnDemand Top 100 winners. These companies are the proof that the Subscription Economy is becoming the engine for change across a variety of industries. OnDemand’s recognition of 16 of our customers confirms we’re not only creating the best product we can, but are helping the best companies in Silicon Valley become better. The companies selected as winners vary from technology firms like Box to social media startups like Branchout, demonstrating the portability and universality of Zuora’s platform. Zuora isn’t just partnering with companies in varied verticals, but the best companies in these industries. 

The winners were announced last month and selected by media networking publication Always On. The competition this year was fierce, with hundreds of private technology companies being nominated by investors, technology leaders, journalists, industry insiders and bankers. In addition to Zuora, Zuora customers Box.net, GoGrid, Xactly, Acquia, Mulesoft, Syncplicity, Symplified, Jive Software, Marin Software, Marketo, DotNetNuke, BrightEdge, BranchOut, People Matter, Yammer, and Zendesk were also honored this year.

Companies were selected based on a set of five criteria: innovation, market potential, commercialization, stakeholder value, and media buzz. This is actually Zuora’s third year we’ve honored by AlwaysON, but this year feels sweeter to us with so many friends to call and congratulate.

 

PS: For those at AlwaysOn OnDemand who requested a copy of my keynote presentation, The Only 3 SaaS Metrics that Matter you can view the deck via SlideShare or my recorded presentation via Ustream.  

If You Can’t Beat ‘Em, Join ‘Em: Car General Motors Embraces the Subscription Economy

by Tien Tzuo, Founder & CEO

 

Let’s say you’re looking for a new car. Your old car, meanwhile, sits idle in a garage 9/10 of the time. You want to test drive a new car, but you want to also save up more money so you can actually afford it. What do you do? Well, if you’re a subscriber to RelayRides, you might be able to earn money by lending out your idle car, find a free place to park your car, and even better, get a chance to test drive a new GM car on your own time. Seem impossible? In a few months it will be a reality.

Historically, the car industry has been one of the slowest to adapt to change. But in the wake of the financial crisis, well-publicized bailouts, and injured reputation, something has definitely
changed. A recent article that appeared in TriplePundit.com discusses the reasons why General Motors, one of the most iconic American car manufacturers, is moving into what the author calls the “access economy” but what we know as "Subscription Economy.” Whatever the terminology, the shift is about single-purchase product-oriented businesses moving to products-as-services and subscriptions. We encouraged BMW to embrace the subscription model two years ago when they only were timidly exploring the subscription/access/sharing model and ZipCar was just beginning to gain traction. Now ZipCar is a well-established brand and GM has jumped into subscriptions with both feet.

GM’s partner is RelayRides, a service that lets you share your car when it’s idle with other subscribers. It’s similar to other car-sharing services and, as the article adroitly points out, makes a lot of sense for GM to invest in. From a marketing perspective, car manufacturers benefit greatly by car sharing services as they get potential customers exposed to their products.

It’s also a good investment, as companies like ZipCar have taken off as late. GM and the other major manufacturers are recognizing that ZipCar and other car sharing services are growing very fast and are proving to be not just a flash in the pan but a true threat to their business. It’s likely that major car manufacturers feel they need to act because so much of the population has moved towards the subscription model embodied by ZipCar. Simply put, consumer buying habits are forcing GM and others to change.

And that change is not only good for GM, but it’s great for the entire industry-- from customers to upstart subscription companies to car manufacturers. For its part, RelayRides gets access to a great fleet of vehicles, gets exposure to millions of GM owners, and scores a major PR coup. But the biggest victors are the customers who can test new cars, have access to cars when they want, and ultimately tailor their driving experience to their own convenience. Customers having more choices when it comes to car “ownership” and driving is a great thing for everyone, and as more subscription services pair up with more car manufacturers, the likes of GM, Ford, BMW and Hertz will be recognized for what they are: pioneers.

BranchOut Gets Green Thumb Treatment, Now Spreading Roots in Facebook at Even Faster Pace

by Todd Pearson, VP Customer Success

 

Rapid growth isn’t always a good thing. Like a plant that has outgrown its pot and has nowhere to go, companies can sometimes be restrained and stymied by their billing system. But being able to welcome your company’s growth and steer it to long-term success: that’s the sign of a good business. 

Take BranchOut, for example. BranchOut launched in 2010 and in a little over a year, has become
the largest professional network on Facebook with millions of users, over 3 million jobs, and 60 countries represented. But with all of that rapid growth, tangled developed. During its initial launch, BranchOut deployed Salesforce CRM to manage all sales activities, but soon realized that in order for its business to succeed, its subscription billing had to match its growth.

That’s why they turned to Zuora. Using Zuora and Salesforce CRM in tandem has allowed BranchOut’s billing, provisioning and sales departments to automate billing and renewals while staying in synch. With Zuora, BranchOut cut its billing cycle to a quarter of its former time and has also cut the entire sales cycle to a third of its former time. With Zuora’s seamless integration with the DocuSign eSignature solution, BranchOut’s sales team is able to go from verbal agreement to quote to term to contract in less than six hours. That means BranchOut can handle the flood of new recruiters, new potential recruits, and ensure that the two can meet and profit from the relationship.

We like to think that we helped BranchOut get some growth formula, sunlight, and a better pot to help spread its roots. But however you phrase it, we’re excited that Zuora has helped the fastest growing jobs network become even better.

 

For more details on BranchOut, check out...

 

BranchOut, Facebook's Largest Professional Network Uses Zuora to Decrease Sales Cycle

 

Zuora Serves as Catalyst as BranchOut Spreads Roots

 

The Fear of Paywalls and the Newspaper Industry’s Need to Change

by Tien Tzuo 

The Wall Street Journal’s Papers Put Faith in Firewalls perfectly encapsulates what’s wrong with the publishing industry right now. Instead of celebrating innovation and seeking new ways to adapt to a rapidly-changing media dynamic, the WSJ Russell Adams’ voices the skepticism of the industry, the very same skepticism which has led to the newspaper industry eschewing change in favor of increasingly stagnant and outdated revenue models. 

If “metathesiophobia” is the fear of change, then we need to come up with a new term for fear of changing business models. And make no mistake about it, newspapers need to change. In a new Pew Research Center study on the state (or fate) of the publishing industry, one newspaper executive lamented: "There's no doubt we're going out of business right now." 

But the Pew study reveals that these prescient executives still live in a culture paralyzed by fear. The Pew study describes this fear in detail, interviewing newspaper executives who reveal a culture of “inertia” that make innovation impossible to achieve within newspapers. According to 

the Pew report, many executives won’t risk trying to change their approach to revenue because their publications would fail anyway and they’d be blamed for it. “There might be a 90-percent chance you’ll accelerate the decline if you gamble and a 10-percent chance you might find the new model. No one is willing to take that chance,” explained one beleaguered executive. 

Is this really what has become of the fourth branch of government? Sitting around passively accepting their fate? Is this how they intend to honor classic journalists, some of whom risked their lives to bring us the highest quality reporting? We need a free, independent media to not just survive, but thrive. It’s time for publishing leadership to either lead or move aside in favor of those who can.

The Wall Street Journal rightly highlights the success of The New York Times, Wall Street Journal, and Pearson’s Financial Times (who also happens to be a Zuora partner). But the author claims these are the “exceptions” to the rule rather than what they truly are: the leaders in the space.

These pioneering icons won’t be going back to a free model. Free is going away, and newspapers need to understand this. People have already shown that they will pay for quality content, and now it’s a matter of newspapers understanding this and adapting to it... quickly.

The truth is, when newspapers begin to think creatively about their approaches to digital, they’re more likely to succeed. The Economist handed the keys to all of their online content to its Tablet Chief, Oscar Grut. The Washington Post hired Rob “Cmdr Taco” Malda, the founder of Slashdot, to overseer its online strategy. These are people who don’t come from 40 years of journalism experience, but instead have a background in digital content that newspapers so desperately need.

Paywalls aren’t a perfect solution, but they’re a start. Next, we’ll begin to see subscriptions that cater to a variety of consumers-- frequent readers, fans of the Sunday sections, or just the occasional browser. We need publishers to have this power and this relationship with the customer, and not cede it to Apple or Google, who have been all too happy to control content while the print industry struggles.

 

 

 

Subscriptions & Weird Cat Ladies

by Megan Golden, Marketing

 

I would not peg myself as a cat person, per say. Maybe it’s that I'm afraid I’d wake up one day and be 45, single, with nothing to my name but a wardrobe of sweatpants, a rainbow of fabric headbands, and 15 cats in my tiny 600sq ft apartment while known to all the local youths as the Weird Cat Lady. Obviously, the cat being the impetus.

But there's good news for all those Weird Cat Ladies (WCL) out there -- Boxiecat.

Boxiecat has introduced a subscription service that makes owning a cat (or 15) a lot easier: now, instead of going to a store and lugging home a 10lb bag of litter, Boxiecat will deliver kitty litter to your door.  

It’s an exceptionally simple and yet clever solution for “busy cat owners” (aka, WCLs). Cat owners are likely to be repeat customers (everyone needs litter), especially when the alternative is venturing out in public in my hypothetical sweatpants and fabric headband with a shopping cart stacked high with kitty litter -- I mean the visual is offensive alone.

With Boxiecat, you “Set your home cat litter delivery schedule and relax [in your sweats] because you'll never have to shop for litter again [thank god]. Stop lugging heavy bags home from the store and save time with Boxiecat.”

Delivered via USPS, the litter is $20 a shipment and you can cancel anytime. It’s also green (saving driving time to the store and coming in Cradle to Cradle certified shipping boxes) so at least you’ll be an environmentally-friendly WCL. 

Unfortunately, Boxiecat does not take away your old litter, discipline Cat Damon for doing unspeakable things to your couch or provide a WCL Anonymous hotline. But the added convenience and flexible shipping schedules makes this a rather inventive and practical subscription solution to a formerly singular-transaction-focused problem.

K-Cup Coffee As Subscription Service

Chris Holt, Marketing

 

In college, I lived with a friend who was a coffee addict. The guy simply couldn’t function unless he had his morning cup ‘o joe, and then needed another pickup by early afternoon. He was very specific and brand loyal too: he’d always journey to the same coffee shop by the campus library. He wouldn’t tolerate any of that mass brewed cafeteria stuff. When he moved out to the real world, he was an early adopter of K-Cup single-serving coffee.

Well, it seems that coffee addicts like my former roommate, or at least connoisseurs, have been noticed by retailers. Online megastore Amazon has a “Subscribe and Save” program for buyers who commit to repeat purchases on k-cup consumption. Participants can reap big benefits too, like discounts of up to 15% on select items.

My roommate was useless if he didn’t get his specific cup of coffee, and would grow irate if the barista messed his order. Thankfully, Amazon’s program is a bit more forgiving than he was. You can indicate if you want to skip deliveries online or change the frequency of the shipments. Of course, if you require a steady diet of K-Cup consumption and can find your specific brand available through Amazon’s subscription service, then there’s very little downside to participating.

But K-Cup subscription services to coffee addicts is likely only the beginning. More and more goods are going from single transactions to subscribed, continuous relationships. Target, the discount retail giant, revealed “last month that it's exploring a subscription service to provide shoppers with discounts on regularly purchased merchandise,” explains DailyFinance.com. So if you’re regularly buying things like toilet paper, milk, or cereal you may be rewarded with a service of your specific need. Me? I’m looking forward to a subscription service that delivers Cocoa Puffs to my front door.

 

Washington Post Misses Link Between Sharing, Subscriptions, and Services

Tien Tzuo, CEO

 

The Washington Post’s Lifestyle section published a piece on Sunday highlighting many subscription-based companies that have challenged the conventional single-transaction business model. While the Post’s analysis is mainly on retail-products-as-services like Zipcar, Rent our Boxes, Netflix, and Tie Society, the simple fact that subscription businesses have penetrated into the lifestyle section of newspapers speak to the growth of the subscription economy these past few years.

Personally, I prefer the term “Subscription Economy” to the Washington Post’s use of “sharing economy” as “Subscription Economy” encapsulates products and services that aren’t merely tangible objects to be shared. Dell, The New York Times, Billmyparents, and Pearson’s move to subscription monetization isn’t simply about “sharing,” it’s about having a stronger relationship with the customer that (hopefully) will be longer lasting and deeper.

But The Washington Post poses an interesting question: is the move to subscriptions partly generational, as each generation approaches ownership differently? Is the younger generation simply more okay with sharing their toys, cars, movies and ties? Or are we simply too impatient/cheap to put up with inefficient models of consumerism? Why bother owning a car that is idle for the majority of the time? Why invest in a tie you’ll wear only twice? And, if you know you’ll use a service continually, why not invest in a monthly payment system?

Adele Tells Spotify: I’ll Find “Someone Like You”

by Chris Holt, Marketing

Adele Adkins brought home an armful of Grammy Awards for her smash hit album “21.” Yet, despite millions of sales, the album “21” is notably absent from streaming music service Spotify’s content catalog. According to FastCompany.com, Adele was surprisingly fine with having the content on the site, but wanted it be only available to premium (paid) members. But since Spotify wanted to keep its music libraries for free and premium members the same, the company actually declined to have the hit album on their service. “Spotify would have had to change its whole strategy to accommodate her,” explains FastCompany’s Austin Carr.

The story of Adele’s “21” isn’t completely new; for decades, artists have been trying to control the way their content is consumed. But as the power of record companies has waned and third party services have increased, artists, record companies, services, and consumers often have different priorities and approaches to content consumption. The rise and fall of Napster, the prolonged absence of Beatles music on iTunes, and Radiohead’s decision to release an album online with payment optional—all of these moments indicate an evolving societal view of copyright law, artist rights, and monetization of media. Smack dab in the middle of this tug-of-war is subscription services like Spotify.

For music services, the better the library is and the most convenient the access, the more customers will feel comfortable subscribing. And the more subscribers you have, the more likely it is that at least some of them will become paying customers.  But as record companies and artists see profits disappear as their content is streamed for free, they in turn put pressure on music services. This pressure can be in the form of withholding artist content (as is the case with Adele), charging more for the use of the content, or even launching competing services themselves. That seems to be the intention of HTC and Beat Audio’s joint venture: to provide competition to Spotify and perhaps provide more protection to artists’ and record companies’ content.

Personally, I want to see more competition between music subscription models, because while I use Spotify, it can still be improved. Spotify blinking means that artists still have a real impact on how their content is being consumed, and that’s a good thing. But it’s also worrisome if record companies and artists simply walk away from the table and deny music service listeners their content. The possibility of no more “freemium” music services isn’t something consumers look forward to, and seeing incomplete libraries scattered across several music platforms is also not something consumers want.

The way I see it, you can’t put the music streaming subscription genie back in the bottle, and so the music industry and the artists’ collective gnashing of teeth is an element of growing pains. It seems that the best way to combat situations like the one that transpired with Adele’s “21” is to offer not just off two pricing models (freemium and premium), but many. Subscription business models should be all about the consumer and their unique needs. So the lesson here is that Spotify wasn’t flexible enough to offer multiple solutions: perhaps something along the lines of different subscriptions for how frequently you listen, what genre you listen to, how important it is to listen to new music, and of course how frequently you get advertisements. Spotify, and other music services, haven’t really tapped into targeted advertisements either, the way companies like Facebook and Google have. Subscription services aren’t going away, but it’s up to the players involved to create a flexible, scalable solution that is going to satisfy customers and artists alike.

Spotify blinked and is likely going to be challenged soon. If they can adapt, they’ll continue to thrive, but if they don’t, then another competitor will be able to deliver the experience that the consumer wants--and where the consumer goes, so will the artists.

Babysitting as a Service…The Importance of Trust in Subscription Success

by Megan Golden, Interactive Marketing

Are you a busy Bay Area parent? Do you and your hubby work late nights? Or do you just need a night to get out, away from your rugrats? Well then Wondersitter.com might just be what you need.

For all those Bay Area parents working Silicon Valley hours, subscriptions have come to the rescue, saving marriages one babysitter at a time. Since I’ll be checking No Dependents on my taxes this year, clearly I haven’t been in the market. However, I can confidently say this is the first subscription-based babysitting service I’ve seen. But the idea behind it is ages old: parents want a reliable, responsible babysitter who will reward their loyalty.

At the root of Wondersitter, lies its “Wonderdollars” program. Wonderdollars are purchased by parents in order to get discounts on booking fees, rewarding parents who frequently book. You can also sign up for a $99 a month subscription for daily day care.  And perhaps best of all, if the babysitter is late, doesn’t clean up, or otherwise fails to meet the customer’s expectations—the booking fee is waived. And this really seals the deal for me, as a someday-in-the-far-off-future Mother, that the company really does stand behind the sitters they send to your home to care for your children.

That’s ultimately the tipping point with service-as-subscription models. In order to subscribe, you need to trust the service to provide quality care every time. No one wants an experience like The Simpsons’ in the infamous first season episode-- you know, the one where a babysitter service sends a sitter who promptly tries to rob the place? So it looks like if Wondersitter’s employees rob your home, you’ll at least have your booking fee waived. Which is highly appreciated.

All jokes aside, Wondersitter is simply taking the service-as-subscription model and tying it to a business that, like massages and car rentals—is all about reputation. As Wondersitter continues to build its sitters’ reputation --  and I hope it does, so that my someday-in-the-far-off-future babies can take advantage of this -- the company’s reward programs will ultimately make it an attractive alternative to simple word-of-mouth recruitment.

A Call to Arms: How Subscription Economies are Saving the Journalism Industry

by Tien Tzou, CEO

In 2009, the journalism and publishing industries were reeling. The Rocky Mountain News had closed. The San Francisco Chronicle was in bad shape. The Seattle Post-Intelligencer was no longer in print. Unprepared for the move to digital revenue streams, these hulking and dated publishers and publications have found themselves getting flanked by blogs, eBooks, and “free content.” Bankruptcies and closures decimated the industry.

And with the demise of these high-profile publications, a greater danger emerged: the death of journalism itself. Sometimes considered the “fourth-branch” of the US government, throughout American history, journalism has kept power brokers honest, revealed truths and exposed lies. But as its flagship publications closed, people began to wonder if we’d ever see another Bob Woodward.

 

During 2009's dark times, I made the claim that in order to survive, publications and publishers would have to shift to digital, and re-invent their business models around the consumer, around subscriptions.

It seems that someone was listening. Over the last two years, the New York Times and Financial Times have started to move some of their content behind a paywall, and the success of these ventures indicate that customers are willing to pay for quality, subscription-based media content. Gannett, the world’s largest newspaper publisher, recently announced the majority of its 80 papers would be going behind a paywall in the next year. Similarly, in a recent Wall Street Journal piece, new CEO Scott Thompson seeks to move Yahoo “away from its advertising roots and get more of its revenue from fees and commissions."

Now on Thursday, Pearson announced a digital distribution model for its multi platform business. With Zuora’s help, Pearson launched its Plug & Play platform initiative in under 30 days, allowing third party developers to create, display, use and create Pearson’s award-winning content. Make no mistake about it, this is only the beginning for Pearson. "We are becoming a digital business," explains Pearson CEO Marjorie Scardino. "A third of everything we sell this year will be digital".

 

The New York Times’, Financial Times’ and Pearson’s actions indicate that the media industry is turning the corner; after a decade of decline, media companies demonstrate that diversified revenue streams and a digital, customer-focused model can ensure not only their survival, but their triumph.

It is my belief that media companies are a vibrant part of our culture’s fabric-- they entertain, they inform, and at their best, serve as watchdogs for our societal vices and champions of our better instincts. Though the “free content” craze has thrown the publishing industry to the mat, it’s obvious that they’re getting back up.


But now is not the time to stop. The journalism and publishing industries need to rally around the success stories of their peers and continue to adapt to new technology and new ways of reaching their audience. If The New York Times, Financial Times, and Pearson can succeed, we know others can as well. Consider this a call to arms, and we here at Zuora are happy to wave the flag.