20VC Intercom's Eoghan McCabe on What Makes A Truly Great CEO & What Founders Should Look For In Their Investors

In this episode of 20 Minutes VC, host Harry Stebbings interviews Owen McCabe, CEO and co-founder of the successful SaaS company Intercom, which has raised over $116 million in VC funding. McCabe shares his entrepreneurial journey, from founding Contrast and co-founding Exceptional, to his passion-driven approach to creating Intercom, which aims to humanize customer communications online. He emphasizes the importance of being both a specialist and a generalist as a CEO, the challenges of fundraising, and the value of having investors who become partners in problem-solving. McCabe's vision for Intercom is to fundamentally change how businesses connect with customers online, making interactions more personal. The episode also features endorsements for legal firm Cooley and mattress company Eve, highlighting their contributions to entrepreneurs and consumer benefits, respectively.

• Owen McCabe is the CEO and co-founder of Intercom.
• Intercom is a customer communications platform that has gained significant traction in the SaaS industry.
• The company has raised over $116 million in venture capital funding.
• Before Intercom, Owen co-founded Contrast, a software design consultancy, and Exceptional, a developer tool startup acquired by Rack Space in 2011.
• Thanks given to Jason Lemkin and Mamoon Hamid for the introduction to Owen McCabe.

"Now, Owen is the CEO and cofounder of Intercom, the customer communications platform that's taken the SaaS world by storm in the last few years."

This quote introduces Owen McCabe as the CEO and co-founder of Intercom, highlighting the company's impact on the SaaS world.

"And prior to Intercom, he founded Contrast, an award winning software design consultancy, and cofounded Exceptional, a developer tool startup acquired in 2011 and now forms as part of Rack Space."

This quote provides a brief background on Owen's entrepreneurial journey before Intercom, including his previous ventures Contrast and Exceptional.

• Intercom was founded by Owen McCabe and his co-founder Des.
• McCabe and Des have been working together for nearly ten years across three different companies.
• Their first company was a consulting firm started right out of college.
• They learned about business and people through their consulting work with startups.
• They transitioned from consulting to product development with Exceptional, their second company.
• Exceptional was a developer tool for error tracking and was moderately successful.
• The founders realized the importance of working on projects they were passionate about.

"Intercom just turned five, and at our birthday I realized that myself and one of my co founders, Des, we've been working together nearly ten years."

This quote explains the long-term working relationship between Owen and his co-founder Des, highlighting the unique aspect of their partnership.

"The first that was not a total failure was called exceptional. And that became our second business."

This quote details the transition from their first business, a consulting firm, to their second venture, Exceptional, which was a successful developer tool.

• Owen McCabe emphasizes the importance of passion in business.
• He had a realization that he was not passionate about Exceptional, which led to the decision to sell the company.
• The experience taught him to focus on work that aligns with his passions.

"One of my earliest lessons in business, which was that it is phenomenally important to work on things you're passionate about."

This quote captures Owen's key lesson on the critical role of passion in business success and personal fulfillment.

• Owen McCabe discusses the importance of connecting with customers.
• He shares the story of Colin Harmon, owner of a coffee store called 3fe (Third Floor Espresso), to illustrate the value of customer relationships.
• The loyalty and connection they felt with Colin and his coffee shop were something they lacked with Exceptional.

"The relationship that we ended up with, with Colin created real loyalty. We were third friends and for game mistakes, and we gave feedback and paid more, bought more coffee. It was magical."

This quote highlights the loyalty and connection that can form between business owners and customers when there is a personal interaction, as exemplified by the relationship with Colin Harmon.

"But I never really connected with our customers, especially never a"

This quote, though incomplete, suggests Owen's regret at not having established a deeper connection with the customers of Exceptional, which contrasts with the meaningful interactions at Colin's coffee store.

• Internet businesses often lack personal connections with customers.
• Current tools for customer communication are impersonal and transactional.
• The tools lead to disjointed internal communication within companies.
• Intercom was created to address these issues and foster better customer connections.

"Is it just a case that inherent in Internet business that you get in return for this great scale and other cool benefits? No opportunity to have a relationship with your customers?"

This quote highlights the perceived trade-off between the scalability of internet businesses and the ability to maintain personal relationships with customers.

"They were transactional, fake, spammy, shitty, bloated. They had everyone in the company on different tools. No one on the same page, no one really, without any potential or opportunity to properly connect with their customers."

This quote describes the flaws in existing customer communication tools, emphasizing their impersonal nature and the lack of unified company use, which hinders genuine customer connections.

• Exposure to various businesses and markets through consulting provided a broad perspective.
• A diverse set of values and principles applicable to all businesses were developed.
• The consulting experience served as a foundational grounding for the Intercom founders.

"You need these few different views, different perspectives, different takes on the same thing to really get a sense of holistically what it is that you're dealing with."

This quote illustrates the value of multiple perspectives in understanding a business holistically, akin to viewing different sides of a cube to recognize its shape.

"It was really like that foundational grounding, like when I started, because I had a little more experience in business."

The quote suggests that the speaker's prior business experience provided a solid foundation that helped address fundamental business questions and informed the approach to Intercom.

• Successful CEOs need to be both specialized in certain areas and generalists in others.
• The speaker considers themselves a generalist, particularly skilled in product and business strategy.
• CEOs must learn about all aspects of a business, including finance and capital raising.

"A great CEO needs to be just an extreme generalist. It needs to just be really fucking good at a lot of things."

This quote emphasizes the necessity for a CEO to have a broad skill set and be highly competent in numerous business areas.

"I've had to learn that and be pretty damn good at it and be able to speak fluently with actual experts on that topic."

The speaker acknowledges the need to become well-versed in areas outside their expertise to effectively communicate with and negotiate with professionals like venture capitalists.

• CEOs must practice applied prioritization and resource allocation.
• The challenge lies in combining the need for focus with the requirement to be a generalist.

"Focus can also be..."

Unfortunately, the transcript cuts off at this point, and the speaker's full explanation of how they balance focus and generalization as a CEO is not provided.

• Effective CEOs must be proficient in multiple areas and carefully allocate personal and company resources.
• Prioritization involves more rejection than acceptance, focusing on what is essential and feasible.
• Successful businesses encounter numerous opportunities, but must learn to decline those that do not align with current priorities.
• The ability to say no is crucial for maintaining focus and direction in a company.

"Prioritization is more a process and practice of saying no than it is saying yes."

This quote emphasizes that prioritization is fundamentally about declining opportunities to maintain focus on the most crucial tasks.

• The process of gathering a large base of angel investors is likened to herding cats, indicating high difficulty.
• The founders of Intercom faced challenges due to their lack of experience and entering an undefined product category.
• Investors were initially skeptical, leading the founders to rely on those willing to bet on them as individuals.
• The approach was to solve real problems with original solutions rather than copying existing companies.

"When we were raising our seed round, we didn't know what the fuck we were doing."

This quote reflects the founders' inexperience and uncertainty during their initial fundraising efforts.

• The narrative of structured fundraising at regular intervals is contrasted with the messier reality experienced by Intercom.
• Intercom focused on building a strong product and team, which attracted investors organically.
• The company never ran a formal fundraising process but took an opportunistic approach when the right investors showed interest.
• The founders valued investors who understood and shared the vision of Intercom, leading to swift investment decisions.

"I never ever ran a process."

This quote indicates that the speaker did not follow a conventional, structured approach to fundraising, instead allowing the company's fundamentals to attract investors naturally.

• The speaker's view of what constitutes a good investor evolves post-funding, suggesting a shift in the investor-founder relationship.
• The quote is incomplete and thus does not provide sufficient context for further analysis.

"The best investors, they very quickly switch to being pa"

This incomplete quote suggests that the speaker was about to describe a quality of the best investors post-funding, but the full context is not provided.

• The best investors are described as partners who are actively involved and share the burden of the company's problems.
• Great investors understand that things can be broken within the company and are willing to work together with founders to resolve issues.
• The worst investors impose strict expectations, timeframes, and milestones, which can be damaging to the creative spirit of founders.
• Founders are seen as deeply creative, and pressure from investors can hinder their creativity.

"The best investors say, okay, you've got my money. Now that's irreversible. Hopefully this all works out. But we know that there's a lot that's really broken. Let's all try and figure it out together."

This quote emphasizes the collaborative approach good investors take, acknowledging that while they have provided funding, their role also includes working through the company's challenges together with the founders.

"The worst investors try and say, hey, you've set these expectations. There is a certain time frame. There's a certain way that things should be done. There's a certain way that we want you to work. Here's some milestones, here's some criteria. You want to meet."

This quote highlights the counterproductive approach of investors who prioritize rigid expectations and milestones over the creative and adaptive process needed in a startup environment.

• The speaker discusses the challenge of personal growth to keep pace with the scaling of the company.
• It is expected that CEOs, especially founder-CEOs, will continue to grow with the company through all its phases.
• The challenge lies in learning and adapting quickly enough to meet the evolving needs of the business.

"And so the biggest challenge is continuing to learn and scale somehow, like I said, amongst all the other things I've fucked up, I have managed to learn at the pace that this business requires."

This quote reflects the speaker's personal challenge to continually learn and adapt in order to scale with the business, despite making mistakes along the way.

• The speaker admits to not being a "tips and tricks" person when it comes to productivity.
• They reveal a personal method of using post-it notes to manage tasks.
• This indicates a preference for simple and straightforward organizational tools over complex systems.

"I am not a tips and tricks kind of a guy, so I have not a good answer for you."

This quote demonstrates the speaker's dismissal of conventional productivity hacks, implying a more individualized approach to managing their workload.

"If you saw how I got things done via at least two dozen post it notes stuck to my computer every day, you wouldn't even ask me that question."

The speaker's use of post-it notes as a way to stay organized suggests a visual and immediate approach to task management.

• The speaker's favorite book is "A Technique for Producing Ideas" by James Webb Young, which is a short, impactful read.
• The book's brevity and content have allowed the speaker to finish it despite a busy schedule.

"My favorite book is also one of the few books I've managed to even finish in the last year or two. And I've managed to finish it because I think it's no more than ten pages, and it's called a technique for producing ideas by a guy called James Webb Young."

The quote reveals the speaker's preference for concise literature that provides value, as well as the practical challenges of finding time to read amidst a demanding role.

• The vision for Intercom is to change how companies interact with their customers online.
• The goal is to create a sense of personal, human connection in internet business interactions, moving away from impersonal and transactional experiences.

"The goal is to fundamentally change how companies connect with their customers in the future."

This quote outlines the overarching mission of Intercom, which is to revolutionize the customer experience in the digital space.

"If Intercom is successful, a customer of an Internet business, which we believe all businesses are becoming, will feel like they're actually getting to connect with a human, that they'll have a real personal interaction, that it will feel anything but fake, spammy, shitty transactional, which is how business online works today."

The quote provides specific details on how Intercom aims to make online business interactions feel more genuine and humanized, in contrast to the current state of digital customer experiences.

• The host expresses gratitude to those who facilitated the interview, highlighting the importance of networking and connections in the industry.
• The host also promotes their own social media and newsletter, emphasizing the value of staying connected with the audience and providing updates.

"And also, I want to say a huge thank you to Mamoon at social Capital and Jason at Sasta for making the introduction today, without which the interview would not have been possible."

This quote shows appreciation for the individuals who helped make the interview happen, acknowledging the role of professional networks in creating opportunities.

"And if you love the show with Owen today and do not want to leave the world of the 20 minutes VC, then you can add me on Snapchat at hstebbings, or you can follow me on Twitter at Harry Stebings."

The host uses this opportunity to encourage listeners to engage with them on social media platforms, fostering a community around the podcast.