Listen to the story of how Craig Walker, Founder & CEO at Dialpad acquired TalkIQ for $50M in 2018. With one startup acquired by Yahoo in 2005, another acquired by Google in 2007 and a background as an M&A lawyer, Craig’s perspective on M&A is insightful for any startup founder looking to acquire another company.
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FULL TRANSCRIPT BELOW
Craig Walker – Founder & CEO @ Dialpad
Dan O’Connell – Chief Strategy Officer @ Dialpad
Jessica Lin: Co-Founder & General Partner @ Work-Bench
Jessica Lin: All right. Thanks so much everyone for joining us for our fireside chat today, disrupting the desk phone: how and why we made a $50 million acquisition. My name is Jessica Lin. I’m a co-founder and general partner at WorkBench. We are an enterprise-focused VC fund in New York, and we invest in enterprise startups throughout the country and it’s both a privilege and a blast to be here with one of our WorkBench portfolio companies, DialPad with Craig Walker, founder and CEO, and Dan O’Connell, chief strategy officer and former CEO of Talk IQ.
Jessica Lin: So one of the things I love most about being a VC is I’m always learning. And of course, last year as one of your investors, when we learned of your plans to acquire Talk IQ, we were thrilled to hear that. But even just this past week, I learned so much more of the inside scoop of this acquisition, and that’s why we’re really excited to share more today, both about why some acquisitions … A lot of them you don’t hear ever of how they turn out. They usually don’t turn out that great. And that’s why with so many marriage analogies, what I think what makes the DialPad and Talk IQ acquisition so special is it almost feels like it was two comets flying on your own trajectories and blazing through, and then colliding and creating an even more beautiful comet that is now going to take on and kill all these legacy IT phone dinosaurs.
Jessica Lin: So we’ll chat more about analogy, really milk that, and again, you’ll hear, especially throughout this session why this is not really a story about just one acquisition. It’s actually a story that brings both Craig and Dan’s former lives together, and we’ll hear more of the special sauce.
Jessica Lin: So with that, at WorkBench, we have actually a signature icebreaker we like to do. And so, given that Craig and Dan again have worked together now through an acquisition and through this past year, we thought we’d actually try something known as the newlywed game. So both Craig and Dan have whiteboards on their chairs. We’re going to ask them a few questions about one another to see how well they know each other. Ready to go?
Craig Walker: Fire away.
Jessica Lin: Okay. So this is questions for Dan about Craig. So both of you will answer, right? For both of you, which one of you is the bigger procrastinator? There’s only two choices. It’s either Craig or Dan.
Craig Walker: It’s pretty easy.
Jessica Lin: All right, ready? Let’s see.
Craig Walker: Of course.
Jessica Lin: All right. Definitive. All right. Now who is Craig’s favorite historical figure?
Dan O’Connell: Craig, all he does is talk about history.
Jessica Lin: So they didn’t see these before, but I had to say.
Dan O’Connell: There we go.
Jessica Lin: Okay. So Craig, what’s your favorite quote that you quote from him?
Dan O’Connell: Did you write Patton?
Craig Walker: Yeah. I did write Patton. A good plan violently executed today is better than a great plan next week. I believe it.
Jessica Lin: All right. What is Craig deathly scared of? Hint: it sheds.
Craig Walker: Pretty simple.
Jessica Lin: We got this?
Craig Walker: It’s not that hard.
Jessica Lin: All right. Snakes. Three for three. So apparently there’s a great video, so everyone will hang out after and play the video. And then last but not least, what is Craig’s catchphrase around the office? I’m literally seeing what Craig’s writing. Okay, we got, Kale And, “Bitchin’,” which is three out of four. Really good.
Dan O’Connell: 75% is pretty good.
Jessica Lin: All right. We’re going to flip it really quickly and go down the line for Craig about Dan. Which one of you is the more organized?
Craig Walker: Not even close.
Jessica Lin: So we got a Dan and we have a Craig. All right. This is more technical question. What position did Dan play on his water polo team? Driver and wing. That was a trick one.
Craig Walker: I have no idea what the positions are.
Jessica Lin: Third one. What does Dan do when he’s stressed out? Work out and paces. All right. That’s pretty close. I’ll give you that one. And last but not least, what is Dan’s go to karaoke song? Apparently Dan is a singer and has his own cover band.
Craig Walker: Very impressive.
Jessica Lin: So I’ve gotta see … Take on me and Living on a prayer. Both very good ones.
Dan O’Connell: That’s a good one. It’s my backup.
Craig Walker: Came close.
Jessica Lin: I think both of those should be. All right. Cool. Thank you very much. Very impressive. Very, very impressive. Craig and Dan. So we’ll jump in. I’ll start with Craig’s comment and then we’ll bring in Dan’s meteor and go from there. So for Craig, I think what’s so ironic about your journey in a lot of ways is that you actually started as an M&A lawyer, right? And then you join the light side as a tech founder. So are there any experiences you had as a lawyer that informed how you approached M&A years later?
Craig Walker: Yeah. So in the mid-90’s I was with a firm. We represented Cisco, and Cisco was doing a ton of M&A back then and they were really the masters at it.
Jessica Lin: This is so much foreshadowing.
Craig Walker: Yeah, no. And there were a lot of … I mean, you see a lot of M&A deals where it doesn’t go well, and ultimately Cisco … I always was impressed with how they really cared about one symbiotic culture, and to make sure that it was going to work well together. And John Chambers, you’d read his blog or hear him talk today and he talks about that culture being more important than anything else, and I think that really informed our opinions. And when I was at Google, we did a couple acquisitions. It was very similar to trying to find right culture and did the same thing here.
Jessica Lin: Yeah. And that’s what I think with our time today we can also have you all walk away with some tactics around, again, what makes a great acquisition? How do we make them successful? And so, I think when most folks read your bio, Craig, I’m sure they do a double take because you started a voice company that was then acquired by Yahoo in 2005. You then started another voice company, which was acquired by Google in 2007. So how many founders can say that they’ve personally started and sold two UCaaS, unified communications as a service companies? I mean, I feel like you’re a true UCaaS unicorn founder.
Craig Walker: Yeah. I never thought I’d end up there. I mean, I think it talks to what a big opportunity it is and just how nascent it was in ’99 when we started, or when DialPad one started. The name of the company was DialPad, bought by Yahoo. We bought the name back later. So totally different companies. But it’s just a really big opportunity, and for like … At Google Voice, we wanted to give people a way to manage their communications and it seemed to be a real natural fit, and with Gmail, and how do you bring the web into it? And how do you do much more than just a voice phone call? And that’s the same philosophy we try to bring to DialPad. How do we make it better before the call? How do we make it better on the call? How do we make it better even after the call and tie in a whole bunch of non-voice pieces to make it a better experience?
Jessica Lin: So when you think back to those two acquisitions, can you just share some highs? Some lows? I mean, what are things that you didn’t expect? What are things that you would not repeat again?
Craig Walker: Yeah. So, when we were being acquired by Yahoo, it was pretty … There’s a couple of different philosophies you can have in negotiating an M&A deal. One is that we’re going to end up at the end of it working together, so let’s be really friendly during the process. And the other is, it’s going to be a bare knuckle fight on valuation and terms.
Jessica Lin: I think you had used the term professional leg breakers.
Craig Walker: Yeah. The Terry Semel era of Yahoo certainly seemed a little sharp elbows, and it was … By the time the negotiations on the deal closed, it was a lot of broken glass. When we went through it with Google though, it was super friendly, everyone wanted to make it a success. And when we started there, everyone was fired up. So the process itself actually helps influence the success of the deal afterwards as well.
Jessica Lin: All right. Very cool. So then you started your third UCaaS company, which is your current company now, DialPad, back in 2011. You guys won Tech Crunch Disrupt in 2012. And you again get asked this all the time, but what made you start your third business phone company?
Craig Walker: Well, there was still so much to do. At the end of the day, we had figured out how to make really high quality voice over IP calls and how to do a lot of interesting features, but when you looked at the enterprise voice space and you look at … We have three products. We have Uber Conference for conference calling. We have DialPad Talk for our phone system replacement. We have a call center product for sell and support. And when you look at those products, they’re pretty terrible. The legacy versions of those were pretty terrible. They’re expensive, they’re complicated, the end users don’t like to use them very much.
Craig Walker: And so, it just looked like a massive opportunity that every bit our bet was, and this was 2010 when we were leaving Google, that every business was going to move to the cloud for their email and productivity suite. And that once they do that, you’ve now freed your workers to be productive from anywhere on any device. And once you’ve done that, there’s no way you can make them live their business communications through a desk phone or a legacy phone system. So we saw that as something that had to happen, and we were in a great position to be able to build that.
Jessica Lin: Awesome. So I guess we can fast forward then, let’s say to 2017. You’ve been building DialPad for roughly five years. Some incredible VOIP technology infrastructure, a phenomenal team, and actually Keith is around here. I know you guys do some really fun stuff with mascots at Dreamforce. So that’s a whole nother discussion we talk about your CMO, but … You clearly also again saw more opportunity even on top of this business phone layer. At the time conversational AI was really heating up here in Silicon Valley. I mean, what were your thoughts when you started seeing these other players in the space?
Craig Walker: Well, we’d been really interested in artificial intelligence for a while, and we were meeting with virtually every competitor in the space, every provider, and they all wanted to integrate with us so they could get access to the call data and be able to go do their magic. And basically everyone we met with had the approach of, “Hey, we’re just going to listen in on your call. We’ll join your conference call and be another participant and just record the whole thing, and then try to sort it out afterwards.” And that didn’t seem like that great of a thing for us.
Craig Walker: And when we met with Talk IQ, they actually had a platform that we could integrate into our core telephony so it wasn’t just handing them a recording at the end of the call and having them figure it out. In real time, they can transcribe the text. In real time, they could get sentiment scores. In real time, they could pop up recommendations or what to say if someone mentions a competitor. Or if someone asks a support question, it would have the answer in real time. And that to us seemed much more compelling than just the after the fact analysis. And so, they were the only ones who could do that. They’d built their entire ASR engine from scratch. So we were doing actually a business deal, arm’s length business deal to partner and integrate their stuff, and it just seemed like a much more compelling way to provide a better AI service than just after the fact data.
Jessica Lin: Yeah. So you guys, again, had met with a number of other conversational AI companies. Again, how do they just get on your radar?
Craig Walker: Well, they reached out to us mostly because we had a lot of users on Uber Conference and a lot of users on DialPad.
Jessica Lin: And we’ll get Dan’s side of the story too. Don’t worry.
Craig Walker: But the AI companies all had the challenge of, how do I get onto that call? How do I actually get the content? And so, they’re going around trying to get everyone who provides the service to be able to give that pipe or that recording of the call to them.
Jessica Lin: Okay. So had gotten together, at least from a licensing deal relationship, and at some point you and the DialPad team thought, “We’d like to be in an even closer relationship and we’d love to acquire it.” I mean, can you talk us through behind the scenes? What were those conversations? What was that thought process?
Craig Walker: Yeah, sure. We actually were at a board meeting February of last year, and we’d spent probably the last six months working with Dan’s team to integrate, and we were giving the board an update on how this was going to be this completely differentiated product, how it was going to set us apart from anyone in the space, and how it would help with call center and everything else. And Marc [Andreessen 00:13:54], one of our board members just said, “Hey, so why don’t we acquire those guys?”
Jessica Lin: Just like that. Of course, right?
Craig Walker: And it was funny-
Jessica Lin: Simple as that.
Craig Walker: I called Dan. Board meeting ended at noon, and we met at town hall restaurant in San Francisco at 5:00 PM that night.
Jessica Lin: And so, this time around, you are the acquirer. So when you think about this experience, I mean, how did it compare to you being on the other side from Yahoo and Google?
Craig Walker: Yeah, this one was a little easier to get done. Dan was super reasonable, and we both saw the value of a combined offering versus two independent companies. And it really didn’t take a whole lot of negotiation or discussion. We just did it.
Jessica Lin: Yeah. And so, the pricing or negotiation piece, I think that’s a little bit of a black box. I think everyone, again, reads about acquisitions, but how do you decide that price point and the value?
Craig Walker: Yeah. It’s relatively hard when they’re both two private companies, and what’s the relative value of each? So they had raised money in September, we had raised money in June, and we just said, “Let’s just take our last post money valuations, add them together, and see what percentage each of us own.”
Jessica Lin: Very fair.
Craig Walker: It was fair and made sense.
Jessica Lin: Awesome. And I guess, for the last question I’ll ask for you, Craig. What advice do you have for founders who maybe looking to go out to acquire startups themselves?
Craig Walker: Yeah. I’d say we were lucky in that Dan and I had worked together at Google. They were funded by Felicis as we were funded by Felicis. We had spent six months working out an arm’s length transaction. Our engineering teams were working well together already. So that synergy and that shared values and shared vision of what this product could be really made it easy. So I’d say anything where you have that shared mindset and strategy. And the nice thing is, it’s now been 9, 10 months. We’ve lost hardly anyone. The two teams work really well together. The products are getting integrated really well. So if you didn’t have that, I think would have been obviously a lot harder to make the deal a success.
Jessica Lin: Okay. Awesome. Thank you, Craig.
Dan O’Connell: I was just going to add on that it’s just super seamless on … Our product teams were onsite on a weekly basis. I had worked with Craig and Craig’s co-founder, Brian Peterson, at Google. When we were trying to figure out how to get on call , he was the first person I called, because I was like, “Hey, you have this whole business communications platform. You can probably help us out.” And then just the teams knowing each other made everybody feel really comfortable, and then you have shared investors. We saw the vision in the same, and so it really came down to … You’ve got two CEOs that want this deal to happen, and it became a very natural conversation for everybody to really just get behind and feel good about.
Jessica Lin: Yeah. Again, the comet analogy trajectory. So you would have known a lot of the DialPad team for years when you first started out at Google. Can you just talk a little bit about that?
Dan O’Connell: Yeah. It’s funny. Anytime I tell this story and I was like, “15 years later,” you never figure things will come full circle. So, I joined Google early on in 2003. The first engineer that I sat next to … And I was in sales. It was Brian Peterson, who’s Craig’s co-founder for DialPad. So it’s funny. We were going through our careers and suddenly I said, “We need help on figuring out how to get on call paths,” so we could capture conversations and transcribe them and do a bunch of interesting things. Brian was the first person I thought to call. And had we not had that conversation, probably none of this other stuff would have happened. So it reminds you that the world, especially in technology, is very small. People are more connected. You’d never know how things will play out many years later, where people get to in their careers.
Jessica Lin: Yeah. And so, you joined Talk IQ in 2017 as a CEO. So can you tell us more about where the company, the product, and the technology was at that time?
Dan O’Connell: Yeah. So at that time … So I had joined. We were six people. I joined actually as a COO., The CEO at the time needed to to get back to the east coast to deal with some family stuff and ultimately asked me, had I thought about running a company? My goal had always been to ultimately either start a company or run a company. My dad was a CEO. I remember going through the interviews with some of the board and actually asking them, “Do you think I’m ready to do this?” Which is probably the worst question, actually when you’re running your own company. But it worked out. Initially got thrown into the mix of, we had raised 6 million in seed, went through raising our series A. We took 14 million that was led by a Salesforce and Scale Ventures line, a couple of other fantastic investors. And really it was just off to the races from that. We had probably a handful of customers we’re still going through, like product market fit, but super early on. And as I said, it’s just been fantastic to see the opportunity in the market and so forth.
Jessica Lin: Cool. And so, along the way you’d done this licensing deal with DialPad. Were you talking to other larger companies at the time? And, how did you manage that process from a licensing perspective?
Dan O’Connell: Yeah. So we were doing two things. So at Talk IQ, we’re doing speech recognition. Basically, we’re a startup trying to do three different startups in it, is the way I talk about it. We had to build our own telephony stack. You’re building your own speech recognition engine, which is taking audio, transcribing it to text, and then you’re doing NLP on top of it. So NLP is, how do I teach a machine to understand insights, map sentiment, and things of that nature? So those are basically three tough problems to try to figure out and we’re trying to do it as one.
Dan O’Connell: When we signed this licensing deal, that was really to provide speech recognition and then NLP to any conversation that was happening within DialPad. We hadn’t actually explored that as an API to the business. We were always building a full platform that a sales or a support organization could go and buy. So one, it opened up to, hey, think about the business slightly differently. When the acquisition offer came, Craig and I were just talking about this. We didn’t try to shop the offer at all. We actually weren’t looking to even sell the business. We had just closed series A. We had to go through a little bit of convincing for our investors, so this is how we see the world. There’s this massive opportunity and window to do this together. We’re both stronger businesses for it. But we really decided to do this, along with our [Etienne 00:20:31] and Jim who are our co-founders at Talk IQ.
Dan O’Connell: We view DialPad is the most innovative business communications platform in this space, and I don’t say that because I know Craig. We weren’t going to go and work somewhere else. They had four different pillars that we could go take our technology to, call center space, web conferencing, cloud telephony, and then also within sales. So it seems like we resonated on how to actually build things, the vision, and also the opportunity. And at the end of the day, our teams liked each other. And I knew Craig and the executive team and shared values that actually became the driving source of, I can go show up probably at an office park somewhere. I personally don’t want to show up in an office park somewhere, at least at this time. And so, it just made sense from that standpoint.
Jessica Lin: Yeah. So that’s an interesting point that you touched on, which is there’s your own feelings about the deal, right, Dan? And then you have your VC’s feelings, and then you also have your team’s feelings, and a team that had been obviously working and building Talk IQ. So when you first got the call from Craig, did you know this was the conversation that was being had? Was it very outright? Marriage proposal?
Dan O’Connell: Yeah. It’s funny. Anytime you become a CEO, I think … Well, for me it’s like one time, so … But at the time I thought about, you always wonder, how is this gonna play out? Will somebody call one day? And then, what is that conversation actually like? What happens?
Jessica Lin: Was it like what you thought it was going to be?
Dan O’Connell: No, it wasn’t. Craig actually called me and said, “Hey, do you want to grab beers?” And Craig and I know each other, so I was literally like, “Yeah, we’ll go to beers and catching up.” And then he said, “Hey, have you guys thought about selling the business?” And at that point, you’re speaking candidly. You’re trying to figure out … You don’t want to show, “This would be great. We should absolutely do this.” You’re trying to play hard to get. It’s like dating a little bit.
Jessica Lin: Yeah, there’s a weird dating element, right?
Dan O’Connell: So it’s a really interesting but candid conversation of, “Hey, we actually see the world the same way as we talk about this. We think there’s a tremendous opportunity if we can make that the economics work for the investors. We want to do this and our teams want to do this.”
Dan O’Connell: The interesting thing I will add to that though is, I had always talked about this as to the team along with Jim and Etienne on, this is the best thing for everybody. And I think that was a little bit of a mistake as a first time CEO to go through some of these. You assume that because you have an exit or because you have an acquisition offer that everybody else thinks that’s the best thing, and what was interesting is, I do think people that go early on to startups really are startup people. And there were a couple members of our team that really wanted to either go down with the ship or be king of the hill, and they wanted to be on either side of things, but they didn’t want help in the middle. And so, that was something that I learned through that process, which was pretty unexpected.
Jessica Lin: Yeah. I’ve talked to other founders who have gone through this acquisition process, and I know for some of them it’s a really lonely journey because you actually can’t talk about it with most of your team, and there’s a due diligence process and it’s a big burden to carry. And so, curious how you managed through that yourself personally, Dan?
Dan O’Connell: Yeah. So part of the reasons that I wanted to run a business was just being part of different businesses and you go through, what would I do differently if I could? If I had control? And for me, we were really transparent when we got the offer. So we’re a small enough team to actually say, “Look, there were 20 of us at the time. All of those people, we’ve gone through the ups and downs of a startup.” And really, I’d always said I just wanted to be transparent. Here’s what it is. And, we want people to be … For me that was just a value that I’ve always had. I’ve always wanted to be really transparent. People knew our burn rate. People knew our day zero date of when we were getting run out of cash, they new revenue. Because I’ve been parts of startups where you don’t know that, and I think it’s a really challenging place to be and work, especially if things ever go bad. And you want to make sure … I think that transparency helps that you get the right people on the ship and those people are going to stick with you through thick and thin, but there’s obviously risks to that. So we definitely talked about that as a small team of 20.
Jessica Lin: And so, there are people who felt two different things it sounds like. How were you able to really get that whole ship aligned and get on board the DialPad train?
Dan O’Connell: Yeah. I think at the end of the day it’s that the team ultimately said, “We all talked through the pluses and minuses of this as a unit.” Obviously that conversation starts with the founders and the executive team, so initially it was Jim, Etienne and me talking through, Hey, do we want to do this? Is this serious? And that trickles down to … We had our conversation with our leadership team, a couple of the director level and VPs, and then it trickled down to the next step of managing that.
Dan O’Connell: And then really just having some honest conversations with folks. What are the fears? What are the pluses and minuses? People were worried about, hey, if I join, I might have a different manager. Will I still work on things? Will they still be a priority? Something that Craig made very clear from the start is, anything that you guys are doing is the number one priority. And I think that’s also what became very important in the acquisition is, you’re not going through an acquisition where it’s, “Hey, we’ll acquire the team and when you show up here, all of your jobs are different. What you’re working on is going to be completely different, and what you’ve built is going to get thrown away.”
Jessica Lin: Which happens a lot, right? And that’s, I think, usually the norm.
Dan O’Connell: Yeah. So I think we’ve been in a super fortunate place of working on things that we’re betting the company on.
Jessica Lin: Yeah. Okay. So we know what Marc Andreessen thought of the deal. To your point, you sometimes have to convince your investors, and I’m sure lots of founders in the audience are thinking about that too. So at a high level, how did the conversations go?
Dan O’Connell: Yeah, they were fantastic. I think the one thing to think about was … Fortunately for us it was chips stayed on the table for folks, and I think that’s what’s important. I can’t speak for all VCs. I haven’t been a VC. But I think it was important for them to know, “Is there still an opportunity for me to maximize the potential value that’s out there?” And I think they all saw that, hey, this business can help us solve a really large challenge of getting on a call path. It opens us up to four massive markets in terms of opportunity in these teams. Know each other, are functionally very efficiently together, and you guys ultimately as a founding team want to do this. So we’re supportive of that.
Jessica Lin: That’s awesome. And for any of you who have worked at a large company, sometimes integrations can take years. I know. It sounds like the two of you have been very thoughtful about this, very intentional. I’m curious just for you, Dan, your role changed, right? Now you’re Chief Strategy Officer. Can you share a little bit of what about what that personal journey has been like?
Dan O’Connell: Yeah. I have to get used to having a boss again. I say that jokingly. But yeah, it’s different. In my past career I was running sales organizations who are used to having a target and having a team. This is the first time in my life that I haven’t had a target or a team, and that’s something that I care a lot about. I really like being … I try and be a motivational person and inspiring to teams and getting in the weeds of stuff. So that’s been a little bit of an interesting transition for me. But Craig definitely gives me a lot of responsibilities and influence within the business and has been an exceptional mentor. I look up to him a lot. He’s sold two businesses. He’s done this exceptionally well.
Jessica Lin: UCaaS founder unicorn.
Dan O’Connell: So that’s another thing that I try to take from it is, how do I actually learn personally through this experience that hopefully I’ll have another chance to either start a business or run a business? So take these learnings, because I think it’s a really unique opportunity.
Jessica Lin: That’s awesome. And so, I heard a little bit about some of the culture playbook. And so, would you guys be willing to share some of the pages from your culture playbooks? Some of the tactics that you guys have employed, again, to make these two teams Talk IQ and DialPad really come together as one?
Craig Walker: I think we have a couple of common experiences … Or the values of wanting everyone in the company to be on the same page. We never want to surprise our employees. We’re now 350 folks and we still … Every Friday we have a Friday at 4:00, give an update to the whole company about what happened in the week, what did we learn? What went well? What didn’t? And then we now … Since we have offices in a bunch of locations, we livestream that over Facebook workplace and it’s actually … And then we save the video and upload the slides so everyone can get it.
Craig Walker: And you never want … My thought on this, which sounds very similar to Dan’s thought is, you want your employees to be there for the right reasons. You want them to be able … They have opportunities elsewhere. The Bay area is like zero unemployment. They can take their skills and do anything with it. And so, effectively they’re investing in the company, so they have a right to know how their investment’s doing, and so we always try to over disclose that. And so, our core value is just do the right thing.
Craig Walker: We used to have … We used to brag about our employee handbook literally being three words or four words. It was like, do the right thing. That’s now changed with insurance policies and [DNO 00:30:28] things that require a bigger one. But to the core, I mean, that’s it. And we trust people and I really like when Netflix put out that whole values deck of, rather than having all these rules to try to keep everyone in line, just don’t hire the guys who would break the rules. So we try to do that, and that felt like it was really one of TalkIQ’s core values as well. And then from there, we basically merged our official values with theirs to come up with five, and they all really felt that they belonged in the same family.
Jessica Lin: And so, I heard that this 4:00 Friday, you also have an opportunity for companies to come in and pitch you guys. Is that something? It’s like an open mic?
Craig Walker: Come in and pitch us? We do invite partners. We do invite potential customers. We do invite potential employees. And we do invite other CEOs in the portfolio. Last Friday, we had three other Andreessen Horowitz portfolio CEOs who were smaller companies to see what happens at a Friday at 4:00.
Jessica Lin: That’s awesome.
Craig Walker: It’s just a good time. The week’s effectively over, and we both were at Google and Google had this great Friday at 4:00 and Larry, Sergei, and Eric would be up there and basically doing the exact same thing. And if they could do that, we sure should be able to.
Jessica Lin: Yeah. Just even more exposure for everyone around the table, right?
Craig Walker: Yeah.
Jessica Lin: Okay. So Dan, tell me about karaoke.
Dan O’Connell: Yeah. So, one of our values at Talk IQ is karaoke state of mind. So we’d done a team offside out in Austin back in the early Talk IQ days. T one out, we had a great karaoke night as a group and that became a value of have fun, own things. If you guys have ever done karaoke, karaoke goes well, even if you’re a really bad singer, for the people that own it. And I think that’s true for anything that you do, whether you’re presenting, whether you’re doing a pitch, whatever it is. You just have to own it and you have to just not take yourself too seriously, and I think that’s something that also plays in our culture is yes, you want to drive accountability. Yes, you want to be a strong performer. But at the end of the day, we’re not saving lives.
Dan O’Connell: And I think there’s just a … I just think that you can loosen up, and I think people appreciate that. I’ve definitely worked in businesses where leadership becomes difficult to talk to or people are scared of talking or really sharing their thoughts, and that’s also become like a real value of that karaoke state of mind. It’s just, don’t take yourself so seriously. It’s going to be okay. And if you have frustrations, find ways to actually share them, embrace that in part of the culture.
Dan O’Connell: And a big value that we don’t stand for is no bitching. I don’t know a better way to actually [crosstalk 00:33:20]. I don’t know a better way to actually say it, but it’s like, if you have a frustration, tell me what the frustration is. I want to help. And if I can’t solve it, then hey, life’s short. You probably should go find something that you’re not going to complain about and you’re going to be happier, and that’s better for everybody.
Jessica Lin: Yeah. Awesome. Well, so we’re coming up now on a year, roughly, post-acquisition, and you guys again are hyper focused on this true cloud phone system. AI integrated through the entire stock that your other competitors cannot say that they do. So how are things going?
Craig Walker: Things are going really well. We look at it … It’s more than just these bells and whistles, these neat features. It’s really being able to provide a worldwide enterprise grade quality as a foundation, and we have customers like WeWork and Uber and Motorola that have offices all around the world. And being able to provide, have that platform as the foundation, and then you have Uber Conference, call center, and your phone system, and then you sprinkle AI magic over the top of it-
Jessica Lin: Which they’re not expecting. I mean, when you and I talk … They think this is just a phone. And then when they hear about this extra asset, this layer, this weapon.
Craig Walker: Yeah. And if you think about it, and Dan likes to talk about business voice being the last offline dataset, and still the amount of phone calls that still happen with customers and with vendors and with potential prospects, that there’s so much that happens, but it’s not captured anywhere. So now being able to capture that and have the ability to analyze every conversation, or see which reps are doing better, score the sentiment of your various agents and being able to just … How can you do that better than …
Craig Walker: Without voice AI, you really have to do it manually and you really put the burden on the call center supervisor to listen in on phone calls and to coach and whisper and hopefully do this really, really difficult work. But it’s very hit and miss and it’s very random. Whereas, the AI piece pulls all that in, turns it all into text, lets you analyze all of it, give you a report on which reps are doing better than others, and then you can tie that back into other things like CSAT in Zendesk or performance in Salesforce. And you can really start to get a 360 view of what it is that makes someone successful, and without that you really couldn’t.
Jessica Lin: Right. And that’s really the base that can unleash, again, all of this AI and NLP. I’m curious, Dan, what has been the early feedback from customers been like? Because they are large enterprises, right? I mean, do they get it? Are they excited by it?
Dan O’Connell: Yeah. The nice part is everyone gets it. It’s super seamless. And I say that meaning you’re running a large team, a client facing team, everyone always says the one thing you should do is coach more. Whether that’s on engaging with their current customers or figuring out how to drive efficiency in sales, and traditionally people have tried to figure out how to do call coaching or perhaps … A tape recorder. You take an audio recording and you try to … You transcribe it and it’s post-call. But everyone gets that this is probably the most valuable thing that people should be spending their time doing, especially frontline managers, which is, hey, how do I just better coach the engagements that are happening? And how do I figure out what’s happening in those conversations so I can figure out how to better build a product, how I can better market it, how I can better support it, and how I can better sell it?
Jessica Lin: Awesome. And Craig, I love this line. You said, “The phone is supposed to be dead by now.”
Craig Walker: Yeah, no. It’s funny. When we got acquired by Google in 2007, I remember the one of the first meetings we had this product review with Eric, Larry, Sergei. The ESL review they do quarterly. And Larry made some comment. He’s like, “Yeah, but phone numbers are going to go away.” A few years, they’re all gonna be gone. That was 12 years ago, and it’s funny when you look at it. Our Uber Conference product, we built it originally just to optimize around phone calls because still 80% of all conferencing minutes are just people dialing in on the phone, and the idea of dialing a number, entering a pin, hearing a beep, saying a name, not knowing who’s there just seemed so ridiculous.
Craig Walker: So it doesn’t seem like it’s going anywhere. In fact, it seems like the more people try to get rid of the human interaction, the more it comes back to life. There’s a really good T-Mobile commercial app now of the guy who played Dwight Schrute on The Office trying to get to a live operator and just how painful it is, and their pitch is, “Hey, at T-Mobile, you’re going to talk to a live operator.” And so, the more people try to get away from it, the more it comes back.
Jessica Lin: Yeah. I think that’s a really fitting analogy for our media is your two medias are more powerful together. Lastly, just on a personal note, how do you feel like you guys best compliment one another now that you’re working side by side?
Craig Walker: It’s great because Dan knows everything about AI and I don’t know a whole lot, so that works really well. But no, legitimately to have another really smart person with shared common values who’s a great leader, it really makes it easier for me.
Jessica Lin: What more can you ask, right? Dan?
Dan O’Connell: I just learn a lot from him. I look up to him a lot. He’s just seen a lot of things, and so just gaining that experience … He also pushes us to take a lot of risks in the team, and I think that’s really important on being comfortable. Trust your gut, make big risks. Those are where the opportunities lie, and if you play it safe you’re probably gonna lose.
Jessica Lin: Cool. Also, if founders leave with nothing else from this session, what is the one piece of advice you want them to walk away and tweet about? Whether it’s about acquisitions or asteroids or marriage.
Craig Walker: On acquisitions, I’d say shared values are going to be your biggest indicator of success.
Jessica Lin: Cool.
Dan O’Connell: I would say overshare. Trust your teams. I think people get a little bit nervous about that. Everybody can always say, “Be careful about what you share.” I think you can trust your teams a lot more than you probably think, and that actually builds deeper relationships and actually creates a better sense of loyalty.
Jessica Lin: Cool. Terrific. Well with that, please join me in thanking my incredible panelists, Craig and Dan. A huge round of applause, please, guys.
Craig Walker: Thank you.