Matthew: Hi. This is Matthew Wise with FounderLY. We empower entrepreneurs to have a voice and share their story with the world, enabling others to learn about building products and starting companies.
So, it’s with great pleasure that I am here today with Mikkel Svane, who is the founder of Zendesk. Zendesk is a Cloud based customer service platform.
Mikkel, we’d love for you to give our audience a brief bio.
Mikkel: Yes. First of all, I’m Danish, thus the broken English here. I moved to California with my family two years ago. Basically, I moved my company over here and then my family moved along.
Zendesk is my first startup at this stage, but I’ve always been working with my own companies, I’ve always been working with technology. Always been working with Internet technologies, basically since my first visit to San Francisco, which was back in ’95. Thus ’95 was the year when we started to have dial-up connections and so on in Europe and I flew into San Francisco. Drove up to San Francisco through the 101, and there’s all these billboards and they all have web addresses on them and I was like, “What the hell is going on here?.” It was super-interesting, something that defined a lot of my career path. But I’m Danish, I have a couple of kids, live on out in Bernal Heights, grew up in Copenhagen.
Matthew: Can you tell us what makes Zendesk unique? Who is it for and why are you so passionate about it?
Mikkel: Yes. We built Zendesk. I have two co-founders for my company, and we built Zendesk because we had experience from working with these kind of systems. We implemented these kind of systems for companies and enterprises of all sizes and both from the business side and from the technology side, and these systems were just painful to work with.
It felt like it was a space that, it was an industry that flew under the radar. There was a bunch of startups working with social this and mobile this and productivity and how to work smarter and better and all kinds of stuff. But nobody really wanted to deal with the customer support Help Desk space. I think a lot of it had to do with the fact that, back then, all traditional customer support Help Desk was very much for the bottom feeders. If you couldn’t figure out how to be an Engineer, you ended up in the Help Desk. If you couldn’t figure out being a Sales Person, you ended up in the Customer Service Department.
It wasn’t a very sexy industry, you didn’t pick up a lot of girls saying you work with Help Desks, so it seemed like nobody really tried to reach or take that industry up-to-date. So, we thought it was painful products to work with back then and we got together and said, “We can do this product. Let’s figure out building a product that is both beautiful, simple, intuitive and all of that stuff and make it up-to-date so that it works with Internet technologies and you can subscribe to it as a service and so on.” As with start-ups, there’s many ways to tell the founding story but this is one of them, at least.
Matthew: What are some of the technology and market trends that currently exist, and where do you see things developing in the future for your space?
Mikkel: We were, in many ways, a first mover in kind of rethinking the customer service space, the customer service platforms out there. And I think we’ve been blessed and we’ve been very, very lucky that since we launched our product, it has become very, very obvious for companies that they need to take the customer service much more seriously. It’s very hard today, because of the Internet, because of social media and all that stuff, it’s very hard today to conceal or to hide a bad customer service experience. If somebody has a bad experience with something, it’s out there.
So you not only, for some companies they say, “Well, we can’t satisfy everybody. So, there are some of our customers, they get a bad customer service experience and that’s too bad, we’ll lose them.” But nobody can really say that anymore because if somebody gets a bad customer service experience, they’ll tell everybody about it and it will be super public. It will be out there, and their friends will know about it and they will inspire others to look for other products, too.
Since we launched our product, a lot of companies have realized they need to take their customer service and their technical support much more seriously. Basically, they have to address some of the very basic contract items in dealing with your customers or dealing with people in your own life. They need to be responsive, they need to be open and transparent about what’s going on and they need to be authentic. You can’t just lie yourself out of stuff. You have to address things with a real tone. That is basically what we at help companies are doing and to what extent it has really helped and transformed our business.
Matthew: What inspired you to start Zendesk? How did you come across an idea and discover the opportunity?
Mikkel: As I said before, we worked with these kind of systems. We found that it was painful to work with them. The implementation processes were typically year long. It became very complicated systems that were very complicated for the actual users, the customer support people that supported this use. I think most importantly all these systems were so complicated, so filled with metrics and management and administration that nobody really had the ability to focus on the customer service experience.
It was kind of like the customer got buried in all these big, complicated systems so, we basically said, “Let’s turn this upside down. Build a system that is beautifully simple to use, that you can hit the ground running with the system. You don’t have to think about training, administration, or anything like that. It’s not something that you have to install on your own server. You don’t need to think about how does this integrate with my email server, or how does it integrate with my website and take care of all of that stuff. And just allows you to not focus on the clutter and focus on your customers.” In many ways, that was what, at least, one of the stories that defines the startup of our company.
Matthew: Who are your co-founders? How did you meet? What qualities were you looking for, and how did you know that they would be a good fit?
Mikkel: First of all, they are really good friends. I think that everybody knows that the first period of a startup, pre-funding and all that stuff is a bitch. There are so many things that can go wrong. So, you need to have a good contract, a good relationship with the people that surround you.
One of the dilemmas with building a startup, pre-funding is you have to go through a phase of bootstrapping, there’s no money in it, it’s a little hard for everybody. And if you are out together with really good people, they all get all these offers for, “Why don’t you get a job here? or Why don’t you participate in [inaudible 08:05]. We are funded. It’s a completely different game,” and you have to manage yourself and your co-founders through that process and that’s just painful.
I’ve known both my two co-founders for many years. I’ve been working with them in different companies, and we were all working as consultants, back then. And we all agreed that, if we wanted to get back to what we were really passionate about and that was building products, building great products, this was our last chance. If we didn’t do it now, we would never get to do it.
I have two co-founders. We are three co-founders in total. Morten, we’re all Danish, Morten and Alexander, Morten Primdahl and Alexander Aghassipour. You have to spell that. We are all three with the company still, and Alex is our Product Mother and Morten is our Chief I-Tech and still responsible for most of the infrastructure.
Matthew: From idea to product launch, how long did it take, and when did you actually launch Zendesk?
Mikkel: I think we worked with the idea for quite a while and I think we spent almost a year trying to build the product, getting ideas about what was the optimal work flow, what were the best practices that we try to built big into the product without making them stand in your face. So, I think that took a year building a working version of the product and being able to launch that. That was one of the things we really wanted to do. We wanted to go out and have a fully functional product that you could start with on day one.
That was a little bit over 4 years ago. That was October 1st, 2007 that we launched the product into the wild, and it was a fully functional product and we started having customers already the first month.
Matthew: Are there any unique metrics or social proof about Zendesk that you’d like to share with our audience?
Mikkel: Sure. Yes, I will. We came to San Francisco two years ago. It was a very bootstrap operation until then. It was basically the three founders, and then we had a couple of people around the world helping us. Today, I think we’re like 130 people in total, 100 of those people here in San Francisco in our new offices in the new Mid-Market District up in 6th and Market. We announced earlier this year that we now have more than 10,000 customers. That is 10,000 businesses around the world using our product for serving their employee’s partners or, of course, customers.
We have customers enrolled in 100 countries today. We have a European Headquarters in London. We have an APac Headquarters in Melbourne. We have an Engineering Division that we just set up in my home city of Copenhagen where we have, I think, ten employees right now. We’re a cost free raised round over here, so we have through our series A, B and C raised a little over $26 million. And we are doing really, really well.
I remember one of the first times we got to San Francisco, I visited Twitter and these guys, there were like 20 people and all over the place and it was the greatest people to deal with, ever. And they wanted to use Zendesk. I remember they were like, “Yeah, we probably have like a couple of hundred requests a day.” Yeah, no problem. Easy Peasy.
And we helped them, and soon after that, they got on “Oprah” and Obama, and I don’t know what. Their popularity just exploded. And we got through that transition with them. It’s one of these stories where we are a little tiny bit of the Twitter story and that’s just superinteresting.
I also remember the first time the Groupon people approached us. Tiny little company up in Chicago. We didn’t really knew who they were. There was some weird conversation going on. We were literally uncertain about it. “What are these guys?” But we said, “Yeah, let’s make our way to helping them and get them started with some good customer service and so on.” Right now, today they got 3,000 agents on Zendesk. It’s completely crazy and we’ve been with them through this crazy growth they’ve been on. It’s really interesting to see these operations from the inside. And I can tell the same story of FD&B or Dropbox or a lot of these other companies that are using Zendesk today. That’s an amazing part of our story.
But, coming back to what it is that we really want to do here, building a beautiful, simple product, is also that we wanted to marketize this space. We want to make everybody capable of providing great customer service. So, some of the stories that are most kind of fascinating for me is how these little maintenance management company in Missouri that needed to bid on a tender and needed to provide a sales service solution for this tender. So, they set up a Zendesk over the weekend, made it look crazy good, submitted it and won that tender and they’ve been winning every tender since then just because they have a professional grade, sweet looking sales service part.
So these are some of the stories that are great to share.