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Here’s your program.
Andrew: Hey everyone, it’s Andrew Warner, founder of Mixergy.com, home of the ambitious upstart. The place where you come listen to entrepreneurs tell the stories of how they built their businesses. Joining me today is T.A. McCann, founder of Gist, which launched in 2008 and sold to Reasearch in Motion less that three years later. Gist is a next-generation social address book. T.A., welcome to Mixergy.
T. A.: Thank you very much.
Andrew: So, how many users did you have before you sold to RIM?
T. A.: Well, we don’t talk about the number of users, but we had over 100 million profiles in the database, so users had connected their address books and we had created social profiles on their behalf, well north of 100 million.
Andrew: Oh, what’s the difference between a user, then, and a social profile in the system?
T. A.: So, I’m a user, and in my social address book, or my Gist address book, I’ve got over 47,000 contacts. So it’s a 1:47,000 ratio in that case. Most of our Gist users would have somewhere between 500 and 5,000 contacts. We’ve got some people that are north of 100,000 contacts, so the difference between number of profiles in the database and users is that.
Andrew: I see, okay. You know what, why did you guys cancel my account? Actually, I’ll tell you why you canceled my account. You canceled my account because I didn’t use it. What I’m curious about is, why cancel accounts that aren’t being used, when there are so many other companies that are locking users in even if they know that they’re not really active just so they can boost their numbers? Why did you guys decide in that kind of environment to cancel accounts that were inactive?
T. A.: Well, there’s two main reasons. One is, if you’re not using your account, you probably want to stop hearing from us or being bothered by us, or clearly we haven’t done enough value. But probably the more important reason is, when accounts are active for us, we actually do a tremendous amount of work on behalf of the user.
So, let’s say that you had a thousand contacts that we went through and we organized and ranked for you, and every morning we go out and we search 50,000 new sources, 20 million blogs, Facebook and Twitter to bring that content to you. And if that work isn’t being valued by you, then we don’t want to do it for you. So, in that sense, all we really ask is that people log in people log on once a month and get value out of Gist and then their account remains active. So, the only people that we’ve made inactive – which is actually more accurate – are people who never log on or never use the service, because it costs us a lot of compute time, so to speak, to go and do that work.
Andrew: I see, okay. And I ended up just going and actually creating a new account, I didn’t realize I could activate the older account.
T. A.: Yeah, just log on, for anybody who’s out there – I mean, we’re working through this particular issue, I think it’s a fair issue, so that A, we communicate well with our users and B, they understand. I think that when I tell that story people go, “Oh, okay, that’s logical. If I’m not using it, it’s okay to sort of make the account inactive, if I am using it, I only have to use it once a month.” Or use it inside of Outlook, inside of Gmail, on Android, iPhone, forthcoming Blackberry. If you’re using it at least once a month then your account remains active with out any other additional effort.
Andrew: Okay. All right. I thought it was some kind of secret thing, because you guys gave me access before I think it went public. Someone heard my request to try it, you gave me access and I thought, “Maybe it’s too secret, they want to shut down people as much as possible to keep the secret from spreading about what Gist is about.” This was a while back when you guys canceled.
T. A.: Yeah, absolutely the opposite. Gist is all really about helping you connect with other people, and in the process if they can use the the product to connect with other people and turn their contacts into relationships, then everybody is winning in that particular case.
Andrew: All right. I gave a description at the top of the interview of what Gist is. I said it’s a next-generation social address book. I think that gives people an understanding of what it is, but I think if we give them a story of how a businessperson might use Gist, we’d give them an even clearer understanding of how the product works.
T. A.: Yeah, I think all of us, every businessperson now has contacts which are spread out all over the place. So you have contacts which might be in Google contacts or Outlook, you have Twitter contacts, Linkedin contacts, Facebook contacts, so just even being able to put all of those contacts into one place is value number one. And that’s what we do. So, you can connect all of those different accounts into Gist and we bring all of those contacts together into one place in the cloud, and that’s sort of step one.
Step two is then we sort of pull them all together, so tam@gist.com is also mapped to T.A. McCann at Twitter, or T.A. McCann on Facebook, or this Linkedin sort of handle. So this one person now has all these different attributes. And the second stage of what Gist does is really to organize those. So we look at communication patterns, we look at your calendar, we look at all the different ways you’re connected to someone, so everybody gets scored on a scale of one to a hundred. So now I have all my contacts in one place, and they’re rank ordered, and that changes dynamically every single day.
And then the third problem that we have is, okay, now I’ve got all my contacts, but there’s content being posted all over the place. So how can I bring together all the content about all my contacts then give it to me in a way that I can take action on it? And in terms of business scenarios, you’re inside Gmail, and you get a new email from somebody, and you’re like, “Who is this person? What are they all about? Do I know them? Have I interacted with them before?” And Gist inside of Gmail sort of answers that question for you. It says, this is this person on Twitter, this is them on Facebook, this is them on Linkedin, and here’s is how you’ve interacted with them in the past, so you can have a better interaction with them in the future.
Andrew: And shows a picture, too.
T. A.: A picture, too, yeah.
Andrew: Which, many people – it seems like such a small thing. Why would you even need a picture? Hacker News doesn’t show pictures of any of their users at all. But a picture really brings to life the interaction that you’re having with someone in an inbox.
T. A.: Well, I think a picture – in that sort of trite way, a picture tells a thousand words. And if you just look at somebody, in some ways, you just gather an age, you can infer someone’s age. You can infer oftentimes by the way that they’re dressed whether they’re more casual or formal. You can even sometimes infer a set of personality traits based on the types of photos that people put up of themselves on a variety of different services.
So when you know nothing about someone, a picture is the first start. And then, as you start to peel back the onion, you can say, “Oh, this person is on Twitter, and they post a little bit or they post a lot.” That tells you something. They have two followers or two thousand followers, that tells you something. And then you can delve a little bit deeper into the content, to say, “Oh, and they talk about technology or wine or mountain biking or whatever”, and each one of those layers of discovery can turn a contact into a relationship.
Andrew: Okay. All right, I’ve got a sense of where the company is today. I’d like to go back and hear how it evolved and how it got here. I read that the idea came from a conversation you had with Steve Hall and Paul Allen of Vulcan Capital. Why were the three of you brainstorming ideas?
T. A.: Well, I was an entrepreneur in residence at Vulcan, so that’s a fun job where you get to basically spend a lot of time on a whiteboard coming up with different ideas, and along that process we had these very regular brainstorming sessions where there would be all kinds of different ideas come out. And that particular one sort of struck a chord with me, so prior to being at Vulcan I used to run the Exchange business at Microsoft, so I’ve thought a lot about business communication or professional communication and the challenges people have in that area, and I’d actually written a number of plans that were really about a prioritized inbox.
So many of us see the Gmail priority inbox. I wrote a plan and prototyped that in the late 90’s. So I had a thread in my mind of, “Can I prioritize the inbox,” and it was sparked by a conversation between Steve, Paul and myself which was really about the other part of the equation, which is, can I Google everything I care about all the time? So, we all struggle with sort of looking to the computer or the web, to say, “Send me information that is going to be relevant to me.” And, so Paul and Steve were coming from the “predictive searching” direction, and I was coming from the “prioritize lists of people and companies I care about” direction, and those two things sort of aligned into the foundation of Gist, and it’s still what we do today. You know, all of my contacts, in priority order, with all their content, and then delivered to me in context.
Andrew: How did you think through the business potential of the company?
T. A.: As I said, I had a lot of experience in sort of the professional category, as opposed to pure consumer. And the short answer is, we looked at this and said, we should copy as much as we can out of A, the exchange business, and B, the Salesforce business. So, Salesforce had gone and enabled sales professionals by giving them control of their information, putting it all in the cloud, charging them a monthly service fee to give them an information advantage.
And, in a pure coincidental way, the third business that we had really looked at was the BlackBerry business. So the earliest adopters of BlackBerries were business professionals who wanted access to their information on the go, and wanted to create an information advantage. They wanted to know more about everything than anyone else. And so, when we thought about the business, we tried to invent a lot of new stuff, but our basic business model was, focus on a business professional, the people who need information advantage and will likely pay a service fee for that, and focus on an Outlook re-director that puts my information in the cloud, helps me prioritize it, focus on what’s most important and charge me a monthly service fee.
Andrew: Can you tell me about some of the ideas that you guys discarded, and why, to help me understand the process of coming up with this idea for Gist?
T. A.: Well, in the early days, sort of before Gist as it were, there was a lot in this brainstorming of, well, “Could I look at my search history to figure out what I wanted to buy, could I look at my Tripbid to figure out where I might like to travel, etc. So, we threw out a lot of those ideas because it’s very difficult to get specific enough to actually bring me the right information, whereas if I know it’s a specific person with a specific email address that I can link to a specific Twitter handle, I’m much more likely to give the right information. So, once we got to that part of it, we’re like, “Okay, it’s for business professionals, it’s about people and companies, it’s about using that to go and Google the information.
Some of the things that we’ve thrown away or we’ve tried multiple times that have never made the light of day, and everyone asks for, are the node-based social graph. So, I’m in the middle and all my people are somewhere around me, and it’s this visualization of my social network. And you see tons of these all over the web. And we’ve done it three separate times, we’ve never shipped it, because we could never find a really good use case for it. Always looked neat, and I could click around on it and watch the bubbles move around, but there was never any specifically very good use case for it. I’d say other things that we’ve probably wanted to do more of and just haven’t gotten to is . . .
Andrew: I mean as separate businesses. You were in that brainstorming session with two really smart guys, three people with a lot of experience, trying to come up with ideas of what the next business is, what are some of the ideas that you floated and said, “No, they’re not the right ones.” I’d like to hear why you decided, just help me see how you think through a potential business.
T. A.: Oh, well, you mean back in the Vulcan times.
Andrew: Right.
T. A.: So, we did a lot of stuff around virtual worlds, the Second Life sort of space. The hypothesis was, there was a 2D web which happened, and there could be a 3D web which is happening, and what are all the opportunities around the 3D web? And so we prototyped a lot of stuff in that category. You know, what will be the Yahoo, if you will, of the 3D web? So there’s this search. What will be the tool set of building virtual worlds? So, that type of category. And we threw a lot of that away, because we had to bet too heavily on essentially one platform called Second Life. It was too deep, too much betting on something you couldn’t control.
Andrew: I see.
T. A.: We did a lot of stuff around semantic search, and Paul has another company called Evri which is in this space, so there’s a lot of ideas that are in and around semantic search, so when you do a search for “apple”, what are you looking for? Are you looking for the fruit, the company, the record label or something else? And then inferring from that search, well, I gave you three choices, so what’s the next sort of logical next action? So there’s a lot of stuff we sort of threw away in there, and some of that sort of we got narrowed into what Evri is.
There was a ton of stuff in mobile. So, there’s a bunch of stuff that Gist does that’s in mobile already, which is sort of “give me access to everybody I need in the palm of my hand.” But you’ll see some things that, for example, in our iPhone app, it’s integrated with my calendar. With one click, I know who I’m meeting with and I can get the gist of them before that meeting. So that’s a useful scenario, but there were some things which we prototyped and brainstormed in kind of an opposite direction. So, “Could you predict all the places I had to go meet that day, and how long is it going to take to get there, and alert me what time I had to leave.” So, things like that which are very calendar-centric. And, you know, shades of that in Gist, but there could have been whole companies invented around the next-generation calendar.
Andrew: Why did you not go for the next-generation calendar, considering all the opportunities there?
T. A.: It just wasn’t as big, and the other parts of the thread that, from a Gist perspective, were that there’s a big problem if I only had one inbox. There’s all the contact part, but then there’s all the inbox part. So now I have a Twitter inbox, and I have a Facebook inbox, and a Linkedin inbox, and a FourSquare inbox, and a Tripbid inbox. The number of inboxes was growing much more rapidly. So, when I kinda compared and contrasted those opportunities, as much as I’m passionate about the next-generation calendar, I chose the inbox and the communications side of it as more important.
Andrew: I read an interview with you from a few years ago where someone asked you how you feel about the culture at Microsoft. And one thing that stood out for me was, you said, “They don’t care about a new product that will deliver ten million dollars in revenue or even a hundred million dollars in revenue. It needs to be a billion dollars.” It needs to be really big, and not all ideas have to be that way, and not all ideas are interesting will lead to a billion dollars. Was there some number or some size that you said, “Whatever this new idea is, whether or it’s Gist or something else, whatever new idea has to hit some size for it to be exciting for us?”
T. A.: No.
Andrew: No.
T. A.: No, I mean, in my perspective, and, I think most of the best businesses, and in Gist, actually, we’ve not done this as well as I would like to do my next one – which is to take something which feels so small, it’s really just a feature of something else. And it might even be a feature of a very small thing – and build on the back of that. So, if you’re building into a space where the trends are in your favor, so is it likely that in three years from now we’re going to have nine inboxes, or 12 inboxes, or 15 inboxes? Pretty likely. So, we were building into a space where the wind was at our back, even if we could only solve putting two of them together. And then three, and then four, and then five, and then six and then ten. So I wasn’t really focused on how big the business could be, but I was definitely focused on how many people are likely to be able to use this. So, over time, I think that every single person, let alone business professional, will have this problem. At a minimum, you have too many email messages, and then you’re going to have too many inboxes with too many messages with too many people, so I was much more focused on, “Can we get something that actually works for a narrow enough segment, but is leading to a very big segment that has all the trends at our back.”
Andrew: I see. And you said that, “We have not done this as well as my next one,” which, to me feels like there are two questions that I’ve got to ask about that. The first is, why didn’t you do it as well, or what didn’t you do as well?
T. A.: We built too much. So, the product is too big. I mean, if I normalize all the criticism that most people have about Gist, most of them say, “It’s really cool, but I’m confused, I don’t know what to do.” So, it has too many features, it has some of those attributes of a Microsoft product. Like, you can do this, and you can slice bread, and you can make [??], and you can confirm meetings, and you can do this, you can do that, so it’s too much. And that was a little bit of a product of our own success.
So we were pretty good at coming up with ideas, and my development team is awesome. And, so, we’d say, we’d have an idea, and we’d code it, and we’d ship it, and it’d be done. And so we’d do another one, and another one, and another one, and didn’t have enough discipline to continue to focus on just a couple, and get those to be perfect, or best in class, so that everybody says, “When I log on to Gist I know exactly what to do”, and we had enough repeated success in that. So the product is now big, and fully featured, and so, we’re now sort of going back and saying, “Okay, well, what can we remove, or where can we re-focus our attention on the core scenarios which we’re just better than anyone else in the world at.”
Andrew: What would that have been, looking back with 20/20 hindsight, in 2008 or 2009, if you could have said, “we’re going to focus on these two things or this one thing”, what would it have been?
T. A.: I think that the dynamic building of profiles; which I still think we’re probably as good as anybody out there. So, you send me an email address, I send you back a very rich profile, a social business profile as we describe it. I think we’re still arguably the best, but I think we could have been a while order of magnitude better at that. And the next is always focusing on the logical next action with a contact. So, the followup, what am I supposed to do-, so here’s all this information, what am I supposed to do? And, you’ve seen slowly but surely more of that coming into the product, and we’ll be doing more of it, so it’s really helping me manage my relationships as much as it is giving me information and letting me infer what I should do next. So, focusing more on the logical next action.
Andrew: I see. And both of those seem different from the combined single inbox. Are they?
T. A.: In that sense, the inbox we’ve done very little with. Right? You can’t really send email from Gist, you don’t manage your inbox from Gist-
Andrew: You can’t respond to Facebook, of course.
T. A.: You can post to Facebook, but it’s just not really very focused on what I would consider to be the attributes of a normal inbox. And I’m not sure it will be, ever. Because I know how hard it is to actually build an email inbox, or a Twitter inbox, or a Facebook inbox and the amount of effort that’s required just to get to parity is huge. You’ve got to add spell check, and bullets and this and that. So the likelihood of actually building an inbox to replace your inbox is very low.
But it is fair to say, when you’re thinking about a social address book, and then saying, “Well, what do I do with my address book?” I use it to find your phone number and make a phone call. Or I use it to find the last time I talked to you and I reach out. I use it to figure out, of the six ways I can connect with you, phone, text, email, IM, Skype, whatever, it’s smart enough to tell me that they all exist and let me choose, or even tell me you’re online here but you’re not online there. So, making the communication more efficient and focused is something that we definitely will do. And generally, we’re not going to build a phone system either, but we’re going to let people say the right way to connect with this person now is probably via the phone. Or Skype, or IM, or text, or DM, or Facebook message.
Andrew: The other part of that statement that I caught and wrote down to come back to is, “Not as well as the next one.” Was the idea always to build this and sell it and move on to the next?
T. A.: No, I see that in the sense of, you know, I consider myself an entrepreneur. So, I hope that 20 years from now I’m doing the next one, or the next one, or the next one, or the next one, and as all the entrepreneurs out there, I mean, we have a hundred ideas. And it’s a question of picking one and working on it for a while, and getting it to a stage where you feel like you’ve achieved something, and then either moving on to the next idea or doubling down and taking your idea to the next level. And I think all of us will always have, and the better you get at it, the more ideas, and the more quickly you can vet those ideas and find the people who can do them with you. Because any idea that’s going to be good is one that lots of people are going to nod their head and say, “Oh, I would use that.” And, you’ve got to find great people to do it with, and that usually involves a spiritual kind of connection to the idea.
Andrew: So, I’m looking here at your bio which I’ve pulled off of Linkedin. And I see so may different companies. And it seems like you’re the guy – if I can just connect the dots here – you’re the guy who thinks through products with people. That you can help them shape the product that becomes a business. Am I misreading the notes here?
T. A.: I think that’s fair. I mean, that’s what I like doing. I love it when I can sit with another entrepreneur, or person, and they can say, “So I’m thinking about this, and how could it work, and what value would it deliver to which particular person?” I have a basic mantra which is any kind of decent description says, “Customer, value proposition, feature set, business model.” And I have on my blog a couple of sort of examples of this, and in that they all kind of play off each other,. So Gist could have been focused at somebody like Reputation.com which wants to maintain their reputation. It’s a different customer with a different value proposition, different feature set and maybe the similar business model. So, getting those four things to work together is what I really like doing. And then at the end of the day, I am an engineer, I am a product geek, I like building stuff and thinking about how does it actually work, and so doing that at the earliest stages when it’s very whiteboardish and very quickly iterating that with end users is something I really like doing, so yes.
Andrew: Do you have an example of how you’ve done that? Of how you’ve helped someone take a fuzzy idea or one that’s too early and helped shape it?
T. A.: I’m working on one – I’m trying think about what stage I want to do. So, I have another company I started called Jump2Go, and it’s in the radio space. So, I had a friend that I met along the way, and we had this kind of initial emotion of, you’re listening to the radio, and you hear a song, and you want to bookmark that song to figure out, you know, buy the album, get the concert tickets. So I had that idea myself, and I met him and he had done a lot of work in radio and he had some ideas, so we slowly and surely conceptualized what Jump2Go was, and we could have been very focused on the consumer, we could have focused on the enterprise, the business themselves. And we focused on the radio station and helping them more effectively connect with their consumers.
And now Jump2Go is deployed in hundreds or thousands of radio stations, where the consumer can connect with the content, and content could be music or content could be advertising. And that sort of productization of a set of ideas, and in that case we had RDS, which is the text strings that come across on the radios, we had different radios which could consume that RDS, so now Jump2Go technology is in all the radio enabled iPods, where you’re listening to a song, you press and hold the button and you add it to your list, that’s all done with Jump2Go.
Andrew: I see.
T. A.: So, doing it in the car, doing it on a mobile device, doing it on a specific mobile radio, in this case, the iPod, were things that I worked with Alan, my co-founder on doing at Jump2Go. And I’m working on a couple of things with another entrepreneur in the photo space, so mobile photos. The Instagram color sort of space is a real interesting space of how do you document your life, how do you interact with your friends, how do you interact with beautiful content in a way that’s compelling? So we’re working on some stuff right now.
Andrew: So, “we’re working on some stuff right now,” you’re saying about that. You’re still at Gist. I’m looking at the bio again, and there’s Icarus Partners, 2004 to now. Vulcan Capital consultant, 2006 to now. Jump2Go, 2006 to now, Gist… What I’m trying to say is with all of that, and HelpShare apparently, 1999 to now, still active there.
T. A.: Yeah.
Andrew: How so you stay active in all these different projects and stay that engaged when it’s hard enough for most entrepreneurs to even do one thing well?
T. A.: Well, I think that I would say that I, A, focus on what I do pretty well, so this process of continuing to focus on what I do well. B, I leverage my social graph a lot, so a lot of what I do is very quickly get out of the way. So, to the extent that I can just make a connection on your behalf and get out of the way, and I don’t have to monitor it, I don’t have to know what’s going on, I just leverage my social graph, I’m good at that. And I think I stay reasonably true to the same thematic areas, which are I like connecting people and information, and where they can build stronger relationships.
So if you think about Jump2Go, it’s about the beauty of sort of discovering music and sharing it with other people. If you think about HelpShare, which was really about questions and answers. This was Quora 12 years ago. And connecting people on questions and answers, and Exchange has attributes of that, Gist has attributes of that. So, things which are naturally similar, of information, people, connections, knowledge sharing, therefore it’s very easy for me to see that and I’m just naturally passionate about other solutions like that. Like, i think the way they’ve implemented Quora is great, and I use it a lot, and I’m studying it a lot, and thinking about that space, and I have been for 12 years.
So, I’m not learning a lot of new stuff in that category, it’s just that the content area stays similar, my skills stay similar, what I do, and I stay similar at the stage. So I like that super early stage where it’s still whiteboardy and just getting to the business, the “go to market” part of the company. Like, I know much less about that. I don’t know how to scale marketing very well, I don’t know how to build a sales team. I don’t know how to do any of that very well. So I stay focused on the areas where I know how to add the most value.
Andrew: You told me before the interview that we’re going to have a hard time getting a shot for this interview that doesn’t have a whiteboard behind you. Is there a whiteboard in the house, too?
T. A.: Yeah, sure.
Andrew: There is. So, going back to Gist, I now understand how you came up with idea, how you brainstormed it, what your vision was. What was the first thing that you did after you clarified that vision?
T. A.: Prototype. Well, I would say there are two things. That the vision is never actually fully clarified, it’s just a snapshot in time. I mean, we’re still working on, still trying to sort of realize the vision we had in the beginning, and at the same time we’ve realized much of it. So, I did two things, and we’ve done this in parallel, and I recommend it for every entrepreneur, was I coded the first version in Powerpoint. So what will it do and how will it sort of work, and I took it to a customer. So, my hypothesis was that salespeople would get a lot of value out of Gist. So, I went and I started meeting with salespeople and I would pull out my product which was just Powerpoint, and I would say, “So, if you could connect to Outlook” and walked through the whole product plan, they go, “That’s cool!” And I say, “Would you pay for that? How much would you pay for that?” So I was really working out the customer, the value prop, the business model and the feature set all at the same time, but all in Powerpoint.
Andrew: Did you make it clickable so that they could maybe click “Add A New Contact” and go to the slide where they’d see the-
T. A.: No. It didn’t actually work, it was more like, okay, connect to outlook, then I’d draw a box over here, like this is where their contact, you could show their Twitter thing, and I didn’t know if was actually even possible, really, but I wanted to validate that, and start to focus on, “well, is the picture more important than the tweet? Is it more important that I have email and attachments from before?”
Andrew: Yes, so what did you learn from those conversations that you didn’t know, where you showed them just Powerpoint?
T. A.: I learned, and I’ve learned over the last couple of years that when you say, “salespeople” that there are many different kinds of salespeople. There are inside sales and outside sales. There are people that are focused on transactional selling, like if I’m selling you a vacuum cleaner, I don’t have a lot of time to convince you versus selling you a million dollar server infrastructure. So I learned to start to get much more segmented, on when I said “salespeople”, what do I mean? I learned about the kind of attributes of the persona so many of us who develop products, you develop persona-based stuff. so what are all the attributes? What if you have five contacts or 50,000 contacts? Should the system act differently? Does it work differently? Are there different values?
So we can narrow in on many different attributes, and the more people I met with, the more that I could sort of validate or add new attributes. Like, where do you learn about new solutions? Do you learn about them mostly from you friends or mostly from reading something? If you read online, where do you read online? What new solutions have you chosen? So I was getting further and further defining each one of my categories and either validating or not validating the feature set, the business model, and how they correlate with each other. So, you can build a feature set that doesn’t support the business model, or the other way around, or a value proposition which is not supported by the feature set, or a value prop that when you tell it to the end user, they go, “Huh? Don’t get it.”
So, in that process of really-, you know, before there was anything, before it was still just an idea, I spent a lot of time with end users, and every time I found one who liked it, I’d say, “would you introduce me to two more?” Guys like you. If you liked the solution, who would you tell about it? And they would introduce me, and I kept repeating that, and we’d call that “FOG”, or “Friends of Gist” or “Fans of Gist”, and we still do it today. So every week or two weeks we have people who come in the office, and we validate either what we’re doing or what we’re thinking about doing with these kinds of users. So that was one thing.
Andrew: So, before I ask you about the second, and I’m writing a note down to make sure that I get to that, I’ve asked that question of a lot of entrepreneurs, and they’ve shown me how talking to customers before you build a product sends you in a clearer direction or a better direction and points you to ideas that you wouldn’t have discovered otherwise. It occurred to me that maybe sometimes having those conversations sends you in the wrong direction. Did that happen to you at all, where maybe some customer said, “Yes, this sounds great”, but when you actually presented the finished product to them, they didn’t use it, or it confused them, or were you misled in any way by customers before you built?
T. A.: Well, I think there’s a difference between-, some people do what would be considered focus groups. Which is like, “here’s my product, I want you to react to the product.” And in some cases we did that, but very, very few. Because there wasn’t really a product, it was a concept of a product. And the more closely it actually gets to a real product, that’s where you start to get into a very difficult spot, especially if it doesn’t yet exist. Or even if it exists in a beta form, where people give you a lot of feedback like, “Oh, the button should be in the right or the left”, or “this text doesn’t make sense”, or “I think it should be blue or green”. But when you’re really talking at the Powerpoint level it’s more conceptual. So it’s, “if you could put all your contacts in one place”, “If we could go and discover their Twitter handles”, “If we could prioritize it”, so that kind of stuff.
I say the only downside was that certain early people who give you that feedback get wed to a certain feature that you never do. So, we had lots of our early users, as you might imagine, are Blackberry users. They are salespeople who are using their Blackberries to prepare for meetings, etc., and so from day zero, they’re like, “Great! Let me know when it’s on the Blackberry.” Well, we’re three years into it, we still don’t have it yet on Blackberry. It’s coming soon, but that part of it we could have chosen very early a different sort of product plan and yet we didn’t for that particular case.
Andrew: Why not? If you heard it so much, why not give it to them?
T. A.: We couldn’t find the people.
Andrew: You mean the people to create the BlackBerry?
T. A.: Yeah. Like, I looked around and I was like, great, I’d love to hire a Blackberry dev and I couldn’t find any. Not that they didn’t exist, but I give our development team a lot of latitude. We try to supply them with a lot of data, meaning, “Here’s the user, here’s what we’re trying to do, here’s who we heard it from, this is what Grant wants, and Kendall wants, etc., and then our engineers make a lot of their own decisions. And, we looked around and said, “Okay, who knows how to build a Blackberry app?” “Oh, well, we don’t know how to do that.” So, let’s go try to find that person, and I just wasn’t ever really successful at finding the person to actually create the application. The demand was there, the demand is still there.
Andrew: Why do think with your big contact list that you couldn’t connect with that person? What was it about Blackberries?
T. A.: Oh, I don’t think it had anything to do with that, as far as you know, “couldn’t find”, or “didn’t find” or “didn’t leverage my social graph well enough”, it was one of those where some combination of “who do we know” and “who wants to work with us”, and “who’s already here”, and “what are we doing?” So, it was maybe not looking hard enough, and maybe not asking enough, or maybe not committing to just getting that part of it done.
Andrew: Okay. And you were saying there was something else, the second thing that you after you came up with the vision.
T. A.: Well, in parallel with all of this “FOG” sort of work, or customer validation sort of work, or customer insight if you will, was we just started prototyping really quickly, and we shipped every two weeks, and we will ship basically every two weeks since we started. And so-
Andrew: Two weeks.
T. A.: Two weeks.
Andrew: What’s the first thing that you shipped within two weeks?
T. A.: We had a “connect to my Gmail inbox via IMAP and prioritize the list of people in my inbox based on sent messages” in two weeks.
Andrew: So the first thing that you launched was that? Was the priority?
T. A.: Well, that’s the first thing we had. I mean, from the time we started prototyping until the time we launched something was more like six months. But, I can talk about how that process happened and mostly because of inside of Vulcan and spinning out the company and things like that. But from a prototyping perspective, we had that “connect via IMAP, get my messages, look at the message headers, prioritize the people I’m sending the most mail to,” we had that one in really quickly.
Andrew: Oh, wow.
T. A.: And then we next connected and said, “Okay, now I have a list”. You can usually look at the message header and say, “this message, which is tam@gist equals T. A. McCann. And then you can do a Google search against Google news and say, “is there any news out there about T. A. McCann?” And we got that working pretty quickly, and that prototype which we built just for ourselves, we’re like, “That’s cool. That’s valuable.” And it was because the API’s were open and it was relatively easy to do. We used a half-assed algorithm, and we had that running in a very, very short amount of time. And from there was “connect to more inboxes, make a better algorithm, and connect to more news and quotes.” You know, more content.
Andrew: All right, and you were saying that there was six months before the actual product launch, and it had something to do about being inside of Vulcan and spinning out. Can you tell me about that process?
T. A.: Yeah, so I was managing five or six projects, all of which we were prototyping at the same time.
Andrew: Within Gist. Or Within Vulcan.
T. A.: Within Vulcan.
Andrew: Okay.
T. A.: So, the ideas for gist were one of n number of things I was working on, and as the prototype got better, and as I saw more people that I knew, meaning these kinds of relationship-centric people that I like to hang out with, saying, “That would be really valuable”, I was personally getting much more excited about it than just regular other projects,. Like, I wasn’t personally that excited about the “virtual world” stuff. I could see there’d be a business there, etc., but I wasn’t personally excited about it. And, as the prototype took shape, and as I validated it further, and as our dev team made rapid progress, I got more and more excited. So, it took me about three or four months to where I got so excited that I went back to Paul and Steve and said, “There’s enough here to turn this into a company, and I want to go run it.” And then we put that in place and then had the team, and got the sort of minimum viable product ready and had that in September.
Andrew: Wow, this is so interesting the way you guys worked inside. I had no idea. So you were just basically tinkering, coming up with different products, you had six different products that you trying out at the same time, one of them took shape and seemed like it was a winner and felt great to you and that’s the one you ended up going with. But, the way that you develop inside of Vulcan is just to try a lot of little ideas, the way maybe a college student who wants to come up with his next big idea might try launching different websites?
T. A.: Absolutely. And part of this trying is in two stages. The first stage is that construct that I’ve talked about. You know, who’s the customer, what’s the business model, what’s the feature set, and what’s the value prop? And if you get good at that, you can try a thousand ideas, you can do 20 of them today. And you start to write those down, and it’s almost like a mad lib. And you start filling them in and you’re like, “That feels good, let’s spend more time on that. Let’s break apart the-”
Andrew: And I just lost the connection . . . oh, there we go. You were saying, “That feels good, let’s break apart,” and then we lost the connection for a moment.
T. A.: Yeah. So you could write ten of those really quickly. And you’d say, “Okay, well, let’s say I wanted to stack rate those ten. Which one’s the most interesting? I don’t know, this one.” And then you start to break it apart a little bit. Okay, well, who’s the customer? Salespeople. Well, what are the attributes of salespeople? Do I know any salespeople? What else do salespeople buy? Okay, a little bit broader. Feature set. Social address book. What does that mean? Okay, break it apart. Address book part, yeah, social part, news part, and you know, you get better and better and better at that.
And at some point you kind of either run out like, “I’m bored”, like “ehh, it doesn’t feel that interesting.” Or you then say, “And it’s better than”, which then you get into the competitive space, you’re like, “Hmm. I don’t feel like I can say that it’s better than what’s already there.” And then you sort of stop, throw that idea away. Or, it sits in the back of your mind, and I think what ends up – for most entrepreneurs that are successful – is an idea continues to just nag them in their brain. They’re like, “I know there’s something in here. I know it’s competitive, but the part that differentiates it, or this customer set, or the feature set – like, I think if we could just make it do ‘x’, it would be enough.” And that sort of nags you enough, and you usually have to have a passion for the space. So, like, I have a lot of ideas in gaming, but I’m not a gamer. So, ideas for gaming, I lose interest in them relatively quickly because I don’t want to think about, I don’t want to talk about it, I don’t want to have a cup of coffee or a beer and talk about it with other people who talk about that sort of stuff, it’s just not that interesting to me. Whereas thinking about “how do I leverage my social graph”, “how do I connect more efficiently”, “how do I have better meetings”, like, a lot of people would think, “That’s boring, I don’t want to talk about that.” But that’s stuff that really gets me excited, and so any chance I get to talk with other people and ask them what solutions they use and how they’re doing it, and that type of thing.
Therefore an idea or many ideas in that space can sit in my mind for a long time until I find the right catalyst of the idea, and then probably most importantly in any of this is the right people. The right people to go build it with. Because you start to identify like, “Oh, it’s a technical problem. Can I make it do A, B and C?” And you look around and mail all the technical people and say, “Gosh, I haven’t found anybody, or somebody who’s not working on something they’re more passionate about.” Or, this is a marketing challenge, or this is a sales challenge, or this is some other aspect of it. So it gets back to leveraging your social graph, both in terms of validating the idea, and then finding the people to actually go work with you on it, and the earlier and earlier you get the more emotional commitment you need to have to the space, to the customer, to the ultimate thing you’re trying to build for them. And if you’re not passionate about that, it’s just a job. It’s not a passion and you won’t be successful.
Andrew: This process of going through ideas and picking the right one is so freaking fascinating to me. I could spend hours with you digging into how that happens, because I feel like we see it play itself out, but there isn’t a framework for understanding it the way that there is, say, the lean startup method, or Customer Development by Steve Blank. But we do kind of see it, if you go back to the old blog post from Evan Williams where he was thinking through Obvious Corp, you can see that what you’re describing is kind of being played out there. But, there isn’t a framework for figuring it out, and that’s why I’m fascinated by this.
T. A.: Well, I’m taking the – because I like doing it, and I like working with other entrepreneurs – so this blog post that I have with a couple of Powerpoint slides of this process at least that I’m using, and continue to validate, I’m very involved with like, Tech Stars, and Founder’s Institute and other entrepreneurial groups. So I’m sure it’s not all the way right, but it at least works pretty well for me, and has worked well for lots of other entrepreneurs who are getting their stuff going. And I think that this construct also helps you with all the other aspects of it, like positioning. What do you call it? Gist is a… fill in the blank. Well, you could call it 27 different things. The process of “who’s the customer, what’s the value prop”, in there somewhere is the positioning and the beginning of your marketing.
Andrew: I see.
T. A.: And the feature set, “and it does what?” Puts all my contacts, prioritizes them and then goes and gets all their content. that’s a feature set description, which is essentially the beginning of marketing, like, what are the three things you’re going to put on your website? And I’m not a very good marketer per se, but forcing the entrepreneur to sort of do that part of it, and if you said, “these are the three pieces of the value prop”, well, how do those tie into what you’re going to charge people for? And how do those three features – how do you communicate that they’re better than what they already do? So, you use Outlook today as your address book, well, Gist is better because, dot dot dot, and that’s why you should pay me this much money.
And so this process of building ideas, and the more of this you do, by whatever construct you use, the better you get at it, and the better you talk yourself out of ideas. Like, “eh, that one doesn’t work. I can’t figure out how to tie the feature set to the business model, the other way around, or I can’t figure out who to sell this to, or when I figure out I think I want to sell it to housewives or whatever, I went and talked to ten of them and they looked at me sideways, like, ‘I wouldn’t pay for that’, or ‘I don’t know what you’re talking about'”. That whole process is encapsulated in this methodology, framework, whatever you want to call it.
Andrew: Would they pay for it? You’ve said that several times, with Gist, and now in relationship to housewives. Why was it so important to build a product that people would pay for instead of one that would just spread virally and get a lot of use on the internet?
T. A.: Well, at the end of the day, if we’re going to build a company – so, there’s a difference between building a product and building a company. So, in building a company you have to have a revenue source at some point. So, I think to break it apart, you can start in the “what is the business model” as sort of certainly two if not three kind of very well known business models. One is the “and user pays”, two is, “someone pays advertising or support or sponsorship or something”, and now I think you’re starting to see an emerging sort of “in virtual goods” kind of “in app purchase” type of thing, so it’s sort of “the user pays” but it’s sort of “sponsorship”, but let’s just assume for a minute that it’s just simple, like either the end user pays, or it’s advertising supported.
For me, I know very little about advertising supported businesses. I know a fair amount about subscription based businesses, so for me, most of the things I’m interested in, going back to the “how can i do a lot of it”, is like, I know how that looks. I know lots of other companies, I know how they’ve done it, I’ve studied that sort of stuff. When a blog post comes around about how Evernote does Freemium, I love reading it, and I love thinking about it. How does that work? How would that work for Gist? How would that work for the other 12 ideas I’m working on? So then, staying focused on that, I just have always gravitated towards building a business that is “the end user pays for”. Because I think it’s actually easier to think about because you only have one customer. When you build an advertising supported business, you tend to have two customers, or users. You have users, which you have to give one set of value to, and you have advertisers, who you have to give a different set of value – and, in many cases – a different feature set to. So, at least for me, in my simple mind, it makes it easier for me to think about building something for some person, and then saying, “if I build that for you, will you give me money for it?” And if they say no, then I don’t think I’ve created very much value.
Andrew: Okay. So, six months into it, you get excited, you want to be a part of this product. When you launch, what does the product look like?
T. A.: Well, the product was similar in functionality, just less of it. So, fewer address books you could connect to, so I think at the time it was Outlook and Gmail, and the only way you could see Gist was either on Gist.com or inside of Outlook. And yet the amount of content we would show was just less. And the process of building a profile was just not as good. So it was similar to today, just kind of less in every category. And the connection, prioritization, connecting to content and then presentation was just a lot less of it.
Andrew: what’s what surprising thing you learned about the Freemium model? About how to get someone to go from free to paying?
T. A.: Well, we never turned on monetization in Gist. So I don’t-
Andrew: You know what, actually, I was wondering about that. I had a note here to ask about it, and when you mentioned it, I said, “I must have just missed it in the site.” Why didn’t you, then?
T. A.: I’d say there’s two answers to that. One is, as a board, and as a company, the pace of the market was going so fast that we knew that every hour that we would focus on answering your question of “how do we move user ‘A’ from being free to paying”, or from paying to premium, would be an hour we wouldn’t spend on something else. Building product, marketing product, etc. So, this whole space is moving very, very rapidly. So, we chose as a group to, say – meaning the company and the board – that, let’s keep focusing on building out the product footprint, and building the user and usage base, as opposed to monetizing it. Point number-
Andrew: What about-? Sorry, go ahead.
T. A.: Yeah, point number two was, I think that it was challenging for us to get narrow enough on exactly what we wanted to charge for. So there were a while bunch of different things we could have charged for, different SKUs we put together. In fact, I have all the-, you know, the web page was done, the SKU-ing was done, the back end was done, and we called it off at the eleventh hour, twice.
Andrew: Again, with 20/20 hindsight, if you would have charged, do you feel that it would have informed you differently about what to build and how to build it and how to present it to your customers?
T. A.: Yeah, I’m not sure it would have been any better, but different, probably, yes. I mean, always, when you have a new data point, which is to actually say, “our hypothesis was users were going to pay for ‘x’, they’re going to pay a lot more for ‘y’,” and then you turn it on and they don’t, then it’s certainly information. I think oftentimes it’s difficult because, let’s say that feature ‘x’ is implemented great, and feature ‘y’ is implemented okay, or it’s early and you’ve got a lot more to do there, and you can confuse yourself because no one’s paying for feature ‘y’. Is that because it’s not valuable, or it’s just not implemented that well? Or let’s say they’re implemented equally well, they’re equally valuable, but you suck at marketing feature ‘y’, and you’re good at marketing feature ‘x’, or lots of people understand feature ‘x’, because it’s a problem they really have, and feature ‘y’ is an emerging problem. So there’s a bunch of stuff that I think is unfortunately back to the construct, difficult to sort of divine sometimes, but more data is better than less data. Having the data about who’s paying for what and how long it takes them to go from free to paying is better than not having that data, given unlimited resources and time.
Andrew: I see. So then, your relationship with Rapleaf is one that kept coming up later, just before the sale. What was the relationship with Rapleaf?
T. A.: Yeah, we were similar to other providers in this space, where we were using some of Rapleaf’s data to enhance our profiles, and we had actually talked to Rapleaf very early on about how they were sourcing some of their data because we were seeing things coming through that we were like, “where is that coming from?” And they weren’t able to tell us, so we had started to deprecate our relationship with Rapleaf well before the whole Rapleaf thing happened, and so we didn’t use Rapleaf anymore and had sort of almost – it was sort of coincidental because we had almost sort of unplugged it all when that whole spat came out, and I think it was just very difficult for them to know where some of the data was coming from, and in fact along the way, we re-architechted the entire infrastructure of Gist so that we would always know where every piece of data came from, how it was added to the system, whether it was added automatically, whether it was suggested to the end user and the end user applied it, whether the end user typed it in, whether I requested it in and you added it to my profile of you, so we have a very sophisticated infrastructure we call “Fragments”. So every single piece of data across all those hundreds of millions of profiles we know exactly where it came from, what service, when it was added to the database, who added it, and in which particular format, so we’ll always be able to answer that question. It’s a very cool piece of engineering, actually.
Andrew: And for people who don’t know, the issue with Rapleaf was that they were getting their data from Facebbok and Linkedin and other sites, they were just grabbing it, Facebook and Linkedin I think threatened to sue them unless they stopped crawling or scraping their user data, and expunged all existing data collecting from their networks, I’m reading from, I think it’s a TechCruch article. They stopped doing it, and a few other sites, as a result, didn’t have data because they were counting on Rapleaf, they were building their businesses on top of Rapleaf. TechCrunch said that because of that, you decided to sell to RIM. Was there any truth to that?
T. A.: No, not at all. That has nothing to do with it, in that was well before that that RIM discussions had started. The interest from us from a RIM perspective was, “How do we most effectively get Gist to tens of millions of users?”
Andrew: Okay.
T. A: And so that part of the discussion, which you have a couple of answers. One is you raise a bunch of money and you keep doing it, and two is that you go and attach yourself to someone who has tens of millions of users. And there were only a handful of players who do that, many of which we have relationships with, and when we kind of started to think of our alignment towards the future, we thought, “oh, business professionals, mobile, important, prioritizing my information, important, people who liked having an information advantage, that’s important, and a lot of support, if you will, to go realize our vision,. And that’s how we ended up with RIM.
Andrew: Okay. Why was it important to get tens of millions of people in the system, instead of like, I’m thinking of, like, 37signals who’s founder I recently interviewed here, who has a contact management system which is different from Gist, but it’s focused on fewer features, sometimes really missing features that I would love to have in there, but it’s focused on fewer features, fewer users, all of them paid, why was that not the right model for Gist?
T. A.: Well, I’ll speak about this philosophical. I think that every business professional and maybe everybody should be focused on building relationships with as many people as they can. So getting the value of Gist to tens of millions or hundreds of millions of people is kind of an emotional sort of philosophical approach. And I looked at it and said, “how can we do that?” How can we bring the value of what we’re doing, and the end result of people having very strong relationships, understanding each other, getting to better outcomes more rapidly, which is what we’re trying to do, as fast as possible, is the goal. And what is the right tactics to get there, of which we now think of this as a pretty good tactic.
Andrew: Alright, in a moment I’ll ask you what your proudest achievement is, or what you’re proudest of with Gist. Let me first ask, what would you have done differently? What’s one thing that you say, looking back, could have gone a different direction?
T. A.: You know, I would have focused on a narrower feature set, I think I mentioned that. And I think I would have focused more on the content and the communication in the application. So, how do people experience the words itself of “what do I do next? What am I supposed to do?” So, it’s a little bit in the product management category, but we still have not done that as well as i would have liked. So trying to answer this question of “I walk on to Gist.com, I create my account, then what am I supposed to do next?” And how do I slowly expose the value of the application to the user so that everybody, or at least a lot higher percentage of people say, “I totally get it all the way along.” And, I’m not exactly sure what that means from a “do this on Monday and do this on Tuesday”, but I would have liked to have had a higher percentage of people really understand the application and what it can do, because a lot of people today, if they sit down with me for ten or 15 minutes and I show them how I use Gist, they’re like, “Oh, now I get it.” And that’s a failing on our part of making it easy for them to understand, where they have to sit with somebody else. And it’s a failing on our part. So I would have done either more effort on that, more people on that, more time on that, that, I think is something I would have done differently.
Andrew: All right, then, proudest accomplishment.
T. A.: Well, I think as an entrepreneur, you get proud of two things. One is building a great team, and so I’m very proud of the team that I have and the process that we’ve done. So, I’m equally proud of how we build Gist as I am of what we build at Gist. So Gist is a 20 person team, and you compare that to some of our competition, and the breadth of our application, the sophistication of our application, and do that with 20 people – which for a long time was like 10, 11, 12 people – I’m very proud of the process that we’ve built here, and how we build the software at the level that it is.
So, I’m very proud of that, I’m proud of the team that we have. As an entrepreneur, you’re proud when you can have a nice exit, give a nice return for your investors, and sort of step up into now that we do have an opportunity for tens of millions of users to have the value of Gist, and really push this whole envelope forward of social connections, content connections, contact centered relationships and that feels exciting to me, too. So, as an entrepreneur, our team, our process and the opportunity to bring Gist to a larger and larger number of people.
Andrew: So, how do you plan to do that? How do you plan to get more RIM users to be Gist users?
T. A.: Well, certainly the first step will be building a BlackBerry app. And from there we’ll continue to think about – I mean, it’s a very large base. And so I’d say step one is build a BlackBerry app, get it in front of as many RIM users as possible, and then start to think about how to leverage the other types of things that the BlackBerry base has. For example, BlackBerry enterprise servers, pretty interesting area. And thinking about the social enterprise, I mean, every CIO in America is trying – and worldwide, probably – trying to figure out, what do they do with social? What should they do with Facebook and Twitter? And I feel like we and RIM have an opportunity to create that conversation and actually to productize it was that – irrespective of your philosophical approach toward social – can enable the worker of the future to embrace their social graph, to connect on many different levels to understand what’s going on, to get faster answers to questions, to recruit their friends to come work with them, that type of stuff. The social enterprise is a really interesting space that’s – I think – going to evolve very rapidly over the next couple of years as well. Not to mention mobile social, and “how do people experience their social graph on their mobile devices” is pretty exciting for us to get to work on as well.
Andrew: There are a few people, actually, who were theorizing about that, when you were bought out by RIM. They said, “They’re bringing T.A. in to add social to RIM. To make businesses social.” And I can see that that’s part of the vision.
T. A.: Yes, that’s right. And that’s something that got me and the team very excited. So, our ability to-, we’ve always been focused on the business professional, from day zero. And making a business professional have a greater control of their information, their contact list, and being able to do that certainly on behalf of the individual, the guy that has a BlackBerry today, but also being able to do that on behalf of large groups of people that just so happen to work at companies that just so happen to have sets of systems that are managed by CTOs and CIOs, and helping them to think about how they approach it, and then, okay, which switches in the admin console do they check on and off based on what kind of company they are, and how they philosophically want to approach the business knowing that everybody is going to get more social for sure. That’s 100% in my mind. Where you sit, where you are today, and where you’re going to be a year from now, two years from now, ten years from now, is the sort of journey that we can be on with all these sort of companies, and the individual people who work there.
Andrew: Finally, I kept seeing over and over as I was researching you, that you’re a runner. Brad Feld said that he first heard the idea of Gist and really got to understand it when you took him on a run. Do you still run? What’s your next big one?
T. A.: Yep. Brad and I are actually running a marathon together in May. I walked with Brad this week, he was in Seattle, so we hung out. And we’d already done our runs for the day, so we were just walking. But I think I’ve found that I’ve actually built a lot of relationships on running, sort of like the new golf. And in the case of Brad and myself , we see that as something that’s just important for us, and if you’re running at the right pace you should be talking, and so we’ll continue to do that a lot together. And Brad and I are still working on lots of ideas for Gist, lots of ideas for the sort of bigger category of social connections and contacts, and we’ll do a lot of that in our upcoming marathon in May.
Andrew: Cool. I know he’s running a marathon in every state, is the plan for him.
T. A.: Yeah, we’re doing one in Madison, Wisconsin together. So I’m going to do the Wisconsin marathon with him.
Andrew: I love that. I love running as the new golf, I prefer that to golf. Thank you for doing the interview, T.A.
T. A.: My pleasure.
Andrew: Thank you all for watching, and Jane, thank you for setting this up. Bye, everyone.
