Andrew: Hey there, freedom fighters. My name is Andrew Warner. I’m the founder of Mixergy, where I interview entrepreneurs about how they build their businesses. I got to start this interview like this. Hang on. Standing ovation clapping. Listen to me, Craig. I am so excited to talk to you. Here’s why? I remember when I waited my turn to get Google Voice, formally GrandCentral. The whole thing was going to change my life and unlike other technology that didn’t really come through. Let’s be honest, Craig. Where you get excited about new technology, and you think this going to be life-changing or exciting, and then it becomes okay, another new thing.
Here is why I love Google Voice, this product that Craig Walker created. It’s one of many different voice over IP companies that he has run, internet cloud-based communications companies that he has created. Here’s what I loved about it.
Yes, any phone number you have can come . . . You have this one Google Voice that goes to any phone device that you had. At first, that didn’t seem that interesting because I only have a phone. Who cared about other phones. I love that you could then start screening calls. You could get your voicemail messages transcribed, bumps spam out of the way. It would do cool things that I ever used but seemed cool. Like, I can have a different voicemail message for my wife and one for someone else, right? Just cool, amazing technology, and here’s where it came in handy. I moved to Argentina soon after I got Google Voice. No issue. People could reach me from anywhere. It’s fan freaking. It’s amazing, amazing, amazing.
All right. That is a company that he created called GrandCentral, sold to Google, became Google Voice. It was the second foray into voice over IP. Before that, he had one of the pioneering companies that he led in voice over IP. It’s Dialpad. I’m looking at an old version of Dialpad on my screen here from 1999. Their mission was to do free web-based phone calls, and they pivoted and adjusted. And we’ll talk about how he helped turn that business around, sold it to Yahoo. We’ll talk about why he founded GrandCentral next and then sold it to Google less than two years later. And then why he’s back now with Dialpad, and what he’s up to in Dialpad in a world with so many competitors.
We’re going to find out that and so much more thanks to two phenomenal sponsors, Craig. The first is a company that makes shirts, and I’m so excited to wear it. I’ll show you here today. It’s called Outerknown. And the second is if you have a Mac, you got to find out about Setapp. But I’ll talk about those later. First, Craig, good to have you here.
Craig: Yeah, it’s great to be here.
Andrew: You had a situation with your daughter and Google Voice. Can you talk about what that is, and what happened, too?
Craig: And that was cool. My daughter is a junior at University of Colorado, and actually my son is a freshman at Arizona. Both of which were in classes at the start of the year this year. And their professors got up like, “Hey, let me introduce myself and put on the board. Here’s my Google Voice number.” And they both asked me. You know, I can’t hear . . . Impressive, people are still using it, so that was very cool to see.
Andrew: What do you feel about that when you see that? Does it feel, like, might’ve been an interesting vanity point? I’m trying to get a sense of who you are by your response to that.
Craig: No. It feels really good. What really, really gets me going is when I run into people and say . . . Who tell me that they loved GrandCentral because that was a much smaller precursor to Google Voice. And when you meet those guys like we were only around for, like, seven months as a public product before we got acquired. Those were the really, really early adopters. When people tell me they still have their GrandCentral phone number, it makes you feel really good.
Andrew: Are you a little upset that we’re using Zoom here? I was trying to watch your face as we connected. You got a competitor. What do you think of that? I felt like maybe it was a bit of a diss, and it was unintentional.
Craig: Yeah. No, not at all. Look. Look, we compete across all mediums of enterprise communication whether it’s videoconferencing. We have UberConference, which we think is much better than Zoom and works a lot better for . . . If you’re dialing in from the phone, there’s no pins, there’s no anything like that. We had a, you know, unified communications phone system replacement that, you know, that Uber and Motorola and WeWork use their phone system. So look, we’re going to compete with a lot of people in those massive markets. We just launched a call center products, you know, for sales and support teams. So these are massive, you know, added up, it’s $100 billion market. There’s going to be a ton of competitors, so no worries that some people are using some parts of other stuff.
Andrew: What’s the deal with Dialpad? So you led Dialpad in the early 2000s, you sold it to Yahoo. How are you now the founder of Dialpad again? What’s the deal here?
Craig: Yeah, so we got acquired by Yahoo in 2005, left pretty quickly to go start GrandCentral, got acquired by Google 2007, left Google in 2010 to start this company. And we needed a name and as you know, getting a domain that ends in a dot com that is spellable and actually makes sense for your industry is really difficult to do. So I called one of my buddies who was still at Yahoo, asked him if we could buy the Dialpad name back from them. And they hadn’t been using it for six years, and they said, “Yes.” We acquired it and named this company Dialpad as well. So two entirely different companies, but the name still relevant, and it’s a great dot com.
Andrew: How big is Dialpad today? And my goal for this interview is to understand how you even got here. Talk about the previous companies that you led. But how big is it as far as revenues, as far as users?
Craig: Yes. So we’re approaching $100 million in revenue. We have 525 employees. We have over 60,000 businesses that are using our products. We have offices . . . The headquarter is in San Francisco, but office in Vancouver, office in Austin, office in San Ramon, office in Raleigh, office in New York, office in Waterloo, Kitchener, Waterloo, office in Tokyo, and office in India, so . . .
Andrew: So $100 million in revenue, big operation here. Real talk. I’m proud that you’re here. But what’s in it for you? Why are you doing this? Why are you sitting here and doing this podcast with me?
Craig: I don’t know. To me, it’s great always talking about your own products. I mean, with you, it . . .
Andrew: Because . . .
Craig: Because I don’t . . . Maybe it’s a vanity thing or maybe it’s wanting to reach new users. But, you know, frankly we have a point of view that communications and business communications should be interesting and fun and productive and shouldn’t be beholding to, like, some IT shop in the back of your business but actually should be driven by users who really want to be able to work from anywhere and be as productive as if they were in the office. So the more we can then go out and talk to people, the more we can get our name out there, the more we are able, you know, to serve more customers.
Andrew: You got into Dialpad originally because you were at . . . Was it Sterling Payot Capital?
Craig: Yeah. That was a family-venture fund.
Andrew: That invested in Dialpad. And you got into it, by the way, 1999, the height of the great period, and then a year later, it was the worst of the worst, right?
Andrew: In dot com.
Craig: Exactly right. So Dialpad was this rocket ship of the company. You could tell basically the concept back then was let’s move the phone call off the phone network and onto the internet. And once you do that, you avoid all the cost and all the legacy phone carriers, and then you can start doing some interesting things with it and drive a lot of cost out of the thing. So it was a total rocket ship, raised a ton of money in a very short amount of time, grew to a very relatively big company at the time. Like, in 18 months, it got up to 300 people. And then 2001 came along, and unless you had a money-making business plan, you really weren’t viable. So that’s when I got brought in to try to cut the burn and [inaudible 00:07:52].
Andrew: I heard they were losing $4 million a month.
Craig: Yeah, they were losing about $4 million a month back then.
Andrew: That’s huge. And you got into VC around the time, I think, that Dialpad was launched. Were you part of the decision-making process on investing in Dialpad?
Craig: Yes. So I was on the team that invested, and I was super excited about the concept of going after this massive communications market without having to be a telco to do it. And I think, like, as you’ve seen, you know, innovation of, you know, Skype Zoom, you know, the RingCentral, all these, you know, multi-billion-dollar companies that have come out of that, it was a pretty good bet. I mean, in the early days, it was a question of how do you monetize it, and how . . . You know, like, while you’re still creating standards and people are still on dial-up, you know, part of venture investing is timing. And sometimes you’re too early, sometimes you’re too late. Luckily, we were able to turn it around and turned it into a profitable company and then get acquired.
Andrew: And I want to understand how that all happened. But you did talk to our producer about that being one of the most difficult parts of entrepreneurship and investing. Talk about that timing.
Craig: Yeah, it was . . . I mean, I remember it like it was yesterday. October 19th, 2001 brought in as an interim CEO of the company and literally by that time, like, it was near the end. Like, the company was running out of cash. We had a high burn, a ton of employees . . .
Andrew: What I mean . . . Sorry, Craig. What I mean is the problem was that Dialpad was too early, you feel, right? That, if you guys could come in a little bit later when high-speed internet was already in place, when costs were a little bit lower, that would’ve helped. Is that what you meant?
Craig: For sure. If you look at what Skype was able to do, Skype came in with the very first, like, broadband Kodak, so they assumed everyone was on a broadband connection. And if you have that as your underlying assumption, you can make the quality really, really good, right? And any time prior to Skype’s launch, broadband penetration was really, really low, so to have that assumption and to build that really didn’t make sense. So, you know, we were three years before Skype. That meant we had to build it to work over narrowband, and you have to work on a dial-up, and it was much more a challenging time.
Andrew: Let me take you down memory lane for a moment. I’m looking at one of first versions of dialpad.com. On the bottom, it says, “System requirements.” You had to make sure that people understood that they had the latest version of Windows, the latest version of Internet Explorer or Netscape, that they also had an internet connection which you had to be clear about, a soundcard which who knows if they have a soundcard or not, and a microphone and speaker. And you couldn’t assume that any piece was in place before you . . . I think there was a . . . before you introduce your Java web technology to them. Then we’re talking, like, that is what was on the homepage.
Craig: Yeah. It was crazy back then, and think about it. I remember putting soundcards into my PC, like you’d buy them separately and screw them in. So yeah, it was . . . and very early time, but the cool thing is virtually every single Dialpad call would start with . . . I can’t believe that I’m talking on my computer over the internet. Like, that’s legitimately was one of the most viral products of the time, like it grew to 14 million users in a matter of months.
Andrew: And partially it’s because . . . So I talked to Ahti, one of the creators of Skype when I was in Estonia doing interviews. And he said, “Look. It was so expensive to call internationally.” Forget long-distance within the country, which is expensive, but internationally, it was super expensive. People would put up with a lot in order to find a solution to that, so I get it. You come in though and you say, “Look. They’re burning money. They have a big team. I’ve got to cut it down.” One of the things I heard you do was actually even have the date. It was October . . . Oh, where was this? I have too many notes on you. Come on, scroll faster. Here, October 19th, 2001, you come into the company, you have a hands-on meeting, talk to 150 people. Do you remember that day?
Craig: Oh, I remember it. Yeah. It was legitimately one of those ones where you realized that you have to cut costs immediately. So had all-hands meeting, you had to tell them that I was just brought in by the board of directors. New CEO brought to effectively lower the cost as immediately and drastic as humanly possible. And from that 150 person all-hands meeting to the next pay cycle, we were down to 15 people.
Craig: One five. Yes.
Andrew: And the way you go, so you basically get . . . Ninety percent of the people had to move on. And then also I want to know what happened to the product? How did you figure out who those 15 were because they were key people for you?
Craig: Yeah. It was kind of like they’re necessity’s mother of invention. What I did is I went to every, like, the seven C-level VPs of the company, I said, “Hey, if you were me and you had to make a list of 15 people to keep, who would you put on that list?” And so they all gave me their lists and, of course, they all included themselves and their cronies and, you know, the guys they brought in. But when I compared all those lists, there were three names that were on everybody’s list. So then I just said, “Look. I don’t know anyone here. I’m going to take those three guys, put them in a room and say, ‘Okay. Now if you three guys were to come up with a list of 15 people, who would it be?'” And they came up with a really good list, so that’s the one we went with. And one of those three guys was my co-founder at GrandCentral. He’s my chief product officer here. We’ve worked together for 19 years now.
And so, yeah, that was kind of like beginning of the turnaround. And frankly, once you had it down to such a small team, we started asking ourselves, “What did everyone else do?” Because we were able to still keep the product running. We were still able to add features and be a little innovative. And, you know, as we start, we changed it from a free model to a pay model and again, it was international calling. So you’re saving people 50 cents a minute. Okay. I’m not saving them 51 cents, but I’m saving them 50 cents. They were happy to pay the penny. So end of the day, we turned it around. We built a backup to about 60 people when we got acquired by Yahoo. And then now, it’s kind of like a really nice opportunity to really learn voice over IP, and that helped us go found GrandCentral.
Andrew: Craig, why start with the people and not what you’re going to do? Why not sit down and say, “The vision is here’s what it is.” I’ve heard you tell the story before, and I’ve noticed that it always is I had to figure out who the right people were. Why?
Craig: Well, I mean, as someone coming in and you’re running out of cash, the only thing you can really do is to stop spending immediately is legitimately headcount is one of the quickest things, right? Like, we couldn’t go renegotiate contracts over the course of 48 hours. You couldn’t go, you know, charge . . . maybe you can charge more, but that’s . . . At the end of the day, that’s one of the most immediate things you can do.
And then frankly, it is the right people. You really wanted to find that DNA that could go through a really tough period and come out stronger and, like, take on as much work as you can give them, and that really is the core. I mean, like, this is my third start-up. It is that same core of people who’s been the founding teams of each one of these companies. And it’s that kind of ethos and quality that you want kind of like throughout your organization like we can do anything. It doesn’t matter how many of us there are.
Andrew: But did you walk in knowing we’re going to do the exact same thing we’ve been doing. Calls internationally, long-distance calls that are expensive, but now we’re going to charge a tiny bit of that amount of money. You knew that going in.
Craig: Yeah. I mean, I figured that out. Like, there were a ton of businesses at the time. You remember ’99 and 2000, they were trying to make up, you know, for money-losing by selling ads and, like, you know, it’s going to be an ad-driven model. And it just clearly that ad revenue wasn’t going to cover the cost. So by being able to say, “Look. Here’s what I’m going to cost us? Here’s what we’re going to charge for it?” We could pretty easily build in our margins almost overnight.
Andrew: And there was the prepaid phone card, too, and then there was the online stuff. Was part of your business model to also let people call from phones?
Craig: Yes. So you could just dial in to a toll-free number, enter a code, and go through, but it was interesting. One of the things that saved us was we had a customer support guy who he said, “Hey, can you try to do some sales as well?” He found a pocket of international like internet cafés in India, where they were buying Dialpad in bulk and then reselling it to people walking into the café to make calls back to the U.S. So we charge him a couple of pennies, he charge them a dime, and everyone saves a ton of money, and so that really was a big cash infusion that saved the company.
Andrew: Why did you decide to sell to Yahoo?
Craig: You know, Yahoo, obviously had a bunch of resources. They have this great online product. Yahoo Messenger was the number one chat app at the time, and they saw Skype as a bit of a threat because Skype was growing pretty fast, and Skype also had messaging and IM in it. And so by their theory was by adding Dialpad to Yahoo Messenger, they’d be able to then more effectively compete with Skype, and that made a lot of sense. They had 250 million daily users and to have your product in the hands of a quarter billion people sounded pretty good to me.
Andrew: Trying to see how much it was bought for. It was mid-2005. The only rumor that I saw was $20 million. Is that understated, overstated, crazy?
Craig: That’s understated. But yeah. No, I wouldn’t say crazily different.
Andrew: So somewhere around there. This was in the age before the crazy acquisition amounts.
Andrew: How are you feeling as I’m talking about this. I’m sensing . . . I’m trying to what figure out . . . Oh, actually, wait. I actually see here $50 million is what someone said. Is that roughly it?
Craig: It’s in that ballpark.
Andrew: In that ballpark. How are you feeling talking about the past like this?
Craig: It’s weird because I don’t do it that often but, you know, like, it’s kind of nice. You have so many things going on in day-to-day where, you know, like, now Dialpad 2, the current Dialpad is 10 times the size of the last one. The last time we did it just from, you know, employees and revenues and everything else, that it’s kind of funny to think back all the day-to-day struggles and battles you had in back 15 some years ago.
Andrew: Okay. As long as it’s not, like, a thing where . . . I find that some entrepreneurs never like to look back, and if I asked them anything about a past company, it’s too painful. And I’m trying to read you as you’re sitting through this.
Craig: Yeah, I was. I’ll tell you. Like, it was a 8:00 a.m. till midnight, 1:00 a.m. job for four years straight, like it was a tough time, and it was a terrible time in the economy. It was a terrible time in Silicon Valley. It was a terrible time to raise money, so it took a lot to make that successful.
Andrew: What do you think it is about you that made you stick with it? I read that you had a single mom growing up, that you were left to do your own thing, that that influenced you, that you had a lot of jobs. Was it part of that work ethic that you got as a kid?
Craig: Yeah, I think so. And I think I always wanted to be a CEO, and the opportunity to be a CEO was great. And particularly coming into a business where they were, like, virtually zero expectations of success. You really got the freedom to just do what made sense to you. And I realize, you know, they’re . . . And I had gotten my MBA prior to business school, but this wasn’t, like, MBA-type stuff. This was literally just common sense. And so, you know, like, when you are operating on a corpse and it doesn’t survive, no one’s going to blame you. It was kind of like a perfect opportunity to really try a bunch of things and just be smart and hard-working, see if you can make it work. And, you know, lo and behold, and I still fundamentally believed at the time, this is a great company, and this is a great idea, and this is great technology, and it was just a matter of time before the world kind of realizes that.
Andrew: All right. Let me take a moment, talk about my first sponsor, and then we’ll come back in and discover how you came up with GrandCentral. I was listening to Naval Ravikant. You know that guy, the creator of AngelList.
Craig: Yeah, yeah, yeah.
Andrew: He’s invested in Uber, a bunch of other companies. I heard him speak, and he started to talk about productivity, and he went really basic, and he said, “It’s like a lumberjack. You can’t improve the productivity of a lumberjack the way you could . . . ” And then he stopped himself, and he said, “Well, you know, unless you give them better tools, and then he becomes a more productive person.” And for some reason, maybe because I was running and I was in a flow state, it made me think, “I can also. The work that I do can also be improved based on the tools that I have.”
And what’s the one tool that I use when I’m sitting here at my desk. It’s my computer, but I don’t improve it in any way. Then I thought, well, you know, “I have Setapp.” I have a subscription to them. And the Setapp bundle includes over 150 Mac applications to help me do things, like speed up my Mac, get rid of all of those . . . Are you on a Mac, Craig, or are you on . . .
Craig: Yeah, I’m on a Mac.
Andrew: You are?
Craig: I’m on a Mac.
Andrew: So, you know, on the iMac, you can have, like, all those different menu items in the top right which distracts you. For some reason, the Mac opens up every window to every app in a small thing on your screen which means you see all the other windows which is very distracting. And one of the things about Setapp is it found all those little apps that you need, some of them are really big apps, that will help you be more productive, speed up your computer, get more productivity out of yourself. And it says, “Instead of buying each one individually, we’ll give you all of them together.” And so whether you’re keeping passwords, whether you’re working with PDF files and want to sign them, whether you’re doing focus work, and you need to get rid of all the other distractions on the screens, whatever it is, Setapp has an app for you.
I want you to go and get this for free. All you have to do is go to teams dot . . . I’m going to do it right now. Teams.setapp.com/mixergy, and when you do, you will get this at a better price than I paid for. You will also get to try this for free. Go to teams, that’s teams like baseball team, but plural. Teams.setapp.com/mixergy. And I should spell Setapp is S-E-T-A-P-P.com/mixergy, and I’m grateful to them for sponsoring. Where did you come up with idea for Google Voice . . . excuse me, for GrandCentral?
Craig: Yeah, GrandCentral, so it actually hit me. I was in a taxi going through L.A. and was working at Yahoo at the time and realized that voice over IP to-date like Skype, Dialpad 1, Yahoo Voice, so it had all been about just how do you make cheap, maybe even free phone calls? And what it was really lacking like that was 2005, 2006, was anything really cool about just controlling your communications because, at the time, you got a work phone number that had a work voicemail. You got a home phone number that probably had a home voicemail. You had a cell phone that had a cell voicemail. But no one just called you on your cell all the time, it was super expensive. And so, like, people would try to reach you at all these different locations. And, you know, I get off of a flight and you’d see everyone just pull out their phone, check three different voicemail systems.
And it hit me of, this is ridiculous. I should just have the Craig number, and it would ring me wherever I want it to. You know, like, you, the caller, shouldn’t be guessing where I am. You should just try to reach me, and then if I did that, I could move all the features to the cloud, and, you know, like, have a different voicemail greeting for my wife versus my boss. And we can even change the ring back tones, so, like, we will let you upload any kind of music. So when you called me, I could have you listen to Guns and Roses instead a ringing sound and stuff like that. But, you know, a boss or someone else could hear just a normal ring sound. And we just basically realized that with voice over IP, you could take apart every single feature of the phone system and let the user control it which was really cool.
Send unknown callers to spam or block callers, and then if a bunch of people send the same number to spam, we just block it from the whole system, so no one would get it. All these cool things, transcribing voicemail to text, let you SMS from your computer, and use this number that isn’t a cell number but use it to text, all these things are things we figured out how to do. And it just seems like the phone company had always owned this little treasure chest of all these features. And you had to just sit there and wait for them to give them to you, but we could just throw basically all the Legos on the table, and let the end user set it up however they wanted.
Andrew: How do you know which features to include? Which ones are going to get me excited? Which ones I was actually going to use?
Craig: You know, we gave you all of them and so . . .
Craig: And then you know what I’m saying? Again, it’s kind of like Lincoln Logs or, you know, or Legos. A hundred different people are going to build 100 different things. And hey, there’s no reason why you shouldn’t have the tools to do it. We were lucky. We found a great CTO, this guy, Don Fletcher. He was a Caltech Ph.D., MIT applied math genius. And in interviewing all the folks because I had this long list of all the features I wanted or all the parts I wanted to expose. Like, 10 CTO candidates said, “Two years, I can do half of it.” Don comes and he’s like, “Six months, I can do all of it.” Like, Don, you’re the man.
And he delivered on it, actually took him nine months, so a little bit longer. But that really changed things, and then once you had that, people loved it. You know, people love being in control of their stuff. They love getting it out of the phone and into the web and being able to have an interface that actually made a lot of sense. So that was kind of the genesis of it that I was driving around in a taxi in L.A.
Andrew: Look at all the excitement for it. I’m now looking at TechCrunch. Michael Arrington, the founder of TechCrunch said he flagged it as the most exciting startup I’m currently tracking. “The New York Times,” David Pogue, who was very influential at the time, “One number that will ring all your phones,” and wrote a very positive story about it. Other bloggers whose stuff I can’t find anymore because it’s all broken links, were super excited about it. Weren’t you, at the time, also not allowing just anyone to come in or were you charging? Was it difficulty in getting access to it? And then once you switched to Google, it was locked down for good.
Craig: Yeah, it was interesting. So for GrandCentral, the costs were . . . and we only raised $4 million. And so it wasn’t like we were sitting on this war chest, and so we didn’t have millions and millions of phone numbers, just waiting for people to come sign up. So we are pretty judicious about how we assigned them, and where we got them from. And then once we got acquired by Google, the problem wasn’t obviously the cost of getting phone numbers. The problem was, okay, before we relaunch this, how do we make it available to 100 million users? Like, your scale problem is 10 times different at Google. You know, we spent 18 months rebuilding it inside the Google infrastructure in order to scale like that. And, you know, that same Michael Arrington once, you know, wrote a blog post of like, “Hey, whoever the last person at GrandCentral, turn the lights out on your way out.” Like, he was getting pissed because . . .
Andrew: It was taking so long, and he thought maybe this is not working.
Craig: Yeah, there was a number of acquisitions where, you know, you enter and you never appear, right? So we knew that Google Voice was coming. We just couldn’t tell anyone when or how? And so ultimately, like, literally about two weeks after Arrington wrote that piece, we opened up, and we started letting people come in, but we were doing it on a limited beta basis. And I remember seeing on eBay, like invites to Google Voice were selling for, like, 40 bucks, and so it was awesome. But yeah, but then we ended up opening it up and, you know, tens of millions of users.
Andrew: Why did you sell so quickly?
Craig: It was funny because we weren’t . . . You know, the Yahoo experience wasn’t awesome. Like, we got into Yahoo, and it turned in to be a big company, and it was really hard to get things done. So when Vincent and I left, and he was my co-founder, and my head of sales or product and marketing at Dialpad 1. We said, “Look. We’re not going to get acquired again. We’re just going to run with this.” And then 18 months later, they were wanting to buy us. If there was one company in the world in 2007 you were excited about, it was Google. Like, that was the one that was so chaotic.
They were going to let us run like our own startup. They were very hands-off. They gave us a lot of resources. And there was a guy, Wesley Chan, who was the product manager, who was championing the entire deal, and he was just so persuasive and convincing. We were like, “Okay. Well, if there’s one company we want to be acquired by, it’d be Google,” so we went for it. And then . . .
Andrew: He was on the Google Talk team. I heard that he saw you at the Consumer Electronics Show back in 2006 and said, “We like this. Let’s find a way to make it work.” You said, “How about if you guys invest in our Series B?” He said, “How about we acquire you?” My guess is I’ve heard you say in preparation for this interview that they were going to be the fastest way to get to 100 million customers, but you could’ve gotten to 100 million on your own. And my sense is that the acquisition price was so strong that you said, “It’s going to take us forever and a lot of risk to get that on our own. Let’s go with Google, and we could be proud of what we create there.”
Craig: Yeah. I mean, any time you say no to those deals, too, where they also have an option to go pick up a competitor of yours, and then you’re fighting a very large competitor, so that was a consideration. But legitimately, we were right down the street from Google. We were in Milpitas or we were in Fremont, they were in Mountain View. We really like the folks. You know, Google was again . . . It’s about a fifth the size of it is now. Like, it was a pretty entrepreneurially kind of thing. A funny story about, like, the Wesley meeting goes. I’m meeting with five people from Google at CES, giving them a demo. And of those five, there’s one guy who’s not saying a word. He’s got terrible stomach problems. He’s lying down on the ground like . . .
Craig: Literally like he . . .
Craig: He legitimately ate a hot dog at a vendor’s booth and felt green. Like, I was talking to all the other folks. I don’t think we said one word to Wesley as he was rolling around on the ground. And he was the one who loved it just from hearing it from afar, so that was a really interesting way to meet him. But, yeah, like, it’s tough to say if a big company . . . And Wesley was pretty good about it, but he’s like, “Hey, look, you know, we’re going to get into the space. I have Google Talk. We’re going to do it. We’d love to do it with you, but if we don’t, we’ll find someone else.” I’m like, “That’s pretty compelling.”
Andrew: He’s pretty impressive. He’s, I guess, the founder of Google Analytics. And then as an investor, he invested in Canva. He invested in Dialpad. He invested in ring.com and a bunch of other companies that ended up doing really well. You guys stay in touch? I guess, as an investor, he must . . .
Craig: Not really, but he’s an observer on our board, and he invested in us through his new fund, Felicis.
Andrew: I heard that you grew up near Steve Job’s house. I wonder did it have any influence on you or did . . . ?
Andrew: What was it?
Craig: Yeah, it was crazy. I grew up in Cupertino and, you know, we moved there in 1965 and lived there until, like, I don’t know, ’85 or so. And tiny little street, Presidio Drive, you know, again, it was kind of a blue-collar, a little bit of a hard scrabble neighborhood at the time. And I didn’t know it but this gal that I or a friend that I grew up with. She and her family moved to Virginia, and she is in sixth grade. They rented this house out to this guy for two years. It turned out to be Steve Jobs, and he was starting Apple in Cupertino and . . . No. I’m like I’m sure I must have run into him in the neighborhood, but I was in sixth grade. I really wasn’t understanding what was going on around the corner in the industry. But it was a kind of a cool story once he passed away, she posted something about him in her house. I’m like, “Oh, wow, I was four doors down.”
Andrew: Did you feel that the area where you grew up helped shape who you are? Was it encouraging of creation and entrepreneurship?
Craig: Yeah, it really was. So Cupertino, when I was a little kid, was, you know, it was apricot orchards, so it was legitimately agricultural. And then all of a sudden, like, these business parks would start. And there was a company called Timeshare and then Apple and then a couple of others, and you just see the whole landscape changed and it was like . . . Well, it’s a tiny town. You know, it was much smaller back then. And so there was something going on. This was the tech revolution. This was before the PC existed. I don’t know. Maybe it was just something in the air or in the water, but there was just a lot of risk-taking, a lot of smart people there.
Andrew: And you had a bunch of different jobs. What’s the one that had the most influence on you?
Craig: Good question. I don’t know. Probably delivering newspapers for the San Jose “Mercury News” at, like, 5:00 in the morning before, you know, sixth grade and stuff. So I had that job from . . . I think I had it from fifth grade to eighth grade. And that was, you know, three years of getting up at, you know, 4:30 or 5:00 in the morning, go and folding papers in any weather, riding around on your bike, delivering them, like you used to get off the bike, and put them on people’s porches, so they didn’t have to go down to the street to get them. Like, I don’t know. It was just a very cool thing for when you’re 10, 11 years old to one, be making, you know, 300 bucks a month. But number two, to be, like, in control of your destiny and delivering the news for people, I really thought it was a super, liberating, interesting experience.
Andrew: You actually liked going out, and all you made was $300. That was not that much for a sixth-grader for waking up at 5:00 in the morning.
Craig: Hey, I mean, this was 1976. That was the time.
Andrew: Oh, wow. All right. Man, I’m looking at you. I thought you’re way younger than that. All right. That does make sense. Let me come back and find out about why Dialpad 2.0? So second sponsor . . . I’ve got to say, Craig, one of the things that I noticed about you is you’re a good dresser, but I don’t feel intimidated. Like, you’re not walking around in suit which makes me feel like, “All right. I’m about to talk to a banker.” You don’t walk around with something that feels like it’s way too highfalutin. This is casual clothes, but you look well put together. That’s a look that I’m going for. So I said, “How do I get this?” And someone on my team said, “Andrew, have you checked out Outerknown?” And I go, “I hate shopping. What am I going to do?” He said, “Just go and check it out,” so I went and I checked it out.
Simple, easy-to-wear clothes, kind of stuff that’s super casual and comfortable. But also, since I travel a lot, I can just toss it into my backpack when I travel, go-go internationally. I’m going to all seven continents this year to run marathons on everyone and interview. So I wanted to be casual enough that I could feel comfortable in an airplane or comfortable walking around town or looks good enough that if I sit down with the creator of Skype, with the founder of Bolt. Bolt is one of my favorite companies. They are the Uber. Do you know them?
Craig: No, I don’t.
Andrew: They compete with Uber and a lot of markets. And I talked to the founder, and I said, “How are you going to compete with them?” He said, “Well, let’s look at South Africa.” And he started giving me the numbers of how many people Uber sent to create and open up the South African market, and how much money? He goes . . . I said, “So what did you do? He said, “I just sent a PowerPoint.” I said, “What do you mean?” He goes, “I just found someone who can go lead it for us. I give him a PowerPoint.” I said, “Here’s how we run. This is our operation. I’m hiring you to go run it.” And with one person, he created Bolt. He said, “We’re not going to beat Uber. We’re going to be second to Uber in every market. We’re going to be the lower-priced competitor, so you’ll always come to us when you’re looking for a cheap option.”
Anyway, fantastic. I want to look good for him. The guy built $1 billion-plus company wearing a freaking white T-shirt. I can’t walk around in a suit and tie. I can’t even be in, like, a buttoned-down collar. So let me show you one of the things that I’m going to be wearing as I travel around. This is from Outerknown. I got to take my earphones off first for a sec. Well, it is. Tell me this is not going to be good on Antarctica. Oh, this is a podcast. Nobody can even see it.
Craig: It looks [inaudible 00:36:09] . . .
Andrew: But I’m going to describe it. What do you think?
Craig: I think it looks great. What’s the brand, Outerknown?
Andrew: Outerknown. They’ve actually said, “Andrew . . . ” Not they, Outerknown, but people on my team said, “Andrew, you’re going to talk too fast. Can you just please spell it? So I will. It’s Outer, O-U-T-E-R, Known, K-N-O-W-N.com. Go shopping there. If you decide you want to buy, use the discount code, MIXERGY, and they’re going to give you a big discount on your order. So it’s Outerknown, great clothes. From what I understand, they were created by an influencer, and so he’s got a bunch of people on there already. And I’m really proud that they consider me an influencer. And now I get to wear their clothes as I travel the world and do interviews everywhere. So outerknown.com, even if you’re just browsing, go look for clothes that you guys are going to feel really comfortable in. All right.
Craig: Looks good.
Andrew: Thank you, Craig. Coming from you, that means a lot. Were you always a good looking guy? Were you the type of person who felt confident because you look good, because you spoke well?
Craig: No, I don’t look good. I’m just a hard-working guy eating a lot of beef jerky, drinking a lot of caffeine, sleeping three hours a night. That’s it.
Andrew: I was one of the dorkiest looking guys in New York. And it’s a city of people who are masters of the universe. And I said, “One day, I’m going to do so well that I’m going to hire someone to dress me.” Yeah, I have people that dress me, and they buy it. And I never followed through, so unless they come in every day to dress me, it doesn’t work.
Craig: Hey, well, the pink shirt is for Breast Cancer Awareness Day today.
Andrew: Oh, is that right? Is that what today is?
Craig: We’re all wearing them in the office.
Andrew: I didn’t realize. I’m glad you brought that up. So one of the things that I’m trying to understand is what the connection with UberConference is? Wasn’t UberConference created by one of the co-creators of tickle.com?
Craig: We started UberConference in 2012. We launched it. TechCrunch just wrapped in New York.
Andrew: Was this the first thing that you created before Dialpad?
Craig: Yeah, this was . . .
Craig: So the company, it’s all the same company. It’s all the same, you know, products we sell, same platform. But at the time, it was 2012, we wanted to make a better conferencing service. And it drove me insane that the idea of joining a conference call was in 2012, the idea was still you dial a phone number, enter a 12-digit code or a 7-digit code, you’d hear a beep, you’d say your name, you’d get dropped into a room, you wouldn’t know who’s there, you hear a bunch of voices. Freaking insanity which when you asked me about competing with Zoom, same thing. If you ever dial into a Zoom call or . . .
Andrew: I do. Either the problem that I have with dialing into Zoom is . . . not to put them down, but it is a huge . . . You’re right that it’s a problem. I’ve had guests who had mic issues on their computers. And I want to give them a phone number to call in. The problem is I can’t give them the phone number. I can give them the main phone number, and then I have to say, “Can you please go over to the mic on the lower-left, hit the chevron? Nobody knows what a chevron is, so I do this with my hand, and then I say, “When you do that, go to audio setting, and then see your user ID or username or something, and then put that in when they asked you for that?” That is absolutely a problem. So you saw that as the original problem?
Craig: Yeah, the original problem. And then we said, “Hey, look, if we can make a better conferencing . . . ” So for us, you just dial the number, and you’re in, right? And we also let you see . . . we give you a URL, so you can see, here’s all the people on the call. So even though it’s not video or it wasn’t a video at the time, I’d see your profile, I’d see your link in information. I know who it is who’s talking, I know who just joined, I know who just left. I can share my screen. I can lock the room. I can do all these things that you could do through a phone other than you wouldn’t have the visual, and you had to enter these ridiculous codes, so we did that. And that the time we said, “Hey, look, we’re going to name the company Uber Communications, we’ll have UberConference, Uber Meeting, Uber Voice, Uber Call Center. As we know UberCab, at the time, changed their name and kind of like made it in the industry. So we said, “Okay. We got to change our name.” That’s when we called Yahoo and bought back Dialpad.
Andrew: So what’s the connection to . . . I guess Alex Cornell is the person I was thinking of.
Craig: Yeah. Yeah.
Andrew: Is he one of the co-founders of the company?
Craig: Yeah, he is. He was our fourth co-founders. So Wesley Chan introduced us to Alex Cornell.
Craig: So I had myself, the two technical leads of Google Voice, and we needed a creative person and designer, so Wesley introduced us to Alex. We went and got Chinese food. He quit his job, joined us. We were working out of my house. And, Alex, you know, wrote the hold music for UberConference, wrote a whole song that was just a . . . Like, he got a Wall Street Journal article about it. Like, it was just a really cool creative thing. And Alex left us to go start his own video business, then he went to Facebook. Now he just came through Y Combinator. One of the most creative guys I’ve ever met, so we were lucky to have him for a while.
Andrew: All right. And I see it here. Alexia Tsotsis wrote the article about you when you won TechCrunch Disrupt?
Andrew: What was it that they saw about UberConference that they liked so much?
Craig: Well, just the idea. And it’s kind of like a continuation of that GrandCentral, Google Voice, UberConference, Dialpad idea that you don’t have to do telephony the way it’s always been done. Like, the idea that legitimately on a conference call that you while driving, you have to try to enter, you know, a seven-digit code is nearly impossible. And just the thing of putting users first and putting design first and putting . . . Like, on Dialpad now, one of our coolest features is we acquired this artificial intelligence company. Like, while you and I are talking now, if we’re on Dialpad, I’d be getting a real-time transcript of the call, and I’d be able to filter it at the end of the call and say, “What are all the questions, you know?
Andrew: Hang on a second. Hang on a second. Wait.
Andrew: So you’re saying, I get on Zoom with you or not Zoom. Look at this.
Andrew: I get an Uber . . . Wait. What’s the name of the product that I would get on?
Craig: Dialpad is our phone product. Yeah.
Andrew: So I get on Dialpad, I get to see you visually.
Andrew: While we’re talking, I get a transcript, so that I could automatically search it and find out what you said before that was helpful.
Andrew: What do you guys charge for that?
Craig: That’s just included as part of our Dialpad products, so . . .
Andrew: So for 20 bucks a month, I get that?
Craig: A month, yeah. Exactly. Included, and then all the things of . . . If you think you’re sales rep, and so I want to ask you a question. We can even pop-up answers to most frequently asked questions. How do you handle objections, deal with competitors, all those things? You can set up that when a mention comes up, it will give you the coaching that you need to, you know, have some . . . and better ask.
Andrew: I’ve interviewed salespeople. People who run sales organizations who said that they create tools that let them do that. And so what you’re doing is you’re listening to the objection that the customer has and you bring up for the salesperson a list of objections what their response is?
Andrew: Because your software knows that that’s happening.
Craig: Yeah. So part of the artificial intelligence is transcribing that into text. The nice thing about our system is it does it in real-time, so while the call is happening.
Craig: And then within half a second, it can say, “Oh, look, you mentioned a competitor. Here’s the battle code for that competitor,” pop on the screen. “Here’s how we handle that objections.”
Andrew: Is this from the TalkIQ acquisition?
Craig: Yeah. So TalkIQ is this company that was funded by Salesforce and Scale Ventures. And we acquired them about two years ago, and we built it into our platform.
Andrew: I see. So let’s talk then about the big vision here. What are you trying to build? Any kind of communication that we need, you want to enable. Is that the thing? How do I understand this?
Craig: If you were to think about it, every business has probably three distinct needs around voice communication. One is for conferencing, one is for their phone system, and one is for a contact center, whether they have salespeople or support people. Those probably are the three big ones. If you add artificial intelligence to all three of those and just make it . . . you know, integrated into all of it, think of how much better your organization can be. Every conversation gets through, gets transcribed, and is searchable. Do I want to know how many times a new product we launched was mentioned? I can do that, so I want to see the [inaudible 00:44:29].
Andrew: I, as a salesperson that or does the sales manager can even see how many times people mention it?
Craig: For sure.
Andrew: The conversations. Okay.
Craig: Yeah. And let’s say, I’m a sales manager and I want to see what’s the average sentiment on all my calls? Is there one rep where the prospects come off with a negative sentiment? Is there another, they’re really happy? Is there a particular objection we need to get better on that when it comes up, we don’t close as many deals. It just makes everything like that spoken word no longer is just lost once it’s spoken. It’s now categorized, and you can learn from it.
Andrew: And the whole thing is you want to enable that kind of intelligence in all three of the areas that we’re communicating right now.
Craig: Exactly right. Because just having it on a call center makes no sense because a lot of times, you’ll then go to a conference call and do a demo and bring in a bunch of other people, so it needs to work there, too.
Andrew: The part I’m most excited about is I like the transcript. So you know what? I work with someone at Tucker Max’s company, Scribe. And they always give me an UberConference phone number. It’s in my address. It’s in the calendar, I just hit the button . . . I hit the link, and it calls in. Now I understand why they want it. They want a transcript of everything that we’ve said, and they automatically get it at the end of a call.
Craig: Yeah, automatically get it. In UberConference, we literally launched that on September 4th, so literally, it’s been out for a month.
Andrew: Got it. I had no idea this was there, and I didn’t realize that you guys also do the objection handling.
Andrew: The first customers that you got for UberConference were who?
Craig: Geez. So Box was the very first big one, but I’d say Uber was an interesting one that they signed up for UberConference, and then they expanded to a ton of UberConference users, and then they expanded using it for their phone system, and then they expanded worldwide, and then we’ve gone with them worldwide, so they’ve been . . . They were one of the earlier adopters and then also, one of the bigger ones.
Andrew: What’s the deal with phone systems? I understand, by the way, why conference software is so important now. Everything we do is remote, right? And so even if there are two people in the office, I’d prefer that we use some online conference, so we can get a recording of it for the people who were not there. What about phone systems? Why is that so important now? Why did that change?
Craig: Yeah. Like, it’s interesting that if you’re going to be . . . if you’re going to have an HR department, if you’re going to have a legal department, a finance department, biz dev team, you can’t do that all through people’s personal cell phones. It’s just like what are we going to do? Okay. Should I call this number for, you know, to schedule an interview? And it’s just someone’s personal cell phone while they’re out in a bar and [inaudible 00:47:15].
Andrew: Oh, I see what you’re saying? You’re saying, “Look. We’re all using phones, cell phones right now.”
Craig: Yeah. Well, people . . .
Andrew: One of the first things I did when I got into this Regus office is they put a phone on the desk. I go, “Get rid of it.” They go, “You don’t have to pay for it.” I go, “I don’t want the space . . . I don’t want it taking up space. I’m not using an old phone.” But you’re saying even in other businesses, this is happening. We can’t force phones on them, but we can’t have them use their personal phone numbers. And that’s why the phone replacement is becoming so important.
Craig: Yeah. I’d say . . . I mean, think about it. Like, every big business that existed longer than 10 years ago has a phone system, right? People legitimately aren’t using them because they’re just pulling their cell phone from out of their pocket. But you lose all the value of separating work from personal, right? And the company loses the control of like, let’s say, you leave, they want to be able to take all the contacts and all the conversations and hand them to the next person. So what Dialpad does is you don’t need the best phone, but you still get that work number. It just works on your own personal cell phone.
So now it’s kind of like there’s no reason at work you to ever use your personal Yahoo email address or your Gmail. It just looks stupid, and it seems a little stupid when you end up in someone’s personal cell voicemail when you’re trying to make a business call, so you still need the business phone system. You just don’t need, you know, an archaic, expensive phone that’s sitting on your desk.
Andrew: So let me understand how you think as an entrepreneur? Did you say, “I see the world shifting towards personal phones and towards remote workers? I see how my understanding of online communication is going to be applicable in this new world?” Is that it or did you just say, “I’m going to start with this one thing, and we’ll see where it goes”?
Craig: No, that’s it. Exactly right, the first one. So we were working at Google, and Google was . . . They had launched Gmail for business, right? And you started to see companies adopted because it was much better to just use Gmail for business than it was to have your on-premise Outlook Exchange Server that was really crappy and slow searching. And you have the VPN into it from home if you wanted to use email. Like, it was crazy, right? So Gmail was way better. And what we realized is well, the version of Gmail of a phone system versus a expensive Cisco’s, you know, Cisco handset sitting on a desk, it’s the same concept of, yeah, I should have all the best features, but I should be able to do it from anywhere on any device, whatever is in my pocket.
And that was really just the genesis of like, “Look. We’re exchanging. People are coming into the office. Less people are sitting at their desk the least.” The idea of having the way to communicate with them of winning this device that just sits on a desk that no one’s at anymore, really seemed antiquated. So, yeah, that was kind of the genesis of everyone will ultimately move to the cloud for this, and we want to be the first and really be prime now in great position to help them make that transition.
Andrew: I can’t believe that I didn’t . . . I don’t know why I never considered Dialpad. I didn’t realize what you guys were doing. I think I was considering it as one of these older companies that had still been around and probably by going enterprise, and so I thought it wasn’t for me. But if you’re seeing that I’m a little distracted is because I care about this stuff. I’m kind of into software like this, and I’m looking through the feature set for the phone plan, for example. And I see something like audio snippets. I get the rest of the features. What’s audio snippets?
Craig: Yeah. Let’s say, you and I are on a call. And I want to just capture the [inaudible 00:50:47] and you say something really interesting. If I click snippet, it’s going to capture recording of the back 10 seconds and forward 10 seconds, grab that little snippet, and throw it in a summary for me.
Andrew: Oh, that’s huge. I love that type of stuff. That’s what we are moving more and more towards. I realize that there’s a lot that comes up in our calls and our meetings. I just need to record it, so I could share it with someone else. Like, if I say something that’s good, I want to make sure to record that and then give it to the writer and say, “Can you please send that out?”
Craig: Yeah, hit the snippet button for that because, like, that’s a more productive than just saying, “Here’s the hour-long recording of my call. Go find that interesting part around minute 47.” That’s a little more challenging.
Andrew: All right. And it looks like investors in the company . . . Andreessen Horowitz, Marc Andreessen is on the board. Am I right?
Craig: Yeah, he is. He is good. I just had breakfast with him on Saturday.
Andrew: What makes him great? What kind of insight do you get from him?
Craig: Wow, Marc is one of the smartest guys I’ve ever met in my life. The insights I get from him is so . . . One of the beauties of . . . You know, I’m a third-time entrepreneur, so, like, I’ve seen some things. But he is invested in 300 companies, so his pattern recognition is much greater than mine. And he had seen companies that have gone through various stages of growth, that have tried to go after different channels with the market. He just has a ton of experience, and he’s a student of startups. Like, he literally reads voraciously. He takes it very, very seriously. Like, he works as hard as anyone I’ve ever met. If I were to send him a text right now, we can get a reply, you know, within minutes. Like, he is just typically connected and very into it. So yeah, he has been great. All of our investors have been great.
Andrew: You guys have GV, which used to be Google Ventures. You’ve got Softbank. You’ve got individuals like Mark Zuckerberg, I think. Sheryl Sandberg, Jack Dorsey. Am I wrong?
Craig: Well, they’re through ICONIQ Capital that manages some of their assets, so ICONIQ Capital. Yeah, they led our most recent round. The co-founder of Android is on our board from Google, Rich Minor. So we’ve just been blessed to have really great investors.
Andrew: All right. For anyone who want to go and check it out, the website is dialpad.com. And I want to thank the two sponsors who made this interview happened. The first, if you are looking for clothes that will make you feel good, a little closer to the way Craig Walker looks. Basically high-power guy, still looks so comfortable that I could feel natural talking to him, still feel, like, I can just BS with you on a call and not feel ill at ease. This is the site where you get that type of clothes, Outerknown. And number two, if you need software for your Mac, every software that you need is available for you right now at setapp.com. S-E-T-A-P-P.com/mixergy. Craig, thanks so much for being on here.
Craig: That was awesome. Thanks again.
Andrew: You bet. You bet. Bye.
Craig: I appreciate it.