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14 Leadership Lessons From ZoomInfo Co-Founder and CEO Henry Schuck

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October 19, 2020 8 min read

Opinions expressed by Entrepreneur contributors are their own.

Artificial Intelligence in business development is an area seeing disruption thanks to mass adoption of this technology. This industry is expected to see massive growth beyond the pandemic, which is why the first tech IPO of the Covid era was one of the most-talked about of the year. With a stock price that soared over 60 percent above expectations in its June debut, ZoomInfo (NASDAQ: ZI) – a SaaS platform that helps B2B and professionals identify and connect with their next customers – is clearly here to stay. To discuss the company’s success story, I had the pleasure of hosting a chat with co-founder and CEO Henry Schuck for the seventh episode in Comparably’s “” series with Entrepreneur.

Related: Free On-Demand Webinar: How ZoomInfo Developed a Winning Go-To-Market Strategy

During these virtual fireside talks, I ask CEOs to share some of the invaluable lessons that they have learned on their path to the top and advice they would give other entrepreneurs as they embark on their own careers. I found a real kindred spirit in Schuck. He also grew up in southern California and founded his company while in law school. After earning his business degree at UNLV, he went on to earn his J.D. at the Ohio State University where he co-founded ZoomInfo (formerly DiscoverOrg) in 2007. The go-to-market intelligence solution went through six M&As and now employs 1,300 people in multiple offices, helps 15,000 customers worldwide and has $350 million in recurring revenue.

Watch the full webinar to learn more about Schuck’s origin story and how he took the company public from the ground up. These are 14 key takeaways from my conversation with this incredibly transparent and captivating leader:

1. Believe there is nothing you cannot do

Schuck says it wasn’t until his late 20s that he realized that not everyone grows up with a can-do mentality. Despite growing up in a single-parent household with modest means, he still believed that if he worked hard enough he could do anything: “If you believe in yourself, you should jump in and get going. No one is going to believe in your business more than you believe in your business.”

2. There is no secret sauce to success as an entrepreneur 

Despite many sleepless nights wondering if he was doing everything he could, Schuck eventually came to realize that there are no superhero entrepreneurs or CEOs out there. They are simply human beings who put their pants on one leg at a time like anyone else. There’s just a spectrum of difference, and that’s how hard they are willing to work and how open they are to learning and improving on a daily basis.

3. Invest in yourself

You’ll need to be your own first customer. If you’re confident the idea is the right one, go all in on your dream. With little idea of what the VC or private equity market looked like, Schuck and his co-founder started ZoomInfo (then known as DiscoverOrg) with $25,000 they put on their credit cards to get the business off the ground. The first customer came five months later.

4. Make sure your product solves a problem that every customer needs solved

If you walked into a room with 2,000 of your ideal customers, in the best scenario they should all be able to say your product solves an existing pain point for them. You can mess up a lot of elements of a new campaign, but you can’t mess up the marketing when it’s “lights, camera, action” with customers.

5. If you’re a CEO, you’re also a salesperson

If you don’t believe you are, Schuck says, he can guarantee you won’t be successful: “If you’re not in front of the customer selling your product and service, hearing that feedback and getting beat up along the way, it’s not going to work.”  

6. It’s okay to make mistakes, but if you’re not honest with yourself about those stumbles, you up the chances of making them again

People are generally not very good at identifying things that they are bad at. They will avoid thinking about those things if they can. But a successful leader cannot afford this kind of thinking. He or she needs to be able to confront those failings and learn from them so it’s not repeated twice.

Related: 8 Leadership Lessons with Indeed CEO Chris Hyams

7. Feedback is a gift

If a manager feels a certain element of an employee’s performance stands to be improved, it’s incredibly valuable for the employee to hear that criticism, even if it is uncomfortable at the moment. If the employee is left to his or her own devices to choose the areas they need to improve in, they’ll likely choose the wrong ones, and there will be little alignment.

8. Don’t be afraid to act like a serious business if that’s your company identity

Do this, despite the pressure to add more PlayStations, ping pong tables or beers on tap in the break rooms. Schuck mentions ZoomInfo has a more buttoned-up identity when compared to other workplaces in the burgeoning tech space, but that over time it’s become a strategic value to the business, because it’s capturing the right people.

9. If you see long-term value in an investment, don’t focus too much on short-term pain 

Don’t worry about investing money now for something you’re sure will be valuable to your business in the future. If you’re as convinced as you need to be about the investment, then the time is probably right to pull the trigger.

10. Do not settle on talent; instead, hire the best people you can possibly find 

Take the necessary time and due diligence to hire the right people for your organization with the best at what they do and a good culture fit, with the ability to be coached. Schuck admits it was difficult to do this effectively when he tried to scale his successful 10-person sales team in the early days. It wasn’t until he utilized the Omnia cognitive test that things turned around. They found core qualities the team all had in common and looked for those same attributes in future employees.

Related: 10 Leadership Lessons with Dallas Mavericks CEO Cynt Marshall

11. There are countless questions you need to ask yourself before the potential acquisition of another company, especially one that involves sales and marketing 

Can you upsell the tech to existing customers? Does the combination of both companies improve both? Will your business grow faster with the acquisition of that company? Is it already profitable, or can you get it there? The ZoomInfo acquisition by DiscoverOrg was like a merger of equals, and it was clear that one company did some things better than the other, and vice-versa. Being focused on the best talent from both companies will find you the greatest value.

12. The recurring annual subscription is a hugely valuable business model 

It creates the highest-value companies and puts you on the line every year to present a version of a report card to your customers, centered around whether your product continues to add value.

13. Make a commitment to earning great talent early on

In the early days of ZoomInfo, Schuck says he loved to hire people who were often overqualified in terms of experience so that he would feel committed to grow the company enough to make it worth that hire’s while: “If you feel that way about talent, then you’ve probably got it right.”

14. B2B businesses offer first-time entrepreneurs access to a multitude of problems that need solving

Many entrepreneurs starting out of college are focused on consumer-facing products, as that’s the context of the world they know so far. But the sooner a young entrepreneur can get into working on products for the B2B market, the better, as businesses have an endless number of pain points to solve for that are inherent to their operations.

Related: 10 Visionary Leadership Tips from Warby Parker’s Dave Gilboa

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The Trump campaign celebrated a growth record that Democrats downplayed.

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The White House celebrated economic growth numbers for the third quarter released on Thursday, even as Joseph R. Biden Jr.’s presidential campaign sought to throw cold water on the report — the last major data release leading up to the Nov. 3 election — and warned that the economic recovery was losing steam.

The economy grew at a record pace last quarter, but the upswing was a partial bounce-back after an enormous decline and left the economy smaller than it was before the pandemic. The White House took no notice of those glum caveats.

“This record economic growth is absolute validation of President Trump’s policies, which create jobs and opportunities for Americans in every corner of the country,” Mr. Trump’s re-election campaign said in a statement, highlighting a rebound of 33.1 percent at an annualized rate. Mr. Trump heralded the data on Twitter, posting that he was “so glad” that the number had come out before Election Day.

The annualized rate that the White House emphasized extrapolates growth numbers as if the current pace held up for a year, and risks overstating big swings. Because the economy’s growth has been so volatile amid the pandemic, economists have urged focusing on quarterly numbers.

Those showed a 7.4 percent gain in the third quarter. That rebound, by far the biggest since reliable statistics began after World War II, still leaves the economy short of its pre-pandemic levels. The pace of recovery has also slowed, and now coronavirus cases are rising again across much of the United States, raising the prospect of further pullback.

“The recovery is stalling out, thanks to Trump’s refusal to have a serious plan to deal with Covid or to pass a new economic relief plan for workers, small businesses and communities,” Mr. Biden’s campaign said in a release ahead of Thursday’s report. The rebound was widely expected, and the campaign characterized it as “a partial return from a catastrophic hit.”

Economists have warned that the recovery could face serious roadblocks ahead. Temporary measures meant to shore up households and businesses — including unemployment insurance supplements and forgivable loans — have run dry. Swaths of the service sector remain shut down as the virus continues to spread, and job losses that were temporary are increasingly turning permanent.

“With coronavirus infections hitting a record high in recent days and any additional fiscal stimulus unlikely to arrive until, at the earliest, the start of next year, further progress will be much slower,” Paul Ashworth, chief United States economist at Capital Economics, wrote in a note following the report.

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Black and Hispanic workers, especially women, lag in the U.S. economic recovery.

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The surge in economic output in the third quarter set a record, but the recovery isn’t reaching everyone.

Economists have long warned that aggregate statistics like gross domestic product can obscure important differences beneath the surface. In the aftermath of the last recession, for example, G.D.P. returned to its previous level in early 2011, even as poverty rates remained high and the unemployment rate for Black Americans was above 15 percent.

Aggregate statistics could be even more misleading during the current crisis. The job losses in the initial months of the pandemic disproportionately struck low-wage service workers, many of them Black and Hispanic women. Service-sector jobs have been slow to return, while school closings are keeping many parents, especially mothers, from returning to work. Nearly half a million Hispanic women have left the labor force over the last three months.

“If we’re thinking that the economy is recovering completely and uniformly, that is simply not the case,” said Michelle Holder, an economist at John Jay College in New York. “This rebound is unevenly distributed along racial and gender lines.”

The G.D.P. report released Thursday doesn’t break down the data by race, sex or income. But other sources make the disparities clear. A pair of studies by researchers at the Urban Institute released this week found that Black and Hispanic adults were more likely to have lost jobs or income since March, and were twice as likely as white adults to experience food insecurity in September.

The financial impact of the pandemic hit many of the families that were least able to afford it, even as white-collar workers were largely spared, said Michael Karpman, an Urban Institute researcher and one of the studies’ authors.

“A lot of people who were already in a precarious position before the pandemic are now in worse shape, whereas people who were better off have generally been faring better financially,” he said.

Federal relief programs, such as expanded unemployment benefits, helped offset the damage for many families in the first months of the pandemic. But those programs have mostly ended, and talks to revive them have stalled in Washington. With virus cases surging in much of the country, Mr. Karpman warned, the economic toll could increase.

“There could be a lot more hardship coming up this winter if there’s not more relief from Congress, with the impact falling disproportionately on Black and Hispanic workers and their families,” he said.

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Ant Challenged Beijing and Prospered. Now It Toes the Line.

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As Jack Ma of Alibaba helped turn China into the world’s biggest e-commerce market over the past two decades, he was also vowing to pull off a more audacious transformation.

“If the banks don’t change, we’ll change the banks,” he said in 2008, decrying how hard it was for small businesses in China to borrow from government-run lenders.

“The financial industry needs disrupters,” he told People’s Daily, the official Communist Party newspaper, a few years later. His goal, he said, was to make banks and other state-owned enterprises “feel unwell.”

The scope of Mr. Ma’s success is becoming clearer. The vehicle for his financial-technology ambitions, an Alibaba spinoff called Ant Group, is preparing for the largest initial public offering on record. Ant is set to raise $34 billion by selling its shares to the public in Hong Kong and Shanghai, according to stock exchange documents released on Monday. After the listing, Ant would be worth around $310 billion, much more than many global banks.

The company is going public not as a scrappy upstart, but as a leviathan deeply dependent on the good will of the government Mr. Ma once relished prodding.

More than 730 million people use Ant’s Alipay app every month to pay for lunch, invest their savings and shop on credit. Yet Alipay’s size and importance have made it an inevitable target for China’s regulators, which have already brought its business to heel in certain areas.

These days, Ant talks mostly about creating partnerships with big banks, not disrupting or supplanting them. Several government-owned funds and institutions are Ant shareholders and stand to profit handsomely from the public offering.

The question now is how much higher Ant can fly without provoking the Chinese authorities into clipping its wings further.

Excitable investors see Ant as a buzzy internet innovator. The risk is that it becomes more like a heavily regulated “financial digital utility,” said Fraser Howie, the co-author of “Red Capitalism: The Fragile Financial Foundation of China’s Extraordinary Rise.”

“Utility stocks, as far as I remember, were not the ones to be seen as the most exciting,” Mr. Howie said.

Ant declined to comment, citing the quiet period demanded by regulators before its share sale.

The company has played give-and-take with Beijing for years. As smartphone payments became ubiquitous in China, Ant found itself managing huge piles of money in Alipay users’ virtual wallets. The central bank made it park those funds in special accounts where they would earn minimal interest.

After people piled into an easy-to-use investment fund inside Alipay, the government forced the fund to shed risk and lower returns. Regulators curbed a plan to use Alipay data as the basis for a credit-scoring system akin to Americans’ FICO scores.

China’s Supreme Court this summer capped interest rates for consumer loans, though it was unclear how the ceiling would apply to Ant. The central bank is preparing a new virtual currency that could compete against Alipay and another digital wallet, the messaging app WeChat, as an everyday payment tool.

Ant has learned ways of keeping the authorities on its side. Mr. Ma once boasted at the World Economic Forum in Davos, Switzerland, about never taking money from the Chinese government. Today, funds associated with China’s social security system, its sovereign wealth fund, a state-owned life insurance company and the national postal carrier hold stakes in Ant. The I.P.O. is likely to increase the value of their holdings considerably.

“That’s how the state gets its payoff,” Mr. Howie said. With Ant, he said, “the line between state-owned enterprise and private enterprise is highly, highly blurred.”

China, in less than two generations, went from having a state-planned financial system to being at the global vanguard of internet finance, with trillions of dollars in transactions being made on mobile devices each year. Alipay had a lot to do with it.

Alibaba created the service in the early 2000s to hold payments for online purchases in escrow. Its broader usefulness quickly became clear in a country that mostly missed out on the credit card era. Features were added and users piled in. It became impossible for regulators and banks not to see the app as a threat.

ImageAnt Group’s headquarters in Hangzhou, China.
Credit…Alex Plavevski/EPA, via Shutterstock

A big test came when Ant began making an offer to Alipay users: Park your money in a section of the app called Yu’ebao, which means “leftover treasure,” and we will pay you more than the low rates fixed by the government at banks.

People could invest as much or as little as they wanted, making them feel like they were putting their pocket change to use. Yu’ebao was a hit, becoming one of the world’s largest money market funds.

The banks were terrified. One commentator for a state broadcaster called the fund a “vampire” and a “parasite.”

Still, “all the main regulators remained unanimous in saying that this was a positive thing for the Chinese financial system,” said Martin Chorzempa, a research fellow at the Peterson Institute for International Economics in Washington.

“If you can’t actually reform the banks,” Mr. Chorzempa said, “you can inject more competition.”

But then came worries about shadowy, unregulated corners of finance and the dangers they posed to the wider economy. Today, Chinese regulators are tightening supervision of financial holding companies, Ant included. Beijing has kept close watch on the financial instruments that small lenders create out of their consumer loans and sell to investors. Such securities help Ant fund some of its lending. But they also amplify the blowup if too many of those loans aren’t repaid.

“Those kinds of derivative products are something the government is really concerned about,” said Tian X. Hou, founder of the research firm TH Data Capital. Given Ant’s size, she said, “the government should be concerned.”

The broader worry for China is about growing levels of household debt. Beijing wants to cultivate a consumer economy, but excessive borrowing could eventually weigh on people’s spending power. The names of two of Alipay’s popular credit functions, Huabei and Jiebei, are jaunty invitations to spend and borrow.

Huang Ling, 22, started using Huabei when she was in high school. At the time, she didn’t qualify for a credit card. With Huabei’s help, she bought a drone, a scooter, a laptop and more.

The credit line made her feel rich. It also made her realize that if she actually wanted to be rich, she had to get busy.

“Living beyond my means forced me to work harder,” Ms. Huang said.

First, she opened a clothing shop in her hometown, Nanchang, in southeastern China. Then she started an advertising company in the inland metropolis of Chongqing. When the business needed cash, she borrowed from Jiebei.

Online shopping became a way to soothe daily anxieties, and Ms. Huang sometimes racked up thousands of dollars in Huabei bills, which only made her even more anxious. When the pandemic slammed her business, she started falling behind on her payments. That cast her into a deep depression.

Finally, early this month, with her parents’ help, she paid off her debts and closed her Huabei and Jiebei accounts. She felt “elated,” she said.

China’s recent troubles with freewheeling online loan platforms have put the government under pressure to protect ordinary borrowers.

Ant is helped by the fact that its business lines up with many of the Chinese leadership’s priorities: encouraging entrepreneurship and financial inclusion, and expanding the middle class. This year, the company helped the eastern city of Hangzhou, where it is based, set up an early version of the government’s app-based system for dictating coronavirus quarantines.

Such coziness is bound to raise hackles overseas. In Washington, Chinese tech companies that are seen as close to the government are radioactive.

In January 2017, Eric Jing, then Ant’s chief executive, said the company aimed to be serving two billion users worldwide within a decade. Shortly after, Ant announced that it was acquiring the money transfer company MoneyGram to increase its U.S. footprint. By the following January, the deal was dead, thwarted by data security concerns.

More recently, top officials in the Trump administration have discussed whether to place Ant Group on the so-called entity list, which prohibits foreign companies from purchasing American products. Officials from the State Department have suggested that an interagency committee, which also includes officials from the departments of defense, commerce and energy, review Ant for the potential entity listing, according to three people familiar with the matter.

Ant does not talk much anymore about expanding in the United States.

Ana Swanson contributed reporting.

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