Inside Braze’s blitz to $500M in CARR | Building broad, going global, and outfoxing the competition | Bill Magnuson (Co-founder & CEO) and Kevin Wang (CPO)

Brett: All right. Thank you guys both for joining. 

Bill: Yeah. Happy to be here.

Brett: Bill, maybe we could sort of have you kick it off. And 

the place I was curious to start is what were you doing in the 12 months before you ended up working to get Braze off 

the ground? 

Bill: Yeah, so I'll actually go back, a couple of years because I graduated from MIT, studied computer science there and finished my undergrad in 2009. So that was well timed with kind of the early launch of the smartphone industry, early launch of the app stores. And then I moved out to San Francisco and worked at Google in Mountain View, for a time, ended up writing my master's thesis there, but I was working on a visual programming language for building Android applications right at the launch.

I remember a cupcake. Launched that summer the big fiberglass cupcake out on the lawn of the Android building, definitely a really exciting time to be at the ground floor of mobile and the visual programming language we were working on was actually targeted toward education and trying to kind of bring app development.

To people that were still introductory computer science students, we were working with a number of colleges in their freshman courses to teach computer science, but do so in a way where someone could make something tangibly useful to themselves on a mobile device and do so in a way without a ton of software sophistication. And it was really cool to see that come to life because you know, the idea that you would be able to do that even in a desktop application would require big teams and huge amounts of time. But because mobile was so new and because these devices could interact with the physical world and they would be your companion, even simple ideas could come to life quickly.

And so, you know, I was there for the ground floor and you could see all this energy and this excitement in mobile. But This was still very much early days. You know, people were still really nervous about putting a credit card into a mobile app, this concept of digital purchases was brand new, paradoxically, even the purchasing of mobile apps in the app store. I think in the early days was holding back people thinking about building those businesses because you didn't have any recurring revenue or ongoing revenue streams from your mobile app users. It was like all the money you were ever going to make from them was right up front. And, you know, but I could see that the energy was there and really wanted to make sure that as the world was going to change as we 

adopted mobile, that I was going to be a part of it.

Brett: What did you identify as back then? Were you just sort of like a product builder and hacker? were you interested in businesses? what were you kind of like before you started the company? 

Bill: there's 

a brief foray in between that where I went back. So I went back to school, got my master's, kept working at Google while I was getting my master's and actually wrote my thesis on that visual programming language. But then I had a brief stint in the finance industry when worked at Bridgewater Associates, which is a macro head global macro hedge fund up in Connecticut.

And, you know, I always had a strong interest in macroeconomics and in business and largely in systems and, you know, wanted to kind of make the leap to be an entrepreneur or start a company for a variety of reasons. As I graduated from my master's in 2010, you know, related to kind of family and finances that I won't get into right now. I made the personal choice to just go and work in the hedge fund industry for a little bit of time. but you know, through that time, the family situation stabilized, I accomplished the kind of financial goals that I had in 16 months later was ready to, to take the plunge and go start a company. And so, I left there, but, you know, consider myself a software engineer for sure.

I started out as the CTO. At Brace had studied computer science in school, still consider myself certainly a software engineer and a technologist, but was also always very interested in the, you know, the economic side of it, and a big part of what made mobile really interesting to me was just how it was impacting.

Our systems and our way of living, you know, our relationships with institutions and with each other and really giving us that access to knowledge and communication that we were going to be able to bring with us everywhere we went. And, you know, it's easy to look back at that now and see why it fundamentally changed the way that we lived our lives.

But I still remember debates even back at MIT with people that was like, why am I ever going to need a smartphone to speak like, well, life's not about need, you know, the fact that this brings you freedom and it brings you communication and access to knowledge, wherever you are in any moment of the day, you know, I felt was fundamentally important.

And it was just something that I wanted to be a part of in order to help people build businesses. And what I thought was going to be a fundamental change 

in the economy and the way that we lived our lives.

Brett: Did you 

find that Bridgewater was useful, that experience was useful in the context of eventually being a founder or was it just sort of a digression on the path and there's not a lot of residual 

value? 

Bill: No, I absolutely do think it was incredibly useful. One of the major values at Bridgewater is focused around transparency. And one of the things that that means is that if your ears are open, you know, you can really learn a lot about a lot of different parts of the business and, you know, Bridgewater's transparency is even at the level that.

The equivalent of their board meetings would be recorded and sent out, not just for viewing, but sometimes even for lesson work where you would listen to recordings, happening in the management committee meetings and hear about how the company strategy was being formulated. You know, you could very visibly see where things were breaking due to scale. I was there as an intern actually in 2008 and I came back a couple of years later and they had tripled in size during that time period. And there's a lot of things that break as you scale and triple, you know, in a short period of time. And because of the transparency and the introspection of the Bridgewater culture, you know, anyone that wanted to could have a front row seat for really seeing where those systems were breaking down.

And it wasn't just in the investment process and the investment strategy. It was in all the different operations of the business, you know, the finance organization, the talent team, the client services department. and really looking at how the organization developed and scaled in a way that was hypercritical, very analytical and very transparent. I didn't really realize how valuable that was until later on when we ran into some of the same scaling challenges, and I wasn't approaching them for the first time, and I wasn't. Approaching them in a vacuum. And I also already had the experience of seeing it at a company that actually is pretty similar in scale to where Braze is today.

We're about 1700 employees now. And when I was at Bridgewater, we were about 1500. and that actually carried over into, aspects of the Braze culture as well, where, you know, we make sure that. We're providing push based transparency out there. There's a lot that's available to any employee in any part of the company in any part of the world to be able to understand what the strategy is down to a detailed level, how we define success, how we measure success, how we're doing against those targets that we have.

And you know, not everyone opts in to actually ingesting all that transparency. It's obviously, you know, it's a lot of work. It's a lot of reading. It's a lot of time. But one of the things that I learned at Bridgewater was both the value that that has for people that really want to lean into it in terms of growing, you know, their part of the business and taking more comprehensive ownership, but also the value of having those values in your, you know, in your company culture and in the way that you operate. 

Kevin: I'd also say as somebody who was in the early days of Braze, but did not work at Bridgewater our other co founder and now CTO Jon Hyman was at Bridgewater with Bill. One aspect of Bridgewater's culture that I really appreciated and continue to appreciate is that there's a very strong emphasis on first principles thinking.

And I think that particularly when you have a journey, in the startup days like Braze does, where you're entering a new, very rapidly evolving market, and there isn't a lot of history that you can necessarily lean on that sort of first principles approach and approach of thinking about how do we debate and discover The underlying ground truth of our market sort of from those first principles.

I think that that was actually really instrumental to the early success. 

Bill: Yeah, absolutely. Especially when things are changing so quickly, there's a lot of noise. There's a lot of opinions about where you should, prioritize and, you know, place your chips and to be able to have a, a well regarded, you know, well reasoned, well debated opinion about where the puck is moving to so that you can anticipate that.

And we talk a lot about being on the right side of history. You know, as we were going through early product development, and I think that, especially when you're a small company in a highly competitive space, and you in some cases have incumbent or enterprise competitors, you need to just make those calls correctly more often than not, because you just don't have the resources or the time to be, making mistakes about where the future is going and how things are going to evolve.

And I think that When you approach a lot of these problems from that more first principles thinking, you get more robust models about how the world works, how you know this lever is connected to that one, how these things are going to respond over here, and that helps you make better investments.

Brett: Given first principles thinking is sort of one of those phrases that's sort of thrown around a lot but not particularly well defined, how did it instantiate itself? In those first few years, what's a story of early building that shows kind of what that actually looks like. 

Bill: I'll actually use an example from data privacy, which is a landscape that has. really evolved a lot over time. And in the early days of mobile, there were a lot of abuses of of data privacy because the operating systems didn't really have protection around them. You know, there was a lot of use of hardware, identifiers and location data and such that are foreign to today's digital landscape, even as you know, a lot of the, you know, for instance, the ad tech or the analytics world has advanced quite a bit. And location data, I think, is a good case study in this because if you just think about yourself as a human and you think about some of the data that's most valuable to you, location is close to the top of that list, like where you are in the physical world. you know, so we actually in the early days, we had basic geofencing capability, but there were a lot of companies that were building a lot of kind of insights that are derived from location data.

They were building, taste graphs and other sorts of, trait information that you could kind of harvest and pull in, and be able to use that to help target message marketing messaging that was, you know, based off of location data that was coming from ad networks and other places. we just felt that because we as humans treat that with such sensitivity, that it would be a game of cat and mouse forever and was not one that was worth playing.

You know, we were very focused on the first party ecosystem. We wanted to, I've always used this phrase of being a good listener rather than a creepy detective. and really making sure that to the extent that you're using data in order to personalize or enhance the relevance in marketing messaging or in, you know, other ways that you might be modifying the product experience, that those should all be done in a way that's respectful and that has reciprocation, where when someone's providing you the data, You're doing something good with it in order to enhance their experience.

You're not just like bundling it up and selling it to the highest bidder, which is what a lot of competing services were doing at the time and what a lot of, you know, early mobile apps were doing as well. And a lot of our competitors also were able to provide a differentiated, you know, targeting and personalization capabilities because in many places, you know, at least we felt that they were abusing privacy in a lot of ways. And it was our perspective that along the way, whether it was governments or it was the, operating systems, you know, or it was consumer sentiment. And then eventually, you know, you see the chain of events where it's like, there's investigative journalism around these topics and then outrage follows.

And then, you know, Congress takes action or the platforms change. And along the way, there were a lot of things that were existential threats to people's feature sets or to their business models, or they were like really disruptive changes where they had to change the way that they But because we stayed rooted in what we felt was a kind of first principles understanding of the sensitivity of certain data and of value exchange when it comes to kind of trading your privacy for relevance and personalization, I feel confident saying I don't think we've ever had to roll back a feature we've built over time because of new data privacy legislation or new changes in the operating systems.

And so that's just a great example of being on the right side of history, making sure that you're, you know, you're actually being very efficient with your resources. You're not building things where the, you know, the whole world's gonna get turned upside down on you a year from now. And, you know, we were able, while everybody else was like scrambling for GDPR, or they were dealing with the IDFA changes in iOS or all these other things, we just kept building and we kept executing.

And none of those things were issues because we predicted that, you know, changes of that ilk would eventually happen. 

And we stayed on the right side of history.

Brett: Bill, I wanted to 

go back to the journey we were talking about, was the transition from Bridgewater to actually founding the company? 

Bill: there's kind of 

the mindset around it. There's the literal actions that happened. And I think that, you know, I had grown up in rural Minnesota during the dot com boom. And, my computer was my gateway out of rural Minnesota to the rest of the world and was really attached to that and kind of enamored by how comprehensively and how quickly the world changed through, you know, the late nineties and the early 2000s. you know, I was also a kid in my parents basement, you know, luckily had a computer and internet connection, but didn't really have a lot of opportunity to interact with it more, meaningfully. And then, you know, as I entered the job market and graduated from school, here came mobile. And it felt to me like mobile was going to be as much or more important, you know, on a similar timeline as, you know, the, the.

com boom was in, you know, the mid and late nineties. And I just knew that I wouldn't be able to forgive myself if I was at a hedge fund on the sidelines for it, as the whole world was changing. Because, you know, going back to your first question, absolutely still, you know, consider myself a technologist.

It's what really, um, you know, the being able to build and create, you know, new things with new discoveries and new innovations is really what makes me tick, as a person. And. you know, the, the things that I mentioned before that were kind of in my life that I needed to stabilize, that was mission accomplished.

And so you know, I'd already had a bit of a wandering mind, if you will. And I was ready to make the jump. And then I actually took part in the TechCrunch Disrupt New York hackathon with Jon Hyman, who, as Kevin mentioned before, was, he was my boss when I first started at Bridgewater and, was my fellow technical co founder when we started, Braze, then called AppBoy all the way back in 2011.

Brett: we ended up getting top honors in the hackathon and, that resulted in a, chance encounter a few days later where we were on our way to the conference to present our, our winning hackathon project. And I met Bipul Sinha who, coincidentally, I actually just had a call with earlier today and got some advice from him on, uh, on a hiring, a role that I'm working on right now. I was really awesome to see him because. I ran into him on a crosswalk corner on the west side of Manhattan in, I guess it would have been May or June of 2011.

Bill: And he's the one who then saw us on stage and tracked me down. Afterward, and introduced, Jon and I to our third co founder, who happened to be living down in Texas at the time. And, you know, wanted to do something in mobile. He knew Bipul Bipul was a partner at Lightspeed at the time. He later would go on to be the CEO of Rubrik, who actually IPO'd midway through last year. and that kind of chance encounter brought, you know, the three of us together to be able 

to decide to start a company.

Brett: And then me, Jon and, you know, Mark, we all got together at a restaurant in New York and we just discussed our ambitions and our excitement for, you know, the mobile ecosystem.

Bill: And Mark had been, he actually, crazily enough, was the CEO of an oil and natural gas company in this moment when we're having this dinner. but he had been working on some entrepreneurial pursuits on the side as well. some of them around mobile he had worked on building this social network for app developers. I think it would have been about a year prior to this. So in like 2010, under the name AppBoy before. that ended up not going, you know, gating traction the way that he wanted it to, and kind of having a website for app developers to interact with their users was, you know, switching, you know, for mediums, if you will, and so he decided that he wanted to reboot it and, you know, Jon and I kind of came together as technical talent and, The fundamental goal, in his original social network that also then carried through, and then what we built the idea of AppBoy around, you know, more specifically was just that as a mobile app developer, you wanted to, in order to kind of run a more sustainable longterm business with your mobile app, you should know your customers really well and be able to communicate with them in order to drive, you know, longer term engagement. And the idea for the company was just born from that, which I think is just a fundamental business insight, which is if you want to build, you know, a sustainable business, you do that on the back of high quality, longterm relationships, and if you want to build a relationship with someone, you should pay attention to people when you meet them. Use that understanding to learn more about them and then have more relevant interactions with them. And that'll build a strong relationship over time. And so we were just trying to take those very kind of human and basic business concepts and translate them into software that would help mobile app owners be able to, and they were primarily software developers at the time, actually, mobile apps didn't even have marketing teams.

And we can talk a little bit about the implications of that later. But, you know, we really built to try to help encourage people that were building apps, turn those into sustainable businesses. And we were all just really excited about the 

opportunity that that represented.

Brett: what was the thing that you built at the hackathon? 

Bill: It was totally unrelated, and it was actually, if you remember Gilt, which, was the flash auction site where they would do at a certain time each day, a whole bunch of products would become available at really attractive prices, and they had this cool game mechanic in their cart you know, there was limited inventory when they would do the flash sale. And you would buy it and it actually wouldn't check out right away. You'd have a certain amount of time while it sat in your cart and there'd be a countdown timer. And if you went to that product page while everything was sold out, it would say that something was in members carts and sometimes it would show back up in the inventory.

So we actually built a plugin that let you register items in your cart as an auction. And then people that were on the page showing that it was sold out could bid on the items in the auction. and effectively then when you would check out, it would just ship it directly to the person that won the auction instead of, you know, you buying it yourself.

And so it was an arbitrage opportunity on top of a place where you were allowed to hold inventory for free. And, you know, you could, you could imagine that wrecking havoc on a restaurant reservation site or really Anywhere, you're allowed to hold inventory for free. and funnily enough in the example, you can probably go dig up the video on YouTube somewhere. But when we did the live demo It's Jon buying a bikini for himself because we found out partway through the hackathon that the guilt website Actually was different whether or not you had a male profile or a female profile and we did our prototyping and Jon's wife's account And then when we were going to do the demo, we decided to make our own account, but the plugin didn't work because the website had changed enough by being a male user profile.

So we had to switch back to the wife's user profile 

and just go with it for the demo.

Brett: That's awesome. You mentioned sort of the insight that you landed on around businesses sort of understanding their customers, at least sort of in this sort of early days of app ecosystem getting built. When you have that meal, did you actually just talk about these ideas and land on that as the higher order bit in a meal or this is days or weeks of just open ended discussion?

Like what got you to the higher order idea? 

Bill: Yeah, crazily enough, we 

did land on that in the meal. and you know, I would spend years afterward on places like Hacker News, reading these articles about you know, startup advice. And so many of them were, you know, you got to treat your co founder relationship like a marriage and you got to really vet it out and you could end like You know, it all just kind of clicked together and we just went with it. you know, none of us were living in New York city proper at the time. Mark was in Houston and Jon and I were up in Connecticut cause we both live near where Bridgewater is located. we decided kind of in the, in a couple of conversations after the word, but it was really just that one in person meal, um, that we were all going to quit our jobs and have a go of it.

And we did spend weeks afterward together. in New York on whiteboards, you know, working out the product spec and kind of going through all the capabilities that we wanted to be there and really work through the details of it. But that high level problem of, you know, how do you help someone that's building a mobile app stay connected to their users better and be able to encourage ongoing usage?

Like we knew that 

was what we were going to work on right out of the gate.

Brett: So 

then maybe you could talk a little bit more about those few weeks. So you had the lunch and you kind of explored a bunch of ideas and said, okay, that's interesting. You were then whiteboarding in those. Like what, what did you actually do to go from the higher order insight to something you would actually ship to 

someone 

Bill: we worked out kind of the early object model and you know what we wanted to be able to keep track of, how we wanted to communicate with people and when the important moments were, you know, in a, in a mobile app user journey to be able to create that strong early connection and then ongoing engagement with people. And interestingly enough, the early version of AppBoy actually was a lot more opinionated and a lot more rigid. we built a number of game mechanics. We built out a user profile. I had cross channel communication from the very beginning because, you know, when you try to solve a more fundamental problem like that, you realize that actually unlike a lot of companies that are built to just be, Oh, we're going to be a push notification service, or we're going to do email marketing.

Like they all start on a single channel. We were just trying to solve a business problem. And so we knew that we needed to be cross channel from the very beginning. So we had four different message types. we had push notifications, email. We had a newsfeed, before there was a Facebook newsfeed. I used to call it a mini blog inside your app. but it was, it's proper noun was the, the AppBoy newsfeed. and then we had our slide up message. We had a user profile, the early version of AppBoy actually let the user interact with the profile itself, because it was meant to be like a profiling system that the user would be able to, present themselves in like the app community as that person, things like that ended up changing, you know, that profile goes into the background. we ended up building more and more customizability for the onboarding. You know, message flows and, you know, various triggers that would happen throughout the life cycle and all those kinds of things along the way. But a lot of those early building blocks were all there because we were really working on that problem of what do we want to know about the person in order to drive more relevance and value? and then how are we going to communicate with them in an ongoing basis? And that really just drove a lot of that early product design. 

Kevin: It was also right at the transition point between, the social way into the mobile wave, which of course ended up being very tightly intertwined over time, but a lot of the things that you described about, like the user profile moving to the background and it originally being the sort of editable concept was, I think, sort of an offshoot of the tail end of social being a huge part of how we were interacting.

And as the market continued to evolve, yeah. It's like you have that North Star of what Bill and Jon and Mark were aiming at, but you end up evolving it for the way that the consumers and the way that the overall society as a whole is able to kind of interact with the technology. And I think that the way that they ended up sort of traversing that landscape was really instrumental to getting to product market fit, achieving traction and ultimately making a lot of the product decisions that led to braise growing the way that it has.

Brett: Kevin, 

maybe you could talk a little bit about what were you doing before you got involved with Braze and like, how did your AppBoy at the time and what caused you to join, what was going 

on at the time 

Kevin: I 

was working at Accenture doing consulting in the energy trading industry for a number of years prior to Braze. It was actually a fascinating industry. I am like as far as one can possibly be from it right now, but I sometimes still think about how it was really interesting. Like. You know, you can go and trade like a strong wind over Texas.

This is a financial instrument that exists out there. and from that experience, I got the, chance to work very closely with a very, very old school legacy enterprise software that was. Being used in ways that were wildly productive for these energy companies and that sort of planted the first seed in my head of, I mean, you know, kids don't grow up thinking, man, I really want to do like enterprise SaaS one day, but from working with this technology, seeing how successful it was, I definitely got that idea that there was a huge amount of promise.

And then that combined with observing from, you know, a completely different place, a completely different state from where bill and Jon were the rise of mobile. I was very, very keen on figuring out a way to get to a place where I could both sort of pursue the fact that I saw a lot of opportunity in enterprise SaaS and also make sure that I was sort of catching these early side of of the mobile wave that was blowing up. so Bill and I actually know one another from college. We were fraternity brothers at M. I. T. One time bill was passing through Boston where I was living with our now head of growth and our first employee Spencer Burke I think you guys were coming from a ski trip. Yep. Yeah, we're up at 

Bill: Killington and swinging through Boston I think we were other we're doing something hiring related.

Like yeah, I remember that was going on or there was interviewing Yeah, I had a candidate or something 

Kevin: like that and Stopped by made the pitch and it was pretty much exactly what I was looking to get involved with obviously new bill I had a ton of respect for bill and also enterprise software in mobile sort of really aimed at the way that the world was going rather than where it was right now.

And yeah, that's how the journey 

began. 

Bill: I 

gave it to him and I called him back and I was like, Dude, when we were hanging out in Cambridge, all you did was complain about your job. And so I don't care if you take my job offer, but you need to go to your job and take someone else's job offer.

Kevin: Yeah, 

I remember that. It's funny. I actually have the email where I turned it down. But I remember this phone call. It was one of those phone calls where like, you know, you hang up and you just kind of look at the phone for a while and just sort of think about your life and think about your future.

Brett: what was the state of the company when you joined Kevin? 

Kevin: I was the 8th 

person into the room and and literally into the same small room, same room. So we were in what was like the second or third WeWork created. Yeah, it was 

down in the meatpacking district. It was the early days of, uh, WeWork and they actually ran out of money while they were building it as 

seen in the, in the TV shows.

And so we 

still had bare concrete floors and the heat exchanger for the entire building was in our little glass box. And so it would get up to like a hundred degrees in that room. 

Yeah, one of the nice things about the concrete floor, too, is that we were also we had a sort of an open music policy in the office, and I remember one time sort of the third time that Rihanna song We Found Love came on the day very, very loud, sitting there on the concrete floor, just like, wow, you know, this is very, very different from big consulting, I would say.

The people are way smarter and this is, this is a very, uh, much more scrappy environment, but overall, I think that what really struck me was that it was. Clear from the way that we were seeing the market evolve, but there was going to be something here and the pace of development that we had at the time.

And this is all I would say, like very firmly pre product market fit. The pace of development was so high and was so fast and our understanding of the market was evolving so quickly that I remember that providing a lot of optimism very, very quickly, to have that experience where it's like, you know, that there's going to be a pot of gold, but you're going to have 

to really explore the whole forest to find it. 

Brett: Bill what did you see in Kevin that made you want him to be your, you obviously had a long relationship, but like, what about him? Made you want to hire him, particularly because there are a few things more important than those first 10 people that join a company 

Bill: So Kevin's, academic background. He didn't share. This is actually a neuroscience. And, he decided to learn to code along the way because he wanted to actually make money, and had participated in a number of the coding challenges at MIT. Well, getting his neuroscience degree. but I felt that, you know, given what we were working on and the way that we were thinking about, you know, kind of the science of like human relationships and the way to kind of connect and have that resonance with people and relevance that the combination of someone with, you know, brain and cognitive sciences, background along with the ability to actually build and execute in the early days from a software engineering perspective would be particularly valuable to us as we were growing.

And that was one of the major 

reasons that, you know, I really wanted to get Kevin on board.

Brett: Bill When you decided to commit to work on this, did you think you were going to build a giant company? Or did it just seem like, Oh, this is interesting. There's a lot of like, what was your level of ambition and confidence that you would be eventually running a publicly traded company? 

Bill: I 

often get the question as we reach these milestones, you know, you, you open a new office, you ring the bell, you do a, you know, an all hands for the first time post COVID. And there's like a thousand people in the room. And people are like, did you, did you picture it like this?

Like, did you ever think we would be there? And I was, I I've always been like Well, I never thought we wouldn't. I didn't like explicitly think through the details of what scaling would mean, but I understand how exponential growth works, you know, and, I never assumed we wouldn't succeed and continue to grow and scale.

And so, there's definitely a little bit of You know, the blissful ignorance of all the downside risks and all the ways that you might fail and just staying focused on the path that we're going to keep building and executing and knowing that, you know, if we do that, as we continue to grow, you know, if we've got the right vision and we keep effectively putting one foot in front of the other, that we're gonna get there eventually. I never really put a lot of time and explicitly visualizing what those milestones would be or what they would feel like. but there wasn't necessarily doubt along the way. maybe there should have been, you know, but I think that's one of the magic, things of being a founder is that you just need to, in many cases, it's not even that you need to ignore it.

It 

just never really comes knocking.

Brett: I want to go back to that first three to nine months when you were getting the company off the ground full time. Did you spend time looking at what other companies were in the space? And did you spend a lot of time with customers or was it more just ideating? A little bit removed. 

Bill: we didn't have, 

or we least didn't perceive direct competitors, uh, necessarily. So there was no competition to look at. And in fact, I couldn't even told you, like what CRM stood for when we started the company, comically enough. we also. Interestingly, didn't start out building for marketers, which is interesting, but it's just primarily because mobile apps didn't have marketing teams.

When we first started the company, you know, if you don't have a business model, there's not a lot of reason to try to pour fuel on the fire of your business model, and you know, along the way, as mobile apps started to mature into businesses and they started to become more sophisticated, the space that we were building for ended up getting owned by marketing and obviously now is helping define what the leading edge of marketing and customer engagement even is. you know, at the time we were really building for mobile app developers, the reason that I think developers alone were able to be effective in those early days was because the distribution mechanism of the app store was just so incredible. And so we were definitely working with mobile app developers. we were going to, you know, a lot of mobile app meetups. you know, I had already been in the mobile industry a bit before. And so, lot of great opportunities in my network and community to be able to bounce ideas off of people and really figure out, you know, along the way, what was going to be valuable to mobile app developers.

We also did look at things like game mechanics, we were definitely watching the way that UI and UX paradigms were developing and evolving because that was really important in the early days. especially because our vision for our product would involve being incorporated into the actual mobile apps.

And so that meant that you couldn't just be an email or push notification coming in over the top. You actually had to be part of the look and feel and the interaction of the app. And so we were very I would say immersed in the entire mobile app ecosystem at the time. but interestingly enough, as I alluded to at the beginning, the mobile app ecosystem itself wasn't really ready or open to us.

You know, I remember giving presentations at mobile app meetups in New York in 2011 and 2012. And the tagline was to turn your app into a business, you know, and people were skeptical because a lot of app development at the time was just hobbyists that were kind of building things and throwing them into the app store. And so we definitely had things that we could draw on, but we also really tangibly had to make a bet about the way that the app. Economy would grow up in a way that we couldn't tangibly see. and, and even when we went and talked to some of our potential early customers, I remember someone telling me that they didn't want our service because the sooner people stopped using their app, the sooner they could stop paying the server bill for those people. And they had already made all the money they were ever going to make on them because they bought their app for a dollar 99 and that was it. And so they didn't, they didn't want an engagement platform. And so that was an interesting example where we had to look at that and be like, okay, that customer feedback is wrong. our conviction was that the mobile app ecosystem would turn into, you know, a thriving economy with great sustainable businesses, but they just weren't there yet 

to be able to even talk to.

Brett: Can you talk 

in a little bit more detail you started to, but in that first year, how would you articulate the different versions of the product that you actually shipped? It sounded like the earliest product was less sort of the, what the product is today and more like. User management and user profiles and engagement sort of all in one.

Like what were those first handful of turns and what did that actually look 

like? 

Bill: we thought about it 

as like a toolkit for engagement and, you know, you picked up on something there, which is actually that, it also included a user feedback module in it so that people could do customer support from within the AppBoy platform. And interestingly enough, a lot of our development. In years two and three was about cutting early scope that we had built and then deepening the things that survived through that. And so, you know, removing that that user editable user profile, but at the same time allowing that profile to be much more comprehensive and flexible behind the scenes. we actually removed the user feedback module entirely. You know, first we experimented with stopping, demoing it because it ended up being a distraction during sales cycles. And we felt that the space we were working in around specifically in, fully automated engagement, as opposed to engagement from a one on one basis was where we really wanted to go. and we started out with a lot of like hard coded user journeys where you would get, you know, badges and you would get, specific messages like that would show up in your newsfeed based off of your usage patterns or accomplishments or achievements that you had in the application and such. And really started to make a lot of those more generic and they were they were generic in the data models. But the way that we actually presented them to the people that were using our software was much more hard coded. And so that was what a lot of the early development was was we started with kind of an opinionated toolkit. And then we ended up whittling it down, while also making the surviving parts substantially more flexible and customizable. 

Kevin: Yeah, I think during those months is also when a lot of the foundational elements of how we really differentiate the product today. A lot of those foundations were really laid then. So starting to have the realization that mobile was not sort of the second of two channels that were going to exist for marketing between email and mobile, but what mobile really was creating was an entirely different paradigm, an entirely different network of ways that you could reach somebody and that that was going to cause sort of this Cambrian explosion of other channels and other platforms you would have to to. And so a lot of the architecture decisions we were making then were like Bill said, Laying that foundation in a way that could be expanded, another set of, I think, important, decisions that were made that's around when we start to really settle on this, event streaming architecture that we still have today so that we can be a real time and responsive platform.

That was really critical because that's what we needed to do just to get even our most basic, say like in app channels to work in any sort of coherent way. But what we start to realize with this was that that's the way that the entire world was going to work in a few years. And so we bake that into the very direct assumptions of the overall platform.

And so a lot of the work that was happening, if you were sort of. Looking at the product from the outside looked like sort of, you know, tweaking and adding a few different ways of messaging here and there, but on the inside, it was really sort of retooling the engine because every week we were crystallizing more and more of the way that we thought that the world was going to be. I think there's some interesting parallels say to where like AI is today where I think that AI is probably a few quarters earlier than that. And people still don't know what's what's going to happen. And there's a lot more change going on. So it's probably a little bit harder to predict at this moment in time.

But that's sort of the journey that we were on in those early days. 

Bill: Yeah, we also had 

really interesting early kind of product development moments and customer feedback moments as we backed into some of these older industries. So like email marketing is an example. For us, it was non negotiable to do everything interactively and in real time.

And for us, real time didn't mean faster than a nightly batch. It meant literally you're using a mobile application, and if it freezes for more than 50 milliseconds, you think that it's died and you're going to force quit it, right? Like you had to be interactive in terms of the personalization of the delivery. And so we applied that to everything that we did, and then we would go and talk to marketers and they'd be like, Oh, and so when I define an audience like this, like, how long do I have to wait before I can send to it? the question didn't even compute for us because everything that you did in our, product was completely real time, like everything from an audience.

Perspective, it was streaming, it was a real time classifier. It wasn't this batch process where you run a SQL query and you get a bunch of people out of it and you write them down and then you send an email to that list. It was like, it was all really built to, to use real time classifiers and to live in that stream of data.

And that was. You know, second nature to us because it was just required by the interaction paradigm of mobile, it resulted in a whole bunch of capabilities that we had that we didn't even realize were differentiated against, you know, that kind of more legacy space of just siloed specifically email marketing products.

But it also resulted in some places where there's things that are easy to do in SQL that are hard to do in real time streaming. And so we had this funny, juxtaposition of having this differentiated, extremely powerful capabilities. But we were also missing things that a lot of customers of existing categories would have considered table stakes. And, you know, that resulted in some interesting, prioritization Jenga that we had to do where we needed to make sure that our go to market was targeted at the people that appreciated our differentiators enough that they were willing to ignore the things that we were missing that were table stakes. And we knew that we couldn't just kind of build all those table stakes things. Cause we were literally almost 20 years, you know, we were, I guess at the time, 12 years behind the email marketing clouds we were competing against. We weren't just going to be able to build all that stuff overnight. So we had to both be really choiceful about how we close the gaps on the expectations for the existing category.

while also finding the right people out there in the market that, you know, really appreciated us for our real time capability. So as a result, you know, most of our early customers were places where real time was non negotiable. So, you know, delivery applications, dating apps, like, anything that was interacting with the real world. there was a lot in gaming and anything where in product use cases were more important, say than email, use cases.

Brett: Maybe sort of on 

that point, what's the story behind your first handful of customers? 

Bill: when we go back to the 

early, early days, we actually, we had a beta and I think we had like over a thousand people sign up for the beta. We announced it on TechCrunch you know, and all the, all the normal places, from back in the day. And it's a kind of a funny number to look at because we had a thousand beta, signups in like the first two weeks when we announced it.

And even still today, we only have a little bit over 2000 customers and, you know, out of those thousand beta signups. I don't think we have any customers, today, uh, that actually would have come out of that initial set. And so the earliest foray into customers, you know, we weren't asking people to pay for it either.

And so that was a chasm that needed to be, you know, moved over. And at the time, as I mentioned, a lot of mobile app developers were hobbyists and, you know, they weren't necessarily willing to spend money. And if they couldn't make money on their customers in the long term, there was no reason for them to pay someone. to be able to engage them in the long term. And so that created some interesting early friction because as I mentioned, the early customer hadn't really emerged yet in the market. And then what happened over time is, growth teams started to grow up. And this was around like growth hacking and data driven, marketing tactics and being able to kind of evolve strategy quickly, compounding learning through experimentation and being able to do that in a data driven way. And that was actually something that was just a very natural use case for us, because we had this agility built into everything being real time. We had this data driven user profile to be able to determine the messaging. We were still pretty rudimentary from an analytics standpoint at the time, and that was something that needed to kind of be built and grow up.

But what we found was that these early growth teams that were part of mobile apps were they were our ideal customer, and that was something that was still in the early days, but they were also pretty tight knit community because they were kind of forging a new, more data driven, more experimental way of approaching a lot of marketing.

And that wasn't something that was being taught in school. It was something that was being, you know, learned as it was growing and as it was evolving. And so, what we did in the early days really, it was, we, we looked for, those teams, those job titles, and we looked in the mobile apps that we felt were gonna benefit from, you know, what we were doing.

And so, early subscription apps were important as well. You know, it, it took a while before, for instance, Sell data was cheap enough and fast enough that you could do music streaming. But, you know, those were places where you were able to transplant an existing business model over to a new form factor. And, you know, the music streaming applications already had a way to make money as an example. And so they were, you know, great early customers, dating applications that were charging subscription fees and, and just really anyone that was. Getting that early user traction and actually had an incentive to keep their customers around for a while.

Kevin: Yeah, the moment that I really remember was we had a holiday party at a garden. And I remember thinking like, wow, this is really working because we had just signed a number of our early true enterprise customers. And what was more important, I think, about these enterprise customers than just the fact that we had them was the fact that they were all using, then AppBoy and now Braze in the same approximate way, which was the way that really aligned with our vision for where the world was going. I think of an enterprise customer it's like a little bit like dating or like a little bit like dating to get married and it's sort of, it's a red flag if you go on a date and all, you know, all the person wants to talk about is like, wow, you got a great car, you know, you've got, you got a great apartment or something like that.

It's like, that's not really why you want to go on a date with them. whereas with these customers, they were very locked in on that overall vision that we had with that sort of, you know, very early proto version of a growth team where you would talk to them and they would say, all right, I'm running a mobile app right now and these are my ambitions and these are my KPIs.

And this is something that we look for in a modern growth team right now. They tend to be very tied to core business metrics. And they would say, All right, I'm running mobile right now, but really, I ought to be running the web team to I ought to be running the email team. All of this should be working together. All of this should be working in real time. We should be building like a much deeper relationship with our customers. And for us, it was like, Yes, exactly. That's exactly what we think you should be doing as well. that was sort of the moment for me to realize like, okay, we are now we've reached sort of like the root node of this overall web of different possibilities.

This is where we need to be. These are the buyers. We've got three of them right now, but 10 more conversations next week, it's going to be 100 the week after 

that. And that was really the moment for me.

Brett: How far into the company's life was that? 

Bill: it was a couple, 

two to three years really. and you know, thankfully, uh, venture capital is an industry. it allows you to build things for a couple of years before you have revenue. we ran out of money once. We almost ran out of money twice. In each of our early fundraising rounds, you know, I've mentioned several times that the market really wasn't ready for us to sell to it yet. our answer to why now the best one we probably had was so we can get a multi year head start on something we are very convicted in, but not everyone agreed with that conviction. it wasn't until our series D six years into the business that we ever had a fundraising round where we got more than one term sheet. it was tough in the early days and, you know, we had that conviction and I remember someone telling me, you know, the first customer is as hard as the next 10 and that's as hard as the next hundred. and I remember thinking to myself, I fucking hope so because that first one was so hard. and you know, the, the early days. it was sometimes difficult to really maintain that full conviction because of how long it took. but then of course, one of the things that happened was that as the market started to come together. And by that, I mean, you know, mobile apps started to develop as businesses, you know, smartphones obviously deployed very rapidly around the world. and those things kind of came hand in hand. That all started to come together for us in a really positive way. And the would be competitors at the time, actually, many of them had distracted themselves or they had kind of cut corners or taken shortcuts. And one of the examples of that actually is that mobile gaming was one of the first places to make any money in mobile. And so if you go back to 2012 to 2015 Probably 85 90 of the SaaS businesses that were in mobile were very focused on helping the gaming industry because it was the kind of quickest route to make money in the early days. But we had conviction again that this was going to fundamentally change the way that we live our lives and change the economy.

And so we stayed focused on building a product that would be, you know, widely useful across all different verticals. And we didn't you know, focus ourselves specifically in on gaming. we also felt that gaming at the time, a lot of it was about either kind of milking whales or tricking children into, you know, buying a lot of in app purchases on their parents phones.

And that was like, not a business model that we felt was sustainable either, and didn't want to really run after that. And so as a result, when the market did come together, we were there and we had already built this diversified capability. And everyone else actually had to spend time pivoting away from gaming.

And some of them never managed to actually complete the pivot. You know, others tried to turn into a more of a horizontal offering for mobile games, as opposed to being a more vertically focused offering around customer engagement, which we, you know, we're very focused on the, the vertically integrated stack and on building comprehensive capability around, you know, all these product areas we've talked about.

And when you look at Braze today, actually, our largest single vertical is only around 21, 22 of our revenue. And we have a highly diversified customer base across a whole bunch of different places. And gaming is one of those. It's, it, it lives in the, it's about a teens percent of our revenue. and we, of course, eventually did come back to compete in that, but it was a little bit of a Nash equilibrium play where we're like, everyone else is going after gaming. This other prize is over here. It's not as big as gaming is right now, but we think it's going to eventually be substantially larger. And so we're going to just keep investing for that future that we think is going to come. 

Kevin: Yeah. We kind of violated one of the rules, I think around like that, like a traditional lean startup methodology of build a super narrow product for one use case, be 10x better and then grow, grow, grow from there because.

We had that really strong opinion on where the market and the technology were ultimately going to go. with that opinion, it's like you look at this world of, you know, cross channel, real time, very robust engagement. And you realize, okay, no, we can't just build this one narrow thing that market requires 50 things requires a whole lot of functionality.

And in a way, the fact that it took some time for the market to really turn towards what we were building for, obviously, it's scary, you don't want to run out of money. But it did give us a lot of time such that we had built probably 35 of those 50 things by the time it turned over. And we were then able to grow very, very quickly with a lot 

of differentiation, which was really helpful.

Brett: So you 

mentioned this a few minutes ago, but when you originally did your TechCrunch announcement of the beta and you had a thousand people on the waiting list, did you go email them and said, Hey, we're excited for you to try the product. And then they came in and just churned and never activated. what happened with those early customers that weren't obviously the right fit or the product wasn't quite there at the time? 

Bill: a lot of them did 

integrate. And that was great because it was good technical vetting. a lot of them continued using our product for quite a while afterward. But, you know, a lot of those early apps just Didn't make it. 

Kevin: They weren't, they 

weren't businesses. They were just sort of hobbyists.

Bill: Yeah. And, and some of them did, you know, eventually turn into businesses, but, there was a bit of a step function that happened where we had those early customers, and it was, uh, you know, a different lens on, the product, you know, same product space, but. We weren't charging for it, and actually the biggest pivot that we made in the early days was really around the business model and the way that we ended up charging customers because in the early days there was an idea that we could potentially build a B to B to C kind of network to be able to do app install ads or, you know, other sorts of kind of advertising injection into the newsfeed, and that would allow for us to kind of finance this toolkit that we then provide to app developers.

But as we were going, a lot of the feedback that we were getting is like, people wanted to kind of break it apart. You know, they wanted, they didn't necessarily want, anything branded by us and the application, et cetera. And, you know, we were kind of looking at it as like, okay, we can get more early customers where they want the newsfeed here and they want to be able to use the slide up, they're not going to use this or that or whatever.

And our early business model. Idea would have required that everything stayed intact. It stayed together as a bundle so that we would be able to run the advertising in the feed what we eventually decided to do is like, okay, there's a willingness for people to pay for these capabilities.

They just don't want it the way that we bundled it and that we're trying to deliver it to them. And so why don't we remove those constraints and just start charging them for it directly as like, you know, SaaS contracts. And so as we went through that, that then required us approaching a new type of customer in a new way with a new commercial model and the product, you know, the product didn't need to change a ton, but we, it was basically adding flexibility to the product, in order to, give people what they wanted from it or what parts of it they wanted from it, and I think along the way, you know, it's possible some of those early thousand signups did eventually become customers. there was kind of an abrupt change when we shifted from trying to monetize in a network based way and shifting over to actually doing annual contracts. And that then resulted in in kind of a bifurcation of where we were trying to go to market and who was there.

But those early beta users were really helpful in, you know, a lot of the technical vetting, a lot of the early customer feedback and also ultimately in crystallizing that we needed to change the approach 

that we were taking from a business model perspective.

Brett: What's the story behind those first few enterprise customers using the product in the way that you wanted in this repeatable fashion? 

Bill: So the first 

enterprise customers and we had a distinction the early days between the mobile Titans, which were the mobile apps that were growing and scaling quickly. And then there was like the enterprise who were companies that already existed that were then trying to build a mobile presence. We were trying to build for both. we weren't trying to sell the banks in the early days. Right. So it wasn't like enterprise with like really heavyweight compliance and security and things like that. It was more like online retailers. And our wedge that we found there was that they already had a business model. They already knew that, you know, if they could engage customers better, they would make more money. and they had data driven marketing teams. And, you know, I've, commented a lot over the years that one of the really cool things about, you know, braise and our evolution and with the market is that we sell to a bunch of job titles that didn't exist when we started the company. And, you know, that's, that's been true for a long time, but that also meant that as this mobile space was emerging, You know, there was also a new way of doing marketing that was emerging at the same time. And so, you know, those early customers on the enterprise side, they were primarily like online retailers they were places where, you know, they had someone that was ambitious.

They were leaning into, you know, mobile as a place that people would do commerce in the future. And they knew that if they could engage customers, you know, more in more real time with higher relevance, they were going to drive more purchases. And then on the other side where the mobile Titans and these were primarily subscription or freemium mobile app services where for them getting people through that early subscription funnel you know, really taking a lot of money was being spent on mobile acquisition at the time in order to drive installs.

But this was still the early days and people thinking about things like daily active users, monthly active users, you know, stickiness, looking at different cohorts and how they were onboarding and what your retention curve looked like. This is the very early days for a lot of that data analysis. In fact. One of the easiest qualification questions in the early days of the sales cycle was asking a customer how many monthly active users they had, shockingly, a lot of them didn't know, right? They knew their downloads and their installs and they knew where they were in the app store charts, but no one was paying attention to what was happening after, you know, day zero of the install.

And so it was really like, who are those people out there in the market that understood how important the shape of their retention curve was to their overall economics of their business, and we're, we're gonna go after it in a data driven way, in an experimental way, and really like understood how that impacted their bottom line.

And we had to go find those people. 

Brett: When you think about those first few years, would you describe it as more of a random walk of just trying different things, being convicted that there was a broad secular trend here that mattered?

Or was there a level of precision by which you were going about this work?

Bill: there was 

a precision to it and maybe actually if I was going to fault us in one direction, it would be that we were a little too opinionated and precise. and then the feedback was like kind of sharpening us, right? kind of shaving things off and focusing them in. you know, to Kevin's point before we didn't pick a really narrow slice and, and, you know, we're focusing on that. We actually, because we had this broader conviction, we were building a little bit more comprehensively than probably we should have. And what the customer feedback did wasn't necessarily gave us new ideas about new places to build, but it told us where to focus and where to, you know, shift and, the first few years. Probably involved just as much, or not like literally the first few years, but in those kind of years, three through five, it involved just as much like orphaning of ideas that we had early on that we decided weren't going to have legs in the long run as it did, you know, really building and growing, things that we knew that we had to focus on. 

Kevin: I would say like fishing in, in this one pond that we had, a lot of conviction was maybe not a pond. It was maybe like a huge ocean, and so if anything, it was like, all right. We're just going to fish every single spot in this pond and we're going to use a rod, we're going to use a net, we're going to try anything we can like there was a lot of, busy activity, we were at a very, very high pace, I think, despite the lack of at that point, paying customers that were actively pulling us in any direction, but what I would say is that was all very, very focused around that core idea and around the market that we were increasingly sure it was going to emerge. 

Brett: Was it a step function change that sort of got you oriented correctly? Or in those six months before that holiday party, when you started to see happy customers in the enterprise that were willing to pay, it was like this gradual, slow turning of the 

crank, if you will.

Bill: I think it was more gradual because 

it also required evolution happening around us. You know, it wasn't just us building and growing into a market that already existed or a demand function that already existed. It was us growing up with. The mobile app economy and it was also growing up with these new ways of organizing, marketing teams and operating them. I mentioned the, the new job titles, but it was kind of really interesting being at the convergence of an entirely new craft, a new set of skills, a new way of running a marketing team, a new way. and one that was also more interdisciplinary because, you know, there was this opportunity to interact in the product. Even here in 2024, people talk about the customer 360 and they talk about sales and support and ignore the product experiences, you know, that are so important for us to be able to maintain connection to a brand and be able to drive that longterm loyalty and engagement and all these revenue generation opportunities. but the entrance of that kind of first party interface through a mobile application meant that a lot of these goals that you might have had before around CRM or marketing or what have you, we're now starting to permeate other places as well. It wasn't just shooting an email in your inbox, taking your, you know, your billboard, trying to get it in someone's inbox and trying to get them to your website.

You know, it was really. Integrating into the entire customer life cycle. And so that just meant that a lot was changing at the same time. and a lot was maturing and growing and, we needed those things to come together. And it's actually one of the reasons why, you know, when we raise money in the early days, you know, a, it was, it was hard to do.

Um, but we also didn't really have a goal of going out and raising a tremendous amount of money in our early rounds because. We didn't feel like the market was actually mature enough for us to go and rapidly scale a GTM or, ramp up the expectations on our early scaling and growth. we actually had a number of competitors in the early days who went out, you know, at the same time we went and raised, 10 to 15 million Series A, they went and raised a 50 million dollar series A, uh, and they actually burned themselves out. Despite having more resources, they were effectively trying to push on a rope. And we had that visibility into our market. And we also had the patience to understand that there were some exogenous factors that certainly we could influence. We could be out there at a meetup, you know, trying to encourage people to think about their app in a certain way or run their marketing team in a certain way, we can train our customers on how to use our software and how to be more data driven, experimental, et cetera. you know, we were only, a few dozen people, depending on kind of what, what period in time this is, in a market that, you know, was much, much larger than us. And so I think just being cognizant of the evolution of those exogenous factors, along with the product development that we were doing and how those things paced together. And then thinking about what that meant for our scaling strategy as well, was really, really important for us to navigate and survive, through those early years. 

Kevin: But what I think was also interesting about our buyer and is worth thinking about for for any startup out there. in terms of the buyer they're focusing on is that these marketing buyers did have there are a lot of network effects of marketing because if I'm running much better marketing than you are and we have a very similar sort of brand, I'm going to win and I'm going to win really big. I'm going to win sort of like a power loss sort of way over you, whatever brand has much worse branding or much worse marketing.

And so, as a result, there's some very, powerful sort of like competitive natural selection in the marketing and growth world. So, as a result, once, uh, the first sort of crop of brands out there started to use products like Braze and start to really find success with them, Very, very rapidly, there was intense competition in the market and the market start to pivot on mass really, really quickly.

I think there's also this aspect where a lot of these marketers, especially in those times early 20 teens, they remembered the dawn of the internet and they remembered that this was such a massive sea change that it was really scary in their industry. And so if anything, they were kind of like a little bit overly jumpy to hop onto what the next new paradigm was, especially once it was working.

They really flooded in and that really helped us in the early days because I think again, since we had built a much sort of thicker rather than thinner product in the early days, we were really ready to kind of welcome them with open arms. Once that network effect really kicked off within that industry.

Bill: Yeah. And I mentioned earlier that it wasn't uncommon that we would ask people how many monthly active users they had and they, they didn't know. but then, you know, Facebook goes public and they obviously had, arguably one of the most engaging products ever built, and they talked about their daily active users and their monthly active users on a regular basis.

It was in every earnings call, and so that was actually, you know, an interesting example where that was an exogenous factor, but it kind of happened all at once because once that started to be part of how people describe success, you know, in a mobile app as an online business. That very quickly permeated the rest of the customer space.

And, you know, people started to understand, like, Oh, I need to know what this is. I need to be able to optimize this, concepts like stickiness or your seven day or 30 day retention, those were new ideas, but they're correct ideas, you know, to Kevin's point, like they caught fire. And I think once some of those new ideas about how to.

Be more efficient with your acquisition spend, how to think about retention cohorts, once those started to permeate those communities of marketers, you know, that really 

created ingredients for us to scale more rapidly. 

Brett: So when you think back to your first few million in revenue, what was the product, what was the positioning and what was the customer base at that time?

Bill: The product in broad strokes, very similar to what you see today, there's obviously much more sophisticated and comprehensive now, but it was, you know, data and event driven, messaging across different channels in order to keep track of where the user was in their user journey and what they were interested in, and then be able to leverage that understanding to deliver messaging to them.

That was either going to usually either going to help early retention. Help convert them into a premium subscriber or help drive incremental revenue through purchases. You know, those were the, the, the major money generating use cases. There was also a lot of transactional use cases, just a lot of operational messaging along the way, to be able to communicate with people.

We also had a lot of delivery applications where for instance, we would tell you that your order was on the way or that the driver was outside, like those kinds of things. And so we were broadly doing all forms of messaging. But a lot of times when you're underwriting the business case and what drove the revenue, it was about kind of those three things.

It was like, Hey, you're spending a huge amount of money on user acquisition. We're going to improve your retention curve. And man, if we could even move that 50 basis points, you know, on day seven or day 30, that's, that's a 10 X ROI because of how much money you're spending on acquisition. similarly, you know, same concept is just optimizing your premium subscriber flow and then driving the incremental revenue.

And so our early customer base was a mix of those online retailers trying to drive incremental purchases and then early mobile, primarily subscription businesses, or just ones that had a premium upsell through in app purchases of some kind if it wasn't a subscription and trying to drive people through that purchase funnel through additional retention. It was surprisingly global, even at 3 million. and actually today we do 45 percent of our revenue outside the United States. but that number has been in the high thirties, early forties, you know, since well before IPO. I used to get questions about that when we would raise financing grounds, be like, why is your business so global? and I would also look at it and be like, it was kind of annoying on the one hand because we didn't have people in those places. So we had to spend a lot of time getting on planes to go visit, you know, early customers cause our. first 10 very large customers, like one of them was in Berlin, one was in Norway, one was in Armenia, we had one in Singapore, you know, and then there were another half a dozen that were in the U.S I think only one of them was in New York. And so we only had one that was in our own backyard. The rest of them we had to get on planes. Some of them we had to cross oceans. but I think that was, you know, really a testament to how global of an opportunity it was and how great of a distribution mechanism the app store was because You didn't need to be in the U S to take advantage of, you know, the wealth of the U S market as a new mobile app, you could launch from anywhere in the world and you were in the app store and you could process, in app purchases and every currency. And, that was just an incredible distribution mechanism and opportunity for those early businesses.

And that resulted in us being very global right out of the gate. They had those two qualities, either they were already selling something to someone or they were one of these mobile Titans often in subscription, but they were spread out across a bunch of different verticals as well.

And that really helped, you know, keep the drive a lot of the demand signal for things being flexible and customizable. and, you know, performance was obviously an imperative all the way through because of what we were doing with real time, you know, on demand services, car share delivery. like local dating apps, things like that. 

Brett: When you think about the first handful of customers, did you get them through some inbound, they heard about you, they were at a conference, or were you outbounding and sort of trying to develop, you know, what would be considered account based marketing or something now, where you found, you know, the head of growth at company X, you hustled to get a meeting with them, sort of that type of thing?

Bill: Yeah, it was much more outbound. You know, we would occasionally pick up a good warm lead by presenting at a meetup or being at a conference or something like that, but we didn't have any meaningful budgets to be able to spend on kind of broader demand gen. the early customers, you know, it was, there was a lot of qualification required and a lot of active selling.

We had to kind of paint the vision for people, in many cases. And so a lot of it was a direct motion and, you know, a lot of us were involved in it, that adage that, you know, everyone, everyone needs 

to be a seller was absolutely true in our early days. 

Brett: Did you find as you started to get into stronger product market fit the next marginal customer became easier to get? And there's sort of this classic metaphor of it was like you were pushing a rock up a hill and eventually it started to go down a hill? 

Bill: it ebbed and 

it flowed, because I think there were times when we would, we'd get a great, you know, we would launch something new that you know, really resonated with people. we had a lead on the competition in the early days. And so there was kind of this, this moment where as the market came together. And before competitors woke up to it or had time to kind of pivot over to the opportunity, we had some free sailing there for a little while. but as I mentioned, you know, we also had a hard time raising in the early days and, you know, we, we had other people that were kind of come in from, deeper pocketed adjacencies and things like that.

And so there was, there were moments where then the noise and we were in New York, we weren't in Silicon Valley, you know, we weren't a YC company. We didn't have, you know, big, big brand name backers and things like that. And we had competitors that did. I'm obviously biased, but I feel like we had the better product the whole time. we would go through these kinds of ebbs and flows where we would have some clear sailing and then there would be a lot of noise in the market and our lack of kind of brand presence and awareness would really harm us. you know, there would be new opportunities coming up and we just weren't getting a seat at the table for those opportunities. we would evolve our go to market. We would start to get, you know, those seats at the table. We would break into those networks, you know, people, within that marketer community would start to know more about us. And so we'd get those at bats and we, we were, we could win those at bats when we would get them. especially when we would build something new in the platform that took a long time for our competitors to be able to imitate or be able to answer. and so, you know, I, I think it was, it was both at the same time. Like we would have these downhill portions that felt really good and things are coming together. and then we'd have, you know, a bunch of competitive noise would happen for some reason. Or we would, in order to hit our next set of goals, we needed to be able to double or triple or, you know, 10 X. The amount of lead flow, and we just didn't have the demand gen budgets to be able to do that. Or we didn't have the sales team coverage to be able to do that.

And we need to work out, you know, a new way of being able to go to market more efficiently. And a lot of learning along the way. So yeah, I mean, if you're, you're in this journey, I think sometimes it's one, sometimes it's the other. And that's probably pretty natural. 

Kevin: Yeah, I think there's also this element where product market fit isn't static, because you can end up, you end up in a situation where you have really tight product market fit, say for those early mobile Titans. But we didn't necessarily like bill referenced earlier have really tight market product market fit for a bank. And so it starts to feel really, really slow in some places. And if anything, you're pushing an even bigger rock up and even steeper hill when you're say, entering a new market adjacency, you're entering a new sort of customer persona.

That's maybe structurally or for whatever reason, not really as ready a buyer as your as your core market. And so. You do end up with a lot of places where there's really high growth in sort of one sector of the business that you've been selling to really successfully. But then I know one large transition for us was that we had a lot of strength in the early days out of mobile email.

Of course, we now know is a mobile channel, but a lot of marketers did not necessarily realize that in sort of the early days of mobile, but it was all going to be so tightly intertwined. And so as we were making a really big push into email, that felt like something where we're certainly pushing the rock uphill, for a certain period of time, just because we were really entering a different, very, very large market.

And so I think it's a natural evolution, but what's really key is just to not view product market fit is sort of a stamp that you get in your passport and then you're off to the races. It's something that you are continually. consolidating and also continually looking to expand if you want to have 

the time to build a really large business. 

Brett: If you strive right now to be as intellectually honest as possible, when you think back to the first few years of getting into product market fit in the way that you've articulated it, what things would you bucket in you were just lucky, and in what areas would you say the most skill was at play?

Kevin: One of the most important pieces of luck was that through a combination of being very persuasive, uh, Bill didn't mention this about his background, but he's like a national champion debater, or, you know, having a really strong team or having a really strong prototype that we were able to survive to the point that the market turned in the direction that we were aimed at. You know, it was probably more skill than luck that we had sort of picked the right direction to go in. I mean, we were very, we were all on the early team, very early adopters of mobile and really in sync with where we thought that market was going.

But I will also say to your question, there's one element which is different, which is that you really need to just put in the hours and just do a lot of stuff to get product market fit. Otherwise, the or you just can, I guess, get incredibly lucky. But generally speaking for for I think almost any software business, you just need to take so many shots on goal just to really consolidate that strong product market fit to get kind of explosive traction.

and that element is something that I think is pretty universal across all startups, but is really important for anyone listening to consider is that you should expect to have to put in a lot of effort just to have enough shots on goal that you capture product market fit. 

Bill: Yeah, and I think I would agree that the biggest luck component was probably just the timing, you know, that we didn't, in fact, fully run out of money that we didn't stall out and that the market did come into its own in time for us to take full advantage of that.

you know, choosing mobile because of our tremendous conviction and just how big of an opportunity it would be. I do think that to some extent also surprised on the upside. you know, you look back on even just the most recent past of the last few years and just how thoroughly mobile has really permeated every aspect of our lived life.

that I think created an opportunity that was just tremendously large. And, you know, we obviously. We were born from a conviction behind that. but I think even, even looking at it now, it's like the fact that mobile has permeated. Every corner of the globe and spread more than any technology that's ever come before it, including even like literacy to be able to read your phone, there's a phone in almost every human being's hand. The average number of them is greater than one per human on this planet. And you know, the spread of mobile cell networks goes further than, you know, even terrestrial electricity and the ability to charge them from a grid these devices have so thoroughly permeated every part of our life, and that's created huge economic opportunity.

The timing and the scale of that, we couldn't have planned that specifically. And, and, you know, we embarked on a journey without a real answer to that question of why now specifically, we had a why now generally, but I think we got lucky that we survived not having why now specifically answered pretty well.

Brett: What are the most important things that you figured out that if a friend of yours, who's really talented is going to start a company, you try to impart on them?

Bill: I think the first one is just about commitment and endurance and making sure that the thing that you want to go and build is something that you want to dedicate at least a decade to. I think a lot of people, they kind of perceive startups as these like great opportunities for like, you know, to be disruptive and build, you know, wealth and what have you, but they also succumb to a lot of the headlines of this or that acquisition happened.

And it happened, you know, quickly and in the early years of it or whatever. And, and there's a lot of people that I talked to who. you just ask them how long do you think it takes on average for a company to IPO, they grossly underestimate, things like that.

And so just making sure that there's commitment and conviction and that it's something that they want to dedicate, you know, every waking hour to for many years from here on out and therefore, that requires like passion in the space that requires like conviction. The other big thing that I try to challenge people on is the path of fundraising because everyone also just defaults to go out and raise as much money as we can like right away and don't really grapple with you know, the fact that A, there's a lot of businesses that people may start that are not appropriate to be venture backed.

And when they go and they try to kind of back them with other investors, they very quickly lose control of exactly what trajectory it needs to be on and, you know, how, how they're going to build it and, and things like that. In a way that ends up being detrimental to their passion and to their connection to it.

And so if those things are not aligned, well, if it's like, Hey, if you're going to go raise venture capital, your only option is to go keep scaling this to the moon, that's what you need to earnestly work on for a long time from now. And if that doesn't resonate with you, you know, you need to rethink aspects of that.

On the other hand, if that does, fantastic, you know, and then I can, you know, then we have a longer conversation about, where and how you pace that and, you know, how you go about it and a lot of details there. But those two starting conversations of just, like, dedication, conviction, your endurance to do it over the long term and the way that you want to go about it and how you're going to fund it and how you're going to grow it.

Kevin: I've got a slightly more tactical one, which is, it's well known sort of out there in the industry that you need to have technical ability and, you know, like YC very famously talks about how they like technical founders and things like that, like that's not a big secret.

But. I would take a much more pointed approach to it, which would be to assume that the life and death of your company will at some point and potentially at multiple points in the company's life hinge on your ability to win a product velocity foot race against every competitor in your market.

because in this sort of house to house fighting of what SaaS inevitably becomes, because I think that a lot of folks think like, okay, I'll be able to get a product built and then, you know, I'm going to put marketing behind it.

I'm going to put sales behind it. We're going to raise a bunch of money. Like. 100,000 Twitter followers, it's going to be awesome. This whole thing is going to work. all of that helps, all of that can be a great accelerant. But ultimately, to have, let's call it like terminal value product market fit, like the ability to actually kind of win an entire category, that requires just getting into these product foot races for a very long period of time, and then winning them and If you don't have that DNA, and you know, I think we were fortunate enough, Bill and Jon, very technical, brilliant engineers.

So we were fortunate enough to have that DNA. If you don't have that DNA and you don't really invest in and cultivate it, then you're not going to win that foot race and somebody else is going to be able to marshal all of their go to market resources against you in the long run.

Brett: What things did you figure out that are more sort of insights that might be useful to folks as it relates to competition specifically?

Kevin: It's important to think about pre and post product market fit. I think pre product market fit competition, it's sort of more of an abstract sense because you don't even really know who you're going to be competing against or what you're going to be competing over. And even I would say up through maybe 2 million to 5 million ARR, I think that thinking too much about competition is generally distracting.

for two reasons. One is that you don't really know the identity of your company, and also you don't know, you are not seeing enough of the deals in the market. You're not seeing enough of what's actually going on in the ecosystem that you actually have any leverage to do anything with competitive knowledge.

So I think it's important to be competitor aware, but not really to act on it. But in the longer run, I actually disagree with the advice that you should just, you know, completely ignore the competition. I mean, think about it. If you are in a boxing match, You would go and you would prepare for the match and you would work out and you would train on your own,

but you're also probably going to like look at tape of of your competitor and just try to figure out, you know, just generally what's going on. It's certainly a minority of the activities that a company should be doing but I think it is part of the overall constellation of understanding what the environment is that you're operating in. For that matter I think it's important to also understand like your supply chain. Like what are the large cloud providers that you're reliant on going to do? Are they competitors in the long run? Are they partners? Are they allies in the long run? Just being very, you know, situationally aware, I think is is very, very important.

Bill: Efficiency in this matters a lot because you have to dedicate the vast majority of your resources to building your own vision, but also, if you're losing deals like at the finish line and your sales team has spent, you know, six months or, or longer and many, many hours trying to get you the opportunity to sell to a customer and you lose it, you know, somewhere close to the finish line, that is a wildly inefficient use of the company's resources as well.

And so I think if, if you're going to kind of pragmatically try to figure out how to balance out staying focused on the customer and running your own race versus knowing when to look at the competition, I would say, look at those late stage losses and figure out, you know, what led to those losses. Some of them, it makes sense and you should have lost those deals.

And that's really good feedback to go back to qualification and say, Hey, you know, we need to get our sales teams time focused and prioritized. And so, you know, if there were these criteria that led to us losing at the finish line, let's make sure that we qualify out of those deals, you know, as long in the early days, you don't need to sell to that many customers.

Like your market penetration is going to be very, very low. And so you're better off trying to find the right customers. In that ocean of opportunity that you are needing to win every single opportunity, and that obviously starts to shift over time as your scale gets bigger and your opportunity gets gets larger.

and then the other side, and we talked about this a lot is finding points of leverage where you have an unfair advantage against competitors. And almost like a product, you know, jujitsu, if you will. And so when you're analyzing those losses and you're like, Hey, we've got this product gap, you know, looking at that and saying like, all right, what's the bare minimum that we need to do?

Or what's some way that we could take advantage of the way that we are architected versus our competitors to build something that's either going to be hard to imitate or where we can build it with a lot less effort than, you know, then it took them to build it in the first place or where they may be overbuilt something and we lost because we were missing part of this thing, but not the whole thing, right?

Those are all examples where you would look at it and be like, all right, this was an inefficient use of go to market resources. We think we should have won this customer, this thing, this reason that we lost it was on our roadmap. It just wasn't on our roadmap until next year, you know, And that I think changing your product vision to adapt to competitors is absolutely an error to make. But changing the prioritization and then also finding opportunities for differentiation where you've got, you know, some form of unfair leverage because you're relying on your architecture or some other thing that's unique about your company, those are both responses to competition.

that I think are extraordinarily valuable to build for. And you should be able to do those without taking your eye off, you know, the bigger ball of your, customer feedback and everything else. 

Kevin: there's just a very strong, management leadership, emotional side to this as well.

Because I think that competition if you obsess over it, and if you talk about it all the time, and if you talk about it in a fatalistic way or even too emotionally agitated in a way. it has an element where it will start to trigger something in large teams where they will start to obsess over it and they will think about competition all the time and they will start to ignore things that, are much, much more important, like just operating and doing your job and just executing really, really well.

And so I also think that it's really important, as a leader of a, of a company or somebody who's in a position where people are kind of listening to your opinion on competition to just be very, very measured about how one is operationally talking about and thinking through and reacting to competition because if you're not, This is just one of those areas of startup management that has the ability to get completely out the barn door and take on a life of its own.

Brett: I like Bill, what you said earlier, when you're talking about one of the, I think it was you that mentioned sort of one of your architectural insights was this idea of real time streaming. And so maybe it made sense to sort of find customers that cared about real time streaming instead of trying to sell customers that don't care about it.

And they're asking you about features that an incumbent has. And I think that that idea of changing your customer is often the most valuable thing that you can do, where I think the intuition is just to change your product basically, or value prop.

Bill: And I think also, you know, there's two sides to early scale. On the one hand, you know, if you're successful, the size of your customer base, you know, at time of IPO or, you know, 5, 10 years from now is going to be 100 or 1000 times higher than it is when you're in the early stages of product market fit.

And so that's a really good reason to actually, well, it is important to listen to customers, you know, you can't lose sight of your vision for how you're going to sell and conquer a much larger market and make sure you're building for that. Because some of those early customers could be just as distracting as some of those early competitors, right?

If you don't keep your eyes on that much higher scale opportunity that you're building toward, you know, on the flip side. In the early days, you also in the private markets, you only need one person with a big checkbook to believe in you , you know, to make it to the next stage. in the early days of product market fit, in order to, hit those early, you know, scaling milestones, you only need, you know, one, 10, a hundred, you know, a few hundred customers.

And that means that, you know, if there's hundreds of thousands of businesses out there that you could potentially sell to, you can be pretty choosy about the ones that you talk to, if you only need a hundred to hit next to your sales goal. Right. So keeping in mind, like what scale does and does not do for you and allowing that to, you know, help you prioritize, I think is super critical in the early days.

Brett: So just a final question to wrap up. I would love each of you to sort of share, what's the thing that the other has taught you that's kind of had the most residual value or kind of the thing that rattles around your brain the most?

Kevin: The ability to be very strategically patient. I mean, something that I've always, really respected about Bill and I would say have, have come to respect and appreciate even more as Braze has been a public company and has been on this very, very long journey is the fact that I think Bill is very good at thinking about what the company is going to need to do positioned in the, in a very general sense, like positioned in the marketplace, but also in terms of like company culture, in terms of, you know, certain elements of, team structure, things like that to win big prizes over a very long timeframes in a very definitive way. And I think that thinking in that way, rather than just reacting, because at a startup, there's so many things that happen. There's 100 decisions a day. You know, 30 new things come up, half of them are really scary, like every single day for years and years and years, it's very easy to become very reactive.

I think Bill is good at not being reactive when you shouldn't be reactive, but also has the ability to be reactive. And so that's probably one of the biggest things I'd say I've learned. 

Bill: Yeah, the first thing that jumped to mind for me is, uh, I really hate repeating myself. It's one of the, when people ask me, like, what's it like being a public company?

And it's like, well, uh, when I have to start at the beginning over and over and over again, and every single, like, you know, investor meeting, I really just want to claw my eyes out. But I think Kevin actually taught me the value of repeating myself. you know, Kevin was our first like full time, product person.

Like we, we were broadly just like a group of engineers designing and building the product, as kind of one amorphous engineering blob in the early days. And we, we first started to formalize product management and that required communicating like the product strategy and the product vision to people.

I had this allergy to repeating myself and Kevin, you know, really beat it into me that you just need to get up at every all hands and at every, you know, company meeting and repeat the product vision and make sure that, you know, people understand it. They understand its consequences. It's second order effects.

They can distill it down. They can repeat it. and that's going to require you to repeat yourself. and there's, there's tremendous value in that. And so, He didn't just teach it to me. He had to beat it into me to really, for me to really embrace that. Um, but I think that's incredibly valuable to make sure that everyone is really aligned and deeply understands the vision and where the company's going.

Brett: Awesome. Well, great place to end. Thank you guys for such a great conversation and sharing so much

Bill: Yeah, absolutely. Thanks for having us on today. 

Kevin: Thanks Brett.