Henry Schuck – Creating Ambitious Teams at ZoomInfo – EP.218

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(00:00:00) – Intro

(00:03:49) – What would you focus on if you were running Boeing?

(00:07:26) – How have you seen other CEOs solve culture vs. process problems?

(00:12:47) – How do you approach hiring?

(00:20:28) – How can you incentivize employees to buy into company values?

(00:23:11) – What have you learned working with investors and other CEOs to be a great founder and M&A executive?

(00:26:52) – How do you incorporate new tools or partners into Zoominfo?

(00:33:53) – What have you learned about integrating acquired companies?

(00:36:24) – How do you get a conviction when doing due diligence on a potential acquisition?

(00:38:49) – What skills around M&A are you looking to improve?

(00:41:19) – How will data companies in the future succeed?

Alex Bridgeman: I’m an aviation geek as well, beyond just data. And of course, all of the Boeing stuff right now is pretty wild. And I don’t know, I’m sure you enjoy your ZoomInfo job, but the CEO is leaving at the end of the year, so if you’re looking on the job market yourself…

Henry Schuck: I’m very unqualified for that role, unfortunately.

Alex Bridgeman: You seem to run a pretty good company, pretty well-run business. What were some of the things you’d focus on or look at if you were running Boeing?

Henry Schuck: Look, I don’t know enough about the issues at Boeing, but I’m certain that, I won’t say I’m certain, I’m relatively certain that it’s a culture, there’s a culture issue. Look, some problems, this is a learning I’ve had over the last two years, some problems you can solve with process, where you show up and you go like, oh, we did this thing poorly last time, so now let’s build a process around it to make sure nothing ever falls through the cracks again. But some problems cannot be solved by process, and if you try to solve too many problems by process, you just end up with like all this crazy process crap, basically. And that’s because a lot of problems need to be solved by culture and not by process. So, I’ll give you an example. I got super upset, I don’t know, a year ago, because people would post something on Twitter or they’d post something on LinkedIn, they’d be upset with us about something or they’re trying to get support and they weren’t getting it. And inevitably, I was the one responding. I’d see it. I would respond to it. I’d be like, hey, no problem, I got you connected to support. This thing’s going to get fixed. And I went internally and I told the team, like hey, it’s kind of BS that it’s just me responding to like upset customers out there. And they’re like, okay, no problem, we’re going to create a process. We’re going to create this like rotating list of people who have to check Twitter and LinkedIn every 30 minutes Monday through Friday, and then Friday through Sunday, we’re going to create a rotating shift. That’s not how you fix this. Like, this is a culture problem. A product manager should care what people are saying about ZoomInfo online because that affects the work that they do. And the leadership in content and the people who own Twitter or whatever, the people on social, they should feel like owners of this business and feel a responsibility to check. I’m not asking them to ruin their weekend. Nine out of ten times, nothing is on Twitter. Just when you go on Twitter on the weekend, put ZoomInfo in the thing and see if there are pissed off people you can respond to. And care about it. And you can build process and process and process, but that process is going to break down  because someone’s going to be at a wedding or in a movie or whatever. And what you want to create is actually culture that cares to solve that problem, not more and more process to solve that problem. And so, my sense is that you could go into Boeing and do one of two things. You could go like, go, okay, we’re going to add lots of process to make sure doors never come off the plane again. We’re going to do this process and that process and 62 other checklists, as if the checklists that exist already were not enough. We’re going to add a whole bunch of additional process. I don’t think that solves Boeing’s problem. I think you have to solve the problem with culture.

Alex Bridgeman: How have you seen other CEOs and peers of yours solve that kind of culture versus process problem?

Henry Schuck: My CEO friends want to solve problems with culture. They also happen to be like founder CEOs, so they’re very comfortable solving problems with culture. And I’m not trying to say that there’s no place for process; there is. But process is also a very comfortable place for people to go to in corporate America. When I come at you and I go, hey, there’s a problem, I need this fixed, it’s very comfortable to go, got it, this is how I’m going to fix it, process, process, process, process, process. I talked to 50 people, here’s what they said we should do, and I build this whole process. It’s a much more comfortable place to be than to try to solve it with culture. Because culture requires you to be slightly inspirational. It requires you to lay out principles that are important to you and your team. It requires you to manage to those principles and make sure that everybody in your team believes in and drives to those principles. We have a bunch of corporate values. And I wrote them originally in 2015. I remember where I was. I was going through an airport, and I got super frustrated that like every time we rolled out a change at the company, people would be like, oh, another thing, another change, this is like, oh, you guys are always just changing stuff. And I was like, listen, changing stuff is actually part of our culture; that is who we are. We’re going to constantly experiment things, and we’re going to get things wrong. When we get things wrong, we’re going to change. That’s who we are. And I realized, okay, I need to codify that into a document that amongst- we’re going to change fast. We’re going to change a lot of things. We’re constantly optimizing. That and a whole bunch of other values that I want people to know ZoomInfo stands for. And I wrote it in 2015, shared it with everybody. In 2023, I went back and read it, and it was like, oh, like eight years, this thing got watered down. Like every time a new head of employee value branding showed up or some new person in content showed up, they took this thing that was like specific and created ideals and they took a little bit off the edge and then a little bit more off the edge and a little bit more off the edge to at the end, it just reads like every other company’s culture and values and principles. And I started doing these round tables with our employees, like, hey, do you know our values? What are our cultural values? And nobody knows any of them. They only know one, which is get 1% better every day. They all know that one. Somehow that one’s stuck. It’s memorable. It’s like- but none of the other ones. And so I rewrote them. And so today, there are five. Be relentless. Be experts. Be innovators. Be a team. Be experts. Be innovators. Be a team. I’m going to forget one of them still. Did I say be relentless? I’m forgetting one. Be entrepreneurs. Be entrepreneurs. Be entrepreneurs, be innovators, be a team, be relentless, be experts. And I’ve almost completely committed to them to memory, but they’re everywhere. And every time I talk to somebody or go into a situation that I don’t think is living up to those ideals, I will tell people like this is not us being relentless. This is not us being entrepreneurs. Entrepreneurs take risk and they move fast. This is just like 10 months of process to do something an entrepreneur would do in three weeks. This is not us being entrepreneurs. This is not as being innovators. Like this is not us being relentless. And then I went around and said, okay, cultural values and principles, they’re fine, they’re important, and it’s great that I’ve outlined them in a way that people can- I think is more authentic. But people also don’t know what be relentless sounds like or looks like at the company. And they don’t know what being an entrepreneur sounds like or looks like in the company. And so, then I went through and I gave everybody a bunch of examples of what be relentless looks like and what be an expert looks like and what it sounds like. And I told people, if you were blind and you came to ZoomInfo, what would you hear that you would know, oh, this is a company that takes being an expert and being an entrepreneur as a serious principle. And then we wrote those down for our employees. And I want people to go, this is who we are. You come to ZoomInfo, you give me more of your waking hours than just about anything else in your life, almost certainly more than everything else in your life. More than you give your family, more than you give your friends, more than you give yourself. And you should understand who we are as a company. Like, you’re on the team. What do we stand for? And so, I want people to know what those things are because they can either align to them or go like that’s not really me. I’m not relentless. I’m not an entrepreneur. Great. There’s like lots of companies where that’s not a cultural principle. They don’t even want it. Like Boeing doesn’t want entrepreneurs and big risk takers. And they probably don’t want innovators. They want something different, safe, risk averse. That’s great. It’s not us. But if that’s you, you shouldn’t come to ZoomInfo. And making sure people understand those things helps us get the right group of people who are aligned culturally to do the work.

Alex Bridgeman: Is it also a hiring filter, finding people who fit those values? I’m trying to think of like a company of ZoomInfo’s size, like that’s an easier culture to maintain when you’re really small and it’s just you and your friend in the dorm room or maybe a half dozen people, but beyond a sharing of values and repeating yourself a lot, how else does that happen? How else do you create that culture?

Henry Schuck: Look, first, Alex, I’ll tell you, I don’t buy into that premise. I don’t think it is- I don’t think you said impossible, but I don’t think it’s that hard to scale a business and continue to keep that type of cultural value and principle at the forefront. Have a lot of companies done it? No. And does it get watered down along the way? Yes. It does take you showing up constantly and reminding people that these are the types of people we look for and that we should be screening for those type of people. I think Netflix does a really nice job of this. It’s very clear what Netflix’s cultural values and principles are, and if you don’t meet them, Netflix doesn’t want you to be at Netflix, and they’ll give you a severance and they’ll show you the door. And I think they’ve done a good job of scaling to tens of thousands of employees by maintaining that. That doesn’t mean you’re a hundred percent, but it does mean that it’s a central part of how you think about the team that you’re putting together. Definitely easier for ten people than it is at 3,700. But people have to be reminded that this is a priority in the business, and it’s important to the business. Otherwise, what happens is that every other pressure in the business to hire overtakes this. And so, yeah, yeah, yeah, I know that these things should be screens, but I need to hire 30 people, 30 account executives in the next three months. If I adhere to this principle, I won’t be able to hire 30. I’ll only be able to hire 10. And the business needs to be okay with 10, 10 people who align to those principles, and you take a little bit longer to go find the other 20. Like hiring right, the first thing you have to agree to or the first mental model you have to agree to if you want to make sure you hire really well is that you have to agree that it’s going to take longer than what you would like. And then you have to be really disciplined around spending the time to get the right people at your company. And that is where most of this breaks. Just your time pressure, your performance is being pressured by the lack of this person or you need new people and then you make- you trade off, you compromise on those principles, and you end up getting less than really great people or really culturally aligned people into your business. I have this, I do this thing twice a year where I get together with a group of founder CEOs, and we spend like a Thursday through Sunday and all we do is talk about like our businesses, what’s going well, what’s not going well. Everybody has like a unique superpower. So, everybody’s just trying to yank that superpower out of the other person. One of them’s really great at product design. One of them is really great at compensation philosophy. Someone’s good at go to market. So, everyone’s just trying to like steal that superpower from the person around them. But our first meeting, I asked everybody like, hey, if you went around your company and you interviewed everybody, what percentage of them would you rehire? Like with unlimited time, what percentage of your staff would you actually rehire? And the answers were between like 30 and 60%. And you went like, man, if that’s true, isn’t it the biggest problem in all of our businesses? Isn’t it the number one issue we should be focused on? The fact that we wouldn’t rehire 60%, 50% of the people who work at our companies. We’ve talked about different ways that you could do that. Everybody went back super inspired. I wrote cultural principles. Everybody went off and did their thing. I don’t know how it’s going now, but it is like a- that is a big- I think at every company, every founder CEO, every CEO, if they ask themselves that question, they answer it really honestly, I think puts a big spotlight on what has to be the biggest issue in your business. And it’s just the people business.

Alex Bridgeman: Yeah. What are effective ways to address that? Or what do you take away from that? What would an effective, perfectly performing CEO do with that information?

Henry Schuck: I think you would go and you’d, number one, make sure that all of your talent acquisition professionals know how to screen for that. What are the things- would know exactly what you’re looking for in all of your roles, and you would set up a structure that gives you a longer period of time to hire and do some better planning so you’re never in a crunch, so you have the right pipeline of people and the right amount of time to hire the right people. You would go to every hiring manager and you would say, hey, like these are critical screens that we need to do on every employee that we hire at ZoomInfo, and I want to know how you’re going to adhere to it. How are you going to test for it? Here’s how we do it in sales, how we test for it in sales. Here’s how we test for it in engineering. You need to figure out how you test for it in content, in marketing, and product management. And you would force people to live by that construct. That’s the only way I think you can do it. At Coinbase, I just read this article about Coinbase. Coinbase today, this isn’t a small company too, I think Coinbase is like 5,000 employees or something like that. Today, every hire has to be approved by the COO and CEO. The COO and CEO took over the hiring process and said like we’re looking for these types of people, and I’m going to approve every single one of these, every single person we hire. That’s happening today at a 5,000 employee company. So, that’s how important it is or how important people can- or how much people can value it, and it’s just a matter of can you get like your- By the way, just for the record, this is a culture process thing. Coinbase is going to solve it with process. The new process is every one of your hires goes through me. And I think actually the solve is a cultural one. Like make sure everybody understands what it is you’re looking for and then that you built a culture that also wants to drive that outcome. And then you don’t have to approve every single person who comes through the door, but maybe for some period of time, you do it so that you show people what it looks like and how important it is, and then you build the culture around that. But I think that is a culture thing.

Alex Bridgeman: So on top of culture, what have you learned about various incentives or processes perhaps of getting folks to get behind being entrepreneurs within ZoomInfo?

Henry Schuck: Yeah, look, I think it is, number one, one of the big things that we’re doing, we went from 1100 employees in June of 2020 to like 3700 in June of 2023. And that means we hired a bunch of people remotely. We hired them in the pandemic. And to keep people coordinated and aligned, we built like all sorts of process. Like, okay, we’re all going to meet every week, no agenda, just going to meet, align. If you want to get something done in product marketing, you need to go talk to your counterpart in marketing, go talk to your counterpart in sales, go do another meeting with the executive team, whatever. It’s like seven meetings to get a 15-minute decision done. And so that slows everything down, which is the opposite of being an entrepreneur. And so, I’ve been going through and making sure, number one, that I’m sharing a lot of context about how I’m making decisions, about how I’m thinking about the business with my executive team. And then, I’m making sure that they’re sharing that context down to their teams so that they’re in better positions to make quick decisions without having to go get context from a bunch of people to make those. I think that’s one thing. You mentioned incentives. You mentioned incentives. I think like, when I think about incentives, there’s obviously like comp incentives and we use those. Primarily, you’re using that in sales; you’re going like whatever your sales target is, your quota is, once you get there, you make more money. I think other places in the business using these types of incentives is less effective because your connection to the impact might be muted. But I think it’s less about incentives and more about aligning to who we are as a team and feeling like if everybody feels and believes that they’re on a team that upholds these principles and everybody around them are also upholding those, there is a disincentive to bucking that trend. And you don’t want to be the only team that’s not doing that. So that’s how I would answer that.

Alex Bridgeman: You’ve been a founder and now a pretty astute M&A executive as well. It’s kind of rare to see that in one person, like being an effective founder and good at M&A in large-scale businesses. That’s a challenging skill set. What have you learned from various investors you’ve worked with or just other CEOs of being good at each of those things, each of those skill sets?

Henry Schuck: Yeah, look, I think being good at M&A requires you to be- being good at either requires you to be a good capital allocator. That’s kind of like at its most simple. In its most simple place, your job as CEO and founder or all the way through is to be a great capital allocator. I have this much of resources; where do I allocate those resources to get the most return on that investment, on those resources? And sometimes that is like hey, I’m going to put these dollars in marketing because I see something good happening in marketing and I want to accelerate it. Sometimes, it’s I’m going to take these dollars away from this team because they’re not performing. I don’t see how they return on the investment. I’m going to go put that over here into something that I do see real return on. And then sometimes, it’s I built this really efficient business and I have an opportunity to acquire a company that’s a competitor or an adjacent company, and I can run those businesses far better and more efficiently than they’re being run, and if I do that, it creates the optimal outcome for my employees, for my customers, for my shareholders. And I think you’re constantly looking, I’m constantly looking at the world through those lenses. And just those three lenses are kind of the biggest, the main ones. For all decisions, for all issues that I find in the company, I am looking at that through a lens of the customer, through the lens of my employees, and then through the lens of my investors and shareholders. And I’m trying to make the best decisions with those inputs. Throughout the growth of ZoomInfo, sometimes that was building new product organically, sometimes that was acquiring adjacent products or competitive products, sometimes that was driving sales and marketing for the products that we have. And so, it’s really trying to figure out where your capital is most effectively allocated, and I think if you’re doing, like today, for example, I’m not doing a lot of M&A today. The bar is high. I think valuations in the private market are still dislocated compared to the public market. And so, you know what I think the best company to buy is? ZoomInfo. And so, we’re doing share buybacks right now. And so, we’re allocating capital back to buying what we believe to be the best priced best company on the market. And so, we’re allocating capital that way right now and less towards an M&A lens. Now, that doesn’t mean that’s going to be the case forever. There might be a big transformative acquisition that we want to do, and we should allocate capital that way instead. And so, these things, they change over time based on what’s going on in your business, based on where you see growth opportunities, based on where you see green shoots in the business that maybe you want to accelerate. You might accelerate that by putting more of your P&L dollars into that part of the business. You might accelerate that by doing an acquisition that would speed up that part of the business. And so, these are all just like, how can you be a great capital allocator? There’s a great book called The Outsiders. Have you read it?

Alex Bridgeman: I have, yeah, big fan.

Henry Schuck: Yeah. It does a good job of basically laying out this principle.

Alex Bridgeman: Yeah. Can you dive into that kind of matrix of build, license, acquire or partner with some new tool or functionality or product that you’re hoping to incorporate into ZoomInfo? You’ve kind of done a little bit of all four, it seems.

Henry Schuck: Yeah, yeah. What were the- build, license, acquire, partner?

Alex Bridgeman: Yeah. So you build yourself, license it from someone else, buy the business, or find some sort of partnership.

Henry Schuck: Yeah, so let’s talk about licensing. Licensing or partnering, which are often, they might be synonymous in a lot of ways. Sometimes there’s something experimental, and I don’t really know if it’s going to be adopted by all of my customers. I don’t have strong conviction for it, but I do think it’s interesting. In those situations, I want to license or partner, and I want to test it out. If I’m licensing or partnering, do I see an incredible lift? Do I see an ability to sell it across my customer base? And if I do, then the question becomes like, do I want to build or do I want to buy that? So, I’ll give you an example. We bought a company in 2021 called RingLead. RingLead was a partner of ours. It’s a data management technology that helped us from a partner perspective, helped us land a whole bunch of enterprise accounts. And so, when we showed up to our enterprise customers, they were saying, listen, we love ZoomInfo, but we actually need help doing like deduplication and cleansing of our data and using ZoomInfo’s data to do that. But then we need like rules and structures to maintain the data going forward. And we don’t really want to just buy all your data if we can’t actually do that. Like, okay, great. RingLead will help you do that. Let us bring our partner into this conversation. We’ll have the conversation with you. They go, okay, yep, now I can see that. Unlocks an enterprise sale, unlocks an enterprise sale, unlocks an enterprise sale. And so, we said, okay, this is a great partner. It’s helping us unlock enterprise sales. If we had this as an asset, it fits with what our customers are trying to do with ZoomInfo. We want to expand the enterprise. We think our biggest opportunity is within our enterprise customers. And this helps us grease the skids on the way in to all of our enterprise customers. Why shouldn’t we own this product? And then so we acquired RingLead to help us do that. There are other places where I actually think like partnering around an ecosystem is actually the better structure. So today, we’re launching, we’re launching in the middle of the year our co-pilot product, which is an AI-driven co-pilot for salespeople. And one of the things that’s a key input into that co-pilot are signals, signals that tell you what’s happening at an account, signals that tell you this is the right time to reach out to and engage with an account. Those signals, they can come from a lot of places that we own. So, for example, we own a great intent data product. So, it can come from that. We know when we’re tracking 300 million business professionals. So, we know when they’re moving jobs. They might have been your customer at their last company and then they just left. You need to know that. That’s a great signal. We have this great IP to company grab. So we can tell you, we can de-anonymize at the company level visitors to your website. Great, that’s super valuable, it’s a great signal. We own that signal. And then a number of other signals we own. Then there are a whole bunch of signals that we don’t own and we don’t think we should own, that we want to partner with. And so, we want a data ecosystem, a signal ecosystem, essentially that somebody could come into and say, hey, we sell signal on when oil and gas companies are going to start a new rig. I don’t know, I’m just making it up. And I don’t need to own that signal. Oil and gas, people who sell to oil and gas are just going to be a small segment of my customer base, but I want them to get the best signal possible. I need a partnership motion that plugs them into an ecosystem that takes advantage of that signal downstream. And so those are areas where I think it makes a lot of sense to partner and having an ecosystem to partner makes a lot of sense. When it comes to other M&A, like the best type of M&A also needs to be looked at from a go-to-market. You’re looking at it through a number of lenses, the two most important being go-to-market and product, or product and engineering. And so, the go-to-market lens, in the best acquisition you can do, you acquire a product that you can sell to your entire customer base, has applicability throughout your customer base, and is not so complex- is not a particularly different sale than what you’re already doing within your customer base, what you’re already selling. If it’s too technical, too complicated, sells to a different buyer, all of those are like knocks on the go-to-market side. You want a product that you can sell to all of your customers and the buyer is the same. That’s the best possible M&A, and that the integration is fairly simple and straightforward. If you can get those two things, you can see a lot of growth synergy in bringing the companies together. That’s where you start. Go to market, can I sell this to my entire customer base? Can my existing sellers with some enablement sell it to the customer base? Or do I have to bring in an overlay or have SEs, or all of that? And then, can I implement and service it in the same way I’m implementing and servicing my core product, or do I have to hire different people, different implementation consultants, a different delivery mechanism? So, in a perfect acquisition, those things line up and then those are the knocks on it. Then on the product side, can I integrate it quickly? Can I migrate it quickly? So most often, they have existing customers. So can I migrate them to a single platform relatively quickly? And we’ve done that as fast as a year and a half, the full migration, and as long as four years for a full migration, but the faster the better. So, is the integration easy? Is the migration easy? I think those are from the product and engineering side. Do they use the same languages that we use or was it built in something weird that needs to be completely rebuilt? So you’re kind of thinking through that piece as well.

Alex Bridgeman: You’ve integrated a lot of acquisitions over your time and in different ways too. Reign King seemed like a big downsizing. ZoomInfo is continuing the momentum that they had. What have you learned about integrating companies underneath one tech platform, one set of values, one employee base? How do you view integration into a single business through ZoomInfo?

Henry Schuck: Yeah, look, I think if you put two similar companies together, oftentimes you’re faced with decisions of, you have duplicative roles. And so, if we have an overlapping customer base, I don’t need two reps on SAP, I need one. And so, how does my employee base shake up after I put the two companies together is an important thing to think through. If you’re doing M&A right, you are finding things in the acquired company that they’re doing better than you. When we acquired ZoomInfo, they were way more efficient at marketing, and they were much further along from a technology and engineering perspective than we were. Great, that means the CTO of ZoomInfo should become the CTO of the combined company, and the CMO at ZoomInfo should become the CMO of the combined company. They’re doing something better than us. Like it’s more efficient, generates more, it’s faster, whatever their criteria are. That’s super interesting because what inevitably happens is the company that did the acquisition, like in the ZoomInfo acquisition, we were DiscoverOrg, we acquired ZoomInfo, but then the CTO of ZoomInfo became the CTO of the combined company, and the CMO of ZoomInfo became the CMO of the full company. And so, then I had a bunch of employees who were like, what the heck, like we’re the acquirer. It’s like what is happening? It’s like, look, we’re putting the very best possible team we can put together, and I’m going to make decisions that evaluate who’s doing something better, faster, more efficiently, and then those people are going to run the combined business. And that means in some places, DiscoverOrg has a much better go-to-market motion. We’re going to take over that. And in some places, ZoomInfo has a better engineering motion. They’re going to take over that. And so, communicating that to your teams is super important. We’re building the best team. It’s not like a conquest because we have more to do after that acquisition. And then sometimes there’s duplicative roles and you have to make tough decisions around those too.

Alex Bridgeman: It sounds like you’d make these decisions really quickly and often have a good plan put together before you close. How do you get to that conviction before all the papers are signed?

Henry Schuck: So, you are meeting the executive teams. You are understanding, like in sales, you’re looking at numbers, you’re looking at how people are performing. There are some places where you don’t need two CFOs, so that’s always a fairly easy one. You don’t need two CMOs. And so, you have access to a bunch of data during M&A that’ll help you make those decisions, and then you can ask to meet people on the team before the deal closes to see if you, to gain or lose conviction in your perspective. Then there are some places- look, and then I think the best advice there is once you’ve made the decision, you have to communicate it immediately on day one, in my opinion. I think the worst thing you can do is show up, obviously, the first day, everybody’s going to go like, are there going to be layoffs? Are you firing people? Is my job in jeopardy? And if you can’t be really clear about that answer, you just create- you slow down the opportunity in front of you because everybody’s going to be nervous. Everybody’s going to be talking about who they think is on the chopping block or not on the chopping block. It just creates this really crappy culture. And you have an opportunity up front to have your decisions made and show up and say, listen, there are a subsection of folks who are going to know in the next 24 hours that we’re eliminating those positions, and they didn’t do anything to deserve that. They didn’t do something bad. It’s just that the acquisition forced this decision. I get that they’re your friends, and that you’ve worked with them, and that they’re great people. Know that we’re going to give them a severance. We’re going to give them healthcare benefits. We’re going to help them find a new job. And we’re really going to be good by your former colleagues. And then we’re done. That’s it. Go back to work. Like don’t go to work worried about whether you’re next. Once this is done in 24 hours, we’re done. That’s the team. We’re going forward after that. And I think that level of clarity is really important.

Alex Bridgeman: What other skills around M&A are you focused on improving for yourself now like today? Like in the next two years, what do you want to be better at?

Henry Schuck: I think the biggest thing is being- one of the things that I got wrong is we ran primarily like a data platform, and then we went out and made a number of software acquisitions, and they were great software companies, and we were so convinced that the way that we ran onboarding, implementation, customer success, account management was like so amazingly good because we had done these other data acquisitions and we took their less efficient motions and turned them into our very efficient motions. We were convinced that you could just take that model and plug it in everywhere. Well, it turns out software businesses are much more complicated because they are necessitating behavioral change. Whereas our core business is like, hey, you’re doing prospecting every day, right? You’re in your CRM every day, right? I’m just going to make that way better for you, way easier for you. You don’t have to change any behavior, really. All you have to do is instead of like going and using crappy data to do your job, we’re going to give you really great data to do your job, and we’re going to rank the accounts and it’s going to be like a much better experience for a thing that you’re already doing. For most software businesses, it’s a little bit less like that and a lot more like I need you to change this behavior, and every day, I need you to do this other thing a little bit differently, or I need you to like change your workflow to this new workflow. And that deployment, that implementation, the customer success behind that is a lot more- is a lot less efficient than when you’re just plugging into an already existing flow of work and making it better. And so, one of my learnings is delivery, implementation, those things differ from software platform to software platform. And you have to really understand what you’re trying to get the end user and customer to do and how much change is built into that. Otherwise, you can get the model really wrong. And I’ve gotten that wrong.

Alex Bridgeman: How do you think data companies in the future are going to succeed? Both in a ZoomInfo context, but across data companies that you look at or hear about, what do you think is going to work in the future?

Henry Schuck: I think unique proprietary data assets will continue to be really valuable and will continue to be really valuable and protected. And I think, I’ll give you an example. Not all data companies can say that, because what a lot of data companies have done is they’ve taken a pretty generic data asset and then through fundamentally people energy, like in offshore people energy, they’ve tagged what was a generic data asset in a unique way. And so, in a generic data asset, let’s say I just have 100 million companies, and it’s just generic, it’s like company name, company description, maybe the industry. It’s like an okay data asset to do some stuff. Where it becomes valuable is if I can tag it in a way where like a niche market can get value out of it, especially if that niche market is like pretty big, and then I could sell it into that use case. So let’s say private equity firms, venture capital firms, they want to find the next 20 most likely to be successful HR technology vendors, software HR tech vendors. Today, in ZoomInfo, you can do it, but it’s probably not fully tagged the way that you would want it to be tagged. And so, there are companies that have gone out and they’ve done really specific tagging around this. And that data asset, while super valuable in a non-generative AI LLM world, becomes like way less valuable in a generative AI LLM world because you can take that generic data asset and then you can just tell the LLM, go find me the HR tech companies across this. And if you’ve ingested a whole bunch of information, you don’t have to have it be structured. It could be really unstructured, and the LLM can go pick up and do the tagging for you across millions and millions of records that wasn’t available before. And so, I think if you’re a data company that’s collected a unique data asset, that you’re in a protected space, but if you’ve taken a generic asset and done some tagging or categorization on top of it that was valuable in a non-generative AI world, those things I think you’re going to see under pressure.

Alex Bridgeman: Henry, thank you so much for coming on Think Like an Owner. I really appreciate getting to meet you and chat with you a little bit more. Thank you for sharing your time.

Henry Schuck: My pleasure, Alex. Best podcast I’ve ever been on.