Andrew: Hey, everyone. My name is Andrew Warner. I’m the founder of Mixergy and I do interviews for an audience of entrepreneurs.
And I’ll never forget I talked to one of the people in my audience and he had gotten funding from Y Combinator, built the app, the app was getting massive numbers of downloads, I don’t remember how many and I was excited about it. I said, “This is fantastic. This could be like someone I could have on Mixergy. This is someone we should be featuring.” And he still was a little down. I thought, “What’s going on? Why are you so down? Why isn’t that number exciting you?”
“Well, what we’re realizing is it’s not that hard to get downloads. What is hard is to get people to keep coming back to our app and we can’t get them to remember using our app.” I remember asking, “Why was it so easy to get downloads?” And he said, “Well, if you just get featured a couple of times by Apple, the downloads will come. That’s not so hard. It’s the retention. That’s where we’re struggling. We can’t get people to remember to come back and download our stuff.” He had an ecommerce app. So, of course, people think of going to Amazon and other ecommerce apps before they think of going to a newbie. That’s the pain.
Today’s guest is an entrepreneur who understood that pain long before other app makers and digital brands understood it. He created a company to help solve that problem. Recently they changed their name to Braze. His name is Bill Magnuson, and I invited him here to talk about how he understood this problem, how he built up a company to help app makers and other digital companies solve the problem and where he is right now with the business.
This interview is sponsored by two companies that you’ve probably heard me talk about forever, and the reason you hear me talk about them forever is because it works and people keep signing up and telling me happy they are. So you’re probably going to hear me talk about them more in 2018. Here they are. The first will help you hire your next great developer. It is called Toptal. The second will help you host your website right. It’s called HostGator.
Bill, I’ll tell you about them later. But first, good to have you here.
Bill: Yeah. Thanks for having me. Great to be here.
Andrew: Let’s talk about numbers. How many users, people like me who aren’t—I guess we have an app, but how many users are actually engaged with your software?
Bill: We track about 1.3 billion monthly active users across the globe and across about 400 different companies.
Andrew: And these 1.3 billion users are using not apps that you create, but apps that your clients create. How many clients do you have?
Bill: We have about 400 distinct company entities that we work with, and that’s spread out across 600 applications probably as well as websites and other sorts of digital properties that they use to manage relationships on.
Andrew: So you’ve got an enterprise product. When I try to figure out what you charge, all I come across is the same thing that everyone else does, which is demo. Press a button for demo and now press a button to see prices. I’m sure that the prices vary based on clients and based on the work you do, but can you give me a sense of what a company would pay?
Bill: So our average contract value typically for an enterprise client and we’re, of course, primarily working with direct to—or we’re working with consumer brands or consumer scale brands is in the six figures. We’re working with clients on an annual basis, and really you saw it in the numbers, if you just do the quick math of 1.3 billion users across only 400 clients, we’re obviously working with people that are generally at scale.
What we want to do be doing is working with them on long-term plans and really driving toward goals around long-term engagement and driving revenue from customers after building a strong relationship with them. So we want to make sure that we’re invested in our clients and they’re invested in ours. That’s why I think that that enterprise model actually works really well for what we’re trying to accomplish with our products.
Andrew: Give me a sense of revenue. Where are you guys? What do you feel comfortable saying publicly?
Bill: So we don’t disclose revenue numbers, but we can say that we’ve increased by double-digits, like over 10x growth over the last three years, and that’s a growth rate that’s been continuing.
Andrew: We can say over $7 million, right?
Andrew: You blew right by it. Can we say over $15 million?
Bill: I’m not going to continue on—
Andrew: You’re not going to keep escalating, but $7 million was laughably small, I could tell you. All right. Let’s understand how you got here and then we’ll understand the details of how you guys work now that you are here. You’re a guy who used to work for Google. You worked on something called App Inventor for Android. This helped universities do what?
Bill: So App Inventor for Android was originally targeted at university level education for computer science. It’s actually since had two additional lives, which I think are really exciting. One is that it’s actually moved into younger and younger classrooms. The beginnings of it were targeted at university level. The second one is that it has become an open source foundation for a lot of other applications. The thing that it does is it’s a visual programming language for building mobile applications.
So we started it at Google and Google Research. It was called App Inventor for Android. It was actually at the very earliest days of Android. So right around Cupcake, if you remember the myTouch 3G coming out and being the hot new phone, that’s kind of the era that we were working in. We piloted it in a bunch of different schools. It was used to remove a lot of the stumbling blocks of dealing with syntax and things like that and still teach people really great programming concepts and allow them to get up and running and building an app that they can see and touch and use immediately.
Andrew: You did something that very few Googlers do, to my knowledge, anyway, you went to work for an investment company, for Bridgewater. You’re working there for a little bit, I guess 16 months, and the itch, the entrepreneurial tech startup itch gets you and you decide to do a TechCrunch event. What was the TechCrunch event and what happened there?
Bill: That’s pretty accurate. A former colleague of mine who’s now our CTO, Jon Hyman, he and I had worked together at Bridgewater, he had gotten the entrepreneurial bug as well. So he invited me to attend the TechCrunch Disrupt hack-a-thon with him. And that was Disrupt New York hack-a-thon back in early 2011. We decided to enter the programming competition together. It was one of these all-night hack-a-thons where you start on Friday night and you stay up all night and do all your presentation disheveled in the morning having not slept.
The application we built was called Gilty, and it was a browser plugin that let you arbitrage items that you had gotten from the flash sales while they were sitting in your cart. That was a really exciting opportunity for us because we were able to build this cool thing in the hack-a-thon. I was able to work with someone I worked with at Bridgewater in the past. It really unlocked a lot of potential for us as a pair to have an opportunity to really go start something else on our own.
Andrew: But the idea was there’s a flash sale, I put the thing in my cart, and then I auction it off to see if anyone wants to buy it for more than I paid for, and if I do, I buy it from Gilt and then I sell it for higher than I paid for it. If I can’t find anyone else, I never even buy it. That’s what won?
Bill: Exactly. Risk-free arbitrage. And you could imagine the same thing working on anything where you’re allowed to hold inventory for free. So imagine going to an OpenTable site and all the reservations are gone, but there are people that were auctioning them off and you could just bid on a reservation that someone else is holding.
Andrew: Or tickets to a Live Nation event, etc. You put it in your basket. You get that countdown that says pay for it. That’s what you’re talking about.
Bill: Yeah. Exactly. That was what it did.
Andrew: And what you did was you went to the hack-a-thon just to feel—were you thinking you were going to start a business, or was it just to stretch your creative abilities and see what you could do?
Bill: We definitely weren’t planning on building a business out of that idea. In fact, we didn’t. The company we started ended up being obviously in a different space. But we really liked the excitement and the energy around it and the ecosystem that was around it and also just legitimately loved building things. The opportunity to spend 24 hours coding and working on something was really appealing to both of us.
Andrew: Meanwhile, once you win—in fact, even if you just show something interesting, people come to you. So you got a bunch of opportunities. Anyone go anywhere?
Bill: So we had people coming out of the woodwork from a lot of different dimensions. Gilt invited us to come in and give a tech talk about what we built. We kind of talked theoretically about if someone were to do this at some point, how could they detect it.
Andrew: They wanted you to come in and talk about how to stop it.
Bill: Exactly. You could imagine this not being helpful for a company that’s selling restaurant reservations or tickets or whatever to have this presence in their space and have people feel like maybe their carts were getting stolen from them or whatever it is. Or you would definitely see the ill-will towards scalpers. This is almost putting scalpers into Gilt, which they definitely wouldn’t have wanted, as well as other opportunities from angel investors and VCs and other entrepreneurs that were looking to start things.
There was just a lot of opportunities that came out. As we analyzed all of those, our cofounding CEO, Mark Ghermezian was down in Houston, Texas, and he had an awesome track record of starting tech companies in the space and he was kind of on hiatus from that and working oil and natural gas at the time. He wanted to get something started up in mobile, and we were very like-minded. We all decided to come together in New York.
Andrew: He was in what?
Bill: He was in oil and natural gas.
Bill: His family owned oil and natural gas holdings. At the time, he had successfully transitioned out of his prior startup and his executive experience, he just got tapped to work on that family business. But the whole time he was doing that, he was really interested in the mobile space. He had been working on some side projects and things like that. When we spoke to him, I was still at Bridgewater and I was considering making my next move. Jon and I were looking at opportunities together, and we found someone that we—
Andrew: Oh, you found someone—I looked him up, by the way, in preparation for this interview. Tell me if I’m pronouncing his name right—Ghermezian?
Bill: Yeah, that’s right.
Andrew: The Ghermezian family is, according to Wikipedia, the Ghermezian family is a family of Persian-Jewish origins who have developed several of the world’s largest shopping malls in addition to oil and gas, as you talked about. So he independently was doing these other projects, and this guy at Lightspeed, who you guys happened to meet on the walk over to the TechCrunch hack-a-thon, says, “Hey, I like you guys. I like where you’re going. There’s a guy you need to meet.”
He introduces you to Mark. Mark becomes the CEO. What’s his contribution to the mix? I know that you guys had clear—or did you guys have clear roles? If you did, what was yours and what was his?
Bill: Yes, we definitely had clear roles. I started out as the CTO. Jon was the CIO. And then Mark was the CEO. Because we had—I always described us as having the advantage or the liberty of having two technical cofounders. Usually that’s something that you’ve got an idea and you’re always trying to find a technical guy and we had two. So that was definitely a big advantage we had.
As Jon and I split up the responsibility set, I ended up being a lot more customer-facing, attending a lot of prospect meetings, client meetings, etc. That really helped us in the early product development because we were able to take a lot of the insights that we would get when we were out on the road talking to clients about what they wanted to do, what they were trying to do and really looking at it from both a technical and a product perspective.
Andrew: And bring it back to Jon and say, “Jon, here’s what they’re looking for.” Can you be more specific about that? Sorry to interrupt, but I want to get a little bit more flesh on that. So give me an example of a place that you went personally, some conversation that led you and Jon and Mark to rethink the product even a little bit in a way that you never would have thought before having those meetings. What’s one example?
Bill: I think that probably the biggest example is if you go all the way back to the very earliest days of Appboy and you kind of look back at the old press and our old product positioning, you’ll see that Appboy, actually, when we first started, we viewed ourselves as something that would be—I call this Appboy as the proper noun, where we would live inside the mobile application and the end user would visit an Appboy logo or something like that and they would be able to see their user profile there.
That’s also where they would see the in-app messaging, where they would see the card stream. These are all things that we still have. We still build user profiles. We still use those to personalize the card stream and to personalize the in-app messaging. At the time, we viewed it as something that we would bundle together, and it would be in something that was under this umbrella, proper noun of Appboy that a user would come to recognize and click on and see this kind of expected user experience.
And in conversations with clients, we would get a lot of questions about that and they would say things like, “Can I white label this? Can I put my logo on this instead of yours?” And on its face, that seems like a reasonable question. But if you think about what they were asking, what they were asking is if they could put a button with their own logo inside their own app. That doesn’t actually make sense.
So when we brought back some of these questions and the feedback and the different desires that people had where they were like, “We love this core feature set. We don’t know if we want all of it bundled together or not in exactly that same way,” we realized we needed to disassemble it and make it so that it was something where, depending on people’s use cases, they could use the different messaging channels that we were providing and they could flexibly collect data into the user profile in any way that they wanted.
That was something we would have obviously realized eventually, and a lot of it was due to not just our own learning but the evolution of the mobile ecosystem that was happening in 2011, 2012, but I think we got their a lot more quickly because we were directly in those client conversations.
Andrew: How would you get those client conversations? How would you even get in front of someone who would take you seriously enough considering that you came from Bridgewater? I guess a Google background helps, but you didn’t just come from an environment where this would have been your specialty and people would want to talk to you about what’s next. You’re coming out of nowhere with this. Why would they talk to you?
Bill: I think it goes back to your opener, which is that everyone at the time, they were out getting downloads and installs, and they saw this incredibly leaky bucket. Getting featured in the App Store is a nice, free way to get users, but actually more often, people were out buying users. Buying users were very expensive. When you looked at the fact that 90%+ of them were leaving the application within 30 days, it was pretty clear that these applications, if they were going to run as sustainable businesses and if they were going to build large, engaged user bases over time, they needed to have a focus on retention and engagement.
I think amongst the company set, we were the only people that were working on that. There was so much out there to help you with attribution, so much out there to help you with acquisition, help you with putting ads inside your application, but actually just like running a sustainable business by engaging users over the long term, I talk a lot about how—or I used to—there was almost a Maslow’s hierarchy, which was that first, you merely existed, like we’ve got a mobile app, it’s in the App Store, we’re good. Okay. Well, now it needs to do something useful. So we need to go from existing to providing a service.
Then once we’re providing a useful service, now we need to get a user population. Once people got their population, they were like, “Oh man, I need to do something with these people. I need to engage them. I need to make money from them.” It took a while for the market to evolve to that point, but once it did, we were there with open arms to talk to people and really help work through that.
Andrew: How did you know about this problem? As you told our producer, most people when you launched weren’t even aware this was an issue. How were you and Jon so aware of it that this was going to be your product?
Bill: I think that it was by really learning the lesson that we had seen in the dotcom boom or that you kind of see in any disruptive platform shift, which is at first, it kind of goes through that evolution of at first everyone is focused on just trying to figure out what it is and get anything out the door. If you go out in the web, I went through that exist, provide, and then your numbers, like merely putting your company’s phone number and an under construction animated gif on the web was considered building a company website if we go back to the dotcom boom.
Then we started to figure out what are the useful things you can do with a website and a web service and ecommerce business and all these other things. Then there was a long period where everyone was focused on hits and page views. You probably remember the site visitor counters and everything else. Then the dotcom bubble burst. The companies that made it up the other side are some of the largest companies that have ever been built in human history, and they were all the ones focused on engagement. They were focused on revenue for a user. They were focused on building a long-term relationship with them.
So what we saw in the mobile was all the same early stages that we thought happened during the rise of the internet and dotcoms. We wanted to be there so that when those businesses matured to that point, that we were ready to help them build sustainable businesses and really take a lot of apps that we saw that had a lot of potential but they were focused on the vanity metrics. They weren’t focused on longevity. We just saw that gap because we knew that meaningful businesses were going to be built in mobile and we wanted to be there to help them when they got there.
Andrew: That’s an interesting approach to finding a product the world needs. You’re saying there are certain things that all businesses need regardless of platform. Whatever the next new platform is, it probably won’t be there first and someone would need to build it. So if engagement is one of those issues, I would imagine if someone came out with a virtual reality app platform that actually took off, someone in the audience listening to us, if not you guys, Bill, at Braze, someone would need to say, “All these people are going to create apps and it’s going to be really tough for them to do it, apps in virtual reality. Let’s see if we can make it easier for them to create apps.”
Then the next issue they’re going to have is how do they get users to come in. Then immediately after that, they’re all going to go, “Holy crap. I got users. I built this app. How do I get them to keep coming back and stay around?” So if any of those pieces aren’t in place at the right time, that’s an opportunity for a business to come in. That would be true for wearable technology if apps existed, for virtual reality, for whatever new platform someone creates. That’s the way you’re thinking and that’s what brought you to Braze today.
Bill: Absolutely. I think you also left out chatbots and voice assistants as well. If you go look at all of the writings about voice assistants right now, the problem isn’t that there’s not tens of thousands of different ones. It’s an engagement problem. It’s the same thing all over again.
Andrew: I have that exact issue with Alexa. I get these Alexa skills and I forget what’s the Alexa skill that brings up a night light, what’s the Alexa skill that will read a story or have rain go—you’re right. There is not repeat business. All right. Let me talk about my first sponsor and then we’ll come back and I want to find out now that you had your idea, you got some feedback, what did that first version look like and how did you get actual customers to pay you for it?
But first, I’ve got to tell you and everyone else about a company called Toptal. Do you know Toptal, or am I about to blow your mind?
Bill: I don’t.
Andrew: Okay. I think I’m about to blow your mind. Here’s the thing. When it comes to developers, when companies are new, it’s, “Who can I get?” It’s like, “I’ve got a new company. Is there a friend from high school? Is there a friend from college who’s a developer? Is there some event that I can go to and find a developer?” Then it’s, “All right, I’ve got that developer.” If it’s not there, it’s, “Maybe I can go to some cheapo freelance website and find a cheap developer who can take exactly what’s in my head, help me structure it in a piece of paper or something or some documentation and get them to program it.” That is the first step for any kind of development.
As companies progress, they have more funding, more maturity, more mental awareness, they start to think not, “How can I get a developer?” not, “How can I get what’s in my head developed?” but how can I get someone who’s so smart they can outthink me? How can I get someone who’s so smart that when I show them what I’m looking for can say, “I see the problem you’re trying to solve, believe it or not, there’s a better answer out there?”
That is what companies—you correct me if I’m wrong, Bill, I don’t care if they’re a sponsor. If I’m not expressing this right, you let me know. But that’s when you want someone who can outthink you. That’s why companies like Google spend so much time trying to find the right intelligent person, the way they think as opposed to someone who can do a specific task. Am I right about that?
Bill: I think so. Absolutely.
Andrew: How many people on your team?
Bill: We’re pushing about 200 people that we’ll start the year with.
Andrew: 200 at this point? That’s even more from when you did the pre-interview not too long ago.
Bill: It is. We’ve been growing really fast.
Andrew: All right. When you look for developers—I’m going to get back to the sponsorship message in a moment—what do you look for as a team when you’re trying to hire developers?
Bill: I think that you hit the nail on the head that one of the primary things we’re looking for is an ability to learn new things and ability to just apply that intelligence around how do I learn new things? How do I capitalize on them? How do I use them in a way that builds on the past in a really great way? I think a big part of our competitive advantage in the space is our ability to consistently be utilizing new technologies with new capabilities and new performance characteristics and things like that.
So I think it’s interesting that when you look for experience in engineering, there’s one school of thought where maybe you look for someone with x-years of experience in some particular platform. If you go back to 2011 and tried to hire an iOS engineer with five years of experience in iOS, they obviously did not exist. What you needed to look for is people that have a healthy track record of really learning and consistently challenging themselves with new generations of technology and keeping themselves current and enjoying that challenge. That’s a big part of what we look for.
Andrew: I’ve got a friend who recently got a job at Alphabet. It was in the virtual reality, something that I probably shouldn’t say publicly. He decided at some point the group that he was a part of was shifting so much that he wanted to go do something else. I said, “How are you going to go find something else?” He goes, “Google will let you just go talk to any other department and if they want you, you can go work with them.”
I wonder how does someone who’s starting with one thing end up where I think he’s going to eventually end up, which is the autonomous car, Waymo division. How do they do that? It’s because not that he knows how to build autonomous cars, but he’s a smart person who can think through problems and come up with solutions that haven’t existed before and no one can direct him to do. That’s the way that Google thinks.
Toptal, all they did was they say these types of people are out there in the world. We’re going to make a specialty out of coming up with challenges and hunting strategies for luring these people in. If we get them in our database and we get them in our world, then we can go to businesses and say, “Do you need a developer? If you do, we will match you with the right developer. You can hire them part-time, full-time, hire a team of people—sometimes they’re a team of people that love working together and they’re top people, you can hire them all at once.
That’s what Toptal does. I’ve hired from them. So many people in my audience and interviewees have hired from them. I’m going to recommend that anyone who’s looking to hire a developer, go check out Toptal.com/Mixergy, no obligation. Once you do that, you’re going to see you can’t even hire on the website. You can’t buy on the website. What you could do, though, is schedule a conversation with what they call a matcher. That matcher will understand your needs. Frankly, also, if you’re listening to me, your quirks, how do you communicate, how do you work.
Then they’ll go find someone who develops in the languages that you’re looking for, can deal with and work with the quirks that you have because every company operates differently and then can slide in like a member of your team. If you’re happy with that person, you can get on a call with that person. If you’re happy with them, you can often start within a day or two.
Go check them out, here’s a special URL where Mixergy listeners get 80 hours of Toptal developer credit—I always articulate that extra because I think when I listen to myself, my New York speed kills the name—Top as in top of your head, tal as in talent. Mixergy listeners will get 80 hours of Toptal developer credit when they pay for their first 80 hours in addition to a no risk trial period of up to two weeks. That special URL is Toptal.com/Mixergy, Toptal.com/Mixergy.
Where are you from?
Bill: I’m originally from Minnesota. I’m actually flying back there on Friday morning for Christmas.
Andrew: Oh yeah. This is going to be published right after the holidays. I’m wondering when you go back to see your dad, the dad who was—what did your dad do? He was an IBM salesman, right?
Bill: No. My dad was actually an HVAC maintenance guy.
Andrew: Oh, HVAC. So when you go back and see him—
Bill: He had a close friend that was an IBM salesman when I was a kid.
Andrew: What is he going to make of what you ended up doing with your life? Is this the kind of thing that he thought was the right direction for you or not?
Bill: I think that it took my parents a while to figure out what it was that Appboy was doing because we were operating in the mobile space and it was a couple years before they even had smartphones once we were founded. I think they are definitely in a position now where they accurately explained to everyone what I do. They’ve absolutely been really happy and proud. I’ve loved technology my whole life and here we are building a fantastic technology company.
Andrew: They didn’t freak out when you gave up this great job at Bridgewater? This is a Googler, works at Bridgewater and now he’s going to go start something brand new, they didn’t freak out or worry?
Bill: My dad has a healthy skepticism of the hedge fund industry. So I think he was a little bit relieved that I was going to do something else.
Andrew: Okay. Do you have a healthy skepticism about them?
Bill: I’ve got my own skepticisms.
Andrew: What do you do with your money? Where do you invest it?
Bill: I invest in a lot of different things. I like to obviously really take advantage of knowing and being involved in the startup community and give back to that and help be supportive, minor angel investor in cases. In other places, I just try to make passive investments to diversify risk and generally let my capital do work.
Andrew: I’ve not been good at that. I’ve got friends who are now buying houses in San Francisco, renting out places in them. I’ve got friends who are doing random stuff, and it works for them. I’ve not been good at that. I’ve been focused on my one thing. I’m very myopic that way—not myopic, very focused.
Bill: Yeah. I think that it’s better to find something you love and spend your time doing that rather than chasing your capital around.
Andrew: Yeah. Meanwhile, my capital is not growing as fast as I’d like it to. Maybe that’s a whole other interview. You look around at the time and you see Foursquare. Apparently Foursquare inspired you and the team. Am I right, or is that just my imagination based on how many articles referred to the whole Foursquare gamification?
Bill: Yeah. I think that if you go all the way back to our founding and you look at that problem that we were focused on, Foursquare was a standout amongst a lot of the early mobile apps in the ecosystem because they were focused on the engagement problem, primarily, and this whole idea of like gamifying the application, giving people points and badges and things like that. I think a lot of the points and badge systems that people tried out early on were like good early attempts that didn’t have longevity in terms of those specific strategies.
But I think the fundamental idea of like how do we observe a person through their user journey, recognize important milestones as they’re interacting with the brand, reward them along the way, I think it was a digital and mobile application of a loyalty or rewards program. To that end, they were one of the best people that implemented that early on.
Andrew: By the way, when you’re touching your desk, I think you’ve got some paper or something, or it feels like there’s paper rustling because the mic is on your desk. Just be aware of that. Okay. So now I get it. It was that you guys wanted to increase engagement for app makers and you said, “Here’s one way that’s working. Let’s include that.” But it wasn’t at all the focus. That’s not what you were trying to do. You weren’t trying to turn every app into a badge based, Foursquare-type company.
Bill: Yeah. I think that our primary focus was really about how do we improve engagement in applications, how do we improve retention? How do we give people the opportunity to build long-term relationships with the users of their application and turn their into customers? One of the things we say is like we want to help you turn your app into a business, turn your users into customers. I think that we saw in Foursquare’s strategies a really great way of doing that. But that was always just one of the many arrows in the quiver.
Andrew: Who’s the first customer that you got, and what did you do for them?
Bill: Going all the way back to our first full enterprise signed an annual contract, was up and running was a company called textPlus. What textPlus is they’re a mobile app—their key differentiator amongst all the messaging apps is they give you a real phone number. With that real phone number, then you can do a lot of other things. It was for people that had phones, whether it was in the developing world or developed world that had data service but they didn’t necessarily have a phone number or maybe they needed a US phone number if they were abroad.
Andrew: So you got them as a customer. How’d you get them as a customer?
Bill: We met them at an event, I believe, early on, just engaging in the technology community amongst a lot o f the early app startups. They were actually based in California and we’re based in New York. I think we met them at an event in San Francisco, and then we continued to work with them through a lot of the early goals that they had. One of the things there is they were giving people a phone number, and they had a revenue model. You could purchase talk time and you could purchase premium features on your phone number and such.
So they had a really clear model of what made a user valuable to them, and they also had a subscription-based service. There weren’t a lot of those if you go all the way back to 2012, people who had mobile apps with multiple products, products that were providing real tangible value and ones that had subscriptions related to them. They were a really great early use case.
Andrew: So you knew if you could get people to use their app more, chances are they were going to pay for more minutes or more subscriptions. I think they charged for numbers at the time, right?
Bill: Yeah. I think they had a freemium model where you could have it a certain amount of time. Also things like reminding people when things were going to expire were very important.
Andrew: Okay. I could see how you’d offer them a clear benefit. How did you meet them, and how were you able to close the sale considering the little experience you guys had? It sounds like you also had some people who were using the version before you started charging them, right?
Bill: Yeah. So we released the very earliest SDK out in just kind of like a public beta to get a bunch of developer feedback, to have people test it out in different integrations. There were a lot of different ways to build apps back then that were popular. As you mentioned in the VR case, as you see new platforms, there are all these different ways of building the applications. So, at the time, even just having an SDK and ensuring that it can go into a lot of different app frameworks was very important. So we worked with a developer community that had engaged with us and tried us out through that, and then as we started to build more advanced features, we then started to add the pricing to it and really work with people to sign longer-term contracts.
Andrew: So there was a free version. That’s the SDK that I kept reading about when I went back to look at older articles.
Andrew: Does that still exist to this day?
Bill: No. You’ve got to go all the way back to like 2012.
Andrew: So this was when you guys were trying to figure it out. You made this available for free. People got to use it, test it, give you feedback. Was textPlus one of the free users where they wanted the experimenters?
Bill: Yeah. They started out experimenting. I think probably the first handful of annual enterprise contracts that we had started out with pilots, or they started out by doing a test integration.
Andrew: Did they find you by themselves, or were you guys finding them and saying, “Hey, we’ve got this free SDK. Go try it out?”
Bill: I mean, in a lot of those cases, we were meeting people through the mobile and the startup community. We also have always had extremely good word of mouth spread of our product. A lot of the people that were at textPlus were also through their introductions and references to other people that they knew were responsible for a lot of our clients who came in after that.
Andrew: Who’s the person who did this? Was it you hustling and talking to them and saying to different app makers and different companies? Is there someone else I should be talking to? Were you that guy?
Bill: When you’re a small company, it’s kind of all hands on deck to get those first clients in the door. It was me and Mark were really the primary people.
Andrew: Largely working your network, talking to friends, when you meet someone, making sure they introduce you to someone else and constantly following up all the time.
Bill: Yeah. Absolutely.
Andrew: Someone texts you in the middle of the night, you respond?
Bill: Yeah. It was 24/7 support by a different name, right?
Andrew: Yeah. I’ve got friends who are in the early stages of companies, and they’re the ones that respond the fastest to any text message because they have to.
Bill: Absolutely. It’s something that obviously as you scale the business out, those things are not sustainable, but you’ve got to do unsustainable things in the early days.
Andrew: All right. So that’s one of the early milestones. Then our producer talked to you about the next big milestone. I was intrigued. You said the next one was discovering what was unique about mobile, about mobile and digital first companies. What did you discover that made that such a big milestone for the development of your company?
Bill: So I think that that’s referencing going back to this evolution, which is that first existing and then the second step is provide. I think a big part of provide is really looking at what are the things about this new platform or this new technology that are going to fundamentally change or provide completely new ways of doing things. I think a really great example is the entire on-demand economy, so whether it’s getting people from point A to point B or it’s delivering food to them or delivering experiences.
In all of those cases, that’s something that was uniquely enabled by having this always on data connection with location tracking on it. It also was enabled by having a trust network, which is something like Facebook that would allow you to trust strangers through those networks. These were like the kind of fundamental building blocks that were required to then conceptualize the entire on-demand economy. We now see huge companies being built. The majority of them are customers of Braze now.
When we started to see companies like that being built, that I think is distinct from looking at all of the classic enterprise who have products and services that we all know and love and have been around for decades, figuring out how to use these new mobile channels, these digital first companies are really an example of what has fundamentally changed about the technology that allows for brand new businesses to come into being.
Andrew: Why was that important? Why did you need to identify that the ability to do something like Lyft is important versus the ability for New York Times to have a mobile app? I would imagine that you guys wouldn’t care. It’s just about how do we get, regardless of whether it’s technology that could have existed before apps or after, how do we get people to use that app more frequently? Why did it matter?
Bill: You’re right that we helped both equally. I think that it just mattered because it was a really great additional opportunity, and it created a lot of these brand new companies so that when we were—you talked a lot about like how do you get them to trust you? How are you the small company going into these large applications? A big part of that was we were able to work with other companies that were growing up right alongside us in order to get us to scale and get us to that level of credibility early on.
In fact, a lot of the—when you look at a lot of companies, a lot of them looked to companies like Postmates or Lyft or whomever as great examples of providing fantastic digital experiences, doing things like building out growth teams and the way they approached marketing and product decisions, the iterative nature they all worked through. So I think it just represented an important vector for us to be able to grow our own business and continue to push the envelope on a lot of different use cases.
Andrew: Okay. Then you guys went after bigger and bigger customers. It seemed like in the beginning it was more the mobile first companies and then later on, you realized there was an opening, companies like Microsoft, Citibank, Domino’s. Am I right that those became the big success stores?
Bill: I think that when you look at it today, both are vitally important to our business. We are really building an organization that can provide a fantastic customer experience on both sides of the house. The ordering was really, yeah, we worked largely really the digital first, especially people that were specifically in the mobile ecosystem, but the technology was built to scale to both massive user audiences as well across all the different digital properties that someone might have in addition to mobile.
We have that kind of natural jumping off point. We’ve really worked to mature a lot of the processes and the business over the last few years to allow us to work more fluidly with the classic enterprise as it’s kind of a totally different ballgame when it comes to things like procurement and security, etc. But I think that as we continue to look into our own future, both of those customer categories are important.
Andrew: I want to understand how you get them and then how you understood what they were looking for. Let me take a moment and talk about my second sponsor and get this. I was at an event recently in San Francisco. Bill, this guy was like 22 years old, fresh out of school, looking for a break for what he’d done before. He wanted to work for a startup. I said, “How are you going about doing it?”
He said, “There’s this company I wanted,” I won’t mention their name, “I want to work for them. I built a website saying why they should hire me.” He put the company’s name in the domain. So imagine if it was Microsoft, it would be, Why Microsoft Should Hire Andrew. He built a whole page, a whole website for them. He sent it over. I thought that’s pretty impressive. “So you want to work for this company?” He said, “Actually, there are a handful of companies I want to work for. I created a different site for each one of them.”
I thought about it and I realized how much does a domain cost? Domains are like $2, $10 if you go for a dotcom, $2 if you go for some of the cheaper top-level domains. He got a hosting package. It lets him have unlimited domain hosting. He just has to buy the name, and then he gets to host it for free. He takes a theme that makes sense, creates a site for it with that theme. It’s a few more steps than sending out a customized email, but look at the impact that he has. Think about someone passing around within the company saying, “Look at how badly people want to work for us. Look at the kind of person we’re attracting.”
That gets people’s attention. I thought maybe that’s an approach that companies can take when they’re trying to bring in new customers. Imagine, Bill, if I wanted to work for you or I wanted you guys to hire my company. It would be WhyBillShouldHireMixergy.com or WhyBillShouldHireMixergy.info. I create a whole site, go the whole parallax effects, whatever it is that look nice that would show you what we do and why you’d want to work with us. Would that get your attention, or am I just fooling myself?
Bill: I think it would get my attention.
Andrew: Even if it’s just for a second. If you guys are out there and you want to take that approach or any number of other approaches to creating websites, I’d love for you to sign up for HostGator because I think they’re great hosting because it just works. But frankly, if you decide to go for someone else, look for this one word, actually two words—unlimited domains. You want them to host unlimited domains because with that, you get to experiment infinitely.
Imagine if you just get—well, never mind. I can come up with lots of different ideas—HostGator.com, hosting that just works, really inexpensive and you’ve got a group of people behind it. If you go to this special URL, they’ll take 50% to 60% off of their already low prices. Frankly, at this point, maybe you can find it cheaper. I used to say I get the cheapest price, but every once in a while, they’re experiment by offering 70% or something.
At this point, we’re talking pennies. Forget about looking for the cheapest beyond this. This is super cheap already, $4.98 a month for a hosting package that includes these unlimited domains, look at their website for details. That includes unlimited email addresses, unmetered disk space, unmetered bandwidth, support 24/7, 365, 45-day money back guarantee if you listen to me and you think this idea didn’t work, Andrew’s full of it. And if you decide to keep it, $100 AdWords offer to help promote your new business.
Here’s the URL where you get all of that and you get to support Mixergy. Go to HostGator.com/Mixergy.
That was a pretty decent ad read, don’t you think?
Bill: That was pretty good. I liked it.
Andrew: I’m always evaluating.
Bill: I’ve got a lot of domains myself.
Andrew: For what?
Bill: Just random ideas that you have with friends. I unfortunately am logged into Namecheap on my phone. So I just go and—
Andrew: To this day, you’ll go in and on your phone, buy another domain. Sorry?
Bill: They’re only a couple dollars.
Andrew: So what’s one that you’ve created that you wish you could start but maybe you could give the idea to the audience because you’re not going to do it?
Bill: I registered—actually, I think this one may have expired last year because we didn’t get around to it. But I registered PandaApocalyp.se. The idea was to use it to just host pictures of large panda flash mobs, where everyone would dress up in giant panda mascot costumes and descend on public parks and other sorts of funny places.
Andrew: Why? Why would you want to do that? Is it just for fun? Is it something else? What am I missing with that?
Bill: I think that’s just for fun. Yeah. I don’t really see a business idea there.
Andrew: Okay. I don’t have that level of fun for the sake for fun thing. I am with you about like this need to keep creating. You get this stinking app on your phone and you go at your desk while you’re having lunch and you go, “This would be a pretty cool site. It doesn’t take that much to build.” Just go build it and see what happens. Unfortunately, it looks like that is available. Someone can go and buy that domain right now.
Bill: I would love to see it.
Andrew: Here’s what I would, if I were trying to get your attention, I would get PandaApocalypse.com, put something on it and say, “Bill, your company should work with us,” or, “Bill, if you want this domain, it’s totally yours. Thanks for doing a great interview.” I would use it as a calling card. You can buy anything for $10 from Amazon, but most people think if you send them stuff, it’s just a waste of space. I don’t want it. I hired someone to come to my office and help me just throw out all the junk in the office. But a domain is a fun thing to get.
I’ve got to move on to continue with the story. The bigger companies, I feel like in some ways they’re harder to work with. Like Citibank, you can’t possibly have a friend of a friend who worked at Citibank, right? Once you get to the enterprise, how do you get these customers?
Bill: I think that in a lot of cases, what we saw, especially in the very early days was that a lot of the enterprise clients were hiring people out of the successful digital first companies. So a lot of them saw the successes that were growing in a lot of these new mobile companies. For them, they wanted to bring to bear all of the domain expertise and all of the preexisting experience they had with their internal teams and then cross-pollinate that with people that were coming in from other growth teams or other sorts of teams at a lot of the digital first companies that we were working with.
So that early cross-pollination was, I think, very important for us to have these deep, preexisting customer relationships because people would have been using Appboy and now Braze for multiple years, and then they would find themselves in a new job and they would immediately get in touch.
Andrew: That’s a big one, that they would end up there.
Andrew: What about this—I was doing a quick Google search here. It seems like Microsoft has a mobile engagement SDK also. Am I right about that?
Bill: I’m not—Microsoft has a lot of different products. I wouldn’t be surprised.
Andrew: But beyond that, it does seem like a lot of people are getting into the space now. You started out with people not getting it, and now there are a lot of people in the space. Let’s talk about both sides of that. When people didn’t understand this, before it existed, you have to sell the problem and then the solution. Then you ended up with this new world where suddenly there were job titles that never existed before like lifecycle engagement—that’s a title? Lifecycle engagement marketer, that’s a title you guys sell to?
Andrew: As the space evolves, how do you make sure you’re catching up to that? I know you told our producer that was a challenge. Then we’ll go into what’s happened today.
Bill: Yeah. I think that what we’ve been doing is we’ve really been trying to push this point of view about focusing on the customer experience, focusing on delivering cross-channel and personalizing based on listening as closely as you can across all the different touch points that you have. Those things in doing those things at a consumer scale when we started was new, right?
So these ideas of like how do I build a great customer relationship are timeless. It’s like you listen to people. You try to understand them. You try to deliver things, predict what they’re going to want and give them delightful experiences, and that builds a strong relationship over time, which eventually returns value to you. Then when you look at how are brands executing on those goals and those promises, we’ve seen a lot of experimentation in terms of team structure and responsibilities and things like that.
We’ve also seen people that have come from a lot of different spaces. So some people came from the paid ad ecosystem. Other people came out of email marketing. Some people came from B2B CRM and marketing automation backgrounds. Looking at lifecycle engagement marketing and looking at this kind of cross-channel consumer scale CRM challenge. It’s a difficult challenge. For us, really, it’s been about more than just building technology. It’s also been about educating the marketplace and really helping our customers along the way.
Andrew: Yeah. I can see that content is a big part of your business today, teaching, teaching, teaching, how to increase engagement. You have a list of listicles around increasing engagement. When did you guys get good at that?
Bill: When did we get good at content marketing?
Andrew: Yeah. Was that part of the beginning?
Bill: Yeah. We’ve been building content for a long time, but I think that our efforts to amplify that in a meaningful way really started a few years ago. That was as we continued to scale the rest of the business as well, we also started scaling a lot of our ability to have a voice as a brand to be out in the marketplace educating people. In the early days, a lot of the focus was on just getting the product market fit as it should be.
But as we got there and as we started to have more willing ears out in the market that wanted to learn these things and were willing to focus on them, we’ve met that demand and have continued to build out a fantastic ecosystem of resources, both the content marketing that you’re seeing online, but also through the events that we host, through our LTR conference, which stands for long-term relationships, as well as a lot of the things we do with our clients in terms of advisory boards and other sorts of clients and customer summits.
Andrew: You guys are fantastic at this stuff. You’ve got guides for downloading, blog posts that lead to more information. You’ve got the Marketer Academy, etc. What’s the council that you have? I didn’t know about that.
Bill: So we work with our clients and on a regular basis in cities all over the globe, we’ll pull together people that are using our product day in and day out, the people setting the strategy within their organizations about what their goals are going to be for their marketing and their growth teams.
We like to just pull them together both to allow us to hear from them directly, for us to tell them what we’re thinking and vet that out as well as for all of them to meet and interact with each other. I’m very proud to say that we’re responsible for forming a lot of relationships across companies where people now can share ideas and cross-pollinate things across different categories and knowing what’s working and what’s not.
Andrew: How do you structure those? I get getting a bunch of people together who are clients, but how do you structure it so that it’s useful for them and meaningful for you too?
Bill: So we’ve been experimenting with the structure over time, and I would say that the high-level answer to that is that we’ve tried different things and then we always ask for feedback at the end. We’ve iterated on it. It depends a little bit on the specific market and the types of companies that operate in that market. So hosting an event like that in Berlin is different than hosting it in San Francisco, just as an example. I think that a big part of it also depends on who the people are that are in the room, what the challenges they have are. We try to precede it by helping understand what people would like to talk about what they would find valuable.
We then also have our own presentations. We also keep a very close connection with our customers through our customer success managers and through a lot of the engagement that we do on our own. We actually use Braze in our dashboard in order to engage our own customers. So that helps us to keep our finger on the pulse of what’s going on around our customer communities. So, when we’re going into those, we’re not going in blind. We’re going in with a lot of experience from having hosted them over the years as well as with a preexisting relationship.
Andrew: The benefit of these councils for the members, they get to come in and learn about engagement from other council members, right? All your clients are focused on engagement, so they get to learn from each other, and then you also want to know from them what are you missing, what’s working for you? What do you wish happened? That’s the broad strokes of it?
Bill: Yeah. And we also like to kind of talk a lot about the future, be like this is how we see the various spaces and new technologies. This is what our point of view is about the importance of things like chat bots or VR/AR or the connected home or whatever. This is what we’re thinking about building in that space.
We want to hear from you about how you’re thinking about investing in it, what kind of time horizons are you looking at, or asking things like these are our new feature sets that we’re thinking about building or moving into, does the expertise exist in your team, is this part of what you’re responsible for? All these various things where we can really help vet out our product direction.
Andrew: Got it. Am I right to also understand that they’re helping each other, that they’re passing on to you and others what’s working for them?
Bill: 100%, yeah. The first two things you said there were absolutely spot on.
Andrew: This is such a great idea.
Bill: Building a community amongst people is really valuable and important.
Andrew: In person?
Bill: Yeah. Absolutely.
Andrew: I don’t talk to a lot of companies that have that. That’s brilliant. The other issue that I brought earlier was one that you talked to our producer about. You said there are a lot of companies coming into the space. A moment ago it seemed I found a product by Microsoft. You weren’t surprised that others are in there. What do you do considering how many people keep coming into internet of things the space to allow yourself to stay ahead?
Bill: We just stay focused on what we know best and what we’ve been working on for over six years now. When we really started out, I think that we were the only people that really deeply attacked this problem of lifecycle engagement out of the gate. When you look at a lot of our competitors, you’re going to see people that came from single channel messaging of all different kinds.
You see people that came out of the analytics space, people that came from A/B testing, the ad space when you look at how our legacy competitors have assembled themselves over the years by just buying different things and bolting them all together—all of those approaches are iterating toward what we started out with. We started out with this stack, this vertically integrated stack that was purposefully built for lifecycle engagement, and we’ve been focused on building a really deep and high-quality product experience.
So there’s definitely been a lot of noise in our marketplace. There’s a lot of competitors. We’ve just stayed focused on providing an experience that has a lot of feature depth. It’s got integrity to it. It’s got stability and reliability, and ultimately it’s delivering on what customers are asking of it.
Andrew: All right. I should have probably even said this at the beginning of the interview. Braze is the name of the company. It used to be called Appboy. One of the reasons you guys switched was you go beyond apps, and you wanted to be clear with people that you allowed them to engage in multiple platforms including email and social, etc., right?
Bill: Yeah. I think that apps were obviously an important part of our early years, but as we look into the future and as we look at this problem of engaging customers, it’s one that is not tied to a particular device or a particular medium. We’ve always delivered messages across channels, always pulled together user profiles by pulling in data across all the different touchpoints that a customer has. So we really like that Braze is about bringing people together. It’s a verb that means to bond with great strength. The new name is really focused on what we’re trying to do for our customers and not just a particular point in time, the technology.
Andrew: We used to all be excited about how Foursquare would let someone be the mayor of the coffee shop if they checked into the coffee shop a lot and encouraged more people to check in. Today, what is something that is exciting to you that if someone’s listening to use, they’ll say, “Wow, Braze is actually really doing something amazing. I wish we had that.” Let’s close it out with that use case and I’ll thank everyone and we’ll send them over to your site, Braze.com. What’s a good example of that?
Bill: The things that I get really excited about are places where people are using real-time access to data and things that are changing in real time. I guess two great examples, one is an application that allows for people to transfer money to friends and loved ones in other countries and such. They’re going to be particularly sensitive in a lot of cases to fluctuating exchange rates. So the ability to deliver these notifications to people as exchange rates hit certain thresholds, allow for them to transfer that money back to friends and family and do it in a way they’re comfortable with. That’s a great example where you’ve got this real-time, data-driven experience that’s really driving engagement and it’s delivering it via a messaging channel in a way that is a marketing goal, but really adds to the product experience.
Another great one is for on-demand ride sharing or on-demand food delivery, pre-empting bad weather. So the on-demand ride sharing example is really good. If it’s about to rain in your area 30 minutes from now, that means that in 30 minutes, you’re probably going to be in a case where you’re trying to get a ride home and you’re switching back and forth between multiple ride sharing apps trying to see which one has a lower multiplier, whereas if I can preempt that and I can tell you that in 30 minutes, it’s going to rain. You should order a car home right now. You’re going to have a better product experience because you’re not going to be paying any sort of surcharge, and I’m also going to capture you as the customer because you’re going to [inaudible 00:54:10] directly. That’s another great example where you need to be able to know where the user is. You need to be able to talk to them. You need to have access and this ability to act in real time. So those are I think both really great examples that are really leveraging the edge of our technology.
Andrew: That’s utility, usefulness, it’s not gimmicks. The website is Braze—actually, it’s just Braze.com, right? It blows my mind that you guys didn’t have to get Braze Analytics or something. It’s just Braze.com.
Bill: Or Braze.eu.
Andrew: Braze.eu too because of the data protection?
Bill: Absolutely. We have an entirely isolated EU stack to help with data privacy concerns.
Andrew: Got it. All right. Braze is the name of the company. Thank you so much for being here. I want to also thank my two sponsors. The first is the company that’s going to let you become a website or domain addict if you want to. It’s called HostGator.com/Mixergy. The second one will let you hire your next great developer. It’s called Toptal.com/Mixergy. Of course, as always, guys, we’re trying to get feedback on the audio quality and the way that we’re doing these interviews, let the team know.
If you could say nasty things about the way that I’m presenting myself, it doesn’t have to go to me. It can just go straight to the team. We want to improve. I don’t want to call anyone out. If you’re unhappy, I want to hear about it without making you feel bad about telling me. Here’s the email address, Contact@Mixergy.com, super simple. Of course, you can always reach me at that email. Let them know to pass it on to me. Cool. Thanks, Bill.
Bill: Yeah. Sounds good.
Andrew: Congrats. Bye, everyone.