Great Builders & Success First with Intercom’s Eoghan McCabe | E1962
09 Jun 2024 (3 months ago)
Intercom’s Eoghan McCabe joins Jason.
- Eoghan McCabe, the co-founder and CEO of Intercom, joins Jason for a conversation about building successful businesses.
- McCabe discusses the concept of building the "Master System," a seamless and beautiful platform that provides a one-stop solution for customers.
- While this approach may be appealing from a technological standpoint, it can be challenging to position and market such a tool effectively.
- McCabe emphasizes the importance of positioning and pitching a product effectively.
- Trying to be an "everything tool" can make it difficult to communicate the product's value proposition clearly.
Family history of the two McCabe’s: Jason and Eoghan.
- Jason and Eoghan McCabe are both of Irish descent.
- Their ancestors came to America through Ellis Island in the early 1900s.
- Many Irish immigrants came to America in the 1970s and 1980s due to lack of jobs in Ireland.
- They often worked illegally in low-wage jobs but were known for being hard workers.
- America is still seen as a land of great opportunity by many people around the world.
- Eoghan McCabe is the co-founder and CEO of Intercom, a customer messaging platform.
- He was born in Dublin, Ireland, and studied computer science at Trinity College Dublin.
- After graduating, he worked as a software engineer at Google in Dublin.
- In 2011, he co-founded Intercom with Des Traynor and Ciaran Lee.
- Intercom has grown to become a successful company with over 30,000 customers worldwide.
The kindness and dedication of Intercom’s co-founder Des Traynor.
- Des Traynor, co-founder of Intercom, is known for his kindness and dedication to startups.
- He was generous with his time, giving talks and staying for hours to provide guidance and support to founders.
- His passion for innovation and teaching was evident in his interactions with startups.
- Intercom was founded in 2011 and has raised over $200 million in funding.
- Eoghan McCabe, one of the co-founders, left the company but returned a month before the launch of ChatGPT.
- McCabe brought in professional management and made significant changes upon his return.
What Intercom is, the state of the business and Eoghan’s return as CEO.
- Intercom is a customer service platform for digital businesses.
- Zendesk was the previous champion in the SMB and mid-market for customer service but had stopped innovating.
- Eoghan saw an opportunity and decided to go after customer service.
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Looking at overlap and adjacencies when you are building SaaS products.
- Overlapping or adjacent SaaS tools can be appealing to build, but it's important to consider practical matters like positioning, go-to-market strategy, and pricing.
- Trying to be an "everything tool" can make it difficult to establish a clear market position and can lead to complex pricing models.
- Building a horizontal tool and then adding use case-specific features can increase complexity and make it challenging to meet the specific requirements of different customer segments.
- Intercom fell into the trap of trying to be all things to all customers, leading to complex pricing and ultimately a change in pricing strategy.
- The SaaS model of paying for what you use can be freeing for customers, but it can also lead to challenges for businesses as they grow.
- Companies are consolidating their SaaS subscriptions, reducing the number of products they use and the number of seats they purchase.
- This consolidation, combined with advancements in AI and other tools that increase sales efficiency, can make it difficult for SaaS companies to grow their revenue.
The brilliance of the pre-seed pricing model, and is it broken?
- The pre-seed pricing model was brilliant.
- It is possibly broken now due to market consolidation and companies tightening their budgets.
- Companies should focus on delivering killer value rather than loose financial control to achieve long-term success.
- Companies that achieved high valuations in 2021 but are struggling now likely didn't build deeply meaningful businesses.
- Salespeople tend to take the easiest path and sell what people are buying, even if it's not what they need, leading to churn in a loose environment.
- Intercom, despite being a successful and profitable company, also experienced loose spending during the loose days.
- Eoghan McCabe implemented a system using credit cards with limits to control spending on different categories of software.
- At the end of each year, the limits were reduced to identify which subscriptions were not essential.
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- Eoghan McCabe, the co-founder and CEO of Intercom, discusses his journey as an entrepreneur and the importance of great builders and success first.
- McCabe emphasizes the need for founders to be great builders and to focus on success first, rather than just raising money.
- He believes that great builders are those who are able to execute and get things done, and that success first means focusing on building a sustainable business that can generate revenue.
- McCabe discusses the impact of AI on the future of work and how it is changing the way companies operate.
- He believes that AI will create new jobs and opportunities, but that it will also require companies to adapt and change the way they work.
- McCabe emphasizes the importance of investing in AI and staying ahead of the curve in order to remain competitive in the future.
What is next for companies with SaaS-based pricing?
- Companies with SaaS-based pricing are not likely to rip it out and replace it with a chat interface anytime soon.
- Building software in the AI world is more challenging than it was 10 years ago.
- Companies need to have deeply existential conversations about how AI technologies will impact their businesses.
- Over time, AI technologies may reduce the number of employees and seats that companies need.
- However, this is likely to be a gradual process that takes place over many years.
- Companies are rightly hesitant and careful about adopting new technologies that could impact their customer relationships.
- The current seat-based pricing model for SaaS companies is likely to go away over time.
- A new pricing model based on consumption or value creation is likely to emerge.
The future of customer service and AI.
- AI is predicted to revolutionize customer service by providing efficient and personalized assistance, potentially surpassing human capabilities in certain areas.
- Intercom's campaign highlights the advantages of AI over human alternatives, emphasizing that AI can be cheaper, faster, and better.
- AI has the potential to eliminate frustrating interactions with travel agents, phone operators, and certain customer service representatives.
- Intercom's AI agent, Finn, assists customers by accessing public and internal knowledge bases, as well as prior conversations handled by support representatives.
- Finn intervenes in conversations when it assesses a high probability of resolving the issue, achieving a success rate of resolving tickets at 43%.
- Finn engages in conversations with customers, seeking clarifications when necessary, but it does not attempt to impersonate a human.
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- Intercom's customer service team has remained the same size for two years due to the implementation of AI, which resolves 45% of customer issues.
- Moving up the corporate ladder involves taking on more engaging and challenging work.
- Customer support agents often face frustrating situations, such as customers not understanding simple instructions.
- It is inefficient and dehumanizing to assign repetitive tasks to unique individuals, as it wastes their potential.
- A Boomer lawyer, unfamiliar with computers, found it unnecessary for attorneys to use keyboards and initially mistook a mouse for a laser pointer.
- Customer support explained how to use the mouse and trackball, demonstrating the lawyer's foresight in anticipating technological advancements.
- Confirming with customers and providing reassurance is a crucial aspect of software design that AI language models (LLMs) lack inherently.
Expectations from AI one year from now.
- Eoghan McCabe, from Intercom, discusses the future of customer service and the potential of AI-powered customer service agents.
- McCabe believes AI-powered customer service agents will eventually be able to take actions on behalf of customers, such as issuing refunds or resetting passwords, but emphasizes the importance of safety and security when deploying them.
- He envisions a future where AI agents handle routine tasks while human agents focus on complex or sensitive issues, but stresses the need for ethical constraints and adherence to the same rules and regulations as human agents.
- Checks and balances are necessary to prevent misinformation and ensure responsible use of AI.
- Early-stage AI startups have an advantage in terms of experimentation and targeting smaller companies, while established companies face higher expectations and criticism for any flaws in their AI products.
Breaking down the negative press and social reaction to the Humane Pin.
- Eoghan McCabe empathizes with the creators of the criticized product and believes in the potential of ambient and conversational computing.
- McCabe criticizes the early release of the product and the pressure companies face to deliver but refrains from criticizing those attempting to innovate.
- McCabe highlights the importance of supporting new creations and draws a parallel to the movie Ratatouille, emphasizing the value of creation over criticism.
- Despite its positive aspects, the product's potential was overshadowed by the negative headline "worst product I've ever reviewed," leading to its downfall.
- McCabe questions the reaction of the product's creators and their resilience in the face of criticism.
- McCabe discusses the criticism faced by the creators of Google Glass and their response to it.
- McCabe emphasizes the importance of protecting idealists and dreamers, like those at Apple, to foster creativity and innovation.
- He suggests that marketing the Google Glass as a developer kit rather than a consumer product could have mitigated the criticism.
- McCabe proposes a technique of assuming that new technologies work and considering their potential impact on the world if they were successful.
What the world will look like as conversational AI develops.
- Conversational AI will become faster and more fluid, allowing for seamless interactions and the ability to perform tasks on our behalf when integrated with accounts and credit cards by big tech companies like Google and Apple.
- While screens will remain important for certain tasks, we may shift towards smaller devices like smartwatches or pins for interacting with conversational AI.
- The demand for personal computing will grow alongside conversational AI's prevalence, but it won't immediately replace traditional computing methods.
- Alternative personal computing devices, such as the reMarkable tablet, are emerging to address concerns about distraction and addiction.
- AI writing tools have simplified the process of becoming a good writer, increasing the value of exceptional human writing and creativity in a world filled with AI-generated content.
- Handcrafted and artisanally made human creations that convey a deeper emotional connection will continue to be appreciated despite the prevalence of AI-generated content.
What makes a great manager and the “return of the king” at Intercom.
- Eoghan McCabe, the former CEO of Intercom, returned to the company and implemented changes in his management style, emphasizing the importance of being willing to make tough decisions and sticking to one's beliefs for the success of the business.
- McCabe highlights the significance of transparency with employees, including openly communicating values and policies, and stresses the need for healthy skepticism and independent thinking in the face of prevailing narratives.
- He discusses the challenges of diversity and inclusion in the tech industry, emphasizing the importance of hiring based on competence and merit, rather than identity or demographics, to avoid legal issues and tokenism.
- McCabe criticizes the practice of tokenizing women and people of color, arguing that it does not benefit them or the tech industry as a whole.
- He emphasizes the importance of prioritizing building something special over minor conversations that may offend people and suggests that founders should focus on being liked by winners and hardcore individuals who share their vision of changing the world, rather than seeking universal likability.
- McCabe stresses the significance of immediate response to founders' inquiries, even outside of regular working hours, as a measure of commitment and partnership.
- He acknowledges the sacrifices and trade-offs involved in pursuing ambitious goals and encourages individuals to find a balance that aligns with their personal values and purpose.
- Successful founders have a high level of competency and resilience and should expect to face difficulties and challenges, but should not be discouraged by them.