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11 minutes | Oct 8, 2020
E122 – Trustpilot CEO Founder Peter Mühlmann – 3 of 3 – Market beats Team beats Product
Peter Mühlmann: It takes 10 years. it takes two years or three years usually just even to know if you’re right about it and if it actually works. Stephen Cummins: Yeah. Peter Muhlmann: Like you’re not going to figure out if it worked or not in five or six months. If you think you do, then… then that’s usually not enough time. And then you’re just failing by default. And so, so you need to mentally prepare yourself for that. And then, I will say that… the market beats the team, beats the product. In the sense that picking the right market is often more important than anything else. But then getting the right team in place is… is more important than you having a good idea or not because it’s the initial idea you have is very long. Well, it’s going to evolve. It’s not like you’re sitting in the bathtub with the rubber duck and saying this is what the company is and what it’s going to do. It is rather the sum of a 1,000 ideas. And then 990 of them are not yours. Stephen Cummins: Welcome to 14 minutes of SaaS! The show where you can listen to the stories and opinions of founders of the world’s most remarkable SaaS scale-ups! This is episode 122 of 14 Minutes of SaaS, the last of 3 episodes where I chat with Peter Muhlmann, CEO & Founder of Trustpilot ======= Peter Muhlmann: But what we do see for software in general…. is that if they have thousands or tens of thousands of customers, Stephen Cummins: Yeah. Peter Muhlmann: We are generally a great tool for them to invite their customers to tell them what they think about us. Stephen Cummins: Okay? Peter Muhlmann: And… and we also see that it’s a growing market for us… because they have relied on case studies and they have relied on their own websites to sell their product. Stephen Cummins: Yeah. Peter Muhlmann: But I definitely think the evolution of this is going to be to rely on your customers to sell your product. Stephen Cummins: Absolutely. That’s a big part of the buying decision. So, yeah, reviews. So how… tell us a little bit more about how Trustpilot makes money? Peter Muhlmann: So we’re a freemium SaaS service. So, that means that for free, you can invite your customers to tell them what they think about you. Stephen Cummins: Okay. Peter Muhlmann: You can respond to reviews. You can flag them to our team that will look at the reviews Stephen Cummins: Yep. Peter Muhlmann: And add a little bit about your company. So is there anything I can just get started and use the platform? So then we have various pay services. Where you pay for example, for insights into your business. So we have some rather sophisticated… software that can actually read all the reviews. And what’s… what’s fantastic about that is that you find out what’s good and bad about your business in real time. Stephen Cummins: Okay, Peter Muhlmann: So for example, we’ve had some great examples where we were able to tell an online car rental company that you are now beginning to get bad reviews. It’s an Italy and it’s because when people return their cars, their staff is rude, Stephen Cummins: Okay. Peter Muhlmann: that goes directly to the CEO..and… and automatically. Stephen Cummins: Yes, Peter Muhlmann: And two weeks later, we can now tell them; whatever you told them that worked. The staff is no longer rude. Stephen Cummins: Okay. Peter Muhlmann: And… and being able to monitor that… And whereas people usually do that and surveys and so on. And it can be very reactive and slow. The other thing that we charge for is embedding the reviews into all your systems and onto your website so that potential customers can see them. So, for example, if somebody is monitoring how… customer service agents are performing …or what customers are calling you about… being able to connect that and knowing have they submitted a review or not is powerful? Stephen Cummins: And I guess they can decide to have that internally or externally if you… Peter Muhlmann: Yeah. So it’s like I’ll… I’ll give you an example. So, so, for example, we have postal companies where they say, we’d like to know how every mailman is performing and how every delivery center is performing. And we’d like to know that instantly being able to see that is powerful. Stephen Cummins: Absolutely. Peter Muhlmann: And… and then there is the ability to showcase your reputation to visitors visiting the website and embedding that into… into your website and… and make it in a way that makes sense for that website Stephen Cummins: Absolutely. So you’re very much a B to B to C in the majority. A case here that your business really is… is really there? And, you know, when did you really start to, I suppose, you know, you know, pick a brand new, when did you hit ten million A&R like how long… how long did that move up to nearly 100 million A&R really taken you? Peter Muhlmann: God, I don’t even remember. I have to think about that. It definitely is the first couple of years we were really small and… and really slow and didn’t know how to just sell it. And then I think when we raised, we did a five…four or five million dollar round in 2011-2012… is when we started to… to get real traction. Stephen Cummins: Yep. Peter Muhlmann: And so it’s probably been between that and a couple of years into the future. Stephen Cummins: Okay. Very good… very good. So taking it back to your good self, Peter, do you find it difficult to keep a good…Maybe I should’ve asked somebody else to give it to… to balance your life in terms of physical and mental health when you’re you know, driving a rocketship like this. How do you do that Peter Muhlmann: Yeah, that is the ultimate challenge I find is… is staying sane and healthy. Yeah, because the… the business will always be able to take more from you then you can give it. Stephen Cummins: Yeah. Peter Muhlmann: There is never a time when you say I’m done. There was never a time when you say, when you say like, is there really nothing you can do that it will improve something here or there? No, that list never runs out Stephen Cummins: Sure. Peter Muhlmann: And sometimes… even… there’s just not the question about what you could do… there’s also one you absolutely must do for the business to continue to exist. And… and I find that… that initially you don’t appreciate what a long run it is… that… that this is not a three or five year thing and it’s not even a ten year thing. This is a twenty year thing. And 20 years is a very… very long time. And… and so, so what I find is the trick is that I really need to focus on maintaining a good cadence. So well, I obsess over what I eat. When I eat. When I sleep. Stephen Cummins: Yeah. Peter Muhlmann: That I sleep well. Stephen Cummins: Yep. Peter Muhlmann: That I get exercise and… and that I stay balanced. And also because I find that as the company grows, it is better that I take fewer decisions but take those decisions well. Stephen Cummins: Okay. Peter Muhlmann: And so, so, so I think we’re now at a stage where it’s slightly less about the hours I put in and slightly more about the quality of those hours. Although I will admit that when you are in the early stage, it is the grind. Stephen Cummins: And there’s… there’s of course, a lot of extreme opinions either side of that, but extremely, you know, we’re growing up and we decide how long we’re going to do that, burn the midnight oil for them, and we decide how to… how to sort this out there. If there’s one personal quality that you have, Peter, that you feel has helped you succeed over time what would that be? Peter Muhlmann: I think I’ve been good at giving space to others and recognizing what they’re good at and then letting them run with their ideas and their professionalism. And so I was never afraid of hiring somebody who was better than me, or smarter than me, or more experienced than me. And so that means that I have brought some incredible people onto the business and that I think that’s also part of the reason why they love working for the company is because they feel trusted. Stephen Cummins: So you’re a pilot that’s invested trust into your passengers and as a result, they’ve become a lot more than passengers. Peter Muhlmann: Exactly…No, but I thought, I find I’ve… I’ve been very… very good at creating a place where people feel it’s also their company, Stephen Cummins: Yeah. Peter Muhlmann:And it’s a place that they care about and that they care about improving, you know? Stephen Cummins: Okay. Excellent. I’ll… I’ll just take up one more minute of your time. I have one last question. If you were to give a little bit of advice to anyone coming over to you and saying, “you know, what I’m thinking of leaving this company and setting up my own business” What’s something you feel you’d always mentioned to them as something to remember when they do that Peter Muhlmann: It takes 10 years. Stephen Cummins: Okay? You’re not the first person to tell that actually, it’s kind of a magic number that 10 years isn’t it? Everyone thinks it can take three or four. Peter Muhlmann: Yeah. Yeah, but… but… but it… it takes a, it takes two years or three years usually just even to know if you’re right about it and if it actually works. Stephen Cummins: Yeah. Peter Muhlmann: like you’re not going to figure out if it worked or not in five or six months. If you think you do, then… then that’s usually not enough time. And then you’re just failing by default. And so, so you need to mentally prepare yourself for that. And then, I will say that… the market beats the team, beats the product. In the sense that picking the right market is often more important than anything else. But then getting the right team in place is… is more important than you having a good idea or not because it’s the initial idea you have is very long. Well, it’s going to evolve. It’s not like you’re sitting in the bathtub with the rubber duck and saying this is what the company is and what it’s going to do. It is rather the sum of a 1,000 ideas. And then 990 of them are not yours. Stephen Cummins: Yeah. And of course, market beats team beats product data… data, backs that up market is really timing. So fantastic, Peter Muhlmant. Thank you so much for giving us your time on 14 Minutes of Saaa. Peter Muhlmann: Fantastic. Enjoyed being here. Pleasure. Stephen Cummins: Thanks a million. You’ve been listening to 14 minutes of SaaS. Thanks to Mike Quill for his creativity and problem solving skills, to Ketsu for the music and to Anders Getz for the transcript. This episode was brought to you by me, Stephen Cummins. If you enjoyed the podcast, please don’t forget to share it with your network, subscribe to the series, and give the show a rating. *Also big thank you to Hallie Therrien for proof-reading transcript! Listen to 14 Minutes of SaaS on Spotify / Apple podcasts / Google podcasts / TuneIn / Stitcher https://twitter.com/AppSelekt
14 minutes | Oct 8, 2020
E121 – Trustpilot CEO Founder Peter Mühlmann – 2 of 3 – Embracing Negative Reviews
Peter Mühlmann: It’s ok to get negative reviews. A Actually negative reviews can be more valuable for you than positive reviews. Stephen Cummins: Sure. Peter Muhlmann: So for two reasons, first of all, we… we did an AB split test where we’re… we’re showing consumers a page with one negative review. Stephen Cummins: Yeah. Peter Muhlmann: And the other page has zero reviews. And then we do a split test that says “so which one are people more likely to buy from?” Stephen Cummins: Okay. Peter Muhlmann: And people are far, far more likely to buy from the one with one negative review. Stephen Cummins: Okay. That’s interesting, Peter Muhlmann: Right? And because it is better to know… Everybody knows that people aren’t perfect. Everybody knows that sometimes people make mistakes. Stephen Cummins: Yeah. Peter Muhlmann: The… the notion that… that, oh, you have to be perfect is actually not believed by your customers. Stephen Cummins: Welcome to 14 minutes of SaaS! The show where you can listen to the stories and opinions of founders of the world’s most remarkable SaaS scale-ups! This is episode 121 of 14 Minutes of SaaS, the second of 3 episodes where I chat with Peter Muhlmann, CEO & Founder of Trustpilot. And then we have such a multitude of emerging markets. So people say, “Hey, I have a doctor on the iPhone, people want to know, Does it actually work?” Stephen Cummins: Yes. Peter Muhlmann: People saying, “I have this self storage company for you, people will want to know, does it actually work?” And all though we… we try in our go to market approach to be rather disciplined about which industries or sub-sectors we’re… we’re… we’re approaching… Stephen Cummins: Yeah. Peter Muhlmann: Because… because the dynamic. So that… that if you have most… content that most companies within that industry becomes more relevant for the consumers and for the businesses. So there’s a self reinforcing effect there. Stephen Cummins: Absolutely. Peter Muhlmann: But sometimes we just see whole industries just self select to go on. So for example… just some… some oddity, the mobile phone recycling industry at… at some point, all the companies at once decided Stephen Cummins: They hit some tipping point. Peter Muhlmann: Yeah, exactly. That they needed to use us; that was the leading company in… in the category that started to use us and then five or six others wanted to… just went on board. Stephen Cummins: So, is that a strategy? Where you can get one major company in one industry to get in and then this kind of fomo for the rest of them. Peter Muhlmann: That can certainly help. Stephen Cummins: Okay. Peter Muhlmann: That can certainly help. Stephen Cummins: And how do you… you know, because obviously brand equity is built around trust, Peter Muhlmann: Yes. Stephen Cummins: Not just the name but the nature of reviews. What are the things you do to try to protect that? Because nothing is 100% watertight but what are the things you do to try and protect that at the moment in terms of… Peter Muhlmann: Yeah, so we… we invest enormously into ensuring the integrity of the content on the site. Stephen Cummins: Yeah. Peter Muhlmann: So, there are many dimensions and so the first of all is just ensuring that people are as unsuccessful as entirely possible in manipulating the system. Because since consumers care so much about this, of course, sometimes people will also try to have more sinister motives and try to write fake reviews of them. So the way you should think about this is very much like a bank is preventing credit card fraud. So, you may go to a supermarket and use your credit card there and then your bank says, like, “we blocked it because five minutes later it was used in China, there’s no way you can have traveled to China in five minutes.” Stephen Cummins: Yeah. Yeah. Peter Muhlmann: So, so that’s weird. So what… what they, the banks are doing is they’re looking at data of what typical behavior looks like and then they have statistical patterns that are catching anomalies. Stephen Cummins: Yes. Peter Muhlmann: And so we do the same. So, let’s say that there is a company in London and usually they have a UK based audience or a company in Paris that usually has French customers. Then suddenly, they’re getting a ton of reviews written on the other side of the world. That’s weird. Stephen Cummins: Yes. Peter Muhlmann: And now that’s just one data point. And then we have hundreds of these data points that we look at and so what that means is that it can be virtually impossible for us to detect if your friend goes in and writes a glowing review off your podcast but if you want to have hundreds of good reviews, so that it actually matters, it’s very hard not to trigger the data points. Stephen Cummins: Absolutely. Peter Muhlmann: The other one we’re… we’re… we’re trying to do is we’re actually telling the businesses it’s very much a mind… that it’s okay to get negative reviews. Actually negative reviews can be more valuable for you than positive reviews. Stephen Cummins: Sure. Peter Muhlmann: So for two reasons, first of all, we… we did an AB split test where we’re… we’re showing consumers a page with one negative review. Stephen Cummins: Yeah. Peter Muhlmann: And the other page has zero reviews. And then we do a split test that says “so which one are people more likely to buy from?” Stephen Cummins: Okay. Peter Muhlmann: And people are far, far more likely to buy from the one with one negative review. Stephen Cummins: Okay. That’s interesting, Peter Muhlmann: Right? And because it is better to know… Everybody knows that people aren’t perfect. Everybody knows that sometimes people make mistakes. Stephen Cummins: Yeah. Peter Muhlmann: The… the notion that… that, oh, you have to be perfect is actually not believed by your customers. Stephen Cummins: Yes. Peter Muhlmann: They… they know you’re just a human and sometimes you’re a little…you may…but not knowing everything. That’s really what… what scares people. So, it’s a little bit, like, think of yourself as if you’re buying a digital camera and it’s a really cheap one. Stephen Cummins: Yeah. Peter Muhlmann: You probably know, maybe the battery life isn’t so good. Maybe the camera isn’t so good either, but you’re okay with that because it’s really… really cheap. And you just like to know where it’s not as good and then be okay with that decision. And… and the other reason that negative reviews are really valuable is that … it can signify a mindset in how you respond.. Stephen Cummins: Yes Peter Muhlmann: And… and so we find that responses to negative reviews can be more powerful than 10 positive reviews. Stephen Cummins:Yes. Peter Muhlmann: Again, because people always know that things go wrong. So it’s not about they want things to never go wrong, but it’s how does the company react. Stephen Cummins: Okay. Will, the company go to war with… with you as a customer and say, “Yeah, but you forgot to read page 17 of the terms and conditions where it clearly says that you have no right to complain about this.” Stephen Cummins: Okay. Okay. Peter Muhlmann: Or are they the kind of company that says, “Really sorry that you had a bad experience; let’s fix it and here’s a bottle of wine and some flowers” that… that… that is much more powerful than ten good experiences. Stephen Cummins: Absolutely. And, you know, I did notice something pretty powerful and positive that you did. Which was an obvious thing a company is going to do, of course, is come in and start flagging every negative review and I saw you built something into the platform this year. I think, to actually combat that which is obviously very strong… a strong thing to… to do as well. Peter Muhlmann: Yeah, because again, I think… I think what… what consumers… it’s really important that they realize is that how a company is using the online media will really say a lot about how, what… what its’ mindset is. Stephen Cummins: Okay. Peter Muhlmann: And so in this case, for us, the… the thing is that so everybody can go in and write a review on Trustpilot. And of course, it has to be like that because it should be up to you if you want to write a review of the business, not if the business wants you to write a review of a business. Stephen Cummins: Yeah. Peter Muhlmann: So the openness of the platform is paramount. But then because of that, there has to be an opportunity for businesses to say, “actually this person didn’t buy from us or this person wrote some crazy things that are not okay to write.” Stephen Cummins: absolutely, right? Absolutely. Peter Muhlmann: And we will then take a look at that. Now, some companies then abuse that and takes it too far and just says everything is wrong. Every single negative, like, is either written by the competitor or just didn’t happen. Stephen Cummins: Understood. Peter Muhlmann: Until we started to flag that and that’s actually been really popular by consumers. Stephen Cummins: Absolutely. No, no, that… that makes total sense. Now, there’s no doubt you bring value to the market and, you know, on the consumer side, I can see it. And even on the small business side, I see it because you’re kind of evolving because you were so early in this. And by the way, I believe the consumer, I totally buy… believe what you said, the consumer leads the B to C leads B to B by the nose always, they’re always more innovative and they’re always ahead. Well because you were in there your user base, a huge method you user would be in the consumer or a small business space. So I’m gonna… I’m gonna give you a challenging question, but before I say, it… I will say that there’s no doubt that you bring value to the market. You’re $193 million investment. You’re almost $100 million A&R, I believe, you’re knocking on that door. And you’re, yeah, you’re growing your staff 20% year after year…more than that. But on the B to B, you know, I’m a B to B SaaS guy and, so, I had a look around and I… I did find a category CRM and I had a look in there and, you know, I saw a bias towards the smaller companies because, you know, for example, I looked at Salesforce and it has an incredibly low review and the reviews are really about… they’re just one thing they’re not like they’re not going into a huge amount of detail. Now we’re talking about a largerB to B enterprise play. And then I looked at Pipedrive, which by the way is a great company, and it gets great reviews in there. But Pipedrive would be for smaller businesses, small to lower medium sized businesses. I’ve interviewed one of the founders; brilliant company, but as a CRM isn’t even a complete CRM. It’s a serum for salespeople and a brilliant one and it spotted a hole in the market which Salesforce wasn’t addressing for sure. But, you know, Salesforce is a phenomenal CRM there. It doesn’t really have anything close to it. I know because I’ve worked in the domain for years and years. It gets absolutely torn apart on the platform. And… and I think part of the reason is that,you would be more on the small business side of the consumer side and when you get to that enterprise scale, you probably need a bit more depth and a bit more, a much deeper feedback. I know the flip side of that is that might be a barrier to people actually giving reviews. What would you say to that? Peter Muhlmann: Okay. So there’s a lot to answer to there. So first of all… Stephen Cummins: It’s because I tried to be diplomatic there…because I’ve looked at some of the other categories and there’s brilliant stuff in there. But this was something that I flagged personally. Peter Muhlmann: Yeah. No, there, there was so much to go into there. So so let’s start. So…the easiest thing is just the quality and the indepth of the reviews. So, something that you will definitely see from us is that we want to invest into creating a higher quality of review. So that, for example, if you’re writing something, we will start nudging the user and say, “hey, but what about this? Or what about the delivery” and… and ask you to comment deeper… that’s some work with that will likely start next year and that can hopefully add some more flavor to the reviews? Stephen Cummins: Is that part of why you’re here? Nope? Peter Muhlmann: Nope. That’s just a part of the response. Stephen Cummins: Okay. Peter Muhlmann: And then the other part of it is that we do see that the larger companies are sometimes slower in picking up… and engaging on the platform. Whereas, the smaller companies are more fast moving and understand that it matters. Stephen Cummins: Yes. Peter Muhlmann: So, so, what you will see is that for… for some of the very… very large companies they maybe say, like, “Okay, we’re engaging on Facebook and we’re engaging on Twitter and that’s it.” And it’s going to take Trustpilot another couple of years before we get to that size. But I will say though that the large companies in today’s world are wrong when they’re taking it for granted that they can just rely on the power of the brand. Stephen Cummins: Okay. Peter Muhlmann: Because imagine for example, that in… in… in… this doesn’t matter which country you live in. Imagine that you’re a customer at the largest bank or you’re a customer at the largest CRM system… Stephen Cummins: Yeah. Peter Muhlmann: Being offered in that market… or customer anything…we’ll just say the largest. Stephen Cummins: Yeah. Peter Muhlmann: And if you have a problem, how good to expect the customer service is going to be from 1 to 10? How much do you expect that they care about you? And it doesn’t matter if you’re a B to B or B to C. And so the answer is that actually you don’t expect that they treat you as anything but a number. And so, I think that the opportunity for the large companies here is that they need to engage so that they show that they care. Stephen Cummins: Okay. Peter Muhlmann: Because if… if… if… if… if there’s one thing that I see these companies do wrong, it is; they don’t engage and so the question is …it may not be that… that… that we are a 100% accurate reflection of… of that product. Stephen Cummins: Well nobody’s 100%… Peter Muhlmann: Exactly nobody… nobody is. Stephen Cummins: There’s no perfection here. Peter Muhlmann: But… but I certainly think that everybody would be wiser and smarter if the company would engage and… and share their story and show how they deal with those complaints. Stephen Cummins: Okay Okay. Okay. and you’re saying starting next year, so is that… is that an area? Because I mean you’re so widely spread? And the barrier to kinds of submitting reviews is… is… is low, which the, on the positive side, it’s you know, you have a tremendous volume of reviews which makes for a kind of a fairly democratic situation and certainly makes your business stronger because there’s an awful lot of data there. So are you going to go after that space a little bit? A bit more bit deeper on the I’m… I’m talking with the midsize to, kind of, enterprise B to B? Kind of type… Peter Muhlmann: So, so, so the… the type of… of setting, where we do really well is when they have a lot of customers. Stephen Cummins: Okay. Peter Muhlmann: So, so we’re not, so, so for example, I mean, this is not B to B SaaS. This is the very opposite of B to C Saas. Stephen Cummins: Of course. In the next and concluding episode 3 with Peter Mühlmann, we learn why markets beat the team beat the product. Our only sales people will be our customers. Peter Muhlmann: But one hundred million dollar mining equipment is never going to be something where you will add a great deal of value because it’s a really a one time investment people are making You’ve been listening to 14 minutes of SaaS. Thanks to Mike Quill for his creativity and problem solving skills, to Ketsu for the music and to Anders Getz for the transcript. This episode was brought to you by me, Stephen Cummins. If you enjoyed the podcast, please don’t forget to share it with your network, subscribe to the series, and of course give the show a rating Listen to 14 Minutes of SaaS on Spotify / Apple podcasts / Google podcasts / TuneIn / Stitcher *Also big thank you to Hallie Therrien for proof-reading transcript! https://twitter.com/Stephen_Cummins
16 minutes | Oct 8, 2020
E120 – Trustpilot CEO Founder Peter Holten Muhlmann – 1 of 3 – From the Basement
Peter Mühlmann: I sold a lot on the eBays of the world and then I thought, actually I would like to start my own website also, because of that’s what I saw other people did. So I did that and I thought lots of people were just going to buy automatically. The trouble was, we did get some visitors but nobody bought because they suspected that it was just Peter sitting in a basement with his friend, two kids, selling electronics. And the trouble with that was it was actually true. And I didn’t want to refer them to the eBays of the world because all my competitors were there. So I thought, why isn’t there a way where I can gather my customers’ opinions and show it in a credible way so that people trust my business Stephen Cummins: Welcome to 14 minutes of SaaS! The show where you can listen to the stories and opinions of founders of the world’s most remarkable SaaS scale-ups! Stephen Cummins: Welcome to the first of 3 episodes with Peter Muhlmann, CEO & Founder of Trustpilot. When you’re looking to select SaaS applications, you want detailed, validated, credible data – not magic. I interviewed Peter because he built a phenomenally successful B2B SaaS company that holds a huge position in online reviews – with its biggest success in the B2B2C domain. Finance and retail are the biggest parts of that. It’s a remarkable growth story. It has over 100 million reviews on it’s platform – with well over 5 billion monthly impressions on its Trustpilot widgets. It has about 760 employees, 660 of those located in Denmark, the US, and the UK. This is Peter’s story and was recorded in the Web Summit in Lisbon at the end of 2019. I’m recording this update … literally … in a telephone box in the amazing Dogpatch Labs in Dublin in September 2020 – as Peter takes us from his idyllic youth all the way to the powerful ‘why’ behind Trustpilot, and their 2-stage experience of achieving product-market fit. Stephen Cummins: Peter Muhlmann, CEO and Founder of “Trustpilot”; a major global independent review platform reviewing businesses across multiple categories worldwide. Delighted to have you here on 14 Minutes of SaaS Peter. Peter Muhlmann: Thank you for having me. Appreciate it. Stephen Cummins: Tell us a little bit of your life growing up in Copenhagen, I believe, prior to … and including perhaps your days in Aarhus University. Peter Muhlmann: So, I actually grew up in a very small town close to the German border. My Dad is a doctor. My Mom’s a nurse. I have two younger sisters. We had a dog that thought it was a lion. And life was really good and simple. Then when I was 18, I thought it was time to do something new. So I moved to a city to take an education. That was the city called Arhaus where I spent an enormous amount of years in business school before dropping out to do Trustpilot. Stephen Cummins: And your dog that thought it was a lion? Tell me a little about that? And how small was the village? Tell us a little bit about that? Peter Muhlmann: A little… It was called a Cairn Terrier. So, so it’s a terrier dog and it’s, say about, 30 centimeters long and 15-20 centimeters tall. And the Danish name it had, translates into the English language as; it’s a one word that means “a lot of noise.” Stephen Cummins: Perfect guard dog, right. Won’t do any damage but will keep you away. Peter Muhlmann: Exactly. And it had an amazing self-confidence. Stephen Cummins: And how small was that town? Peter Muhlmann: It was about 1,000- 2000 people; I think, last year in… in the local newspaper, they marked that it had now passed 2000 people. Stephen Cummins: Wow. Peter Muhlmann: So it was the sort of town where we were 11 people in the class and you basically knew everybody. And so a little bit like this movie childhood where you live in a house and you play in the forest and you … Stephen Cummins: Nice. Peter Muhlmann: … walk to school. So very… very safe. But… in some way I’m… I’m actually also jealous of the kids that grow up in a city because they can meet other kids who are exactly like them. And I think that can also be a gift when you’re… when you’re growing up. Stephen Cummins: Absolutely. Yeah. Yeah, there’s a bit more energetic conversation and there’s more … there’s bigger crowds of kids together. But then you had all of that beautiful experience with nature. Childhood is lost today. You know, you had a childhood by the sounds of things. Peter Muhlmann: I did have a childhood, I didn’t get a cell phone until I was 19. So in that way for me, the real world is having a landline telephone where you call your friends and say, “Hey, do you want to meet there at this time?” And when you do that… and all this new technology in some ways, it seems a little fake or unreal. But yes, I had a real childhood. Stephen Cummins: Aarhus University. How were your days there? Peter Muhlmann: I… in some sense, I quite like being a student because you had a lot of freedom… and I was the kind of student where I played the game too much. So for me, the game was “get as good grades as you can with as little effort that you can.” And so I was very good at just coming to… a week before we had a test I would just… read and read and read … and do a lot of similar tests and then do really well. Stephen Cummins: And did you stay up late at night before them? Peter Muhlmann: No, no. I… I need my beauty sleep, but I think in hindsight I would actually recommend the exact opposite strategy, that… that you learn because you’re interested in learning something. And people obsess over the grades when they should actually obsess about getting some knowledge. So in that sense I was a very good, but bad student. Stephen Cummins: So, I’m guilty…I’m guilty. I did the exact same thing except I stayed up all night actually before exams. I was like a slightly exaggerated version of that, but looking back, I’m almost ashamed of my younger self because it was just such a pointless exercise in some ways. Peter Muhlmann: Exactly, because now I can remember nothing of it, absolutely nothing, I took away with me from that place. Stephen Cummins: Yeah Peter Muhlmann: But the beautiful thing about being a student in Denmark is that the government will actually pay you to study. So, so you’re being paid, say, 500 euros a month… Stephen Cummins: Ah ha. Peter Muhlmann: And most people listening will say “Oh, that’s not a lot,” but… but when you are at 18 or 19, that… that can buy you a lot of pasta and tomato sauce. And so actually life was pretty good. And… and there was the safety net that if the company didn’t do well, I could also always just fall back on that. I could always just fall back on studying. Stephen Cummins: Yes. Yes. Peter Muhlmann: and a lot of my friends did that, like it’s… it’s a very Danish thing that you start a company next to studying. So, so I was very fortunate there, that I didn’t amass any student debt that like you do in other countries. Stephen Cummins: Like the United States, for example. Peter Muhlmann: Exactly. Exactly. Stephen Cummins: I think that’s a great thing about Europe, and of course Denmark’s an even better example than the average; you’re even given money to… to survive, basically, while you’re doing it. So what drove you to… to build Trustpilot? And what was the initial problem you set out to solve? Peter Muhlmann: Yeah. So I created Trustpilot to solve two problems really. So the first problem was that people like my parents could sometimes have a hard time shopping online and then they would get bad experiences because it… it could be very hard to see if you could trust a company or not. And it would be hard to see if they will give you a good or bad experience because there was virtually no information about these businesses. And e-Commerce was in its very early stages. Stephen Cummins: Yes. Peter Muhlmann: And so I thought, ‘Hey, wouldn’t it be better if you could compile all the customers’ opinions about a business and put it somewhere trusted?’ And… and… and that it was necessary for that third party to be independent; both of consumers and the businesses. Because a lot of companies will say, “Hey, like we did a survey and 98.9% of our customers love us” and they would advertise with that. But if that’s just the company saying that; it has no credibility. There has to be something else, somebody else, saying that… that you can actually trust. So, that was the one problem I wanted to solve. So I think about that as… as when my parents, if they buy a new kitchen, they may want to buy it from a company that is a little cheaper, but will then actually get a good experience. Stephen Cummins: Okay. Peter Muhlmann: If they’re going on a holiday; are they going to get a good holiday? Stephen Cummins: Yes. Peter Muhlmann: And so the beautiful part about Trustpilot is that you can see what other moms think about a business before you buy. The other problem I wanted to solve was a personal problem I had which is; I was selling electronics online, selling them on eBay. And so, the beautiful thing about selling stuff on eBay is that after each transaction eBay will say, “Hey, what do you think about the purchase?” Did it go well or did it not go so well? And so what that allows is it creates a world where the thought of buying a used cell phone from a gentleman in Hong Kong who claims that it’s as good as new and he will send it to you if you just wire him some money. Stephen Cummins: Sure Peter Muhlmann: Isn’t as crazy as it sounds because you can see the 10,000 other people did the same thing. And so, I sold a lot on the eBays of the world and then I thought, actually I would like to start my own website also, because of that’s what I saw other people did. So I did that and I thought lots of people were just going to buy automatically. The trouble was, we did get some visitors but nobody bought because they suspected that it was just Peter sitting in a basement with his friend, two kids, selling electronics. And the trouble with that was it was actually true. And I didn’t want to refer them to the eBays of the world because all my competitors were there. So I thought, why isn’t there a way where I can gather my customers’ opinions and show it in a credible way so that people trust my business. And so that was really the… the starting point for Trustpilot was that I could help businesses and I could help consumers and everybody would be better off. Stephen Cummins: So that was your starting point..and at what point did you feel “I’ve got product market fit? businesses are interested in listing with us” and how did you get the businesses to trust you enough? Peter Muhlmann: Yeah. So, so, so…there were two stages of product market fits. So the first stage was the consumer product market fit and that was there from day one. Stephen Cummins: Okay. Peter Muhlmann: Really, we were very early to the market, but I think we were right in predicting that opinion sharing would get popular. Stephen Cummins: Yes. Peter Muhlmann: And so, so when we started, there was no Twitter, there was no Facebook there was no LinkedIn. Certainly, I didn’t know about them. They were just in… in the early stages. And so, so what has happened after us starting Trustpilot is that the… the opinions sharing online, it just become so commonplace. Today you cannot buy a pizza without sharing your opinion about the pizza, the delivery person and the company behind it all. You’re taking it actually for granted and if you’re not being asked about your opinion, that’s weird. Stephen Cummins: Yeah. Peter Muhlmann: So, but… but it wasn’t like that back then. Stephen Cummins: Yes. Sure. Peter Muhlmann: But people like that. Stephen Cummins: Cause we’re talking in 2007. Peter Muhlmann: Exactly, we’re talking 2007 and people like to read other people’s opinions, also. So everybody thought that… that was interesting. Now, the second stage was then… making companies interested. And… and so I was the first telesales representative for Trustpilot because there was just me to do that. Stephen Cummins: Yeah. Peter Muhlmann: And I don’t know if anybody has tried that, but I can actually be rather grueling; calling people cold and trying to persuade them that… that they should speak with you in the first place and use your product and the second place and… and maybe even pay for it. Stephen Cummins: Today’s nearly impossible. Yeah. And it was hard in 2007. Peter Muhlmann: It was, I think… I think it is… it is, it can be soul crushing. Yes. But what we found was that we… we had product market fit with two types of customers. So the… the first type of customer, what was the one who was extremely customer oriented. Who obsessed about the customer experience, but didn’t feel rewarded for it. Stephen Cummins: Yeah. Peter Muhlmann: So often we would speak with people where they would say, “Hey, I care more about customer service than all of my competitors, I know that. They’re not giving a good service, they’re selling it much cheaper than me, but I don’t get rewarded for it.” Stephen Cummins: Yeah. Peter Muhlmann: And… and they saw, “Huh, if I can just show that. That’s… that’s really good.” And then the other one was the ones who were on the avant guard of the customer opinion and online marketing. Where they were… and also picked up that this opinion sharing and opinion consumption was popular. Stephen Cummins: Yeah. Peter Muhlmann: So was very much this about… about getting the early adopters and the small companies. And then as the small companies started doing it, their competitor said, “Hey, what’s going on here? Now, this company is showing that their customers love them. Why can’t we do that?” And then… and then initially it was primarily online retail, but then other industries said, “Hey, I’ve seen… I’ve seen this on all the retailers. So I’m selling broadband connections, or I’m selling you a travel package or I’m selling whatever it is. Why do customers not care about this in my world?” Well, obviously, they do. So in that sense, we also started to get a lot of businesses to self select onto the platform. Stephen Cummins: Okay. so tell us how, you… you know, how you make money. And give us an idea if that’s… if that’s okay, of what, I know you’re… you’re incredibly broad. I looked at the list of categories and I got dizzy. You know, it’s you’re… you’re a huge player, really, in terms of volume of reviews. It’s… it’s… it’s remarkable and great credit to you. But what would be the category, I know you don’t want to limit it, but what would be,the categories that we bring in the bulk of the revenues currently for Trustpilot? And I know you’re probably going to evolve into many other areas. Would it… because it looks to me like the… the… the kind of the meat of it is consumer and the meat of it is… is kind of consumer brands…and… and is that a fair comment? Peter Muhlmann: Yeah. So so partially, for historic reasons though, because… because the early adopters of online marketing, really, were the online retailers, It was eCommerce. So they’re the ones who were onto this at first. And then came travel. And then came everybody. Stephen Cummins: Yeah. Peter Muhlmann: So we’re now in the phase where we have a lot of retail. We have a lot of travel. We have a lot of services companies. Also financial services companies. Stephen Cummins: In the next episode, episode 2 of a trilogy with Peter Mühlmann, we double down on the company itself and find out what markets Trustpilot does particularly well in. You’ve been listening to 14 minutes of SaaS. Thanks to Mike Quill for his creativity and problem solving skills, to Ketsu for the music and to Anders Getz for the transcript. This episode was brought to you by me, Stephen Cummins. If you enjoyed the podcast, please don’t forget to share it with your network, subscribe to the series, and of course give the show a rating Listen to 14 Minutes of SaaS on Spotify / Apple podcasts / Google podcasts / TuneIn / Stitcher *Also big thank you to Hallie Therrien for proof-reading transcript! https://twitter.com/RemoteSaaS
17 minutes | Aug 6, 2020
E119 – Braze CEO CoFounder Bill Magnuson – 2 of 2 – Mobile is Personal
BILL MAGNUSON in conversation with STEPHEN CUMMINS TRANSCRIPT – part 2: Bill Magnuson: Lean startup methodology has an important role to play It helps you with… with financing realities. It helps you learn things but it doesn’t necessarily get you to the best product solution or the best innovation or the best revolution. Be observant. Like get your head up and look around you and critically think about everything that you see around you. Things that are around you are a certain way because someone decided to make them that way by and large. “Why did they do that? How did they organize it? What were the things that went into play? What other options did they have?” My curiosity, kinds of, applies to systems and processes and I research a lot of different things in that way. And… and I think that… that has ultimately lead to an ability to read tea leaves just a little bit better and to be able to understand and keep in touch with what’s possible that wasn’t before and how are things going to change? And… and I think that those things have come together to really contribute to my success. Stephen Cummins: Welcome to 14 minutes of SaaS! The show where you can listen to the stories and opinions of founders of the world’s most remarkable SaaS scale-ups! This is episode 119 of 14 Minutes of SaaS, the concluding episode of 2 where I chat with Bill Magnuson, Co-Founder and CEO of Braze, a customer engagement platform. In this episode we move from continuing the colourful backstory of the origin of Braze to why lean startup methodology is not really the be-all and end-all for realizing audacious visions, to addressing the fundamental human problem of listening to people in order to understand them so that we can communicate more effectively with them, to the power of curiosity Stephen Cummins: There’s a very interesting backstory, Bill, to how the company started. Could you tell us a bit about that? Bill Magnuson: Yeah. So as I mentioned earlier that my other co-founder, John Hyman, was my boss when I started at Bridgewater. And so when I started, to kind, of think about what was next, he was doing the same thing. And he invited me to join him as a last minute stand-in for his TechCrunch Disrupt Hackathon team. The other person he was planning on doing it with accidentally double booked himself with a rock climbing trip, and so he flaked out on him at the last minute. So I came in … I cancelled my plans for the weekend and we went and did this all night programming project. And that project ended up winning in the judging; and so we were invited to come back to the conference later that week and present on stage. So fast forward a couple of days; John and I are walking to the conference. It’s admittedly late morning, not early morning because we had been out a little bit the night before celebrating… And on our walk in, he was, chatting with the woman who is actually now his wife; girlfriend at the time, on the phone. And so I was standing in the crosswalk. I had no one to talk to, so I started just chatting with a guy standing next to me. And we carried a conversation as we walked across Twelfth Avenue on our way over to the Disrupt venue which is one of the piers on the West Side of Manhattan. Stephen Cummins: Cool. Bill Magnuson: And he saw me on stage presenting our hackathon project later that day and reached out to me via email and it goes something like: “Hey, I don’t know if you remember me, we met in a crosswalk and I want to introduce you to this person that I know who’s living down in Houston. And he’s running an oil and natural gas company right now, but he’s been involved in the mobile space in the past and he’s really interested in starting something up in mobile. And I think that you two would enjoy meeting each other.” And so I of course ignored that email for about three weeks because I got dozens of them that looked very similar because at the time if you were written up for winning the TechCrunch Hackathon, that was a really big deal. Stephen Cummins: Everyone wants to co-found with you. Bill Magnuson: Exactly, people were coming out of the woodwork. And after a few weeks when the dust settled, I went back and looked through everything and… and that was one of the shortlisted ones I decided to reply to. And I ended up meeting with Mark and, seemed like a really interesting guy and so I introduced him to John as well. And the three of us all … they say that you should really take your co-founder relationship super seriously and you should think about it as, sort of like, dating before marriage and all these things. And honestly, we didn’t do any of that; we all went to New York for one dinner. We had that one dinner and we all connected and we decided to move to New York together and all quit our jobs and start up the company.. Stephen Cummins: And tell us about that first year or two with Braze. Bill Magnuson: We were building to try and help people take the mobile experiments that they were doing and the apps that they were building and turn them into businesses. And I remember going to meetups in New York, and presenting and talking about Maslow’s hierarchy for the app owner, where in the early days, it was enough to merely exist. There were only a few dozen apps in the app store and you could literally do anything and charge people 99 cents for it and people would try it out. But pretty quickly it evolved from that to the point where you needed to provide something. Like what was a meaningful product or service that can be provided in mobile that couldn’t be provided before? And I think there were a lot of really good analogies into the dotcom days; which were that, in the very early days. Let’s take a bank as an example, they could put up a website with an “Under Construction” animated GIF and their opening hours and that counted as a website. And that was enough. And then it was like, “Oh well wait, what about having a website is actually special for a bank?” Well, maybe you can check your bank balance online any time even when the bank is closed, right? And so that’s that progression to the Provide Stage. Stephen Cummins: Yeah. Bill Magnuson: And now the Provide Stage and mobile also depended on the advancement of the underlying technology. The batteries had to get better. The cell networks had to get faster. GPS got miniaturised, and started to similarly become more battery efficient. And then that lead to a lot of the earliest businesses that were built in mobile were on the back of those things. It was media streaming, like music streaming. It was local marketplaces. It was dating applications and such. And then there was a long stage of vanity metrics. And of course, the vanity metrics and the dotcom boom; we all know very well, people raising money based on hits and page views and the visitor counters. And we had the same thing in mobile, it was downloads and installs, and where am I in the app store rankings? And it wasn’t really until we got beyond that… that, people started to focus on things like daily active users, monthly active users, or God forbid revenue, right? That we would measure the success of the business by. And what we really needed was for people to get to the top of that pyramid and to really be focusing on: “How am I engaging people in the long-term. How am I driving them towards becoming more valuable users and really driving revenue?” And so the early days was … it was a lot of education. It was a lot of trying to get people to think more forward … and think about their forays into mobile as being real sustainable businesses. Stephen Cummins: You obviously thought very deeply about it, or the founding team thought very deeply about it, because when I listen to you talk with passion about… about engaging meaningfully and stuff like that … very often, when I talk to somebody about the first two or three years of the company, they’ll talk about a bridgehead customer that help them or a vertical they went into … but you guys were constantly questioning this in the first two or three years, your approach to actually developing the company. Bill Magnuson: Yeah we tried to develop it pretty comprehensively which honestly meant that it did take a while for us to get traction. And when you really look at the growth curve of our company, we’ve grown a lot in the last few years. In the early years, we were really focused on R&D and we didn’t really follow the whole lean startup MVP playbook very well. The very first release of our product actually had all the cross channel messaging that you see today; we had email, we had push notifications, we had In-app messaging and we had an option that was both ephemeral and one that was persistent. That ended up being a really important enduring advantage because our initial release wasn’t siloed in a particular messaging type, which meant that all of the other things around, “who do we talk to”, “How do we prioritise different strategies?” “What are we going to say?” “How do we personalise the content?” “How do we measure it?” All of those things were actually built to solve the harder problem of communicating in all these different says. And I think a lot of other companies actually made the… the unintentional mistake of building all of that sophistication higher up for only a single channel. And then when they needed to add other platforms, or when they needed to go from ephemeral to persistent messaging, or from push based messaging to pull based messaging ,or outside of our product experience to inside of a product experience; that these are all ways that kind have stretch the rest of their system to the point where it breaks. And then they’ll end up with heterogeneous feature sets depending on what channel or what platform you’re on, or things don’t intuitively fit together. And of course,
17 minutes | Aug 6, 2020
E118 – Braze CEO CoFounder Bill Magnuson – 1 of 2 – Reading the Tea Leaves
BILL MAGNUSON in conversation with STEPHEN CUMMINS TRANSCRIPT: Bill Magnuson: walking down an alleyway and you come up to a big wall and you can’t see what’s on the other side. And sometimes in life, you gotta just take off your baseball cap and throw it over the wall if for no other reason than to force you to climb over and see what’s on the other side. Fundamentally, this problem that we’re trying to solve which is; “How do we understand people better while they’re interacting with the brand in order to communicate with them in a way that’s more valuable to them?” Stephen Cummins: Okay. Bill Magnuson: That’s a fundamental human reality and it’s one that’s not tied to any particular generation of technology. And it’s also one that’s not tied to a category of business really. And I think that that’s been really important or our durability and our ability to continue to innovate and adapt to a changing technology ecosystem; changing consumer preferences because our foundation is in that human problem. Stephen Cummins: Welcome to 14 minutes of SaaS! The show where you can listen to the stories and opinions of founders of the world’s most remarkable SaaS scale-ups! This is episode 118 of 14 Minutes of SaaS, the first of 2 episodes where I chat with Bill Magnuson, Co-Founder and CEO of Braze, a customer engagement platform. Braze says that context underpins every Braze interaction, helping brands foster human connection with consumers. It was founded in 2011 and has revenues well north of 100M USD. It has 49% employee growth in the past 12 months, with growth every month through the pandemic – the model and business appear to be on the right side of history with Pandemic Growth Fit as not a single month has not featured employee numbers growth. It’s in the leadership quadrant in mobile marketing G2 grid. It’s Glassdoor performance is very strong and it’s obviously a big promoter of employee success with 88% of employees past and present recommending working there to a friend and Bill has an outstanding CEO approval of 90%. Stephen Cummins: Bill Magnuson, Co-Founder and CEO of Braze customer engagement platform here at the Web Summit in Lisbon. Great to have you on the show Bill. Bill Magnuson: Thanks for having me. It’s great to be here. Stephen Cummins: Brilliant. Okay. Well, I’m wondering if you could tell us a little bit about your formative years all the way from childhood, let’s say, to graduating in MIT. Tell us a bit about yourself? Bill Magnuson: Yeah, absolutely. So I grew up in Minnesota which, if you’re not familiar with the United States, most people know about is the frozen north portion of the country. And I grew up in a relatively rural area. I was actually a first generation college student. And so I grew up just about a mile away from where my ancestors when they emigrated to the United States originally homesteaded. And grew up canoeing and hunting and camping in the summer. And snowmobiling and skiing in the winter. But also had a strong affinity for computers. And so, I think something that was encouraged by my teachers and by parents and such, which was me spending a lotta time on my computer. It would probably nowadays be called a screen-time addiction. But it was really formative for me in terms of getting very interested in technology, especially in the early days of the internet and such. And so after leaving high school there, I ended up going to M.I.T. in Boston. The first one to leave the nest and move away from the original homestead area… and study computer science there. So I did both my undergraduate and masters at M.I.T. And I graduated right around when Android was launching, which ended up being pretty formative. Stephen Cummins: Okay. I’m not surprised you’re from that area, of course … partly because I can hear a tiny twinge of Fargo in there, maybe? Twin cities. Not much though … but also the name Magnuson, there’s a huge amount of Nordic migration to that part of the world Bill Magnuson: Yeah, absolutely. And actually the… the cafe in my hometown still serves lutefisk even to this day. Stephen Cummins: Actually, you moved to New York. Living and working in New York, compared to a rural part of Minnesota; do you ever wake up in the morning and go: “This is different!”? Bill Magnuson: It’s unimaginably different. And actually my parents come out to visit every once in a while, and my Mom really revels in the culture of the city, but my Dad I would say tolerates it. He enjoys coming out and spending time with me and my wife and the kids, and such; but I think he always can’t wait to get back home to the woods and to his garage. Stephen Cummins: Fantastic. How many kids? Bill Magnuson: I’ve got two kids. Stephen Cummins: Great, what age? Bill Magnuson: They’re 14 and 16. Stephen Cummins: Wow. You were Young. You’re a pretty young guy. You grew up very … Bill Magnuson: Yeah. So, I’m actually a Stepdad. The kids have lived with my wife and I full-time since they were eight and ten, but they were her kids originally. Stephen Cummins: Fantastic. I have two kids myself. Nothing better in life, nothing better in life. You went from M.I.T. … So tell me about M.I.T. actually. What drew you to M.I.T.? And I suppose the interest in computing and engineering, I guess. Bill Magnuson: Yeah. honestly, it was because I saw M.I.T. in movies that I liked. Like I said, I was a first generation college student so I didn’t have much to go on in my family and not much from a high school guidance counselor type perspective. And I, what I would now refer to as foolishly … it was the only school I applied to.It sounded like an awesome school. I’d seen it in movies and so I applied and then I got in. And there had been an option to go to the University of Minnesota which was in the Minneapolis-St. Paul area – I grew up about 30 Miles outside of there. And I had done some programs with them when I was in high school that just gave me an automatic ability to go there. And that had actually been the plan the whole time. Meanwhile, I had applied to M.I.T without really thinking about it a lot. But when I got in, it really changed the thinking for my whole family. It wasn’t something that even seemed like something I was ever going to do. I was just gonna default into that path; going to the University of Minnesota, and when that acceptance letter came, I actually had this feeling of… of this like opportunity was sitting there at my doorstep. And I was gonna ignore it. And I almost got angry at myself, where I was just like I had been on this path my whole life. And then felt like it wasn’t the right thing to do to just default into what the plan had been the whole time … here was this opportunity that existed. And I remember I had this conversation with someone… in… in that senior year of high school when I had to decide where I was going to go and he told me this anecdotal story of you’re walking down an alleyway and you come up to a big wall and you can’t see what’s on the other side. And sometimes in life, you gotta just take off your baseball cap and throw it over the wall if for no other reason than to force you to climb over and see what’s on the other side. And that story really stuck with me because… it was an unknown, it was a total unknown. Going to Boston. Moving halfway across the country. Going to this school that I’ve only seen the movies. Like a lot of unknowns, a lot of risks but, there was nothing to do really other than go check it out. And so, ultimately, that was what I decided to do. Stephen Cummins: Yeah. It’s amazing how many founders I’ve interviewed that have gone to M.I.T. and I’ve met the co-founders in M.I.T. So there’s no doubt it’s… it’s a remarkable place. I’ve been in the museum there actually; it’s quite a remarkable museum as well. So you, after that, you got an internship with Google as a software engineer and you had a similar role – slightly more senior probably – with Bridgewater Associates for a short time. Were there any experiences, during that time that, you know, influenced you in becoming an entrepreneur quite early in life? Bill Magnuson: Well yeah. I actually … I’d wanted to really start something of my own right when I graduated. The condensed version of the history was that I finished my undergrad and then I was actually recruited by one of the professors from M.I.T. that I had worked with during my undergraduate … (He) was at Google as a visiting faculty, he was on sabbatical from M.I.T. and was…had assembled a small team that were working on something in Google research around Android. And so he actually invited me to come and join that team and so I went there after I finished my undergrad. And it was a visual programming language for building Android applications that was being done with a team of past students of his that he had brought together into this small team. And it was out in Mountain View in the Android building. And so when I had originally been planning to go and do something for the summer and then come back and join a research group in the PDOS group at M.I.T. (which is a distributed systems group) and then finish out a Masters. And I ended up actually changing plans to go and work on this project with Google and it was right at the dawn of Android. So to bring you back; the G1 which was the slider phone with the horizontal qwerty keyboard, if you remember that one, had just come out that fall. Stephen Cummins: Okay. Bill Magnuson: And I had been involved in building early Android applications in the first launch of the app store before they had any documentation. It was definitely a frustrating experience to say the least. And … was able to be in the Android building in Mountain View This is obviously post Google acquiring Android, but it was right
14 minutes | Jul 30, 2020
E117 – App Annie CEO Ted Krantz – 3 of 3 – Adding Lustre to the Gem
Ted Krantz App Annie CEO Stephen Cummins: Welcome to 14 minutes of SaaS! The show where you can listen to the stories and opinions of founders of the world’s most remarkable SaaS scale-ups! This is episode 117 of 14 Minutes of SaaS, the final instalment of a 3 episode chat with Ted Krantz, CEO of App Annie. This kicks off with some fascinating insights into the thinking behind App Annie’s brand metamorphosis – embodied by a completely altered logo. And, as is traditional for 14 Minutes of SaaS, we’ll receive some great advice from our guest. This time it’s more career advice for those who want to get into the C-suite in established tech companies as opposed to our usual advice for SaaS founders. Stephen Cummins: So I have to ask you what’s with the new diamond logo because you have … ? Ted Krantz: Don’t call it a diamond, Stephen Stephen Cummins: Okay. Forgive me. Okay. So that’s… that’s just me looking at it, but the new logo with, and it looks like, kind of Sci-fi, really clean, strong upper case logo. It could not be more … it’s like a statement of saying ‘We have changed!’ … because what was there for all those years was the friendliest of handwriting. Ted Krantz: Yeah. Stephen Cummins: And suddenly, I see something with tight angles, sharp clean … and I see very, very clean professional looking uppercase font. What are you trying to transmit to the world? Ted Krantz: You have good eye! Stephen Cummins: I do. Ted Krantz: You know, many different things. One. Who writes by hand anymore? Right? Stephen Cummins: Makes sense Ted Krantz: The icon itself. Yes, it’s got a friendly component to it, but … does it have the right enterprise premium flair to it? Especially when you’re selling to the C-level and our average deal size is about $100,000. Okay? So there are issues there. The second piece is … It has never been refreshed. And we’re at a point in time or we’re changing the trajectory of the company with this much broader value proposition than just the way you used the think about App Annie. So it was the natural transition. And I was very passionate that we need to do it. We more affectionately like to think of it as a gem. Stephen Cummins: Okay. It’s a softer word. Ted Krantz: Yeah. But it’s got more to it than … more artistic quality than just calling it a Diamond. Stephen Cummins: Okay. Ted Krantz: There’s times you can look at it … and it looks like a gem … and there’s other times it looks like an open box… by design. Stephen Cummins: Okay. Ted Krantz: Depending on if we’re using the colour version or the black & white version. Stephen Cummins: Is it connected with the gamers? Ted Krantz: There’s a level up element of gaming that we used in the gem aspect. There’s also a unit of data in terms of the box and the dimension and depending on how you’re looking at it. And then with the colour highlighted like you’re talking about … it’s like a hotspot. Could that be an opportunity to dive into? All of that was framed with a great deal of deliberation to come up with that logo Stephen Cummins: For sure Ted Krantz: The other thing that I like about it … it’s a logo mark that unique; and it’s something that can identify us without the name itself. We AB, tested this like crazy because we’ve been around a long while. We want to make sure we get it right. Yeah, we had 80 percent affinity across the board for this new logo, including our customers, well globally with a big sample size. And I’ve heard very little negative. Only Upside in terms of this release. So when you get these things look at Slack. When they changed their logo, that didn’t go so great. And so I felt really proud that we developed this logo with our own intellectual property as well. It was all in-house. Stephen Cummins: Definitely, clearly a much better fit for an enterprise grade company with high-tech massive investments in… in… in cutting edge technology. So coming back to your good self Ted, living such hectic life. I mean, you’re running the company and you’re running around here which, you know, I know how tiring that can be. You know, how do you keep mind and body together? How do you stay healthy? Ted Krantz: I’m a huge… I’ve done a lot of martial arts over the years. I’m a huge believer in physical mental, spiritual and kind have been three dimensional at all times. So no matter what it takes, everyone that knows me knows this as well. I’ll work out almost every day. If I don’t get my workout in a particular day, it’s very rare. It’s something that I really need to disengage and get physical … that allows me to also think more creatively. I do a lot of my work inside my head in terms of strategy and considerations when I’m in the gym that I wouldn’t normally do if I’m just running from meeting to meeting. Stephen Cummins: Is that a form and meditation for you? Ted Krantz: I do meditation separately. Stephen Cummins: Okay. Ted Krantz: I started Headspace. I grew up doing martial arts. I’ve always been a little bit intrigued by that. I’ve gotten to a point where I am more self-aware of that and I’ll work on it …. but it’s like 10 minutes a day. I’m not like, you know, the Twitter CEO enable to do it for, whatever it is, 90 minutes every morning. I’m not built that way, but I’ll try to block, you know, 10 minutes and I’ll do that every day. And it’s really helpful. My whole philosophy on meditation is changed as a result of Headspace because they’ve mainstreamed it. I used to think of meditation as just blocking that 10 minutes … and trying to, like, get all the thoughts … fighting them out of your head. And then there’s a point where you’re more enlightened, you say now the philosophy is to get to that calm perspective and then apply it in the everyday world. That’s very beautiful to me in terms of finding a way to get to that next level and really stay tuned to that meditative state of just, like … letting things happen and not react. Stephen Cummins: Yeah. And I guess when you’re emptying your mind … and I am guessing, when you’re meditating; that’s more just a complete dissociation. Whereas your ideas, I think you were saying, come in the gym … Ted Krantz: They do. Stephen Cummins: … because you’re just focusing on something repetitive that, you know, automatically … Ted Krantz: In particular swimming. Stephen Cummins: Okay. Ted Krantz: Because I don’t swim with music so I’m swimming and I’m thinking the whole time. Stephen Cummins: Okay. Yeah. That’s when your ideas come to you. Ted Krantz: Yes. Or on the bike. I’ll be texting the people in the office. Stephen Cummins: I used to time trial on the bike. I love the bike. So what’s the one personal quality, if you were to pick one, that you feel, you know has helped you succeed over the years? Is there something that you could actually see in yourself that is common to the period when you’re in that kind of, you know, in that battle stage in sales roles? And then in a more kind of leadership and roll in sales and then moving into the C-Suite and all of that. Is there… is there one internal quality that you feel you have that has helped you continue to succeed as you’ve moved into those roles? Ted Krantz: I’ve gotten away with great qualities in terms of public face, presenting on the stage, the presence, all of that is something that I think I do organically really well. But I think what differentiates me… there’s a lot of people that do that well…What makes me unique, I think, is being a coach. Stephen Cummins: Okay. Ted Krantz: I’m motivated by coaching, I push and I challenge and I develop people. And I develop people that want to be developed. If I have someone on my team that I feel like has hit their career arc and they feel like they’ve got great game and they don’t have a lot of tuning to do, I don’t invest much. But where I will invest is on people that I think have great potential that are high quality people, and I want to see them thrive. And more of my career, especially at this stage, is that motivation. It’s watching them shine. I’ve had my time. Stephen Cummins: And have you found as you’ve moved kind of from company to company that people come with you sometimes? Ted Krantz: Yeah. I’ve always had a following that way for sure. And I’ve also inherited people that may have been ready to walk out the door that are ready to stay with me for the long run too. So I take pride in both of those. Stephen Cummins: Is there anything you’d like to be better at? Ted Krantz: There’s a lot of things that I’d like to be better at. Stephen Cummins: Anything in particular? Ted Krantz: Consistent feedback would say I could probably be a little more patient. I think that’s a… that’s a consistent trend for the… for the team that… that works for me. Stephen Cummins: They’re not smiling though. They’re deadly serious. Ted Krantz: Yeah, no. They’re actually in the room with us laughing at the moment because they know how true that is. I do have a tendency to set the expectation just slightly higher than is probably doable. Right. So there’s always that element of managing my expectation … that it’s gonna take a little bit more time and so, yeah, those are some things that I know I could do better. Stephen Cummins: So three of Ted’s senior team in the room here are having a little giggle. Yeah. As he’s saying all of that. What are you most proud of in your life so far… That’s always a tough one because you ha
14 minutes | Jul 30, 2020
E116 – App Annie CEO Ted Krantz – 2 of 3 – SaaS to DaaS
Ted Krantz App Annie CEO : We’re taking our domain as the industry standard for market data on mobile, and marrying that with first party data. So that you have insights into your own performance on the advertising side, both ad spend and monetization. So you have the full footprint of mobile performance. Then what we’re doing is we’re moving from metrics that we do traditionally like downloads, revenue, monthly active users, daily active users; to strategic C-Suite metrics that we can now calculate with these two datasets … that get us to customer acquisition costs, lifetime value, return on ad spend. This is a completely different game changing equation that gets us from an element of sometimes mission critical with some accounts and not so much with others … to ‘No, we’re mission critical for everyone!’. Stephen Cummins: Welcome to 14 minutes of SaaS! The show where you can listen to the stories and opinions of founders of the world’s most remarkable SaaS scale-ups! This is episode 116 of 14 Minutes of SaaS, the second of 3 episodes where I chat with Ted Krantz, CEO of App Annie. This episode’s discussion is all about Ted’s transition into businesses built around mobile data and marketing – and his personal migration from enterprise SaaS businesses to DaaS; Data-as-a-Service Stephen Cummins: Now around 2012 I think it was … you moved into Kenshoo.. Ted Krantz: Kenshoo, yeah. Stephen Cummins: Which is kinda media and digital marketing if I’m right? Ted Krantz: You are. Stephen Cummins: So moving into media and digital marketing, but then also having kinds of delivery teams, service teams, marketing … even though you would have been involved with marketing and in the sales role. But having a plethora of responsibilities and moving into a fundamentally different domain, you know, how much of a learning curve was that for your years at Kenshoo? Ted Krantz: It was pretty substantial. Digital marketing is kind of an entity all in of itself and established in the digital realm. Kenshoo’s the market leader even still today for bid management. Unfortunately, it has to compete with Google and DS3 and Facebook Power Editor … but it has an Amazon play too. And when I got into that opportunity … it’s a Sequoia backed play and market leader as well. But like you said, the deployment of that technology was very different. You had a pretty intensive on-boarding process to get that technology working the right way. Billions of dollars going through that platform! That’s the thing from the bid management perspective I don’t think most people appreciate. Stephen Cummins: Yes. Yes. Ted Krantz: All those dollars are flowing through those bid management tools and the execution is mission critical. If there’s something wrong with the software … if you’re down, they’re losing dollars. So it is a 24X7, mission critical, 911 arena to operate in. So that was different. Stephen Cummins: Wow. Ted Krantz: The other thing that was different too, even including C3, but the big enterprise companies. The millennial, the younger generation, were not part of that ride up until that point too. So I got a dose of, you know, how the younger generation is motivated, how they think about their work and what they want out of a job. And that was the first time that I had that part of.. Stephen Cummins: Did you find that hard to adjust to? Ted Krantz: I did. I also found it rewarding. I think there is a way that millennials come at the game in the corporate world that is refreshing. They couldn’t care less about title. They’ll ask you anything. They’ll tell you anything that’s on their mind. I think they’re, in some ways, better at execution. And, because they just are there to get it done and get to the next level. They were (on a) relentless career progression track, in general. So, I think they’re there and they’re highly motivated. The trick is balancing that without talking about a promotion every 12 to 18 months. Stephen Cummins: Yeah, that can get expensive. Ted Krantz: Right. But I do think they’re very self motivated, very strong and independently minded and you’ve just gotta figure out a way to motivate them. Stephen Cummins: Okay. Okay. And did that form like a good bridge for you … for your move into App Annie as President? Was that kind of a decent preparation for moving over into a slightly different domain again? Ted Krantz: I don’t think it could have been better. Stephen Cummins: Okay. Ted Krantz: Because I got the full picture of digital in the advancement of that … up into the point where you could see that mobile was starting to be the primary window for all things digital. That was the device. That’s where the game was going. Off of desktop. And so I got a chance to look at App Annie. It’s a market data play. I have not done that before. Stephen Cummins: Yeah. Ted Krantz: It’s more of an asymmetric business model because we’re gathering market data and that play, versus a traditional SaaS play, that’s a big jump. So I’ve gone back to the gaps you were trying to identify, I’d say that’s the primary gap. Going to App Annie is that migration from enterprise SaaS to DaaS; Data-as-a-Service. Stephen Cummins: Absolutely. Yeah. Yeah. And so, you know, digging into that data as a service… tell me a little bit about how… well first of all, for the listeners, would you just tell us what value does App Annie bring to the world? Ted Krantz: Simplistically stated, we help companies win on mobile. So what we provide … and the original thesis of the company was essentially to be the SMP 500 index for mobile apps. Stephen Cummins: Okay. Ted Krantz: So key metrics like downloads, revenue; there was clear line of sight into where you stack rank against others that you want to benchmark against. And there was a viral effect in the market of companies coming at us to get that lens into the market data, because they have data on their own app … but they don’t really know relative performance-wise where they sit. So that… that was really the opportunity the jump-started App Annie … is that window into downloads and most notably revenue. And coming up with those estimates is very difficult to do. Stephen Cummins: And is it mostly companies in a competitive space that are… that are your customers? Do you have, like, investment houses using you? Who are your customers? It’s probably everybody nearly. Ted Krantz: It is everybody at this stage. We’re now over 100 million. We’re on public record for that. We’re in all verticals. But you can really break this market down as kind of a tale of two cities.  You have a mobile first cohort; call it big gaming, the big app publishers. And, you know, some of these companies like venture capitalists and hedge funds where the data is able to be monetised and there’s a mobile first dimension. And they all have very sophisticated teams, probably data science in play – and that data is mission critical.  And then literally, there is everybody else … where the app plays a role in the journey, but that door through the app is not the only door. It’s just part of the user journey. And how to construct, how to work with the app for all these different businesses and all these different verticals is a little bit unique. Stephen Cummins: Absolutely. And you… you recently acquired, I think it was reported 10 days ago in TechCrunch … Libring for mobile analytics. Tell us a little bit about how that acquisition extends the body you can bring to the world. Ted Krantz: Yeah. I get really excited about this, because this is a new blue ocean for us. It’s hard enough to come up with a blue ocean once. But we re-identified another opportunity where nobody else is playing. And the premise for this, Stephen, is essentially solving the enterprise manual intervention that’s required to drive ROI positive outcomes on mobile. Stephen Cummins: Okay. Ted Krantz: So the way companies work today … you have your own data and you have an analytics framework for that and maybe a couple of different systems. You have a…probably a CDP player, maybe a DMP player, you have ad tech players – like a Kenshoo in the mix. You should attribution players in the mix. You have all these systems. Stephen Cummins: Yup. Ted Krantz: And with that comes heavy systems integration. Some of that you might do in house. Maybe your system integrators. You most likely have agencies involved. You have spreadsheets flying all over the place. This is the reality of how you orchestrate ROI in mobile. It’s crazy. Stephen Cummins: Yeah. Yeah, Yeah. Ted Krantz: So what we’re doing with Libring that’s game changing … is we’re taking our domain as the industry standard for market data on mobile, and marrying that with first party data. So that you have insights into your own performance on the advertising side, both ad spend and monetization. So you have the full footprint of mobile performance. Then what we’re doing is we’re moving from metrics that we do traditionally like downloads, revenue, monthly active users, daily active users; to strategic C-Suite metrics that we can now calculate with these two datasets … that get us to customer acquisition costs, lifetime value, return on ad spend. This is a completely different game changing equation that gets us from an element of sometimes mission critical with some accounts and not so much with others … to ‘No, we’re mission critical for everyone!’. Stephen Cummins: Absolutely. And it feels like …. even though you’ve created a big chunk of the space as you said, your original blue ocean space when App Annie arrived on the scene … Ted Krantz: Yeah. Stephen Cummins: You know
14 minutes | Jul 30, 2020
E115 – App Annie CEO Ted Krantz – 1 of 3 – Forged in B2B Software Sales
Transcript Ted Krantz, App Annie CEO : Yeah, honestly, I was fortunate because I got put in a global role.. Stephen Cummins: Okay. Of course. Ted Krantz: And it was Global Accounts at Peoplesoft and I had Craig Conway in my accounts. Stephen Cummins: Yeah. Ted Krantz: So I’m this, you know, mid thirties, young executive, flying around the world and having Craig, like, sitting in meetings with me. So I got indoctrinated in the C-Suite hard and heavy…very early on. We had some big global accounts and Craig was intimately involved in those accounts. That’s one thing I really learned from him. I think at a high, you know, high level with my career, I’ve been blessed that I’ve had three legends that I’ve been pretty close to. Craig early on at Peoplesoft, you know. And then I moved over with Tom Siebel at C3. I’m very close to Bill McDermott still today at SAP. Stephen Cummins: Very good Ted Krantz: And all three of them have heavy influence on my career. Stephen Cummins: Welcome to 14 minutes of SaaS! The show where you can listen to the stories and opinions of founders of the world’s most remarkable SaaS scale-ups! This is episode 115 of 14 Minutes of SaaS, the first of 3 episodes where I chat with Ted Krantz, CEO of App Annie – a mobile data and analytics platform. Ted is what I call a re-founder, because he’s overseen a complete re-imagination of the brand – something that was overdue. Employee numbers have held pretty steady in the last 6 months through Covid. About 77% of employees and former employees would recommend working with App Annie to a friend (well above average) and Ted enjoys a healthy approval rating of 80% on Glassdoor. That’s well north of the average rating, which is – if you’re curious – 69%. Since our interview App Annie have launched Ascend – which is the upgraded new version of their acquisition Libring for advertising analytics. It has more than 1 million users and over 1,100 clients. Stephen Cummins: Ted Krantz, CEO of App Annie, a mobile marketing data and analytics platform here on 14 Minutes of SaaS. And we’re here in the Web Summit. Great to have you on the show Ted. Ted Krantz: Delighted to join you Stephen. Thank you for having me. Stephen Cummins: Fantastic. I’d love to know a little bit about where you came from, where you grew up, your life. Prior … let’s say, all the way from childhood prior to you entering the kind of the B2B software world of Peoplesoft. Ted Krantz: Got it. Yeah, I grew up in Omaha, Nebraska, which I kinda describe as a great place to be from. Great family values. Grew up in Omaha which is 600,000-700,000 people. My dad was a policeman. And so we moved to Dallas when he I guess I was 12 or 13. So, just as I moved into middle school. And then I spent the better part of 30 years basically in Dallas. Played some sports when I was a child. I was one of those not gifted athletes, but very competitive. So, I played football. I did a little boxing and I did a little bit of baseball. Stephen Cummins: I thought you were a footballer when I saw you actually. Ted Krantz: Yeah. I played football. Yeah, I played quarterback. Stephen Cummins: Okay. Ted Krantz: Well, I played in Texas in those days they ran wishbone. And I was a throwing quarterback. Stephen Cummins: What’s the wishbone? Ted Krantz: Wishbone is a lot of handing off. So the game has changed. Now, there’s a lot of passing, but when I played, it was a lot of… lot of running. Stephen Cummins: Okay. Okay. So it was a little bit more like rugby perhaps? Ted Krantz: It was. Stephen Cummins: Okay. Ted Krantz: That would be a good analogy. Stephen Cummins: So tell me a bit more about when you move to Dallas. Did you enjoy moving there? Did you miss your home? How did that work out for you? You were 12 or 13? Ted Krantz: 12 or 13. I love Texas. Stephen Cummins: Okay. Ted Krantz: Indoctrinated really quickly. Football was a big portion of that. It’s a big football state. Stephen Cummins: Yeah. Cowboys. Ted Krantz: Built my nucleus of friends that I still have today, actually, Yeah. Went to the University of Texas at Dallas. I worked my way through school. I paid for my entire ride. So I was the first in my family to go to college. So I bartended my way through school. Stephen Cummins: Fantastic. Same as myself. Ted Krantz: Yeah. Stephen Cummins: First generation as well. Ted Krantz: Yeah. Stephen Cummins: Yeah. Usually have to work a little bit harder in the States. Ted Krantz: You do. Stephen Cummins: Just because of the cost of [education] Ted Krantz: I was bored in high school. I didn’t really have to try academically until college and then I was, like, really excited and motivated. Stephen Cummins: Fantastic. Ted Krantz: But not so much as a student in high school. Stephen Cummins: Okay. I was actually the same. Ted Krantz: Yeah. Stephen Cummins: I couldn’t wait to get out of school. Ted Krantz: Yeah, yeah yeah. Stephen Cummins: I wonder if moving something to do with it … I moved around as well but changed schools as well. So you have a pretty impressive kind of 12 years period from around 2000, I believe, in Peoplesoft, SAP and C3… In similar roles – building sales teams … Ted Krantz: I grew up through the revenue ranks, yes. Again bartended my way through college and my degree was in Economics and Finance. And so I got my degree and I started interviewing with the finance companies and I thought, ‘man, I just wasted like five years of my life. I’m not sure that this is for me’. And so I took some of the, you know, kind of classic personality profiles and testing and where you should go career wise and sales look pretty good on paper. And I interviewed with a software company called Egghead Software… early on in 1990 and that’s when I started in software. So, I worked my way through a lot of different mid-sized companies. Specialized a little bit in customer relationship management before that was really a cool space… by Marc Benioff and the like. And then I got into the enterprise companies with Peoplesoft in 2000. Stephen Cummins: Oh … CRM, you mean being, yeah, a cool space from… from Salesforce. Ted Krantz: Exactly. Stephen Cummins: And you … Ted Krantz: It was cool before Salesforce, but Benioff made it much cooler. So growing up through the sales ranks, it’s a performance based world. It’s very different than the world today. Back when I was going through the ranks, there were more people than jobs. Now, it’s the opposite. So you really had to work your way and distinguish yourself through execution and performance. And so by the time I got to Peoplesoft, I had, you know, the better part of 10 years of kind of growing my skills, and I got very fortunate to move into a leadership position; a global role, which was a ton of fun. Stephen Cummins: Yeah. Ted Krantz: I had more exposure than I thought it was signing up for actually. Craig Conway was running Peoplesoft at the time. There was a big thing, no code on the client and pure HTML, which was really disruptive. And, you know, Larry Ellison didn’t like the value prop very much. Stephen Cummins: No. And he lost a couple of good people. Ted Krantz: Yeah, he absolutely did. Stephen Cummins: Who built some amazing companies. Ted Krantz: Yes. Yeah. Stephen Cummins: Working your way through that, I mean, there’s a thing that, I… I mean, I went back to Salesforce, and did a little bit of sales for a few years and, but one of the things that struck me is some people are probably born to it. I did very well at it, but I felt I couldn’t do it from my life. And part of the reason was this thing where it all starts again every year and… Ted Krantz: And every quarter. Stephen Cummins: Yeah, exactly. You could say every… you can break it up whatever way …. that takes a certain amount of stamina… Ted Krantz: It does. Stephen Cummins: Were you happy when, you know … when you reach a certain point where you’ve got up into the C-Suite and stuff like that? Did you feel “Whew I’ve done my stint” or do you still find yourself getting involved in large deals? Do you find you can’t … you know … do you find it hard to leave that part of your life alone? Ted Krantz: That’s an interesting perspective. I don’t feel that way. Stephen Cummins: Okay. Ted Krantz: I have released from the deals. I do get more into the metrics, but I’ve got a great sales leader that handles the execution side. So I’m fortunate there. And I’m really not fascinated by that anyway; I’ve always been driven more by strategy. Stephen Cummins: Okay. Ted Krantz: So I think for me, it’s an easier release then it might be for some. Stephen Cummins: Okay. Yeah. Yeah. Yeah. But would you not feel when you’re working, I’ll take you back to… to Peoplesoft for example … that on a kind of a month by month, quarter by quarter basis, it’s more tactical than strategic. Ted Krantz: Yes. Stephen Cummins: At that stage in your career…. Ted Krantz: Yeah, honestly, I was fortunate because I got put in a global role.. Stephen Cummins: Okay. Of course. Ted Krantz: And it was Global Accounts at Peoplesoft and I had Craig Conway in my accounts. Stephen Cummins: Yeah. Ted Krantz: So I’m this, you know, mid thirties, young executive, flying around the world and having Craig, like, sitting in meetings with me. So I got indoctrinated in the C-Suite hard and heavy…very early on. We had some big global accounts and Craig was intimately involved in those accounts. That’s one thing I really learned from him. I think at a high, you know, high level with my career, I’ve been blessed that I’ve had three legends that I’ve been pretty close to. Craig early on at Peoplesoft, you know. And then I moved
17 minutes | Jun 5, 2020
E114 – Bob Moore – 3 of 3 – All about the Network
Bob Moore: And have an open mind and be curious and and don’t don’t allow yourself to be defensive about anything, like you being wrong is maybe one of those powerful things can happen to you, especially at that at that stage. So start with something that you know and you’ve empathy for and you think you can have some success behind, and that success will propel you potentially into that thing being great and huge. And you can do it forever, but it might give you the ability to see something you couldn’t see before because of the momentum behind you and the access that you get. And maybe that’s where the real idea is. You’ve got to run really hard and fast or else you’ll you know, you waste a lot of time and up a lot of debt along the way, too. Stephen Cummins: Welcome to 14 minutes of SaaS! The show where you can listen to the stories and opinions of founders of the world’s most remarkable SaaS scale-ups! This is is the 3rd and final episode of three with Bob Moore, CEO and Co-founder of Crossbeam. It’s episode 114 of 14 Minutes of SaaS. Bob has a healthy obsession with SaaS ecosystems. He feels RJ Metrics was an opportunity missed because they didn’t focus heavily enough on ecosystems. Salesforce is the largest pure-play SaaS company in history and its single biggest achievement is its ecosystem. Looker’s 2.6 billion exit value to Google was, in part, a function of the fact that it positioned itself in the centre of a large ecosystem. And Looker was a competitor to RJMetrics. That’s the key to why, for Crossbeam, growing the network … growing those inter-connected ecosystems … is the single biggest metric for the business. And as always there’s some advice for SaaS entrepreneurs. Stephen Cummins: Who are your typical customers. Obviously, it’s a fairly horizontal play, but…but at this stage in your evolution, what verticals and regions would you be strongest in at the moment? Bob Moore: Yeah. So the honest answer is right now our our best stuff is North American B2B SaaS companies with at least one employer….one employee that’s got the word partnerships in their title. Like that is… that’s my… Stephen Cummins: That’s who you sell to and through. Bob Moore: The 100 percent of businesses that meet that profile we want to get them on this network. And you’re right, it’s a big horizontal play. We’ve got inroads in retail and financial services and large consumer brands. A little bit of health care stuff; we’re looking at HIPPA compliance. So there are a lot of places to put it, but because the business requires that both partners be on the platform, you get all these extreme network effects which are good and bad, right. In the early days, it’s a major ‘chicken and egg’ issue because the first person should never sign up because they don’t have anybody to partner with. So every deal is like closing two deals at once. So, we have to stick to these really narrow verticals and own the network graph where… where the mesh is the most dense and that happens to be B2B Saas. And then what we do is … we build out these concentric circles from there as… as we get more… more adoption. Stephen Cummins: So.. so you’re definitely on the right podcast. So where do you see Crossbeam going in the next two to three years? Bob Moore: Care a lot about the creation of value out of these ecosystems that is measurable and attributable, and that turns the partnership function into something that’s truly scalable and is a hero within the organization. There’s a lot right now where due to the lack of data, people that are in partner manager roles are kind of reduced to a lot of checking calls, a lot of emails, different styles of attribution, depending on which partner they’re dealing with. It’s chaotic and what we want to do is just provide a means by which we can create comfort and standardization in how data gets exchanged and collaborated on between companies that are working with each other. And then actually help build out the workflows that people used to turn that data into value for their companies. So from a product standpoint, that’s a big point of focus. And then from a market growth standpoint, there are some very interesting kind of winner take all effects in this market because of those network effects. And I think it’s just important to us that we are … it’s a core value of the company that the network comes first. And what that means is in any decision, if we have an opportunity to grow the network, to get more partners on board, we’re going to prioritise that over, over just about anything else that might be kind of a secondary path to success or metric … traditional SaaS metric. Stephen Cummins: It’s a very attractive market. And you’re very shiny right now. So there’s going to be … there’s gonna be a lot of heat in that domain. So there’s a land-grab aspect to that. Bob Moore: Oh, yeah. There’s a … there’s a moat to be dug. And there will be folks certainly trying to cross that moat. No doubt, we’re already seeing it. Stephen Cummins: And I know I get the impression just from what I’ve seen of you in research, that you love your city. You love Philly. You love Philadelphia. So, you know, are you largely a co-located company, is that how you’re built or … because you mentioned Zapier. And I actually don’t know. I didn’t get a chance to check that. But did you, you know, do you have remote employees or you primarily co-located in a few offices? How do you, how are you structured. Bob Moore: Yeah. So we’re culturally extremely remote friendly and I think take a very remote first philosophy around how we operate. So even if it’s two people that are in the same physical office, like there’s gonna be a Zoom, you know, turned on. It’s very possible they might be in different rooms or they might be sitting at different desks. We try to make sure that those team members of ours who are not physically in the same office as others, are not second class citizens within the culture and the operations of the business. That said, about seventy five percent of our company is in Philadelphia in an office we have there. So I think that’s the thing where, you know, at an early stage, kind of less than one hundred people company, it can be managed by a hand-to-hand combat. And we’re all one happy family. I think it does get hard. What I’ve heard and learned from other founders is you’re either 100% remote, or you’re not. Stephen Cummins: And hybrids are tough. Bob Moore: Yeah, hybrids are tough. So I think what makes it less tough over time and will make some of that advice get stale quickly … tools we use to run the business are tools that have been built with remote collaboration made kind of in mind. And it’s it’s interesting that tools like Zapier and Invision are fully remote businesses because they can have such tremendous empathy for remote work styles that inherent in their products are these things that just make it easier to, you know, to collaborate even when you’re not in the same place. Stephen Cummins: And the great thing about it is companies like them and Hotjar and lots of pretty cool hundred percent distribute companies … they write, they tend to write a lot about what they do. And yeah, the ones that are most interesting are usually the ones that are kind of agnostic about the whole thing and just say, well, “this has worked for us and this is how we built it out”. Bringing it back to Philadelphia, you’ve been involved in volunteer activities around economic empowerment, entrepreneurship and very notably education. And you know … me as I guess an Irish guy, but very much a citizen of the European Union who’s worked with a lot of US companies, I would see the US as a global leader in entrepreneurship. But for a developed country, I would see it as compromised somewhat for both education and for, not for elite universities of course, but for education for all or for a reasonable level of economic empowerment for all. I would see the US as having more problems than almost any developed country in the world right now. Developed. How would you feel about that statement? Bob Moore: I wouldn’t disagree. The experience that I’ve been fortunate to have is one that is somewhat diversified based on what chapter of my life you look at, because if you look at my childhood education, which is in a public school system, in a, you know, middle class school district in southern New Jersey… Stephen Cummins: Because you made it … Bob Moore: Yeah, like an extremely diverse student base, both racially, economically. You know, it just … it was wildly different from my experience going to an elite Ivy League University that happened immediately after. And, yeah, the number of times in my freshman year, in Princeton, that like my jaw physically hit the floor just by having experienced, you know, something so wildly culturally different. Whether that is the extremely tremendous academic prowess of the folks that I was competing with or something just, you know, cultural like the the things that are taken for granted in terms of the level of privilege that exist, whether it’s the quality of the food that you’re eating or the tenor of the conversation that you’re having. It was an eye opener for me. And then I think, you know, from there I’ve continued to really benefit from a tremendous amount of privilege that is kind of just been an extension of my education at Princeton. I couldn’t have gotten my job at INSIGHT if not for my Princeton education. Stephen Cummins: But you give it back. And you’re very self-aware, listening t
16 minutes | Jun 5, 2020
E113 – Bob Moore – 2 of 3 – Selling it Twice
Bob Moore: What percentage of companies use the word “platform.” It’s massive. It’s like 80 percent of companies “we are a platform.” We can’t all be platforms, right? A platform is like the baseline thing on which everything here should be built. And if you go … it’s like platforms all the way down. It’s platforms on platforms on platforms. The real word of the day should be “ecosystem.” Stephen Cummins: Yes Bob Moore: Because all of these companies that view themselves as platforms, they see it in that way because they see that “Oh, there are 50 companies connected to us; and therefore they are built on top of us, and therefore we are a platform” … but they’re forgetting that they are also connected to all of those 50 companies. So … a mesh of these companies that are self-identifying as “platforms” for really participating in “ecosystems” Stephen Cummins: Welcome to 14 minutes of SaaS! The show where you can listen to the stories and opinions of founders of the world’s most remarkable SaaS scale-ups! In this episode 113 of 14 Minutes of SaaS, the 2nd with Bob Moore, we learn all about his evolution as an entrepreneur through 2 exits and on to his current startup Crossbeam. If we think of a company as a product, then we learn how Bob managed to essentially sell his first company twice, the 1st time to Magento, the 2nd time to Talend. And we see another example of this pattern of serial entrepreneurs repeating similar levels of success, but in a fraction of the time the second time round. Stephen Cummins: And Stitch? Tell us about Stitch. Bob Moore: Yeah, so you think of RJMetrics as this big monolithic, like, “we do it all for you” one stop shop. So we’re gonna pull your data out of Salesforce and out of Marketo and out of your back-end databases and whatever else. We’re gonna drop it into our data warehouse and then we’re gonna let you set up these business rules so that you get charts and dashboards and log-ins and sharing and everything like that. That’s really three products in one: It’s what they call an ETL service; which is Extract, Transform, Load. So all the data pipelines, all the, like, “let’s pull this data out; talk to the API.” And then you’ve got the data warehouse, which is in the middle, which is where the data all lives. And then you get the business intelligence tool, which is the charts and the dashboards and collaboration. RJ was all of that. And what happened between 2008 and 2016 when we sold to Magento is that each of those individual pieces became so extremely critical to the way in which modern businesses and data science teams operate that they actually became a category in and of itself. So, like, take data warehouses, for example, in the middle. The release of Amazon, Redshift, Google, Big Query, Snowflake, which has become a real rocketship business itself, Microsoft has gotten into this game. All of the big public clouds have these massively scalable, cloud based data warehouses. So the fact that we have a data warehouse in the middle was great unless you wanted to control your own data warehouse, which you very well might want to if the rest of your infrastructure is sitting inside of AWS or inside another public cloud. So like on the heels of that, businesses like Looker and Periscope and there’s kind of a new renaissance for tools like Tableau … because they could sit right on top of those existing data warehouses. They don’t have to worry about ETL. They don’t worry about warehousing. They can just be charts and dashboards and collaboration around data and build amazing businesses there. And they did. And our competitive set went from being other monolithic stacks of everything to being a mindset shift where people would say, I don’t want to buy a big monolith, I want to buy these three components and tie them together. People started buying RJMetrics just for the pieces. So, like somebody would buy an entire full-price RJMetrics, buy the whole stack, and then just use the part where we pull data out of these systems and drop it into a data warehouse; to put it in their data warehouse instead of ours. And ultimately, we saw enough of that pattern that we said we should just break off this piece of the technology and sell it as a standalone product called RJMetrics Pipeline that does nothing but the ETL piece. And we’ll drop it wherever you want it and then we’re hands off; we’re clean. Steven Cummins: Yep. Bob Moore: And that allowed us to go from being a competitor with these amazing rocketship companies like Amazon Redshift, like Looker, to actually being an extremely powerful complement to them. We could go to market alongside them. We could co-sell with them. They were incredible partners because we made their product better and they made our product better. When we sold to Magento, part of the negotiation was …. Magento only care about Magento data. They didn’t care about all these other data sources. And we had this amazing ETL product, RJMetrics Pipeline, that they didn’t necessarily value. So part of our negotiation there was … let us keep our RJMetrics Pipeline and in the process of doing it, you know, they bought the RJMetrics brand and everything else. They got all that. So we couldn’t keep calling it that so we’ve rebranded it as Stitch, and that’s where Stitch came from. And then we ran Stitch for … and when I say we, I should say my co-founder, Jake Stein … while I did my 18 months at Magento, Jake ran Stitch as CEO. Actually we’re in the same physical building in Philadelphia so we saw a lot of each other. But the team there, Jake and Chris Merrick, our CTO just crushed it. And in about two years, a little under two years, Stitch got almost as big as RJMetrics did in eight year from a revenue and customer standpoint, and we were acquired by Talent in November of 2018. Stephen Cummins: That’s an interesting negotiation to be able to get a decent … decent outcome, plus keep a company, and then build it up to the same size and double your exit basically. Bob Moore: Yeah! One of my investors called it the triple Lindy. It’s like we basically sold the same company twice. It was, you know, it’s a glorified way really of describing a pivot where we at RJ didn’t move fast enough to capture our strong market position when we had it. And we really had a pivot that business hard. And we got …. we just got really lucky on having a series of transactions that made that lucrative instead of extremely painful. And I think that’s more luck than design to be candid. Stephen Cummins: So what drove you to jump out into Crossbeam? Bob Moore: I didn’t feel like I was done. And I love this idea. And I felt like there was a ticking clock on the idea. Crossbeam, conceptually, is, if you think of what we did at RJ and Stitch, it’s helping people get their data all into one place and analyse it and get value from it. At the end of the day, what you’re really doing is building a bunch of these data silos. Like your company has their silo. My company has mine. What I saw at Magento and what we saw at Stitch and at RJ was; when you want to collaborate with other companies, with third parties … I’ve got my silo and you’ve got yours and it’s a non-starter to think that you might let the other company into your silo. Our data is sacred and our data is protected. And there’s a lot of … especially in a post GDPR world … there’s a lot of really good reasons why that’s true. But then how do you answer really simple questions with your partners; like “how many customers do we have in common and who are they?” Or “are my sales reps currently selling to any of the same people that your sales reps are selling to?” Maybe we’ve got 50 partners in our tech integration ecosystem and we can only do one webinar a month. So who’s the next company that we should do this webinar with? When we think about power over our target accounts overlap, or our addressable markets overlap. What’s the next tech integration we should build in order to either expand our market or increase the stickiness of our product among our existing users? Every single one of these questions, which will come up time and time again in all these environments, were unanswerable because the only way to do it is to draw a Venn diagram of mine and yours. And the only way to draw a Venn diagram is if one side of the other has both of the circles and if the data is structured in such a way where it can even be compared … apples to apples. Two enormous problems. That…. Stephen Cummins: And a third problem, no? Bob Moore: Yeah. Stephen Cummins: You’ve got a conundrum because you’ve got, you’ve kind of articulated… you’ve got a conundrum whereby how do you balance, you know, doing things that are mutually beneficial and for the customers as well as for the two vendors, which is the initial drive, of course, while keeping that data private enough to not go.. go to the red side of the law or of of your customers perception of you? Bob Moore: And that’s paramount. Yeah. I mean, that’s kind of like … that’s a through line to all of this around the privacy, security and compliance components have a lot to do with transparency, control, accountability, data ownership. That chain of custody of data and how and when and why it gets exposed And exactly having the ability to control those rules based on your regulatory environment, the nature of the partnership you may have in place, the nature of the outcomes you’re trying to drive. And we, you know, I looked around at what people were doing in this area to try and solve this… and the answer was they were emailing s
16 minutes | Jun 5, 2020
E112 – Bob Moore – 1 of 3 – The Hammer that found a Nail
Bob Moore, CEO & Co-founder of Crossbeam, in conversation with Stephen Cummins: "I knew I wanted to start a company before I knew what company I wanted to start. And that is a really problematic way to get into it, because I think a lot of people end up in this mode where you're a hammer looking for a nail"
17 minutes | May 27, 2020
E111 – Christian Gabriel – 240 Degree Decision
Christian Gabriel talking with Stephen Cummins "They started off saying, ‘You know, yeah, we'd love to build Capdesk. If we can get, you know, 15 percent of your company in warrants, we'll build it.’ And once we built the prototype and our second funding round came up, I then asked them, you know, how much would it cost to hire two of you to go full time? And they gave me this ridiculous price. So then I said, 'You want to be equal co-founders, then? ... And they said ‘Yes. Wow!’ And the first thing that happened with equal co-founders was, ‘Christian, We need to rebuild the whole platform.’"
17 minutes | May 13, 2020
E110 – Ilan Twig – 4 of 4 – Halcyon Days
TripActions Co-founder Ilan Twig in conversation with Stephen Cummins: "When I worked for HP, there was no goal and everything was certain. And I'm just thinking about it right now. But that was the reality back then. That's why I was a walking dead. At least for me, I need to have something to aim for. And I need to wake up in the morning knowing that I need to solve something. I need to challenge myself with something. Be true to yourself … because when you start masking it with whatever bullshit, the chances that something good will come out of it is so low … it’s zero actually."
15 minutes | May 13, 2020
E109 – Ilan Twig – 3 of 4 – Fantastic Voyage
TripActions Co-founder Ilan Twig in conversation with Stephen Cummins: "Expenses are a pain in the butt. What you optimise for when you travel for work is completely different than what you optimise for when you travel for leisure. We thought if there is a way that we could then make people think about how they make their decisions when it comes to corporate travel more similar to how they do it when they book their leisure travel, there is an interesting opportunity for saving money for the company."
16 minutes | May 13, 2020
E108 – Ilan Twig – 2 of 4 – Stream to Ocean
TripActions Co-founder Ilan Twig in conversation with Stephen Cummins: "We sold StreamOnce, but I didn’t really feel that I filled a desire of building a company in the valley. It’s a nine month journey. So really there was nothing. We knew that the next thing would have to be big. And in order for that to be big, the market must be big. You know, there are markets you can have the most amazing idea, but if the market is small and you are the most successful with no competition, it will still be small"
15 minutes | May 13, 2020
E107 – Ilan Twig – 1 of 4 – Loving the Machine
TripActions Co-founder Ilan Twig in conversation with Stephen Cummins: "I never try to impress. I always assume I know less. And I think this created space for wonderful relationships. And relationships are so important when you start a company."
16 minutes | Apr 29, 2020
E106 – Georg Petschnigg – 6 of 6 – Perpetually Meaningful Movement
Georg Petschnigg in conversation with Stephen Cummins at the Web Summit in Lisbon: "Start with the team ... Because like, who knows where are things gonna go? Like, you want to be with people you like .. that you learn from, right? Because there will be highs, there will be lows. And there might not even be light at the end of the tunnel. But you will enjoy the journey if you enjoy the people that you’re with. So it’s like you’re already a winner no matter what happens if, you know, if you have the right team"
17 minutes | Apr 29, 2020
E105 – Georg Petschnigg – 5 of 6 – New and Old Amsterdam
Georg Petschnigg, in conversation with Stephen Cummins: "Having a tool for great thinking - Paper. Having a great tool to see inspiration and hold onto it - Collect. Having a tool to show, you know, your work -Paste. Having a great tool to deliver your ideas – Transfer. Right. So, we have a tool for thinking, seeing, showing and delivering. These are sort of the pillars of the creative process.And that's an incredibly exciting proposition, right? Because the world hasn't...doesn't understand that this exists yet. But it does. Like, we built it!"
16 minutes | Apr 29, 2020
E104 – Georg Petschnigg – 4 of 6 – Dancing with Big Tech
Having a business that has a hybrid business model where you can counter and interact with your consumer … either with free or subscription. That's what makes it so powerful because you're actually … I think WeTransfer is one of the few companies that can dance with the big tech companies. But can do it authentically, because we don't we do not depend on their distribution.
17 minutes | Apr 29, 2020
E103 – Georg Petschnigg – 3 of 6 – Beautifully Obvious, Fifty Three to WeTransfer
Why did Bas and the team actually build WeTransfer? Well because they wanted to get behind great ideas. Okay? That's why it exists. Right? It's not to send the file. It is to make a client happy … to get like your music out … to deliver the great video! That's why they got into this! It’s the same reasons why we got started with Fifty Three! We got into it because people have those ideas locked in your head, and you have to get them out. And that's sort of where we then, you know, start thinking about … well, what if it's not about just sending files? But it's really about the transfer of ideas. It's about the movement of ideas. We want to be the company that's behind every great idea.
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