This is the first in a series of periodic posts chronicling the beginnings of successful startups, covering the idea's conception, early product iterations, acquiring their first users, raising a seed round, and much more.
Ambition is generally formed with reference to role models. You see a founder, scientist, or artist and realize that you want to achieve something great, like them. Their success—whether it’s Jobs, Einstein, Merkel, Picasso or Curie—becomes a guiding lens for your own energy and aspirations. The work that made them famous becomes your adopted standard for excellence, whether that be building your own Apple, wining a Nobel prize, or leading your country.
And while each of these endeavors had humble beginnings, it's difficult to appreciate that fact fully. What does a behemoth like Apple share with the software idea you’ve just prototyped? Were those ideas always destined for success? Always a step ahead? Of course not. At some point, they were just like you.
Consider Intercom, a multi-billion dollar company with over $200 million in annual revenue and 25,000+ customers including Facebook, Shopify, and AWS. Intercom’s leaders are internationally renowned, but ten years ago they had no idea how big Intercom could be.
Eoghan McCabe, Des Traynor, Ciaran Lee & David Barrett were humble hired guns developing web apps for non-technical founders. They used their modest income to build side projects, hoping that one might carry them to a $40k/yr salary.
This is their story, from a simple error tracker to a customer relationship juggernaut.
“If you’re modelling yourself off one of the big successes, start where they started, not where they finished.”
- Des Traynor, Lessons Learned in Growing a Product
Before Intercom: Contrast & Exceptional
Before Intercom, the founders worked together as technology consultants on a small team called Contrast. They developed web apps for their clients, who were usually non-technical founders that needed their first product built. On the side, Eoghan, Des, Ciaran & David used the income from consulting work to fund their own shared projects. A few months after starting Contrast in mid-2008, they launched their first product.
“We launched a load of other products that either didn’t work out or we sold. We launched a thing called Qwitter, which was a tool for letting you know if someone quit following you on Twitter, which we sold. We [also] built a product called Task 5.”
- Des Traynor, Interview With Josh Pigford, Baremetrics
One of the products they built was Exceptional. It was used by software developers to tell when something went wrong in their web application.
“Exceptional was a Ruby on Rails error tracker. So if an exception happened in your code, you’d get notified - What had happened, what line it was. You could get SMS, a push, you could even get a tweet about it, because it was social. You could also see what users were affected and that sort of stuff. And then, as a team you could comment, you could assign it to each other, etc.”
- Des Traynor, Interview With Josh Pigford, Baremetrics
Exceptional was a complicated product, and this made it liable to crash occasionally.
“A recurring task we had was apologizing for downtime… We used to have to apologize for this all the time. We built a way where we could push a little message inside the product to say sorry about that downtime. A lot of people said, 'What is this thing? This is cool.'”
- Des Traynor, On Starting Up
Below is what Exceptional looked like to users. The bubble with an X on the bottom right is the "message inside the product" that Des mentions. This is the earliest prototype of Intercom. Notice how simple it is. The feature enabled Des & co. to broadcast a message inside their web app to their users. That was it.
Take a look at the admin page for that "message inside the product" feature. It worked as intended, but it’s clearly a hack. While it was built with the bare minimum amount of polish and clearly not intended for customers to use, it worked!
The founding of Intercom
The invention of Intercom was not a single "Eureka!" moment, but a gradual, incremental realization on the part of the founders. Exceptional's message feature caught peoples’ attention, and customers wanted to use the broadcaster themselves to send messages to their own users. None of Contrast’s other projects had elicited such an enthusiastic, surprising reaction as this small feature.
Over the course of a few months, the founders came to see that the broadcaster might be a viable standalone business. If it eventually made enough money to replace their consulting work & Exceptional, they would see that as a success. Further, they were excited to work on the idea. Helping businesses talk to their customers was an interesting problem to solve.
In late 2010, the founders sold Exceptional and used the proceeds from the sale to begin working full-time on Intercom. They abandoned their consulting work and all other side projects.
“I worked on the idea in December 2010, I pitched it to the rest of the team a couple of weeks later in December. We wrote our first line of code the first days of January 2011. I think we had people using it by March or April 2011. And then we launched it publicly in the summer of 2011.”
- Eoghan McCabe, The Frontier Podcast
But how ambitious were they?
In January 2011, the team officially started Intercom. They rebuilt the feature they had created in Exceptional, started adding more features, and created something ready for customers to use. After 3-4 months, they had some initial users, and they launched in June 2011—6 months after starting work.
Though the initial broadcast feature was created just to push messages to customers, the founders quickly began to realize that the idea had an enormous range of possible extensions.
This is what those features looked like. Note the increase in the quality of the visual design from the prior images. As Intercom transformed from a hack into a product, it became far more polished and aesthetically pleasing.
As you might expect, the User List enabled customers to get a better understanding of their users. In the above screenshot, the admin can view each user's number of clients and projects, how many SMS messages they've sent, and what plan they’re on. This ability to work with custom data made Intercom significantly more flexible and useful.
Customers could also now see more detailed profiles of their users, including usage information and social media profiles. They could also keep track of conversations with customers.
The User list could also apply filters, enabling Intercom customers to communicate with specifically tailored groups of users. They could now easily push messages to each users in groups selected via filters.
These features were all shipped within 9 months of starting Intercom. After starting work in January 2011, the product launched publicly in June, and all of the above features had been built by early October 2011.
Here’s what the shipping schedule looked like from June to October 2011. It reflects one of Intercom’s core philosophies: "ship fast and ship often."
Fast gets good quicker than good gets fast. https://t.co/rfKjyzTfNy
— Des Traynor (@destraynor) March 4, 2021
Intercom’s first users & customers
The team needed to find their first users, and hopefully turn them into their first paying customers. Since several Exceptional customers had been curious about the broadcast tool, those people were an obvious group to start sharing Intercom with.
Further, it helped that Des Traynor & Eoghan McCabe had built sizeable personal brands within software and design circles at the time by blogging regularly and speaking at conferences. It also helped that the products they had previously built were used by the same type of people that would use Intercom, i.e. businesses on the Internet!
And yet, getting users onboard still required toil. It was a long and unexciting grind to convince people to use the product. This was Des Traynor’s primary job in the early days.
“TL;DR: I emailed people and asked them to try our product… So all day every day I’d email people to tell them about Intercom, show them what Intercom might look like for them, and hear their feedback. I did this 100% by hand and if I was to do it all again today I’d still do it by hand. Honestly… We grew email by email, Skype by Skype, webinar by webinar.”
- Des Traynor, How Intercom Got Our First Customers
“At the start, we kind of begged, borrowed, and stole customers. And by that, I mean, you know, we just went to people we knew in the industry, friends, previous clients, from our consulting business, anyone we knew, and kind of asked them, would they please try this thing out. And I think there's a lesson in that. If you do not know people who could use your potential product, if there's not individuals in your phone book, that you can call or text and ask them to try the damn thing, you're working on the wrong product or service.”
- Eoghan McCabe, The Frontier Podcast
This is what Des’ inbox looked like at the time. Meanwhile, Eoghan was working on strategy, fundraising and design, while Ciaran & Dave were serving as the engineers building the product.
I'm up at 6am to run a seminar for good folks in Australia, New Zealand, India, Singapore and more. Starting now: https://t.co/GAVLVk7z
— Des Traynor (@destraynor) August 2, 2012
Feedback on the product came to the team in many forms. The first issue was whether or not people would use the product. Then the issue became how much they would pay for it. While many people responded positively to Des’ pitch, that wasn't always the case. As he tells it:
“I distinctly remember an industry veteran in 2012 explaining to me in detail how ‘real’ companies would never use Intercom ‘at scale’.”
Des Traynor, Twitter & LinkedIn
Other potential users found Intercom interesting, but not compelling enough to spend money on. One response that Des got was along the lines of “this is cool but I think that I should build it myself.”
“The first sort of hallelujah moment I remember having was probably late in the day. Eoghan and I jumped on a call with [a user]. Literally, the first thing he said was, 'Oh my God, you guys. This is incredible. Product-wise, I’ve just spent all day talking to all my customers. I’m getting so much great feedback. It’s incredible.' ”
- Des Traynor, Oral History of Intercom
In parallel, the team was thinking about pricing. How much should they charge? Would people even pay for the product? Was it more than a fun tool for them to try out? In mid 2011, they set out to find out and started charging.
“We decided to charge $50 and see how that settles in. [Our attitude was] 'Then we’ll come back to this problem and we’ll know more. The data from the future isn’t here yet, so let’s wait until we get that data and then we can base our next move on that.' It was a good thing to do from the point of view of getting something out the door. It got that perpetual monkey off our back of, 'It’s a bit of a toy, will people ever pay for it?' Turns out, yes, they will. They’ll pay for it in massive amounts. They were happy to do so. Pricing from there, we tried to get progressively more advanced."
- Des Traynor, On Starting Up
Intercom’s first fundraise
Luckily, Intercom gained momentum, and that momentum inspired new levels of ambition. Through working on the product, acquiring users, and exploring the solution space, the founders realized that the opportunity ahead of them was orders of magnitude larger than what they initially expected. At this point, they chose to raise venture capital. This is what their first pitch deck looked like.
“It’s from late 2011. When raising $600,000 was a monumental task. And when I thought it could get us to profitability.”
- Eoghan McCabe, Intercom’s First Pitch Deck
Intercom’s initial aim was to raise $600k, but they actually raised a seed round of $1m in late 2011 instead. They announced the raise in January 2012, one year after starting the company. Their investors included Twitter co-founder Biz Stone—whom the team had met when their side-project Qwitter blew up— and entrepreneur Jon Siegel, who had acquired Exceptional a year previously, as well as Eamon Leonard, a Dublin-based founder that had shared an office with Eoghan.
2011 was an auspicious start for Intercom, and in 2012 they made their first hires in Dublin & San Francisco: Ben McRedmond, who had just finished high school in Dublin, and Darragh Curran, a former Contrast colleague.
Their pitch deck above gives you a sense of the team's ambition at the time of the raise. Eoghan estimated that this $1m in funding was all they needed to become profitable, and Ciaran thought they might be a $10m company! That's not what happened. While Intercom perhaps could have become profitable after their seed round, they instead decided to accelerate growth and postponed profitability while raising an additional $240m in the following 8 years. Today, Intercom is worth over $1.6 billion.
Conclusion
Intercom began as a hack, but today it’s a worthy source of inspiration for any aspiring founder. As successes go, this is not an exception.
Figma started out as an in-browser toy, Facebook was an “online directory for college,” and Apple was a side-gig for Woz & Steve Jobs. Take note! Whatever you’re working on could turn out to be a lot bigger than you think.
If you’re looking for some help along the way, get started at Pioneer.
Written by Tom McCarthy. With thanks to Ciaran Lee, Des Traynor, Eoghan McCabe, Liam Cribbin, Emma Murphy, Gytis Daujotas, Eamon Leonard, Lucas Gleba, Molly Mielke, Jackson Prince, Mishka Orakzai, Andrew Ng & Rishi Narang for their help.