Transcript: Startup Hurdles & Venture Funding Lessons (Appboy, Mark Ghermezian)

 

Laurel:  Welcome to another episode of the Series A podcast, where we sit down with founders who’ve raised, or are in the process of raising money, from venture capital firms.  We want to get to the heart of the lessons they’ve learned, both about fund raising and about operating start up.  Today we’re here with Mark Ghermezian, the founder of Appboy.  Appboy provides marketing automation technology to mobile apps.  What does that mean?  Well, their technology powers brands you know and use on a daily basis including Soundcloud, Epsy and Urban Outfitters, among others.  The company offers a suite of tools for marketers to engage mobile users, to understand their demographics and then target them through in-app messages, push notifications and email.  They help their marketing customers manage over one billion customer profiles.  In total, Appboy manages over 100 billion data points each month, and it’s growing like wild fire.  Now let’s get to the interview with Mark Ghermezian. 

Let’s say you were talking to your grandmother.  How would you explain to her what Appboy does?

Mark:  Yeah.  Well she doesn’t speak English quite well.

Laurel:  OK.  Well let’s assume Grandma know what an app was.

Mark:  Yeah.

Laurel:  She’s like, she’s a marketer but she doesn’t.

Mark:  Well I think the best way, the way to explain that way is imagine you walked into a coffee shop, and the menu would adapt to who you are and the messaging and in terms of how it would be personalized would be like 'Hey Laurel, we really know you like herbal teas.  Today are some special teas that we brought in from India that we know you’d like to try and it’s already heated up and it’ll be ready for you in two minutes.'  [LAUGHTER]  You’d be like 'well that’s awesome.'

Laurel:  That’s fun.

Mark:  Yeah, and I think like, that’s what we do at Appboy, not in that context but in a way of we’re all connected.  We’re mobile people in ourselves now.  Like I think people say it’s a mobile world, that we’re mobile in terms of like we’re all running around.  We have, well you have your watch, you have your Fitbit, you have an iPad, you have your desktop or your laptop, then you have your iPhone, and through all those you could be interacting with the same brand.  And I think for the marketer on the other side of the table, they really need to understand who you are crosses different touch points, and then be able to communicate to you how you desire to be communicated.  And there’s a lot of different ways to be communicated.  Either it’s email, push, in-app messaging, pop up on the desktop, so that’s kind of how we’re taking this idea.  We’re digesting it, humanizing it for the marketer and then allowing them to do really awesome personalized campaigns and marketing to their customers.  So it’s really about building that intimacy between the customer and the brand. 

Laurel:   OK.  So there are tons of mobile marketing startups, but you can focus, but you focus on mobile marketing automation.  Can you talk a little bit about what it means and why it’s such an important idea for companies?

Mark:  Yeah, and I think if you think about mobile, and this goes back to what I just mentioned about how there’s so many touch points, but desktop, you can’t take your desktop with you so it really, it only captures who you are when you’re at home or at the office you turn it on.  But our phones are attached to our hip.  We literally sleep with it, we get up, we run with it, we travel with it.  Wherever we go our phones are with us.  And with that comes a lot of things that are changing.  Time zone differences.  What apps did you open, what apps did you close.  What websites did you visit, language preferences.  Even like iOS, I think we’re up to version 9 of iOS, Android, I’m not sure what device and what version of Android we’re onto now, but those are getting upgraded every six months, or every couple of weeks, and you need software as a marketer that is moving that quick, that speed.  And I think that’s the difference between like marking automation and other marketing companies out there and I call incumbents out there they started building software like ours, but it doesn’t adapt and move as quickly as mobile.  And that’s what it means when they say we move as quick as mobile.  That’s what it means.  It’s like mobiles move so quickly because you can update an app almost every day and you have to update your software and everything’s over air and I think just look at Tesla.  They, they’re updating their cars over the air with software and I think that’s what mobile’s all about.  I mean that’s kind of how we’re thinking about it too.

Laurel:  Kind of blows your mind.

Mark:  Yeah.

Laurel:  Well you didn’t start out as fully fledged as you are now.  You started out with a small singular idea.  So let’s talk about how you first came up with that idea and what that idea was.  And how it morphed.

Mark:  Sure.  So when apps came out to me it was, I saw a void of me as an app user.  How is the app like downloaded and gonna communicate to me and understand who I am because we’re all selling our products or the apps through the app store and not having our own store front for it.  Can’t really control it.  So when I thought of Appboy I thought OK, I have to create a way the users can use the app and also discover more apps and also on the back end, the developers and the brands can really understand who they are.  As we thought of creating a platform that gamifies the system and so it was really about the more you would use the app as a customer you would get badges and awarded and we would send that data to the marketer and say hey, this is Laurel.  She’s read a hundred articles on the New York Times app.  You should award her a free subscription or you should award her as the queen of the New York Times.  And without us even realizing it we were building a CRM platform, a marketing automation platform because we were still creating these individual profiles and all the users but we were using it for the purpose of awarding them with badges, not awarding them, not with communicating with them.  So when went out showed the product to people they were like this is awesome but we don’t the gamification.  We want the profiles and we want the master gene.  And it just goes back to being a startup founder and starting a company.  I think you have this concept, you always have this idea but when you launch you have to keep your ear close to the ground and just adhere to how the market’s reacting and not, never get emotionally tied to your original concept and adapt and I think the ones that adapt come out to be successful and that’s really what we’ve, what I’ve learnt through this process is we had this original concept and we just moved it along as the tide changed.

Laurel:  Right.  And when you, so that was a pivot.  No?

Mark:  A pivot to me is when you change completely so if we were selling apples and we started to sell cars.  The premise of what we do today is still there.  The premise is always been how do I connect the user with the brand or with the developer.  How we do it might be a little different.  We are much more sophisticated today.  But the premise was always there so a lot of what we use today is still the original code and what we have built, what we built it when we first started.

Laurel:  Wow.

Mark:  Yeah.  So obviously it’s an evolution and then a pivot.

Laurel:  I like that.  It’s a pivot on the word pivot.  It’s an evolution.  So your team originally, tell us a little bit about the startup team.  Like where did you come from and how did you.

Mark:  So this was my third startup.  I’m not technical in any way.  I like to think of myself as just being a very creative business minded kind of guy and I got lucky fortunate to meet two of my cofounders who are extremely technical.  John Heiman, my CIO and Bill [Nagazine?], my CTO and when I spoke about the concept of what we’re building and I said listen what’s really awesome on the backing of what we’re building if we can get into the top apps we could be managing billions of users and that’s huge.  That’s a lot of scale.  Cause we can have all this data on all these users and I think that’s kind of what triggered it at the beginning without us really understanding what it would lead to and I got really fortunate with that.  I think that was one of the most important things for me was getting really awesome technical cofounders who then built an amazing technical team based here in New York.  And I think that’s kind of what got us going and we spent two years building out this product and lucky we raised enough money to kind of, till we could figure out the product the market fit.

Laurel:  Wow.  Two years.  So that’s a long time in startup land.

Mark:  Yeah.  I think, cause we were too early yet.  I think when we started thinking about what we were building the ecosystem for apps was not focused on engagement and retention and understand the customer.  It was how do I get apps out.  I don’t really give a crap about who they are.

Laurel:  Who they are.  What they do then.

Mark:  I just want to be the number one in the apps store and I’ll pay anything I can to get there.

Laurel: Right.  And that was what year would say?  Around?

Mark:  That was in 2012 and 2013, I would say.  So we were trying to sell this in 2013 and people would say, no we’re focused on acquisition, user acquisition and we got a few customers which we were fortunate to get, to give us some data and then in 2014 this just started taking off and in this past year it took off like a rocket ship.

Laurel:  So tell me a little bit about advice you were giving the other founder now that you’ve been through that part of the cycle.  You started with no money, and how much money, some money and where did you get the money?  Originally?  What year was that?

Mark:  Yeah.  So we did our first seed round the end of 2011.  It was just me and I met a few folks at [South Bar?] in Austin and I did a million dollar seed and to me I think the biggest thing that I learnt from that was talking a big vision in a big market.  Alright?  So I think a lot of founders or entrepreneurs that want to start a startup, they think that they can just build one feature in a small market and capture one percent of that and build a business that’s attractable to VCs but it’s not.  It needs to be a huge billion, a few billion, tens of billions dollar market and you want to capture one percent of that.  And then that’s big.  And I think that was a big thing for me is just given that story to and getting just one VC to really appreciate it and then getting the deal done.  I think it was really important for me to raise that money and seal it and then go out and look for my two technical cofounders.  The next piece of that was that I raised enough money in my series at which was about a 5.1 million dollar series A which allowed me to really figure out that part of the market fit.  If I would have done even a 3 million dollar series A we would not be here today because we wouldn’t of had enough time to figure out the product the market fit.  So I think the advice to other people is like raise as much as you can.

Laurel:  Especially in times like this.

Mark:  Especially in times today yeah.  I think the bar’s also been raised in terms of the quality of startups and what you need to do to raise money which is good for everybody.  But yeah, I think don’t get greedy and if someone’s giving you a term sheet do your best to get it done.  And obviously it needs to make sense and the others inside of it and everything else that comes with that.  But I’m a big fan of raising money and raising money when people are giving it to you. 

Laurel:  Yeah.  So when you originally raised the million dollar seed though, that’s a lot even for, yeah.

Mark:  I’m a big fan of a big seed.  I think it’s wrong to do and this was before Angel Messing was doing the seed round, do a minimum of a million dollar seed cause it takes time to hire.  It takes time to ramp up employees.  It takes time to build your product and you want to focus on your product.  You don’t want to do 250,000, 250, 250 then all you’re doing is spinning your wheels raising money and then your competition will have gone out and raised that million, or two million dollar seed even though they took a little more dilution they’re way ahead of you on the product and they’re going to become the market leader.  And that’s it.  So that’s why I’m a big fan of raising a larger amount, terms that are fair and move forward.

Laurel:  Yeah.  Was it hard to do or because you already had two startups, it was a little bit easier for you to get that kind of seed?

Mark:  It was still hard.  It was hard and there were many that said no at the beginning but those were the ones that helped me figure out fine tune my pitch.  And figure it out it was still very hard.  I wouldn’t say it was easy.

Laurel:  Yeah.  So the guys who finally did the million dollars that was Blumberg?

Mark:  Yeah.  Blumberg, Capital was a lead of our seed.  Laurel you came in at round two.  And we all sought Accelerator ventures and Bull Pen.  I think those were the ones that were part and Metamorphic Ventures.

Laurel:  How did you first meet Blumberg?

Mark:  I met Blumberg at South Vine.  So they had a good presence there.  I met Metamorphic here.  One of my advisors introduced me to Mark Michelle at Metamorphic and then while I was in South Vine, Blumberg was on the fence and so they introduced me to Alex Lloyd with Accelerator who really grabbed it and understood my vision.  And once he was on board then it was kind of domino effect with everybody else coming on board which is great.

Laurel:  I see.  About how many total did you go to before you got.

Mark:  I probably met, I would say, seven to 10.

Laurel:  Seven to 10. 

Mark:  Yeah.

Laurel:  And how big was your deck?  I didn’t say it like that.

Mark:  No. No. 

[LAUGHTER]

Laurel:  How big was your deck, I said. [LAUGHTER]  Sorry I got to keep it real here.

Mark:  No. No.  It’s good.

Laurel:  Playful.

Mark:  It was about eight to 10 slides.  I think it’s also important is keeping it really clean and to the point and just seed that.  Like they’re not looking for numbers.  They’re looking to see how you thought about it.  It’s like an interview, right?  There’s no right answer to it.  It’s how are you thinking about the answer.  How are you answering it.  And how are you thinking about your company.  How are you thinking about the market.  How are you thinking about your product.  And are your being naïve.  Are you not.  I think that’s what it comes down to.  At the seed level, they’re really not investing in your idea, they’re investing in you.  And can this cofounder, CEO, CTO, CIO, can the cofounders really, if I give them money, can they figure out what this product’s going to be two years from now?  You know.

Laurel:  Did you already have the cofounders signed up on it?

Mark:  No.  So that was a very unique case.

Laurel:  Yeah.  That is very unique.

Mark:  Because a lot of people don’t like to invest until you have that.  But I made it very clear that I’m not deploying this cash or doing anything until I hire my cofounders, my technical cofounders and we get it going.  I did do that.  I stayed true to that.

Laurel:  What were the two companies you did before that?  Did they have any relation or bearing on this company?

Mark:  So prior to this I did an MVNO which is a mobile virtual network operator.  It was called XE Mobiles and that got me into mobile.  But really at a high level it was exactly what Virgin Mobile does and Virgin Mobile buys minutes at a wholesale rate from Sprint and they just rebrand the service Virgin.  We did the same thing with Singular which is now AT&T.  And so I did that for about three and a half years and prior to that I did, you’ll get a kick out of this, it was restroom advertising.  So all the ads on top of urinals, inside women’s restroom on the walls, it was very targeted.

[LAUGHTER]

Laurel:  What happened to that company?

Mark:  So I was lucky enough to sell that company.  It wasn’t like a huge outcome, but it was a great experience where we’re built up into all the New York sports clubs, Boston sports clubs, about 120 sports club here in New York and several theaters, several stadiums.  It was great.  It was really, honestly the only way you were able to target females verses males until mobile, until Facebook really came out, so it was really awesome.

Laurel:  It’s great.  So it was kind of related in the sense that it’s kind of an, you’ve been in advertising and you’ve been in mobile. 

Mark:  Yeah.

[LAUGHTER]

Laurel:  How has the mobile landscape changed since you started your company?  Paint the picture.  Two thousand, eleven, twelve, thirteen.  And then today.

Mark:  Yeah.  Well, it’s changed a lot if you think of how we all interact with our friends today.  It’s all through messaging, less calling, different messaging platforms for different friends.  We all are connected through a watch or a Fitbit.  We have three different devices, our phones, our iPads, our laptops as moveable devices.  Then we have our desktops.  I think it’s the world’s so different, it’s amazing.  And to think, we’re only six or seven years into it too.  That’s what’s crazy to me.

Laurel:  What do you think is gonna happen next?  Do you think virtual reality is gonna play?

Mark:  I think virtual reality is gonna be the biggest.  I think in 2016 the one percent of the market will start adopting the virtual reality.  Twenty seventeen, 2018 is when it hits the mainstream.  I’m a little worried about how it’s gonna impact the next generation of children.  Like they’re already disconnected in terms of how they socialize with their friends through Snapchat and Facebook and this is gonna take a toll on their level.  Like you’re gonna put this on when you get home.  You’re gonna shop with your friends on this, you’re gonna go to concerts with this.  But you’re sitting at home doing this.

Laurel:  Yeah.  That’s freaky.

Mark:  It’s freaky.  And but it’s gonna be amazing in some ways too.

Laurel:  Yeah.  You can experience.  You can go shopping in Bali.  You can buy goods and services.

[CROSSTALK]

Mark:  You can buy courtside seats to a basketball game and probably have a better experience than someone who’s actually there.  I think what is really awesome is like Madison Square Garden are the next where the Rangers can sell millions of tickets to a game, not 16,000.

Laurel:  Oh.  I didn’t think of that.  Wow.  Limitless, the number of seats.  And you can sell the best seats.

Mark:  It’s limitless and like you can go, best seats, a hundred times.

Laurel:  Oh my god.  That’s wild.  That is crazy.

Mark:  It’s gonna be amazing.  Yeah.  And I think it’s like, I don’t know.  I think It’s gonna change, I that and to me drones even though a lot of people bought them for gifts for the holidays, I think it’s, the commercial use is gonna be bigger so for safety and for agricultural and I think for delivery I’m so excited about that stuff.  I think that’s gonna be a game changer where literally you can order things from Amazon and have it here in 15 minutes and you can actually have, you can summon a drone one day to go check on your kid in the park one day.  I think that’s, those are the use cases that I think are going to be incredible for cops.  There’s no reason why a cop should be in danger anymore.  They summon a cop drone to go check on something and pull people over.  There’s, I think it’s going to be a whole different world technically. 

[CROSSTALK]

Laurel:  I’m going to have a pet drone that just watches my stuff if I want to leave it on the street corner. I’ll go stay here and watch this for a second.  [LAUGHTER]  Can you imagine?

Mark:  It’s going to be amazing.

Laurel:  But how will it affect your company?  Do you think?  What’s going to happen in the next five years?

Mark:  So I think for us, because we’re, and this goes back to your question of like how we’re different.  I think every connected device is something that Appboy will monitor on behalf of the brand.  Take that data and humanize it for the brand on behalf of their customers.  So if you, if there is a drone that’s using, that Amazon is using and we know it’s delivering something to you, we will take that data of how long it took to deliver so we can get, so we can then tell you, hey by the way, this will take 15 minutes to deliver but downstairs might have the product.  I don’t know, we can, every, that’s what’s so awesome.  We’re gonna connect into every single connected devise, whether it’s your Apple TV, one day your car, one day your frig, and all this is gonna come into the CRM solution that we’ve created on behalf of those brands.

Laurel:  So if you’ve got Droneboy, Frigeboy.  [LAUGHTER]

Mark:  No.  Not yet.  Not yet. 

Laurel:  What can we expect to see from Appboy just in the coming year? 

Mark:  I think today we have about close to 1.5 billion customers on our platform, 1.5 billion users on behalf of our customers.  So we have a lot of data we’re sitting on and for us it’s how do we take this data and create a predictable environment for the marketer and for the brand which would benefit the customer?  So instead of coming in and digging through the data and creating segments and trying to personalize the messaging, how can Appboy surface that data right to the top, create that personalized message for you, the New York Times and then send that out in the method that that customer wants?  Like we’re starting to tinker with this a little bit but I think that’s where it’s gonna get exciting, is where it becomes very predictable.  And then like I said I think as more connected devices come out, like the Apple TV, I think once that hits a little bit more mainstream that will be another platform that we will want to communicate through on behalf of our brands for our customers, for their customers.  I think those are the things that we’re kind of looking at.  It’s exciting and we’re processing so much data, I think about a hundred billion data points a month now on behalf of those 1.5 billion users so there’s a lot of things that we’re doing and I think it’s staying in the forefront and it’s continuing to be a thought leader in this basis is what’s going to allow us to continue doing what we’re doing.

Laurel:  So your product that you built in 2011 is, was scalable to this degree?

Mark:  I give the credit to my backing and my cofounders and the entire product engineering team.

Laurel:  That’s amazing.

Mark:  We’re at the scale of Twitter and that’s the scale that we built based on the monthly active users of those users.  Like we’re at that scale which is really awesome.

Laurel:  That’s incredible.

Laurel:  Mark, what’s been the biggest hurdle for you as a startup?

Mark:  I think the biggest hurdle for us has been culture and scale and they kind of go hand in hand. 

Laurel:  So it [stings?] more as you grow big?  Or?

Mark:  Yeah.  It’s like when you build a startup you’re almost building a family.  I call that a family but families, people don’t tend to come and go, right?  So we call that a family in teamsin some ways but when you’re five people it’s easy to maintain that 10 people, 20 people, 30 people, 40 people, but now we’re over a hundred people and you’re bringing in a lot of new people, like this year we’ve hired I think close to 60 people, in 2015 and new people, new ideas, new processes, a little more formality cause you’re growing and you’re maturing as a company.  At the same time there’s a reason everyone decided to work here.  And I keep telling them we have to keep it weird you know, and we have to keep it fun and weird.  [LAUGHTER].  The second it loses that aspect of it even for me, it just kind of loses that vibe and that mojo that you have and that’s the biggest thing for me is continuing to keep that culture continue through and you have to push it down onto the managers of the company.  It’s up to me to make sure I reinforce it to the managers and they reinforce that within their team.  Because as new people come in they need to feel that culture from the beginning.  And it just takes a few people to kind of ruin it.  So I think that’s been the hardest thing for me and scale when you’re hiring new people you’re supposedly not responsibilities and I think the biggest thing is making sure that the employees and the people on the team know that when your spreading responsibilities it’s not because that person isn’t capable of that responsibility that they once had a few months ago.  It’s more efficient and much more productive and we want everyone focusing on what they’re awesome at.  So that’s kind of the biggest thing is that I’m as a cofounder, as a CEO is culture.  Cause I feel like I have a responsibility to the company a responsibility to everybody there and if anyone’s unhappy it’s my fault and that’s because I’m not putting in the proper attention down to do the company and I think to me the culture resonates right into the product, the product resonates right into the customer and it’s a full loop.  If you have enough great culture your customers feel that right away and they want to work and be part of that.  If you have a really shitty culture.  What do you do?

Laurel:  How do you, but I mean it’s good to talk about it at high level but what are some practical things that you guys do?  I mean I’ve spoken to some other CEOs here have regular company lunches where they do lunch and learn from each other.

Mark:  We do quite a few things.  So one, we actually do free lunches every day.  We have catered lunch.  I think it’s one of the most important things that we do.  I think when you’re growing to a hundred people you have so many different departments and people can get stuck into their own little bubble and when they come up for air when they go get lunch they see new faces and they talk.  So that’s one thing we do.  I send out a weekly email every Friday to the entire company.  I talk about personal things.  I talk about what’s on my mind.  I talk about things that aren’t going well sometimes cause I think that’s the biggest thing is never hide what’s not going well cause you’re all in this together and that’s the whole startup world is you have 10 bad days and one really good day.  But that really good day offsets the 10.

Laurel:  So you’re pretty transparent.

Mark:  Extremely transparent and I think that’s the biggest thing in Appboy is the transparency and maybe we’re a little too over transparent sometimes but I think transparency is the biggest thing that we have on the table today.  And we actually do quarterly surveys across the company where it’s anonymous in terms that they give us their feedback, what they like, what they don’t like.  If they’ll be here a year from now, if they think their manager’s good.  If they think that the department’s working on the right things.  How do we, how do you think we’re perceived to the competition?  Do you think you’re being paid well? 

Laurel:  That’s phenomenal.

Mark:  And then we actually show the results of those to the entire company at a hands on and we address the issues head on with everybody and we say this is how we’re addressing the following items that came up.

Laurel:  What if there’s something that you can’t address?  What do you do?

Mark:  We bring it up and we say we’re gonna work on it and you can’t keep everybody happy though, right?  Especially at a hundred people.  But we do our best and I think those are the kind of little things we do.  We work very hard on having cross department events.  We push people to go to lunch even if we cater lunch, we say here’s a budget.  Go have lunch with a group of yourselves.  Those are the kind of things.  I think it’s that and I think tomorrow we have yoga at our office.

Laurel:  That’s great. 

Mark:  Yeah.  And I think it’s like to me every single person at Appboy tomorrow could find a job somewhere else.  Right?  And they picked to work here for a reason and we have to continue to make sure that we fulfil the reason why they picked to work there.  And I think if you take your employees for granted then I think that’s a huge mistake.

Laurel:  Yeah.  Those are great examples. I love that.  You’ve raised about 23 million in funding since [unclear].  What’s the most difficult part of raising capital other than the time it takes obviously?

Mark:  I think the most difficult part of raising capital is getting your investor, your potential investor to really appreciate your vision.  I think the biggest mistake people do is trying to get that person on the other side of the table to come around.  If they don’t get it at the beginning, they’re not gonna get it.  And I think that’s the hardest part is, because in some ways as cofounder you can be stuck in your own bubble but the opportunity your building is, so in some ways you could be drinking you own Kool Aid but the hardest part is getting that investor to come around.  But when you find that one investor that gets it, it’s amazing and I think that’s the most amazing part about raising too, is someone actually believesin what you are doing and they’re writing a check.  But there’s gonna be, like I said for every 10 days you have a bad day, one bad day, you’re gonna have 10 bad VC meetings and one that really gets it and that’s all you need so.  But there’s gonna be 10 and I think that’s the hardest part, if just the amount of no’s you get can be demotivating for you as a cofounder and CEO and it’s hard coming back to the office and people are like how was it?  And you’re like, not so good.  And it’s demoralizing to some people but I think that’s why as a CEO, that’s your job.  That’s why you are CEO, is you need to go and manage those no’s and come out with that win.  But that’s the hard part.  And I think that’s why certain people can be CEO and some people cannot be.

Laurel:  So getting from series A to series B are there any lessons there?

Mark:  The seed stages in series a, you’re still selling the dream.  Alright?  So you don’t have real hard numbers that people can back into and see if this is working.  Once you’re talking about B and C you have numbers so you’re not selling the dream anymore.  So in some cases selling the dream is easier than selling when you’ve got numbers because maybe your numbers aren’t hitting the benchmarks.  But if your numbers are hitting then it’s been easier.  I would say our A round was probably the hardest because the market was still in a flop in terms of do they want this, do they not.  We’re early.  We’re still figuring out the part the market fit.  But like I said we found that one investor which was the rally, the rally venture guys with Tom Peterson who we’re fortunate enough that understood what we wanted to do.  And I think that was the difference.  I think those were the two differences and now we come, I would put them in different compartments, is your seed A here is the dream.  B, C and onward is really the numbers and that’s what, I think that is the difference.

Laurel:  What do you think you’re best at personally?  Not technical.  Mathematical.  What are you good at?

Mark:  I’m good with products, marketing; I would say I’m good at management.  I love empowering people to do what they need to do and giving them the ability to just kind of execute.  I am the least micro manageable CEO out there.  I hate micro managing people.  I want to enable people to be successful.

Laurel:  What if you’re not micromanaging them do they take advantage and then don’t do their jobs?  How could, do you notice it?

Mark:  Well you fire quick and hire slow.  [CROSSTALK]

[LAUGHTER]

Laurel:  I think I taught you that.

Mark:  Yeah you and I think a few others.  You learn that the hard way because it’s always hard to let people go.  But I’m also, I love building relationships with my customers and with our partners especially in such a young company where you’re new entrant to the market.  It’s all about trust and to me I genuinely love doing that.  I love to understand the needs of our customers, the issues they’re having, how could we do better and I continue to do that with our customers even though we have several hundred customers today, I try to keep that going on an ongoing basis.  I think that’s kind of what I love to do and I think the most important thing is empowering the employees and empowering your executive team and your managers and your VPs to go kind of run each department of theirs like their own little startup.  And that’s what I kind of love to do.

Laurel:  As a company what do you think is most misunderstood about Appboy?  Like when you think about it when you go out into the marketplace and you’re talking to new people you like, why do they think that about us?

Mark:  I think a lot of people think we make apps.

Laurel:  Really?

Mark:  Sometimes I just don’t argue with it.  It’s like yeah, yeah.  And that’s in the more nontechnical VC or tech world and maybe some friends.  Like I heard you make apps.  What are you up to?  What app are you making?  I think that’s the biggest thing.  And then I think that the name Appboy is just not, it’s come to mean something now because I think we’ve done an awesome job creating a brand around it and our new branding just really kicks ass.

Laurel:  Yeah.  Love it.

Mark:  Yeah.  And it’s, it, but now it means something but before it was like Appboy?  What’s Appboy?  [unclear]  [CROSSTALK]

Laurel:  Well eventually they accept that problem when they were starting.  What else have I not asked you that I should of?  Communications.  How do you communicate with your investors?  How often, how much?  Do they also get this weekly email?

Mark:  So they don’t get the weekly email but what the board, I would say I communicate on a weekly basis whether it’s calls, emails, with investors it’s hard because if you get seed investors now were already with serious seed so I think not that it filters out but I do send out here and there, hey we’re doing this.  We’re doing that.  Keeping them informed.  I think it just depends at what level the investors come in and certain investors are more in [work?] than those other people on the board.  But I think it’s important when I first started though up until the series A and series B I did send out at one point it was monthly, then turned into quarterly.  I still like to do quarterly emails but it’s still hard cause we running like real operation and a real company now.  I don’t think I sent one this year on an annual basis but I probably need to do that but I do send out, will you tell me off and do you get stuff from me?  Probably not very often.

Laurel:  You only send me things when you need something.  [LAUGHTER]  You send me little notes saying hey we could use help with this or that.  Or anybody know somebody at this company?  But I don’t see much about the company.

Mark:  Well I should probably send one to you then.

Laurel:  Yeah.  I had no idea you were doing so well. 

Mark:  But I think you’re right.  I think that, I think that I’ve learnt from that.  I think it’s important to keep the investors up to date because the truth is like at the beginning I did do that and we were able to do like our seed.  Then we did a bridge, then everyone’s participating in our A and want to participate in our B and hopefully one day in our C and I think the reason for that is because I do keep everyone informed so there’s no surprises.  And I don’t need to update them on stuff because they are up to date when I’m looking to do another round.  And I think that’s a big thing I would tell other founders and startups is keep your even with the ups and downs, and specifically the downs, don’t be scared to tell your investors that you’re having issues or you’re having a problem.   They’re investors.  They know that.  There’s a risk associated with investment.  They not expecting you to kick ass from the start.  And I think that’s something that I did at the beginning was I mentioned our hurdles.  I mentioned why we’re having a hard time and what’s working, what’s not and they’re there to help. 

Laurel:  And they did help.

Mark:  And they did help.

Laurel:  So by giving advice or.

Mark:  Absolutely.  Oh, how did they help?

Laurel:  Yeah.  Like what were some of the things.

Mark:  I think it was like advice.

Laurel:  Hiring advice.

Mark:  Hiring advice.  Firing advice.  Product advice.  Customer advice.  Like we’re all new to this game and then I think, I think that’s the best thing about, I think the biggest thing as a CEO is taking feedback and not being too, I don’t know.  What’s the word I’m trying to look up?

Laurel:  Sensitive.  Or sensitive.

Mark:  Yeah.  You need to take the feedback, adjust it, and then you as a CEO; you need to make the decision of what you think makes best.  What works best.  But I think, I a big advocate of feedback from investors and the board and other, even executive members of the team.

Laurel:  Was there ever a time that you made a decision that everyone disagreed on?  Or that anybody disagreed on?

Mark:  Well when we wanted to do our series A, everybody wanted to do a smaller round and I pushed, I think a three million dollar round, and I pushed for a five million dollar round and if we didn’t do that we wouldn’t be here today.  I think that was the biggest thing that I just stuck my, I was just very adamant about.

Laurel:  That was in, what year was that?

Mark:  It was in 2013.

Laurel:  Why do you think you wouldn’t be here if you hadn’t done two more million?

Mark:  Because it wouldn’t of gave me the runway to figure out the product market fit.  And enough, cause when you’re doing your series B, you needed the numbers and you did the customers and it was a couple quarters that allowed us to do that and without those quarters we would not of been able to prove it.

Laurel:  Wow.  Geez.  Do you see a lot of companies that fail on that alone?

Mark:  I think so.  I think the biggest reason why startups fail is because they don’t raise enough money.  I really believe that.  I think founders and people like getting startups are smart people.  They can figure it out.

Laurel:  With enough time.

Mark:  Time is literally money in this game and you need the capital to work through it.

Laurel:  Was there ever a time when you were scared?

Mark:  With our series A, we probably had a month left of payroll.  But that’s the name of the game.  We got it done, we got it done.  We prevailed and we stayed true.  I knew we would get it done.  And honestly I think if we went back to our seed investors and said hey, like we need a bridge after working through the series A, we probably would of been able to get it done.  I think also it was like, it was hard finding the right executive team to support me and my cofounders.  And.

Laurel:  Because why?  I know you did go through some senior.

Mark:  Yeah.  And I think it’s, because this is our baby and we wanted people to, who appreciate the vision we have but we also wanted to keep the culture and the core and what we had in the office, in the office in the company.  So you have to bring in the right people for that too and I think that was the hard part for us but now we have the best executive team out there I would say.

Laurel:  So finding people that fit the culture and also have the skills was hard.

Mark:  Exactly.  Yeah.  Really hard.  And.

Laurel:  Well because you were in that weird phase of just early days and so you couldn’t afford a 200,000 or 150,000 salary of, for somebody who had already done that three times at other startups.  You had to go.

Mark:  Yeah, it was also like thrift cause you don’t want it to turn into a corporate office and bring certain, nothing against those people, like obviously we all know them.  But like I said the culture is really important and there’s certain ways that how I want my company operating as a CEO in terms of keeping it fun and it has to be fun.

Laurel:  Absolutely.

Mark:  And you need people that really appreciate that and respect that.  Respecting that is really important.

Laurel:  Yeah.  So, so you feel like you’ve found that?

Mark:  We found that.  We got extremely lucky with the team, the VPs we have and even the managers, but at the same time we’re a big advocate of growing the employees inside the company.  There’s so many people that have grown into management roles, into VP roles in the company.  Our head of customer success spends their, he came on, I think he was our third or fourth employee.  He had so many different roles, came into this, throughout the whole three or four years and now he’s our VP of customer success and he’s grown into that position and he’s awesome.  And that’s what; I’m more interested in growing the people in the company than bringing in people all on the top down onto them.

Laurel:  Yeah.  I’m sure they respect you for that and they love that.  And that’s why they’re there.

Mark:  That’s why they’re there.  Yeah.

Laurel:  Last question.  So if you had to kind of encapsulate since you’re not, I assume you’re not revealing sales figures yet.

Mark:  Not yet.  No.

Laurel:  OK.

Mark:  I’d love to because they’re so awesome but I can’t.

Laurel:  So how can we kind of express to the audience like your.

Mark:  Our growth?

Laurel:  Yeah.  Your growth or your success without saying the exact number of sales? 

Mark:  So there’s a few ways to look at success. Obviously everyone can go hire people but if you think about last year, November time in 2014 November, we were 35 people. 

Laurel:  You mean 2014.

Mark:  Fourteen.  We ended this past year December 31 at 101.

Laurel:  Two thousand fifteen.  So that’s more than 100%.  Correct?

Mark:  Yeah.  We, last year.

Laurel:  Is that also what happened with sales?

Mark:  Yeah. So just to put into perspective, last year November, December time, so 2014 December we had 100 million users on our platform.  December 2015, we have 1.5 billion.

Laurel:  Wow.  Yeah.  So huge growth.

Mark:  Huge.

Laurel:  The number of clients you’ve gotten, the number.

Mark:  Yeah.  It just reflects customers, skill ability, everything.

Laurel:  So wait.  So that would mean you have ten times the number of customers and sales have grown.

Mark:  We have, yeah.  I don’t want to get into the numbers.  But.

Laurel:  That’s not the numbers.  That’s like multiples.

Mark:  It’s awesome.  And it’s amazing.  We used to process a billion data points a month.  We’re now doing a hundred billion a month.

Laurel:  That’s what’s amazing to me, is processing that much.

Mark:  Our customers are the most well know apps out there like Tinder, ABC News, Shutter fly, Lyft, every big app, every brick brand knows we’re the de facto CRM platform for mobile apps today and I think it just goes back to our reputation and the culture.  People at the culture is what’s created the reputation of who we are in the market.

Laurel:  So excellence with, if you had to say it with three words that you stand for, what would they be?  I think of you as having excellence, fun like you said.

Mark:  Yeah.  We’re very genuine.  I go into a meeting, what you see if what you get.  We’re not gonna bullshit you.  We’re not gonna sell you things that we don’t have today.  We’re selling you what we have today but this is a partnership and we’re gonna build this together and it’s genuine.  It’s genuine, smart and we move really quick and respect.  And those are the kind of, I know that’s a little more than four words but those are the things that are part of who we are at Appboy, which I think is allowing us to kind of lead this market and kind of leave of competitors behind and just kind of move forward.

Laurel:  If you weren’t alive who would be the best person to run your company.

Mark:  [LAUGHTER]  Wow.  I think like I said because I don’t micromanage, I think it’s in a good place where me and my cofounders are still aligned with everything.  I would say I don’t think it’s a specific person and that would be for them to decide.  But I think Bill John and even Miles, our CRO; we have such a strong unity between the four of us that I think it would just continue to operate.  I don’t think it would be anyone specific that I would say that person.  I think it just goes back to just who we are as a company, not as founders and executive team.  I don’t know.  I could not appoint a specific person.

Laurel:  I know it sounds like a crazy question, but I have a reason.  I mean at a certain point your company grows to a big size and the VCs decide, oh, you know what?  He’s not the right person to run a public corporation or a giant hundred million dollar one.

Mark:  I think everyone grows into their roles.

Laurel:  Do you feel like you can grow into that role?

Mark:  Absolutely.  And then.

Laurel:  Well I guess you wouldn’t say no.  It was a stupid question.

Mark:  Well no, but if you would of said can Mark run a hundred person company two years ago, you said well when he gets to that role we’ll think about it.  I think it comes down to me as CEO is and any cofounder and CEO of companies, you’re starting a company in a vertical that you’ve never been part of so the most important thing is surrounding yourself with the right people.  And I think we’ve done that at Appboy.  I think we’ve surrounded ourselves with the right talent, the right people to allow us to do what we need to do.  And I’m the CEO but that doesn’t mean anything in the company.  And it’s like there’s other more important roles even as low, even the [VDRs?], you know, marketing folks.  It’s the product, the engineering, the design.  I think it, everyone is so important so it’s not me running the company.  It’s everyone running the company.  So I think that’s the difference in terms of how we built Appboy so that I don’t think it comes down to me in terms of who’s the CEO, it’s like, who’s the company and the company is Appboy.

Laurel:  What’s the ideal size of the company?  I mean you’re a hundred people now.  What do you think is like the optimal size?

Mark:  I think 160, 180 up to 200, I think I’d love to keep an efficient process going.  We’re all about efficiency.  I’m not about quantity at all.  We’re really about quality over quantity so I think that’s also a big difference between us and our competitors.  They all go out there and boy just hire and hire and hire and we won’t do that.  I’d love to get between a hundred.  I think realistically will be between 160 and 200 and that would be a good spot for us.

Laurel:  How can we help you today?  What are you looking for?

Mark:  We’re growing so I think the biggest thing for us is we’re growing our product and engineering team.  Like I said we’re building an amazing platform that scaling.  One day we’ll have two billion users on our platform so as an engineer that’s an incredible opportunity to work on a platform that’s scaling.

Laurel:  What kind of engineers are you looking for?  Are you looking for artificial intelligence people? 

Mark:  Yeah.  So we’re also looking for like BI people and so I really want to get people to come in and kind of, people that really look at our data.  Business Intelligence.

Laurel:  Oh.  OK.  Data ELMS.  I think love those data ELMS.  OK.

Mark:  Yeah.  And then obviously we’re be growing our sales team.  We actually just opened an office in London so now we have an office in New York, San Francisco and London.  So we’re growing the team.  We’ll probably get to 160 by the end of this year.  And with that we’re looking for customers and partners.  Right?  If you’re an app, you have an app, email me.  mark@appboy.com and I’ll be happy to put you in touch with the right people and help you guys power your CRM for your app.

Laurel:  Excellent.  Oh, I’m so glad to be part of Appboy.  So thanks for coming in today, sharing all this wonderful intel.

Mark:  Thank you.  Thanks for all the support.