Andrew Warner 0:04
Hey there, freedom fighters. My name is Andrew Warner. I’m the founder of mixergy, where I interview entrepreneurs about how they built their businesses. Joining me is an entrepreneur who did listen to my interviews. And so he gets the goal here, which is to help people who are listening, get some ideas, get some inspiration, get some tactics that are stuck in their heads and are available to them when they’re ready to use them to build their businesses. One of the things that today’s guests noticed that took me a while to really be aware of was that we, when we’re communicating with friends we are using, I’m gonna call him gifs for now but GIF is perfectly acceptable to we’re using these animated images as a way of expressing how we feel like if somebody does something positive, we might send a crowd cheering if somebody is, um, I don’t have any great examples of this, but I see them all the time when I when I communicate with my brother, especially who must love sending out But obviously we see them on Twitter. We see them on Facebook, we see them all over. And today’s guest said, you know, this is a new way of expressing that this is a new way for people to express themselves. And he ended up creating a company whose goal is to enable us to use gifs to express ourselves on the platforms that we love, on iPhones, on Twitter, etc. His name is David Macintosh, he created a company called Tenor. And he sold the this gif search engine and database to Google. And I invited him here to talk about how we did it, we could do it thanks to two phenomenal sponsors. The first is a company called Click Funnels and they don’t even want you to know that you can get great landing pages from them. They just want you to know if you like this podcast and you want to find out how you can grow your traffic. There’s a podcast that you can listen to as a follow up. It’s called Traffic Secrets. And the second is a company that you know me talking about it for years. It’s called TopTal for hiring developers. I’ll talk about those later first. David, welcome.
David McIntosh 2:00
Thanks for having me.
Andrew Warner 2:02
You know, I kept looking for speculation about how much you sold for and I know that those numbers are always off are usually off but I didn’t even find that How much did you sell the company to Google for?
David McIntosh 2:12
Yeah, we obviously can’t speak to the the details of the deal. But you know, we obviously you can find information online around the trajectory of the business and you know, how, how we were doing beforehand and so forth. And so I
Andrew Warner 2:28
guess we were the number one keyboard Weren’t you at the time? Yeah, I’m hearing gifts.
David McIntosh 2:33
Yeah. Fantastic amount of scale that we had a you know, we had in the business and you were built into which other platforms
you can use tenor in most major messaging apps. So not only can you use the the iOS keyboard that we built, but you can find tenor and everything from Facebook, to WhatsApp to Twitter, and many other messaging and community platforms, do you remember the data deal that the deal went through? I do. Yeah. It it, you know, was it was actually great because I remember I was sitting there at the kitchen table with with my, with my wife and you know we were doing a final call to to close it. And so it was kind of fun having my wife at my side, as we were completing completing the transaction I want to say I remember remember very well,
Andrew Warner 3:32
and what did it mean for you? Did you did you look at it and say, Alright, now I made it now I can take a break. Nothing, did it?
David McIntosh 3:41
No, yeah, I’ve been I’ve been busier in the last Yeah. You know, two years, perhaps for any other other time before. I think for me, it was really a continuation of the mission and the the journey and, you know, as you mentioned before, Anyway, we really had this this mission around how do we help people better express themselves? And so it was really a continuation of, you know, how do we continue to improve that product? How do we continue to, to scale it? How do we make it easier for everybody on the planet? Everybody who has a mobile phone, everybody who’s who’s communicated what
Andrew Warner 4:19
it meant for you that the sale didn’t mean I get to take a breath, I get to, like, feel a sense of big accomplishment, I get to buy something it’s, I get to enable people to share gifts.
David McIntosh 4:35
Oh, well, you know, I would say more broadly, not to share gifts, the broader vision is around, you know, visual expression, you know, more generally, I guess what I would say is that, that Yeah, after after a certain period of time, the mission really does become more important than, than all other, you know, attributes. Obviously, it’s
Andrew Warner 4:59
my peace mission. The only thing I can think of and by the way, we usually send microphones to all of our guests but and you’re probably gonna get one tomorrow or something from Amazon but because of Amazon’s issues around COVID-19 delivery didn’t make it to you. But as you talk, just watch out because when you move your mic is brushing up against your shirt mic from your headset. The only thing that I can I’m trying to understand why you care that much. And what I’m flashing to is something you told our producer about how you did some Speech and Debate when you were growing up. And you came away a little disillusioned. Can you talk about what you were doing and why you felt that disillusion?
David McIntosh 5:35
Yeah, well, I guess backing up my my interest in technology started when I was interning at a supercomputing Center at UCSD. And so I was working on clustering software, which helped run these these various computing platforms at scale. And that led me to Berkeley and then that led me to experimenting with a variety of different ways you know, web applications, consumer services, and that ultimately lead to You know, all the way to retirement, which I can describe. But I also, you know, been, you know, active in speech and debate in high school and I liked the intellectual element. But there was sort of a moment remember at, at Berkeley, where I was choosing? Do I really want to double down on the technology aspect? Or do I want to, perhaps focus on on speech and debate and ultimately, you know, take a career in law. And I was just struck by how, you know, with with technology, you were actually building something, you were shipping something, you’re having no impact on the world. And so for me personally, even though I really loved the intellectual rigor of speech and debate, it felt like at the end of that, you know, you could you could go back and forth and you know, who knew which person was right, but at least with technology, you could get to a point where you were building something that definitely did have an impact. So there was there was an element of absolute truth to that versus Speech and Debate were it was fun, definitely intellectually rigorous, but there’s not you know, I, I was having difficulty seeing what was the actual final impact how am I how am I impacting the world or consumers or, you know other people by arguing with other people in a room for for a couple hours?
Andrew Warner 7:16
That make sense. I remember that as a kid, I used to think that debate was about coming to the best possible conclusion. And then I realized No, it’s about whoever is the best speaker wins and it’s no longer about truth. It’s no longer about anything other than an arms race of intellectual power firepower. And then you feel like Alright, I’ve got to have this but it also feels kind of sad that it’s not the truth that wins but it’s the best speaker that wins. So is that partially why you care? Am I making too, too much of a connection there between you trying to pursue truth and grow and meaningful communication back then, and now through 10 are saying this is the way to enable people to communicate Am I drunk? too much of a conclusion there?
David McIntosh 8:02
Well, I think the the connection is definitely there that I was looking for how to build services at scale that would impact a lot of people. So that that that connection was definitely there. But the the way that I ended up there was through a lot of a lot of twists and turns. Okay. And so, you know, initially, what I what I worked on was a company called Redux. And by the way, you know, many of the early people I worked with there, and the board members ended up coming on, you know, to the tender journey as well. But that was much more focused on video in a connected TV context. And so the premise there was we had built some really interesting recommendation technology. More and more people were buying connected TVs. This was back in 2010 2011. And they were using Netflix for movies and Hulu for TV shows, but there is a gap in the middle around how do you help people continue online video, YouTube like content UGC, like content but more of a Leanback context. And so we built this experience that functions somewhat like the TV that we’re all used to, which is linear programming, you could switch through channels, but it was programmed with online content from influencers from your friends from interesting brands. And so we assemble these these channels that you know, people would watch 3040 you know, 50 minutes and it was doing that that I met on a panel on the future of video, my future co founder, Eric, in an intense and at the time, he was running a business called, you know, Mehta cafe. He had joined a little bit after the acquisition of YouTube to build a new business around you know, online video. And so you know, we had coffee afterwards and kept talking and at one point we even thought about the way that whether we’ve merged the you know, the redex business and the Metacafe business and and put them together. And as Eric and Eric and I built a relationship, you know, Eric really started to push us on. How would we reinvent video around the mobile experience? Because at the time, obviously, you had video experiences that were big on mobile, like YouTube, for example, big web presence at the time. And so we were able to translate that into a, a successful mobile experience
Andrew Warner 10:24
and mentally what from what I remember about meta cafe, what they did was, it was like a more it was trying to be a more professional YouTube partnering up with producers partnering up with brands, where at the time YouTube was, anyone can post whatever you want. And we’re going to give the middle finger to brands to some, excuse me to the big content companies because they have to accept the new world. I lost your middle finger. I wouldn’t say that but they would just go do your own thing where Mehta cafe said, Let’s partner together and create something more meaningful, right?
David McIntosh 10:55
Yeah, the time metta cafe was focused more on on professional content, which is You know, I think partially why we had mutual interests, because at Redux who were thinking about these sort of curated Leanback channels, which ultimately meant that the experience did feel more more professional, it was still shorter content weave together,
Andrew Warner 11:16
you know, was a little bit higher finish. So very, very similar worldviews, and then you met up at a panel, you ended up working together, but before you did, you each had to kind of close out your past to move to your future. What happened to Redux?
David McIntosh 11:33
So we both ended up selling our companies to different acquires. And so that’s when we we came together and said, Well, you know, what, if What if we did another? What if, what if we did a company together? And obviously, both of us had this this interest in video. And so, you know, we said, well, what if we What if we reinvent video around the mobile experience, mobile is the biggest platform mobile is still very growing. Very quickly on what would that look like if we if we started a video company focused on mobile, you know, you had vine at the time and other properties like that, but they hadn’t really hit mainstream massive scale. It’s sort of, you know, pop couple million users, maybe 10 million users, but nothing hundreds of millions of users or a billion users in scale. And so the the the the key insight at the beginning was we said, All right, well, you know, video on on mobile is short. And video on mobile probably needs to be shareable. So we built this app that let people create gifts out of videos, pictures, other other forms of content, launched that got a couple hundred thousand downloads some modest success or to build a library of this content. But the problem was that it was still too difficult for users to share this content because to your point, throw in a message or messenger, they’ve got to leave the messenger. They’ve got to open this app. They’ve got to find the content that doesn’t go shared back. It took two to three minutes. It was
Andrew Warner 13:00
a challenge. And the company Redux created a product called riff, see right. riff. See from what I understand your goal was to find a way for people to talk about the videos that you care about and that you guys are helping to popularize by taking short clips that are in GIF format and share them it was like a way of getting more people to share the videos that you are creating. Right?
David McIntosh 13:31
Yeah, so that’s, that’s the creation app that I’m referring to.
Andrew Warner 13:35
And that was spun off after after the sale you got to keep on owning ripsi I think you had about a million dollars in in venture funding that went along with this spin off right? You got to keep a million dollars of it
David McIntosh 13:50
raised separately. So we remember you Okay, raise this sort of brand brand new brand new entity brand new company different, you know, investors that that came in and put in the money And so that was the initial product, where we focused on this, this this creation element. And, you know, what we quickly discovered is that the creation piece worked. But the sharing piece was too difficult. And actually, I remember talking to some of the users would actually call up, you know, call up users that were using the product and, and someone said, Hey, you know, what, if this were in the keyboard, you know, I use emoji all the time, right? I’m using the emoji keyboard on iOS, what if we’re in the keyboard? Wouldn’t that be cool? And at the time, I said, Yeah, that’d be amazing. But we can’t build that product. You know, at the time, iOS didn’t have a keyboard platform. But then fast forward. This is maybe, you know, six months later. I remember the, you know, Apple had a, a developer. I think it was a conference, you know, live stream in the summer. This was like maybe june of 2014 ish. So go to my computer, I’m checking In the news, and I, lo and behold, I see Oh, Apple announced this keyboard platform. And, you know, light bulb immediately went off, I said, Wow, like this is this is gonna solve all the problems that we have with the business, which is we know that people fundamentally want to communicate visually. But it’s just too difficult to do. So there’s too many steps. And so this platform allows us now to make this experience available at the point of input when people are communicating, they can sort of natively access and search from the messaging experience. And so, you know, later that afternoon, you know, I dug into the, into the announcement and looked at the to look for clues around Okay, like, you know, can I do everything I want to do here, right? Because I didn’t know at the time well, with the keyboard environment, be able to actually support animated gifts, like Are there going to be memory constraints, so there are all types of you know, technical hurdles. And so, over the next couple months, you know, we we developed what became the, you know, the gift keyboard, which was the way for somebody to easily search for and share into iMessage. And it’s a I remember we seeded the app with people beforehand. So we created a, you know, a beta build and I did a pre interview with Ryan Lawler. I had known Ryan, all our tech runs from the redex days, he had written a lot about the work that we were doing in in connected TV. And so we got together at a coffee shop and the mission in San Francisco, I think it was on a weekend and and showed him the experience, he immediately loved it one of the products for himself. So I you know, got him a beta build and was intriguing is that in the week up to launch, right because you in this case, with a brand new feature to iOS, you can actually launch it until the new OS rolled out. This was iOS eight, right? So we sort of had to wait. You know, we can have two weeks for that OS to go out. When I found is that link where I set up a beta build started to go a little bit viral people, you know, who had never, you know, sent sent the build to got access. And I recall Actually, there was this funny tweet from from Oh Malik, where he said something like the brightest minds used to be working on ads, and they’re now working on gift keyboards. And he included a link to that, you know, to that private page that, you know, set up, you know, for the application. So, based on the early user feedback, but also the fact that this page sort of started to go viral within a small community, we had a pretty good sense that we had really cracked a core problem here, which is that people fundamentally wanted to communicate more visually, but prior to 10, it was just too difficult to do so. And, you know, so So Ryan, wrote an article in in TechCrunch, which published maybe 12 or 15 hours after the the app is available, you know, with than the store. And from there it went. It went mainstream and went viral. I think we had, you know, millions of downloads within the first, you know, two to three months.
Andrew Warner 18:12
I’m curious about how you understood that Jeff’s were the way that people were going to express themselves. It started out as just a way of you turning your long form video into viral snippets, that little realization, you’re saying, did it come from people reaching out to you and saying, I need an easier way to share this because I want to communicate or what?
David McIntosh 18:35
Well, gifts have been a format on the web for, you know, almost almost two decades, right. And you started to see a resurgence of the format to your point on Tumblr, where, you know, people were starting to use the GIF as a moment of a broader, you know, piece of content. And what I saw is that people were using emoji quite a bit on you know, on the On the device, and so people were clearly looking for a way to more visually express themselves. And there was some usage of gifts on messaging, Apple had actually built support for the gift format in iMessage, maybe, you know, year and a half to two years prior. But what’s crazy is, you know, the GIF format had baked into the ns protocol, you know, a decade plus prior. So you could theoretically even send a gift to somebody with a feature film, and you know, it’s still work, it wouldn’t necessarily be auto animating, but there was broad support, you know, for this for this format. And so I had observed that yes, there was this inherent desire for people to express themselves more visually, this format had been around for a while, but what was really missing was an easy way to be able to access this format, search this format, find the right thing in this expression context, when you want to actually communicate and so I think this was a a, you know, my view on consumer in general is that Most big consumer innovations are driven by a reduction in friction. There’s fundamentally a behavior that users really want to do. Yeah. But it’s just a little bit too difficult to do it. And I think with non digital goods and services, it’s far easier to observe this friction. What we forget in digital services is that often, a very small reduction in friction can have a massive compounding effect over time in the business. And so really focusing on what is the core proposition? How do you make it better? How do you continue to iterate on that? How do you make those gains compound over time, you can end up with a really massive, massively different outcome. So if you think about gifts prior to tener, I would estimate maybe 1,000,002 million people were sharing them in the world on a monthly basis in a messaging, but by making it just a little bit easier by taking that two to three minute process and making a 2030 to 30 seconds, we’re able to multiply The number of people who are able to do this by two orders of magnitude,
Andrew Warner 21:05
you know, what you said about reducing friction for consumers is really insightful. It’s it’s one of the big things that I’m going to take away from this conversation that with consumers, you see what they do. That is what they what they’re trying to do that has too much friction, too many barriers. And if you could reduce the friction, you’ve got a product that they obviously want, because they’re they’re showing that they’re willing to go through all those hurdles to get it. But then I’m looking at my notes here. And I could have sworn that you told her producer that the challenge you had with consumer facing companies, which you I think told her was the hardest thing to take on is that there’s hardly ever an obvious solution that you’re providing. And it’s ambiguous. And I’ve noticed that too, and interviewing entrepreneurs here that with with enterprise, it’s so clear, they tell you what they want. There’s a clear rationale, with even SMB small, medium sized businesses. There’s some of that how do you how do you square the thought of consulting As you’re doing things, we need to eliminate the friction. That’s how we win with. It’s it’s not obvious what we need to create.
David McIntosh 22:07
Yeah, I think the solving friction is always easier in hindsight, right? It’s always easier to hindsight and say, Wow, users really wanted to do this thing. We, you know, we made it just easier to do it. So I think that the process of getting there often involves a lot of twists and turns. But you know, I think these these insights are out there. So you know, if you think about the Instagram story, for example, Instagram didn’t invent filters. And you know, with Instagram, they didn’t even need to believe that filters would be a popular behavior. There are apps like hipstamatic, and a few others that had already searched at the top of the charts, and we’re seeing tremendous amounts of consumer adoption. And so in that case, there’s clear consumer demand to make your photos look better on mobile devices. The insight they applied, as they said, Well, maybe People don’t want to just transactionally take a photo, add a filter to it and share it to Facebook, maybe there’s a whole new role for a network built from the ground up around photos on your mobile device, we then transform in some way to make really attractive for, for consumption. And so that that consumer pain in some ways was was hiding in plain sight. Right, what they did is they took an existing thing that worked, they made it free hipstamatic and the others I think were 99 cents or 199, or something like that made it free. And then the payment, so to speak from consumers was you had to sign up, you had to create a profile. That’s how they you know, bootstrap, bootstrap the network. So I think that the challenge with consumer is that it is often harder to pinpoint what these pains are at first. And once you solve one of these pains, the big risks is will it scale and like with an enterprise business, if you have, you know, 5000 customers 10,000 customers, you typically have a pretty interesting business. you’re charging 100 500,000 million dollars, you know, for your solution. But with consumer, you need it to scale, not just to a million, it’s not just the 10 million users, it has to scale to hundreds of millions of users to be a really big business. And so that’s this. That’s the second half of the challenge, which is you need to believe that the behavior that you’ve uncovered, the way that you’re reducing friction ultimately makes the service useful to hundreds of millions, if not billions of people around the world. I hope
Andrew Warner 24:27
I’m not being obtuse here, as I asked this follow up question, but it seems like especially if you’re looking at the example of Instagram, you’re saying, look for that initial the initial barrier that that’s blocking them from doing what they want, and maybe in their case, hipstamatic was charging a few pennies. And so that was a barrier and remove that then look for the next barrier. And that is, well it’s too much of a pain to move from Instagram into Facebook. What if it was just built in and they could just share it within there? Is that the Answering. Is that what you were doing to or my? My missing your point?
David McIntosh 25:05
Yeah, no, that’s right. I mean, we we looked for I think about it as every big business as a series of wedges that you stack on top of each other. It’s a series of insights. And so in tennis case, the first insight was the right injection point was through the keyboard. That’s how we could build a scaled consumer experience where right we could get consumers coming in to search for this content. What did that do? Well, that let us build a great search engine. And it let us also start to build a great content library because we could partner with all the movie studios, television companies, have them contribute
Andrew Warner 25:38
Well, it won’t let you or was it that at each step, you noticed another another friction point and you had to eliminate it was it that All right, we’ve got the keyboard, but now people need to have a better search or we got a better search. But what people are looking for is not some random dude, but they want to express themselves using what what happened on HBO last night. And so let’s partner well they have all this But installing the keyboard is really hard for people. What if we could bake it into the apps they already use? like Twitter? Am I? Am I understanding that right? Or am I in hindsight adding? It’s, it’s a little bit of both, which is we knew that we needed a way to light the ecosystem on fire. If you didn’t have existing scale, none of the movies and
David McIntosh 26:19
movie studios and television partners, we want to work with you. So you needed some existing scale. But of course, if you didn’t have enough, you know, content, how could you bootstrap with consumers? So you needed some strategy to be able to initially light up light up the network. And so that’s what that launch did that gave us the injection point to light up the network. And then as you described, the next phase of business was to say, Okay, well, how can we reduce friction even further? Well, we can reduce friction by bringing this experience natively into messengers, communication apps, operating system level integrations. And so that that first phase of the business in a sense was building a viral consumer facing property that led us build excellence in search, as well as content. And then that led to the second phase of the business where we’re able to then go and integrate more natively into thousands of different different communication services.
Andrew Warner 27:16
And the integration part is something a past guest of mine, sent me a note afterwards and said, Andrew, what you always miss is, integration is, is so much bigger than how do you create? How do you get people to notice you? How do you buy an ad here if you can integrate it? And he said, Look, for example, people don’t know it, but we grew really fast. He told me and he runs a service that tweaks people’s WordPress installations and improves it for businesses without having them understand how WordPress works. So the only way we grew was WordPress started sending people to us, other hosting companies started sending their people to us and we became their back end. And that was a flood of real customers that are paying and you can’t buy enough ads to do that for many businesses. All right, let me take a moment. Talk about how to get traffic. There is a book called Traffic Secrets. I interviewed the author Russell Brunson about it. And I said, Look, Russell, you’ve created these landing pages for years, you created software that creates landing pages for other people. No wonder you wrote a book that actually encapsulates what it takes to get people to come to your site. And to convert into into being buyers. Instead, yeah. But you know, Andrew, a lot of people aren’t going to read my book right off the bat. And he told me that he’s got a podcast where what he’s doing is taking some of the key ideas from his book about how to get traffic and turning them into a podcast. If you’re listening to me, and you’re looking to get traffic, even if it’s not paid traffic. In fact, especially right now in this environment, he’s going to show you how you can get traffic to your site, get people to try your product. All you have to do is listen to his podcast, he’ll tell you some of the stories from his book, that guy’s got experience having done this through Click Funnels for his business. And also, like I said, creating software that creates landing pages for some of the best marketers out there. So I’m not telling you to buy anything. I’m just telling you at the end of this interview, if you want to learn how to get more people To check out your stuff, go sign up to Traffic Secrets podcast and whatever tool you’re listening to this on. I keep going back and forth. My podcast app right now. It’s slack. No, we’re not slack on what is it? Um, I don’t keep calling it slack.
David McIntosh 29:15
Andrew Warner 29:16
Spotify and the podcast app, you listen to podcasts, what do you listen to them in?
David McIntosh 29:21
I i’ve been more recently getting into various financial related podcasts. So if you give me a moment, I can actually pull up I had bookmark this on on Twitter.
Andrew Warner 29:36
I also listen on my on my echo speakers throughout the house, which I don’t even want to say the name of the assistant on that so I don’t trigger but I listen on that. Yeah. What’s the podcast you’re listening to?
David McIntosh 29:47
This particular one was called inflation deflation. Which one is it with Jeff booth offer author of the price of
tomorrow, the investors podcast
Andrew Warner 30:01
Why are you interested in finance podcast right now?
David McIntosh 30:05
Um, I know, it’s it’s an area that I’ve never spent that that much time thinking about. And, you know, I’ve saved an economic economics background. And so it’s just, you know, interesting, especially in these times with a lot more, you know, volatility and uncertainty to, you know, get a better understanding of the financial systems, but also get a sense of, you know, how other how other people are thinking about it since I think so much of the market is, you know, psychological. So it’s helpful to get an understanding of, of just, you know, how other people in the world are, are thinking through their next move.
Andrew Warner 30:40
I wonder if you thought about this, I keep thinking, What’s the disaster moment? Let’s think about that and be prepared for that. Right. And the easy one is, well, we can’t get food from the grocery store. Let’s go stock up. Everyone’s doing that. But that’s not the real disaster moment. I don’t think we’re gonna get to that point. So what happens if our money isn’t worth what it used to be? How many times do you see in history people who saved up a lot of money And then the value of their money went away. Right? That’s something that I’ve been thinking a little bit about. What do you think? What’s the disaster moment? How do you deal with it?
David McIntosh 31:10
Yeah, I mean, it’s, it’s especially now it’s a good question with, you know, with everything that’s, that’s happening around, you know, COVID I think it’s, it’s, you know, it’s it’s, if you’re if you’re doing a venture backed high growth business, I think it’s, it’s really challenging to focus on, like I said, it’s a long, long tail events, right? Because ultimately, the biggest challenge in front of you is how do you get to critical mass? How do you get to scale How do you continue scaling the business? So I’m a big believer that you can’t think too much about things that you can’t directly control. You know, I remember one of our one of our investors and, and redex Gilman Louie, um, you know, had this this, this quote where he would, he would sort of cite racecar drivers and say, all right, well, you know, successful formula drivers. You know, when there’s a crash in front of them, you don’t focus on the crash. If you focus on the crash to get really locked up on the crash, you can go right into the crash. Yeah, always focus around the way out of the way around it, like focus on where you want to be. And so obviously, it’s not not specific advice. But I think that’s, that’s a general principle, which is situations like this, you know, you you don’t want to concentrate on the on the mess in front of you. You want to concentrate on Well, what’s, what’s the path to get around? Where do I want to be? And then I also think focus helps, right? Like, if you think about one of the, you know, the key takeaways from our story is, you know, we really focused on the underlying levers that drove the business, you know, like, if you if you came to our office, you know, back in the day, we didn’t even have our name on the door. You know, we didn’t we didn’t care. I remember, you know, we invited our investors to come by and I said, Hey, it’d be great if we got to a billion users just in this office with this team with a small number of people. We were really a big believer that by building the right team product by building the right technology, we get a tremendous amount of leverage. And so you know, we did we didn’t measure our success in terms of the size of the office, how many people we had in the office really measured success by how many consumers are we serving? What kind of impact are we driving? what’s the what’s the what’s the quality of service? Is there anything especially in you know, in times like these with volatility that that laser like, focus on what you know, what really matters? That, that that ultimately serves you? Well,
Andrew Warner 33:30
that understanding that if you focus on the crash, you’re going to be a part of the crash because you’re naturally going to steer into the crash. It’s called target fixation. My brother who used to ride a motorcycle would send me videos of motorcycle riders who are clearly looking at the direction of something that they could potentially crash into and because they were paying attention to the danger too much, they’d crash right into it and I, I get it. I understand. I want to know a little bit more about the levers but we talked earlier about About how iOS eight I think it was enabled you to create a keyboard that had gifts in. So people could share directly from anywhere where they could share keyboard virtually. But Apple rejected your keyboard. Why did they reject your keyboard when you put it together and submitted to the app store?
David McIntosh 34:16
Yeah, it was pretty unexpected. Basically, the initial rejection was around the fact that Apple didn’t actually expect this, this type of keyboard, you know, when they when they put out the platform, they were imagining that you’d have keyboards like swiftkey, for example, where you know, people are getting a keyboard. Yeah, exactly. They were anticipating this this visual use case, which ended up becoming, by the way, the biggest use case and the third party ecosystem. And so initially, they the the feedback was, you need a real keyboard in the experience. And so when we got that feedback, we’re like, well, this doesn’t make sense. This is we we Don’t want you to use this as a real keyboard. This is supposed to be something where you’d switch to it, you’d share the gift and you’d switch back to your your normal, you know, Apple keyboard. But we were really under the, under the clock because I think we got this rejection notice maybe it was like Sunday, I think it was Monday, Monday morning. You know, and the OS was starting to roll out later that week. And so I remember I, I was, I was still, you know, working on the codebase at the time of the product and I got to the office early in the morning and didn’t even eat lunch and basically said, Okay, I’m gonna build a very simple query t keyboard to satisfy this requirement, and I’m not gonna go anywhere until I get it done. So, you know, I spent, I guess, six or seven hours built, you know, building a very, very basic Yep, query keyboard just to satisfy the requirements. And then you could, you know, switch between the two modes. You have the gift mode. The Mac keeper monitor, submitted it, you know, submitted it to Apple. And you know went through which is which is great. And so it’s kind of kind of surprising, you know, like, Yeah, and that’s that’s the thing you know, you never the things that come up at the last moment, you never really expect, and you have some sort of nibble.
Andrew Warner 36:20
You also helped me understand why so many keyboards that I used have crappy, like ordinary Qwerty keyboards included in them, like, I use the app copied, which lets me whatever it is that I copy on my screen, automatically. It saves it into the copy app and then through the keyboard, I can just paste it in. And their keyboard for typing. You know, regular letters is kind of bad. It’s a little bit buggy. Sometimes it locks up on my screen. I didn’t understand why they would even ever need it. I could type using the regular keyboard. Now I understand Apple required it. What about Android though, you keep saying that the inflection point was the keyboard. The third party keyboards coming into iOS, I remember as an iOS user, envying Android people for being able to add whatever keyboard they wanted and wish that Apple would do it. Couldn’t you guys have done it on Android? Didn’t you guys do it on Android? We did, we tried.
David McIntosh 37:15
And there were two problems that we ran into. The first was that we didn’t actually want to be a keyboard company and build a full keyboard. And on Apple, there was this nice dynamic where you could easily easily hold down on the globe and switch between keyboards. So it was perfectly designed for I’m using my normal system keyboard, I want to share a GIF. I switched to it I shared I go back versus dynamic. What was the switching
Andrew Warner 37:37
David McIntosh 37:38
with Android, you basically would install a keyboard and stick with that keyboard. It wasn’t set up for people to switch between these keyboards, because it was much more of an ecosystem designed around like any, any developer any any partner, build, build a keyboard. So that was the first problem. The second problem This was the more fundamental one is that at the time, there Wasn’t it what’s called image keyboard support. So you couldn’t actually share the image into a messenger, you could share a link, but not the image. And when we tested this product, we found that it was really unsatisfying to consumers. They get excited about the prospect of this product. But then when they actually used it, and they and they tapped the gift, and it put a link into the message, you could see the disappointment on their face, like, Oh, I want it, you know, and so the first question be like, well, how can I get the image, you know, in the message, and so you can see the viral loop breaking right there, which is that somebody could tell their friend to get this product to finally get the product, but then when it came to actually sharing, they, they wouldn’t make it past that step. And, and that was a really key part of how this product spread, which is that people often notice changes in behavior of their friends. So you know, I think we think that viral products spread because of viral invites and flow. And links and so forth. And, and, you know, at some level tactical level, maybe that’s true. But really what’s happening is that people notice changes in behavior of their friends, that is an interesting change of behavior. They’ll say, Well, how did you do that I want to do the same thing. And so what happened in our product is that it’s not that somebody perhaps never shared a gift before. And this was the first time that they showed a gift. It’s that when they were messaging their friends, their friends would be responding so quickly with gifts and be sharing more gifts. And so that was the change that people notice. And they say, Well, how are you doing that I want to do that too. And that, that’s how the product would spread. And so with the link, that just didn’t happen, because the person wouldn’t want to send the link, and if they did send the link, the person on the other end, wouldn’t want to click on it, because they wouldn’t get that immediate understanding of what the other person was trying to say. Now, obviously, all that’s been fixed. And you know, of course, we’re tenders integrated a bunch of different large Android applications and so forth. So that you know, ecosystems in a much different place today in terms of why we initially launched On iOS in 2014, it was because of that that constraint.
Andrew Warner 40:04
All right, I mean, I want to come back and ask you about how you knew to start partnering up with other companies. You know, let me just hang on this for a moment. I always wondered about that. I thought maybe what you were doing was somehow attaching the tenner logo to gifts. But I don’t think I’d ever seen a 10 or logo attached to a gift the way I might with some of your competitors. So if and I don’t think at the time, Apple told me that my friend was using a tenor keyboard to share a gift. So you’re telling me that the way the tenor spread was, my brother might have sent me a GIF, and then another and another, and I would have had to ask him, what did you use? And then he’d have to figure out how to go and get it from the app store or tell me go find the keyboard at the App Store. Is that right?
David McIntosh 40:45
Yeah, we did experiment with watermarking. Early on, but we found is that that that actually damaged morality, and consumers didn’t like it. And so you would end up with an experience that You know, wasn’t wasn’t great consumers didn’t love. And also it wouldn’t grow as quickly in the long run. Because people were less likely to want to share this content if it had had a watermark on top of it. And so yeah, the core, the core viral loop was you you’d send these things to friends. And they say, Well, how are you doing that? You tell them no, I’m using gift keyboard tenors gift keyboard, they go, you know, and then and grab the the app. Since then, you know, if you think about iMessage, now, there’s things in the platform where there will actually be linkable text, sometimes below the gift. So it’ll have a link where you can go to the App Store. And so there’s been other innovations since then, that make it easier for people to go and, you know, get the application. And of course, when we’re natively integrated. Then all a person has to do is say, oh, we’ll just you know, tap on the gift button, then search tenor, right. And so it’s a little bit easier from a discoverability standpoint, but at the very beginning, the viral loop was simply, you know, people noticing the change in behavior and then telling them to go double the service. Yeah,
Andrew Warner 42:05
it’s unbelievable, isn’t it? You know, like that’s, that’s shocking that the product is so good, and so basic that people would go out of their way to find out, or as you mentioned earlier, I guess Omar Malik is a venture capitalist, but also known for having a reporter background. reporters were starting to spread it before it even officially launched. That’s what you created.
David McIntosh 42:28
Yeah, I mean, it was it was, it was it was amazing to see when we, you know, we launched it was an amazing moment, you know, to see it really rise in the charts and catch on. And, you know, so I think, you know, in hindsight, when we look back, right, you know, that that initial launch that we had was ultimately just a fraction of the scale that grew in the in the years and years to come. And so, I would say at some level, you sort of become numb to the scale Right. I mean, it’s like, as we’re recounting the story now, it’s sort of amazing to think, Wow, just how ubiquitous the service has become how this has just become a part of our daily behavior or daily life. But you know, there is sort of this thing where, you know, you know, my belief is that you always have to be 10 X, and you always have to be looking at what, what’s the next big order of magnitude? What’s the next big inflection point in thinking about that? So along the way, we were always very focused on Alright, we’ve got to this level of scale. That’s fantastic. You know, let’s celebrate that for a moment. But the very next moment, we’d be thinking about it. Okay, well, what’s, what’s the plan? What’s the plan? Got another TEDx? How do we bring this even more people? How do we make the product even more useful? I knew
Andrew Warner 43:42
that in my notes from our producer already to Sermo 10 x kept showing up and I got to come back and ask you whether that became an obsession or a source of frustration that you had to keep finding ways to text, but I’ll quickly tell people I’m going to highlight something that you guys might have even noticed that happened. David Macintosh you listening to right now had an issue where he needed to create a keyboard for an iOS product that he was launching like a standard QWERTY keyboard. And he sat down. I think, David, you said six hours in order to create that thing.
David McIntosh 44:14
That QWERTY keyboard. Yeah,
Andrew Warner 44:15
yeah, that’s the power of a 10 x developer a 10. x mind. The reason that I’m bringing this up in the context of my sponsor, top towel is what top towel has is developers who can work that quickly think that deeply and fast and often have created the same solution that you are looking for have played in the same field that you’re looking to play in. And that’s the beauty of working with top towel, you get top talent available right to you. And so I remember a few weeks ago, I interviewed Noah Kagan, his whole thing is, they keep telling people stop your expenses, scale things down, we’re going into a bad recession. You have to be prepared for this. And I thought I’ll know and I’ve got this top towel add that I’m going to do in the middle of this guy telling him when to cut back. He’s gonna just dump on what I’m saying. Instead, he said, No, I’ve heard hired from top down. I said, Why don’t you want to like cut back. He said, What I love about hiring from top towel is, it’s kind of like Amazon Web Services where you could just quickly scale up all the developer needs that you need, and then quickly scale down when you don’t need it anymore. You don’t have to onboard them for a long time, you don’t have to make sure that they get all the health insurance and everything else that you need in order to get somebody up on your team. And then when it’s time to let them go, you don’t have to go through this whole process of letting them go. It’s quick developers available to you fast that you can scale up quickly. And then also scale down as you need. If you haven’t talked to top towel yet I I’m telling you, there’s no obligation but if you go to top town comm slash mixergy hit that big button, you’ll set up a call and you’ll get to talk to them about how you can hire and if you decide to hire from them. You’ll see on that page I’ve got an incredible deal just for mixergy listeners, because it’s created by mixergy fans. It’s top talent comm slash mixergy to get 80 hours of developer credit for free when you pay for your first duty hours TLP to al.com slash Mr. ZGY top talent Calm, slash mixergy tenex? Meaning Did you sit there all the time thinking? How do we tend axis? How do we go bigger? How do we go bigger? And was that an obsession? Or was that a source of frustration that you had to keep thinking that way?
David McIntosh 46:14
Yeah, that was definitely our mindset, which is what’s the next big opportunity that we can tackle? Right? Because going, going back to the sort of beginning, we talked about consumer opportunities, you know, to build a really meaningful consumer company, you have to be touching hundreds and millions of people, if not, if not billions, of people. So you have to figure out how you crack the next layer layer of distribution and scale for for your business. You know, in our case, we did that by really focusing on, you know, the core levers of the business. And, you know, we were a very analytically engineering driven, you know, organization, you know, so for example, even our BD team, for example, was running SQL queries and doing analysis to figure out you know, what partners do we find Focus on how do we, you know, uplevel, you know, the integrations working with existing partners. And so, you know, we really focus in our case on the quality of search, because we realized in that viral funnel that I described, the more likely you were to find the perfect gift, the more likely you were to actually send that to somebody else, the more likely that person was to say, Well, how did you do that? And then look, to find their own path. And then the cycle continued, right? So again, very center of that. You you you had this experience where How could you for a given intense a given thought, feeling emotion of the back of someone’s head, match that to a visual object that helps people express themselves and said, you could make that core engine better? You would compound that, that, you know, viral adoption process. So it wasn’t that when we would say, hey, we’ve got a 10 x who said, well, let’s come up with 10 totally random ideas that are disconnected from the core product. It was is always looking for what are ways that we could extend what we’ve built, build on top of it, and in a way that lets us, you know, ultimately accelerate faster. And I was going to go into partners next. But
Andrew Warner 48:11
search, I think is something we should spend a little time on. Because it’s obvious now to say it, somebody can search for the right gift, they find it, they could share it terrific. They’re more likely to continue this loop that you’ve created. How did you notice that at the time, were you watching people where you bring them into your office here in San Francisco?
David McIntosh 48:30
Yeah, we had an early version of the prototype that we took out with us, you know, and so there was I remember, we went to a place with a great, a great Taco Tuesday, and we had, you know, the phone with us, and we show it to people and get feedback and we look at where they, you know, were they getting stuck, you know, along along the way. And so, we definitely got, you know, feedback, you know, early on in terms of search, you know, it’s funny, as We almost didn’t ship search of the product, we were running out of time, we wanted to get the product out there. And one of the engineers on our on our team was able to get it working relatively quickly. And so we’re able to actually, you know, go go live a search and good thing we did, because we found that the most retained users coming back to the app over and over again, we’re coming to search. And so initially, people might share from trending or reactions that we had so that they could figure out okay, what is this experience? Like, you know, and part of it was, you know, people didn’t know that you can search for emotions before that was a brand new thing, like people weren’t going and just typing in happy your smile into traditional search engines. And so, you know, the trending and the reaction tags that we had were part of that training process. But once people got that, the most engaged people were coming back to search. And so that was sort of when that that second light bulb went off, and we said, Oh, really, what’s at the center of this business is search. How do we match This intent to express yourself to a, you know, a digital object. And then of course, that that insight didn’t happen right after launch. But as we studied usage of the product, within within a couple months, we had a pretty good sense that that search was really a core a core part of the experience.
Andrew Warner 50:20
And you know what, and now I understand to I’m going through your product as we’re talking about it. I understand now how, like, you’re suggesting that I can share all you know, a W www like, Oh, that’s so cute are so amazing. I wouldn’t have known to search for it just knowing that I could that it’s there means I can start searching for feelings like that.
Unknown Speaker 50:45
Where did you get the gifts?
David McIntosh 50:49
The initial library was originally a bootstrap from that creation app that I mentioned the shop called, you know, risky so that that builds up the initial library and one of our core principles at the very beginning was that we wanted content to be purpose built for this use case. So we didn’t believe that you could, you know, go and index the web and so forth for this content that like that content was created for a different purpose. And so we believe that you would need to create a new content ecosystem from scratch, that would serve this expressive use case. And so what we then started to see was the studios like movie studios, the television companies, all these professional creators wanted to participate in this ecosystem. I remember we, we got a call from somebody who was working with with taken through the studio associated with you know, taking through the lease. And tenant was going viral in their office and they said, How do we become part of this? You know, we’ve, we’ve got this, this new movie that we’re launching, you know, who do something interesting. And so our first inclination was just to take gifts from the You know, the trailer and surface and the product. But what we found was that the moments that help people express themselves, the moments associated with emotion were the most successful. So for example, there was this moment where Liam Neeson was jumping out of a window and you had yellow flashing on the screen that was super successful because people could then use that moment and send it to send it to somebody else. And so the the library is effectively this this mapping of the world’s cultural moments Yeah. To this this this metadata that helps understand why where people want to use how people want to use these moments to to express them
Andrew Warner 52:41
was taking a sponsor the way that Dunkin Donuts was. That’s right.
David McIntosh 52:45
Yeah, they were okay with that
Andrew Warner 52:47
later revenue. sponsorship.
David McIntosh 52:50
Yeah, I mean, I don’t want to talk specifically about you know, the the metrics but at a high level, I would say, you know, it, what we what we really built was a platform that would drive lots of scale to Brand Partners and so that were worked really well for movies and television companies, obviously, because they were in the business of creating cultural moments.
Andrew Warner 53:13
But it also worked really well for advertisers that were in the business of creating cultural moments. Like you could get a lot of a lot of advertisers on TV, what are they doing? They’re, you know, they have ads that are trying to become part of Coltrane somewhere. And so the platform, you know, is a really interesting way of letting people participate, who are ultimately in those in those businesses of creating cultural moments. You talked a lot about tenex. You talked a lot about with our producer, you said billions of users what you wanted, you were inspired by WhatsApp and how big they got. We talked earlier about how Instagram couldn’t just enable you to share on Facebook, they needed to eventually move on to create their own sharing platform and wonder, why didn’t you ever say, look, communication in an iMessage and Facebook Messenger all happens via text when why bolt our thing on it? Instead of saying there’s a A new way to communicate, we’ll create our own chat app. Why don’t you go to that?
David McIntosh 54:05
Well, I think we, we always, in the beginning saw this as more of a layer on the communication ecosystem. We didn’t really see it as a standalone messenger, we saw this much more as like a service as a language that people would ultimately want to tap into. And become, you know, ubiquitous. And so it was just a different, I think it was just a different vision. And initially, I think when you’re, you know, you’re building a messenger, trying to figure out how to bootstrap. You know, it’s a messaging graph from the beginning. How do you create this new way for people to send messages back and forth, we really saw the opportunity being Alright, people are going to be communicating across all these different apps and surfaces. How do we make that better, and when we thought about this language that we’re building languages, ultimately you want to be able to use everywhere you want to be able to use them across all this Different, you know, contexts in which you’re, what you’re communicating. And so we never, ever thought about building a messenger because that just wasn’t in the DNA of the of the mission and the vision, which is to build this expression service that people could use everywhere. I would say, in some ways, the the, the mission and vision from the beginning was the opposite of that, which is how do we bring this everywhere people are as opposed to how do we build a walled garden ecosystem around just just this content or experience and that’s why then partnerships became a natural for you. The first one was with who? Let me see who was our first partner? I think our first our first partner was, I think, a company called Flexi Okay, it was a, you know, an Android focused keyboard. And they had seen our success on, on on iOS and we’re interested in you know, integrating a really strong experience and, you know, I think they have, you know, a herd caught our vision that hey, we’re fighting fundamentally a, you know, trying to build a service layer, communication expression layer, and integrated, you know, our search engine. And, you know, from there we then started partnering with, you know, other players, like, you know, Facebook, for example, was one of the other big big inflection points, there is an initial messenger platform launch. That didn’t work all that well, because it’s still involved. friction and switching. And, and if you remember, back in 2015, but you know, you could build an app for the, you know, the Facebook Messenger platform, but the problem is that consumers would still have to switch out of the app and switching, you know, to into another content for that now, it’s, it’s since been, you know, been deprecated in favor of what was successful, which was a native button built into into messenger and so that was another big inflection point for us. And then from there that created this domino effect where effect In all the different communication in entertainment applications felt like they needed to support this format because of the groundswell of, of consumer adoption. In fact, one of the reasons Facebook reached out to us was they saw our success on iOS, they saw that that consumer pool and that consumer behavior and they said, Okay, well, you know, people really love using this experience within the context of iOS and iMessage. Or they’re using tenors gift keyboard in Facebook properties like messenger, and they said, We need to support this consumer behavior. And we need to figure out how to make it make it easier. So I would say, you know, think about it as sort of a snowball that picked up volume and momentum as it rolled downhill. But the thing that put the snowball in the place was that initial tenor iOS keyboard launch and then the adoption kept building I kept seeing this groundswell looming where consumers were, you know, really asking for, you know, for this for the surface everywhere, why not? Why don’t you sell?
Oh, yeah, good. Yeah. It’s a it’s a, it’s a complicated question.
I would say, you know, at a high level,
we, you know, it’s sort of from the beginning when you asked me, very, very mission vision, you know, driven team.
And we were really excited about continuing to scale and build the service to, you know, make it you know, make it even, you know, better and more useful and ultimately continue scaling and bringing it to more and more people. And so it was it was it was really driven around around that sort of excitement in in continuing to, to invest in scale and the service
Unknown Speaker 58:46
is ever going to help you go bigger with this idea.
David McIntosh 58:50
Yeah, at a high level continue, really, really continue to to dramatically invest in it.
Andrew Warner 58:57
All right. This is a it’s it’s amazing. It’s amazing that you were able to make the transition from video the way that you seemed like, like I think for many people myself included, when you set out on a mission to fix video you have a vision for how video should work. You want to just keep pursuing it and pursuing it but you were able to transition I think you said it’s because of Eric, your co founder who said this is what a world is going Let’s forget about set top boxes. Let’s forget about long form video. Let’s understand this new thing. is Eric still at at Google with you? He is
David McIntosh 59:33
is still still working with me.
Andrew Warner 59:36
All right. Where are you now what part of the bay area where are you located today?
David McIntosh 59:41
I’m down in the peninsula. I used to be up in in in San Francisco
which is great, you know, love the walkability the city and so forth. But I thought I’d try something new for a little bit.
Andrew Warner 59:57
Me liking. I think my wife’s against Because it feels too much like the suburbs. But
David McIntosh 1:00:03
yeah, it’s mixed. It’s mixed. I, you know, I said at the very beginning, I was going to give it at least at least a year, I think, you know, what I love about San Francisco is the energy, right? That, you know, you can walk, you know, to the Ferry Building the blue bottle there, you can walk the blue belt in South Park, and you hear people talking about other deals and investments. And so I love that, that that sense of energy, you get a little bit of that down here. And obviously, there’s a large venture ecosystem that’s built on on Sand Hill Road, you know, so when you go to the court, like the hills in Palo Alto, you get, you know, a little bit of energy. But it just it feels like a much higher concentration of that. That in San Francisco, so I do I do miss that. I could definitely see myself going back up there. You know, a year two years.
Andrew Warner 1:00:49
I’m thinking New Zealand. Do you see how good they have it in New Zealand? They might have with this COVID thing?
David McIntosh 1:00:54
Yeah, yeah, the certainly a beautiful place to go. Yeah, never Though probably removed from entrepreneurial energy, yeah. And you
Andrew Warner 1:01:06
know what you told me before we started you making some investments, I went to your angellist profile. They’re like two VC firms, if I remember right, that you’re part of,
David McIntosh 1:01:13
I’m a lp so limited partner investor, and probably half a dozen promoting more than half a dozen, you know, venture firms. I don’t, I haven’t done individual investments, primarily just because of time. I feel like if you’re going to do angel investing, you need to spend a lot of time on it, because you need to make a lot of investments. If you expect to break even you need to invest in 30 4050 companies. And I just don’t have the time to figure out what 50 companies do I want to invest in. So I fear that it’s a better use of my time to invest in firms that you know, I believe in and people that I’ve worked with in the past and sort of empower them. To make the decisions on on, on where to allocate capital,
Andrew Warner 1:02:05
I can see you’re all in antenor. It’s impressive to see how far you’ve taken this company. And thank you so much for just being here. Before we get started ask you what’s a win for you? How do I make this worth your while and you just said, I just want to, I’m at a point in my life now where I can help I listen before I want to help by giving back to people who are entrepreneurs who are building. There’s no big upside for you and I appreciate that you’ve given us all outside. Thanks so much, David Macintosh and I want to thank the two sponsors who made this interview happen the first you guys know I’ve said this for years if you want to hire now more than ever, go to top towel comm slash mixergy. And this interview is over go check out the podcast I’ve been talking about. It’s Traffic Secrets, and whatever you’re listening to me on, you can just type in traffic secrets and start off there. Thank you. Thank you,
Unknown Speaker 1:02:49
David. Yeah, thanks. Thanks. Bye, everyone.
Transcribed by https://otter.ai