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SaaStr Podcast #183: Eoghan McCabe, Co-Founder & CEO @ Intercom on The Right Way To Structure Your Org Chart

  • Posted by admin on July 13, 2018

Welcome to Episode 183! Eoghan McCabe is the Co-Founder & CEO @ Intercom, one of the fastest growing SaaS companies of the day, providing a new and better way to acquire, engage and retain customers. Due to their phenomenal growth they have raised over $ 240m in funding from some of the best in the world including Kleiner Perkins, Social Capital, Bessemer, and Index, just to name a few. As for Eoghan, prior to co-founding Intercom, he founded an award-winning software design consultancy called Contrast, and co-founded Exceptional, a developer tool startup acquired in 2011 and now a part of Rackspace.

In Today’s Episode You Will Learn:

* How did Eoghan come to be founder of one of the hottest growing startups in SaaS from founding a software design firm in Ireland?
* What does Eoghan believe are the core pillars for success in making the move from SME to enterprise? How does one reinvent oneself to make this transition? How has Eoghan seen the org structure and internal decision-making change with the adoption of many more enterprise clients?
* How does Eoghan determine between the decision to hire the young jack of all trades vs the much more experienced senior exec? Why does Eoghan believe you can never be too early to bring someone more senior than you onto the team? What makes Eoghan say, “we are all learning on the fly?”
* How does Eoghan look to create a culture of experimentation and accountability without the fear of failure? What must the leader do to imbue this culture? Where does Eoghan see many going wrong in trying to make this happen?
* How does Eoghan think about “transparency” with SaaS companies today? Why does he think that not only is it not healthy but also largely not possible? Instead, what is a better, more sustainable solution to transparency?

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Jason Lemkin
Harry Stebbings
SaaStr
Eoghan McCabe

Transcript: 

Harry Stebbings:  You are listening to the official SaaStr Podcast with me, Harry Stebbings. It would be great to see you behind scenes here at SaaStr on Instagram @hstebbings1996 with two Bs.

For the show today, as many of you know, it’s not just me that can interview a SaaStr. The main man, Jason Lemkin is a master of this. I wanted to bring you one of his finest today from a recent conversation he had with Intercom co‑founder and CEO, Eoghan McCabe.

For those that don’t know, Intercom is one of the fastest growing SaaS companies of the day, providing a new and better way to acquire, engage, and retain customers. Due to their phenomenal growth, they’ve raised over $ 240 million in funding from some of the very best in the industry, including Kleiner Perkins, Social Capital, Bessemer, and the Index Ventures, just to name a few.

As for Eoghan, prior to founding Intercom, he founded an award‑winning, software design consultancy called Contrast, and co‑founded Exceptional, a developer tool that was acquired in 2011 and is now a part of Rackspace.

However, that’s quite enough from me. I’m now very thrilled to hand over to Jason Lemkin and Eoghan McCabe.

[drum roll]

Jason Lemkin:  I met Eoghan a little more than four years ago when he’d been here for a little while. Intercom was probably doing 20k a month in revenue or something like that.

Eoghan McCabe:  Maybe a little more or a little less. It was early.

Jason:  You told me you’d never have a sales team and you might or might not hire a marketer. Does that sound about right?

Eoghan:  I asked to meet you about hiring a marketer our first time.

Jason:  The first time we met you said you’d probably never have a sale professional in the company.

Eoghan:  This is a long time ago.

Jason:  This is a long time ago. This is $ 100 million in ARR ago. This is a long time ago, revenue. No salespeople. Maybe the third time we met the question was, “Should I ever hire a marketer?”

Eoghan:  That was the question.

Jason:  Where are you on this continuum of sales and marketing today? Fast forward, especially since you’re an application that enables both professions.

Eoghan:  I think when we got started in 2011 there was a substantially fewer software companies out there which built their tools to be picked up in a self‑serve fashion, that were cheap enough to pay for with a credit card, that were acquired internally by the end user as opposed to some CM buyer.

There was a few, but there was very few. We had had such substantial early revenue growth without doing any of these things that the whole damn industry was saying you were supposed to do. You know that there was and still is a big generation of software pioneers, leaders, and investors who had only ever seen that other model.

That sales model where the company would manually reach out to a small number of named accounts, make that connection, educate them on the product, and thoroughly involve themselves in a quarter’s, if not year’s long process of getting that system into the company. That was the way.

I was super confused about the fact that we were experiencing all this revenue growth. We had no sales and marketing. The whole industry was saying that you’re supposed to have sales and marketing. It was confusing. It wasn’t like people hadn’t been talking about the consumerization of IT back then. Yammer, probably a bunch of people don’t even know Yammer anymore. I’m the old guy.

Jason:  It was pre‑Slack.

Eoghan:  It was pre‑Slack.

Jason:  It was pre‑Slack but no one that built software used it. It was business guys.

Eoghan:  Yammer were the primary and key example of this consumerization of IT. It was a big deal that this service was being adopted by individuals in a company and small teams. Somehow it was supplanting the entire organization, some tools that were bought by the CIO. That was a big deal. Today it’s not even a big deal anymore. That’s exactly how Slack grew.

So many of the software companies that people here are developing similarly will be acquired by the end user. You will just sign up. That was new. That’s the background of that thing. It was me simply saying ‑‑ and I don’t think I said, but it makes for a nice, dramatic introduction to this evening ‑‑ I don’t think I said we’ll never have sales.

I was super confused about the fact that the whole industry said you’re supposed to have sales and marketing, and yet we were experiencing fantastic growth.

Jason:  I don’t think you were. Now, Stewart Butterfield in 2015 at SaaStr Annual said never. You did not say never. There is no question.

Eoghan:  Thank you.

Jason:  You said, it sounded, it would be a while.

Eoghan:  Yeah, it was just unclear to me. Let me say that much. I was always triggered by any advice that says, “This is the way it’s supposed to be, and you’re supposed to do X, Y, and Z.”

Jason:  That patronizing advice is hard as a founder, isn’t it?

Eoghan:  Yeah. First of all, it hurts my pride, and I have a lot of that. Then also, for anyone who is the type of individual who will want to get out there on their own, make their own name, put their neck on the line, aspire to be different, great, and special, they’re the opposite of the type of person that wants to be told what to do. They just are.

Jason:  Then talk about the phase transitions as you grew. In the early days, actually, you put up gates on intercom in the early days, intentionally. You made it intentionally a little bit of work to deploy so that you’d have the right users and customers, if I remember right.

Fast forward to today, and it’s all about the journey and revenues many orders of magnitude larger. What were the phase transitions to intercom today?

Eoghan:  I’ve had many experiences in my life and career where my dogma has hit me in the face, and it really hurt.

Of all of the mistakes I’ve made, and all of the weaknesses that I still have with me to this day, the one thing I feel so grateful to myself about is that I have actually been able to somehow, despite my fantastic pride, and stubborn nature, been able to walk away from some of this dogma, from some of these religious views.

For anyone who takes pride in their passion and strongly held beliefs, similarly permit yourself to be wrong. As someone who can simultaneously have very strong opinions, rip them up, and say, “I was wrong,” those people will do great things. It’s just true that the world and the landscape competitively, the talent market, consumers, and everything else are moving forward.

Everything about the environment is changing. If you don’t yourself change, you will become obsolete. I’m not equating myself to such people, except I am. If you look at any great artists, you will see that they have managed to reinvent themselves.

People who have sustained over the generations, I’m a big fan of Kanye West, for example. We can get into that conversation, if we want to.

Jason:  I won’t touch it. I won’t touch it. It’s good.

Eoghan:  He’s totally reinvented himself.

Jason:  How often do you have to do it? I think it’s every four to five years, you have to reinvent it.

Eoghan:  I don’t know.

Jason:  Are we in Intercom 2.0, or 3.0, or what time are we in?

Eoghan:  I think we’re approaching 3.0.

Jason:  Approaching 3.0?

Eoghan:  We’ll get back to your actual question.

Jason:  This is good enough, the 1.0, 2.0, 3.0, but keep going.

Eoghan:  OK, we’ll do that. The Intercom 1.0, let’s say, was the one where we were experiencing growth. We were refusing to take advice from others. We said, “What’s all this sales and marketing stuff? We’ve got revenue. Something doesn’t compute it. We’re going to go it our own way.”

That worked out for some certain amount of time. Then I started to meet more individuals from middling companies that both had experienced a lot of in‑band growth, had a self‑serve model, who also had sales and marketing people.

I started to see the other side, the other perspective, and respect and appreciate the magic that they can bring. It was just an education was all I needed. There’s something interesting about no things in the history of humanity are stable. All things change, but some things change over a longer time period.

For as long as you and I are in the game, people will be doing things called marketing, and people will be doing things called engineering, for example, just to pick three. They’re going to look different over time. The Intercom 2.0 was realizing that, hold on a second, this marketing thing, this sales thing, these are activities, tactics, and strategies we need.

They need to be reinvented for our world, and reconsidered for who and what we are. I’ll give you a couple examples. It used to be the case in enterprise software ‑‑ enterprise software, you’re selling to big, big companies traditionally ‑‑ or it used to be the case that the demand in the software vendor was created by sales.

Sales would identify geographies, verticals, and they’d list a bunch of accounts. They’d split them up between teams and reps, and they’d reach out. The outreach would eventually break through to some people. Then they’d start a conversation, and they’d educate them.

Remember, this conversation needed to be like, “Hey, have you ever heard of Intercom? Hey, here’s what Intercom does. Hey, do you realize that is a problem that you have in your life?” There was so much work that needed to be done.

Jason:  That could be a whole golf course conversation.

[crosstalk]

Jason:  It could take three to four hours to really explain that.

Eoghan:  If you play golf, exactly. I don’t know how many people play golf in this part of the world.

Jason:  It sounds silly today, but when you bring up the point, the marketing is not so silly.

Eoghan:  There was a ton of work required. In this modern world, education about a company ‑‑ we can get onto this a little bit later ‑‑ happens in just different modes, channels, vehicles, and ways. When we were getting started, one of the things that we did, we were one of the first to really lean into this, I think, we educated the market by way of our content.

We started to talk about the things we were learning. We share those things with the world. That was how we got the message out there that we existed. That’s just one example of how in the old world, there was sales that had to do that, the initial engagement, the education, creating the demand.

In this new world, all of those things are still happening, education, demand generation, but just through a different vehicle.

Jason:  In the early days, I didn’t really remember that. Content marketing did work for Intercom in the early days. I felt it was more almost a viral loop of folks being exposed to it.

Eoghan:  It was kind of a mix of all these things.

Jason:  I wasn’t reading the blog posts. I should have read the blog posts.

Eoghan:  You should have read them. They’re still there. There’s 600 now, so you’re going to have to take the weekend off.

I think the point is that all these types of activities, these fundamental strategies whereby you need to educate people about your existence, what you do, and identify the fact that your solution can fix their problem still happened, but just in different functions, and in different ways. It just took us a second to identify that. I think these things are well understood by now.

What sales ended up looking like at Intercom was, rather than generating that demand, it was actually facilitating the adoption after the demand had been created. It was just a different model, where it was the product being different at the very start, was the core of the brightest part of the fire that created that word of mouth.

Then that was built upon through our content, which got the brand in front of more people. Maybe there was a little bit of virality. Then later came the sales team to engage people who were interested, answer some of the niggly questions, fit their problem with our solution, etc., etc., etc. It’s just different functions playing different parts in different roles.

Over time, this will swing back and forth, or oscillate. You’re going to see these teams become more or less important, or play different roles at different stages in all these companies.

Jason:  I should know this. At today’s scale, you’re not having to deal with CIOs’ offices and different types of buying decisions? Aren’t you starting to hit that in bigger accounts, or not really?

Eoghan:  Our whole strategy was to start with the early adopters, the innovators, the [inaudible 12:39] market. Slowly, we’re starting to talk to these people.

Jason:  Intercom’s big enough, you can’t be a rogue app in your bigger accounts, in your bigger name ones.

Eoghan:  I think the thing that no one realized back then also that’s exciting, and worth embracing today, is that the market is just so much bigger than anyone ever realized.

Jason:  That’s what we all got wrong, looking back.

Eoghan:  Totally wrong.

Jason:  No one knew, especially for software companies, SMBs. No one knew SMBs would be this this big, did we? [laughs]

Eoghan:  Not at all, and it hasn’t finished growing. What people now see as a big opportunity for software companies, and a massive market of businesses around the world that can buy your products, that’s still the tip of the iceberg. To overuse the overused cliché, software is still eating the world. It’s only getting started. Software’s only getting started, the Internet’s only getting started.

All these new devices, we’re only starting to use them in new ways. All of the vendors and the different types of companies that will need to exist to help those types of companies that don’t even exist yet will just blow up this market, and globally, too. The global part is really, really key.

Jason:  It is. A lot of entrepreneurs will hear this story and get very inspired, but the question is, SMBs, software, everything’s much bigger than we thought in 2011. I think it’s two orders of magnitude bigger, but are the categories that can adopt software grown?

The risk is that folks that are building products that can’t ape Intercom’s adoption schedule want to. It’s a greener grass. I’d love to sit in an office in San Francisco and get to my first couple million in revenue through this content marketing viral inbound model. Does it work for more types of products, do you think? Have you thought through that?

Eoghan:  Are you saying, do these strategies work?

Jason:  I may be wrong on this, but I think Intercom got to critical mass with technology companies, software companies, early adopters that saw almost a next generation amalgamation of chat, a little bit of marketing automation, and all this.

They said, “Wow, this is 10 better than what I did before,” but not all of us can sell to super sophisticated software companies in the early days to get off the ground. Has that changed? Can we all be Intercom? Let me put it differently, can we all be a mini Intercom?

Eoghan:  Absolutely, why not? Totally could be. Sure, you could.

Jason:  Everyone would like to do it the Intercom, Dropbox, Slack way. They’re look at Aaron Levy, and they’re like, “Box is harder than Dropbox,” right? I don’t know the answer. It’s something to think about.

Eoghan:  I think that it’s all relative. Because the market is much bigger than it was when we started, because it’s still growing so aggressively. It depends which market you’re talking about. If you’re trying to sell to other software companies, which what we sell to, globally, they’re all becoming more sophisticated and more educated. The same trends continue to happen. There’s just a lot behind that.

Software is now, how would I say, commodified a little bit. It’s just so much easier to build software. You need substantially less expertise. It’s getting into so many different types of niches. Some of the most exciting categories in software right now are verticalized software, where you’re starting to see people build SaaS business for traditional non‑technical industries.

I’m thinking like construction, and all sorts of industries that certainly five years ago, never would have had software built for them because software was hard. It hadn’t yet filled the gaps that were needed for the more technical buyers. The people who cared about these more esoteric industries, these non‑technical industries, hadn’t yet understood how to build technology companies.

It’s still getting into all of the places. You should image and think of a bell curve of adoption. When it comes to the growth of the market, the growth of software, and the growth of Internet penetration of software into industries, we’re still on that early phase. The mainstream of what software will do hasn’t even happened yet.

Jason:  Let me dig. I want to dig into some Intercom‑specific questions after this, but let me ask about one thing you brought up. Maybe not challenge it, but dig in on this idea that it’s easier to build software today.

My learning, just as a student, is that it’s probably easier to build Intercom of 2011 today in 2018, but I think the bar has gone up. When you can procure AI from Google from an API, and don’t have to figure out to build it, I am stunned that I see by the quality of software that I see at a million in revenue.

The products are so much better than they were four or five years ago, that I think the bar, in some ways, has gone up, even if it’s easier to build, because the expectations are so much higher. Everything’s an API. Everything’s available. Why can’t your product be amazing? It used to be your product could be pretty crappy at a million.

Eoghan:  It depends which market you’re talking about. The bar for sophisticated buyers has gone up. Buyers who are in the tech world. They’re already making software themselves. They want AI, insanely fast UI, multi‑platform, all this stuff.

Jason:  On day 10.

Eoghan:  Correct, or at a million, or whatever. That’s the expectation internally in the business. I’m talking about all these verticals, all these non‑tech, traditional industries. Pick all these things, like finance, construction, and different types of labor and trade, the bar is still rising there.

I know nothing about this industry, so I’m just going to make this up. I imagine if you’re building software now for a niche in the farming industry, it doesn’t need AI. Now, it maybe can benefit from it, but it doesn’t need it. The competition there, not only does it not have AI, it doesn’t exist yet. There is no competition. That’s my point.

My point is that the opportunities for software are still expanding, like the Big Bang, still blowing up, still moving. It’s only at the hot little center that we need all of this fancy stuff.

Jason:  We can talk about a lot of Intercom stuff. One enigma for me for Intercom, having been a longtime fan of the CO and the product, is it seems to me, both today and the beginning, the product has always done a lot, aspire to do a lot even in the early days. Today, you have multiple products and multiple verticals. I’d love to know how the hell you balance it.

Before I even get there, I’m more interested in how you position it and market it. The most confusing thing when we first met, I thought I understood Intercom. When we first met, I understood it less well after we met because there were pointers that your brain was going. How do you do that?

Intercom isn’t alone there. But there’s so much stuff going on at Intercom. How do you focus it for customers, for the market, for other stakeholders?

Eoghan:  I need to preface this by saying that the story is yet to be written on our brand whether or not this is a good idea. Let’s check in a couple years to see if this worked.

Jason:  [laughs] Of Intercom being not just a one sentence product to me.

Eoghan:  Yeah. Or the idea of trying to do everything being let’s just call it smart. Let’s find out.

Jason:  I guess if it’s a sweet 3.0, there’s case studies on either side. People want multiple point products. They want something to solve all their problem that they can deploy in an hour.

Eoghan:  I always thought about it in terms of coverage. You can cover areas in different shapes. You could vertically really, really deep into one specific use case, topic or for one team or one industry. You could solve all their hardcore, complex problems.

Or you could go a little more general on a bunch of associated problems and start to deliver magic that comes from this suite, this interconnectivity, the shared data, the share brand other things. For me, I had seen tons of people do the really deep thing. I said, “Let’s try a different shape. Instead of tall and skinny, let’s do short and stout.” Different shape, short and stout.

[laughter]

Jason:  Now it’s just a big square or something like that.

Eoghan:  It’s neither of those shapes. It’s an awkward shape right now.

Jason:  I know things like brand and corporate messaging, we struggle with them as founders in the early days. They do become important. How do you convey that to CNBCs and to the Wall Streets of the world? You’re not quite there yet. How do you simplify this message? Because more of us struggle with this than we might think, simplifying products.

Eoghan:  Product people and technologists, and inventors and artists and makers and dreamers and people who think in details, really struggle with this reductive thinking. If you say, “Give me one sentence to describe Intercom,” my brain says, “There’s just so much more than one sentence. There’s so much you want.”

Jason:  The way the web communicates with its customers.

Eoghan:  OK, we’re done.

[laughter]

Eoghan:  Thank you, everyone.

Jason:  Maybe that’s pretty bad. I don’t know.

Eoghan:  You can do that. I can think of all the reasons why that doesn’t work. I think it’s a skill. I think it takes a different type of person. It needs someone who’s good at simplifying and someone who empathizes with the complexity that is involved in the understanding of the participant of the person who has to listen to my super complex definition.

Really the secret is honesty, starting to understand your strengths and weaknesses, and bringing some awareness and consciousness to the way that you think and the things that you appreciate. Similarly, hand in hand with that, the knowing the types of individuals and people that are substantially and sufficiently different users so they can complement you.

Then, learning how to marry those two things, learning how to work with them. The Intercom 3.0 is us bringing people who, traditionally in Intercom, they’re not Intercom people. They don’t talk any sense. They don’t get us. Now we’re a little more mature.

Jason:  You mean employees or customers?

Eoghan:  Employees.

Jason:  Very good. [laughs] You need folks that have run the playbook before.

Eoghan:  That’s part of it. Also, just different types of skills. For we’re talking about branding, we have people who work in branding and have experience in those pursuits. Together, we can bring both of those types of thinking to the fore.

If you look at any company, including great companies, super successful companies, you’ll see that they always have an angle or a skew. You can point out the weaknesses of Google and Apple, and their skews. They’re both also some of the most brilliant businesses and companies ever made. They still have a certain angle.

For us and for a ton of people who would start software companies, our angle and the way we’re skewed is towards technology and the product, thinking about what’s possible with this thing we’re building.

We have a very pure, simple, beautiful model for that in our heads. Now we need to learn how do we get that to the rest of the world. How do we learn to speak the language of the mainstream? How do we learn to work with people who are not like us, who are quite different, and [inaudible 22:29] ?

[crosstalk]

Jason:  How do you learn as CO? Do you spend more time with customers?

Eoghan:  I’m spending a lot of time with people that are different to me, internally in the company. We’re learning how to find that common ground. We’re learning how to constantly reinvest ourselves and give up our dogma and our bull. Again, I don’t care how successful you think anyone is, I’ve got all my heroes and then my software heroes. These are the Shopifys and the Atlassians.

There’s a long list of software heroes that we’re not nearly at. Even they are having to desperately reinvent themselves I guarantee you. There is at no stage…

[crosstalk]

Jason:  …every five years like clockwork.

Eoghan:  For sure. Shopify right now are going into a bunch of fundamentally brand new areas for them. Reinvention and just ripping up your old strongly held beliefs is of primary importance. That’s just a facet of both the time that passes on the calendar but also the levels of maturity that you get to and the places in the market that you want to sell to also.

If you’re the type of company that is starting at the bottom, selling to early adopters and innovators and wanting to sell to increasingly larger and more mature and serious businesses that may consider purchases, you need to reinvent yourself and change even for just that even if no time passed.

Jason:  As a product‑centered CEO, how many customers does Intercom? A bajillion. How many roughly?

Eoghan:  I think the last number we announced was 26,000.

Jason:  Good enough for this question, 26,000. Because it’s always important as CEO, how do you connect with these 26,000 customers? How do you make Intercom personal to them so they can bond with you, not just this thing on their website? What do you do?

Eoghan:  That’s a really great question. Again, so much of the advice and the wisdom that’s out there comes from the enterprise software world where people say, as a CEO, you’re supposed to be meeting all your customers. You should be closing the biggest deals. You should never be far from them etc. When you have tens of thousands of customers…

Jason:  It’s hard to do that.

Eoghan:  …it’s not actually physically possible. It’s just actually not possible. Yet we’re a bit of a tweener in that we don’t have hundreds of thousands of customers. We’re selling to increasingly larger ones too. I think that knowing that you are challenged in that respect is the first stage. What do they say about addiction and alcoholism? Admit you have a problem is the first step.

[laughter]

Jason:  Admitting you need to connect with customers differently was part of the problem.

Eoghan:  Is the first step. Knowing that you have such a volume of customers and you’re going to be challenged to connect with them is the first stage, moving on from the stage where you think you actually know what they want and need.

In the early days, again, we were building for ourselves, people just like us. There was sufficient amount of them. Now as we’re becoming a little more mainstream or we’re selling to a more diverse or broad audience, we don’t know them anymore. I don’t know them in the same way anymore because they’re just different to us.

There’s tactics and strategies and different things you can do. We built a research team very early on that puts a lot of time into talking to customers, engaging with them, surveying them. They also collate all the feedback that comes in through Intercom.

Jason:  Is that actionable? Does that research…?

[crosstalk]

Eoghan:  It’s pretty actionable.

Jason:  The product team takes that and works with it.

Eoghan:  The great thing about the scale is that while you don’t get the same nuanced, high definition magic you can get from a one on one, which we still also do and I do, you do get statistically significant feedback, high amounts of data and clear signals about what the masses and the world need and want fixed.

Yes, we use a lot of research. We have a product analytics team. We dig deep into our data. We run a bunch of surveys. We run a bunch of interviews. We look at the feedback at Intercom. We put a lot of energy into listening to them at scale. It’s super, super hard.

The thing that we’ve not quite got right yet is finding representative customers to create the anecdotes to support that data. Because people talk so much about data‑driven companies and how you’re a bad person if you’re not close to your numbers.

Humans don’t actually relate to statistics. We actually can’t inherently embrace the meaning of a lot of these numbers. The thing that resonates most with our full being is other human problems. Again, the secret or the magic there is marrying the left and the right brain, the data and the squishy stuff, the immeasurable. If you can do that, then real wonderful things happen.

Jason:  I’ve got a couple of things I want hit. Do we have some questions with Slido? I’ll grab some of these. Let me ask just one thing I wanted to touch on. You hired a COO about a year or so ago, Karen Peacock. She was either our first or second highest ranked out of 200 speakers at SaaStr Annual. Watch the video. It was a pretty good one.

That was an accelerant for Intercom both quantitative and qualitatively. Wasn’t it? What’d you learn from that from making that hire. We could talk about a million management hires because I bet you have 20 VP lessons. We’ve all learned that someone like this can make a huge difference. What’s the takeaway from bringing her in?

Eoghan:  Takeaway is the following. One is, it’s terrible generalization. I don’t think you can ever hire someone substantially more senior in experience than you too soon.

Jason:  You cannot. That’s the not obvious part.

Eoghan:  I deeply believe that.

Jason:  You should have hired her earlier.

[crosstalk]

Jason:  …without any doubt.

Eoghan:  No doubt. The earlier you are, the harder it is to figure out what you need. You’re going to make mistakes. That’s OK too. Be willing to make mistakes and bring in…

[crosstalk]

Jason:  They do need resources.

Eoghan:  Sure. They will figure that out.

No matter what stage you’re at as a business, there is somebody out there who appreciates uniquely what you are and the business that you’ve created, probably appreciates it because they are not about to do it themselves and maybe feel that they couldn’t. But they have a wealth of experience, knowledge and simply just time on the job and on this planet that can be so, so, so valuable to you.

A lot of us put it off because certainly when I started to tell people you afford to do this sooner, people say, “We’re so early. Someone awesome wouldn’t want to work for us at this stage. We’re not hot. We can’t afford them. Would they really want to bet on this thing? We haven’t such and such a proof point.”

No matter what stage you are at, no matter what you have to offer, there is somebody out there who will be excited and willing to help you, who can actually be very, very useful indeed. Maybe they will not be that COO in two or three years. That’s OK too. You can have an awesome, wonderful journey together. You can learn a lot from each other. Maybe they do become that, but it’s OK if they don’t.

Jason:  Try to bring in one seasoned expert that’s a good fit as early as you can possibly find the person.

Eoghan:  Absolutely. Seasoned is all relative too.

Jason:  Maybe at least five more years of doing this than you’ve done.

Eoghan:  Whatever it is. Someone who’s a good stretch ahead of where you’re at.

Jason:  That’s the part, this impostor syndrome. It was funny. Mike Cannon‑Brookes at the SaaStr [inaudible 29:00] talked about how he has it at Atlassian. That was half of it. I still haven’t [inaudible 29:02] . We all have it as founders. I can’t get somebody like that. There’s no way I could get someone from Intuit or from Slack or from whatever. No one’s pushing from Intercom. I won’t bring that one up.

You think you can’t get that person. You can! Maybe 1 out of 20. You got to go find them. You got to ho hunt.

Eoghan:  It depends what that person is. My point is don’t paint some picture of some perfect person who won’t work for you.

Jason:  That’s so easy to do.

Eoghan:  Rather, paint the picture of the person who will because they exist and they can be valuable to you. You need to take a good, hard look at yourself for the reasons you’re not doing it soon. A lot of the reasons can also include worrying about maybe them threatening your position, or you might be a little intimidated by their experience.

Jason:  Do you ever feel that way?

Eoghan:  For sure.

Jason:  I view that as a sign of weakness. It’s interesting that you felt it.

Eoghan:  No, not at all. The truth is the very nature of the beast here in the Valley and in tech, why it’s so exciting and hilarious is that we’re all learning for the first time. People who easily know how to do this stuff in their sleep, which don’t actually exist but there’s people who’ve done it a couple times before so it’s way easier, why would they bother doing this? They’re not doing it.

The only people truly motivated to do this are people who have something to prove. They want to do it for the first time. Even people who’ve done it before, they’re motivated by a challenge that looks bigger than their last thing. Nobody starts a $ 10 billion company and goes, “Whoa, I don’t have to start the next one and make it $ 10 million.” They don’t do that.

Jason:  It’s got to be an order of magnitude bigger.

Eoghan:  They’re just thinking about the next thing. It may be different on a different scale or category, but they’re looking for the next thing. The awesome and hilarious thing about this whole industry is we’re all figuring it out on the fly. Every single person you meet, at every single stage in your company, by the way, is doing it for the first time.

Even the current peacock is a first‑time COO. We’re all learning. To be able to embrace that fact, and bring consciousness to the things that you’re f‑ing awesome at, and also peace with the things that you’re not good at. Just love all of it.

Be able to put that on the table, and be sufficiently vulnerable to say, “I think I’m good at this and this, and I’m excited about that. Let me keep doing. I don’t know anything about this, this, and this. Quite honestly, I know about this and this, and I’m bad at it.” To be able to partner with someone who can complement you, and appreciate you for what you are.

Have a little bit of overlap. I think that was one of the lessons I learned when I went there, talking to potential COOs. People polar opposites are just going to be too opposite, and too different.

Jason:  Too hard to find common group quickly?

Eoghan:  A little overlap, but honestly, someone who has just to experience, who’s just seen a couple of these things before can be invaluable. I hope that everyone here will be able to identify with the idea that every year, year and a half, or two years, if not every six months that’s gone by, you’ve realized how much of a f‑ing idiot you are.

Jason:  What have you decided not to do?

Eoghan:  As many products that we’ve got, as many opportunities we’ve looked at, we have actually said no to a lot of them. We’ve said no to a lot of acquisitions. At some point, you get thrown these opportunities to acquire companies.

Jason:  It very distracting, isn’t it?

Eoghan:  It can be very distracting.

Jason:  Have you killed anything that went into production?

Eoghan:  Yeah, we’ve killed stuff, yeah. I’ve said no personally, but this is a lot about my personal style. I’ve said no to just a lot of potential meetings, investors, different events, and Jason Lemkin opportunities to sit down.

[laughter]

Jason:  Thank you for coming, yes.

Eoghan:  I think you’re more defined by the things that you decide to not do than the things that you are, fairly really and completely. You’ve got a whole buffet of options in every single category, in every single function. The wise and sustainable choice is choosing the little things that you nibble on over time.

Having that, it’s not discipline, it’s actually tastes. It’s actually saying, because we actually would be excited about all these things. Actually, picking the things that you are most excited about, that are highest leverage for your company.

Jason:  Let me ask a follow‑up. Maybe you haven’t had this issue, but I find it’s a tough one. What do you when your team as a group has decided they want to build something? A new product or a feature that’ll take a lot of work, and you know it’s wrong.

You know we shouldn’t do it, and it’s a significant strategic effort. It’s not a, break the company. Has that happened a few times in terms of saying no? Sometimes, the COO has to put her or his foot down when everyone else sees it differently. Maybe that’s never happened in the history of Intercom. I find it’s a tough one.

Eoghan:  It’s kind of happened. I think that the model of the CEO whereby they know all the answers, and they are always 10 steps ahead of everyone else…

Jason:  That does fade. [laughs]

Eoghan:  They don’t exist. Maybe in the early days, it was like a big party between whatever, but no. I just don’t think that they ever really exist. If ever you try to play that role, you’re playing an unsustainable position that you’re going to run out of time with.

For me, it’s always been highly collaborative. I always encourage dissent and open conversation. Sometimes, I have very strong opinions, and I’ll let them know.

Jason:  How do you make people comfortable bringing up that dissent? It’s not easy.

[crosstalk]

Eoghan:  No, it’s not easy. It’s a constant struggle and a battle. I think sharing your own vulnerability, for a start, admitting when you were wrong, telling people you don’t know everything is half the battle. That’s half the battle.

Again, we all have these models for what a CEO is supposed to look like. It’s built out of our own insecurities, because like we said, we’re all figuring it out on the fly. We’re all worried that the people who work for us, who may actually be smarter than us in a whole bunch of categories, might figure out. We get defensive. We put up this strong demeanor.

We pretend to be that role model that maybe we’ve seen on TV, or we’ve just imagined as a kid. That’s just a total failure mode. I’m not saying that we’ve totally figured this out. That CEO title comes slowly. There’s people joining Intercom that had other types CEOs. They’ve learned what CEO means not even just from my behavior, I’m not even saying that my own behavior’s correct.

I think over time, you can start to gently soften that, and make it substantially more collaborative. Ultimately, the CEO is on the hook for the decision. They’re responsible for that, and accountable for the outcomes of that decision. The process by which you make it can, and in my opinion, should, be one where there is open collaboration and debate.

When you give people an opportunity to disagree, dissent, contribute, and then you make a joint decision, then it’s their decision, too. If you tell people, “Hey, folks, happy Monday. Here’s what we’re doing. Go,” even if people are like, “OK, he’s a CEO, guess we got to do what we’re supposed to do,” it’s going to be very hard for them to put their full weight behind. It’s just going to be very, very hard.

Jason:  In my brief tenure in a Fortune 500 software, I learned really big companies have one advantage a lot of startups don’t have, which is it’s easy. You’re allowed to fail in a big company. If I’m at a big software company, and I want to try to copy Intercom, I spend a year, I launch a good clone, no one uses it, and we shut it down after 18 months, you know who loses their job? Nobody.

In a big company, if you fire the people because their Intercom clone has no revenue, you’ll just sit in your office, not your cube, and shut your door, and work on…Sometimes, with faster companies, it’s hard to let people fail. If you allow dissent and challenge, which is good, you also have to let people run with things.

Have you thought about this issue, how long you let projects and failures last before you have to rein them in?

Eoghan:  We try to talk about the idea that we want Intercom to be a place where it’s OK to fail. It’s more aspirational than the message.

Jason:  It’s hard, isn’t it?

Eoghan:  It’s very hard.

Jason:  It’s hard.

Eoghan:  I think what’s important is that if you’ve permitted an open dialogue and discussion, you’ve made the call, and you’re together going to go and make that bet, you need to share accountability. The idea that then nobody’s on the hook is the wrong model. We are on the hook. We’ve failed. First, embracing that failure is the first piece.

The truth is, the way we learn in the world, the model we have on our heads for how things work, come from the outcomes of the decisions that we’ve made. Whether it’s to come up here and try to not curse, but still curse, now, I’m learning I need to be more disciplined, have more taste in the words I use. Or starting a certain project, drinking too much on that one night, or whatever it was.

Whatever things in all your life that you’ve done, all the different mistakes and failures, the person that we are is the outcome of all of these decisions. The truth is that you embrace failure and say, “We failed,” but then you can also authentically say, “Here’s what we learned.”

I only gave it that whole preamble, because without thinking about how these things work, it can sound a little bit like reaching for a silver lining. I hate where it’s like, “Hey, this thing failed, but the good news is…”

I prefer saying, “This thing failed. Here’s why we made this decision. Here’s the assumptions we had. Here’s how we were actually wrong. Here’s what we actually learned, here’s what we’re going to do next.” Honest, mature people are going to be like, “OK, good, awesome.” They knew they had an opportunity to participate in the decision, and the person is up there co‑owning the failure.

They’re not dressing it up, and they’re going to move forward. It’s nuanced in all this. If there’s one little cheat, it’s simply to somehow find your authentic self. Find authenticity. If you can find that authentic voice here you can have sufficient awareness, self‑love, and confidence to be able to be vulnerable with people, everything else gets figured out.

So much of these management tip and the tricks you read in book, I think, are hacks for people not actually being authentic and real people, and vulnerable, open, and honest.

Jason:  It’s a winner, isn’t it?

Eoghan:  It’s a total winner.

Jason:  If you’re not vulnerable, you’re not authentic.

[crosstalk]

Eoghan:  100 percent. It takes time to be vulnerable. We all don’t necessarily learn that growing up. A lot of the experiences we have in life teach us to be more closed‑off, and to protect ourselves, which were important when you’re in school, and there’s a bunch of bullies trying to call you a bunch of mean names.

Later in life, when they’ve gone away, you’re in the grownup world, you’ve raised a bunch of money, so you’ve got so much opportunity ahead of you, you can often afford to open up, not be so protective, and be vulnerable. As a CEO, even if you’ve only raised half a million dollars, and you’ve only got five people in your company, that’s really amazing.

Very, very few people in the whole world have ever done that. You now should feel very proud of yourselves. You should get ready to start to admit your weaknesses, flaws, the things that you’ve failed at, start to open up with people, and start to build some trust. If you can’t do that, you’re going to nowhere.

Jason:  Related to that authenticity and vulnerability, what have you learned about transparency with the team, maybe customers or others, but especially internally? I haven’t been to an Intercom all‑hands meeting, but what have you learned about transparency?

Eoghan:  I’ll say a couple things. First of all, I’m still learning how to do it and how to get better at. That said, just FYI, whenever we do an employee engagement survey, it always comes back, “Oh, my god. We’re super transparent.” I think we’re already pretty good at it.

Jason:  You’re well ahead of the median. That much you know.

Eoghan:  It’s an ongoing journey. One of the things I really struggle with is that when transparency started to get cool, I think the model that we all had in our heads for what transparent was, was all the information was everywhere. Everyone can know all things.

Jason:  Put it right on your blog, right?

[crosstalk]

Eoghan:  Think of a model for transparency, like clear glass in the meeting rooms you can see through. It’s transparent. It works. The problem with that is that, by design, unless you are not a company built in the shape, in the hierarchy where people have not only separate responsibilities and specialized functions across the company, but also degrees of abstraction of responsibility.

Lest you are not like that, by design people focus on certain things, have more context for their things than others, or they have different context. Put another way, I don’t even know all the things in our company.

A CEO can never complain about their own company not being transparent, and yet they won’t actually know all things. It’s not feasible. It’s not possible. Any given day in Intercom, I guarantee you there’s at least five things that went wrong. There’s five crises. If I found out about all five of these things, I’d have a heart attack.

Jason:  [laughs] It’s good to hear I’m not the only one.

Eoghan:  When they’re dealt with by the right people, with the right context, with the faculties to actually solve those problems, I don’t need to know about it. That’s the same for everyone else in an organization. There are a ton of things that we don’t bother everyone with. Why would we tell you about all the shit that you can’t actually fix that’s going to get fixed by someone else?

How about you focus on the thing that you signed up to do? We’re going to take care if it for you. I honestly believe in that. Then there’s other stuff, which is like, the data we have is incomplete. It’s too soon. It’s too early. We don’t know the results of this thing. Again, let’s wait and find the full data.

The other is, it’s like it’s on a sufficiently abstract, nuanced level, where people in their careers just don’t have the sufficient experience to be able to process that.

Jason:  That’s the hard part. The way folks in this room would look at transparency, it’s confusing to many employees. It’s hard to process.

Eoghan:  Totally true.

Jason:  It’s hard to process all those metrics.

Eoghan:  There’s nuance in that message, because it’s not like you’re not smart enough, or you’re not grown up enough. It’s just that you actually haven’t gone through all the shit that I’ve gone through to know this is or isn’t a problem.

Transparency is a bad word for this. A better way, maybe to describe it is, how about we don’t have unnecessary secrets? How about we side transparency as opposed to secrecy? You can err on the side, and maybe give people a little bit too much information. You have to acknowledge that it’s not going to be all of the information, for all of those reasons.

Jason:  I like that, err on the side.

Eoghan:  There is nuance to figure and traverse there, but the model for transparency, where, “How about everyone just see all the things?” It’s chaos. I don’t want to know all the things.

[laughter]

Jason:  It’s a lot.

[applause]

Jason:  One last one, because I know we’ve got to go. I wanted to tie, let’s go back to Business Messenger, because I wanted to talk about Intercom 3.0. What was that question? I think it was, you’ve launched a new version of Business Messenger.

I think the question, it may be too soon to have a biggest mistake or learning, but maybe what were the Zen learnings? Talk about the next iteration of the product. We can have the commercial, too, but what were the higher‑level learnings of shipping Business Messenger?

Eoghan:  I’ll give you a squishy, abstract idea. Is that good?

Jason:  Or we can do the commercial and the abstract idea. Whatever you feel like…

Eoghan:  No, the abstract idea’s going to be more fun. I think a lot of [inaudible 42:45] including, even SaaS, are dangerous. Talking about SaaS and specializing in SaaS, for example, are dangerous, because they instill in us this certain idea about how we’re supposed to be.

It’s like adopting any identity, even male or female. As we grew up, taught what male means. We’re taught what female means. We adopt these certain things, rather than authentically saying, “Who am I?” If you study any sort of spiritual or philosophical stuff for even two days, you’ll find quotes like, trying to be anything other than you is a fail, or the only identity is I.

Trying to adopt anything other than “I am” is a path of friction in life. I will get to your question, I promise. I talk a lot about the idea that us calling ourselves a SaaS company or an enterprise software company is dangerous. It would have us looking around and be like, “OK, how do SaaS companies work?”

Even if we don’t necessarily do that, the company at large, and us when we’re not looking, will start to just tune into certain ways of being. We’ll fit in by mistake, if not actually by design. A lot of times, it’s by design. When people are scared, they’ll just do what everyone else does. That’s really, really dangerous in an industry where you will only be valuable, win, and be successful if you’re not like everyone else.

That’s my little rant on just the idea of too closely clinging onto these identities. There’s equal parts a ton to learn from saying, “We are a SaaS company,” as much as there are dangerous, bad habits, or similar traits you can adopt by accident, and just took like everyone else by saying that, too.

To your question, we launched our messenger in the same 12 months in 2011 as Facebook Messenger, iMessage, Snapchat, WeChat, and a bunch of others. No one was calling them messengers back then. We thought that there was an opportunity to use the Internet to build cool new personal fun ways for people to connect.

Of course, we were inspired and stood on the shoulders of the giants who built chat rooms, like the Yahoo chat rooms, IRC, live chat products, or even text messages, as were all of these other messengers I just cited. Then over the years, this word messenger came out, or started to be adopted. It was only after the fact that we were like, “Oh, we’re a messenger.”

Later, we’re like, “A business messenger,” where all of these folks were consumer messengers. We’re a business messenger. Then we got to last year, where I was like holy…We’ve never actually consciously said, “This is what our future needs to look like, and this is the best thing for us.” Yet it looks really like a bunch of other messengers.

I think that only came from the fact that we started to call it ourselves a messenger. We invented this goddamn thing at the same time as everyone else. It was like, “Hold on a second. Do we really have to be like these other messengers?”

I know that I’m belaboring this point in a really ludicrous way. These conversations like this didn’t actually happen, but maybe they happened a little bit. Our new messenger was a specific effort to say, “Hold on a second. We invented this damn thing. We get to decide what we are. Let’s shake off a little bit what a messenger is supposed to be, and let’s have a little fun with it.”

The new version of our messenger has a home screen. It has cards, you can customize it, and do a bunch of cool stuff that you don’t find on any messenger for all of those reasons. I find the squishy stuff more interesting. If we’re going to put that into a nice little neat business card piece of advice, it’s like, be careful what the identities you adopt.

Whether it’s for you as an individual, and the role that you play, or whether it’s the type of company you are, or for the category that you play in. Just because someone says you’re in this product category, or you’re in that industry, be really careful about all the stuff that you will consciously and subconsciously adopt, lest you become exactly the same as everyone else.

Jason:  That’s a good way to end it. Eoghan, thank you so much. This was amazing.

Eoghan:  Thank you, thanks.

[applause]

Harry:  What can I say? Having listened to the quality of that questioning, I will soon be tendering my resignation. A fantastic conversation between Jason and Eoghan. If you’d like to see more between them, you can find Jason on Twitter, @jasonlk. You can find Eoghan on Twitter, @eoghan. It’d be fantastic to see you there.

Likewise, you can find us behind the scenes on Instagram, @hstebbings1996.

As always, I so appreciate all your support. It really does mean so much to me. I cannot wait to bring you a very special episode next week.

 

The post SaaStr Podcast #183: Eoghan McCabe, Co-Founder & CEO @ Intercom on The Right Way To Structure Your Org Chart appeared first on SaaStr.

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