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This week I talk with Des Traynor, co-founder of Intercom. Des and I talk about his path to co-founding Intercom, turning education on its head, how hiring is broken, the great re-bundling of software, the role of high-quality content in company growth and so much more.
Josh Pigford: Hey, Des, thanks for joining me, man.
Des Traynor: Hey, Josh. How are you?
Josh Pigford: Doing good. Doing good. I would love to kind of kick things off with your back story. You, as a kid, back in Ireland. What were you like? What were you into? All that kind of stuff.
Des Traynor: Yeah, Let me think. I was always into reading and half the time into writing. Until basically, I had a friend when I was seven or eight and his parents had recently purchased an Amiga 500. At that point onwards, we just became all about computers for quite a while. Everything from playing games to just learning how to use absolutely every inane aspect of the Omega Workbench operating system, all the way through to little bits and pieces of learning how to program. There was this cool plugin you could get for Omega where you could directly edit memory so you could cheat and give yourself extra lives in video games and stuff.
So we used to do a bit of that and that was kind of my first exposure to any kind of real bits of the internals of how software works. And then I was a relatively normal teenager, stayed up too late playing Quake and shit. I didn’t get into proper computer stuff, writing programs and stuff, until I was maybe 18, 19 when I went to university. Aside from that, yeah I was a typical, I guess, European stuff. Like grunge music, Nirvana, playing soccer, computer games. Usual shit.
Josh Pigford: Yup yup yup. So family wise, were parents or siblings or anything like that into computers too? A lot of other times I hear about other founders who it’s like, well their dad or their mom was big into computers, or they had a sibling who was huge into programming.
Des Traynor: Yeah, so I didn’t have anything like that then. So I’m the youngest of seven and —
Josh Pigford: Wow.
Des Traynor: I guess there was only really like two of us who were of the right age to have been into computers. I was born in ’81 and you have to bear in mind, computers weren’t probably as popular in Ireland as they might have been in say, Stanford or somewhere, like. So it was unlikely my older brothers or sisters would’ve been, like they certainly they wouldn’t have used a computer when I was growing up. So the biggest influence on me from a getting into computers perspective was probably my friend Chris and his family who were all very much passionate about computers, in particular Omegas, which then kind of basically became my sort of start out. That was what turned my head, initially anyway.
Josh Pigford: Yeah, yeah. So was there, from an entrepreneurial aspect, was there any sort of influence there, or did you have any tendencies towards that kind of thing?
Des Traynor: Um, let me think. I think definitely, I don’t have Gary Vaynerchuk style stories of selling flowers as a kid or selling baseball cards. I’m trying to think. I don’t know to what degree do I really identify with the true phrase “entrepreneur.” I was never passionate about making money or buying or that kind of stuff. The thing that always inspired me about software’s ability to create things that people would use, but not as much create a business that makes this pure, beautiful profit. You know, I admire for whom that’s their core motivation, I have no concern with that. But I like seeing things that might be used and enjoyed. But the financial or commercial aspects don’t resonate with me as much. That kind of trickles … I used to write stories, and I loved to see people reading stories when I was kid. But I never went and charged money for them, if you know what I mean.
Josh Pigford: Yup. You just enjoyed the finished product and the process of —
Des Traynor: Yeah. I think what I enjoyed most, and I still do to this day, is seeing people use and like the things that I either make or I’m a part of making. You can extend that to this very podcast, or to Intercom, the product, or a blog post I wrote, or a conference talk I gave, whatever. I like sharing ideas and sharing opinionated products that resonate with people and that they really identify with.
Josh Pigford: Yeah, so you go to school, I mean university. Computer science, was that —
Des Traynor: Yeah, I studied computer science and software engineering from ’99 to 2003. It was a very … it was a tricky enough degree in that it was like 36 hours a week. It was full on. All my friends were studying arts or whatever, they had like six, six, nine, ten, twelve hours. And not to say that their … their degree was just as hard as mine in different ways. But for me it was very full-on. It’s hard to get into a party lifestyle when you have a 9:00 AM start every day and none of your friends do.
Josh Pigford: So at school you studied computer science and then, what happened after school? You went and worked with a couple other companies?
Des Traynor: So, what happened was in 2003, I graduated top of my class and won a few scholarships and stuff. I think this is still kind of sadly true today. You do the thing that people who do things like you’ve done, do. Which, if you graduate top of your class in university, you should go on and undertake a PhD, or study at least for a Master’s.
So I enrolled in a PhD program and I was very, very interested in the idea of computer science education. That is basically trying to address the question, “Why is it we are so shit at teaching people how to be software engineers or programmers or coders at all?” My evidence for us being shit at it is that, frankly, the attrition, the amount of drop outs, the amount of people who are otherwise smart and occasionally quite good at actually software engineering, somehow fail to perform well in an academic environment, is quite high. So what I was trying to do, is learn what’s actually at the core there? So I spent three and a half years, basically, working on different ways to teach and different ways to assess somebody’s programming ability. And then I dropped out.
Josh Pigford: That’s fascinating. I can probably identify with that. In that, academics in and of itself, wasn’t my bag at all. I wasn’t a great student. But I felt like I could do a lot of stuff. The traditional mold of, you know, sit there, listen to somebody lecture, and then take a test, like that kind of thing never really stuck for me.
Des Traynor: Yeah. I think there’s a lot of people like that and I think when you look at a computer science curriculum, they add in a mixture of basically a very diverse set of topics, some of which are quite studious, as in like learn off these 10 things and you’ll be able to answer this one exam question. So it wasn’t very quite practical. Some of them are quite impractical, as in, write out in English how you would reverse-sort a binary tree on a whiteboard, or whatever. You see this kind of generally being criticized as programmer exercises today during interviews.
Josh Pigford: Yeah.
Des Traynor: Where my work ended up focusing on was, why is it universities are pretty bad at detecting who is good at engineering and who is bad because there is so much evidence that says basically, people graduate from computer science degrees every day around the world. The vast majority of them don’t end up working in the industry because somehow universities thought that they were qualified to be an engineer but the industry didn’t. And what’s at the root of that mismatch?
And ultimately we what came back to for me was assessment. The standard way in which universities are taught on kind of formatted into thinking, here’s how we grade a piece of code. It’s things like if we ask the student to find the smallest variable in an array, we’ll give them two points for identifying that it’s a four loop or a one loop. We’ll give them two points for using the opening brace and closing brace. We’ll give them three points for an in statement and two points … you can end up basically passing, or even acing an exam without having actually solving the problem.
What I found, and I studied this across universities in Ireland and in the UK was that you have this template of the marking becomes the template of the learning. So students basically learn how to pass tests by following the score sheet. So they’re told, if it says the word array, make sure you put in a four loop. And if it says find, you put in if. And as a result, you get people not knowing what the hell they’re doing, but they’ve learned off by heart what ingredients of a successful solution look like.
Josh Pigford: Yup, yup.
Des Traynor: Yeah, anyway.
Josh Pigford: In general, education in general I feel like we’re kind of raising kids to be really great test takers and not actually walking away with anything. That was my wife. She was top of her class and she would tell you, she was just really great at taking tests.
Des Traynor: Yup.
Josh Pigford: But when it came to anything practical, it just didn’t stick for her. Our kids now, we’ve kind of do atypical education style for them. We don’t want them in the public school system because of that very thing.
Des Traynor: Yeah, I think specifically the thing that people don’t acknowledge enough is that how you assess something becomes how it’s performed. And this is true in all aspects. Within Baremetrics, if you tell your marketing person that you’re going to assess them based on NQLs or SQLs or dollars or [inaudible 00:10:42] or LTP or whatever, it is the whole what gets measured gets done thing. I think as a result what we actually … how we test children specifically is such a high leverage activity that never getting questioned because like we’re basically … we’re telling kids … your students, your children aren’t doing well on x, y, or zed and parents take that on board.
They’re like, “Hey, son, daughter, you need to do really well on x, y, zed.” Lo and behold, what gets lost in this game of whispers, where like people are told, focus all your attention on the following three things. Which might be like, reciting this poem for the exam, learning this opinion piece off by heart so that you … if this question comes up, you can recite it. I genuinely think that in general assessment … and by the way, interviewing is the same thing. Interviewing is kind of like how we at companies perform assessment.
Josh Pigford: Yup.
Des Traynor: I think we don’t … you know, people tend not to think about how high-leverage it is to actually get good at assessing people in a fair way that actually taps into their true qualities. Versus, as I said, programmer style stuff is give us a red black tree reverse sorted or whatever. And in school, it might be, recite this poem by Alfred Lord Tennyson or something.
Josh Pigford: Well, and I agree. The assessment part, it’s a tough problem, right? How do you, in a fair and balanced way, sort of check the progress of someone, whether that’s a student or a potential hire. You want to remove the biases, but the solution we’ve got in place is a little jacked up.
Des Traynor: Yeah, and you know, not to sort of … your point is correct. It’s also fair that you want to assess everyone based on their strengths, but then you also this other principle says you need to assess everyone fairly so you can compare one against the other. Which means that you can’t actually customize tests and then compare people.
Josh Pigford: Right.
Des Traynor: So anyway. In general, I know purely how hard and how difficult the problem is. But I do think most startups I talk to, when I ask them how do they interview or how do they test for … you know, how do you hire managers is a great question I ask people a lot. What do you look for in a manager and how do you detect that? And the answer is so off the cuff, “I read this point in a blog post once and it was kind of interesting, so I always ask that.” Part of me is shocked but I’m like this is probably one of the most high leverage things that you do, is detect and identify the talented people who are going to manage your star players and you’re interviewing them based off a good blog post you once read. Have you considered the idea that maybe you’re not doing a great job of this?
Josh Pigford: (laughing) Right. Oh man. All right, we ended up talking about education the entire time. Let’s keep moving. So graduated, PhD program, which you dropped out of, correct?
Des Traynor: Yeah. Yeah.
Josh Pigford: And then you went to do some usability work?
Des Traynor: Yeah, that’s right. What I actually did was … the reason I dropped out was because I’d started writing this blog, which was on destraynor.com, imaginatively enough. I used to do this writing about usability and in general, usability was the buzz word for what we now call product design, or whatever today. But probably 2006 was like the web 2.0 version of this was usability. So I used to write about basically here’s all the shit software and here’s how it should be redesigned to be better. That was kind of the general theme of what I’d write about.
I think after maybe a year of doing that I got approached by a usability design consultancy in Ireland saying, “Hey, you should come work for us, here’s an exercise if you’re interested.” So I did the exercise, they really liked it, and they offered me a job, without really knowing what I was doing. I knew that I had basically gotten bored with my PhD work and I didn’t know where to go from that, because what do you do as a failed academic? Lord knows, successful academics have a hard enough time finding jobs, a career.
This looked to be some ways, like hey, here’s an out that you can always try, and worst case you can always go back to this other thing. So I tried that and then, weirdly enough, at the same time as doing that, I got to know and started talking to this other blogger at the time, in Dublin, somebody else who had a blog. And the Irish tech scene, being relatively unevolved at the time meant that of course two people who have blogs should definitely meet each other. There were only like 25 of us or whatever.
So I met this guy called Eoghan McCabe for coffee. And he was a freelance designer at the time. I had just taken a job at a consultancy that he had said was pretty good. Then we kind of kept in touch and then I did maybe a year’s work of classic consultancy, like discovery, product requirements, usability testing, all that sort of shit. You know, wearing stripey suits and fancy ties and going and meeting people and begging for business and all that sort of stuff.
Josh Pigford: Yeah.
Des Traynor: After a year of that, Eoghan mailed me, somewhat out of the blue, and said, “Hey, I’m thinking about starting my own consultancy. Would you be interested?” And I was like, “Yes!” Because again, I had just kind of plateaued. So that went on to become Contrast, which I’m guessing was the next thing you’re going to talk to me about, if you are following my LinkedIn profile here.
Josh Pigford: Yes. Well, I guess I’m curious … the Contrast thing. Was that because you guys felt like there was this need there? Or you were just tired of what you were previously doing? What was the sort of purpose for you guys to come together?
Des Traynor: From Eoghan’s point of view, it was, “Let’s build the best design consultancy that can be built. I know we can do it. I want it to be really different and I want it to really stand out.” And that’s why it was called Contrast. From my point of view, was like, “I believe it can be done, I definitely feel like I’ve plateaued where I currently am, and I’m quite inspired by the idea of taking this sort of step up to being this company that doesn’t concern itself with being the best in Dublin, or even the best in fucking Ireland, but actually just the best.” And that was kind of what we were really into.
An inspiring piece for us at the time for us was the 37signals had obviously launched Basecamp in ’03, no sorry ’05, or something like that. And we’d been following their journey and they were doing awesome shit consistently. Part of you is kind of blown away, but another part of you is like, “I kind of want to try. I kind of want to see, you know, how far off the mark are we? Where are we weak? Where are we strong?” So we said, “Let’s do it.” So I think it was August of 2008, I think, we opened the doors and got going.
Josh Pigford: Was the intent to just do consulting stuff, or was doing some sort of product thing, a la Basecamp.
Des Traynor: Yeah. The product thing was always on the cards. It was very much like we will do consulting … the three things, the three outputs we had was a blog, a side product, and consulting. And consulting was there to make us enough money so that we could run a blog and spit out side product.
Josh Pigford: So how long did you guys have to do consulting before you guys got to work on your first product?
Des Traynor: I guess, let me think. I mean we kind of had it from the start, we had bits and pieces. We launched, I think, maybe eight months after we started the consultancy I think we launched the product.
Josh Pigford: I say, like there’s multiple products. I mean, I know of Exceptional, was there anything else?
Des Traynor: We launched a load of other products that either didn’t work out or we sold. We launched a thing called Quitter, which was a tool for letting you know if someone quit following you on Twitter, which we sold. We built a product called Task 5. Task 5 was actually, I genuinely mean this, way ahead of its time.
Task 5 was like a planner that lets you identify five, and only five, things that were the most important things you could do on any given day. It was a team-based tool, so you’d add your whole team, so me, Josh, whoever, would all be like, different rows, and the columns were like Monday, Tuesday, Wednesday, Thursday, Friday. It looked a lot like Trello or like Todo, but neither of those tools existed for many years since. And you could drag and drop tasks in between people and tasks could move from one day to the other and stuff. If a day passed and you hadn’t completed everything it would automatically push everything forward.
There’s all sorts of very, very cool features in it. I hate flattering myself, but it was probably one of the more ahead of our time things that we ever worked on. That one just failed. I’m like, it failed but it was one of those ones where you’re looking at it going, there’s definitely something here. Do you ever like have an idea that you didn’t quite execute on and you’re looking, you’re like, “I’m going to see this thing again with someone else’s name on it and it’s going to fucking succeed.”
Josh Pigford: I hate myself.
Des Traynor: You get over the hatred as long as you find something else, if you find your Baremetrics or whatever. I’m sure you can let the other ones go.
But for sure there was like a funny wistful moment when I see things like, say Trello getting acquired for 400 million. I genuinely, I mean Trello’s a fantastic piece of software, it had a lot of stuff that we never would’ve touched. But at the core there was a shared idea there, that app. But I think, to some degree I still think the task … I’ve seen the literal implementation of the idea that we have since, so it’s not like it’s still there. But I think the core idea of like a very simple way for teams to share tasks, pass them back and forth, and minimize the number and all that, I think there’s some genuinely good ideas there that don’t necessarily need to get blown up the way, say the likes of another tool might.
Josh Pigford: Right, right. So Task 5, Quitter, and then Exceptional, maybe some bunch of other things —
Des Traynor: There was a few other, yeah, I can’t remember. Like Twecipe, which was like. It doesn’t really matter.
Josh Pigford: (laughing) I’m tempted to ask you to repeat that.
Des Traynor: I said Twecipe. Twecipe was a Twitter bot, again ahead of its time. A Twitter bot that you would tweet and you would tweet it with three ingredients and it would reply with a recipe over Twitter, so we called it Twecipe. So if you said like, eggs, milk, banana, and it’d reply with like some sort of recipe for an omelet or something like that, I don’t’ know.
Josh Pigford: Sure. Oh man, if only … in some sort of alternate reality, that is like the biggest thing that’s ever been created.
Des Traynor: I’m telling you, it was the future of bots back then.
Josh Pigford: Right. So Exceptional and then, it’s my understanding, say like Intercom, ultimately came out of something you guys had sort of built for Exceptional, right?
Des Traynor: Yes. That’s totally true. So like, I can tell you that story very quickly, if you want.
Josh Pigford: Yeah, go for it.
Des Traynor: So Exceptional was a Ruby on Rails error tracker, so if an exception happened in your code, you’d get notified. What had happened, what line it was. You could get SMS, a push, you could even get a tweet about it, because it was social. You could also see what users were affected and that sort of stuff. And then like as a team you could comment, you could assign it to each other, et cetera. Just sort of basic management features there.
We were the first one but very quickly a tool called Hoptoad later on, later it was called, I can’t remember what it’s called afterwards … by, anyway. There was a few others that followed us shortly afterwards … oh Airbrake. Airbrake was the one that came after.
So we basically … Exceptional has this trait, and I’m sure you probably don’t experience this too deeply. But some tools have this infrastructural-like quality which is they have to live inside whatever people’s products. And there’s a sort of iceberg-like nature to the complexity that you adopt when you build something that sits inside other people’s products. Specifically, a very buggy, big app can cause you all sorts of like … it’s effectively like a DDos on your exception handler, right?. Or, thousands of shitly built open source things that you’d had installed on your solution for free can also produce the same amount of problems, right?
Josh Pigford: Yeah.
Des Traynor: So, what all that adds up to is, you know, reliability and scalability issues, and speed issues, uptime issues, which means that we have to apologize to our users a lot. And whenever you wanted to apologize, you have to get on the database, pull out a list of active users, and then import it into Campaign Monitor or MailChimp and send out this mail to say we’re sorry we were down again, and then deal with all the replies. And the replies were always like, “Dude, I haven’t used your product in years. Why are you mailing me?” Or they would be things like, “Hey I wasn’t using yesterday and I really don’t care if it’s down or not. I only care if it’s down or not when I try to use it. And when I try to use it and it’s not there, I’ll get over it. So you can stop with these emails.” So we’re kind of like, “Shit. Why is it so hard to talk to our users and have these relatively simple conversations.”
So one day we decided that maybe instead of pushing out all these emails, when people log in, we’ll just have a little speech bubble that pops up and says, “Hey. We’re sorry Exceptional was down yesterday. We fixed a few things, we’ve improved the database. Here’s a blog post about it. Hope this helps.” We did that, and then over time, we were like, “Wouldn’t it be cool if we could see who has received this message?” And that became otherwise known as an active user list, which you can now see in Intercom today, because it’s people who have logged in to see the message.
And then over time it we’re like, “Well, you know, we don’t need to send the message to see who’s logged in because we already have this code.” And then over time, it was like, “Well, why don’t we let people reply.” And then once we let people reply, people were like, “Dude. I want this tool. What is this thing?”
And then obviously what happens when you don’t want to message everybody, you just want to message your paying customers? Well now you’ve got like targeted marketing, right? Except we didn’t call it that back then, we just thought it’d be cool to talk to your paid customers. And you can sort of see how when you start pulling on this thread, the whole idea of talking with your customers is really, really important. Why is it so hard today? It becomes very obvious.
So the next obvious iterations were then things things like, “Well what happens if a user’s not been online for ages? Wouldn’t it be cool if you could send an email to them?” And it all kind of built out. At some point, Eoghan made the point to Ciaran, I really think that this little bubble is at least as big a problem to solve as Exceptional. But potentially way bigger and way more valuable.
So at that point we ultimately sold Exceptional and went all-in on this product. We very immediately ran into a new problem, which was that we were able to build and prototype and play with Intercom on the Exceptional user base, if you like, right? Now we had no user base, we just had this concept of a problem.
So we very quickly needed to build a back end for what became Intercom, just so that we could then start seeing it in action again. And then obviously we had to get our customers and, you know, kick on from there. This is like, in terms of timelines, we’re at about 2010, 2011 then.
Josh Pigford: So how long were you guys working on Exceptional and then also on the product that would eventually become Intercom? I mean like I assume there’s this timeframe where you’re more excited about working on the little, what would become Intercom thing, than you were Exceptional itself.
Des Traynor: Yeah, I don’t know how long the overlap period was. I would say maybe six months. Maybe a little bit more.
Josh Pigford: Yeah.
Des Traynor: It was … the sad reality is neither me nor Eoghan, and to a less degree Ciaran or David, none of us were really particularly excited about tracking exceptions for customers. It just wasn’t honestly that interesting a thing. I think there’s a genuine lesson there, which is that if your heart’s not in it, you’re really not going to be able to kill it, you know?
Josh Pigford: Sure, sure. I still think it’s like, you know, there’s a lot of talk about working on solving problems that you’re passionate about. But I think so many times you don’t even find that you’re passionate about something until you’ve done something that you’ve realized you’re not passionate about.
Des Traynor: I would agree. Yeah. I think everyone … I think it’s also … some of those people mistake being passionate about building a business with being passionate about the main. As in, they fall in love with the idea of having a startup, and isn’t it cool that we now have a user base and I love using Intercom and I love mailing my customers and all that. But if you asked them, are you really into solving the length of time it takes to get a dental appointment booked, and they’re like, “No, I don’t care about that.” And I’m like, “Okay.” Well, I think your limit … I think at some point passion forms an upper ceiling for how successful you’re ever really going to be.
But you can still do very well within that ceiling. Because then you can still have a multi, multi-million dollar business within that. I just think that, you know, it’s definitely the case that when we switched to caring about helping people grow a user base and making that business personal and all that sort of stuff. I definitely, I think we all felt that we had all this whole extra chamber of energy that Exceptional couldn’t unlock for some reason.
Josh Pigford: Yeah. Sort of jumping off that, I’d like to talk a bit about bundling, and sort of unbundling software. So, something that I’ve found to be the case and we have built up Baremetrics and sort of expanded what problems we’re solving, is that customers really value being able to solve a number of problems in a single place. And I know personally I have a solid case of tool fatigue.
So you guys have multiple products at this point that traditionally have been treated as separate products from other companies. What’s your take on bundling and unbundling software, and the value of that, and where things are headed?
Des Traynor: Yeah. I mean, it’s a big, meaty issue. So in no particular order, I think businesses generally hate trying to move data around because it usually sucks and you usually lose a lot of information. So as a result, people generally tend to prefer tools where they don’t have to move the data from A to B to C to D. It’s just all in one place.
I think that’s kind of one big attraction. Now a lot of people, honestly, misinterpret that. And they think like that all data should be in one place. And they go off and they build some sort of SAP competitor and it doesn’t work because it’s just way too abstract.
The consumer version of that, by the way, is, “All your files in one place. Isn’t it weird that you have an Instagram account and a Flickr account? Put them all together.” And it turns out that’s actually not a problem, you know? For businesses however, the reason it’s a problem … it’s actually not a problem that Flickr and Instagram are in different places because your work flows … and like Flickr is a shit example because it’s so out of date. But say, Instagram and I don’t know, like Snapchat or something, or Facebook photos or whatever. The reason that’s not a problem is because people are usually doing different jobs in those tools. However, with businesses you’re actually … if you want to support a customer, you do actually want to know, are they paying or not? And that actually really, really enhances the support flow if you can make that distinction. But the reason most tools can’t do that is because you can’t connect your Stripe instance to your Zendesk instance or whatever, right?
So that’s you know … businesses really value when data and workflows are combined in a way that’s kind of multiplicatively valuable. Doing something that’s enhanced by other information is a good thing. But taking two random businesses and trying to stick them together is not, like so. Being like, “Hey we’re also your Spotify and your Baremetrics” is not useful, you know.
Josh Pigford: Sure.
Des Traynor: So that’s sort of the high level case for bundling, right? Is that you have these conjoined workflows and you have all of these sharp edges in the normal world and like … and the great big promise of web 2.0 or that somehow true APIs, all this shit would work together. But in practice, no one ever builds all that because you’d end up having full-time API engineers trying to daisy chain all your tools together.
So we … when we released Intercom this is one of the big pains that we would push forward, which is like, “Wouldn’t you like to be able to have all the data about what your customers are doing before you try to market to them? Wouldn’t you like to know who you’re supporting? Wouldn’t you like to ask questions about specific types of users instead of everyone?” And that really really resonated. And that diagram that’s on our homepage has been ripped off so many million times. That idea at its core, I think, makes sense.
So that’s kind of like, you know, that’s the emergence of bundling, if you like. And then, in general, there’s a few other bits and pieces going on. One is, when you have something like that, there was an unbundling movement for a while except Facebook split up into Facebook and into like, say, Messenger and into like other point solutions, most of which have died away except for Messenger. And there are a few other tools, like Foursquare had that famous split into Swarm on Foursquare. And there’s been a few other cases of mass aware unbundling. For the most part they’ve either been a no-brainer or they’ve been a very bad idea.
The no-brainers, like Facebook, and Messenger, can’t really compete with the WhatsApp’s and Snapchats and WeChats and all that other world as a separate app living on a tab in Facebook. So having its own kind of place makes sense, as long as you can make the integrations correctly. So I think in general, unbundling was actually overrated as a thing.
It only really makes sense when you’ve happened to have created a tool that has multiple disjoint workflows on the same platform. And by disjoint I mean they really have nothing to do with each other. And for some reason combining them is causing you a big problem. And the only reason combining really causes you a big problem, assuming like it’s not an architectural issue, is that in mobile you have very limited real estate. So to actually sacrifice so much screen to this other half of the thing that most people aren’t using, is a waste of time. So that’s why you would split it up.
In general, business tools tend toward bundling. That’s what —
Josh Pigford: Yeah, and I totally agree with that. I mean, I think what we’ve seen newer businesses do is take the advice to say that you should get really good at solving one thing. And then they build this hyper-specific tool that, sure, it solves a problem really well but at the expense of, you know, being another thing somebody’s got to sign up for.
Des Traynor: And that’s like the silent cost. That’s such a good point.
Josh Pigford: Right.
Des Traynor: I think I heard you speak about this recently or blog about this recently but that’s such a silent cost that no one ever knows. Which is the actual overhead of just being another tool in the chain is actually quite significant and so like, I could tell you like, you can have the very best [inaudible 00:34:08] email sender but if you already have Baremetrics, you’re like, “You know what? If these guys can do it, just stick it on here because I don’t want yet another fucking thing to log into and to tweak and configure and have another account and all that sort of stuff and another bill and another invoice.”
So I think that’s genuinely a thing, that you know … and the conclusion of that, which people can occasionally get depressed by, is something like, it means that, like the proliferation of tools versus the consolidation of tools is, in some sense, going to be a trade off of specificity for solution, versus a simple work life where you only have five or ten key apps you use, versus the 50 or 60 that most people use today. Which means that basically, it’s definitely true that the best product won’t always win. And you can even like … the consumer example of this is maybe like the Instagram stories versus Snapchat. Like it’s getting harder and harder to see why Instagram stories isn’t good enough for your average person and why they still need Snapchat, you know?
Josh Pigford: Yup. Why do you think that Intercom has been able to sort of stand out in all these different markets? Is that because of the bundling that you guys … you’ve got the live chat stuff, you’ve got sort of help desk stuff, I mean. Like why have you guys been able to sort of buck the trend, in that sense?
Des Traynor: So what’s the trend you’re referring to? Just, when you say —
Josh Pigford: I’m saying like, you think of, you’ve got … sort of the specific tool thing, but I mean the fact that a lot of those were specific things that were big and you guys just kind of came in and said, “Nah, we’re just going to do it all” and then you’ve done it really well and succeeded in that.
Des Traynor: Yeah, I think that the innovation with Intercom has been mostly around making them all work together. And the key insight being that the data that each thing brings to the next is really valuable and people aren’t getting it any other way. So like, having a singular view of your customer, where you can talk to them on your website, convince them to start a trial, send them their email, support them all the way through their product, you know. And then market to them if they’re not using certain features and then announce your next launch and put them on your newsletter. And you know, to do that all from one place is surprisingly valuable and surprisingly useful. But I don’t … that’s my core answer.
You know, in a lot of cases we were just a better product. And that sounds self-serving but you know, if you considered a world pre-Intercom, what it looked like to talk to a business, the idea of having a full-on consumer-grade messenger experience on the site so you could talk directly to a fan or see where they’re from, exchange photos, files, screenshots, all that. It just wasn’t common. It just wasn’t there. And it is now there, but I think we genuinely did raise the standard of what it meant to talk to a business online. And for that we definitely got a lot of attention and a lot of traction.
Josh Pigford: Yeah, yeah. So content has played a big role for you guys. You prolifically publish content on your blog, you’ve published a number of books. You’re on the second world tour, which is essentially like a live event version of all of the stuff that you guys have published.
Des Traynor: Yeah.
Josh Pigford: So producing all of that is this incredible undertaking. How did you guys come to use all of those things as this significant marketing channel for you guys?
Des Traynor: It started actually back in Contrast, really. We always felt like, you know, if we could communicate good ideas and fresh thinking to the world, the world would respect us. And then when it came to like, “Hey, we need someone to design our product,” that they might hire Contrast. And the second version of that was, you know, in August 2011, we were like, “Hey, we need people to install Intercom so that we have some customers now. How can we do that?”
Well, we’re going to write ideas that targeted users will want to hear. So we wrote ideas for startups, “Here’s how you grow users,” “Here’s how you think about naming,” “Here’s how you get people to use a feature,” “Here’s how you think about retention.” I think I wrote 93 of the first 100 blog posts on the Intercom blog. And it was all just what fresh thinking or sharp ideas do we have that startups will read and that will resonate. And then every now and then when we’re finishing a piece about how to reengage a user, we can be like, “P.S. this is something Intercom does.”
That basically worked, is the most honest answer I can give you. People connected it to ideas, people regard the blog highly, they read it in the hundreds of thousands, frequently. Basically, I think the strategy was, it’s very different to the classic content marketing strategy, but it was very much like, “We’re only going to write stuff that we think is really useful. And when we have a really useful idea, we will write it and we’ll treat it with the same priority that we treat anything else.”
So people often say some version of, especially when I’m doing a media interview, it’s always like, “Where do you get the time to write the book, to write the blog, to write the” and I say it’s always the same place that the engineers get the time to write the source code.
Josh Pigford: Right right.
Des Traynor: It’s just fucking important, you know.
Josh Pigford: Yeah.
Des Traynor: So first it was very genuinely part of my job, for quite a while was, make sure that people are hearing about Intercom and talking about Intercom, even if they don’t know what it is yet. Because we didn’t even know what it was yet. We were calling it like a CRM and messaging tool at the time or something. It was just like make sure that, at the very least, when people see that smiley face, and that icon, that this is not for the first time.
We were having a few posts spike very high on Hacker News, we had like Daring Fireball link us up in the early days and so that kind of got us our seed traffic where it was like, “Okay, this thing is for real now. People are reading everything we write.” And then the books kind of fell out of that naturally, the events came out of that naturally as well, the podcasts too. And now it’s like a team of four, soon to be five, who are responsible for choosing all of the content. And they also work with our events team who make sure it all happens, live as well.
It’s a full-on chunk of our marketing and we respect it as such. And I think when people get content marketing wrong, it’s because they treat is as this, “Oh we need to get the blog going. Quick, hire some fucking content marketers to spit out some bullshit pieces.” That’s just such a brand destructive thing to do.
We always treated it with a good degree of respect and I think it’s a long-term versus short-term thing, but it does work.
Josh Pigford: Well that’s what I was going to say. The long-term play … it can’t be understated. It takes years, I mean really.
Des Traynor: Yeah.
Josh Pigford: For it to really become this thing. Like, you might have a couple of, you know you mentioned Daring Fireball and other, like link it up and you get these little spikes. But I mean, it is a really long play and I think most people end up getting burnt out on it because they put all this effort into two or three … they don’t really get anything from it, and then go like, “Eh, it didn’t work.”
Des Traynor: Yup. Yeah no, that’s so true. But like, most people don’t even have the patience to last a year, let alone two or three before they give up. But people are looking for a smash hit and it’s always the same story. It’s like, “Hey Des, how do we get a blog like Intercom?” And I say, “Oh well, you research it, the sort of areas you’re selling into really well, write stuff they want to read, a couple inspiring pieces,” blah blah. And they’re like “Okay well, if we can’t do all that, what do we do?” And I’m like, “I don’t know.” And they’re like, two weeks later, I get a mail saying, “Hey so we hired a content marketer and he wrote this piece, can you link it up on Twitter please?” And I’m just like, “That’s not how it works. Sorry but that’s not how it works.”
Josh Pigford: Our best posts have been the ones where like I’ve, in my head, committed to publishing something basically every Wednesday and then like Tuesday, I mean, you know, less than 24 hours before, I’m like, “I got to shove something out.” And then I just start writing.
Des Traynor: Yeah. That’s the idea, like, there are different models for how volume games work. So say like, Hollywood spits out like hundreds of films, but just a few smash hits every year. And that’s one model. If you take, say, writers, like you know, if you write one great novel, you’re down as like, you’ll be remembered as a famous novelist, even if every other novel was absolute dog shit.
Because people remember your peak there, people remember your averages in some business. If you’re like a mediocre soccer player who had one great season, you’re basically a mediocre soccer player. For whatever it is, people think that blogging is like … every piece has to smash up the scoreboard or blow the world away. That’s actually not true. I think what happens is you will see people eye roll and unsubscribe and unfollow if you publish junk. And it’s a negative thing. A bad piece does more damage than no piece, and I think that’s something people get wrong.
But at the same time, a good piece is worth publishing always … you only need a few greats here and there … the piece people get most wrong, is setting a specific quota, like 10 posts a week, or whatever because they heard some other company did that. And seven of those are shit, and then the whole blog goes to nothing very quickly. It’s very much a reputation game. You have a good blog and you yourself have a good brand and a good name because you’ve been spitting out quality stuff for [inaudible 00:43:40] for two, three years.
If you start sharing shit, you’re done. No one will say it to you, but they’re all going to quietly unfollow you. That’s just how it works.
Josh Pigford: Yup. Yup. Was there any singular inflection point for you guys where growth just significantly changed?
I think the other one was when we were in beta pricing for one year, where we were just charging $50 flat fee, no matter who you were. Once we actually came off that number, like, “Alright let’s start charging like, bronze, silver, gold. Like 50, 150, 450 or something like that. That was when like I felt like … the first time that I felt like real revenue was coming in for the business. There are moments when you’re like, “Huh, this is going to be bigger than I thought.” But there’s definitely been no one marketing tactic where we’ve turned a corner. Kind of connected to the previous point like, blogging isn’t the thing where one day everything clicks and you get this … you turn this corner. It’s like a slow, slow ramp that will get you there eventually, but you won’t see any big, massive uptick because of one blog post.
Josh Pigford: Yup. What’s been the hardest thing for you guys about building Intercom?
Des Traynor: Well, like, definitely just some engineering wise, there’s some very big challenges. Like we have very, very big customers using us for very, very big and important news cases, that involve sending like 400 million conversations are held through our platform, we have over a billion user records, we have all sorts of like genuine challenges. Like that we try to support 17,000 customers. So there’s lots of challenges that are just natural scale. I think we’ve struggled, or I’ve struggled with like the things that we can’t do that I also know happen to be brilliant ideas.
Josh Pigford: Mm-hmm (affirmative).
Des Traynor: Like there’s a lot of tools … even when like, in three minutes on a whiteboard, you could probably come up with two to three, five to ten million dollar businesses that are missing from the Intercom platform. We know about them all and we’re not doing them. And that can be frustrating at times, you know? That’s the whole thing, though. We’re taking them and just focusing on the pieces that matter most. But yeah, genuinely … the piece like … we have a lot of like, frankly like copycats or rip-offs or whatever.
Josh Pigford: Sure.
Des Traynor: And I think they all hit a wall at some point because actually it’s a fucking hard product to build. And you always get these questions like, “What’s the secret?” Or “How’d you manage to get past this problem?” Or like, “How did you manage to get past it?” We’re six years old, we’ve been at this for a long time, we have 350 people trying to work on this. It’s not actually like, “Oh there’s one top tip,” or “You didn’t find that PHP library? We did.” You know, it’s not … it’s like it’s just a fucking hard problem, I’m sorry.
It’s definitely … there’s no shortage of challenging tasks you’ll meet along the way, for sure.
Josh Pigford: You mentioned, you know, sitting there with a whiteboard for a little bit, you could come up with five to ten million business that you could add to Intercom. Is the reason to not add those because of trying to keep the scope, basically preventing scope creep? Or is it because of those engineering and scaling challenges of like, making that new product work across tens of thousands of customers?
Des Traynor: It’s bandwidth. We’re very stable right now, our reliability is rock solid, we had a really, really good quarter like five nines in most areas. From a scope creep point of view, I think our new, our most recent refresh and redesign has kind of neatly separated the products into their own sort of contained areas, which paves the way for us if we were to ever add more products. But right now one way to put it is like, marketing automation is a multi billion dollar business, customer support is a multi billion business. How many of these do you want? You know?
Josh Pigford: Yeah.
Des Traynor: But like, you know if we take any example of something that we could easily layer on, in itself would be a whole another group of … it’d be like, we’d need to hire like at least 10, 15, 20 more people to run it. It would need to be a whole new, all good. That’s just to build it. Then you have all the fallout, you have to have a whole marketing team, you have to increase your customer support team proportionally. You need several lines of business. You need to have sales reps working on it. It’s like genuinely bandwidth and like, you know, let’s nail the areas we’re in and then we can work on the next one, is kind of what the thinking is.
But at the same time, it definitely frustrates me when I have to use a tool outside of the Intercom domain, because I’m like, “Damnit, this should be on Intercom,” you know?
Josh Pigford: Sure.
Des Traynor: I’m sure
Josh Pigford: Was there a time — yeah yeah yeah, for sure. Was there a time that you guys thought that Intercom wasn’t going to make it?
Des Traynor: No. As in, like right up until we launched it, it was a big, “Will they, won’t they?” Sort of thing. We had like no users or whatever. When we launched, we had some users but like … once it got going, it never really stopped. But there was definitely, like the pessimism and doubt of like … you can’t really afford yourself too much time to think like that in the early days. You really need to be somewhat deluded to give it a try.
I’d say for the first six, nine months it was kind of anyone’s guess if this thing will work. But as I said, once we launched it and people starting using it and people started seeing it, it’s caught on like wildfire, it hasn’t really looked back.
Josh Pigford: Yeah. What’s the next year look like for you guys? What stuff, not necessarily product stuff in the pipeline, but like what’s a big focus for you guys?
Des Traynor: For me, genuinely, we still have to do the North American part of the world tour. We obviously will have more content ready, projects to work on. There’s obviously some big product stuff coming this year as well, which we’re probably not going to talk about for a while.
Josh Pigford: Yeah.
Des Traynor: You know, we … right now it’s three offices, we’ll probably have to open one or two more offices to cover timezones and/or to attract talent. So I think that’s like, a lot of the boring company hygiene stuff is definitely going to sit there for a while, while the product team working to kind of kick off the way they do. But yeah, aside from that, me personally, my role, I run marketing at the moment, so a lot of what I’m thinking about is all the marketing of our projects. Which is, you know, you’ll see some of this stuff drip out, but like the biggest area of focus right now is making sure we do kickoffs, America world tour, America, Australia, and Canada. And then yeah, we’ll be … I don’t actually know exactly what we’re planning on the content side of things. But I know we’re trying different things that maybe won’t be … we just did our first printed book and we might actually do more printed books.
But we’re also now we’re going to come back and maybe look at different formats yet again.
Josh Pigford: Cool. That sounds awesome. Well Des, that is all that I have got, sir. Thanks for hopping on the call.
Des Traynor: No problem Josh, and I wish you all the best with Baremetrics. Congrats on the one billion, by the way.
Josh Pigford: All right, I appreciate it man.
Des Traynor: Thank you.