BILL MAGNUSON in conversation with STEPHEN CUMMINS TRANSCRIPT – part 2:

Bill Magnuson: Lean startup methodology has an important role to play It helps you with… with financing realities. It helps you learn things but it doesn’t necessarily get you to the best product solution or the best innovation or the best revolution. Be observant. Like get your head up and look around you and critically think about everything that you see around you. Things that are around you are a certain way because someone decided to make them that way by and large. “Why did they do that? How did they organize it? What were the things that went into play? What other options did they have?” My curiosity, kinds of, applies to systems and processes and I research a lot of different things in that way. And… and I think that… that has ultimately lead to an ability to read tea leaves just a little bit better and to be able to understand and keep in touch with what’s possible that wasn’t before and how are things going to change? And… and I think that those things have come together to really contribute to my success.

Stephen Cummins: Welcome to 14 minutes of SaaS! The show where you can listen to the stories and opinions of founders of the world’s most remarkable SaaS scale-ups!

This is episode 119 of 14 Minutes of SaaS, the concluding episode of 2 where I chat with Bill Magnuson, Co-Founder and CEO of Braze, a customer engagement platform. In this episode we move from continuing the colourful backstory of the origin of Braze to why lean startup methodology is not really the be-all and end-all for realizing audacious visions, to addressing the fundamental human problem of listening to people in order to understand them so that we can communicate more effectively with them, to the power of curiosity

Stephen Cummins: There’s a very interesting backstory, Bill, to how the company started. Could you tell us a bit about that?

Bill Magnuson: Yeah. So as I mentioned earlier that my other co-founder, John Hyman, was my boss when I started at Bridgewater. And so when I started, to kind, of think about what was next, he was doing the same thing. And he invited me to join him as a last minute stand-in for his TechCrunch Disrupt Hackathon team. The other person he was planning on doing it with accidentally double booked himself with a rock climbing trip, and so he flaked out on him at the last minute. So I came in … I cancelled my plans for the weekend and we went and did this all night programming project. And that project ended up winning in the judging; and so we were invited to come back to the conference later that week and present on stage. So fast forward a couple of days; John and I are walking to the conference. It’s admittedly late morning, not early morning because we had been out a little bit the night before celebrating… And on our walk in, he was, chatting with the woman who is actually now his wife; girlfriend at the time, on the phone. And so I was standing in the crosswalk. I had no one to talk to, so I started just chatting with a guy standing next to me. And we carried a conversation as we walked across Twelfth Avenue on our way over to the Disrupt venue which is one of the piers on the West Side of Manhattan.

Stephen Cummins: Cool.

Bill Magnuson: And he saw me on stage presenting our hackathon project later that day and reached out to me via email and it goes something like: “Hey, I don’t know if you remember me, we met in a crosswalk and I want to introduce you to this person that I know who’s living down in Houston. And he’s running an oil and natural gas company right now, but he’s been involved in the mobile space in the past and he’s really interested in starting something up in mobile. And I think that you two would enjoy meeting each other.” And so I of course ignored that email for about three weeks because I got dozens of them that looked very similar because at the time if you were written up for winning the TechCrunch Hackathon, that was a really big deal.

Stephen Cummins: Everyone wants to co-found with you.

Bill Magnuson: Exactly, people were coming out of the woodwork. And after a few weeks when the dust settled, I went back and looked through everything and… and that was one of the shortlisted ones I decided to reply to. And I ended up meeting with Mark and, seemed like a really interesting guy and so I introduced him to John as well. And the three of us all … they say that you should really take your co-founder relationship super seriously and you should think about it as, sort of like, dating before marriage and all these things. And honestly, we didn’t do any of that; we all went to New York for one dinner. We had that one dinner and we all connected and we decided to move to New York together and all quit our jobs and start up the company..

Stephen Cummins: And tell us about that first year or two with Braze.

Bill Magnuson: We were building to try and help people take the mobile experiments that they were doing and the apps that they were building and turn them into businesses. And I remember going to meetups in New York, and presenting and talking about Maslow’s hierarchy for the app owner, where in the early days, it was enough to merely exist. There were only a few dozen apps in the app store and you could literally do anything and charge people 99 cents for it and people would try it out. But pretty quickly it evolved from that to the point where you needed to provide something. Like what was a meaningful product or service that can be provided in mobile that couldn’t be provided before? And I think there were a lot of really good analogies into the dotcom days; which were that, in the very early days. Let’s take a bank as an example, they could put up a website with an “Under Construction” animated GIF and their opening hours and that counted as a website. And that was enough. And then it was like, “Oh well wait, what about having a website is actually special for a bank?”  Well, maybe you can check your bank balance online any time even when the bank is closed, right?  And so that’s that progression to the Provide Stage.

Stephen Cummins: Yeah.

Bill Magnuson: And now the Provide Stage and mobile also depended on the advancement of the underlying technology. The batteries had to get better. The cell networks had to get faster. GPS got miniaturised, and started to similarly become more battery efficient. And then that lead to a lot of the earliest businesses that were built in mobile were on the back of those things. It was media streaming, like music streaming. It was local marketplaces. It was dating applications and such. And then there was a long stage of vanity metrics. And of course, the vanity metrics and the dotcom boom; we all know very well, people raising money based on hits and page views and the visitor counters. And we had the same thing in mobile, it was downloads and installs, and where am I in the app store rankings? And it wasn’t really until we got beyond that… that, people started to focus on things like daily active users, monthly active users, or God forbid revenue, right? That we would measure the success of the business by. And what we really needed was for people to get to the top of that pyramid and to really be focusing on: “How am I engaging people in the long-term. How am I driving them towards becoming more valuable users and really driving revenue?” And so the early days was … it was a lot of education. It was a lot of trying to get people to think more forward … and think about their forays into mobile as being real sustainable businesses.

Stephen Cummins: You obviously thought very deeply about it, or the founding team thought very deeply about it, because when I listen to you talk with passion about… about engaging meaningfully and stuff like that … very often, when I talk to somebody about the first two or three years of the company, they’ll talk about a bridgehead customer that help them or a vertical they went into … but you guys were constantly questioning this in the first two or three years, your approach to actually developing the company.

Bill Magnuson: Yeah we tried to develop it pretty comprehensively which honestly meant that it did take a while for us to get traction. And when you really look at the growth curve of our company, we’ve grown a lot in the last few years. In the early years, we were really focused on R&D and we didn’t really follow the whole lean startup MVP playbook very well. The very first release of our product actually had all the cross channel messaging that you see today; we had email, we had push notifications, we had In-app messaging and we had an option that was both ephemeral and one that was persistent. That ended up being a really important enduring advantage because our initial release wasn’t siloed in a particular messaging type, which meant that all of the other things around, “who do we talk to”, “How do we prioritise different strategies?” “What are we going to say?” “How do we personalise the content?” “How do we measure it?” All of those things were actually built to solve the harder problem of communicating in all these different says.

And I think a lot of other companies actually made the… the unintentional mistake of building all of that sophistication higher up for only a single channel. And then when they needed to add other platforms, or when they needed to go from ephemeral to persistent messaging, or from push based messaging to pull based messaging ,or outside of our product experience to inside of a product experience; that these are all ways that kind have stretch the rest of their system to the point where it breaks. And then they’ll end up with heterogeneous feature sets depending on what channel or what platform you’re on, or things don’t intuitively fit together.

And of course, when that happens, this is already a really complex problem … Trying to coordinate all of this understanding of people across platforms, communicate with them in all these different ways. If you can’t manage that complexity in a system that’s really delivering that sophistication to you in a way that you can manage it across all those different interfaces, you pretty quickly get buried in that complexity and you can’t move forward.

Stephen Cummins: So, I’ve often felt that the whole lean startup thing, it’s like a religion today. But I’ve often thought about what would have happened to some of the great minds and the great inventors over the years, and over the centuries, if that had been the kind of dogma that ruled the world. I think most of them would have withered. Do you feel that sometimes when you get a two or three brilliant people together and they really want to address a problem at a very fundamental level and understand that before they build it out too much … Do you feel sometimes the lean startup kinds of dogma can drive people down to down a blind alley?

Bill Magnuson: Yeah. I mean, I think that the lean startup dogma … I mean anything that is dogma is generally gonna have its downsides. I think that if you view it as a tool for learning that, that’s really important. So, if there’s parts of your idea that you need to vet out and understand, and you of course, should be applying a certain level of humbleness to how you’re evaluating things. And be really honest with yourself about where you understand things … and where you don’t. And using that lean startup methodology to test things and learn. But if something needs to be audacious and if something needs to be comprehensive in order for it to really make the change, you gotta figure out a way to invest in that. And I think that when you look at … a great example is looking at Space X where they have this big audacious goal but they’ve figured out in… in as lean as you can get in the rocket world. Like ‘How do we actually sell something to the market so that we can go in and we can learn? And we can fund the thing that is the big audacious thing as well?’

Stephen Cummins: Okay.

Bill Magnuson: So they’re not just trying to be lean, they’re also trying to solve an audacious problem. And I think that that’s and… and, that’s an important example to keep in mind is that… that lean startup methodology has an important role to play. It helps you with financing realities. It helps you learn things. But it doesn’t necessarily get you to the best, product solution or the best innovation or the best revolution.

Stephen Cummins: Absolutely. Before I come back to you a little bit, Bill, I just … one little thing I want to ask you is; Braze claims to be kind of set apart, you know, for today’s mobile first world and “tomorrow’s ambient, computing future”. Just tell me a little bit about why you make that claim?

Bill Magnuson: Okay. Yeah, this goes back to what I was just talking about in terms of thinking about: “How do we go back to the fundamental human problem of listening to people in order to understand them so that we can communicate with them?” And this idea that… that problem of listening should be able to act across all these different ways that humans interact with technology. And this problem of communicating with them should also be in, ‘What are all the different places that I have permission to talk to you? And where you’ve welcomed me into your life?’ And then it’s… it’s on me to be as valuable and relevant as possible within those constraints. And so when you define the problem that way, there’s no mention of Apple, or iOS, or web, or VR, or AR, or chatbots, or whatever; it’s really this fundamental thing of trying to understand people in order to talk to them.

And… I think that as we move into an ambient computing future that the platforms are gonna continue to proliferate, and that the ways that we can communicate with people will similarly expand and get more complicated. And what we really need to be able to do is organise all that and be able to communicate to people in the most appropriate way. And if we’re still in some sort of siloed thinking we’re … it’s hopeless. And in the early days I actually used to bristle at people even calling us ‘mobile first’ or a ‘mobile only’ because we were really building something for the future of humanity as changed by mobile. Because I think that mobile was really the first time that we ended up with this really intimate connection with technology. We certainly were receiving email before. We were interacting with computers, we had the internet, but it was in an environment that was controlled and it was deliberate. And this introduction of computing to go with us everywhere and all of our most personal moments. And with us every moment of the day.

That fundamental change; even if we change platforms, even if we take the screen from being in our pocket to like bolted to the front of our face, that change I would posit is not as big of a deal as the jump from before to this stage of intimate or personal computing. And so that’s the future we’ve been building for. And I think that as the form factors and the interface has changed, we feel really well prepared no matter how that evolves because the real important step-wise change already happened with mobile.

Stephen Cummins: What do you think is one personal quality that has been, a kind of a super power for you, that’s helped you succeed? 

Bill Magnuson: Curiosity is the best one to think about there. And a big part of it is just the … I have an insatiable appetite for learning about things that I see your experience or observe. And I actually, I mentioned earlier that I have two kids and the… and the one thing I’m … there’s a lot of parental controlling of screen time that’s happening nowadays. And I’m certainly … I’m not strongly in that camp, especially reflecting on my own childhood, but the thing that I really try to encourage them to do is just be observant. Like get your head up and look around you and critically think about everything that you see around you. Things that are around you are a certain way because someone decided to make them that way by and large. “Why did they do that? How did they organize it? What were the things that went into play? What other options did they have?” My curiosity, kinds of, applies to systems and processes and I research a lot of different things in that way. And I think that… that has ultimately lead to an ability to read tea leaves just a little bit better and to be able to understand and keep in touch with what’s possible that wasn’t before and how are things going to change? And… and I think that those things have come together to really contribute to my success.

Stephen Cummins: When you wake up in the morning, what pushes you to do all this?

Bill Magnuson: One of the things that … so I actually was our CTO originally and moved to being CEO and a lot of people ask me; “How’s that going? What’s it like?” And the thing that … the thing that really I like about it is that as a technologist, you’re constantly solving new problems with new tools. And as the CEO of a fast growing company, it’s the same thing. You constantly are seeing new problems, but you’re building organisationally all these new capabilities as well. So you’re solving new problems with new tools. And I… and I really like that the space that we’re in and the problem that we’re trying to solve is also born of technology. And so there’s change all around this and that ability to contribute to how we organise ourselves around reacting to the change and trying to do it in a positive way so that we’ve got technology that’s coming in and disrupting all these different things …. like how can we take an approach that allows us to try and take it as it comes and allow for that change to happen, but help organize it and really put a human impact behind it in a human focus behind it and try to really get back to who we are as individuals. And make sure that we’re improving our own lives? And then we’re improving the lives of other people. 

Stephen Cummins: Bill Magnuson, thank you very much for being on 14 Minutes of SaaS.

Bill Magnuson: Yes, absolutely. Thank you.

Stephen Cummins: In the next episode, episode 120 of 14 Minutes of SaaS, we have the first of 3 episodes with Denmark’s Peter Mühlmann, Founder and CEO of TrustPilot, a customer review website founded in Denmark in 2007 which hosts reviews of businesses worldwide. The site has processed about 100M reviews since it launched in København or Copenhagen in 2007. In that time it’s raised $193M

You’ve been listening to 14 minutes of SaaS. Thanks to Mike Quill for his creativity and problem solving skills, to Ketsu for the music and to Anders Getz for the transcript. This episode was brought to you by me, Stephen Cummins. If you enjoyed the podcast, please don’t forget to share it with your network, subscribe to the series, and give the show a rating

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