I spoke with Intercom co-founder Eoghan McCabe to learn why he focused on building a product for a problem that he knew intimately, instead of following the more popular and well-known Lean Startup principles.
McClafferty: Who is your ideal customer?
McCabe: Invariably, people who buy these product-first business products, are product-first businesses themselves. Think about Stripe. They made the best set of APIs for developers, the product people, to use. They didn't make a billing platform where the technology came last, which is the way it had always been done before. Previously, it was billing providers and infrastructure made by finance people and billing people.
The value that Stripe brings to the world and the reason that people pay so much more for Stripe is that they've got these great APIs. It's not because they can transact credit cards, because everyone else can do that. The people who buy Stripe, just like the people who buy Intercom, are product-oriented folks from a whole new generation of internet businesses. They value the experience and the fact that the product is built specifically for their problems, not the problems of the CIOs of large companies.
McClafferty: After attending your first meetup at your new SF office, I was under the impression that Intercom was built by developers, for developers. Can you tell me more about this approach?
McCabe: As opposed to it being developer first, it was actually product-people first, but in technology, most of those product-people are engineers. The reason we built it for product-people is that we were ourselves product-people. When we started, we were a four-person software company, so we built it for folks like us.
In small technology companies, typically all of the people early on are product-people, engineering people. People building this generation of technology companies are technologists. And the place where you can most immediately get traction is the place that you understand and know yourself. So we started focusing on product folks and small start-up folks, because that was us.
Over time, as we grew as a company, we just continued to build Intercom for ourselves. We're now 170 people. The four founders who were all product people turned into 170 people with separate teams and teams within teams, with specialized functions and different areas of expertise who all then needed their own problems solved. And we kept solving those problems.
What's really interesting is that Intercom started off as this one general blob of a thing for talking to customers in a bunch of different ways, and over time was split up into products specialized for separate teams. It evolved in that respect, just like we have as a company, but it's still built for people who are getting their hands dirty in internet business.
McClafferty: Why did you go after that specific market, when you could have gone business to business or business to consumer?
McCabe: It was just what we knew. That's it. If you look at product-first companies, they're just built for the folks that the builders understood: themselves. We could build simple communications solutions for a four-person software company, or we could build new plumbing technologies that could be used in a wide range of industries. Obviously we'll pick building communications solutions for that four-person company, because that was us, that was what we knew.
Unfortunately, a lot of startups pick problems that they don't really know anything about. The best companies, they solve problems for themselves. That's can be a bummer sometimes, because there are lots of worthy problems in the world that are experienced by people who can't build software. But if it's not your problem, it's a harder nut to crack.
The process of product, the art of product, and the challenge today of trying to find product-market fit is one that requires deep empathy. To deeply, truly solve a problem that somebody experiences, you need to actually feel their pain.
A different approach is the Lean Startup, in which they talk about getting out of the building and going and trying a bunch of ideas, interviewing people, and surveying people. The reason that they're doing that is to try to get inside of the minds and the hearts of these people who they're trying to solve their problems for, which is fantastically difficult. Most of us don't know what we want ourselves, so if you're trying to figure out what someone else wants, you're close to doomed. So you have two choices- you can try to get inside the hearts and minds of someone else, or you can solve a problem for yourself, who you're the most likely to have meaningful empathy for. It's a bit selfish, but it's easier.
Now it turns out sometimes that the people whose problems you solve are, when you're solving problems for yourselves, are actually a broad range of people. Even though we were solving for small internet businesses, there are probably millions of small internet businesses in the world now. There's a million apps in the US Apple App store alone that didn't exist in 2007. Internet businesses, small internet businesses, have exploded. That little selfish pursuit that is solving your own problems, if done right, if you're like a bunch of other people, you're actually solving the problems of millions of people.
McClafferty: Could you explain the problems that Intercom solves?
McCabe: The highest-level problem is to make internet business personal. We look at all these separate tools that businesses use to communicate with their customers- the help desk, email marketing apps, live chat - and we think they're disjointed. It's really, really hard for internet businesses to actually be personal with their customers and give them a holistic experience when every team is using a different app to communicate with customers.
We're one simple platform for everyone to work together to give customers a more personal, holistic experience. When it comes to support in particular, because it's one platform, everyone in the business has access to shared data about the customer. So when you're providing support to a customer, you can see what the sales team has been saying to them, you can see what emails they got from the marketing team, and you're not talking across each other.
On the flip side, because Intercom is not only integrated with the data across the company, but it's also integrated with your product itself, the customer can actually get support right inside the product- when and where they need it most. They can use in-app messages, as opposed to going to a separate help site where they have to fill out an inquiry, pick the category, select the priority, sift through an FAQ, etc. Intercom is far more direct.
The reason we called it Intercom is that it's supposed to be an intercom between you and your customers; a direct line of communication. It removes all the help sites and tickets, and lets the customer speak directly with you like a real person.
McClafferty: What does the future look like for Intercom?
McCabe: Companies who want to "disrupt" an industry in the academic sense, as put forward by Clay Christensen, start at the bottom of the market and change how people work and think, as opposed to going head-to-head with enterprise solutions like Zendesk, Mailchimp or Marketo. Going head to head with those guys is fantastically difficult. The people who are perfect customers for a Marketo or a Zendesk, for example, are not shopping for new solutions. They're fixed in their ways. So if you want to truly change things, you get at businesses in earlier stages. We started at the bottom of the market, like I said, not only to solve the problems that we deeply understood as the small company we were, but to build relationships with the next generation of major internet businesses.
We've been moving slowly up-market. As we've become bigger ourselves, we've made sure that Intercom is able to still serve us well, so it gets better for bigger customers. We've gone from four people to 170 people in four years and change. The future just looks like more of the same. It means us getting bigger, and improving the product for bigger companies.
Eventually, we'll start to butt heads with some of these incumbents for the bottom tier of their customers. About a quarter ago, some of our customers started to say, "Hey, I dropped Mailchimp for you," or, "Hey, we just quit Zendesk for Intercom." It's starting to slowly happen.
The full realization of our vision, if it all works out, is us continuing to move up-market and fundamentally be the new way that internet businesses talk to customers. We would fully replace all of these incumbent tools. But we're not going to do it overnight and we're not going to do it by going head to head with these folks. We do it by waiting for the people that we sell to today to grow up to be bigger companies.
It's a longer process; it takes more time. You need a lot of patience. For example, Salesforce was only sold originally to sales teams that had five seats or less. Salesforce just sold to tiny little companies, the tiniest of companies, and moved slowly up-market until they eventually became the next incumbent. That's the way it works: the circle of life.