GTM Strategy Simplified — A Fireside Chat with Henry Schuck (ZoomInfo)

Manav Shah

8 December 2022

In our first-ever Fireside Chat, we had the pleasure of hosting Henry Schuck, the founder, and CEO of Zoominfo. In this chat, we discussed GTM strategy and how and some tactical insights on how a founder can leverage GTM as an edge in their early days of starting up.

In this blog post, we will share some of the key points, insights, and a detailed transcript from the webinar. If you missed the live event, do not worry, as this blog will cover everything you need to know.

Let’s dive in:

Manav: Over the last few years, India has shown to be great at building world-class products, but the next frontier to conquer is nailing GTM strategy & execution. What would you suggest to founders from India that are starting up today?

Henry: Yes, products from India indeed rival some of the best products in the US, but what is different is that schools in India do not teach sales, there is no degree called bachelor of sales, it is all centered around writing great software.

So, If you want to learn GTM, you have to experiment, learn online from blogs or bring someone from outside. And that is why most companies in India are PLG based. The challenge is that no $300M+ ARR company in the world can be PLG only, all companies need to find a blend of varied sales motions. And this problem needs to be solved to create mega-value-generating companies from India. To get exponential value, you need to crack sales-led motion. And this is common in Israel too.

ManavRecently, the narrative has changed from growth at all cast to a balance between growth and profitability. How do you think about this situation today?

Henry: My co-founder & I founded ZoomInfo with $25K on each of our credit cards. Further, we started up in Columbus, Ohio; where there were no VCs. So you had to be bootstrapped & hence we had to build ZoomInfo with profitability in mind all the time. We did grow ZoomInfo to around $30M in ARR, and then only brought external capital, that too from a more traditional PE firm. So for us, contrary to the current notion, profitability was a necessity, not a choice.

ManavHow did you get your first 10 to 15 customers? What was the process? Did you use any out-of-the-box methods to get these customers?

Henry: In the early days, here are a few things that you as a founder can leverage.

  • It’s all about cold outbound in the early days
  • After you get the first customer, go ahead & identify their competitors (value prop is validated), so all you have to say is: your competitor XYZ is gaining amazing value from using our product, would you be interested in checking it out?
  • Further, Work hard to get permission to use logos and testimonials. If that does not work out, and the customers say no, try and negotiate the ability to use their names in sales conversations. Leveraging social proof is critical.

ManavIf you’re starting a company today, what are some of the tenants of $1M to $25M growth that you will think about, and what would your advice be for founders in that journey?

Henry: Here are a few things:

  • PMF is very very very important. Further, you know PMF when you have it; it comes in different forms, but it is something that you can uniquely identify.
  • Secondly, It is important to identify your ICP. It needs to be a tight group of companies and a tight group of personas within that company.
  • Once you have the PMF, it is about nailing the messaging to resonate with your defined ICP.
  • These 3 steps are critical, and table stakes. Post this, leverage a high degree of automation to aid your sales teams to go achieve their goals. Automation is what makes ZoomInfo so good.
  • And finally, nailing the people. You in the early days cannot hire the world’s greatest people for each role. You need to hire people that you can scale. For instance, ZoomInfo’s CRO, who scaled the company to $400M –their first sales hire, was a poker player (didn’t even know what Outlook was)

ManavWhat are the underlying fundamentals that you look for while hiring Sales people (SDRs/AEs)?

Henry: For us at ZoomInfo, some of the early hirings did not work out, and hence we got to the drawing room to introspect. We tried to map soft skills to cases of success vs failure, but that did not add up as well. Eventually, a serendipitous thing happened, the team took a cognitive + personality test, and they could see an underlying pattern that every successful salesperson was >90% on the cognitive test. This was the correlation that changed the game. We made sure every next hire did well on that 8-minute cognitive test (ZoomInfo continued that for over 5 years)

The core lessons here are:

  • A Sales person who worked at another company of a different size (not a startup), does not make a great salesperson at a startup. It is just a different pace of execution. A different mindset altogether.
  • Find your objective definition of a successful group of salespeople, and then go try to replicate that.

ManavWhen do you hire a VP of Sales (Sales Leader) vs just AEs/ Sales Rep?

Henry: This is an objective decision. It’s all about the funnel. Website visitors to form to demo to opportunity to closure. If you feel that there are inefficiencies in some/ all of these stages, but you do not have the time to fix them, that is the right indicator to know that you need a sales leader to come in. But let’s say it is not an optimization, but rather a magnitude problem, say you need more leads. Then just hire an AE/ SDR.

ManavWhere do you source/ hire sales candidates from?

Henry: We at ZoomInfo have recruited out of universities. We hire them as SDRs, train them with AEs and they eventually scale to be AEs themselves. We have also recruited out of sales training institutions. An interesting approach could be to find businesses that are training sales AEs within industries with low margins, you can come in and hire these well-trained executives by just allowing them to make more money.

ManavHow should a founder identify the ideal length of sales cycles, is there a science to it?

Henry: It is more art than science. But here is something you can do:

  • Think of all software on a spectrum.
  • You have ERP on one end and Excel on the other.
  • See where you fall and then that defines what your sales cycle should look like.
  • Additionally, see the public company counterparts and learn from that. And try to be faster than that (you are smaller and hence more agile)

ManavHow do you approach firing salespeople? When do you make that call?

Henry: Firstly, it is important to know that firing salespeople who are not a fit is important. And here is why. There are a limited amount of leads. And assume that you have 10 salespeople. 7 good, and 3 not so good. Leads get evenly distributed, and there is lost business by keeping not-so-good AEs. Because for the not-so-good AEs, their pipeline is just not converting, and that is a lost business opportunity. Further, you spent extensively to generate these leads, so the overall cost just compounds.

At ZoomInfo, we have a rule after the 3rd month, every AE needs to do $100K of new business every month, if that is not happening, we will try to find something else for them within the company. The $100K number is arbitrary, but it is important to have that yardstick and then abide by it.

ManavLet’s say you raise $5M (Series A), How much capital will you allocate to GTM?

Henry: Firstly, it depends on the maturity of the product. Where is the product today compared to the competitor, and how is my ability to efficiently sell the product? If both of these things check out, & I can get 100 customers without having to scale the product. I would put 70% in GTM.

The key here is to nail an efficient GTM motion because if done correctly, that can be a funding of sorts in itself. Correctly understanding your CAC Payback is important, < 12 months is ideal, and < 4 months is world-class.

Further, to optimize that number, deeply scrutinize each stage of your sales funnel, see where the drop-offs/inefficiencies lie, and try to fix that.

ManavHow do you think about being bootstrapped vs raising external funding?

Henry: Firstly, There is no correct or universal answer. For me, I wanted to build the best business possible. So when we got to $30M, I could see this huge opportunity; the company was profitable; But to scale from $30M to $100M, $200M; I needed a partner who had seen that journey before. And hence we raised external capital. The PE firm further gave us access to the capital markets, and we were able to leverage them to acquire competitors and roll up into what we are today.

Additionally, If you want to build a lifestyle business then that is fine. But the challenge is if you are say a $30M revenue company, then someone for sure is going to build that feature out and eat your lunch. So at some point, you will have to keep investing in the fight, so that will not continue to make the profits you made in the early days.

ManavIn Enterprise sales motions, “Procurement” teams can be really difficult to deal with, what in your experience has worked out here?

Henry: Two things:

  • First, the turnaround time for legal has to be as quick as possible. Legal is in the service of sales & Customer Success teams. Speed is absolutely important.
  • Secondly, You need to have a strong relationship with the business unit head (the one buying the software). And then you work with the BU head on the same team to help navigate that negotiation with procurement. You should ask the BU head going in that we have proven value, so if this goes sideways with the procurement team, can we trust you to be on our side? Get them to say yes. And that should help.

ManavFreemium vs Free trial vs Outbound sales-led Motion?

Henry: The answer is in the combination of it. When we think about disruption, we think about the product. But the reality is, you can be disrupted by GTM. At this date and time, it is foolish to not have a freemium, free trial. An interesting example: Slack’s key to the freemium motion was, they started a new user in the highest tier. And when the time came to pay, they asked to do you want to downgrade, and very few people want to do that. This is how a company can innovate on GTM.

ManavFailures are a key stepping stone to success. What are some of the top mistakes that you made in your journey that you think are relevant to founders today?

Henry: The biggest mistakes have always been around people (Hiring). When you pay attention to the wrong things when hiring, and do not act to rectify that mistake. These mistakes can have compounding consequences. So first, take your time in hiring, especially in senior-level roles. And then hire the best, not the best of what we have seen recently. Be patient. And once they are hired make sure the whole team is focused on making them successful.

ManavWhat are the top changes that you made in yourself as a CEO, as ZoomInfo has scaled?

Henry: Being focused on my mental health has been one. I make sure that I exercise in the morning. It has now become critical of how I feel during the day. Secondly, With age, there are more aspects to my life. I now have a wife and a kid. So constantly balancing, between being the best husband, the best dad, and the best CEO. Setting up guard rails on each category is important. Commit to each and never trade off.

In conclusion, our session with Henry Schuck of ZoomInfo was a valuable and informative discussion on GTM Strategy. Henry provided valuable insights for businesses looking to stay ahead of the curve in this fast-paced industry and go win in their GTM execution. We are grateful to Henry for sharing his expertise with our audience, and we look forward to hosting more such engaging discussions in the future.

Further, we are starting a new series called Get Set GTM where we will cover actionable & tactical insights around GTM execution from some of the early successes in the world. So do stick around for that.