Building the ZoomInfo of China: How We Scaled to $100M Revenue

[Applause] good afternoon can I do a quick poll um how many people use zoom info for your Leen and how much do you spend on it can I ask what how much do you spend with zoom info by the way 6000 6,000 per year well okay um in short hand we are we were by

lack of a comparison we're the zooming for China but later on I'm going to tell you how we're different uh our company my companies called qcc which stands for quickly check companies we are the Pioneer and the leader in commercial database and business intelligence in China well North of100 million in Revenue we just filed our IPO on the local exchange earlier this year so we'll see how that goes but thank you um

so but China is a graveyard for B2B driven companies and why it's the market is hugely different from the US first of all there's no willingness to to pay most smbs and Enterprises you know the consumers grow up on pired videos PIR and music ask them to pay for software it's unheard of and second if you go after the the larger Enterprises

the government your receivables will run well beyond half a year because it will'll pay you back at least half a year later if not Beyond a year so if you scale that way it's going to destroy your free cash flow so what I'm going to talk about is how our company transitioned away from B2B model to a director consumer model and is Achieve that escape velocity um

and and really become one of the few profitable um SAS companies in China there's now I think about there's only one or two public traded or private company that's profit at scale 99% of the company do not make money in China and we are one of the few companies that does and qcc today if you go to China it's a must have app on your phone and what I'm going to talk about is in

over the life of a company I think there a lot of speakers talk about the tactics right I mean how to the Daily Wars and nutritions but I'm going to talk about is over the life of our company the few key strategic decisions that we made actually determine where we go and um where we land as a company and within that context I'm going to talk about the product decisions that we made how we transition from B2B to b2c on the front

end and trans moved from our first growth curve to Second growth curve second with that strategy in mind how we adjusted our plan Playbook and in terms of marketing and go to market and adapt it to the local market and Achieve nonlinear growth and third is as with a lot of CEOs our job is not just about operating business it's about Capital allocation once we start generating free cash flows how do we spend that money

right and I'm going to later I'm going to wrap up with that a few few points on that um but what do we do uh qcc quickly check companies were commercial database in an app today the app has been downloaded more than 100 million times across Android and iOS and largely were unkknown to the US which is we intended to to be that way because Tom of

publicity can get you into trouble think about Jack ma Alibaba right but essentially our app had our data breath and depths you can think about as a combination of CB insights zoom in for a polo uh crunch base everything into one because we not only have Ben business registration information we have legal core documents around a company we have job hting about a

company we have ownership structure about a company and and and just essentially every everything um about a company that you need to know if it's in the public domain it's in our database so so guess how much it costs you say you spend $6,000 with zoom info definitely we don't charge you for $6,000 we don't even charge you for

$3,000 not even $500 we charge $50 per year subscription per end user we essentially return the commercial database business model that you know of in the US in the west World on its head we directly go went to the consumers what and so that but we had a a more humble beginning because we started as a B2B company the first few years 2015 and

2016 what were we doing we're selling data packages and apis to um you know typical small business partners and Enterprises and that is a very sell driven approach and average ticket is not that large and but it kept the lights on and you know but around 2016 and 2017 2018 we made a very bold leap and very big

transition why why did we do that and then we achieved nonlinear growth as a typical not a SAS company anymore more like a consumer internet company why do we do that because very similar to what's happening right now in the US market with commercial intelligence and dat data raw data is being commoditized very quickly think about the zoom INF for a polo of the world right data is being commoditized very very quickly right now and that already happened in

China since we launched in 2014 it took no more than two years for the price of the data package that we sell to drop by 90% in price and we know the B2B sales model is not going to be sustainable it kept the lights on kept us a float but it's not the future of the company but second but then we made a transition how about we packes the data and in an app and go directly to the end users the lawyers the investors the bank loan officer sales professional because the

depth of data that we have it opens up all kinds of use cases that Norm people probably wouldn't normally think about loan officers need to check the credibility of a small business to make a commercial loan right and then the lawyers probably need to do due diligence on a Target company and students students if you you if you go for a job hey 100 employees does this company have

any labor dispute before with prior employees right so it because of depth and breath of data that we have it opens up to a long tail of use cases that's suitable not just to when we talk about so direct to Consumer we're directly to the individuals instead of going through the the IT department marketing department because $50 you can buy with your credit card right with your alipay or WeChat so that's a kind of big

transition that we made like I said commoditization of API and big dropping prices but we were luckily we were the first mover advantage in offering um our data an app direct actually consumer but we have ton of competition who copy us pixel by pixel the those we're our app is in the middle and you could not tell the they the other two are competitors you could not tell which one is which so

not only were we facing commoditization on data side on the data side we have a lot of competit ons and copycats so how do we differentiate how do we escape that uh the gravity of death of competition so number one we need to build data advantage and killer features and be better at monetizing so from 2014 to 2018 in our world every year we were adding new data packages to

our our our backand database and H it's since we are a SAS and software company wrapped around a core commercial database our data is got to be the leading source of Truth for to any consumer that's how we establish trust right second is building ker features that people are willing to pay we have millions of registered users how do we turn them into paying customer how do we crank up the

Revenue engine that's outside of B2B sales so one at so the magical moment came at the end of 2016 when we launched a feature called ownership look through based on the data that we have with click of a button you could quickly see the ownership structure of a car company from the largest public Trader companies to your mom and pop shop restaurant owner on the street corner so

literally think about all the cap tables of private companies all the ownership structure are at your finger tips and what we build this chart right here is a look through chart interactive chart basically shows the upstream and downstream s subsidiaries and old ownership and that was a CER feature when we launched that and we put it behind the pay wall the Magic Moment came and overnight literally

overnight you know thousands of thousand hundreds and thousands of our prior free registered users turn to PID customers and overnight we realize we need to make that transition from a B2B company into a directory consumer company so how we do do that we we've achieve we continue to take a product leadership and differentiate our product but that's just half of the equation

right the other half is distribution and marketing and we we really capitalized on the proliferation of mobile phones and mobile internet in China it's happening at the time you think about the US and the China it's all happening at the same time but it's two it's two parallel universes and one of the unique things happening in China was the growth of super platforms WeChat you all know WhatsApp right WhatsApp well WhatsApp WeChat has a feature called WeChat official account which is you you as a

business you could register and use it as a publishing platform there we leverage it as our content marketing um engine because think about substack plus WhatsApp content plus billions of us are distribution you you instantly distribute your content to so many users and what do we do since we have data we write up business commentaries and even entertainment

gossips for instance well um a famous Tom Cruz movie just came out and uh hit the back house office we write up entertainment commentary but by the way do you know that Tom Cruz owns 20 different businesses in these industries that that that kind of picked the interest of the average consumer right it's very much in line how we go to market because we're not just going to the professionals we're going to as many users as possible that and that that

that that kind of content grabs attention and we we we on we were on the back of a super platform form so from 2014 to 2017 on the back of WeChat that's how we got our first batch first couple millions of user complete for free complete for free the second what's happening second part of distribution app stores the US is dominated by IOS and

Android right you only have App Store uh Apple App Store and Android stores again this is a parir of universe and and in and the edos syncrasy is there um yes Apple Store still the the half of the equation but the other half of the equation all the mobile phone makers in the local market forked the Android operating system have their own app stores Android App Stores so literally

our operations team had to do with and optimize 20 different Plus app stores so we have a team of 10 people continuously optimize um the Q search and Etc and and the result of that is we had a huge lead in terms of free distribution across this app app stores and this is a snapshot that I just took last week we were number six on the business professional app U leaderboard right

behind waycom that's way chat the official um chat app U ding ding that's Alibaba so we're right behind the Giants and and while our competitors were optimizing SEO we were optimizing the next Frontier of distribution which the app stores and that got us from a couple million users to 20 million all right like I said we charge $50 per person right how does the unit Economics

work in fact it works beautifully like I said we our first couple million to 20 million customers were almost free each of our customer our customer acquisition cost was less than 20 cents and $50 per per year and our retention our retention and engagement is actually better than chat GPT just put it in context our month one retention is 60% I think Chad

GPT is probably 40 to 50% and our paying conversion is 5% and on average a user would open up the app six times a day and use it for seven or nine minutes and and then leave but with that few data points you C understand that the unit economics Works beautifully and money really start pouring in and we we we we did well the the the first couple million dollars that we raised we never

spend it because money start cash start piling up on our balance sheet now the role has to transition from an operating perspective to Capital allocation where do we spend the money right a lot of SAS companies once to raise a huge amount of dollars or they start generating Cas cash flow think about maybe expanding into adjacent areas uh doing Acquisitions most of the time if they're out of your core competency right and most of the time it could fail so C we

have to think very carefully how we deploy that hard earn cash and what we decided is our third Frontier of growth from 20 million users to 100 million users how do we do that Nationwide brand building well to do that there's certain prerequisites first of all where we already have 20 million plus users right we have great word of mouse because it's

such a useful app like it is an app that you open up you do a couple searches you quickly realize it its value and then um you you may only use it for few times a month but you never delete it because it's a utility app second is because online traffic is becoming more and more expensive um acquiring customers online through SEO through ASO were becoming

more and more expensive then we had to get ahead of the curve where we go offline um with a larger user base and brand recognition we actually we spent next time we we spend the money on offline ads we contracted with one of the largest media companies called Focus Media in China who have installed 4 million ion digital screens in commercial bu Office Buildings and residential Office Buildings talking think think about the elevator pitch

this is really the elevator pitch once you step that distribution media essentially works like this you step into the elevator go to the office you're trapped inside an elevator for 30 seconds those are prime time to Market to Consumers so that's what we did um but we are we took a very roid driven approach we did not just Splurge money we started with with a test run across tier one cities tier one there only four tier one cities in China Beijing you've

heard of Beijing Shanghai shinen and gu and four combined together how many po what's a population 60 million what we specifically did was we targeted the commercial Office Buildings we bypassed all the residential building we want to Target business professionals so our first T run cost us $600,000 that's by the way that's a 90% discount of the list listing price we negotiated pretty pretty hard for that and then we run an ad what ads for two

weeks in elevators in you know Subway and over dur well during that month we 3A our Revenue proved that that is a viable um channel for acquiring customers and from there on WE expand into tier 2 cities a dozen tier 2 cities so it's very very Roi driven and that took us us from 20 million users to 100 million users over the course of 3 to 5

years it's mostly is organic growth and from there on we became famous we become a national brand name and this is a snapshot from The Economist last month so they used our data in one of their piece of analysis on China's manufacturing are going broke and our our and our our data was mention in there so

we start getting earned media and and the virtual cycle start spinning of course with money you know we occasionally we slur Splurge it on vanity buying a huge screen at 10 square nobody's going to look at it nobody's in China is going to look at it our end users is not here but it it did give us a little bit bragging R to the VC to our funer friends and Etc but I I it didn't cost much money but it's vanity

so but all that reflecting on that Journey you know I mean I was 32 years old leading a team with an average of 25 years old it's like midc career professional leading whole bunch of kids and we're not you know we were not top we we didn't have top tier Talent even though we are engineering product driven team most of our employees were come from tier two tier three three universities one of our co-founders

never graduate from high school he was self-taught engineer now I went to Columbia I was the only I you know probably people person with a come from a top tier school but that did not matter which is one of the key takeaway and reflection that I had is from zero to one we do need a few smart and daring individuals to really to take the risk but from their one to 100 we need many

maybe not Stell on paper but hardworking and loyal and and and and individuals and I my best days were spending with these young kids and and off in our conference room strategizing and reviewing our our product so so over the last five minutes you know I I kind of talked about the key core strategic decisions over the life of our company how we transition from a B2B company to

a b2c company how we adjusted our go-to marketing Playbook according to that and how we once we start generating cash flow how we wide wisely spend it so I guess the the party message for me is swapping out China every entrepreneur has to do with the spe situation specific um problems that we face in our specific verticals in our customer

cohort or in the set of competitors that we had to deal with swap out China put it in India or in a vertical SAS we all had to find that be creative in dealing with our individual problem so luckily we did and not only found riches but also you know and established a a great meaningful relationships with a lot a lot of employees and I hope you you to find that as well thank you

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