Move on to Mike gozzo, VP of product at Zendesk where we're gonna be talking about growing with messaging as an inflection point, we'll probably just transition right to that so we can get into the details. How's it going, Mike? Doing well, how are you? doing? Great. Thank you so much for joining us today. I really appreciate it. My pleasure. Awesome. Um, so, you know, I know a little bit about where you come from, since you know, we're working together with you guys gave a little bit of a spiel, but you know, you're VP of product at Zendesk right now, you can you kind of tell us about how you landed there.
Sure. Never thought I would be a employee, let alone a VP of product at a company as big and publicly traded this. And this is, we came in there through acquisition. So I'm the founder of a company called smooch.io. Switch that IO was an API first conversation platform for businesses. Think of us like a Twilio in the sense that we powered communications. But we didn't just enable messages to flow from point A to point B, we organized all of it think of, you know, what would happen if you would marry Twilio and a CRM together, and would allow businesses to program and program out their interactions with their customers completely. We started the company in Montreal, back in 2015. Grew that within our initial team took that from really like 30k Arr, with our MVP to over 6 million at the time of acquisition, and have more than doubled that since since joining Zendesk, and it's been a wild ride the whole way through.
That's really great. Full disclosure, we use smooch. Now Zendesk conversation, sunshine, or sunshine conversations. And we absolutely could not live without it. Absolutely love everything that you guys have built your entire team, then wonderful. But when I want to dive into allowing our audience to learn a little bit about how you built such a great company, and how you landed, you know, with Zendesk so start and kind of early days when snitch was early days, you know, how did you go about getting bigger brand customers was since we're talking today about growing with messaging, as an inflection point, was the world's shift towards messaging, a key driver for, you know, enterprise to start buying your product and to start building messaging on their own.
Okay, bunch of questions there. Yeah. So, so let me start at the beginning with call it the founding thesis and the opportunity we saw, and I'll build it from there. Yep. So when we started, you know, investigating the company that would become smooth. The first problem I wanted to solve was something around mobile support. I just sold my last business, it was a wiziwig, app builder company, it was really deep in the app development market. And this is like, 2013 ish, right. And in 2013, people, we're still building apps, the app economy was real, you cared about things like time spent in an app, and you didn't want your users to leave, and so on, and so forth. Where we, where we went from that was, well, keeping the user supported when something goes wrong, and their app was interesting. But you know, providing help wasn't enough, there was really like this engagement problem, and people want it to converse. So on mobile, the natural way to converse with messaging. So you know, we saw that, first and foremost, not being this big societal trend and inflection point, I mean, to be honest, I knew of it but I wasn't completely aware of the scale and magnitude of the trend that was coming on. I just thought it was it was novel medium. And we didn't get caught up in the broader picture and what was going on in the industry, we really stuck to well, if this is the best way to solve that problem, let's build the best messaging experience we can for app developers. And it was only upon, you know, really diving deep into that, that when we did our first MVP release came up for air. Everything started, you know, to connect, and all these dots join together. And we're like, hey, there's, there's actually something bigger going on here. There's platforms like WeChat, Facebook's probably going to launch some kind of messaging app that that matters in the coming years because they're threatened by this. We should be exploring this in a broader way. It really, it really, you know, was a situation of going from Toy to something bigger. And I think that's, that's generally something where we're going to look at inflection points, the ones that matter, probably won't look all that interesting right now. And you know, tough to list what they're going to be in and what the next one is. Because I think if we could predict that we'd all be, you know, awesome, awesome partners at VC firms. It would be really easy to pick the waves that were going to lift all the boats. Yeah, you have to obsess about, about a problem beyond you know, key technology, I think and then hopefully get lucky.
I love that founding story, it's really, really interesting. That's a really important way to look at is sometimes you don't know when or where that inflection point will come from, you just have to be doing all things that you can to provide value to your customers be close to them be close to their problems, and always thinking about where things could go next. So speaking of that, what do you see for the future of messaging? What, you know, how might it impact sales, support, marketing, etc.
I mean, there's no, there's no secret that it's going to be transformational in terms of how businesses and consumers interact with one other, we know it's being transacted, like transformation on our personal lives, like open up a Hollywood movie. And you'll see, you know, texting is now incorporated into like production dynamics, and part of the dialogue and storytelling, and you're seeing it more and more with businesses, because that's how they want to communicate, I think what you're going to see in general, is more businesses getting used to the notion of long running interactions, and not just thinking about their customer engagements as these things that happen at point of need, you know, somebody to take the structural example of somebody looking out at a realtors property list or catching their eye on something and engaging in conversation. I think, you know, first wave of this when people adopt it, you know, and I haven't looked at your data to be sure, but I imagine the first wave, when people are adopting this, they're doing this as one off, they find a property, they engage with it. And that's the extent of the relationship, I think what we're gonna see more and more businesses start doing is realize that they've opened up dialogues with their customers. And that was a result these can be, you know, rich happen over time, be the slow burns and slow, you know, productive relationships that happen over time. I think that's going to be the biggest shift we're going to see in terms of our interaction with business.
I love that. Obviously, that's something that we, you know, we totally believe in is, you know, not only are we a conversationally AI company, not only do we love messaging, but you know, we're aligned with you guys in that. We love coupling that with conversational data about our customers, we love knowing when these people, our customers, our leads, as you know, shown up on our website, added something to their cart, checked out a property inquired about a property, and they might not be ready to message us now. But maybe at some point over the course of our relationship, long term, short term, whatever it may be, they're probably ready to message us. And we need to be there with some contextual data to have a really great conversation. So absolutely love that.
I think it goes even further than just that communication that we think of like words that are being exchanged, you know, what you're going to see happen quite a bit is that because these are places where long running interactions happen, they also become really, really good surfaces to distribute applications on, you look at what Apple has done on the iMessage platform with their iMessage extensions. You know, right now, some people use that sure, when they're texting between each other to play a game or, you know, send some content that's more exciting. What they're doing on their business platform is really exciting, because they're actually letting brands drive entire mini apps within these experiences. And I think you're gonna see that happen in many, many different circumstances when you know, that notion of an app that we've got, and that is a heavy install on our OS, that's going to shift to be more, you know, narrow packaged experiences, delivered contextually and just in time in your relationship over time with a brand. You can see AI assistants doing this, you can see human agents doing it to facilitate a conversation. We're really big believers and a lot of the technology we built that smooch. While not totally adopted here, the places where it is adopted is really, really exciting to see. And every year we see more and more people investing and thinking about their relationships is more than just just verbal communication and actually being something more interactive.
Yeah, yeah, absolutely. I know, we're working on some really exciting stuff with your, your new API's and hopefully can can facilitate, you know, more contextual experiences like that, which we're really excited about. You know, obviously, Zendesk has a huge range of customers from enterprise to, you know, even structurally now, at this point, how are you seeing businesses of different sizes, markets and industries using messaging differently across the Zendesk user base that you might not have, you know, picked up on while you were, you know, smooch independently. You know, how have you kind of seen your product change, and how it's used,
you know, the way our product our product hasn't changed and how it's used. I would say that what happened before was switch had let me go back to the beginning. And I think it's important to get to the founding story and maybe pick up where I left off, because that'll give some context in who was using smooching and what the purpose was and how it ties into messaging. So the first time I raised money for smooch with My co founder, we walked into a VCs office that that we knew from previous businesses, they were, you know, predicated to like, so it wasn't a stressful, we had a really easy time when we're really privileged to be able to raise money so easily. And we walked in, we just had a conversation, our deck was garbage, it was, you know, like, I remember, it was ugly, dark purple and light pink. Next, because we didn't have any design input, we didn't ask our designer to spend any time crafting it. And I had a slide which said, you know, there's two ways this business is gonna end up one way is, we're early. And the first people who buy us are going to be technology companies that are building software. And they're going to build these API's because they care about messaging channels, and we want to build a new range of consumer products. The other way we're going to, you know, find buyers is businesses themselves will care about messaging, and as a result would be really ready to invest to deliver those capabilities on their own. And I remember looking at the partner that that ended up investing in our deal in the eyes and telling him like, I have no idea which one's gonna work. We're just watching both. And I can tell you that the focus from a product perspective is going to be on building underlying technology will spend time on go to market looking at both ends of the spectrum. And we'll see, you know, it might be that we do a 5050 split, and we can't choose or it might be that we have to go all in on one or the other, we really just don't know yet. To us, we didn't know. But we learned really quickly. And structurally was actually one of the first companies that decided to OEM us that back in call it 2016, where we were pushing to figure out where our first real customer was going to be, we didn't really quickly that it was going to become these we call them ISV is the software vendors that were building technology on the platform. So you know, when we step back, we're like, okay, so maybe messaging is going to be a gold rush. And maybe we're selling picks and shovels and that's okay. Now, you know, we got excited about this. But at the same time, we also realized that we'd be hit with a Tam problem, total addressable market. Because, you know, while while it was interesting that we were selling companies like structurally and Zendesk and Oracle and, you know, Genesis and all of these companies that were major software companies, or on their path to be big software companies, you know, the real money in this was in somehow winning that b2c relationship, right was an expanding to that scale. And we didn't really have a pathway to it. So we always had our eye to, you know, focusing on the brand, and we did win some really, really interesting brands along the way. But we made were really, really careful to not overstep there and lose focus with where we were at, as a business, where the industry wasn't even when we picked brands to work with. He specifically only accepted, you know, deals, or I would say, only accepted, you know, contests for deals where the company was digital first acted like a software company was agile, because that's who we knew to sell to. And we really avoided, you know, confusing our marketing or sales. And, you know, at the beginning sales was myself and one of my partners who ran bizdev, we really had to, you know, sell to people, we knew the script for that we could, we could knock out of the park, and we try and shift every time we brought in a little bit, but we stayed fairly, fairly narrow in our, our taxon.
I think that's super important narrowing in on that ideal customer profile for a while and, you know, incrementally changing it is is absolutely important aspect of it. You know, I kind of want to hone in on a part there that I think you mentioned, Zendesk was one of snitches, earliest customers, is
that, right? They were the first major software vendor who signed up on our platform.
That's amazing. And so, you know, obviously, you know, exit dynamics and things like that are super important to everyone listening and a lot of startups are in the business for just that. So how important is it to align key acquisition targets, you know, like potentially Zendesk might have been for you at that point or not. But how a lot how important is it to align those key partners as customers first, do you think that that's what kind of gave you a leg up when, you know, Zendesk came knocking?
No. I mean, the first time that Zendesk came knocking, I remember I was so my whole founding team, and all of our stuff at that point was based in Montreal, still based in Montreal, we love it up here. We're not exactly flyover country. But you know, if you're from the US, you probably you might not know where Montreal is. And it's not it's not a dig against people in the states is that Canada is a big, big, big country, with a lot of land and a few cities. But you know what happened? We were on a trip in a trip to SF and we had reservations to go eat at a restaurant that I always wanted to go eat at called chip in eastern Berkeley. It was like, Oh, we rarely get out to San Francisco. So we might as well eat at this Mecca. For But I got an email while I was out there from this guy named Ben, who was a Corp dev manager at Zendesk. And this was, you know, before we had any business relationship with them, they weren't our customer. He just heard about us on Product Hunt or something. I was like, should I take this meeting? My partner was like, No, no, don't take it, let's go to dinner, he went to dinner by himself at the meeting. You know, I remember talking to Ben and telling him the same early theses that we had to investors, you know, I don't know where this business is going to go. It was really humble, they just didn't know anything that was happening. I kept on mentioning what I didn't know, the value of that conversation with Corp dev was not one of acquisition. In fact, this guy, Ben ended up becoming a VP over the years that we were running smooth. And, you know, he led the deal and the acquisition of, of switch. But you know, and when I, when I spoke to my face, I had no intention to evaluate you for m&a was really just doing a regular startup search. And when we built the business, m&a was the furthest thing on our minds. I know, everybody says that. But I can, I can, like assure you that it was, we never stopped and said, Let's plan for an exit. What I I've learned in the last one, and especially in this one is that the money, the positive things that come out of it, they only come if you're solving the problem properly. Unless we were able to build a business that was sustainable, that was growing, you know, without any subterfuge to have a clean back office that had all its ducks in the line. And that was you know, like a proper, relatively conservative, but fast growing business, then m&a follows. And when we we have what when send us did actually come knocking? We were in a position because we focus so much on fundamentals of building the business and didn't get caught up in, you know, the metrics who needed to hit for our next round. We didn't get caught up in a lot of the usual trappings of startup life where you know, your board can push you in ways that are, are a little unfair. We stayed the course focused on fundamentals. And we had options when they came knocking. We told them no, we told them no, probably about eight times on eight successive term sheets that they sent us on where we dug our heels in. We gave him a ridiculous number, which was basically 10x capital in and we said, if you don't meet this number, we're not talking and we're like, there's no way they would meet this number, like it implied it basically implied like a 23x or 24x, multiple on our revenue. There's like no way they would pay this price ever. But in the end, they paid the price. So when they did I remember our reaction was like, Oh, shit, are we sure we want to do this because until then we hadn't taken it seriously. And that was a, that was a really crazy place to be. And, you know, if Zendesk wasn't an early customer, would we have still been an acquisition target, certainly, because we were we had lots of inbound, as we started growing. And as the space heated up, did the fact that Zendesk had built a relationship with us matter, it did. But what really mattered is the fact that we were consistent in doing what we said we would do. And now that I get to be on the other side, and you know, we evaluate acquisitions at Zendesk, and unfortunately, we haven't closed one since. Since switch join, I've been lucky enough to take a look and see. And it's amazing to me how many fall apart for human reasons, where it's arrogance, and in compatibility with the team that you're dealing with. On the other side, where it's not enough, you know, the back office too messy and too much exposure and risks that are happening there. The stuff happens over and over again. And I think if you're exit minded as a company, that if you want to be extra minded, and that's the way you want to end up in your business, I think it behooves you to focus on
building a bit of a like, or rather doing the boring, non sexy tasks, like ensuring your compliance, you know, having things like sock to compliance or doing your ice or whatever matters in your industry, getting that done, as painful as it is. And as much as your team is gonna bitch about the fact that it's not, it limits their agility, or they're getting approvals or whatever, whatever it is, that stuff really matters, then it can make a difference sometimes between the acquisition going really easy or something falling apart and diligence where, you know, you getting a deal where the terms of the acquisition are predatory. And I would say in, you know, many of the early term sheets, I wouldn't say that the terms were predatory. I think that that's, that's really aggressive. But they weren't necessarily founder friendly. Either. They were benefiting the acquire and unless you can, you know, shape your company such that it has options, always. You're not going to be in a position to negotiate anything great. So, you know, just like when you're just like when you choosing a college major Options, Options, Options, and then, you know, however the cookie crumbles, you're gonna feel good.
I love that entire story. And I'm so glad you were able to share that with us. And I appreciate kind of everything you were saying. There's a lot about what we talked about today, you know, we talked about doing the non sexy stuff, the, the behind the scenes, the back office stuff that stands the company up that makes it, you know, diligent that makes it ready to take the next step, wherever that may be, and able to grow and able to scale and I, you know, I'm thankful for everyone here today. But this, I think you put a bow on a bow on everything we've been talking about in a very succinct way, I wonder if you can leave us kind of with something that you might be seeing in markets. I know, we just talked about this early on in the conversation that you don't really know what technology is at an inflection point. But I'm gonna ask it to you. Do you think that? Or can you see any, what other technologies might be at an inflection point right now that the audience could be thinking about?
It's really, it's really hard to see, I think that, you know, one of the things or one of the problems that I think about a lot, is how, how data and processes are glued together. And you know, if you just look at the enterprise, which is a space that I've spent a good part of my career in thinking about. There's a lot of mess. And it's a market that is difficult to penetrate for all sorts of reasons, compliance being one, you know, cost of sales being another. And you know, if you're new to the enterprise world, it becomes this frustrating, slow process. But as soon as you start doing business is one of these larger companies, you see all of the choices, technology choices, in particular that they've made over time. And you notice that there's people behind those decisions, and that, and politics and things have gone awry. And there's a lot of duct tape in every company. And a lot of vendors in different categories have spent time talking about glue, but they talk about it in a way that benefits themselves and their own ecosystems. I do think there are some companies even out of out of Silicon Valley, that are approaching that problem of you know, disparate and heterogeneous it environments and cleaning it up. I think that's that's an understated opportunity. It's definitely not sexy, this poor developers that are working on that are, you know, dealing with API shit sandwiches, and you know, like, a lot of bitter pills are being swallowed, to kind of connect these things. But I think there's, there's definitely something to think about in terms of this interconnection. Another way to look at it is like the unbundling of data, you know, like CDP. As a thing. Customer Data platforms are, are becoming more and more of a four segment segment that is really leading the charge there, in terms of how they got into the market of like decoupling, and unbundling customer data from everything else. But I think that that same play, of looking at key things that are built into the enterprise software ecosystem and separating them out and thus giving them room to breathe and become more useful, and more interconnected, are helpful. What I struggle with, though, is that while these are all really interesting opportunities, I haven't yet seen the wave that makes them urgently adopted now. And COVID. might be that wave, right? This people look to get efficiencies. But I just I don't know yet. But definitely a space I'm watching.
Yeah. I appreciate you taking a stab at letting us know what you're on the on the market bar just watching. What I tried to get out of answering it, but no, it was great. It's a really good. I think it just kind of puts a bow on on this session with which was absolutely amazing. I really appreciate you taking the time today to talk with us about growing with messaging as an inflection point, but about sharing the entire story. It's mooch and Zendesk and what you've seen and learned. And, you know, this was you hit every part of the startup journey, I think on this very short 20 minute conversation. So I can't thank you enough for joining Mike. Really appreciate it. Appreciate it. And you know, good luck. Yeah, thank you. Take care.