20VC: Why Being First Does Not Matter, Why Defensibility on Day 1 Does Not Exist, Three Core Elements To Move into Enterprise Effectively and What Makes Truly Great Product Marketing Today with Des Traynor, Co-Founder @ Intercom

Des Traynor is a Co-founder and the Chief Strategy Officer of Intercom, the modern customer communications platform that unifies every aspect of the customer journey. To date, Intercom has raised over $238M from some of the best including Index, ICONIQ, Kleiner, GV, and Bessemer. As for Des, before co-founding Intercom, he was a UX consultant, a university lecturer in computer science, and also a Ph. D. researcher. Des is also a prolific angel investor with a portfolio including the likes of Stripe, Algolia, Notion, Miro, and many more. In Today's Episode We Discuss: 1.) Origins of Intercom: How did Des make his way into the world of startups and come to co-found Intercom? When did they realize they really had something with Intercom and had to focus on it? What does Des know now that he wishes he had known at the start of Intercom? 2. Two of the Biggest Myths in Startups: Being First and Defensibility Why does Des believe that being the first does not matter? Why is it not an advantage? Why does Des believe that no company has defensibility on day 1? How does Des believe defensibility is built? What does Des mean when he says, when investing in companies he looks for a "long road to the starting line"? 3.) Product 101: A Masterclass on Product: How does Des answer the question of when to release a second product? How should the second product be resourced? MVP and lean or full budget and committed? What are the biggest mistakes people make when releasing a second product? What mistakes have Des and Intercom made when releasing new products? How does Des advise founders on when to stop working on a product? How do you know when it is not working? How does Des determine between a feature and a product both when building and when investing? 4.) Moving to Enterprise: What does Des believe are the three core things all companies need to scale into the enterprise effectively? Which should they do first? Which is most challenging? How does Des advise founders on when is the right time to move into the enterprise? How does the product need to change to meet enterprise needs and requirements? 5.) The Makings of Great Product Marketing: What does Des believe makes truly great product marketing? Who does it well today? How does your product marketing need to change as you scale from SMB to enterprise? If product marketing to both an end user and a separate buyer, which persona should one prioritise their messaging towards? How does Des advise founders on product marketing when they have a horizontal product with a very broad customer base? 6.) Angel Investing 101: From Stripe to Miro to Notion: Why does Des believe it is beneficial for operators to also be investing? What are the biggest lessons Des has learned from angel investing? How does Des approach both market sizing and outcome scenario planning today? How price sensitive is Des today? How has that changed over time? Item's Mentioned in Today's Episode with Des Traynor: Des' Favourite Book: How Will You Measure Your Life by Clayton Christensen

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Harry Stebbings?

  This is 20VC with me, Harry Stebbings. And do you remember when we had Chris Sacker on the show? It was a long episode because Chris was insanely brilliant and the conversation was just world-class. Well, today is very much the same with such a special guest. He's one of the great product minds of this generation, one of the world's best angel investors, and then also co-founder of the unicorn rocket that is Intercom. And I'm so thrilled to welcome Dez Trainer to the hot seat today. Now, to date, Intercom have raised over $238 million from some of the best, including Index, Iconic, Kleiner, GV, and Bessemer, to name a few. And as mentioned, Dez has one of the best angel portfolios there is in the business, with Notion, Stripe, Algolia, Miro, Hoppin, and many more incredible companies. I'd also want to say a huge thank you, though. This schedule was a real team effort.

• 0:44Harry Stebbings?

  Matt and Doug at Iconic, Aphelia Brown, Kieran Lee, Paul Adams, and many more. Such a team effort and really did appreciate that. But before we move into the episode today, Harvard management companies constantly seeking out the next generation of great investors and entrepreneurs. HMC has managed Harvard University's endowment for nearly 50 years and was one of the first institutional investors in venture capital. Their experience and long-term investment horizon made them ideal partners to get world-changing ideas on a path to viability and success. They work as a true partner, providing insightful perspectives to help managers succeed. I personally have had the pleasure of working with the HMC team and can say that they're truly exceptional partners and savvy investors. Whether you're launching your first fund or your fifth,

• 1:28Harry Stebbings?

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• 2:13Harry Stebbings?

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• 2:58Harry Stebbings?

  You can sign up and start using your new business phone in just minutes. Visit openphone.com forward slash two zero VC. That's openphone.com forward slash two zero VC to save 20% on your first six months. But that is quite enough from me. So now I'm so excited to hand over to the one and only Des Trainer, co-founder at Intercom.

• 3:24Speaker 01

  You have now arrived at your destination.

• 3:27Harry Stebbings?

  Des, this is such a joy to do. As you know, I've been a long-term admirer, fan, so thank you so much for joining me today.

• 3:33Des Traynor?

  Thank you for having me yet again.

• 3:35Harry Stebbings?

  I do want to start though with a little bit of context. So we see Intercom in all of its glory today. What was that founding aha moment for you and the team with Intercom?

• 3:43Des Traynor?

  I think we had a few different ideas. So we were originally a consultancy building software for other people. There was a few ideas on the go, ones that like at times looked hilariously bad. Like we had an idea for like a whiteboarding product and that like ultimately looked like not a good idea, contrasted with Intercom. But then suddenly like Miro comes out like years later and you're like, maybe it wasn't such a bad idea. However, with Intercom, we're building an actual way to communicate with our customers from a previous product. And we want to communicate inside the product. The real spark was like when we realised how much more effective that was. I remember Owen, at the time, our former CEO, current chairperson, saying to Kieran like that this could actually be a huge idea by itself. This little talk to customers. In your product type thing. And when I heard that, my response, whenever I think, oh, could this be an idea?

• 4:24Des Traynor?

  I just immediately go into like, what's the actual strongest Iron Man case we can put to support this or Steel Man case? So I was like, right, what are the trends? Whether it's messaging or whether it's like the rise of web software, whether it's the rise of SaaS and the need for relationships. I started to look at, right, okay, this, it supports so many current sort of tectonic shifts. And then obviously the real click was once we actually offered it to other people and we saw them use it and we saw them like rip it out of our hands and be like, oh my God, I love this thing. How did my life exist without it type thing? That was when it was like, right, clearly brought to something. And that was the decision then to like close the consultancy. Let's get going and let's go all in on this.

• 4:56Harry Stebbings?

  I want to touch on something you said there first, which is kind of the idea selection process for you. VCs always say, oh, it's all about the people. It's all about the people. I don't care if I hate your idea, if I believe in you so much. I've invested many times and actually it was Elizabeth Yin on Twitter who said the other day, no, no, no, like actually the quality of the idea really matters and you have to be excited about it. Which camp are you in? Are you in like the great founders find the market and find the product over time? Or do you have to like what they're doing when you invest?

• 5:25Des Traynor?

  I look at the multiple, the quality of founder times the quality of the idea. But if you're telling me I can only have one, I'll definitely pick the quality founder over the quality idea. I think ideas are only good until you say them out loud and then all of a sudden everyone hears about it. There's an intercom spinner right now called equals. It connects spreadsheets like Excel, like, sorry, it is a spreadsheet and it connects to actually data warehouse. Apparently that's a huge idea and everyone who's ever used a spreadsheet, the first question you ask them is, do you connect it to other sources of information? They're like, oh, will I take an export from a snowflake and import? The very second they hear that idea, they're like, well, I'm in, I want it, let me invest, let me buy, I want the product right now. But now that idea is out there. So if all you had was that idea, there's going to be at least a hundred other people trying to copy that idea and do a quicker than you and better than you. And if they care about it more than you or they're just better than you, they're going to ghost you.

• 6:09Des Traynor?

  So being first doesn't matter. And I think like the sum of that attachment to the idea of like, the uniqueness of the idea is only useful in a world where being first matters. I think it's very rare you can sustain the head start if somebody else is either better funded, better resourced, more passionate. And all you are is the guy who came up with the idea.

• 6:25Harry Stebbings?

  Can you unpack that being first doesn't matter? Cause is there not someone else who's always better suited? Like Google could put their mind to any idea, resource it better than you and you're fucked.

• 6:35Des Traynor?

  I don't actually think that that's true. I think like Google have like tried to put their mind to like, God knows how many things and you still see the emergence of God knows how many products like, why isn't Slack part of the G suite? It's because they can't put their mind to that. Why does Figma exist? Cause they can't put their mind to that. Like, why is Superhuman doing well? Cause they can't put their mind to that. In a case of Google, it's more like, what do they actually prioritize? And the answer is their core businesses, of which they have like five or six or seven, YouTube, G suite, search ads, blah, blah, blah, right? I think being being first doesn't matter is in the rest thing. Let's say me and you have a really dope idea for a really smart take on project management. And it involves, if you want to wind the clock back, let's say it involves like the idea of a metaphor of post-it notes that you can drag and drop around the place. Give it a year and everyone will have it. If it makes sense, give it a year and everyone will have it. And then what are you left with?

• 7:17Des Traynor?

  And if what you're left with is, well, we had it first and you start running advertising campaigns saying the original, you're screwed. No one actually cares. When you pick up your phone, you don't really care. Is this the first touchscreen or not? Turns out it wasn't, but it doesn't matter. The question is, can you sustain your advantage? And I think if all's you are as a person who had the idea, but you don't have that much passion or you don't have that much ability. I don't think like a mediocre person with a unique idea will work.

• 7:41Harry Stebbings?

  I don't believe in defensibility on day one. As you said there, I think anyone can have an idea. And there's lots of people who have relevant backgrounds, but I think I see with my own media business, defensibility is built over time in the processes that we do, in the products that we build subsequent. Do you agree with like defensibility on day one doesn't really exist?

• 8:00Des Traynor?

  Like real defensibility, no, it does not exist. I think there are a few apps, I'm just trying to think of a good example, like Figma might be one, or you know, like Zenly, the Snapchat. Things where it's like really beautifully crafted, really high-end engineering and really hard to copy. Those sort of products, when you see them first, you're like, hmm, it's going to take a long time to get to where these people are today. And like the way I described that in like startup companies who are looking for media invest is I described the length of the road to the starting line. And I would call, if you say you want to compete with Figma, I'd say, Jesus, Harry, that is a long road to the starting line, which basically.

• 8:31Harry Stebbings?

  It would like three years in the dark.

• 8:33Des Traynor?

  Absolutely. And it's the same when you say like, oh, we're going to work on a new email client. I'm like, yep, long road to the starting line. I can tell you what your first two years of roadmap is. And then at the, at the end of that, can you add something unique on top? Who knows? So I think like day one defensibility is rare, but. Every now and then some company does emerge with something that you're like, wow. If you want to copy that, you'll be a long time working on that. It might be like a year, a year and a half, or in Figma's case, as he said, like two plus years. I think anyone who's like, right, like, let's say Adobe probably saw Figma and they're probably smart enough to go, wow, this is a threat to one of our big cash flows. And if they dispatched a team of their brightest, which I'm not saying they did or didn't, and they went at it full time, in two years' time, they'd have to hope that Figma somehow froze to give them that much time to catch up. And Figma ain't freezing and Dylan's too smart a guy to like not make monster progress.

• 9:15Harry Stebbings?

  So do you like it when a startup comes to you and pitches a long road to the starting line? Because it is defensible.

• 9:21Des Traynor?

  If they know what they're doing, yeah, definitely. The only sort of test I'd say there is sometimes, my advice in those cases is work on your differentiators first. So in the case of, say, an email client, oh, we have a new take on email. I would say, right, here's what I believe. I believe you're a competent engineer. I believe you can work out SMTP and IMAP and spam filtering and all that. Let's just push all that aside. I don't want to see a single engineer working on that. Show me the thing you're going to build that's actually new to market. Even if the email stuff doesn't work, I don't care. I'm sure you'll solve the rich tech set of the problem, but I need to see the difference early. Don't tell me after two years' time, we finally caught up with Gmail and now with three months of runway left, we're going to add in the thing that makes us different. It's a waste of time. You have to actually like acid test the differentiators first. But in general, I'm not against it. We have to go dark for like two years to produce something monster. I don't have a concern with that.

• 10:06Harry Stebbings?

  When you're looking at like new angel investments, I think the biggest mistakes I've always made are market sizing. I underestimate the size of the market or I actually think it's bigger than it is and it's actually smaller. Do you engage in market sizing analysis thinking? Do you think it's even worth it if we all acknowledge that we always underestimate how big markets are?

• 10:24Des Traynor?

  I don't engage in it and the reason is the checks are right. So this is where me, you're slightly different in that the volume and the size of check is probably slightly off. You're larger than me by ways. So for me, if it was like left-handed dentists in Dublin, yeah, I'm not going to invest, right? Like, I only need the market probably to be like around a billion of like total revenue spend for this seed check to turn into a valuable series A or whatever. It doesn't need to be a monster. However, the way I actually do it is not like the founders will often come at you with like crazy projections and like Gartner estimates and all that. Like what I actually try to look for is just, well, what is the problem you solve? How many people have that problem and how big a problem is it to the people who have it? Like a big problem to me is something that happens often and matters a lot. Email, communicating with your work colleagues, these are like big problems. Talking to your customers, frequently occurring problem that you'll probably spend money on.

• 11:07Des Traynor?

  Whereas when someone says, oh, this is like the app that checks in to see how your employees are doing on the third weekend of every whatever. I'm like, yeah, it doesn't sound like as big of a problem. So I'm going to put that into the very low category. And in that world, I'd want to see near perfect execution because the only way that market makes sense is if you own all of it. If that ends up being like a cottage industry of like 15 different bootstraps companies and you're like going to take one slice of it. Then we're into like, you might tap out a $15 million in ARR and you're asking for a seed at a value of 40. That's like where I'm like, all right, I'm out. But honestly, I'm out there earlier than the market size. I'm out because I'm just not that interested because it doesn't sound really big.

• 11:41Harry Stebbings?

  Final one, and then because this is totally off schedule. CAC and LTV, I just think it's hilarious when like seed and series A companies kind of pitch in. It's like they will change completely over time. Like this profile is cheaper than that profile, this cohort was totally different. How do you think about like the importance of like CAC to LTV and metrics like that at the early stage?

• 12:00Des Traynor?

  They are relevant. I think if someone's coming to you at that early a stage and they have a really like dialed read under CAC LTV, I'm like, how is that important? Why are you working on that versus working on like building a great product? All these numbers matter, but they matter at scale. They just don't matter early on. What I'm way more interested in is how are you going to get customers in a way that your competitors can't? And if their answer is like, oh, we're going to outbid them for CAC LTV, then sure, let's dig into that. But if the answer is thought leadership, I'm like, right, show me sort of thought leadership you're going to do. If it's like, oh, we're going to do YouTube or show me an example of a video or whatever. The conversation that where most startups fail out is not the efficiency of CAC LTV. It's a blank face after I say, do you have a differentiated route to customers? Or are you just going to be bidding it out with the rest of them?

• 12:39Harry Stebbings?

  I agree with you. I ask the exact same thing as a distribution mind like you. I just never hear the answers I want. I'm literally 99.9% unsatisfied.

• 12:47Des Traynor?

  Yeah, the only times I've been satisfied is when, um, the best way I could describe it is like when it's a closed industry. So like when I was talking to the folks at HOP and say like, well, we need to just reach every event organizer on earth and every company that organizes events on earth. And we actually have not quite their words. We've kind of got those lists already. The first three quarters of most marketing teams' efforts were already passed, which is fine to the people. We have found the people. Now we need to have compelling reasons to get them to use it. And it's going to be an outbound campaign and it's going to be expensive and we're going to be sending them gift baskets. And we're going to be doing all that stuff to try and get them to pay attention to us. But that's ultimately the plan. Then I'm like, right, that makes sense. I believe you're working in a closed market and I believe you can actually identify all of your targets. It's just different when someone says, we're selling to startups. Cause their plan is go number one on Hacker News and repost on product on every two days.

• 13:28Harry Stebbings?

  We spoke about your angel investing. You said something before being that angel investing is good for active operators. Why do you think so, Des?

• 13:36Des Traynor?

  I think since I wrote my very first check in the very first company, which is going to be called Workable. And I've probably written like 50 or 60 since. A few things I've learned. One is how little tolerance you have for excuses when they're outside of your business versus when they're inside of your business. So when someone tries to pitch me on a thing and they say, oh, well, the reason it hasn't taken off yet is because, oh, well, we had to let go over a VP of engineering. And we've got a new one now and she's awesome, blah, blah. I just net all that out to we couldn't get it done and I make my decision based on that. And yet, if internally someone's asking me, why did such and such a thing happen? I'm immediately going into the same mode of, oh, well, we couldn't blah, blah, blah. So I think it's definitely sharpened my sort of appreciation of how other people will see Intercom. I think that's one whole piece. I think secondly, seeing the internals of other companies and learning how they make decisions

• 14:19Des Traynor?

  is really useful from understanding an Intercom buyer's perspective is in under walk arounds, would you adopt Intercom? And like kind of relatively speaking, in all of the priorities in your world, how important are we? In your head, like you're the number one podcast on everyone's list or whatever, but in practice, you're in amongst five others. Similarly, with Intercom, we think, well, surely they've got at least 10 people talking about Intercom on a daily basis. But no, it's actually just Joey in the corridor working on in apps or whatever. So I think getting a sense of your own importance as you rank in other companies is useful as well.

• 14:45Harry Stebbings?

  How does angel investing give you that perspective?

• 14:48Des Traynor?

  I guess literally writing the check doesn't, but the time you spend with the founder does. So my take on how I angel invest is I try to spend as little time scheduled as possible, but a lot of time unscheduled. And by unscheduled, I mean asynchronous email or whatever, right? Cause I've always been interested in startups. I'm just, I love seeing businesses grow. I love diagnosing why businesses are sort of flatlining or struggling. What the check does is kind of gets you a stream of information about like a new Sudoku that you can kind of try to unravel. And you can throw in suggestions. Or you can see the inside of like, as is the case in some of the investments, like you just get to see inside a rocket ship that's just humming and you learn. People don't think this is true, but I'm humble enough to say, yes, Intercom is like a series D or whatever company.

• 15:27Des Traynor?

  We don't need to raise, so hence it's not E or F or whatever, but again, but I can learn a lot from a series ARB person because like when they're wonderful executors, they're wonderful executors. I've invested in companies that have gone on to surpass the valuation of Intercom many times over. And the founders have turned into absolute monster CEOs and monster COOs along the way. You learn a lot from seeing success and how that performs.

• 15:45Harry Stebbings?

  If you look at those ones that have absolutely blown it away, is there one company and one CEO which has shown you the most and what they've shown you?

• 15:52Des Traynor?

  I'll answer this in a slightly different way. I've invested in companies like Stripe is on one end, just like a total absolute outlier, but I'm not going to say blah, blah, blah, because like everyone knows Stripe and it's kind of too easy. But a company where I've seen is that had had say more close access and watched to take off was say Miro, where Andre, who's it is the CEO there. They've just been an execution machine for a really specific problem. And they kind of stood up against an external, what could have been a threat in Big Jam, and they've done really well through that as well. That's a company where I've just watched it pretty much from early doors, really do well. Another one, which is like earlier.

• 16:23Harry Stebbings?

  Sorry, I'm, I'm clicking now. What do you think they did well? Is it just speed of execution?

• 16:27Des Traynor?

  Focus and speed of execution. So I think the easiest thing for a company like Miro to do, I think, is to get notions about becoming Microsoft Office and starting to branch out and becoming a document editor and all that sort of stuff. Because everyone tells you need to go to become a multi-platform suite, blah, blah, blah. You get all the narrative of expand your time now, et cetera, et cetera. Maybe that's the right thing for them to do, what they have actually spent all their time doing is perfecting online multiplayer whiteboarding. And I think that's a really important thing for them to do. I'd say it is probably focused, intense execution without like letting Dirk newfound status distract them from it. If you have to do, if you just sit down with a journalist and say, well, you're now worth whatever billion dollars they're worth, you feel obliged to say all this new shit. You feel obliged to say, well, we're actually going to become a metaverse play and we're thinking about augmented reality and we're releasing some hardware.

• 17:10Des Traynor?

  That's the easiest thing to do, say all this dope shit so you sound famous, but actually the intensity of the executioner has just been awesome.

• 17:15Harry Stebbings?

  Speaking of that, I mean, we're kind of brilliantly intermingling schedules here, but I'm pleased with this. You said there about kind of expanding sooner or beyond into tech editors and more than you should do. Product question wise, when is the right time to release a second product? How do you advise founders on that?

• 17:29Des Traynor?

  A lot of this is going to be kind of boring and tactical, but I think that's honestly what a lot of listeners come to you for. One thing you'd have to look at is, starting with the boring shit, can we actually recruit enough engineers and designers and PMs to actually own a second product? In a way that doesn't harm the first product, because that first product still needs new people as well. You need backfills, you need to continue the investment there. So one whole piece is just very tactical. It's like, can we get the team in? And oftentimes that comes from opening a second office or from acquiring an acqui hire or something like that. But like, are we going to be able to get to people in a way that doesn't cannibalize the success on what is currently the only thing we have that works? That's one whole piece calculus. Are we ready to do it from a staff side? Then separately, do we credibly believe, and this is a two part of here. One is, is the ROI of adding a new product definitely greater than increasing the maturity?

• 18:13Des Traynor?

  And possibly the TAM by like going up market or whatever of the current thing we have. So if we have a project management tool and someone wants us to do a time tracking tool. Are we sure that doing the time tracking tool is going to be adding more value to the overall business? Than just really nailing this project management tool or whatever it is, right? And then thirdly, is there value in doing both of these things under the same company? This is a question of like brand architecture in a sense, right? Because if you really, if you think, hey, I can find a second team and they're going to go and do this sort of thing. Why not just start a second startup? There has to be some like multiplicative value where actually both products end up with unfair advantages because of their cohabitation. They have to share either a source of truth, customer record or something like that. They have to have some sort of shared entities and shared workflows and shared UI. That means that you can do the second product better than some random person off the street could do it.

• 18:58Des Traynor?

  And that your customers ideally will bite off you because they prefer that advantage too. The first trigger point for me is always like, are we sure we're tapped out with what we're currently doing? Maybe a tapped out is probably too negative word. Are we very confident in the trajectory towards a really successful outcome for product A? Then if product B, are we ready to hire for product B? And then if we're picking B, are we sure we can do it in a way that doesn't hurt A? Are we sure that it's valuable and it's more valuable than just simply continuing on A? And then lastly, does A Plus B, is that multiplicative or is that additive? Are you basically adding two things together or are you multiplying two things?

• 19:30Harry Stebbings?

  I I wanna start on number one there in terms of the resourcing with the engineers and the team needed. I'm always in two minds when it comes to second products. Do you do the skinny budget MVP test and iterate in a very lean manner? Or do you really allocate resources to it and concentrate capital? Because you should do if it's a meaningful effort for you. How do you think about that two minded process?

• 19:51Des Traynor?

  I actually think you have to do both. I think you have to prove out that you have some actual alpha, that you could do something that no one else can do. Going back to the idea of chip your differentiators first, like show me this thing working. Let's say a project management tool and you wanna do whatever, HR tool. Show me why are you better than like Workday or Bamboo or Humans or whatever, right? Like, give me something that says that this is actually worth building and it's actually new to market as opposed to new to your company. And then if you can show that, then I think you actually have to show the full set of resources out of it. Now, this is where the advice would differ depending on the stage of the company. If Intercom launches a surveys tool, which we did in March, we can't be limping in with an MVP that doesn't work. It would actually be brand damaging. It needs to have all of the traits of Intercom, which means in context, AI, ML, reporting, mobile plus web, blah, blah.

• 20:34Des Traynor?

  There's like some default assumptions we want our customers to make when they see the Intercom logo. And we need to meet all of that, which means you have to fully resource it. Whereas like a wide combinator startup would just eke away one feature at a time. We'd do brand damage if we asked one of our largest customers, let's say Atlassian or whatever. Hey, we have a new surveys product, why don't you give it a try? And they try it and it doesn't work or it only has one feature. They're like, mother of God, what are we paying you for? So you have to kinda make sure that that your release matches the sort of brand posture that you wanna have with your customers.

• 21:00Harry Stebbings?

  I wanna touch on that. You mentioned obviously the new product that you released there. I think we learn from our mistakes often. When you think about the new products that you've released, what are some of the biggest mistakes you've made when releasing or contemplating releasing new products? And how did that impact your mindset?

• 21:14Des Traynor?

  I think one area that's most difficult to think about is what is a product versus what is just a paid upgrade to your existing platform? And under what grounds should you say this is a new product? Or this is just an extra tab that you pay an extra few dollars to unlock? And I think in general, there are loads of arguments as to when you should do one versus the other. Usually it's around, does it have a distinct buyer that for whom the other product wouldn't appeal? And if so, do you have a cross-sell, up-sell plan? How do you make sure that these people hear about each other and buy it such that it doesn't end up just being an entirely separate line of business? We've made mistakes here. We've definitely made mistakes here. We've confused products with features and features with products. And we've had to unroll that and fix that back again.

• 21:48Harry Stebbings?

  How do you know whether it's a feature or a product? I often have this with founders where I sound like the douche VC when I say, I think it's a feature, not a product.

• 21:55Des Traynor?

  So I totally agree. And I think if you're looking at it from the venture capitalist's point of view, or even maybe like from the CEO's point of view, you might be tempted to think everything's a product because you're actually thinking about its impact on potential time expansion and you're thinking about revenue and all that. I think you have to look at it from the customer's point of view and say, for the vast majority of our customers who use our current product, would they expect this to be part of a connected workflow within the platform? Or do they think that this is somewhat exogenous to what they're currently doing here? And then there's other nuanced pieces like how are they currently solving the problem that this feature slash product solves? And if the answer is they're doing it in Excel or whatever, then yeah, you could probably argue you pull it in as a feature. If they actually have another platform where they like track holidays or whatever the hell it is, right? Whatever the feature might do. If they have a whole other solution already, that's usually a sign that they were willing to buy two different products in this space.

• 22:40Des Traynor?

  So you actually could justifiably claim that this is an entirely separate product, possibly with separate buyers and all that. But I think you have to look at it not from a balance sheet or not even from a technical perspective or even a product purist perspective, but just what do your customers expect and how are they currently solving the problem? And specifically your target customers, because your free customers will expect everything to be for free, attached to everything. And you'll just end up with this amorphous blob of a product.

• 23:02Harry Stebbings?

  We're going to get on to messaging, but in terms of like, so we mentioned that as a release, not all products work, as we mentioned some mistakes there. The hardest thing is how to know when to kill a product. And sometimes you have to. How do you know when to kill a product or feature? You need enough data, but you don't want to leave it out too long. How do you make that decision?

• 23:19Des Traynor?

  I think trajectory is defining traits. So over time, does this product propel itself? Is it growing or dying by default? And you might do a lot of customer marketing where you give effectively like incubation in a sense, right? You're putting on a life support by reminding your customers every month, don't forget about this thing over here. And they all try it once and then it fades away again. If it doesn't have its own momentum as a feature or a product, and if you find yourself just constantly trying to push and nudge and you can't get customers to stick to it, that's generally. Assigned that as a feature product, it's not working. Now, you could rebuild it, you could do a lot of customer research and you could find out what's going right or wrong. But the main point is you have to actually get to the bottom of what's broken. And oftentimes, it's you had an assumption about how the market worked or how your customers thought, and you were wrong.

• 24:00Des Traynor?

  And that's okay. Your job is to be right and wrong. And then when you're wrong, question is what you do about it. And the answer is you end of life, which means you stop taking on new customers. You tell all the current customers, hey, I know you depend on this thing. It's going to fade away over 12 months. Here's our suggested migration path off to some other way to get it done, if indeed they care. And you just chalk it up and just make sure you go back and delete that code and fully rip it out of everything because you don't want these sort of zombie features hanging around.

• 24:21Harry Stebbings?

  I think a lot of times, actually, sometimes the products are good, but they're messaged and communicated in the wrong way. And I actually think the state of product marketing today is so shit. I always say to founders in pools, you have a billboard on Times Square, less than 10 words, so few can do it at all. I hadn't thought about it. I'm not sure. It's dismal. My question to you is, I spoke to Matt at Iconic, one, how do you think about the state of product marketing today? And Matt told me how amazing you are at it. So what does great product marketing mean to you?

• 24:50Des Traynor?

  That's very kind of Matt. I wouldn't really describe myself that way. One of the reasons we think it's bad is we don't take enough of both a user centric and a buyer centric point of view of product marketing. Oftentimes, we confuse something like AirPods marketing, which is glorious. But what we mean by glorious is, one, the buyer equals the user. There's no buying committee. There's no proof points that they need. And no one's shopping based on data or competitive feature set. It's an entirely brand play. So it's very different to say Asana launching a new way to do Gantt charts or something like that. You have to think about it from a point of view, not all products can go to market the same way. Tesla can market a car differently than Salesforce can market a chat client or whatever. So that's one problem, which is we always forget that. And then specifically startup marketing, startup product marketing. Generally, it is always defaulted to, here's a big screenshot and here's a one liner.

• 25:33Des Traynor?

  And I think that's totally fine in a world where the screenshot is really self evident of what is going on. So if I posted a screenshot of like, say Riverside FM that we're chatting on right now, I think it'd be pretty obvious what's happening, as in the product is self evident, right? That's not the case for like a load of like B two B SaaS, where it's just a load of like text input boxes and a graph. And you're like, what is this? It could be anything from payroll software to amplitude or whatever, like anything in between. So I think. You have to bear in mind, a lot of people think their product sells itself, therefore, let's just put a big dopey screenshot up here and say like, data reinvented or something like that. No one has a clue what the hell is happening. I think that is the kind of like state of art at the bottom of the market. So I think the challenge for product marketing is, one, you have to work out what your users and buyers want to know.

• 26:16Des Traynor?

  And they're not always the same thing. And then two, what is the best way that you can show why you're best at it?

• 26:22Harry Stebbings?

  So if the buyers and users aren't the same, do we try and hit them both with the same one? Go back to that billboard, go back to that landing page. Do we hit them both with it? Do we say, fuck it, we're not going to go for the buyer, we're just going to go for the user? How do you think about that?

• 26:34Des Traynor?

  The challenge there is really like, what is the typical adoption path for a product? If we take Intercom, we've been trying to avoid it so far, but like, we have a beautiful inbox. We released it like a couple of weeks ago. It's next generation, fanciest piece of, I would say, customer help support, customer support inbox product on the market. But the person who's buying Intercom and adopting Intercom, they're not actually the frontline user of the product. They're like the VP of support in a two thousand person company. They actually don't even see the inbox half the time. They might see the reports that come out of it, but honestly, even in those cases, they're probably looking at that in Snowflake or something. So they're really not that in the loop. All they care about is what can you do for me? And what's slightly upmarket, like where, when the buyer doesn't equal the user, the buyer's questions are basically, this is going to sound quite reductive and it kind of is, but, I have two numbers to worry about, Harry. Are you going to make me money or save me money? And if so, how and why should I believe you?

• 27:17Des Traynor?

  And that's what the buyer wants to know, because they're just trying to like run their own P and L and get promoted wherever. The user has a different set of concerns, which is, I'm trying to do my job and get promoted. And I need to believe that your product's going to make me more effective, more performative. I'm going to enjoy using it more. Do you work on mobile? Do you do this? How can you support me in my life is basically the questions. Now, as to which goes first, you absolutely have to do both. If you're billboard in Times Square, the actual answer would be, who's more likely to be standing in Times Square looking at that billboard? Your buyers or your users? If it's your users, go with that and go for like the bottoms up adoption, like the product led growth adoption sort of model, where like everyone's like, oh, I wish we could use Intercom, which works well for us. Like, oh, I wish I could use that new inbox. It looks so nice, blah, blah. And then you hope that enough of that groundswell pressure pops into a VP of customer support thing.

• 28:00Des Traynor?

  I've been hearing a lot from my team about your product and they'll hit you with the real questions, which are, what are your proof points? Where are your enterprise case studies? All that sort of stuff. That's how that plays out, basically.

• 28:07Harry Stebbings?

  Do you know what I find really challenging today is quite often I meet companies where actually their customer base is very horizontal. And what I mean by that is Asana, Notion, applicable for dentists and applicable for SaaS startups. And from a product messaging standpoint, it's such different messaging. How do you think about effective product marketing and messaging when approaching a horizontal customer base like that? Cause you have the same, I guess.

• 28:29Des Traynor?

  We have a version of it. I think Notion and Asana probably go broader again and that people use them to plan weddings and shit like that. Like, but I think.

• 28:36Harry Stebbings?

  And shit like that. I love it.

• 28:38Des Traynor?

  The standard answer you're gonna hear to this is gonna be some, oh, well, if you consider it a verticalized marketing play. What that would look like is you pick your top 10 industries and you nail the marketing for that specifically. So you say like, Notion is for dentists or Notion is for software companies. Generally speaking, what you're looking for, industry times workflow. Who do you do it for and what do you do? In the case of Notion, Notion can be like an internet, it can be an externally hosted website, it can model workflows. It can be a project management or project planning tool. And it can be like a to do list and it can be a personal knowledge storage type tool as well. So you have those, like, say, 10 different ways you can use Notion. And then you have, who are the people who use Notion? In that world, you've got startups, you've got whatever, like personal productivity gurus, you've got dentists, whatever else you have. And then you're basically looking for like, what are the most compelling sizable use cases that we can actually play out here?

• 29:22Des Traynor?

  And how do we market them really, really well? The mother of this entire space for me was, oh, what was that tool that last year you bought? The one with the cards you can drag and drop around the place.

• 29:30Harry Stebbings?

  Oh, Trello.

• 29:30Des Traynor?

  Trello, yeah. Trello was the extreme end of this. Trello's goal was really to create a horizontalized productivity tool. And they really were trying to avoid getting stuck into any particular hole. Cause they were like, we want people to use this for shopping lists, weddings, house renovations, planning software products and all that. But inevitably, the problem with most of those use cases is, once you start to follow the money, you end up back in B two B SaaS land. Right? Like, or at least B two B land anyway, right? There's not a lot of money selling software to wedding planners. There's a lot of money selling software to IBM. So generally, the money still tends to bring you home. And as a result, you end up saying, we do our best work for other businesses and we solve business problems. And here's the top three businesses we work in and here's the top three use cases we solve. And then as you move further up market again, you'll end up playing with the foresters and gardeners of the world who are gonna say, hey, we're doing the productivity wave for 2023.

• 30:15Des Traynor?

  And what category would you like to be in? So before you know it, all of your desperate attempts to horizontalize yourself, when it comes to marketing, you still need to pick a lane and say, here's what we are. Even if you're just saying it for one person, you still need to say it. Like, you can't be everything to everyone because no one will buy you. So whenever you're put in a moment, you're still going to instantiate yourself in a specific vertical times use case.

• 30:32Harry Stebbings?

  I'm so pleased you said there about bluntly the move up market because I wanted to talk about this because I see so often making mistakes to founders that I work with today. And it's like fundamentally first, how do you advise founders on when is the right time to start thinking about moving up market? What are the signs that they should do it?

• 30:47Des Traynor?

  I think if this one kind of varies a bit, but generally speaking, you have to look at like the your successful customer growth and what's happening with your best customers. And that's the two variables you need to see. So if you think you just have loads of run room horizontally in the market, so you can just keep getting more and more customers like the ones you already have. And I mean exactly like them. And you don't have to change your product to do that, then I think you shouldn't move up market. You should just carry that growth out. Generally speaking, in all software, we all want the smallest possible product we could possibly have. Doesn't work out that way. Like you're talking to somebody with like three different products across like three different use cases. Generally speaking, if we could have our way, we'd all have just a piece of software that's just one line of code and it has like no bugs and never needs anything and it needs one engineer to maintain it, right?

• 31:29Des Traynor?

  That's like the dream state. And the only reason you add the second and third line of code is to get more customers. So if you can avoid having to have a massive product footprint, then you should. But generally speaking, you want growth. If, for example, you find that like, hey, without doing anything, we're kind of taking our hands off the wheel, we're still seeing like three digit percentage growth across for like loads of different people, all for the same sort of use case. And they're not coming up with really bizarre different feature requests, then stay where you are. Absolutely stay where you are. Now, the actual decision point is if one of these two things is true, we can't keep growing horizontally because they're asking us for specific features. The hotel customers all want a hotel booking feature. Then we have to weigh up that work versus that market expansion against what would happen if we solved the needs of our largest customers and the ones that are out of reach from them.

• 32:14Des Traynor?

  And weigh up the value of doing that work, which is possibly not as much work because it might just be like adding roles and permissions and stuff like that onto your current platform. Then you're looking at the ROI of two efforts and saying, Which is easier and also which keeps our business as simple as possible. And simplicity is really underrated in business in like in loads of ways. Honestly, I could rant a bit for hours, but like, let's say your brand architecture just gets messier. If you had to launch 20 VC but also for soccer teams, it'd just be weird because everyone would be like, what's Harry about, right? It's easier to say you're going to do 20 VC and you're going to do a different one for investors and a different one for founders. That's that's clean. That makes sense. That's on brand for you, you know? So similarly, like you have to think about what does our, what can our brand architecture support? And oftentimes that might just be a move up market. The other variables you have to look at is what's happening to our best customers.

• 32:58Des Traynor?

  One thing that happens to a lot of software companies that sell to software companies is that their best companies outgrow them really quickly. Because software companies all grow really fast. And that means you're going to see somebody just whistle through your target segment and come out to your side. And you'll be like, you'll be there going, wow, they used to be a customer of ours. I bet you they would have paid us millions if we still kind of kept them. And you were like four roles and permissions and a sales force integration away from keeping them happy. So you have to kind of do all of this calculus against each other.

• 33:23Harry Stebbings?

  I'm so pleased you said about the importance of simplicity there because feature creep on the product side is just the most dangerous thing, but also very common to see. How do you retain simplicity with scale and with growth of customer adoption as you think today as a product leader?

• 33:38Des Traynor?

  I mean, like the short answer is you don't, in my opinion. What you do is you fight as hard as possible, but you're going to lose the fight. You're going to end up doing something because like, you know, we have like, you know, hundreds of people working in Intercom. They're not all removing features, you know? So like the product is going to get more complicated. And and I think one mistake that folks make is because like oftentimes product decisions are made entirely within the product org or the ORND org, if you're someone client, they kind of forget about the ramifications everywhere else. As an example, every complex new feature we build has to get marketed by a marketer and has to get sold by a salesperson and supported by a support person. So you have to think about the total cost of ownership of that feature, not just how hard was it to build? Generally speaking, you're trying to find the highest leverage work, which usually involves looking for how little can we do and how much can we get from it?

• 34:23Des Traynor?

  That's the forcing function of simplicity. And then for any given thing, some will say, oh, if you just add like, you know, a classic one for Intercom lore would be, if you only added these four more reports, you'd also be a great analytics company, to which we've all. Always said, yes, that is possibly true. I don't fully believe it's true. But if we did do that, then we'd also have a different problem. We'd also be a fucking analytics company, right? Like, you know, and that has a whole other problem, which is like now we have a different brand. Now we have a different whole like go to market message. Now we have like, we have different needs for different types of like engineers, different big data storage challenges and all that sort of stuff. So just thinking and like our sales reps would need to know how to speak analytics and speak customer communications on the fly and adapt and all that.

• 35:02Des Traynor?

  Like it's so the downstream ramifications of such an easy incremental piece of work are really, really easy to underestimate. And like, so I just generally speaking, I think like if there's ever an opportunity for simplicity that isn't like massively harmful to the growth of the business, I would always try to take it.

• 35:17Harry Stebbings?

  Do you agree with the notion, just raise prices? Mark Andreessen's often said on a billboard, raise prices. Do you agree with that? Darmesh Shah from HubSpot on the show the other day, he said, no, it's goodwill to actually underprice your product in a lot of cases.

• 35:30Des Traynor?

  I think Mark Andreessen's point is just unnecessarily blunt. And I think Darmesh's point is more pointy, like it's the substance in it. You're always trying to capitalize on the value you deliver for customers. You don't want to like squeeze every last drop out of it for sure. And that's Darmesh's point. At the same time, I think there's a danger of like, if you end up doing a lot of a hard adopter of intercom, let's say somebody uses this for everything. We are their onboarding guide, their customer support, we're like how they write sales leads to the reps to close deals. We're how they do in-app feature adoption, we're how they launch things, we're, you know, and like we're also their knowledge base and we're like sending SMSs and WhatsApps for them as well, right? If you want to sustain a product that's that large a footprint, it needs to be paying you back in a way such that you can reinvest and maintain the health of the product.

• 36:15Des Traynor?

  Otherwise you do end up in a world where like you basically can't afford to work on your product in a sense, right? So you have to like, I kind of like, you know, an HubSpot or no stranger to a price increase either. But I do think like the idea of like just raise prices is silly. I think align price to value is the thing you have to do. And just make sure that you're like building the thing that you sell people on and that when you sell them on it, that they're actually getting the value you're charging them for.

• 36:36Harry Stebbings?

  When we think about kind of the raising prices, moving into enterprise, a lot changes in the team structure and the resource allocation that's needed. In terms of the product, what changes with the product when you need to move up market?

• 36:47Des Traynor?

  There's a few big buckets that are just immovable. I'll kind of walk through them a little bit. One is just adaptability, like so making sure to update, like our large enterprises don't just pick up products like randomly. They have like, oh, like they have an MSA, they need to sign a procurement team that assesses you. You need to like SOC two, type two, possibly HIPAA, possibly ISO nine thousand compliant. You need to be able to do a, a, a security review and all that sort of stuff. So there's a whole piece around just adaptability. And there's other stuff like skin processing. So like, so people, they might mandate that you have to be able to sign into the product through to Google, through G Suite, as opposed to creating your own logins and just loads of stuff like that, right? So that's all one big bucket called adaptability. Startups don't give a shit about any of that, but big companies absolutely mandate it. The other one is scalability, and I won't say much on it, just sort of like you need to be able to meet their usage requirements.

• 37:31Des Traynor?

  So if they want to send a million mails a minute, you need to be able to do that. And third one is justifiability. You need to surface the data that proves that your product is delivering the value that they're paying for. So this is often, and there's, there's tiers to this, there's like, generate your own reports, let them generate custom reports. All the way up to let them dump all of your data into their data warehouse or data lakehouse, or whatever they want to call it, like a snowflake or whatever. And get all the stuff over there so that when they're reporting out on, on what value they got, they can do it for you. But that's all justifiability. And then the last one I talk about is interoperability. So you actually have to be a good citizen of their tech stack. So you can't just be like, Intercom's here, delete everything else. They probably have fifteen other tools that they use in conjunction with you to talk to their customers or to manage customer conversations or just the health of their customer base.

• 38:14Des Traynor?

  And you need to like have a really good interoperability posture, meaning that you should be hydrating all the other data sources that would benefit from knowing what Intercom knows. And similarly, you should be sucking in data from them as well to make sure that Intercom is the best Intercom it can be. And in doing so, you become like what they call it, an improvement to their tech stack. So in general, we would say a support stack is better when Intercom is plugged into it. Everything gets better, not just Intercom, but interoperability, like there's a whole world of like APIs and mid where you have to consider as to how people do it. So they're kind of like the big four, I think, that change. And like none of them, just to note for your listeners. Didn't describe a single user facing feature that you're going to do any product marketing for, right? Like, you're never going to have a sexy screenshot of the Salesforce integration or the new API calls. It's always like this behind the scenes stuff that when people say, are you enterprise ready?

• 38:58Des Traynor?

  What they actually mean is all of that stuff and people forget to market it. People forget to like showcase that in the right places because it's not visible. It's not something you can like do a great webinar on or whatever.

• 39:08Harry Stebbings?

  I think adaptability is one of the most exciting places to be investing today. I invested in WorkOS, which obviously

• 39:14Des Traynor?

  Me too.

• 39:15Harry Stebbings?

  Perfect example, uh, Secure Frame, which is obviously SOC two. I think it's such a good space to be investing. It was Aphelia who said SaaS, PLG, and it's all kind of saturated right now, honestly. Her question was, why are you excited?

• 39:28Des Traynor?

  That is a good question. The areas that get me excited is like, I think taking SaaS to industries that don't see much of it is still exciting.

• 39:34Harry Stebbings?

  Do you not worry about the long sale? Sorry, I didn't mean to interrupt, but I'm with you. And then I see the sales cycles for mining companies and the customer education process.

• 39:43Des Traynor?

  Yeah.

• 39:43Harry Stebbings?

  Leadership.

• 39:44Des Traynor?

  That's a problem and it causes possibly a bit of boredom for me and you because it's not as responsive as like launching on Product Hunt or whatever. I just think you need to bake that into, you know, price that into your sort of considerations. I've invested in a B two B SaaS company for managing building construction projects, right? It's going great, but definitely the long sales cycles and the like random adoption patterns and all that are like very weird to me. But the business is a monster. I think it's cool to see how SaaS will ultimately transform these things. Definitely way slower than like, hey, everyone's using, using this like new note taking app or whatever, where we all adopt it in three days. And we're all done talking about it in like four podcasts or whatever. You know, it's different to that, like it'll take five years.

• 40:23Des Traynor?

  In your example, like the car hire company or whatever, like it will take five full years for that company to realize the value of the software it built in year one, which is just very foreign to us because we just think launch the thing already, you know?

• 40:34Harry Stebbings?

  Are there any like decks that come across where you're like, oh, no. Like I get this and it's so easy to do. To a recruitment, I'm like, if I get another recruitment marketplace.

• 40:43Des Traynor?

  Yeah, there's a few, I think, uh, the ones that I get most bored by, anything that smacks of all your data in one place. I just really don't care about, and especially if it's consumer, like no one actually has that problem, just engineers really. Oh, you could connect all these things into one place. This is like the age old joke about like standards. Like we love standards so much. That's why we keep inventing new ones. I think fundamentally the product space, whenever anyone's saying we're going to centralize everything, just sounds to me like you're going to create yet another place for things to live. It doesn't sound like you're going to solve the problem in any meaningful way. So that's one kind of meta pattern I see. I think another one where I just really get bored is like products that are actually just Google Docs.

• 41:20Des Traynor?

  And by that, I mean performance reviews as a product. And when you actually look at it, it's basically like, actually, in my last company, I had this really sweet template for doing a performance review. I asked what were your top three ambitions, your top three hopes. I asked for feedback, blah, blah, blah. And now I've turned all that into a B two B SaaS app. Where you have different text inputs for all of this. And I'm there going like, what is the actual benefit of the structure that you're imposing on the content? Who benefits? Why does anyone care? And then also, if you're right, this is like copyable in like four weeks. Turning spreadsheets into SaaS apps has been a good idea forever. Turning glorified Google Docs into SaaS apps, I think has never been a good idea.

• 41:55Harry Stebbings?

  I love that phrasing. It's also a bit direct, to be honest, Des. And when I spoke to Aphelia, when I spoke to Kieran, when I spoke to Matt, they all kind of told me about your allergy to BS. How do you communicate that and that blunt directness in a kind of graceful way?

• 42:12Des Traynor?

  An area I struggle with is in general is like radical candor. I think I don't say firmly enough like what I actually think. But whenever I'm trying to correct someone's thinking, or at least get them onto my side, I try to like, in the case of one of those startup products, I wouldn't just be like, this is bullshit. Get it out of my face. I'd be like, I'd basically say like, hey, the most successful startups I see, generally speaking, have many of the following characteristics. And when I look at your idea here, what I'm not seeing is any sort of moat, or I'm not seeing anything that's unique, or I'm not, you know. I'll try to get them on board with the sort of principles of my thinking and then explain why this investment would like violate my thinking. And my goal is always that either they walk away saying you're full of shit, Des, which is totally fine. That's a great outcome.

• 42:53Des Traynor?

  Cause like they stood up to me and they said, I'm going to walk away and do my own thing. Or they agree to me because I convinced them. And that's a good outcome too. And then they can correct their idea. I don't mind either of those two. Anything in between is like not good. And so I'll try to force it to one of those two outcomes, I guess.

• 43:07Harry Stebbings?

  Des, what was your biggest investing miss? And did it alter how you think today?

• 43:12Des Traynor?

  I probably am more known for writing too many checks, so I'm probably more known for too many bad checks. There's a few I couldn't get it together to do on time or did too late or whatever. So polywork is one where I still think there's an interesting future ahead of them. I basically just couldn't get the paperwork together, like just one of the downsides of being an operator genuinely, like as in someone who has a job when you're trying to invest, is you're just getting hit with like docu-signs left, right and centre, or like due diligence things. Or like oftentimes it'll be like, hey, we have to form this other company, which is a special purpose vehicle to make this investment and you just sign these seven things. And all, so that sort of stuff is what, where I'm likely to scupper because in general, I'm, I'm probably more likely to have a go than not.

• 43:51Des Traynor?

  There's a few I think will turn out to be a miss. There's a, there's a startup developer tool called Rhodey that I should have invested in when I was given the first chance. And I think that will work out. Incident.io would be another one. There's been ones where because I invested in one area, in one product, I couldn't invest in another. The other one has been the right investment, if you know what I mean. So there's ones I've called wrong that way. Anything else I'd forgive myself because I didn't have the money at the time, like there was a chance to invest in SpaceX, but like I didn't have a hundred grand and that was the smallest check. And I am just like, okay, I probably should have borrowed that money. I didn't have it, c'est la vie, you know? Honestly, I expect to be back here in like five years' time saying, Dez, you've lost famously over a million dollars in startup investing. What one did you get right?

• 44:30Harry Stebbings?

  Okay, I'm just too interested. On the startup checks there, the thing I always advise new angels, consistency of check size. You do not pretend like you know more about one company than you do another. Know your check size and stick to it. Did you do that? Do you have consistency?

• 44:44Des Traynor?

  Kind of. The only thing I do is if I really believe, my check sizes might be like somewhere in like the 25K region, unless I absolutely love the product, love the space and I've just been blown away. In which case I'll push for more and I'll take what I can get. But like honestly, the nature of an investor like me is like, people see me as a jigsaw piece when it comes to check sizing. They're like, hey, we have a gap of blah that can go to Dez or whatever. And I'm never like, I know what it's like on the other side. So I'm never going to be the guy constantly bullying my way in going, no, give me 300 grand or whatever. But so I'd say I have two sizes basically, normal and I really think this is a monster. And I'd say I've only done like five of the latter category.

• 45:18Harry Stebbings?

  Are you price sensitive?

• 45:19Des Traynor?

  I am generally not price sensitive with the exception of bananas rounds. And a bananas round will be like a seed above fifty million or somebody who's going above a hundred X R or I like A or B when they have massive questions to figure out. And I've seen a few, I really have, like I saw a couple of companies I invested in, like if Intercom did rounds at multiples like they did or will do them. We would have been a multi, multi billion dollar company when we were like at seven million in the air or something like that, right? I'm so sitting there scratching my head going like either the whole world, and by the way, it turns out the whole world was wrong, basically, you know what I mean? Like as in the all this is falling apart and now everyone's licking their wounds. But yeah, I've been like struggling to work out some of what's happening in the market.

• 45:59Harry Stebbings?

  Do you do follow-ons? How do you think about reserves? It was interesting, I I interviewed Dom Ashar and he said, I don't ever do a founder meeting, I never do DD, I never do follow-ons, my three rules.

• 46:10Des Traynor?

  Yeah, I follow closely. I I try to avoid meetings unless someone tells me like, no, no, the dude will really sell you on the idea or whatever. So I try not to do those. I definitely don't do due diligence at all, but at the same time, I always caveat my check and say like, I'm only doing this if there's a lead investor who is actually going to do due diligence, if you know what I mean? Don't consider this a commitment until you tell me that somebody is actually going to do the homework here, prove to me the company exists type thing.

• 46:34Harry Stebbings?

  Do you mind that as a founder? Cause a lot of founders would go to you, like if you're a VC respectfully, and I mean this frankly, they'd be like, oh, what a lack of independent mind. It's the classic, oh, who else is in the round?

• 46:45Des Traynor?

  I understand that. And if somebody wanted to have an argument, what I would just basically say is, look dude, I get like twenty minutes to spend max to make this decision. So I'm going to outsource anything I can, what knowing whether or not your company has been incorporated correctly, whether there is a cap table, whether there's some random on the cap table who owns eighty percent of it because they fucking did a series A in your last company. Whether the bank balance is real, whether the revenue is real, whether it's consulting revenue versus recurring revenue. I can't find all that shit out for the sake of ten grand or twenty grand or whatever the check might be, right? Like, I just can't, there's no fucking way. So the only option I have is to outsource that to somebody else. And the only people I can really trust are going to be somebody who does this sort of thing for a living. So like if Harry says he's in, I'll believe it. If Indexator in, I'll believe it. If Joseph, who owns a large hotel chain in the middle of London, says he's in, I'm not going to believe it.

• 47:30Des Traynor?

  I take the ding on the independent mindedness, but I just try to articulate the thinking behind it, if you know what I mean.

• 47:34Harry Stebbings?

  I do want to discuss one final element. You mentioned before having a newborn and it's your second. Children are such an impactful part of one's life. And you said before about the intersection of parenting and leadership. What did you mean by this intersection and how do they come together?

• 47:48Des Traynor?

  I think there's a lot of things that you have to be good at for both. That's the first thing I'd say. What you realise with a kid, you have to like be their, how would you say their their willpower, you have to be their discipline. Unlike yourself, like, let's say you're trying to obey a diet yourself. You have a very closed loop feedback mechanism there. Overeat, gain weight, eat less, lose weight, whatever. Exercise, feel good, don't exercise, feel bad. Whereas when you're trying to like discipline a kid, you're trying to say eat healthy, but it doesn't actually affect you, what or not you do it. And in fact, the feedback mechanism, you'll find out over five years, not in the next like five days, right? Cause it's not your body. So it requires you to have a lot of like care and empathy and compassion for something that isn't directly felt like physically by you.

• 48:29Des Traynor?

  And you're trying to make that happen over like many years as opposed to like many days or like any sort of better feedback thing. And if you're trying to lead a group of people in a business, there's a lot of similarity there in that you're trying to get everyone on the same page and get them support and have them understand the principles by which you're trying to push towards certain things. You're hoping that they're aligned and you're hoping that like that alignment won't disappear once you leave the room or whatever. And you're hoping that the payoff over many years will make them realise that actually, hey, that was actually he or she was looking out for me at the time. So that's that's one whole category, which is just understanding like how to communicate your best intent for them, for people without micromanaging. Because you can't be there every second of your kid's life, because you're not going to, once they walk out the door, they can do whatever they want, you know?

• 49:09Des Traynor?

  So like, there's a lot of that. The other area where I reflect on a lot is, it's a great blog post. I can't remember who wrote it, but somebody will augment, I'm sure. It's called being demanding and supportive. You have to be both of a child or of like people who you work with. And I really do mean work with, like you have to have this stance towards your peers as well. You have to like ask so much of them to make them realise their true potential. And that's the demanding side, but then you also have to be willing to support them should they ever struggle or ever bump into any barriers or whatever. And like, so you have to basically say like, I think you can actually change the world. I think you're one of the best principal engineers I've ever seen. And I actually think you represent the products you build represent the future of this company. I need you to go and do this really, really hard technical thing for me. And then off they go and do it.

• 49:50Des Traynor?

  But if they fail, you need to step in and say, to be honest, that was beyond any of us. It was a ridiculous effort, but you made a phenomenal effort at it. And I'm here to cover for you. Don't think that this has been a bad outcome.

• 49:59Harry Stebbings?

  What if it wasn't beyond any of us? What if you should have been able to do it? I've been let down by people by hires. I've thought more of them. I think I I I'm I'm I'm doing this arrogantly. I'm not smart, but I will fucking kill myself to get stuff done. And I don't always find that with people and then I feel let down and it's not okay actually and I'm upset.

• 50:17Des Traynor?

  Yeah, I think that's the other side of performance management. And I think in those cases, like, you know, when I engage in demanding but supportive mode, it's much more like pushing people to be the very best. It's rare you've tried out with somebody who you have doubts about because you're actually you're trying to push them to perform to begin with. And I think in those cases, you have to move to a slightly more structured type of conversation, which is like, I mean, structured and not in the sense of like a pip or anything. But I mean, when you're asking something to do something that you think they should be able to do, but you have suspicion that they might not. I think you need to outline, here's what I think needs to be done. Here's the sort of timeframe I think it needs to be done at. Here's the level of quality I think it needs to be done at. And here's the expectation, like, I think this is really likely that we'll get this done. Do you agree? And they say yes or no. And if they say no, then you're just on a different page about their capability in a sense.

• 51:01Des Traynor?

  Or like, or what's reasonable. So then you shouldn't be working with them. But if they say yes, then the only other question is like, if any of that changes, let me know because this is a really important piece of work. If you have suspicion that the timeline is wrong, that the complexity is greater than we taught, that the quality bar is lower. You need to like, let me know because we need to correct discourse quickly because you're working on something really important here.

• 51:21Harry Stebbings?

  Final one for a quick fire, I promise. I've made many hiring mistakes in my time. What have been the biggest hiring mistakes you've made?

• 51:27Des Traynor?

  Earlier in my career, just being blinded by the logo, I think was probably the biggest thing, like such and such a person worked at such and such a company. In your head, as a naive, younger founder, it's hard to not to like autocomplete to therefore. What happened to that company is going to happen to us because we just got their head of recruiting or their head of people or their head of marketing or their head of sales. And I had to say hello there because I didn't want to imply it was any particular role. But that's probably the single biggest thing is like, assuming that because somebody worked there, they were responsible for anything. And I think even the greatest companies on earth, and I really do mean this, have a few people who aren't high on the causation index. If you know what I mean, like, they happened to be in a great company during a period of greatness. They didn't have their hand on the wheel. They weren't responsible for causing a lot of it.

• 52:12Des Traynor?

  However, their LinkedIn looks fire. You know what I mean? Like, they look like an absolute superstar and it's only really when you ask them to repeat the magic that you realise they were actually the magician's assistant.

• 52:23Harry Stebbings?

  So I think one of the biggest bullshit things is only hire A-team players. I don't know if you disagree with me here. I don't think there's enough A-team players. If we're doing true A-team players, A-team players at scale, how many people are in Intercom right now?

• 52:34Des Traynor?

  A thousand.

• 52:35Harry Stebbings?

  A thousand A-team players.

• 52:37Des Traynor?

  Yeah.

• 52:37Harry Stebbings?

  I think the definition of A-team is a little bit skewed. Like, I don't mean that rudely to, I'm not saying to you, but like, that doesn't work. And okay is sometimes good enough in certain roles.

• 52:47Des Traynor?

  I think there's a few different things there. One is like, hire for potential, not for uh like state. When we hire somebody, if we hire like a fresh college graduate today in Intercom, they're not our best engineer. And I think everyone should get that. And by definition, their like current state is not A-team. The question is, are they on a positive trajectory? Can they get there? Or can they get to what some companies call like acceptable like sort of final level? Like so as in, if you join Intercom and it turns out like you end up being like our senior manager of podcasting or something like that, right? The question is like, are we okay with you staying there? Or do we need you to become the director? Do we need you to become a VP? Because the person who holds that position in succession planning needs to be on a very positive, rapid career trajectory. So you have to ask those questions.

• 53:26Des Traynor?

  And then there are some areas where, yeah, like you don't, you actually literally can't have like nine people on a team all thinking they're going to be the manager, because then eight of them are going to quit. So like, you you need to kind of like, so you're always trying to fuse youths, like said, not youths, like early in their career with like mid-stage career or late-stage career. You're trying to fuse like a relative ambition to where they are in their career at the moment, actual capability. We actually have experts who are like, who are superstars, like who are whatever. I don't know what you want to call them, like A plus in your analogy or whatever. And you need all, like, the ingredients of a team is not like just a lot of people all walking around telling each other their best. You actually need a mix and people come to companies to learn. By definition, that means they're not the best. They believe they can get better. So like, I think there's a lot of like nonsense behind like, A's hire A's, B's hire C's, don't only hire A's, blah, blah, blah.

• 54:09Des Traynor?

  I wouldn't go as far maybe as you and say like, you're always going to go out to market looking for like the best person you can get in a position. But there's times when you operate relative best and when you operate global best. The chances of you operating the globe, finding the globally best person is pretty slim. There are times when it's worth the effort, but relative best meaning we're going to bring somebody in who's going to be at the top of the org, who's going to set a new standard for us. This time you probably pull that lever an awful lot more.

• 54:31Harry Stebbings?

  And it's worth the effort when it's ahead of function.

• 54:34Des Traynor?

  Probably unless the function's already like dialed and actually, you know, oftentimes hires are made for good reason to bias towards like previous missteps. So you might, your last leader might have been like very hardcore, like bruiser, tough talker, like harsh person to work for. And you might need to kind of like inject a little bit different DNA to kind of soften the org a little bit deliberately. Because turns out that can result in like toxicity or turnover or whatever. Similarly, the exact inverse is true. Maybe you need some teams to actually get a bit more firm and business focused and less casual. You're looking for the best person for where your business is at, for where that function is at and where that team is at in any given moment. And you understand like it's very rare you're hiring for the rest of your life and their career. You're hiring for like contracts of a season, like of like four or five year stints or whatever is generally the sort of norm.

• 55:18Des Traynor?

  Cause in four or five years, Intercom will be a lot bigger and a lot more complex with a lot of new problems than it is today. And certainly than it was five years ago too.

• 55:24Harry Stebbings?

  Des, I want to move into a quick fart. I could talk to you all day. So I want to move into a quick fart. I say a short statement, you give me your immediate thoughts. Does that sound okay?

• 55:31Des Traynor?

  That's great.

• 55:32Harry Stebbings?

  So what's the favourite book, Des?

• 55:34Des Traynor?

  I think it's probably How Will You Measure Your Life by Clay Christensen. I think cause he takes a lot of business strategy, rules and applies them to your personal life. And it touches on everything from your own growth, your own ambition, your relationship with your parents, your relationship with your children, legacy, defensiveness. Where are you uniquely good in the world? Where should you just be the same as everyone else? He applies a lot of those principles. What should you outsource in your life? What should you do? All that sort of stuff. And it maps really, really well. And it ultimately does actually begin to answer that question of how will you measure your life?

• 56:02Harry Stebbings?

  What's the hardest element of your role with Intercom today?

• 56:05Des Traynor?

  Prioritisation, like finding the most highest leverage activities and then saying no to folks who have like most minus one. Picking the thing that is also really important that we just can't do.

• 56:15Harry Stebbings?

  What piece of advice do you often give but find hard to follow yourself?

• 56:19Des Traynor?

  Either focus or like the idea of work on the most important thing and don't work on anything else. Like I say that to folks a lot. And then when I look at my own calendar and ask myself, am I living that advice? Oftentimes the answer is no.

• 56:29Harry Stebbings?

  What do you know now that you wish you'd known at the start of Intercom?

• 56:32Des Traynor?

  From a business perspective?

• 56:33Harry Stebbings?

  Could be anything, could be personal, could be business.

• 56:36Des Traynor?

  The thing that would have given me most solace at the start would be knowing how it all was going to work out so far. Cause I think like the anxiety and all that, like when you're starting out is so intense of just like, what if this breaks? What if that kills us? What if this happens? Oh, Zendesk just released a feature. Are we, should we pack up and go home? You know, like I tend to like be more on the sort of like, I tend to like that Doctor Strange character. I see all possible outcomes and I see all the ways in which things can go wrong and right. But I put it oftentimes more things can go wrong. So I think that would have given me some solace. But more practically, things I wish I knew, I think probably just, I have a much crisper model of how software exists and works. And like, you know, market size versus product size and like, you know, how all those things interchange. How decisions about like adding a feature is actually a decision about adding a headcount, which actually confuses brand, which affects LTV CAC in the long term.

• 57:20Des Traynor?

  And knowing how that whole system is connected is something I've like substantially more clarity on now than I did when I was running around giving all those talks in 2011, telling everyone how the world works.

• 57:29Harry Stebbings?

  Tell me, what would you most like to change about the world of startups?

• 57:32Des Traynor?

  I think like what I'd love to change is I would love there to be one technology publication that has two traits. One, it's run by people who like technology, like as in they believe it generally can be a cause for good in the world. And two, it is optimistic. It actually like, it believes of all the probable paths, a good one might happen. I think our industry is starved of that right now and it's got a lot of the ones that don't fall into that category.

• 57:56Harry Stebbings?

  Tell me, final one, next five years for you and the plan ahead. If we have this chat in 2027, where do you want to be?

• 58:03Des Traynor?

  Personally, I would love to be with Martha, the parent of an eight year old and a five and not five years and nine month year old or whatever, sitting here in Dublin. And I think if I could change anything, maybe it would be like, I'm sorry, if I, any sort of professional development I'd love to make. I suspect I would still be in intercom. I think maybe my role would change again. I'd probably like maybe vacate my current role and make space for somebody else and find a new area to invest myself.

• 58:27Harry Stebbings?

  If I could take one thing away from your current role, which would make it immeasurably better, what would I take away?

• 58:32Des Traynor?

  The thing would be pressure in a sense. So like the, all of the employee headcount, all of the like the trials and tribulations, whether it's in the industry right now or whatever. It definitely like occupies like a. Reasonable chunk of my mind at any given moment, like I can be in the cinema watching Top Gun, but at least twenty eight percent of my mind is thinking about things that might go wrong in Intercom or might go wrong in the industry and how they might get better again. And I would love to be able to find a way just to dial that down, cut that in half, maybe. I don't mind. I always think about things the same way I think about like, you know, is my daughter safe in school? And blah, blah, blah, and what'll be like tomorrow. But like, I do think at times it takes an outsized percentage out of my brain is just worrying about like stuff like that.

• 59:10Harry Stebbings?

  I think the one thing they never tell you installing your own business is that there's never an end to the day. There is always more you can do and you will never not have that if you are doing it well. And I wish someone had told me that.

• 59:21Des Traynor?

  It's doubly true for folks like us where the software industry really wakes up in like ten minutes time at four P M. Uh, when it's like eight A M. In San Francisco and one of the downsides of trying to operate a global, but like San Francisco biased business from Dublin is that like you get a clean run of the day. And just as all your friends are packing up over in Dublin, ready to go home and go for a pint or whatever. That's when work starts. And I think that's a type of pressure that's just a bit tough at times.

• 59:43Harry Stebbings?

  That's final, final one. What's your biggest insecurity today?

• 59:46Des Traynor?

  I hope Intercom to be like one of max two, but possibly one of one. Hopefully one of one businesses I ever like go to the mat on this hard for this long. And I think the thing I care most about is like, it's not so much me, but it's just making sure that everyone who everyone is taking the journey like that, that they look back on it really fondly and that it works out for everyone. You know, it's a meaningful outcome for everyone. That's the thing I I care most about. And it's the thing I'm also like, I always feel like, oh, you know, we have to fight harder if to do this. We have to do that or whatever. Like it's like, it's back to the twenty eight percent worrying thing. I was just, I'm always paranoid of what can go wrong. And I think that's kind of bakes a type of insecurity into my mind, which is like, it's very easy to convince me that something bad is gonna happen because I'll immediately get on boarded and I'll like

• 1:00:28Des Traynor?

  prophesize the worst version of it. So I think that's if I could click my fingers and take anything out of my personality, I think would be probably to have more just robustness, but randomly as a side note, like uh, getting in shape and getting healthy and doing weights and all that really helped here and now. Like I feel like a strong body, strong mind or whatever, like it definitely made me more like, no, I am strong. Intercom is strong. We can get through this. This is just a blip. It's just one customer. What's the big deal? Whereas like, you know, honestly, like twelve months prior, it would have been something like, oh, my God. Well, what if everyone else here is today quit, you know, like, uh, so I think there's definitely something there for sure.

• 1:00:59Harry Stebbings?

  Dez, listen, I've absolutely loved this. Thank you so much for elongating twenty V C. You know, well beyond twenty V C to eighty V C. Maybe we've got a franchise going here. Honestly, man, this has been such a joy to do.

• 1:01:10Des Traynor?

  Cool. Thanks so much for the chat, Harry. I really enjoyed it.

• 1:01:15Harry Stebbings?

  I just absolutely love that show with Des. I do want to say huge thank you to him. I think Des is one of the great product minds and leaders of our time. As I said at the beginning, one of the great angel investors also, and such an authentic and genuine human. You heard it there with everything from his leadership style to his parenting. So a huge thanks to Des for that today. But before we leave you today.

• 1:01:34Harry Stebbings?

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• 1:02:18Harry Stebbings?

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• 1:03:00Harry Stebbings?

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• 1:03:40Harry Stebbings?

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• 1:03:52Harry Stebbings?

  As always, I so appreciate all your support and I cannot wait to bring you an incredible 20 sales episode this coming Wednesday.