
Intercom raises a Series B round of $23M - patrickod
http://insideintercom.io/silicon-valley-outsider-raised-30m-30-months/
======
duggan
Intercom's story has been a wonderful one to watch. They're a particular
inspiration for those of us in Ireland; they've consistently aimed high, have
set high standards for themselves, and generally raised the bar for Irish
companies.

Their blogging has been interesting since before Intercom was even
incorporated (at their consultancy company, Contrast's[1], blog).

They're also a bunch of smart, down to earth people.

Exceptional folks. Congratulations.

[1] [http://contrast.ie/blog/](http://contrast.ie/blog/)

~~~
zeroDivisible
Not only the story is wonderful to watch, but I really like their attachment
to the community here, in Ireland. Being present on most (all?) of the major
events, lending their offices (& time) to host Dublin Code Kata meetings - I
was taking part in few of those last year and they had been a blast, promoting
TTD and hacking while solving interesting problems. Only time and amount of
things to finish in my projects had stopped me from going on those meetings -
but I will continue with the nearest opportunity.

I didn't had a chance to use their products, but hearing the opinions about it
- and knowing their attitude - I'd vote with my both hands if having the
opportunity to do so.

Great job, Guys!

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guynamedloren
> _FOCUS ON ENGAGEMENT QUALITY BEFORE ENGAGEMENT QUANTITY_

I'm glad they touched on this. I've heard from several sources that many VCs
don't care about engagement _at all_ , as long as growth is massive - which
seems crazy to me.

For my own SaaS, I'm focusing entirely on engagement and getting the service
right before scaling up. I'm constantly talking to early users, gathering
feedback and iterating. It's a slow and painful process, but it's reassuring
that Intercom also did this.

~~~
simonw
It's a tricky balance to get right. If you focus on quality for too long, you
may mis-time your growth efforts and find yourself with a fantastic product
and not enough users to keep it viable / raise more money.

A great company needs both growth and engagement.

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tzury
You should read Intercom's founder article about product management
[http://insideintercom.io/product-strategy-means-saying-
no/](http://insideintercom.io/product-strategy-means-saying-no/)

------
dictum
> Your vision is the ceiling for your company’s potential. You’ll never be a
> billion dollar business if you’re not deliberately working to get there. And
> in venture capital, it doesn’t make sense to invest in anyone who isn’t at
> least trying to build a business that size.

If I read between the lines correctly:

Intercom _the CRM focused on medium to small web apps_ as we know it will be
gone soon. Intercom _the Big Serious Business CRM but with a friendly
interface_ is the new direction.

Congratulations to the team — Salesforce is definitely needing better
competition. Congratulations to whatever is second-place to _the current
iteration of Intercom_.

You don't get to a billion dollars without snubbing the initial customers.

~~~
janlukacs
I'm 'affraid' that's what will happen, hopefully pricing won't change very
soon

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ncremins
Really great news for the guys & gals at Intercom, Delighted that they're from
Ireland too. Nice to have some good news around here for a change.

I've had the pleasure of meeting a few of them and what can I say, they're
extremely passionate about what they do!

Congratulations.

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jackgavigan
Great post. I met Eoghan a while back, not long after they'd graduated from
500 Startups and I remember thinking "Smart guy, simple idea, huge market."
Great to see that they're knocking it out of the park.

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adaml_623
" You’ll never be a billion dollar business if you’re not deliberately working
to get there. And in venture capital, it doesn’t make sense to invest in
anyone who isn’t at least trying to build a business that size."

It doesn't make sense to invest in anyone who might just grow to a 50 million
dollar company? I think VCs must be missing out on a lot of opportunities.

~~~
patio11
It's very difficult to make the math work out for Series A/B/C if you exit at
$50 million. If a VC firm invests $5 million and gets a 3rd of the company,
then you sell for $50 million, they get ~$15 million on that deal. Yay.
Unfortunately, to get there, they had to spend $30 million on 10 similarly
situated company, in excess of half of which have a liquidation value of zero.
Absence of yay.

I think the parlance for tripled-our-money is "base hit." You don't play
baseball to hit base hits. (Well, unless you're the Oakland As -- and talk to
Dave McClure et al if you want to hear this metaphor in a lot more detail.)

There exist angels and other seed-stage investors who would not be unhappy
with a $50 million exit, to put it mildly. (To say nothing of the founders and
the employees.)

~~~
michaelochurch
The problem is that no one can predict the future, so VCs end up backing
people who _promise_ billion-dollar potential. More realistic people who say,
"yeah, this could do $50 million, maybe a little more", get hosed. But the
either/or dichotomy ($50M lifestyle business vs. billion-dollar world-changer)
is stupid. There's nothing that says that one can't get to the $50M point and
then, once out of the gravity well, make a bigger and bolder play.

All these numbers are bullshit when starting out, anyway.

 _There exist angels and other seed-stage investors who would not be unhappy
with a $50 million exit, to put it mildly. (To say nothing of the founders and
the employees.)_

Actually, $50m exits under current conditions are horrible for employees, just
because employee equity is so low. After preferences, it ends up being
equivalent to the kind of bonus bankers get when the firm's trying to get rid
of them.

Aside from just regular greed, I think one of the reasons VCs push for
pathetic option pools is to create a company where a $100 million exit will
piss off almost every single employee, which means that even if the founders
would prefer it, there are plenty of key players who'll only do their best in
a quest for a $10B+ result.

~~~
tptacek
This comment isn't responsive either to 'patio11 or to the thread. The
question is, "are VC's missing out on lots of successful exits because they're
allergic to 50MM outcomes?". The answer seems to be "no", because the returns
on 2 50MM exits in a 10 company portfolio don't make up for the goose eggs
from the other 8.

The fact that many of us believe that any given "billion dollar" prospect is
counterfeit is neither here nor there. Sure, most VCs also fail with the "bet
on billion dollar companies" strategy. Most VCs fail. But that doesn't mean
that they should select instead a strategy that appears to be mathematically
predetermined to fail.

~~~
michaelochurch
What makes you think that only 2 of the exits will succeed? Or that the
projects slated for $50M won't turn out to be worth $500M when new approaches
or uses for the work are discovered?

There are too many hidden variables and no one knows what they are doing. I
don't.

~~~
tptacek
If you have a strategy for investing in 10 companies and having 5 of them exit
at 50MM+, you should raise money for a fund.

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rohamg
Intercom is an exceptional example of tackling a large and hairy problem with
dauntless focus. As a user, evangelist, fan, and investor - I'm proud of all
of you and excited to see what comes next. My favorite part of the blog post?
"fundraising is a pseudo-achievement" \- smart, smart smart!

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sunir
Just to play the armchair investor game...

With 2000 customers, what might be their annual revenue (they say in the
millions)? $2-4 million?

Their evaluation must be a huge multiple of revenue. I therefore imagine their
belief is they have conversion down so now it is time to buy marketshare?

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seivan
“My hiring philosophy is aim high. Get people you think you can’t get. Shock
people that you were able to get a certain person.”

And then go ahead and hiring executives and managers who're not outsiders.
Sorta like what Marissa did with that French dude.

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blackdogie
There's some real gold in some of those blog posts on there. Well worth
reading.

~~~
dclara
I think they are really a winner from the following perspective:

1\. Have a large enough vision and market 2\. Maintain high quality of user
engagement 3\. Hire a talent team 4\. Found the right investors

These are pretty much what every successful startup company needs. But I'm
curious about

1\. How did they obtain a user base (especially enterprise level accounts in
the US) and keep them from the competitors, especially when they didn't have
any marketing hiring yet?

2\. How are they able to attract the talented team members even they were
small? The same for investors.

Looks like they have extremely good luck.

Can you refer some of them which may cover the above questions?

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manishsharan
I have always wondered what is the common definition for a billion dollar
company . Is it the annual gross or net revenues or is it the valuation ? If
it is valuation, what P/E multiple ?

~~~
codeonfire
Is it not market cap > $1 billion? For pre ipo companies with no free cash
flow it is amount someone invested divided by perecent equity they got > $1
billion.

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philsnow
Read that as "Infocom raises a Series B round of $23M" and my heart went
pitter-pat.

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roryhughes
Yays to the intercomrades!

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fairydust
Interesting timing giving the Docker funding news.

