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Episode #49 The Inside Story of Branch’s $100M ARR Success ft. Mike Molinet (Co-founder, Branch)

The early days of a startup are like a never-ending game of whack-a-mole. You’re constantly putting out fires, and you never know when the next one is going to pop up. Embracing chaos, and juggling multiple hats comes with a lot of fun too.

This is one of the few episodes you absolutely can’t miss!

Mike Molinet, Co-founder of Branch and Founder of Thena goes unchurned and shares his experiences in the early days of the Branch when he did everything from outbound outreach to support and implementation. He also touched upon focusing on adoption in addition to
– Why relationships matter more than product
– The right time to hire when scaling the company
– Why you don’t need to overengineer tooling
– How investing in indirect revenue can pay off.

Mike also talks about the market pulling towards messaging for communication and how he is building Thena, a customer engagement platform for modern B2B companies. 

"As an engineer, you're taught to think very rationally, and you think, hey, if I build an amazing product, people will find it, people will use it, and you realize that's not the way the world works, that's especially not the way Sales and CS works. In fact, if you can build really good relationships, even if your product maybe is subpar, has issues, you can still end up selling it."

Listening to Unchurned will lower your churn and increase your conversions.

Mike Molinet [00:00:00]:

Unchurned is presented by UpdateAI. In fact, if you can build really good relationships, even if your product maybe is subpar, has issues, you can still end up selling it. You can still end up having success with customers. It may not be ideal, but you can still retain customers and upsell customers. And I see a lot of that being based on honestly relationships and how good you are at your job, at influencing people and seeing understanding what their motivations are, what they’re trying to achieve and then helping them achieve that. And it isn’t always rational, it’s not always necessarily like, tied to KPIs. But once I realized that, my whole mindset shifted and then I started prioritizing relationships and building those better and realizing that just because you have an amazing product doesn’t mean that’s all you need. Welcome to Unchurned, a show about the leaders and innovators of companies who have forged incredible customer relationships and stories you can use to advance your own career. Here’s your host, Josh Schachter.

Josh Schachter [00:01:01]:

Welcome to this episode of Unchurned. I’m Josh. I’m the founder and CEO of UpdateAI and the host of unchurned. And I’m really excited to be chatting today with my new friend, Mike Molinet. Mike is the co-founder of Branch, has served as CEO of Branch, has been there since the very beginning, and we’re going to talk to Mike and learn about how he helped Branch go from one to many, many folks, headcount and revenue wise at the company. And now Mike is working on his next adventure. He’s the co founder of Thena, which is helping companies manage all the relationships that they manage in Slack and other channels. Mike, thanks so much for taking the time to chat with us.

Mike Molinet [00:01:43]:

Josh thanks for having me pumped to be here.

Josh Schachter [00:01:45]:

I want to jump right into it. Usually we kind of just warm up and all that kind of stuff, but there’s such a richness, I think, in the stories we’re going to hear from you about growing Branch from the very, very beginning up until you recently left and now have started your next venture. So let’s go right there. For those that don’t know Branch, I think it’s what, about a $4 billion company valued at you were one of the first four as a co founder there you guys are mobile measurement management platform. Tell us about how Branch started. Like, what that origin story? I’m sure you’ve told it a thousand times, but give us a little bit of how you got going with Branch.

Mike Molinet [00:02:24]:

Yeah, of course. I think I’ve practiced enough over the last few years. So Branch is, for those that don’t know, a mobile linking and measurement company. And basically what that means is we are a technology that goes into mobile apps and mobile websites to ultimately make them work better, make them work a little bit more seamlessly so that when you click on something, you go to the right place, you get shown the content that you were expecting to see. And we also help brands like Spotify and Uber and Adobe and a bunch of others measure where their users are coming from, because as a marketer, you want to know where your most valuable or least valuable users are coming from, so you can double down on those marketing campaigns and those channels. And so we started the company really out of our own struggles as app developers. So me and my co founders, we’d started a mobile app before that in 2013. It was a photo book sharing and creation app, which we wanted for ourselves. And we spent about a year working on that, trying to grow it. And we didn’t really have money, so we were trying to grow it organically. And we did all sorts of things like referral programs. We had a mobile website, we did push notifications, we had emails, we paid affiliates and bloggers to write about us and did a lot of different things. And we had moderate growth. But we really started to realize all the challenges that existed in the mobile ecosystem and really around the mobile linking and the user experience and the mobile measurement. And after about a year working on that app, we realized, hey, maybe that’s the opportunity. And so we gave ourselves six months and said, let’s see if we can build this. Let’s see if other people want it. And we called our friends that we knew working at mobile companies and said, hey, if this existed, would you use it? And all of them said that they were interested, they wanted to use it, they would be interested in testing it. And so that was really the earliest sign that we might have something and decided to go all in on it. And we didn’t know exactly where it was going to take us, but fast forward nine years and, yeah, we’re a 500 person company. Over 100 million arr. US. Valuation was above a billion dollars. And in general, yeah, we’re powering mobile linking and measurement for about 100,000 apps out there in the world. Everyone pretty much uses us.

Josh Schachter [00:04:25]:

That’s amazing. I said 4 billion valuation. It’s closer to a million. Is that right? Did I mess that one up?

Mike Molinet [00:04:31]:

It was a 4 billion valuation on the last preferred round in 2022. So, no, you did not mess that up. But the market valuations are a bit crazy right now. But, yeah, it’s somewhere in there.

Josh Schachter [00:04:43]:

Once you’re a unicorn, always a unicorn, right? So as long as we’re in the same hemisphere there. So it was six months time, very well spent. And you were the only non I mean, I know you have a technical background, maybe we can talk a little bit about that. But you were the only non technical founder within your cohort, right?

Mike Molinet [00:05:04]:

Yeah, I think that’s right. I’m a mechanical engineer, but I don’t think that qualifies in software as being a technical co founder because my MATLAB coding skills aren’t quite up to par for Silicon Valley. But yeah, so we had four founders, and Alex and Dmitri, they were the hardcore engineers. They coded up the SDKs and the APIs in the back end. And then Mata and I were really the business folks. Mata really led marketing and product design and website design and brand. And then I was kind of the sales guy and I never thought I was going to ever do sales. So for anyone out there listening, if you think like, I’m never going to lead sales team, I remember thinking explicitly a couple of years before that like, I will never do sales or lead a sales team. And then I found myself suddenly realizing that I’m the one doing sales and it’s just because somebody needed to do it. So we needed to go talk to people and outbound to people, and that was me. And I think it was really interesting because in the beginning, you just need somebody to do anything and you’re really just doing anything and everything that you can to get the early users. And then as the company grew, then that obviously grows in scope. And so I was the original SDR. I was the original person outbounding all of these companies and then working with moderate to do events and trying to generate brand awareness. And then you start to get some leads, and then suddenly you become the Ae, and you close some of the initial deals, and then suddenly you become the CSM and the support person and the implementations person and the solutions engineer. And you’re really doing it all in the early days. And then you start to hire people to do individual functions and eventually you end up building those functions under you. So really at the end of the day, when eight years later, if you looked at my role, it was I oversaw all things go to market. So sales, customer success implementations, pro, serve, support, all those things. And then I oversaw all things GNA, which is all the kind of internal operations of the business as well.

Josh Schachter [00:06:53]:

You never wanted nor expected to become a salesperson as a founder, as I know now. And as you’ve said, you’re thrown into it. Whether you like it or not, a founder is a salesperson. And then you were all things go to market. So you were also your first customer success manager and specialist. What, what is it about sales and CS that surprised you the most when you put yourself into those shoes?

Mike Molinet [00:07:21]:

Great question. I’ve learned so much and I think what’s interesting about it is that if you grow up in sales, getting a business degree, grow up doing sales or CS, you kind of view things one way. And I came in and I knew nothing about sales. When somebody said, hey, you should hire an SDR, I think at this stage I was like, what’s an SDR? I literally didn’t know what an SDR was, and I had to ask them to explain what that acronym meant and then what it is an SDR did. And so I knew nothing about it. And I think that was both a pro and a con. It was a pro in the sense that I looked at things very uniquely and I would do things that maybe other people wouldn’t do. But that was an advantage at certain times, especially in a startup, because you don’t necessarily want to apply late stage sales and CS Playbooks to a very early stage five person company. But there’s also cons to that, right? There are certain mistakes or things that I needed to learn that I could have avoided if I had done Sales or CS before. And so I made some really common and stupid mistakes along the way, but those were all really just learnings, and I tried to mitigate those and move on as quickly as I possibly could. As for what surprised me the most, I think one of the most interesting things coming from Council engineering background or really just working in tech in general and then getting more into the business side, especially sales and CS. Was just how much things like relationships and in person meetings and just building rapport with somebody goes in actually influencing or getting the thing that you want. Right. Like I was as an engineer, you’re thought to think very rationally, and it’s you think, hey, if I build an amazing product, people will find it, people will use it, and you realize that’s not the way the world works, that’s especially not the way Sales and CS works. In fact, if you can build really good relationships, even if your product maybe is subpar, has issues, you can still end up selling it. You can still end up having success with customers. It may not be ideal, but you can still retain customers and upsell customers. And I see a lot of that being based on honestly relationships and how good you are at your job, at influencing people and seeing understanding what their motivations are, what they’re trying to achieve, and then helping them achieve that. And it isn’t always rational. It’s not always necessarily like tied to KPIs. But once I realized that, my whole mindset shifted, and then I started prioritizing relationships and building those better and realizing that just because you have an amazing product doesn’t mean that that’s all you need.

Josh Schachter [00:09:45]:

You’re preaching to the choir here. This is my gospel. I’ve never actually told this to anybody, literally, but I would one day love to write a book when I get my head above water with Update and I think the title of that book would be revenues are all that Matter for growing your startup or whatever. Except I would cross out revenues and I would have an arrow that says relationships are all that matter.

Mike Molinet [00:10:09]:

Oh, I love it.

Josh Schachter [00:10:11]:

Right? I mean, we’re so metrics driven, but what does it come down to? And another example, I’m going through this in real time right now. Probably shouldn’t be sharing this, but that’s okay. I’m going through these renewals, and there’s one vendor who I’m kind of like hot and cold with not a huge family that I’m not so pleased with how the renewals are going. And so actually, I don’t have any relationship with their executives. But I went on to Apollo and I got the email addresses of their CEO and their CRO, and I wrote a really personal note to these guys saying, hey, we just want to build the relationship, see how we can support each other, get this on the right path for the renewal, blah, blah. It’s been four days now and I haven’t heard back from the CRO or the CEO. And this is like a series B level company. This isn’t a public company. And that kills me knowing how important relationships are now. Who knows? Probably really busy week. We know this week has been crazy when we’re recording this episode, but it’s such an emotional trigger, either positively or negatively, the way that you interact with your customers. So 100% agree.

Mike Molinet [00:11:09]:

I love that. I will absolutely buy that book. Relationships are all that matter. And yeah, you hit on things like you hit on emotions, you hit on trust, right. These relationships that you build with people. If you build a layer of trust, it builds up kind of that bank where then when you have an issue, when you miss an email, when you have a bug, whatever it is people kind of they give you the benefit of the doubt. And they say, yeah, but I know Josh. He’s doing the best he can and I’m going to give him another shot. But if you don’t have that relationship, the default is like, it’s not Josh to them. There’s not a person associated with Update AI, for example. It’s oh, it’s Update AI, and it’s a company, and that’s all that matters. And where relationships really come in is that ability to influence, right? Like, just people like to do things for people that they like and people that they know, and I’m a big believer in that. So, yeah, I think that’ll be a great book.

Josh Schachter [00:11:58]:

Whenever you get around, I’ll let you proofread it. So like I mentioned already before, you took Branch from $0 pre sales, I mean, probably pre PowerPoint, right, deck to $100 million arr from just the four of you folks to 200 people. Actually, no, that was 200 people in go to market, right? You said 500 people. So I want to kind of break that down a little bit to the phases of the company as it relates to relationships with the customer. What were those first relationships? Do you remember the first significant deal that you brought on board and how you managed those relationships in those earliest days.

Mike Molinet [00:12:37]:

Yeah, and you can break down phases into really granular pieces, but there’s the very, very early days, which is all the people that used us for the first 50 apps or so were people that we knew or friends of friends. Right. And that’s typical founder sales in that very early stage, you’re just going to people that you know, and then you start to run out of your network, and then it’s like, okay, now can I sell this to people that have never met me, that don’t know who we are, and that we actually need to prove our value? Because you can get 50 people to use your thing just because they know you. And then that second phase was, hey, can we do this? And our first really big app, which actually gave us infrastructure issues, was in the first year, about eight months in, we got iHeartRadio to implement our SDK. And they went live in December, and it was chaos because they ten xed our volume just on the infrastructure. So that was really interesting. And that was just by building a relationship through the engineering team and finding the right person. I saw a quote the other day that said something like, who is a lot more important than the what? And I was talking about sales. And at the end of the day, if you find the right person at the end of the day and you have a product that solves a need, that’s the ultimate thing. Because even if you are suboptimal, like, I didn’t know how to sell, but I found the right person, and they carried it forward, but I could have been the best salesperson. But if you’re the best salesperson or your best CSM, but you’re working with the wrong person or you’ve run across a blocker, you’re going to have a hard time showing success. Even if your product is amazing. And even if you’re amazing. So that early phase was that stage. Then it was, how do we monetize? So we started monetizing. And in those first couple years of the zero to 1 million stage, zero to 5 million, zero to 10 million really interesting. Everything is very manual. Everything is very much relationship focused. Everything is very small. You’re just kind of trying to do anything and everything. Like, I remember getting on a call on a Friday night, 10:00 P.m., with an inbound lead that was they were never going to pay us. They were small, but it was like they signed up. I emailed them, they’re like, yeah, I’m free now. I’m just working on this thing on the weekend. And we got on a call Friday night, 10:00 P.m., sales call. And they never paid us, never were going to pay us. But it was about doing things like that. Don’t scale. Now, obviously, you get to a certain place later on where that doesn’t work. You can’t do that. You can’t talk to everybody, and you need to actually prioritize. But in the early days, in that phase one, it’s all about learning. It’s not about the revenue. It’s not about how many customers you have. It’s about learning as much as possible, which I can dive into a little bit more, if you’d like.

Josh Schachter [00:14:59]:

Yeah. How do you scale once you can’t maintain that hands on yourself, how do you scale that across your growing organization?

Mike Molinet [00:15:06]:

Yeah, so I think there’s before I get on how do you scale it? One of the things that I share with a few people is what’s the signal or what’s the sign that it might be time to even start to scale or hire more people or to hand some of this off. And I was chatting with somebody recently, and I was with a new startup, and I was saying, when you get to the point where you’re dropping deals on the floor and what I meant by that was when you get to the point where you’re so busy that even if a new inbound lead comes in where before you were probably super excited, you would jump on it right away. You’d email them right away. You’d be like, I can get on a call right now. Please, can you talk to us? Right. That’s when you’re getting one or two leads a week inbound, and you’re just, like, so excited. But when you get to the point where you’re dropping deals on the Lord because you’re so busy, that’s the time to hire, because basically you’re losing money because you just don’t even have the time to follow up with a lead or follow up with somebody that was interested and said, okay, let me know. Send over the contract. And you’re like, Well, Jesus, I was so busy today, I didn’t even get a chance to send them the contract. That’s a good place to be. And when you get to that point, then it’s like, all right, let’s hire. Let’s go.

Josh Schachter [00:16:11]:

Remember that moment in time at the branch?

Mike Molinet [00:16:15]:

I do. It was yeah, probably about, like, seven months in, and it was, you know, we didn’t monetize for the you know, for the first two years. We actually went, you know, went for adoption first. Totally different approach, which I can talk about at a later time, but this was 2014, and so you could do that, and so we were focused on just adoption. I remember there’s this one week where I did 20 customer calls, and it was just like five a day, pretty much. And I was like, My God, I just don’t have time to do anything else. I could barely have time to send them a follow up note. And I was like, I need somebody else. Because if I had somebody else, I could take some of these calls, then we could be a little bit more diligent and not just do the call, but then we could send them follow up emails after and check in on them, make sure that their adoption is good. So for us, it was like that time when I realized I did 20 calls in a week, and it was.

Josh Schachter [00:17:02]:

Chaos because then your nights and your weekends were spent on email catching up.

Mike Molinet [00:17:08]:


Josh Schachter [00:17:09]:

So at the time, what did you guys do? Who’d you bring in?

Mike Molinet [00:17:12]:

Yeah, then I immediately paid a recruiter to go find us our first person, this guy John Joe, and he was amazing. And he came in and put some structure around our outbounding and handling our inbound leads. He put together a CRM. So we use base CRM back in the day for a hot minute. And yeah, then we started to actually have some structure around. It was really awesome. And then eventually hired this guy, Austin Hay, as our first salesperson, but really second behind John Joe. And then we started to scale it up from there. But what was interesting about it is you could say, like, hey, you got to that point. Do you think that you should have hired that person sooner? Do you think you should have started recruiting for it sooner? And I would say no, at least not at that stage. Because at that stage, you don’t have predictability. It’s not like you can look six months out and know exactly where you’re going to be, because we were so early. And it’s the same stage that we’re at for this news company. We’re so early that we’re just like, we don’t have enough knowledge or information to be able to be confident enough that we should hire this person. So it kind of happens overnight where you go from like, okay, we’re getting one to two leads a week. We don’t know if this is going to work. We got to figure it out. And then one day you wake up and you’re like, holy crap, we got 30 leads this week, and I was on 20 calls, and I’m dropping deals on the floor, and we need somebody yesterday. And that’s where we’re at with this new company, too. And that’s kind of the way it goes in the early days, because once it starts working, it starts working really quickly, and then you’re behind on hiring once you realize that you need to hire. But that’s okay because then you’ll hire really quickly and you’re just moving really quickly. So I think it works out in that early phase. Later on, then you can do better.

Josh Schachter [00:18:47]:

Capacity Planning lack of predictability and certainty is one of the toughest things. Building a startup.

Mike Molinet [00:18:54]:

Did someone say chat? GPT for customer success for free. Update AI has you covered CSMS get automated summaries of every customer call. That’s real time savings that adds up. There’s no bot an update even works alongside other tools like Gong. Sign up today at www dot. Update AI that’s update AI first time founders, including myself.

Josh Schachter [00:19:21]:

Often you hire too early because you think you’re going to need more than you do. And then it’s not fair to you. It’s not fair to the person you’ve hired. It’s smart to be patient in that sense.

Mike Molinet [00:19:32]:

Yeah, and it’s like this weird thing where you don’t want to hire too early because you don’t even know. And then when you need to hire, then you’re behind. But I much prefer that one. And then the other big mistake that we made, and then I’ve seen other people make pretty consistently, is you hire for the wrong stage. And hiring for stage is the most important thing when it comes to hiring, especially in the early days. And it can be easy to say, you know what, we need our first, whatever, marketing person. And you go hire somebody that worked for eight years at a large company. Maybe Adobe, maybe Google, maybe Salesforce. Nothing against those companies, but they did one role. They did conferences for those really big companies, and that’s all they did for eight years. And that’s fine, but it’s a very different environment, working at a big company, working in single role, versus really when you come in early stage, at that stage ten for 1520 people, you’re doing everything. If you’re a marketing person, you’re doing brand content, SEO, paid ads, conferences, events, and everything else under the sun, product marketing. And you’re probably selling along the way too. So you also have to make sure that you’re hiring for the right stage, not just when you’re hiring, too.

Josh Schachter [00:20:35]:

A lot of our listeners are in customer success. Do you remember your first customer success role?

Mike Molinet [00:20:40]:

Yeah, I’m trying to think, and I think it was Madeline. And at the time, it’s interesting. We hired the first few. It was either Madeline or Stacy. They came in similar time. It might have been Stacy, but we hired them as Tam’s technical account managers. And at that time, it’s funny, the phases of companies changed too, as we entered phase we’ll call it phase two. We’ll call it phase one. Phase one was still when we hired Tams, and we’re just like, okay, you need to be able to come, and you need to be able to manage relationships, but also be technical enough to help our customers when they have questions about our SDKs and our APIs. Right. And that’s a very hard profile to hire for. We find some really amazing people to be able to do that, but that also doesn’t scale. It’s harder to find 50 of those people. And also you find that as you grow, you need to specialize a little bit more. Just like within sales. In the beginning, your first sales hire is doing SDR activities. They’re outbounding. They’re scheduling their own meetings. They’re doing qualification calls. They’re following up. They’re probably closing the deal. They’re probably helping on board. They’re probably taking care of the customer. And then you hire a post salesperson. That first post salesperson might be combined role. And then you start to specialize and you say, you know what? And I remember the moment when we did this, we said, you know what, Tams, it’s too hard. What we need to do is split that into a CSM role and then a solutions engineer role. Whether or not that’s right, it all depends on your philosophy. But for us, we had a very technical product and we really needed technical people on the solutions engineering side to help with that. And so that was when we started to enter phase two. In my mind, call it 10 million arr, when we said, okay, this needs a little bit more specialization. What that enabled us to do was actually then hire specialists that were CSMS and specialists that were solutions engineers, and then scale up as well, because that was part of the thing that we needed to make sure we could do. You only hire so many tams, but we could hire a lot more CSMS. And then separately solutions engineers. And that was a really nice phase once we did that, because then we’re able to scale much more quickly and then CSMS could really focus on relationship building and adding value rather than having to worry about, hey, this SDK bug came up, can you help me debug it?

Josh Schachter [00:22:37]:

Mike, how many CSMS approximately does Branch have today?

Mike Molinet [00:22:43]:

We’ve gone back and forth and now we’re back to actually the tam model. So it’s a little bit interestingly enough, in phase three, as we crossed 100 million, then we’re like, okay, yeah, maybe we’ll do. Maybe we’ll combine them again because we’re thinking about efficiency. I would say we’re probably in the 40 range, somewhere in that range. And at 100 million arr, call it 2,000,002 and a half million, if you count all the revenue. Some of that revenue is self served. Some of that revenue is handled by just our renewals desk and our deal desk. So not all of it is managed. But yeah, you’re probably looking at a 2 million. I think we want to get to about a two and a half million book per Tam or per CSM.

Josh Schachter [00:23:19]:

So going from that one person, I guess things were blended, but just from those very earliest days of one or a couple of people in the headcount to around 40. Do you recall how the tooling changed? I assume you weren’t using a massive CS platform on day one. What did that look like?

Mike Molinet [00:23:39]:

We were not interesting. Yeah, tooling is an interesting topic because I’m a big fan of not over engineering things. Right. Because I made that mistake. I’ve made that mistake many times where it’s like, oh, we’re going to get this. I hear everyone that’s 500 or 1000 person company uses this tool, and it’s almost aspirational right where you’re like, I one day want to be that 500 person company, therefore I’m going to use salesforce, and that’s fine to be aspirational. But you don’t want to use the tools that that company kind of like with HR, like workday. Should we be using workday as a 300 person company? No, you probably don’t need to be using workday. Like when you get to 1000 or 1500, then maybe in the meantime, there’s plenty of other better tooling for you. And so for us, I was a big fan of not over engineering on the tooling side. And I think we had to hits and misses. I think sometimes we overdid it, sometimes we were behind and did it too late. So in the early days and middays in the very early days, it was like nothing. And it was a spreadsheet. Then it was based CRM for sales. And then eventually we did move to Salesforce. Salesforce is really hard because if you’re small, it requires a lot of time and a lot of energy, dedicated people, and that can be an expensive thing. And so I think actually in the early days, we use HubSpot and big fan of HubSpot from an early stage and even mid stage company tool because you can do a lot with it. But we eventually moved to salesforce. We didn’t have a CSP. We now do, but it’s very recent. Like, we got a CSP when we were at 80 million, let’s say 80 to 90 million. And so we did everything in the meantime with frankly, salesforce spreadsheet. There was a lot of spreadsheets, there was a lot of Google Docs. And yeah, it was a bit chaotic. It worked for us. But that doesn’t work to go from 100 to 500 million arr. And so you really need new systems and new protocols and playbooks when you get to whatever it is, 70, 80, 9100 million, if you want to kind of double, triple, quadruple from there.

Josh Schachter [00:25:44]:

So that was the trigger for recently bringing on the CS platform.

Mike Molinet [00:25:49]:

It was that it was also just having the right leadership and then ultimately actually adding a CS ops person or building out our ops team. And so this was a big one, right? Because before you have an Ops team, it can be really hard to build the right tools. And everyone was just kind of like, okay, whatever, just use Google Docs and spreadsheets. And that works. Once we really invested in the ops team, then we were able to start investing in the right tools, which I believe then unlocks a lot of value. It’s like this weird, it’s not Catch 22, but you don’t want to invest in the ops team when you’re too early. But then when you get to the point where you need it, it’s kind of like the hiring thing. You’re like, oh crap, we needed this yesterday, and I wish we had it a year ago. But it’s hard to get the timing right because you can also over engineer it. You can hire Ops too early and then you can over engineer and have a bunch of stuff that’s unnecessary. And so for us, hiring the right Ops team and really investing in CS Ops in addition to the broader revenue Ops, I think, unlocked a lot of opportunity for us.

Josh Schachter [00:26:44]:

When a company has CS Ops in place or rev Ops, it’s such a beacon of a signal that they take it very seriously that they’re at that next level and that they’re really trying to improve their process and performance. I agree. You really need that role in place to be the glue behind all those things.

Mike Molinet [00:27:03]:

It’s funny because it’s a bit indirect, right? You can’t directly see a, if I invest this million dollars, I’m going to get $5 million back versus some other things are, right? Like, you know that if you go hire an additional five salespeople, you’re probably going to get another four or 5 million back out of that. And it’s just like kind of like how direct or indirect it. And I think things like Ops and some of the things like that and some tools, they’re kind of like one degree removed from the direct revenue. And sometimes it can be hard to justify that, but I think when you get to a certain size, you start to realize like, oh, holy crap, we’ve got $80 million. And if we unlock just 5% more because we’re dropping a bunch of money and opportunities on the floor, that’s worth it. Spend a million dollars, get an extra 8 million in revenue. Sure, we’ll do that. And we had the same thing when we did self serve because we had the self serve tool free and SMB. You could self serve with a credit card onto Branch. And one day we finally, after five years, we finally got enough teams aligned to be able to say, okay, let’s actually look at this and let’s actually start investing in this. And we realized there’s probably $30 million annually that we were leaving on the table simply because we hadn’t invested in the right tooling and the right structure and the right provisioning. And we’re like, oh, now I see the opportunity. Now, in the early days, it’s not 30 million, it’s 2 million. It’s 3 million. You’re like, oh, that’s such a big opportunity. Such a big opportunity cost just for an extra 3 million. But eventually you wake up one day and you’re like, oh crap, that’s 30 million that we’re missing out on. We should probably go get that.

Josh Schachter [00:28:31]:

There’s a theme here. You level up when you see that you’re leaving significant money on the table.

Mike Molinet [00:28:36]:

Yeah, that’s like the theme of startups, which is you just constantly need to be leveling up. I view it as kind of like a game where you get to the next level and suddenly if you get to the next level and you level up, things become hard again. And that’s what you need to do. If things become easy, you probably are not growing right and you never want things to be easy in a startup. So if things feel easy, then it means you probably could be doing a lot more and you should be looking for the opportunities to do hard things. Again, not for the sake of doing hard things, but because there’s probably some opportunity that you’re missing.

Josh Schachter [00:29:08]:

Perfect. Segue let’s talk about doing new hard things. So very recently you joined, you started a founding team, Athena AI. Presumably FINA came from your experiences at Branch the last eight, nine years. Tell us a little bit about that origin story of what has you going now with FINA, what you guys are up to.

Mike Molinet [00:29:29]:

Yeah, so if you’re not familiar with Tina, it’s an application layer. It goes on top of messaging platforms, for example, Slack. And basically what it does is enables you to manage your customers and your customer relationships in your messaging platforms meant for b to b. So if you are a company, and a lot of companies nowadays are interacting with customers in, for example, Slack channels, and it can be hard to keep track of that, it can be hard to remember which messages get flagged for the messages. You don’t get analytics, you can’t market to them, you can’t do a lot of things. But we believe that messaging is essentially replacing email for the vast majority of business to business communication. And so things like Slack and teams and other thing and other messaging platforms are going to continue to replace email. And so we’re just a layer on top of that that makes it easy. Kind of like Zendesk did for email and marketo did for email, we’re doing for Slack and messaging platforms. And so this came really out of our struggles at Branch. So at Branch going back to 2015, I was always a big, big believer in making sure we take care of our customers and we give them above and beyond support. And part of that is because we had a very technical product. So going back to the relationships piece that we were talking about earlier, if you have a really technical product that can be hard to implement and can come with bugs or require certain implementation steps, and you don’t have a relationship with people and they run into an issue, a lot of times they’ll just give up. But if you have a relationship, then they know who to ask. They’ll say instead of suffering in silence, they’ll reach out to you and say, hey Josh, I ran into this issue, I don’t know what’s going on. And if you do, it over email. Email is kind of like an arm’s length, kind of asynchronous kind of at length relationship where it’s not very personal. And going to the relationship side, we felt that Slack and other messaging platforms were an amazing way to build relationships with prospects and then customers when they would eventually sell or implement. And we ended up building a lot of relationships over Slack. And in the beginning, actually, slack didn’t even have shared channels. What they had was just guests. And so what you would do is we would invite them, we would invite our customers to our slack workspace as guests. And I remember one day I was looking and we had 4500 guests in the branch workspace. And you’re like, holy crap, we’ve got so many people. Now you think about it and you’re like, okay, 200 channels with guests. And maybe the average customer has 20 to 25 people in the channel. Some of them had 400, some of them had 200. And you realize like, oh my god, this is such a great opportunity. And then Slack came out with shared channels, and we’re like, we got to convert everyone’s shared channels. And this is the way in which the future of relationships and customer success and support and just customer engagement is frankly probably going to be done. And I noticed it when companies like Adobe and Uber, they would say, slack us, don’t email us. Like, if you email us, we’re not going to see it. We may not see it, we may not get back to you. Slack us, slack us. Notes slack us, ask slack us, whatever you need. And it enabled us to build amazing relationships with customers. So we love that. But we started to realize that at scale, slack channels with customers created a lot of issues, right? If you’re a CSM, it can be really noisy. The customer may not have expectations around SLA. There’s no autoresponders. There’s no ticket deflection. It’s hard to keep track of everything. There’s no tracker or tickets or whatever. And if you’re a management, you’re like, oh, God, how do you know how much is happening inside of Slack? It was like a black box. And so I started spending some time on my weekends trying to build stuff. So the first thing I built was like a marketing newsletter sender, where basically what I would do is marketing would send their weekly or their monthly email newsletter, and I would take content from that. I’d wire it up in a Slack lock kit builder to create like a Slack newsletter. And then I built a script that would then just go reference just a static spreadsheet of channel IDs. And it would just send our newsletter in Slack to like two or 300 channels. And it was buggy and had issues, and it was very manual and was always breaking. But it worked really effectively at communicating to customers because you can imagine I was getting in front of 50 00 60 00 70 00 people in Slack where they actually read it rather than email, where a lot of people archive it. And so I was spending my time doing this. And I remember we had a conversation over Slack with CS management. And I said something along the lines of slack is the most important engagement channel that we have with our customers. It’s where they work. If I could build the branch dashboard in slack, I would. We have to support this as a channel and somebody screenshot of that and saved it and they sent it to me later when I but anyway, so a couple X, a couple of Branch stairs ended up leaving Branch in early 2022. They kicked around ideas for a few months and then they came up with this idea. They’re like, hey, we suffered from this. And then they approached me and they’re like, hey, Mike, we’re thinking about building this. I’m like, you guys have to build this. The market needs this is where the future is. This is where all companies are going. You guys have to build this. And I introduced them to some investors. They did a precede. I was still at Branch. I was still running Branch at that time. And then they got to building and they started building. And about six or eight months later, I started to get a little bit more involved in once they had the product and advising on the go to market side, especially on the sales side, a little bit on the customer success side. And as I got closer and closer to them and the customers, I realized just how big of an opportunity this is. Because we’re not just talking like, oh, support ticketing for Slack. It’s going to be a whole customer engagement platform. There’s going to be a whole customer data layer. There’s going to be all sorts of really interesting stuff that you can do. And so this is a huge opportunity. And I got more and more excited. And then we decided that actually timing was right. Branch was in a great stage. We started hiring the right sea level leadership to take it through the next phase and talking about doing hard things versus easy things and kind of like growing. I was excited to get back to learning quickly and trying new things and doing hard things again. And so the opportunity came up, and I think the time was perfect for us to actually merge and start and come on as co founder and start building this thing together.

Josh Schachter [00:35:30]:

You were ready for the grind again.

Mike Molinet [00:35:32]:

I didn’t think I was, but I was ready for the grind. And I’ll tell you, here’s an example. Yesterday, this is how pumped I am for just early stage startups, whether it’s Tina or just in general, how much I love this phase. So we’re ten people right now. At the time of this recording yesterday, I woke up and I had a 07:00 A.m. Call. It was our first call for the day. 07:00 A.m. Went into the office. I didn’t leave the office last night until 10:15 p.m., so we’ll call that a 15 hours day. I had to wake up this morning and my first call was at 06:00 A.m.. Wow. And I’m going to do a full day of meetings and then I’m on a red eye flight out tonight. But I am so jazzed and so pumped because this phase is just so exciting. And in general, just the CS space and customer service space is really exciting. And I’m really excited to build a technology that helps CS professionals, support professionals, just go to market professionals in general, better service their clients.

Josh Schachter [00:36:26]:

Well, now I’m just flattered that you took the time to speak with me and didn’t punt this conversation, Mike. I appreciate that very much. I know you’re burning both ends. It’s a safe bet. Slack, you see salesforce’s acquisition of it, and I would imagine it’s a major growth driver within salesforce at this point and where much of their innovation is coming from. When I first got into customer success a couple of years ago, there was a debate that I would often be in the middle of with folks that are in the industry of whether to engage your customers in Slack or not. Does Slack then become more of a support channel for customer success teams? Are you then setting false expectations of your responsiveness? But I think that’s all really smooth itself out. I think now teams acknowledge that you have to be there. It is the best way to offer service and support to your teams. And it’s not anything new, right? I mean, Asia, in Asia, they’ve been using WeChat for direct conversations between consumers and businesses and around the world they use WhatsApp for that purpose, right. So this is just in some sense we’re laggards in this paradigm of communication with our customers.

Mike Molinet [00:37:41]:

I think that’s such a good point and yes, absolutely. And you have to look at where the market is pulling and the market is pulling in messaging being the way in which people want to communicate both as consumers as well as b to b. Think about how you communicate with your friends, with your family. It’s probably over WhatsApp, it’s probably over SMS, it’s probably not over email as much anymore versus how it was 15 years ago, which was mostly email. And the business world is moving this way and it’s still a debate. Don’t get me wrong, Josh, I think it’s still very much a debate. But the question is where’s the market pulling? And we can see very clearly that the market is pulling in the direction of customers preferring messaging platforms for a lot of different reasons. And so we can either fight against it, right, which is definitely an option for a lot of companies to say, you know what, no, we’re not going to support Slack. But the question is, if the market’s going in that direction and customers start to demand or expect that they’re able to get quicker responses and use Slack or teams or messaging platforms with their vendors, do you want to be the one vendor that’s left behind that’s still saying, go to our support portal and file a ticket there? You can be, and it’s definitely more scalable, but you’re not building the same level of relationships that you would be and that your competitors are and that other companies are. And so, going back to your book about relationships are all that matter. The end of the day, Slack is one of the best, if not messaging platforms are one of the best ways to build relationships among others. And so the market’s going that way. We believe it. That’s the future. And in fact, I think what you will see over the next few years is that companies that are starting up or start up in the last few years, they won’t even use things like email support, they won’t use Zendesk, they won’t use Intercom, they won’t use some fresh desk. And instead, what they’re going to do is they’re going to be using Slack and they’re going to use tools like Thie to help scale it.

Josh Schachter [00:39:21]:

And what I love about what you guys are doing is you’re straddling this idea of scaling digitally, because that’s all the buz right now. That’s all the rage at these CS conferences that I attend, and all these panels and everything is all about digital scale. But what that often leaves behind is the concierge experience is the human relationship. And so I see something like Slack and the way that you’re helping teams manage it to be able to scale it greater as the glue between those two. Right? And that’s what I love about what you’re doing withena I want to ask you one more question here before we jump. You gave me a demo, Athena. I was very impressed, especially for the amount of time that it’s been. You guys were really less than a year out the gate from, from the very, very inception. And it’s very feature rich, I would say, so far. What’s the most exciting feature, the most exciting wedge for you, Athena?

Mike Molinet [00:40:18]:

Oh, man, I’m just so jazzed about everything, it’s hard to say. I have a soft spot for our marketing automation tool that we built. And I say that because it’s the thing that I built on the weekends while I was at Branch, that then I would manually, every month, I would manually go in and code this newsletter and then manually run the script to send it out to 200 or 300 channels. And I saw the value of then those customers replying and saying, oh, this is interesting product. Can I get a demo on this new feature? And then we do an upsell right from there. And so we built this marketing automation product where basically you can then do that. It’s like marketo, but for Slack. You can market to companies. You can send them newsletters, you can send them release notes, you can send them all sorts of stuff at scale to your dozens or hundreds or thousands of Slack channels. And so I’m really excited about that. I think it’s an interesting wedge because marketers also want to look for new channels to engage their customers and their users, but it’s really just because it’s a soft spot and something that I wanted so dearly that I went and built it on my weekends.

Josh Schachter [00:41:23]:

Mike Molaney, co founder Extraordinaire congratulations on your successes to date and I think this is going to be hugely successful as well and I’m wishing you the best of luck.

Mike Molinet [00:41:34]:

Appreciate it. Josh, thanks for having me and been a big fan of Update AI since I started using it as well.

Josh Schachter [00:41:39]:

Thanks, man.

Mike Molinet [00:41:39]:


Josh Schachter [00:41:41]:

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