The Exchanges

Q Uh, when we think about kind of the raising prices, moving into enterprise, a lot changes in the team structure, in the kind of, uh, kind of resource allocation that's needed. In terms of the product, what, what changes with the product when you need to move up market?

A There's a few big buckets that, um, are just immovable. Um, I'll kind of walk through them a little bit. One is just adoptability, like, so making sure to, like, large enterprises don't just pick up products, like, randomly. They have, like, oh, they have an MSA that you just signed, a procurement team that assesses you. You need to be, like, SOC II, Type II, possibly HIPAA, possibly ISO 9000 compliant. Uh, you need to be able to do a security review and all that sort of stuff. There's a whole piece around just adoptability and there's other stuff like skin processing. So like, uh, so people that they might mandate that you have to be able to sign into the product through to Google, uh, through G suite, as opposed to creating your own logins and just loads of stuff like that. Right. So that's all one big bucket called adoptability startups. Don't give a shit about any of that, but big companies absolutely mandated. Another one is scalability. And I won't say much on it, just sort of like, you need to be able to meet their usage requirements. So if they want to send a million males a minute, you need to be able to do that. And third one is justifiability. So like you need to surface the data that proves that your product is delivering the value that they're paying for. So this is often, and as it does tears to this, does like generate your own reports, let them generate custom r…

AI assessment note: “One is just adoptability... Another one is scalability... And third one is justifiability.”

Q I have so many questions to ask. First one I have to ask is that you mentioned bluntly, obviously, the team watching, you know, the announcements. How does the structure of the team change when you move from Intercom V-one, or kind of the previous gen of Intercom, to Intercom AI first, Innovation AI? Do you change the structure of the team?

A The way we're working today still is that we have a central AI team, uh, led by Fergal, who's our VP of AI. They work on FIN. They work on the core, like, uh, question and answer model of FIN. Uh, they work on, like, let's just say other areas of intercom that we want to apply AI to that we aren't ready to talk about, I guess. They also work on, like, things like what's the best LLM to use, et cetera. And then they work on, like, what we call Horizon Two stuff, which is, like, most of what they do, we're pretty sure is going to work, but Horizon Two is, like, this could Be a total brick wall we run into, but we, we need to try it. Cause if it's not a brick wall, we need to be the first ones to realize that. So it's very centralized and they effectively have breakthroughs and they go and partner with product teams who might own Finn or might own the inbox or might own the reporting engine. And they say, Hey, we just realized given this, we can do that. Does that seem like something your customers would use? And they partner with the product manager, the EM and designer and they say, right, here's a new capability. Like literally there's a new capability that did not exist. Before? Like, this is like, literal breakthrough shit. Can you see a way to use that in your world? And most of the time the answer is yes. So then we're like, right, how does that rank and stack in the roadma…

AI assessment note: “we have a central AI team... they effectively have breakthroughs and they go and partner”

Q No, no, I mean, you know, I would be happy to engage. Yeah, yeah, of course. No, I, I get you there. Okay. I'm going to flip. So you can change one thing about Intercom product strategy. What would you change? Knowing what you know now, looking back historically.

A That's a tough question. Cause like the easy thing to do is to reach for like, here's all the features we killed, but like, that's something I did do like, uh, or we did do. I probably would have taken integrations more seriously earlier. Understanding more about Intercom's role within the tech stack, knowing that we're not the only You know, uh, show in town. Understanding that we have to play nice alongside like workforce management solutions, uh, CRMs, whether it's like Salesforce or HubSpot or whatever, QA tools, Slack, you name it. I think, um, I think we could have gone, uh, gone harder earlier on that, and I think it probably would have been more, uh, valuable to our users.

AI assessment note: “I probably would have taken integrations more seriously earlier.”

Q So do you like it when a startup comes to you and pitches a long road to the starting line? Because it is defensible.

A If they know what they're doing. Yeah, definitely. Like, the only, the only sort of test I'd say there is sometimes, like, my advice in those cases is work on your differentiators first. So in the case of say an email client, oh, we have a new take on email. I would say, right here, here's what I believe. I believe you're a competent engineer. I believe you can work out SMTP and IMAP and spam filtering and all that. Like, let's just push all that aside. I don't want to see a single engineer working on that. Show me the thing you're going to build. That's actually new to market. Even if the email stuff doesn't work, right? I don't care. I'm sure you'll solve the rich text editor problem, but I need to see the difference early. Don't tell me after two years time, we finally caught up with Gmail. And now with three months of runway left, we're going to add in the thing that makes us different. It's a waste of time. You have to actually like acid test the differentiators first, but in general, I'm not against it. Uh, we have, we have to go dark for like two years to produce something monster. I don't have a concern with that.

AI assessment note: “If they know what they're doing. Yeah, definitely.”

Q Sorry, can you unpack that being first doesn't matter, because is there not someone else who's always better suited? Like, Google could put their mind to any idea, resource it better than you, and you're fucked.

A I, so I, I don't actually think that that's true. I think like, you know, Google have like tried to put their mind to like, God knows how many things, and you still see the emergence of God knows how many products. Like, like why, why isn't Slack part of the G suite? You know, it's because they can't put their mind to that. Why does Figma exist? Cause they can't put their mind to that. Like why is superhuman doing well? Cause they can't put their mind to that. So I, I don't think like, I think it's like, you know, in a case of Google, it's more like what do they actually prioritize? And the answer is their core businesses of which they have like five or six or seven. Like YouTube, G Suite, um, I don't know, whatever else, search ads, blah, blah, blah, right? Um, I think being, being first doesn't matter is another way of saying, let's say me and you have a really dope idea for a really smart take on project management, and it involves, let's say, you know, if you want to wind the clock back, let's say it involves, like, the idea of a metaphor of post-it notes that you can drag and drop around the place. Give it a year and everyone will have it. If it makes sense, give it a year and everyone will have it. And then what are you left with? And if what you're left with is, well, we had it first, and you start running advertising campaigns saying the original, You're kind of like, y…

AI assessment note: “I don't actually think that that's true. I think like, you know, Google”

Q So do you like it when a startup comes to you and pitches a long road to the starting line? Because it is defensible.

A If they know what they're doing. Yeah, definitely. Like, the only, the only sort of test I'd say there is sometimes, like, my advice in those cases is work on your differentiators first. So in the case of say an email client, oh, we have a new take on email. I would say, right here, here's what I believe. I believe you're a competent engineer. I believe you can work out SMTP and IMAP and spam filtering and all that. Like, let's just push all that aside. I don't want to see a single engineer working on that. Show me the thing you're going to build. That's actually new to market. Even if the email stuff doesn't work, right? I don't care. I'm sure you'll solve the rich text editor problem, but I need to see the difference early. Don't tell me after two years time, we finally caught up with Gmail. And now with three months of runway left, we're going to add in the thing that makes us different. It's a waste of time. You have to actually like acid test the differentiators first, but in general, I'm not against it. Uh, we have, we have to go dark for like two years to produce something monster. I don't have a concern with that.

AI assessment note: “If they know what they're doing. Yeah, definitely.”

Q Des, you're a founder, founder obviously of Intercom, and you build with OpenAI today integrated into your product. How do you think about a thin wrapper versus a thick wrapper, and whether OpenAI will or will not steamroll a potential startup?

A A thick wrapper is, is like when you've actually solved the user's problem end to end fully. In a way that OpenAI never will. OpenAI will hit some sort of minimum viable account of what's good enough for everyone. You're never going to make money filling in the gaps in a platform, the thing they haven't gotten around to yet. Like I described that as like, it's like you're on a train tracks picking up, you know, euros or dollar coins or whatever. There's a train coming. It's going to hit you at some stage. It doesn't matter how rich you get, that thing's hitting you, right? I think if you find an area where they're not going to go that deep, OpenAI is never going to put like five of their engineers going hard on wealth management and like, you know, banking integrations. So, like, that's the thing. Like, you pick an area and you say, let's do all of it. Not, let's just do a little tech demo science fair. Let's nail the use case.

AI assessment note: “A thick wrapper is, is like when you've actually solved the user's problem”

Q That's so interesting to hear about the concentration of value going to those three core providers in the infrastructure layer. Des, obviously with Intercom, you sit at the application layer. How do you think about this question of where value accrues, infrastructure versus application layer?

A I think right now, a lot of value is going straight into the infra, like as in we're handing it all out the back door to open AI in this case, right? In your first question about commoditization, if that happens, then the value starts To reduce there, right? Because if there's more competitors offering the same thing, that's the beginning of commoditization, or at least you go from monopoly to an oligopoly to ultimately perfect competition where you, you know, and price goes down on each step. That's how I expect that'll play out. Unless openly I can continue to find mass market differentiation, which is always a hard thing to find, right? Like, like it was in the differentiation that all the customers care about, not just specifics, right? So let's assume over time, I believe that like just, you know, the amount of people investing in the space means that I think the infrastructure layer will gradually Get a lot more AWS like, right, which is like razor thin margins. Well, sorry, not razor thin margins. That's the wrong way to frame it. Price mixed with strength of a product as a competitive weapon, if you know what I mean, right? Like Amazon make good money off intercom, you know, but they're also like, we're all in on them and we're very, you know, we're very committed to them. So that's what the competitive battleground. There'll probably be three or four big providers is m…

AI assessment note: “Value just generally follows differentiation around the stack.”

Q What would you do, genuinely? I mean, it's easy to say here, but if you are CEO of Google, and you have shareholders on Wall Street.

A I kind of hate what I'm about to say, but I'm going to say it because I think it's what I, it's what I would feel compelled to do. I'd be scrambling to find ways that companies can sponsor injections into the LLM. So if I said, like, Who is the best footballer in the world? And the answer is clearly like Lionel Messi, but you could say something like according to transfer market, the answer is Lionel Messi, right? Like, and that sort of a sponsored injection, right? And then like you could augment the barred style answer with such injections. So it's presenting you facts that it is kind of disowning, right? Like it's kind of saying, Hey, like this isn't the LLM deducing this. This is just what we think. This is what we've been paid to say whenever we talk about this type of thing. That's kind of the attack factor I'd go on. And I'd try and float that with all my big ad buyers and sort of say, Hey, look, let's be honest, the world is going to go to LLMs. Even if this doesn't work, we have to give it a lash. Then I'd try and like get some sort of traction going for that type of ad model. Then I'd explain to the investors, we have to move to this because the alternative is the company basically starts to be on a ticking clock, right? I could totally imagine Google doing a thing where they give away effectively free Android phones powered by the fact that they now control the inten…

AI assessment note: “I'd be scrambling to find ways that companies can sponsor injections into the LLM.”

Q we love there about kind of me going, oh, AI first, whatever. I spoke to Bobby before the show at Equals, who was obviously with Intercom, and he said that you were actually one of the masters of marketing, and you thought of as a product OG, but actually you should be credited more with a lot of early marketing efforts. Why does most B to B marketing suck, first?

A To leave any sort of lasting impression on somebody, I think you have to say something that is, like, unique, as in, like, it can't be the same thing that everyone says, um, Uh, valuable as in it has to actually matter to them and, uh, and simple, right? They have to be able to get it in one read. If you can speak to your users in a way that presents some value that they can, uh, that they haven't heard before, that they can only get from you and that they can understand, then generally speaking, you tend to like resonate with your users. And, uh, and it's like, you can't just walk in on somebody's life and just start shouting stuff at them. So you need permission to speak to them and that's where you might Lean on thought leadership, or like, make yourself somebody worth listening to. But I think most businesses fail to say something that's either, like, they fail on one of the three tests. It's either not unique, it's not simple, or it's not valuable to them. So you see things like, inbox reinvented. I wasn't really looking to reinvent my inbox, or it's like, forget everything you know about blah. I was like, I didn't know anything about blah. You know, so you have a lot of, like, this, like, marketing speak, if you know what I mean, like, which is just people just lean for, like, their marketing veneer or polish that you get, and it just gets a bit too, um, Salesy, and in, i…

AI assessment note: “most businesses fail to say something that's either... not unique, it's not simple”

Q Most people are like, wow, you're actually quite old. I'm like, thank you. Yeah, age is this kind of strange thing that happens. Before we dive in, Des, what did you want to be when you were younger? When you were growing up in Ireland as a kid, what did you want to be?

A I think it was either a professional video games tester, but I kind of knew that wasn't a career, or at least it definitely wasn't in the eighties. Uh, sports journalist. I loved soccer and I loved writing. So I really wanted to like write about soccer. I just thought like, if I could do that, that would be like the genuinely the easiest job. I used to actually do it. I used to like, I'd watch a game and I'd write down my match report and I'd get my mom to read it. And she'd be like, that's very good. I was just passionate about like, I think I love soccer watching it. And then I literally love writing as well. And I loved like, I'd always read all of the cover to cover every sports newspaper, everything, just trying to get a sense of what's the language. How are you supposed to talk? All that sort of stuff.

AI assessment note: “I think it was either a professional video games tester... sports journalist.”

Q Can I just interrupt, is that a bullshit VC-ism, that like, oh, it's a thin layer on top, so it's not very valuable?

A I think it depends on what you're actually talking about, like, There's a big difference between a feature and a product. If you wanted to say build a chat bot that does customer support, it is true that like, and there's been a lot of these like sort of wrappers where give a URL, answer a question, right? That's pretty easy to build. It's like half a day's worth of work and you're sitting and you're wholly dependent on open AI or Anthropic or whoever it is, you could go for it. There's a massive difference between that and say something that like a large company would actually deploy to its customers, which, you know, ingests knowledge bases, requests, refreshes, reports of itself, reports on customer satisfaction. You know, like, you know, can parse multiple conversations, can understand customer context, and feed that in, knows the difference between a premium user and a free user, and gives context to where answers, whatever. Like, does a wave upon wave of extra stuff you have to build in, like, that's before we get to, like, permissioning, controlling, and targeting, and making sure that some users don't see bots, and some users only see bots, and, like, all of that is, like, the extra stuff you have to build to turn what's, like, a thin, how would you say, like, science fair tech demo into an actual fully commercialized product. So I think like to the VC argument of like …

AI assessment note: “to the VC argument of like a thin wrapper, I think if it is”

Q we love there about kind of me going, oh, AI first, whatever. I spoke to Bobby before the show at Equals, who was obviously with Intercom, and he said that you were actually one of the masters of marketing, and you thought of as a product OG, but actually you should be credited more with a lot of early marketing efforts. Why does most B to B marketing suck, first?

A To leave any sort of lasting impression on somebody, I think you have to say something that is, like, unique, as in, like, it can't be the same thing that everyone says, um, Uh, valuable as in it has to actually matter to them and, uh, and simple, right? They have to be able to get it in one read. If you can speak to your users in a way that presents some value that they can, uh, that they haven't heard before, that they can only get from you and that they can understand, then generally speaking, you tend to like resonate with your users. And, uh, and it's like, you can't just walk in on somebody's life and just start shouting stuff at them. So you need permission to speak to them and that's where you might Lean on thought leadership, or like, make yourself somebody worth listening to. But I think most businesses fail to say something that's either, like, they fail on one of the three tests. It's either not unique, it's not simple, or it's not valuable to them. So you see things like, inbox reinvented. I wasn't really looking to reinvent my inbox, or it's like, forget everything you know about blah. I was like, I didn't know anything about blah. You know, so you have a lot of, like, this, like, marketing speak, if you know what I mean, like, which is just people just lean for, like, their marketing veneer or polish that you get, and it just gets a bit too, um, Salesy, and in, i…

AI assessment note: “most businesses fail to say something that's either... not unique, it's not simple”

Q Can I ask, man, how do you feel about everyone being like, AI first? Like, we see it as a media company, obviously, every single kind of large scale up and growth company is like, AI first, and they kind of throw it on, and you actually tweeted that brilliant picture.

A Yeah, yeah. We can, we're going to end up talking about AI for a while now, so I'll just start off, um, I think it's largely bullshit if the If the basic tech stack hasn't actually changed that much. Um, so what I mean by that is let's say you're a project management tool. All right. And like, Hey, what's, what is project management? It's like tasks, deadlines, files, approvals, decisions, communication, whatever. It's not like really obvious to me that AI is going to like take away a lot of that. Cause like you're planning out projects and like, oftentimes these aren't like, you know, um, these are the things that really have to happen, whether it's like you're building a house or you're, You're managing a rebrand for a client or something like that. There's a lot of like human decision and judgment made. It's not obvious to me where the AI kicks in. And so if you're like an AI first version of base camp, I still think that looks like base camp and maybe they just find areas to sprinkle in AI to speed up little bits and pieces here and there. Maybe, maybe not. I think there's, if you take, say the area of customer support, everything about customer support is going to be affected by AI. For example, summarizing an issue is a very common common Workflow that has to happen. Replying to a customer based on the fact you found in a knowledge base is a very common thing that has to …

AI assessment note: “I think it's largely bullshit if the basic tech stack hasn't actually changed”

Q What does that look like then? So if we think about like the thick wrapper and we unpack that, what is required to be a thick wrapper?

A I think you have to solve. Uh, all aspects of the user's workflow, uh, you have to fit into their tech stack and integrate where you need to integrate. You need to like solve for like, uh, when I say all aspects of the workflow, I mean like in like the hypothetical, like Dolly wrapper, like you need to solve, uh, you know, feedback on, on various images, or maybe there's a bit of collaboration on the client side where they want to discuss things. Maybe there's like prompt, prompt version control to see what we can generate. Um, maybe there's an approval workflow, maybe there's like, uh, and then you're into like asset management after that, and then maybe there's hosting, maybe there's embedding, all that sort of stuff. And then there's a reporting on usage, uh, like how many times is this displayed? And like, you know, does, does it, you know, if it's a marketing product, maybe like, does it, does it correlate or like, does it test well with like conversions or does it not convert when we use it or whatever? Like that to me is like all of the shit that you would want around a tool. If you're going to say like, this is kind of about AI first, if you know what I mean? I think if somebody goes and builds all that and makes it make sense, Uh, the, the dude around the corner who's got like the thin wrapper, like he's got a lot of shit to build, you know? So I just think you're then…

AI assessment note: “you have to solve all aspects of the user's workflow”

Q This is my point. What makes you say that? Because so far we kind of left Searching.

A Yeah, yeah. Uh, for sure. You have to assume Apple's a really well run company, and you have to assume that there's a head of AI in there, and you have to assume that they're training LLMs, and they're looking for LLMs that can possibly run on their hardware natively, and not even have to talk to the cloud, and Apple are very privacy focused, so they're going to get all that shit correct. And you have to assume it's all going to work with your AirPods, your watch, and your phone, and all that sort of stuff. I would be shocked if that wasn't the case. So then what will they win is the question. I think what they'll win is this idea of Siri might finally become useful. You know, uh, and I just think it's, it's there now. Like Siri is currently not useful because it doesn't really have enough smarts. When Siri can be, can be as conversational as ChatGPT and can take actions on the device, I actually think it'll change like the entire interaction model across desktop and iOS as well, uh, in huge ways. So I think Apple will win there, but that, that doesn't outrule OpenAI's success or Amazon's Success selling Anthropic or something like that or any of the other scenarios. So just think who owns consumer AI, uh, at a kind of base level, it could well be Apple. And then in that world, what's interesting is we might see a new type of commoditization of like services. So you might just …

AI assessment note: “I think what they'll win is this idea of Siri might finally become useful.”

Q Where does value accrue most? Is it the application layer? Or is it the infrastructure layer? And how does that change over the short and long term?

A The only parallels we have to go by here are what's happened in other areas, right? Generally speaking, I think right now, a lot of value is going straight into the infra, like as in we're handing it all out the back door to opening, in this case, right? In your first question about commoditization, if that happens, then the value starts to, to reduce there, right? Because, you know, if there's more competitors offering the same thing, that's, That's the beginning of commoditization, or at least you go from a monopoly to an oligopoly to ultimately perfect competition where you, you know, and price goes down each step, um, excluding collusion or price fixing, which are usually illegal. That's how I expect that'll play out unless, uh, unless OpenAI can continue to find mass market differentiation, which is always a hard thing to find, right? Like as in the differentiation that all the customers care about, not just specifics, right? So let's assume over time, I, I believe that like just, you know, the amount of people investing in the space means that I think the infrastructure layer will gradually get a lot more AWS like, right? Price, uh, mixed with strength of a product as a, as a competitive weapon, if you know what I mean, right? Amazon make good money off intercom, you know, uh, but they're also like, we're heavily, we're all in on them and we're very, uh, you know, we're v…

AI assessment note: “right now, a lot of value is going straight into the infra”

Q Okay. Tell me, what's the right way to view competition?

A I think the right way to view competition is with respect and after you've launched and you're out the door, increasing comprehension. Comprehension meaning you have to understand why they're successful. Uh, because I think it's, it's very easy to be like, their product's shit, but maybe they're just brilliant at go to market. And if you don't understand that, you're never going to be like, why isn't I paying attention to me? I've got the better product. I think respect always, uh, because it's just a better way to live life. Um, they had, they have the market. You want the market. You have to respect the fact that they got there. You know, everyone likes to quote like Jeff Bezos or whatever, like, oh, I ignore my competition. I just listened to my customers. Like, do listen to your customers. I think that's a good piece of advice. I just don't think ignoring competition, especially if you're, like, in a market where there is competition, I think it's, it's essential to work out, like, why is it, why do people pick them over you? Is that not a useful thing to know? Like, you can't listen to your customers if they're using your competitors, so.

AI assessment note: “I think the right way to view competition is with respect and after you've launched”

Q Can I just interrupt, is that a bullshit VC-ism, that like, oh, it's a thin layer on top, so it's not very valuable?

A I think it depends on what you're actually talking about, like, There's a big difference between a feature and a product. If you wanted to say build a chat bot that does customer support, it is true that like, and there's been a lot of these like sort of wrappers where give a URL, answer a question, right? That's pretty easy to build. It's like half a day's worth of work and you're sitting and you're wholly dependent on open AI or Anthropic or whoever it is, you could go for it. There's a massive difference between that and say something that like a large company would actually deploy to its customers, which, you know, ingests knowledge bases, requests, refreshes, reports of itself, reports on customer satisfaction. You know, like, you know, can parse multiple conversations, can understand customer context, and feed that in, knows the difference between a premium user and a free user, and gives context to where answers, whatever. Like, does a wave upon wave of extra stuff you have to build in, like, that's before we get to, like, permissioning, controlling, and targeting, and making sure that some users don't see bots, and some users only see bots, and, like, all of that is, like, the extra stuff you have to build to turn what's, like, a thin, how would you say, like, science fair tech demo into an actual fully commercialized product. So I think like to the VC argument of like …

AI assessment note: “There's a big difference between a feature and a product.”

Q To be fair on them. How will we see the cost of compute change? Will it, you know, align to traditional Moore's law? How do we think about that, and does this all value accrue back to Nvidia?

A I don't have any, like, concrete answer here. What I can say that generally happens is, like, There is no tech really in history that has not gotten cheaper. There is no like piece of hardware or software that hasn't ultimately been ripped off by a cheaper candidate to offer a lower prices to more of the market. No matter what way we go, we will see a kind of a fleshing out of the spectrum. So right now I think we've got like high-end Nvidia pairing high-end LLMs and we should assume on the fullness of time that they're going to like continue to produce and they're going to find more, how would you say, More market points that they can sell potentially simpler or more basic chips at. And same with the LLMs. They'll be the fast LLM, and they'll be the accurate LLM, and people will make choices between them, and they'll be the cheap one, and the dear one, and all that sort of stuff. We'll see the solution space fully explored. And in that exploration, I think what you're going to get is like, yeah, I don't think NVIDIA in five years time will be sitting here proud as the only people who can do a GPU. And I don't think that OpenAI will be able to like be the only people who can Do LMs properly. I think, you know, there'll be winners and losers. They'll be like the best, but the best isn't necessarily the biggest market share, you know?

AI assessment note: “I don't think NVIDIA in five years time will be sitting here proud”

Q Sorry, I'm, I'm clicking now. What do you think they did well? Is it just speed of execution?

A Focus on speed of execution. So I think the easiest thing for a company like Miro to do, I think is to get notions about becoming Microsoft Office and start starting to branch out and becoming a document editor and all that sort of stuff, because everyone tells you need to go to become a multi-platform suite, blah, blah, blah. Like you get all the kind of like the narrative of expand your time now, et cetera, et cetera. Maybe that's the right thing for them to do, but what they have actually spent all their time doing is perfecting, you know, uh, like online multiplayer whiteboarding. And, uh, and I think that's a really important thing for them to do. Uh, so like that, I think like this, I'd say it is probably a focused, intense execution, uh, without willing, without like letting their kind of like newfound status distract them from it. Because when you start telling, if you have to do, if you just sit down with a journalist and say, well, you're now worth whatever billion dollars they're worth. You feel obliged to say all this new shit, right? Like you feel obliged to say, well, we're actually going to become a, there's a, there's a metaverse play, and we're thinking about augmented reality, and we're releasing some hardware. Like that's like the, the easiest thing to do, say all this dope shit so you sound famous, but actually just the, the intensity of the execution areas …

AI assessment note: “Focus on speed of execution.”

Q How do you think about, like, the importance of, like, CAC to LTV and metrics like that at the early stage? Irrelevant? Don't bother?

A I, it's not that, like, they are relevant. I just don't think most startups are, like, I think if someone's coming to you at that earlier stage, and they've a really, like, dialed read on their CAC LTV, I'm like, how is that important? Like, why are you working on that versus working on like building a great product? Like, I think, um, all these numbers matter, but they matter at scale. They just don't matter early on. What I'm way more interested in is how are you going to get customers in a way that your competitors can't? And if their answer is like, oh, we're going to outbid them for CAC LTV, then sure. Let's dig into that. But like, if the answer is like, you know, thought leadership, I'm like, right, show me sort of thought leadership you're going to do. If it's like, oh, we have, we're going to do YouTube. All right. Let's show me a, show me an example of a video or whatever. I, I, the conversation that where most startups fail out is not the efficiency of CAC LTV. It's most, it's like, it's a blank face after I say, um, do you have a differentiated route to customers or are you just going to be bidding it out with the rest of them?

AI assessment note: “all these numbers matter, but they matter at scale. They just don't matter early on.”

Q When you're looking at, like, new angel investments, I think the biggest mistakes I've always made are market sizing. I underestimate the size of the market, or I actually think it's bigger than it is, and it's actually smaller. Do you engage in market sizing analysis thinking? Do you think it's even worth it if we all acknowledge that we always underestimate how big markets are?

A I, I don't engage in it. And the reason is, um, like the checks I write. So this is where, I mean, you're slightly different in that, like the volume and the size of check is probably slightly off. You're larger than me in both ways. Um, but so for me, like, you know, if it was like, you know, left-handed dentists in Dublin, yeah, I'm not going to invest. Right. Like, but you know, uh, if it's, um, I only need the market probably to be like around a billion of like total revenue spent. For, for like, for this seed check to turn into a valuable series A or whatever. It doesn't need to be a monster. However, the way I actually do it is not like by, you know, cause startups, the founders will often come at you with like crazy, like projections and like Gartner estimates and all that. Like what I actually try to look for is just basically what is the product? Well, what is the problem you solve? How many people have that problem? And how big a problem is it to the people who have it? Like, um, a big problem to me is something that happens often and matters a lot. So like, I don't know, email, like communicating with your work colleagues. Like these are like big problems talking to your customers. That's a pretty frequently occurring problem that you'll probably spend money on. Whereas when someone says, oh, this is like the. The app that checks in to see how your employees are doin…

AI assessment note: “I, I don't engage in it. And the reason is”

Q Yeah, no, listen, I'm totally with you. We were speaking about your angel investing. You said something before being that angel investing is good for active operators. Yeah. Why do you think so, Des?

A Yeah. So, um, I think since I wrote my very first check in the very first company, which is going to be called workable, uh, the recruitment software company, and I've probably written like 50 or 60 cents. I think, um, a few things I've learned. One is like how, how little tolerance you have for excuses when they're outside of your business versus when they're inside of your business. So when someone tries to pitch me on a thing and they say, oh, well, the reason it hasn't taken off yet is cause, oh, well, we had to like, you know, let go over a VP of engineering and we've got a new one now and she's awesome, blah, blah. Like I just net all that out to, we couldn't get it done. So, and I make my decision based on that. And yet if internally someone's asked me why did such and such a thing happen, I'm immediately going into the same mode of, oh, well, we couldn't blah, blah, blah. I'm like, so I think it's definitely, uh, sharpened my sort of, uh, appreciation of how other people will see intercom. I think that's one whole piece. I think secondly, seeing the, uh, uh, the internals of other companies, uh, and learning how they make decisions is really useful from understanding an intercom buyer's perspective. Uh, like is in under what grounds would you adopt intercom and like kind of relatively speaking in all of the priorities in your world, how important are we? Cause we're, yo…

AI assessment note: “it's definitely, uh, sharpened my sort of, uh, appreciation of how other people will see intercom”

Q Sorry, I'm, I'm clicking now. What do you think they did well? Is it just speed of execution?

A Focus on speed of execution. So I think the easiest thing for a company like Miro to do, I think is to get notions about becoming Microsoft Office and start starting to branch out and becoming a document editor and all that sort of stuff, because everyone tells you need to go to become a multi-platform suite, blah, blah, blah. Like you get all the kind of like the narrative of expand your time now, et cetera, et cetera. Maybe that's the right thing for them to do, but what they have actually spent all their time doing is perfecting, you know, uh, like online multiplayer whiteboarding. And, uh, and I think that's a really important thing for them to do. Uh, so like that, I think like this, I'd say it is probably a focused, intense execution, uh, without willing, without like letting their kind of like newfound status distract them from it. Because when you start telling, if you have to do, if you just sit down with a journalist and say, well, you're now worth whatever billion dollars they're worth. You feel obliged to say all this new shit, right? Like you feel obliged to say, well, we're actually going to become a, there's a, there's a metaverse play, and we're thinking about augmented reality, and we're releasing some hardware. Like that's like the, the easiest thing to do, say all this dope shit so you sound famous, but actually just the, the intensity of the execution areas …

AI assessment note: “Focus on speed of execution.”

Q Do you agree with the notion, just raise prices? Mark Andreessen's often said on a billboard, raise prices. Do you agree with that? Dharmesh Shah from HubSpot on the show the other day said, no, it's goodwill to actually underprice your product in a lot of cases.

A I think, uh, so, like, I think, um, Marc Andreessen's point is just, is just, like, unnecessarily blunt, and, uh, and I think Dharmesh's point is more, um, pointy, like it's, uh, there's substance in it. Like, you're always trying to capitalize on the value you deliver for customers, and you don't want to, like, uh, squeeze every last drop out of it, uh, for sure, and that's Darmesh's point. At the same time, I think there's a danger of, like, if you end up doing a lot of, like, like, so a hard adopter of Intercom, let's say somebody uses us for everything, we are their onboarding guide, their customer support, where, like, how they route sales leads to, like, uh, to the reps to close deals, We're how they do in-app feature adoption. We're how they launch things where, you know, and like we're, they're also their knowledge base and we're like sending SMSs and WhatsApps for them as well, right? You have to kind of like, you know, if you want to sustain a product that's that large a footprint, it needs to be paying you back in a way such that you can reinvest and maintain the health of the product. Otherwise you, you do end up in a world where like, um, you basically can't afford to work on your product in a sense, right? So you have to kind of like, you know, on HubSpot, I know a stranger to a price increase either. Um, but I do think like the idea of like just raise prices is s…

AI assessment note: “I do think like the idea of like just raise prices is silly.”

Q I love that phrasing. It's also a bit direct, to be honest, Des, and when I spoke to Ophelia, when I spoke to Kieran, when I spoke to Matt, um, they all kind of told me about your allergy to BS. How do you communicate that and that blunt directness in a kind of graceful way? I haven't quite mastered this.

A I don't, like, an area I struggle with is, in general, is like, uh, like radical candor. I think I, I don't say firmly enough, like, what I actually think. But whenever I'm trying to correct someone's thinking, or at least get them onto my side, I try to, like, uh, Like in the case of one of those startup products, I wouldn't just be like, this is bullshit. Get it out of my face. I'd be like, I basically say like, Hey, the most successful startups I see generally speaking, I have money of the following characteristics and here they are. And I'm, when I look at your idea here, what I'm not seeing is, uh, any sort of moat or I'm not seeing anything that's unique or I'm not, you know, I'll, I'll try to get them on board with the sort of principles of my thinking and then explain why this investment would like violate my thinking. And my goal is always, That either they walk away saying you're full of shit Des, which is totally fine. That's a great outcome. Cause like they stood up to me and they said, I'm going to walk away and do my own thing. Or they agree to me because I convinced them and that's a good outcome too. And then they can correct their idea. I don't mind either of those two. I, I, anything in between is like not good. And I, so I'll try to force it to one of those two outcomes, I guess.

AI assessment note: “I'll try to get them on board with the sort of principles of my thinking”

Q How do you think about, like, the importance of, like, CAC to LTV and metrics like that at the early stage? Irrelevant? Don't bother?

A I, it's not that, like, they are relevant. I just don't think most startups are, like, I think if someone's coming to you at that earlier stage, and they've a really, like, dialed read on their CAC LTV, I'm like, how is that important? Like, why are you working on that versus working on like building a great product? Like, I think, um, all these numbers matter, but they matter at scale. They just don't matter early on. What I'm way more interested in is how are you going to get customers in a way that your competitors can't? And if their answer is like, oh, we're going to outbid them for CAC LTV, then sure. Let's dig into that. But like, if the answer is like, you know, thought leadership, I'm like, right, show me sort of thought leadership you're going to do. If it's like, oh, we have, we're going to do YouTube. All right. Let's show me a, show me an example of a video or whatever. I, I, the conversation that where most startups fail out is not the efficiency of CAC LTV. It's most, it's like, it's a blank face after I say, um, do you have a differentiated route to customers or are you just going to be bidding it out with the rest of them?

AI assessment note: “all these numbers matter, but they matter at scale. They just don't matter early on.”

Q there in terms of the resourcing with the engineers and the team needed. I'm always in two minds when it comes to second products. Do you do the skinny budget MVP test and iterate in a very lean manner? Or do you really allocate resources to it and concentrate capital because you should do if it's a meaningful effort for you? How do you think about that two minded process?

A I actually think you have to do both. Um, I think you have to, You have to prove out that you have some, like, some actual, like, um, alpha in them. You can do something that no one else can do. So, like, going back to the idea of, like, uh, ship your differentiators first, like, show me this thing working. Like, so, uh, so let's say, you know, I don't know, let's say a project manager tool, and you want to do, like, whatever, HR tool or Show me why are you better than like work day or bamboo or humans or whatever, right? Like, give me something that says that you're like, that this is actually worth building and it's actually new to market as opposed to new to your company. And then, uh, and then if you can show that, then I think you actually have to throw the full set of resources out. Now this is where the advice would differ depending on the stage of the company, but like if intercom launches a surveys tool, which we did in March, we can't be like limping in with an MVP that doesn't work. It would actually be brand damaging. We need to like, it needs to have all of the traits of intercom. Which means in context, AI, ML, reporting, mobile, mobile plus web, blah, blah. Like there's like some kind of like, uh, default assumptions we want our customers to make when they see the Intercom logo. And, and we need to meet all of that, which means you have to fully resource it. Caus…

AI assessment note: “I actually think you have to do both.”

Q but in terms of like, so we mentioned that as a release, not all products work, as we mentioned, some mistakes there. The hardest thing is how to know when to kill a product, and sometimes you have to. How do you know when to kill a product or feature? You need enough data, but you don't want to leave it out too long. How do you make that decision?

A I think trajectory, uh, like it is like the defining traits. So like, uh, over time, does this product propel itself? Is it, is it growing or dying by default? And you might do a lot of like customer marketing where you give it like, uh, like effectively, like, you know, uh, incubation in a sense, right? You're like, you're putting on life support by like reminding your customers every month. Don't forget about this thing over here. And they all try it once and then it fades away again. If it doesn't have its own momentum, Uh, as a feature or product, and if you find yourself just constantly trying to push a nudge and you can't get customers to stick to it, that's generally a sign that as a feature or product, it's like, it's not working. Now you could rebuild it. You could do a lot of customer research and you can find out what's going right or wrong. Uh, but like the main point is you have to actually get to the bottom of what's broken. And oftentimes it's like you had an assumption about how the market worked or how your customers saw it. And you were wrong and that's okay. That's like your, your job is to be right and wrong. So, uh, and then when you're wrong question is what you do about it. And the answer is you end of life, which means you stop taking on new customers. You tell all the current customers, Hey, I know you depend on this thing. It's going to fade away over …

AI assessment note: “I think trajectory... is like the defining traits... Is it, is it growing or dying”