The Exchanges

Q And what are the key levers you're pulling to drive even, even if it's just initial price or revenue expansion year over year? Is it number of seats? Is it number of product add-ons? Is it utility and an API calls? What is it?

A So we go to market with, uh, six primary clouds, and you can buy the whole thing, and you can just say, I'm buying the Expedience cloud, and you can have an enterprise agreement for the entire platform. But typically, you can just go by the social cloud, or our marketing cloud, or our advertising cloud, our research cloud, or our commerce cloud, or care cloud. And each one of these then have products underneath it, So if you're buying a social cloud and you don't want to buy the whole thing, you can buy social listening, you can buy social publishing, you can buy, um, social, uh, automate, uh, automation. Um, it's really by cloud, you got these products, um, and you can buy them a la carte, or you can buy them as a cloud, or you can buy the whole thing as a enterprise license.

AI assessment note: “you can buy them a la carte, or you can buy them as a cloud”

Q And walk me through kind of, and now we understand kind of the business and the general customer size. Give me some of the backstory here. So what year did you launch the company in and where was your brain? Where was your life at that point?

A Um, this is 2009, right? I was, uh, life was good. I was, uh, an executive at a public company. Um, Um, at, uh, Alliance Data Systems, right? We were, Epsilon's a division of Alliance Data, and I was running a division of Epsilon called Epsilon Interactive. At that time, arguably, Epsilon Interactive was the world's largest email marketing company, and we had blue chip clients, credit card companies, pharmaceutical companies, retailers as clients, um, and so I was in a very comfortable position Um, and, and you watch social come by. And so this is 2008, 2009, and you watch the meteoric rise of Twitter and Facebook and LinkedIn. And for most people from the outside, you know, you'd be enamored with the success of these companies, but someone in my shoes, I'm a product guy. My background is in, in product development and engineering. Um, If you come and you're, you're running the largest email marketing company at that time in the enterprise space, you are very clear about the problems you're facing with email at scale. So at the, at that time I was dealing with spam. I was dealing with multimedia. I was dealing with the rigidity of email as a channel. So when I looked across the landscape and I watched the rise of these social media networks, Um, what I saw was the basic limitations of email communication being solved. So if you look at YouTube or Flickr or Slideshare or Faceboo…

AI assessment note: “this is 2009, right? I was, uh, life was good.”

Q But how, in the moment, how were you able to do that? It's very difficult.

A Yeah, it's very difficult, but when you go through difficult times, I always look for patterns from history. So my experience living through the email marketing wave, um, gave me absolute clarity and confidence in what we were pursuing. If you think about email marketing as an industry, um, in 19, 99, there were publicly traded email marketing companies. None of them made it past the dot-com bust. And What happened was as, as, as Epsilon Interactive, we ended up acquiring DoubleClick's email solutions group, which had a bunch of companies. We acquired a bunch of email companies. So I've watched how that industry goes through an early peak. Then actually the wave really starts. And when we exited in 2005, by all accounts, we thought we were on top of the world and we were way bigger than responses or exact target as Epsilon Interactive. But they went on. These companies stayed on for another, whatever, five to six years, and they all exited at, you know, what exact target sold for two and a half billion, responses sold for a billion and a half or something. So what you learn from history is a lot of the times at the top of the wave is not what you think it is at that point in time. So that, those parallels gave me very high degree of confidence that I got to keep up With the vision and always validate it against the market needs and the market reception and not get carried away …

AI assessment note: “when you go through difficult times, I always look for patterns from history.”

Q And what is that series D E F? You're getting up there. You're gonna have to invent some new letters in the alphabet. All right, Reggie, uh, in all seriousness though, so you've raised capital, you're doing some interesting things to fund growth. Uh, what, you know, you've done many small kind of acquisitions. Walk me through when you're looking at an acquisition target, what are you looking for strategically?

A We are filling out Our portfolio of capabilities against a vision that's super clear. Our vision is to create the world's first customer experience management platform. That's purpose built for the front office. So we are architecting an integrated holistic approach that should allow large companies to work across lines of business Markets and customer facing teams on one platform. And we've got all the components mapped out. So we've done 11 acquisitions, and every time we've done one of those, it was to go bring in a specific capability that we didn't have at that time. Now that's one. The second interesting thing there is every one of these acquisitions that we've brought on, we have practically thrown away the code. In most cases, we've written down the revenue. Um, and I get this question most of the times when I say this, like, why did you buy these companies? We buy these companies for what I think of as a domain expertise. There's a lot of things that you learn when you go create a company from scratch, and usually it goes through one or two generations before the big picture emerges. So what we do, for example, we bought a company in social advertising space.

AI assessment note: “every time we've done one of those, it was to go bring in a specific capability”

Q like the first few years you fought like hell not to take money, right? But in Battery Ventures in March, 20 12, Neeraj finally got you and said, you're going to take my five million dollar check whether you like it or not. Why'd you bootstrap for the first few years there? How much of your own money did you put in and why'd you eventually say yes to Battery?

A So I had a, a slightly twisted state of mind at that time. Um, having gone through, you know, having raised money in the past and gone through that experience, um, And it's not fair to say I was trying very hard. I, I didn't want to take money. What I realized was very simple. Um, if the company is successful, you want to own more of it, right? For sure. Because we had, we diluted ourselves so much in my previous lives. Two, if the company is not successful, the question then becomes, are you more comfortable losing your own money or somebody else's money? And the answer for me was, I'm more comfortable losing my money than somebody else's money, because it just, my brain deals with that better. I just write it off, move on. But I just didn't want to face someone whose money I lost.

AI assessment note: “What I realized was very simple. Um, if the company is successful, you want to own”

Q Let me, let me rephrase this question that I think might work better with your brand and how you think, because you definitely think differently. Uh, there's a customer that you know is a fit for you. It's one of those eight, 9000 you haven't got yet. What is something weird you might try to help them speed up the discovery of you?

A I tell them, I tell them in great detail that What I see in the future of customer experience management. I, I tell them what I see. I talk about customers that are connected. I talk about people, uh, experience being the new brand. I talk to them about how marketing is foundationally now flawed. Because 80% of your budget, if you're spending into what to say to people, and 90% of people are making the decision on what others are saying to them, you're off. So I try to point out how marketing and advertising and research and commerce and care can foundationally be different. And, and then I try to help them understand the economic impact of not catching up To where their customers and their competition is. And I leave it up to them.

AI assessment note: “I tell them in great detail that What I see in the future”