Colin Nederkoorn

Josh Pigford on April 17, 2017

 

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This week I talk with Colin Nederkoorn of Customer.io, where they help companies automate customer lifecycle emails and campaigns. We chat about growing up in Singapore, watching his dad run an international shipping logistics company, working nearly a dozen different jobs before founding Customer.io, and biking across the country. Such an interesting story. Hope you enjoy it!

Josh Pigford: Let’s jump in here. I guess, I’d love to hear kind of, I mean beginning of you as a kid, really. As a kid were you an entrepreneurial type, or what were you doing when you were a kid?

Colin: Yeah. I grew up in Singapore. I guess, that’s probably the weird thing, or interesting thing about me. My dad is originally Dutch and English, my mom’s from New York, and grew up in New York City, and they met in New York City. My dad grew up in Singapore, as well, he was born there. I was born in Singapore, I spent 16 years of my life there and my dad did international business, so he was a ship broker, and he was on the phone at all hours of the night. I was really exposed to him as an entrepreneur when I was growing up, and saw kind of him doing business with the rest of the world, and I would meet all of these weird and interesting people from all over the world who he was doing business with.

That had a pretty big influence on kind of my views of international business, I guess, which led to me wanting to build it, you know a SAS company that anyone in the world can sign up for. But, when I was a little kid, I think, one of my defining characteristics was I was pretty rebellious. I would break a lot of things. I would take the family computer apart and break it and then panic and have to figure out how to put it back together and make it work, again. I would also try to find the loopholes around things. I would like to do things like pirate CDs when CDs were a thing. In Asia, growing up pirating video games was a big thing, and I remember trying to figure out things like, I don’t know if you remember back then, but when games were on floppy disks, the original copies of games to prevent people casually pirating them, they would have these little things they would give you, like the manual, they would ask you for what’s word five on page eight of the manual.

Josh: Of the manual.

Colin: I was always intrigued by how does all this stuff work? How do you circumvent things? My mom thought that was a really worrying trait of mine, that would get me in trouble. And get me in prison, or something.

Josh: Like a hard criminal.

Colin: Yeah. Like a hardened criminal, but really I just liked, I liked two things, I liked problem solving, and I like figuring out how to do things that people don’t think I should do.

Josh: Got you. You’ve got a dad who is doing international business, and were you actively observing him? Was he doing work sort of in front of you, a lot, or was it always just sort of like dinner table talk kind of stuff or not? How much of his sort of entrepreneurial bent was a part of daily life?

Colin: I mean, it was all day, every day. We had a telex machine at home, and then we had a fax machine at home and these things would be going off in the middle of the night, and I didn’t always wake up in the middle of the night when they’d go off, but his business kind of never stopped, it’s 24 hours a day, seven days a week. Funny story from sort of a small tangent, but funny story was one of the things that he did was shipping edible oil around the world, so a ship takes a bunch of oil, cooking oil, from place A to place B and I remember one funny story was a ship arrived into port in Israel on the Sabbath and the oil needed to be blessed before it could be discharged from the ship, because a rabbi basically blesses the tanker, because it’s more practical to do that then blessing individual containers of cooking oil. You couldn’t get a rabbi there and these ships are like, when they sit there idle it’s $20,000.00 a day, $30,000.00 a day, something like that, so everyone’s freaking out, because the ship arrived on the sabbath.

Josh: And, you need a rabbi.

Colin: My dad would get a phone call when something like that would happen. There was always these crazy interesting things that happened when you’re trying to move goods from point A to point B.

Josh: Through different cultures and different cultures, and all that.

Colin: Sure.

Josh: So, your dad is doing business, you’re taking things apart, and just figuring out how they’re working, and then, so that’s you as a kid, so what happens, you’re in school, obviously, did you go to college?

Colin: Yeah.

Josh: You end up at college, what are you studying, then?

Colin: We moved to England when I was 16. Lived in England for a couple of years, and finished high school there. I was really interested to live in the United States. That was something that I had never done, I kind of spent summers here, but my mom’s American, I have an American passport, I’ve had it from birth, and I never lived in the United States, so I wanted to go to college in the US. I went to Rensselaer Polytechnic Institute, or RPI, which is in upstate New York. When I started school, my major was electronic media arts and communication.

After the first year I was interested in that stuff, but I wasn’t a good enough artist that I think it made sense to continue, I can make things look okay because I’m assisted by a computer, like I could figure out how the programs work, but I’m not actually an amazing artist. I ended up changing my major to management with a focus on management information systems. One of my college courses was the IEEE standard way of building software, and basically you never actually build any software you just write a bunch of, you write like five different specifications documents, that’s how the IEEE recommends you build software.

Josh: I’m gouging my eyes, right now, just hearing about it.

Colin: But, it was kind of interesting to get some exposure to sort of like to building a business, I guess, in college with a management degree I did accounting, I did finance, a lot of the focus was kind of on running factories and stuff.

Josh: [crosstalk 00:08:23].

Colin: But, that’s kind of interesting stuff, too, but leaving college I had this management degree and it set me up well for at least the basics of running a business.

Josh: What year is that, early 2000?

Colin: 2004 I graduated from college.

Josh: Okay. At that point, I mean, the web is obviously around, but building web based businesses is not really, I mean certainly-

Colin: Yeah.

Josh: Not what it is today. That makes sense that your college, any kind of business anything is especially at an university where that kind of lags what’s actually going on-

Colin: Mm-hmm (affirmative).

Josh: Do you feel like you took anything practically away that you could apply to running your current business from that or this sort of like the overall experience college experience is what you took away from it?

Colin: I think knowing what a balance sheet, and income statement was, or is, is helpful. One of my freshman or sophomore classes we did a Myers-Briggs test.

Josh: Yeah.

Colin: Some of the surprisingly, at the time, I totally dismissed this stuff, but some of the organizational behavior type work that we did in classes was kind of interesting, too.

Josh: Like, the psychology behind people.

Colin: Yeah. How people work. Not how to motivate people, but how teams work together, I think that stuff was really valuable, and really applicable to building and running a company, at least at a foundational level. I think with a lot of these things they introduced me to these concepts, but did necessarily give me enough information to go and do it properly in a company.

Josh: You mentioned earlier you grew up in Singapore, moved to England, and eventually came to the states, did you feel like you had enough I don’t know maybe exposure to the business side of things in Singapore and England, was the culture of business different between those three countries?

Colin: Yeah. What’s kind of interesting, Singapore is very practical in the way people get educated, lots of math and science not a lot of art, at least historically speaking, that might be changing, now, I haven’t lived there for a long time. The entrepreneurship is not, like the creative side of entrepreneurship is not really taught in school there, so the US has a contrast to Singapore and then maybe the UK, as well. The US is like, oh, you want to go make a thing, it’s never been made before? That’s amazing, go and do it. Where the UK is much more skeptical, and maybe Singapore is much more practical when it comes to building stuff, like, oh, what’s the science? Go focus on getting a science degree and do that instead. Whereas, yeah, I think living here and one of the reasons I like to live in the US is people are much more open to new ventures and much more supportive of new ventures and I think that varies from city to city, too, but in general as a place to make something new, there’s lots of stuff in place to help you do that.

Josh: Yeah. That makes sense. You finish up college, 2004-ish-

Colin: Mm-hmm (affirmative).

Josh: Then, what are you going to do?

Colin: I couldn’t figure out, I didn’t have any access to startups at that point and I think that was really the end of a bust in startups. I ended up getting a job doing something similar to what my dad does, I did that for two and a half years, and I moved down to Houston, Texas for that job.

Josh: Like a shipping logistics kind of thing?

Colin: Yeah. I was a ship broker and I negotiated freight for Petra companies, so it was like a sales job, but you’re similar to what I described earlier, there’s a bunch of Petra chemical cracking that happens in the US Gulf and that stuff needs to make it out to China, so that manufacturing can use it in China to make plastics, which comes back to the US on container ships. Someone needs to make getting that stuff out to China happen, and that was my job.

Josh: Have you-

Colin: Yeah.

Josh: Have you heard there’s like an eight part little podcast series called, I think, Container, or Containers and there’s a guy who basically breaks out the entire history of containers and container shipping.

Colin: Cool.

Josh: Where it started and the economics behind it, and how it’s sort of revolutionized the manufacturing, shipping, the whole thing. Yeah.

Colin: Yeah. I haven’t heard that, but that sounds super interesting.

Josh: Yeah. It’s pretty fascinating stuff.

Colin: I was there-

Josh: Yeah.

Colin: When I was there, basically a small company, I was the IT person in the company and I would convince them to kind of do things like we bought a rack for the office and we were putting, and I like bought some Dell servers and we were doing our hosted exchange, hosted Microsoft exchange and we were running Blackberry server and our website was hosted from the office, as well. I was the-

Josh: Did you get all that stuff setup, or just convince people that they should get it setup?

Colin: I got some of it set up, I think we had an IT person that we worked with, as well, but I was the Linux admin on our website, so I was kind of trying to find ways that I could exercise my technical, or scratch my technical itch, where I just really wanted to, I didn’t want to do sales. I just wanted to do technical stuff, that was kind of much more interesting to me, so I convinced them to buy all this equipment, so that I would have something to tinker with. Then, while I was there that was when Apple switched to Intel hardware and I saw that as another opportunity.

I had bought a Mac in college, but in work I would switch back to a Windows machine, and I really wanted to buy a MacBook, was it, yeah, I guess it was a MacBook, at that point, so Apple switched to Intel hardware, and that’s when I ran this Windows XP on the Intel Mac competition. I was in this shipping job, I had no business doing anything in technology, and posted this thing, started this website, posted this competition and sent it to Slashdot and Dig, if you remember those.

Josh: Yes.

Colin: Dig.com. It got a bunch of traction, got a bunch of excitement around it and I think within a few months these two guys out in the Bay area had figured out how to run Windows on the Intel Mac, so that’s kind of after doing that, that helped me realize I should get out of what I was doing and figure out how to get into tech. It’s really hard, there wasn’t a good way to do it, so I started a company with some people I knew and our goal was to do, we did, and I’m sure a lot of entrepreneurs have done this, we did the, we don’t know what company to start, so let’s just brainstorm ideas.

We went through that process for probably a month and then wrote out all of the ideas that we had and eventually picked on that seemed to lean on some of the skillsets that the people that I was with, the three other people I was working with, which was to do algorithmic trading, algorithmic stock trading. In retrospect there was sort of no reasonable path forward, there, but what that did was that got me to leave Texas, leave Houston, and I moved to Boston. I got a space, a co-working space in Boston and started to meet people who were actually doing tech. That helped me land my first tech job, which was doing technical support for a really niche social network.

Josh: The jumps from stuff, here, so you’ve got like a sales stuff-

Colin: It’s crazy. Right?

Josh: Going on, and then you started this stock trading company, which were you even into stock trading, or it seemed like a decent idea?

Colin: I was a little bit interested in it, but the idea of printing money seemed like, well, that seems like a good idea-

Josh: Sure.

Colin: If you can print money.

Josh: Then, you ended up in tech support.

Colin: Yeah. After joining this co-working space, I was like, well, this company that we started and I guess technically we incorporated it, or did we? We made an LLC.

Josh: Mm-hmm (affirmative).

Colin: Technically a company did exist, but it really didn’t have any legs, so I needed some other income, because I was living on ramen.

Josh: Yeah.

Colin: Or, the equivalent. Someone else needed help that was in the co-working space that I was in, so I said I would help them and answered a bunch of tech support questions.

Josh: Tech support, so you’re doing that in some way to sort of fund your algorithmic stock trading company. Right?

Colin: No. I think I had known the writing was on the wall that, that wasn’t going anywhere. I was, like, all right, I’ve got to figure out what’s next, and this is a job so let me take this job.

Josh: Got you.

Colin: I started doing that job, I got a little bit, it was a really small team, so I got a little bit of exposure to doing product work, because I would work directly with an engineer and come up with ways to add a new feature or solve a UX problem, or something like that. I was like, I really, really like this stuff, and then I ended up being able to sort of turn that into a job with another company in that space into a product management job. That was my intro into the tech world, and then from there I have been kind of only doing software and tech jobs.

Josh: Did you go from the product management job to Customer.io, or were there-

Colin: Buts. A couple things in between, so you really want to go deep into this story, Josh?

Josh: Yeah. If it’s just like a string of random jobs, then cool, but-

Colin: No.

Josh: I’m curious if they were all like the same job, or did you keep this sort of like honing in on what it is that you felt like you were good at?

Colin: Yeah. The second job that I had in tech, was working for Ruby on Rails Consultancy Company. We were working with a client and it was, I think, four engineers, plus me, and the engineers really didn’t like interacting, not that they didn’t like interacting with a client, but they wanted someone to act as the middle person to sort of get the specs from the customer, so the engineers don’t have to, because I’m a people person.

Josh: Yeah.

Colin: If you know that quote from Office Space, but that was basically what they wanted someone to do, and once I understood what the customer kind of wanted I would translate, I would make my recommendations and suggestions on what the feature should be, that kind of represents that. I didn’t have a lot of responsibility there, but I sort of felt like they were giving me the opportunity to kind of interface directly with the customer as well as kind of come up with how we would solve some of the problems they wanted us to solve. That was really cool, and that client stopped paying their bills and the Ruby on Rails Consulting shop ended up having to shut down.

Josh: [inaudible 00:22:19].

Colin: At that point, I was like, crap, I don’t really have enough experience, here, I don’t have a ton of experience doing product work, but I do know I like this. I was kind of just, when I don’t really have a clear path forward, I tend to just kind of figure out something else, so I ended up organizing with my roommate at the time, we decided to go ride our bikes across the country, so I kind of took a break, I don’t know if this was like a quarter life crisis.

Josh: Mm-hmm (affirmative).

Colin: But, took a break for a few months and rode our bikes from San Francisco to Boston.

Josh: Wow.

Colin: One of the interesting things about this is that if you’re in between jobs, doing this is like an amazing conversation starter, because anyone you’re interviewing with has this immediate thing that they’re probably curious about, like, oh, why did you do that? What was that like? What was most interesting? It makes you really stand out as a candidate.

Josh: Yeah.

Colin: While I was riding my bike across the country, I think I either applied for jobs just before or was applying as I was going, and I ended up getting a job at a company called, Thrive, and they’re a mint.com competitor based in New York and they offered me a job when I finished up my bike trip, so I moved to New York with a legitimate product manager job.

Josh: Wait, so you’re like biking, like on your way from San Francisco to Boston, biking, and you get a job offer, and so you’re just like, hey, yo, that sounds good, but I’m going to keep biking.

Colin: They didn’t give me the offer until the bike ride was finished, so I was a little stressed out that it took a while to get the offer, but in the end things worked out.

Josh: Got you. At that point, you moved from Boston to New York.

Colin: From Boston to New York, actually, at the end of the ride, I had packed up all of my stuff, so my life was in three or four boxes.

Josh: Yeah.

Colin: I shipped all the boxes to San Francisco, I figured that I would be moving to San Francisco and would just find work there.

Josh: Sure.

Colin: Then, I got the job offer in New York, so I had to go to San Francisco to receive boxes and then ship those boxes to New York.

Josh: You moved from San Francisco, well no, you moved from Boston fly to San Francisco to get your stuff, moved to New York-

Colin: Mm-hmm (affirmative).

Josh: To basically be a legit product manager at Thrive.

Colin: Yeah. We ended up being required by Lending Tree pretty soon after I had joined, and I stayed for about a year more, after that, so I was probably there a year and a half to two years, so it was really very quick to acquisition.

Josh: Did you get, were there any fruits of that acquisition for you, or were you there for so little time?

Colin: Yeah. Not really. Yeah. Unfortunately, not really. Then, after that I was kind of itching to do something different, and joined challengepost.com, which is now Dev Post and Brandon, the CEO of Challenge Post started that company partially inspired by what I had done with the Windows on Mac contest.

Josh: Yeah.

Colin: I was like, oh, this is fate, I have to be the product manager here. I joined Challenge Post and that was an awesome, awesome experience that my cofounder John, there, and we were there for I guess two, two and a half years. We worked at Challenge Post and then started Customer.io.

Josh: Nice. You were a product manager at Challenge Post. Right?

Colin: Mm-hmm (affirmative).

Josh: And, John, your cofounder was the engineer?

Colin: Yeah. I was head of product. He was head of engineering.

Josh: Got you. Your at Challenge Post working on stuff, how did you and John end up teaming up for Customer.io?

Colin: We both really enjoyed working with each other. John would do a bunch of side projects, one of his side projects was this analytics tool called, Chatter Analytics, which he kind of launched, but then wasn’t really sure how to scale it up, or whether he wanted to turn it into a real thing, but that gave him a lot of exposure into collecting analytics data. Then, I was also kind of interested in starting, creating products, or starting a company, or doing something like that, and he and I did a startup weekend together. We had already worked together, but we were like, all right, what if we take ourselves out of the office and do startup weekend, will we still like working together? What we found is we really did like that, and there were a couple of other people who we worked with in Startup Weekend, I think our product during Startup Weekend was called, Plugs and Wifi. It was like a HTML5 mobile app that would help you find places that have plugs and Wifi.

Josh: Nice.

Colin: Which I think is probably done at every single Startup Weekend.

Josh: Right.

Colin: But, you know, it’s fine, the point was not that product, the point was how would we work together if we were kind of building this thing and making decisions together. From that experience we kind of sat on it for a while, and then over the winter holidays in 2011, we were like, all right, are we going to do this thing? We got a go, no go decision on whether we’re going to start a company together. Then, we were both in agreement that we should do it.

Josh: 2011, you and John decided that you guys like working together, but at this point, sort of like the stock trading thing, like you don’t have an idea per se, but you just know that you want to work together. Is that right?

Colin: Yeah. I probably skipped a step. The way we decided that we were going to go and start a business together was we had a few ideas of things that we wanted to do. We really liked, we both really liked analytics and data, so we evolved his original idea and started doing customer development. We talked with a bunch of other people we knew in tech in New York, or New York and elsewhere, and started asking them about their analytic stuff. Our first idea was really just a richer version of Google analytics, like down to the person level, probably somewhat similar to what Mixpanel is doing, but I think maybe they weren’t that prevalent at that point, or something like that, but basically it’s like here are all your people and here’s what they’re doing in your app, and if you know that, then you can reach out to them.

We weren’t thinking about the reaching out to them part, but we were just thinking about visualizing all of the activity in your application, which that’s really what Chatter Analytics did. It showed activity on your website, and this was identified activity on your website. When we pitched that to a bunch of people the feedback that we kept getting was like, look, I have all of these different tools that show me what’s happening, but none of those tools allow me to take action, and actually change the behavior that I’m seeing, so if you guys can build something that helps me influence behavior, that’s really interesting to me, and that’s worth money to me.

We heard that, a few times, from people and we’re like, oh, totally, this makes sense, that’s kind of close to revenue, so it means that people are willing to pay for this thing, and it’s using this analytics data and it doesn’t seem like anybody is using this analytics data in this way at this point. So, we started building a tool that would take this data, act on the data and then show you the results of acting on that data. That’s really the foundation of what Customer.io was and is today.

Josh: You do all this sort of customer research, figure out what you need to build and this is 2012 at this point?

Colin: This is 2011, and then we continued doing customer research at the beginning of 2012 and I think there was a blog post by Paul [inaudible 00:32:00] and forgive me if I’ve butchered his name, but it was, the blog post was like, customer retention as a service, and there just happened to be a lot of conversation in the tech sphere about this idea of using analytics data to drive messaging, right around the beginning of 2012. I remember seeing a tweet by Rand Fishkin from Moz, who was like, man, if someone could solve this user retention as a service thing for us, that would be great.

So, I reached out to him and he introduced us to other people on his team thinking about this stuff, and so we talked with them, we did customer development with them. They’ve never been a customer, but we got amazingly valuable feedback when we were pre-product, just by being able to talk with people in their company who were thinking about this stuff. We were just trying to understand this space, and understand how to build a product that would be really valuable for the companies that we were going after, which at that time was really focused on SAS, we were really focused on SAS, but then we’ve kind of shifted away from sort of only SAS, over time.

Josh: Yeah. You guys get Customer.io off the ground and get the product out there, you guys did, did you do Y Combinator, or something-

Colin: We didn’t. We didn’t do any accelerator, or anything like that.

Josh: I feel like a saw a pitch that you did.

Colin: Oh, yeah. We applied for Y Combinator and there’s this old, our Y Combinator video is online somewhere.

Josh: But, is that like where you were on stage pitching it?

Colin: That was at the LAUNCH Conference, or LAUNCH festival.

Josh: Okay. But, that wasn’t any kind of like accelerator thing?

Colin: Correct. Yeah. We didn’t win anything or get funding as a result of that presentation.

Josh: Okay. Early on, it’s just you and John, basically kind of hacking stuff together, figuring out what to build.

Colin: Mm-hmm (affirmative).

Josh: Then, you build it, and then at that point is it just like you turn it on and start getting customers, or do you guys go and try to raise some money, or put in your own money, or how are you guys staying afloat in the early days?

Colin: Neither of us had any money. Any sort of real money that we could kind of put into the company, so our intention was to get some friends and family money, and with that build a profitable company. I think, we raised 80K in friends and family money, and then realized very quickly that we weren’t going to, you know, we started in April 2012 with five companies paying us 10 bucks a month, so that’s 50 bucks a month in MRR. To go from 50 bucks in MRR to paying two people’s salaries who live in New York, that was not going to go very far on 80K, or it wasn’t going to get you very far. So, we ended up raising some more money from some angels and some professional investors, and then we hired another person, so we were three people on the team. We kind of tried to figure that out, and tried to get to an amount of money where we were actually making a dent in our burn, and it definitely took us longer than we had expected, but I don’t think we, we just didn’t have any money, so I don’t know how we would have gotten there without raising money.

Josh: Otherwise, you would have had to basically get a job to-

Colin: Yeah.

Josh: Fund it. Right?

Colin: You know, you take on consulting gigs, but then your time is split 50/50 between consulting and building your company.

Josh: Right.

Colin: Especially in the early days it was so consuming and we wouldn’t have gotten there very quickly had we been splitting our time, so we really wanted to be able to focus on building the product and the company.

Josh: How long, you got a little bit of money in the bank from raising with friends and family, and a small seed round, at what point to you guys, I guess, at what point do you realize, hey, I think we’re onto something, and this might actually work?

Colin: Have we realized that?

Josh: You know, you’ve got a couple dozen people on your team. You’ve grown somehow. Something works.

Colin: Yeah. I mean, I think it was pretty early on that we realized that there was something to it and that there was a pain point we’re solving for people, it definitely, you know, the first five customers that we had were doing us a favor than us doing them a favor. But, we would get a ton of interest on our site. A lot of people signing up. A lot of people saying that this was a pain point for them and all of their logic for sending messages to their users was in the spaghetti mess of code, and their application. They couldn’t change it. They couldn’t modify content. Hey, can you help us solve this problem? We definitely saw there was a lot of interest, there, but our product in the early days couldn’t really deliver on the promise that we would like to make to customers, so John was writing Map produced queries by hand.

People would say, people would kind of describe in plan language what they wanted the software to do, and for a particular triggered campaign, and John would write the map produced code by hand in our admin interface to make it work the way they described. He’d look at the data that they had and try to figure out how to do what they’re asking us to do. That’s obviously not a very scalable way to do it, but it enabled us to really understand that the needs of our early customers and what they were trying to do and then build a UI that would make it possible for them to do that, self serve.

Josh: Obviously, with something like a messaging platform where the use cases are essentially infinite.

Colin: Mm-hmm (affirmative).

Josh: And, you’re strapped for cash in a lot of ways, what were the infrastructure costs like? I mean, was that a pain point, or was it still pretty cheap, at that point?

Colin: Well, we expected infrastructure costs to be pretty high, and I think, I forget what we pay now, but it’s probably like 30 to 40K a month, excluding email sending, but just for servers it’s probably like 30 to 40K a month.

Josh: Got you.

Colin: In the early days, we definitely expected infrastructure cost to be really high, but it wasn’t breaking the bank or anything like that. That kind of led to us setting up physical servers, which was something that we did, probably in mid 2013, we were like on Eye Note for a while, and then they had, they were sort of having networking and reliability issues, and one of the things with our service is that it requires a lot of machines working together, and each machine is doing its own dedicated thing, so if a data center is having networking issues that kind of kills our service. We ended up getting off of the Cloud and onto physical servers, and we’re now going the other way where we want to get back onto the Cloud and part of that is that the Cloud price performance is much more efficient than it was four years ago.

Josh: Yeah.

Colin: Part of that is that our service has, the way we provide our service has been optimized compared to four years ago, so we’re a lot more confident we can make the economics work.

Josh: Yeah. At this point, I mean, early on you’re growing the company, both people working there and the number of customers, I mean, at that point, from a product perspective your problem assume is less from a customer growth standpoint is less like switching, getting people to switch from a different service, there’s not that sort of direct competition as much as getting people out of their own app. Right?

Colin: Mm-hmm (affirmative).

Josh: Or, people just using mailing lists, like a MailChimp kind of thing to try to hack this stuff together, or what are you bumping up against as far as reasons people would not want to use you, or trying to convince people?

Colin: For startups, for really early stage companies, they often would write code into the application, and some companies when they’re trying to solve this problem, if they had a less technical person on their team, prior to writing all that code, they might consider using Customer.io, so they’re like trying to solve this problem of hey, we want to send these onboarding messages to our customers, how do we do that? And, engineers are like, I know how to write the code, and the marketing person is like, but then I cannot change anything, I cannot change it from three days to four days without actually going into the app and redeploying the application. Some people already had a system in place that was built into their code, other people were evaluating that project and wanted to set something up, and they would be looking at us as an option instead of writing code to do it.

From time to time, people were trying to do things in traditional mailing tools, mailing list tools, and the thing that they really liked about Customer.io verses a mailing list tool was like we know everything that they’re customer has done, so it’s less static. Typically, in the same way you rely on an engineer to run an export from your user data base to give you, oh, I want to know everyone who’s logged in the past 30 days, because I want to send them a message, that’s something that an engineer would run an export on, and then you put that into your, you upload that list and then you send a message out to them, instead of doing that, instead of the engineer needing to do that, now, a non-technical person can build a segment in Customer.io and then just send mail to those people.

Josh: Yeah.

Colin: Yeah. It was like a totally different way to accomplish these tasks that I think for companies that were evaluating us, it’s like, oh, you’re interacting right on our user database and it’s always up to date, and that feels way more dynamic than the old way of doing stuff.

Josh: At that point, were you even finding customers? It’s almost a shift in mindset of how to solve the problem.

Colin: Sure.

Josh: How were you guys even finding customers at that point?

Colin: It’s been a lot of word of mouth. I think that especially in the early days we found that anytime we sort of got like an article written about us, we’d get a bunch of low quality leads, and they were typically people who didn’t quite understand where the service fit in their app, or maybe they didn’t even have an app. Then, it would create a lot of extra work for us, so we found that successful customers who were using us would tell other people when those people would talk to them about the problems they were trying to solve would tell those other people to check out Customer.io, and that was kind of the strongest way that we would get, or we’ve gotten new customers, is just through word of mouth. Amazingly high quality traffic, and generally those people are a great fit for using our service, so we’ve done a little bit of promotion, but not a ton, and just really relied on giving people a successful experience of the product.

Josh: Speaking of growth, what for you guys, was there any sort of singular inflection point where growth really changed or picked up? I mean, obviously if you’re doing a lot of word of mouth stuff, typically, that’s like sort of a trickle, but was there any specific thing that you guys did, or shipped, or whatever that kind of changed how fast you were growing?

Colin: Yeah. I think in the early days the addition of being able to send a newsletter changed our trajectory, because in the first version you couldn’t send a newsletter you could just set up triggered campaigns, and once we allowed people to do batch mailing that really changed our trajectory. In terms of recently, it sort of really been steadily continuing from that point, so I haven’t seen anything that sort of like drastically change the trajectory since then, but, yeah, I mean the company has grown really steadily over the past five years. The long slow SAS wrath of death is real, man.

Josh: Mm-hmm (affirmative). It’s maddening.

Colin: Yeah. You just have to embrace it.

Josh: Yeah. It’s also one of those, like hashtag, first world problems where it’s like, our growth is so stable, of all the problems to have. That’s a pretty good one to have.

Colin: Yeah.

Josh: The inverse of that, of growth, or even the inverse of, I guess, of talking earlier where we were thinking that you were on to something, has there been a time when you thought I’m not sure this is going to work, or hey this event, or this technical problem, or money, or whatever, like we might not make it, have you had anything like that?

Colin: Yeah. Sure. Especially in the early days there were lots of these events at the end of 2012, we almost ran out of money, and we wouldn’t have been able to make payroll, and we did a small contract job just to get some additional cash, and then there have been like service related things where we’re like really struggling keeping the infrastructure up and we’re like, holy crap, if we cannot figure out this problem this is the end.

Josh: Yeah.

Colin: But, luckily and knock on wood we’ve been able to, any problems we’ve come up against we’ve been able to sort of figure out a solution to, but it definitely has not been smooth sailing behind the scenes, as we kind of hit these new roadblocks that we kind of need to figure out a way to navigate.

Josh: Yeah. What’s past customer emailing and messaging for you guys, like long-term big picture stuff?

Colin: The thing that I’m really interested in and the reason I’m excited about what we do is I want people to be able to use our product to improve the relationship they have with their customers. To me, what that means at least for technology companies is that automated feels personal, and not in a creepy way, that we need to be able to continually improve how we make automated personal. I don’t know if that really ends. There’s definitely, today, a lot of what we do in our product is about giving people more control over who gets what message, giving people control over the content in a message, so our liquid template language allows you to do conditional statements and stuff like that.

A sophisticated customer of ours can do really amazing things with our tool to make an experience that they’re delivering to a new sign up or a new user really phenomenal that even though a human didn’t write it, it feels close enough to someone writing it that you don’t care. That’s really our goal is that companies, especially tech companies who are highly leveraged, where you might have 20 people on your team and your user base is 20 million people, especially companies like that, like you don’t have to have this crappy impersonal way that you interact with all of your customers and users. Yeah.

Josh: I guess, off of that, is there a certain bit of technology or something like that, that excites you, that makes that automation feel more personal? Is there something that you guys have been looking into or researching that you’re like, hey, this changes the game for us?

Colin: Lots of stuff that’s kind of early, but not really under active development. I think that AI is such a hot space, right now, or machine learning, I guess, people tend to use the term machine learning more than AI, I think. I think that there’s so much interesting stuff that’s going on with that, and as it applies to messaging you can apply machine learning in a few different places, there’s like content, and there’s the time that something gets sent, and there’s the medium that something gets sent on, so there’s all sorts of stuff like that, that I think that it’s going to have an impact, but my thought is that I want to kind of see what materializes in the marketplace, first, before we go and drop what we’re doing and go and pursue that, but it’s definitely early days there. Lots of interesting stuff going on, and I’m kind of interested to see how we can leverage that type of thing in our product.

Josh: That sounds cool. Yeah. The machine learning stuff, I don’t know, even talking about it, it feels like, oh, I’m using buzz words, and stuff and I feel dumb, but at the same time the reality is there’s some amazing possibilities stuff.

Colin: Sure.

Josh: You know, we’ve been able to internally use machine learning stuff to predict with 95% accuracy that if somebody is going to convert to a paying customer now, it’s like crazy.

Colin: Mm-hmm (affirmative).

Josh: It’s just insane that, that stuff is possible, and at work, we’re just scratching the surface with it.

Colin: Yeah. Absolutely.

Josh: I think, a lot of times people, I don’t know, you’ve been doing Customer.io for what five, six years, now?

Colin: Five years. Yeah.

Josh: Yeah. Baremetrics, we’re working on four years and I cannot imagine, I don’t know, you know you think of exits and acquisitions and stuff, it’s like to me there’s just, both of us are almost just getting started with what’s actually possible.

Colin: Yeah. That’s the way I think about our business, it’s still interesting to me, it is still as interesting today as it was on day one, and there’s so much work left to do that, you know, you look at what happens, so recently I was learning about workflow app, which was this iPad app that people are super excited about on Apple, and I’m interested in anything that has workflows, because that’s a lot of what we do. They got acquired by Apple, and now the app is in sort of like life support.

Josh: Yeah.

Colin: There was so much potential there, so much potential to go further and it’s such a shame when companies have an early exit and don’t reach their potential.

Josh: For sure. I mean, I think that’s why, you know, really both of us have a bigger, there’s a bigger picture at play instead of it’s not just this tech idea, you know, it’s not like, look, I’ve got this cool idea for some functionality. Right? There just, you call it like a mission statement, or vision. Right? I think when that sort of motivates and empowers the whole company then you’ve got a lot more stay, like, it’s a lot harder to get burnt out on that stuff.

Colin: Yeah.

Josh: When there’s a bigger picture, you’re like, this bigger goal to hit. You know?

Colin: Yeah. Absolutely. I was talking to someone yesterday, and when I started, when we started with Customer.io, I think probably not on day one, but very soon after I kind of had a 10 year horizon for the company, or for my time at the company, like I want to be doing this for 10 years, and we’re five years in, and I still have 10 years ahead where I want to be doing this.

Josh: Yeah.

Colin: That really hasn’t changed for me.

Josh: There we have it. Colin Nederkoorn of Customer.io. If you want to learn more about Customer.io head to Customer.io.

Josh Pigford