Hi. I’m Eoghan McCabe. I’m the CEO and a co-founder of Intercom.
Notice a trend here? I write the easy posts, taking credit for everyone else’s smart work, and everyone else writes the hard posts, about said smart work.
We’ve announced a new round of funding every year for the past four years, which provided opportunities for us to update the world on our progress. But what about when we’re not raising money? Which we don’t intend to do forever…
For the first time today, we’re going to share some numbers and plans that we’ve previously kept close to our chest, in the hope that our customers can bet on us more confidently. But also to show the world just how successful a business that stays true to itself can be.
We still feel like outsiders in Silicon Valley and the SaaS industry. We’ve stayed skeptical of the Valley playbooks, or at least never thought we could make them work for us. And in a time of excitement for things like artificial intelligence, we’ve been more interested in facilitating authentic connection (our mission being to make business personal). We’ve tried to put passion and art and love and creativity ahead of revenue and valuation and buzz and traction, discovering that the latter can often follow the former.
Vanity metrics and other bravado
Intercom is still in its infancy as a business. We’re only five years in, and compared with some of the companies we’re trying to compete with, still small at just over 300 people. And yet we feel like our hard work is finally starting to pay off.
Many, many thousands of humans
Late last year we passed 100,000 monthly active users of our products. (People working for the companies who use Intercom.) This is big for a business product, and it’s mind-blowing for us to imagine this many humans all over the world working in our products.
These humans are now starting or responding to over 400,000,000 conversations with their customers per month. Which has doubled since July last year.
Early Educate success
24 hours after launch, 648 companies had created 20,396 articles on it. Today, two months later, it’s making $1.5M in annual recurring revenue (ARR). For context, it took us two years to get to $1M in ARR for the whole business.
We see this growth as incredible validation of the market’s demand for newer takes on legacy concepts, and in particular our platform and personal approach to our products.
New customers, of all sizes
There are now over 17,000 companies paying for Intercom, most of which are using more than one of our products.
The bulk of our customers are still small. We’re proud to support some really amazing young, growing companies like Marvel, a popular prototyping app; Classy, a fundraising platform for non-profits based out of San Diego; Canva, graphic design software based in Australia; Monzo, a disruptive digital bank; and Siftery, a great place to discover new products to use at work. Every time I look at our customer base, I discover new, amazing companies I hadn’t come across before.
A major revenue milestone
99% of new customer growth is still inbound. Customers are coming to us, primarily via word of mouth. This means we save a phenomenal amount of money that conventionally would be spent on sales and marketing, which instead we put into new product development.
We finished last year at a very big milestone — we passed $50M in ARR. And we grew from $1-50M in ARR in three years. This is faster than role models like Shopify, New Relic, Hubspot, Zendesk, RingCentral, Atlassian, and others grew at this stage. Slack however beat us by growing from $1-50M in ARR in less than three years. (In fact, I think they went from $0-50M in less than three years too.) Thanks Slack!
A healthy, sustainable business
But most importantly for you, we’re trending aggressively towards profitability. (Finishing last year at a -34% operating margin, about on-par with a range of public software companies.) We’re here to stay.
So here’s what’s next
Our mission is to make business personal. Our deep desire is that every single business on the internet can use Intercom to connect with their customers. We put this long-term goal ahead of short-term financial targets. So here’s what’s coming this year to help achieve just that.
Upgrading our products for growing companies
We’re evolving our products to work well for your business as you scale. This doesn’t mean we’re going to switch our focus to the “enterprise” market. It just means that as your business grows a little bigger, we’re going to work very hard to try to keep you on Intercom, rather than make you have to consider the legacy alternatives.
Every product is getting an upgrade. Right now, we’re working very hard on a long list of improvements to our Resolve product. Think enhanced workflows for support reps – like being able to easily loop additional people into a conversation – and features for team managers – like reports. We’re so excited about these! Some of the features are looking really great.
(This smart-ass illustration is supposed to be of the Resolve product logo evolving. Nobody got that. Oh well.)
Building out our infrastructure for 100x more growth
We’re investing very, very heavily in our infrastructure. All parts of our system were tested last year. For example, the amount of records in one of our core databases grew from 600M to 2.4B.
Because of this, and imperfect planning on our part, our customers had to suffer a bunch of downtime. Particularly towards the end of the year, as our availability fell to 99.7% — well below our 99.9% goal.
We were devastated by this. We re-prioritized our work, putting dozens of engineers on the problem, and spent millions of dollars to get us to a healthier place. We’re pretty proud of where we’re at now. The bulk of the problems we had before are gone. But we have some really great things to ship still. Expect a far more available and faster Intercom moving forward.
Opening up our platform
Intercom’s vision is to replace all of the separate apps or solutions that companies use to talk to their customers with one simple platform. But it might take another 10 years to really get there. Until then — and even after for areas we have no plans to invest in — we need to make sure Intercom plays nice with other products.
We’re slowly and steadily expanding our APIs, and nurturing our nascent ecosystem. This is a long-term investment. But already we know of over 100 third-party Intercom integrations. Like Aircall, which lets you call your customers from Intercom, or Statbot, which lets you track and chart key Intercom metrics. So cool.
Making Intercom affordable for all
Finally, starting up is in our DNA. We were babies so recently, and have many friends only starting their baby companies now too. We love invention, and we love people who invent. And so we don’t ever want to be too far from that world.
It was very important in the early days for us to demonstrate that people would pay for this new and unfamiliar thing — a collection of features nobody had ever put in the same product. That helped us raise much needed early capital. Later on, it has been important to grow our revenue to help pay the bills — we insisted we’d never be one of those over-funded, over-valued companies. But as our products become more sophisticated, allowing us to charge more for them to bigger customers who need the extra functionality, we can afford to give a little back to the next generation of startups.
Watch this space for cheaper pricing for baby companies, and simpler pricing for all.
I hesitate to write this next part, because I fear it might not be believed. Most companies say some version of this at some point. But the following is true. And I hope that if you don’t believe me now, you’ll later come to believe it by our actions.
The reason we do this is to make cool and useful things for you. We’re thrilled to make money in return, and we love that we get to build a company our way too. But the reason we started this thing, and the reason we continue to show up every day, is for you. We really want to surprise and delight you. We want to see what you do with our products. Nothing gives us more satisfaction than to simply see them be used.
And so if you really want to know what’s next, it’s us doing our very best — which will sometimes fall short of all of our hopes — to simply serve you. 100,000 thank yous to all of you who’ve shown us so much love and support over the years. We hope you’ll stick around to see what’s next.