Transcription: E103 – Georg Petschnigg – 3 of 6 – Beautifully Obvious, Fifty Three to WeTransfer
Georg Petschnigg: WeTransfer exists like … well because they wanted to get behind great ideas. Okay? That’s why it exists. Right? It’s not to send the file. It is to make a client happy … to get like your music out … to deliver the great video! That’s why they got into this! It’s the same reasons why we got started with Fifty Three! We got into it because people have those ideas locked in your head, and you have to get them out. And that’s sort of where we then, you know, start thinking about … well, what if it’s not about just sending files? But it’s really about the transfer of ideas. It’s about the movement of ideas. We want to be the company that’s behind every great idea. And that’s then what then led to this, sort of, this idea of like building a set of tools to move ideas.
Stephen Cummins: Welcome to 14 minutes of SaaS! The show where you can listen to the stories and opinions of founders of the world’s most remarkable SaaS scale-ups!
Stephen Cummins: In episode 103 of 14 Minutes of SaaS, the third in our 6 part series with WeTransfer Chief Innovation Officer Georg Petschnigg, he explains why he was compelled to build both a software and a hardware product from scratch and at the same time in order to deliver on why of Fifty Three … that is … to get behind great ideas. In doing this Fifty Three managed to deliver a phoenix-like resurrection of the stylus. And we learn how he saw WeTransfer’s acquisition of Fifty Three as an entrance, not an exit. And not just entry into to a huge channel – which WeTransfer is of course. More than that. A truly brand based acquisition – a meeting of minds and values across the Atlantic from New York to Amsterdam. And synergistic products of course. All to empower this new entity to be a major catalyst for the birth and growth of great ideas at a global level.
Stephen Cummins: What products that you set out to build?
Georg Petschnigg: Yes, the first product ended up being “Paper.” But we actually built two products at the same time and we didn’t know how … we didn’t really know what these products are being called. It was called like “Journal” at first, right? And then we tried to build this other product called “Pen.” But it ended up being “Paper” and “Pencil” … which I think are much better names. But … so we built “Paper” … it was a really exciting product for us, because we had taken a lot of the lessons that you would actually gain from design school about sketching and drawing and visualizing …. And we essentially developed like software and computer graphics algorithms to make those really approachable and easy, you know.
So that anyone actually picking up, you know, drawing or sketching on an iPad would actually benefit from them. So, we developed ways where you could think through colour. Using, like, watercolour … a sort of a proxy of that. But actually, anyone could do it! Like even without having to have the hard skills of learning how to do watercolour, right? But you could really draw with colour. We worked through how, you know, people could very quickly like draw and control lines. So we’ve developed a lot of, you know, algorithms that essentially would make anyone’s drawing look great. And that again is in this positive feedback loop. When someone’s getting an idea out, and they see it just beautifully rendered as they’re creating … you know, it encourages you to overcome that moment where you’re going to be like your harshest critic, right? You’re seeing your idea for the first time … Let’s make sure it looks good. So that you keep creating that idea.
And that essentially became sort of the essence of Paper. We built this very game-like environment where, you know, getting your ideas out was encouraged. And it looked really good. And that actually really defined, sort of, how creation and mobile creation … or gesture base creation on iPads should work. And it became sort of the standard for inks … for many years to come.
Stephen Cummins: Amazing.
Georg Petschnigg: We were also building our digital stylus at that same time. Like … our belief that, you know, you have to solve that problem of how to express an idea and render it with pen, touch and ink. And you have to build the hardware and the software together, right? That’s a…
Stephen Cummins: Really a big challenge.
Georg Petschnigg: Of course. It’s huge challenge! Because the teams work very differently. It’s costly to do this. You have to invest a lot in the R&D. It’s harder… hardware development is super different from software development, right? Like iterative development and design from software which is like, you know, the standard practice, right? That does not work with hardware. Like it’s just … you can’t like say “Oh yeah … we’ll fix it”.
Stephen Cummins: Yeah.
Georg Petschnigg: No. You know … you can’t like … you gotta be really sure before you make 100,000 of these things that it actually works really well, right? It’s a completely different development process. But that said, that pairing of like a great stylus that enables the hand to think … and the software to respond correctly, right? We were able to do that, and then essentially “Pencil” became our second product. That was the hardware product that became than the best selling digital stylus in the world.
Stephen Cummins: “Pencil” and “Paper”
Georg Petschnigg: “Pencil” and “Paper”. That’s right.
Stephen Cummins: Fantastic.
Georg Petschnigg: And then, yeah, and then that led into, sort of, the last really great challenge I’ve started then working on at Fifty Three …. which is essentially “How do you get people in teams and to create together?” So Paper and Pencil is very much about individual creativity, and creation and getting your ideas out. With Paste we then really started looking at how teams, as a whole, create.
Stephen Cummins: Yeah. And even just taking it back to the first two there. You know, humans evolved to weild things … and that’s why we, I mean … even now, you know … despite working in digital all the time, you know … I have these notes written all over a piece of paper (here), because every now and then, I like to pick a pen up. And, you know, sometimes I can transmit my thoughts… in fact, always I can transmit my thoughts better if I’m wielding something … than if I’m just typing. Because that’s how I evolved.
Georg Petschnigg: That’s right! Humans are tool makers.
Stephen Cummins: Yeah, absolutely. And so then you get on to Paste. And this was a huge leap to connect up teams, to allow collaboration. It was like the next step, because design is collaborative usually. And it’s probably something that you’re, even though you’ve produced a very successful product, is probably something that you’ll continue working out for years to come.
Georg Petschnigg: Yeah. I mean, that’s essentially … that also led us to the sale of Fifty Three then … to WeTransfer.
Stephen Cummins: Okay.
Georg Petschnigg: Right. So now we’re jumping ahead to like 2018. We’re really looking at like… you know … we need a bigger stadium. We need a bigger audience, right? And, you know, we knew of WeTransfer as like one of the greatest creative forces or creative brands in Europe, right? But it was fairly unknown in the United States. But we knew like WeTransfer has been supporting creativity in all of its shapes and sizes and forms, right? And we’re not just talking, like, art or… drawing. We’re talking like anyone who is out there like trying to get a new idea into the world, right? That’s how we think about creativity very broadly. They’ve been really supporting that large audience. About 50,000,000 people that come to WeTransfer every month.
They send over one and a half billion files on WeTransfer. It’s a juggernaut, like, when it comes to that. But hardly known in the US in comparison to its notoriety in Europe. So we saw that. And, you know, to us we saw in this opportunity that as we started working with the team, you know, we could really take that idea of sending a file, of transferring a file.
And then you now get to the “Why.” Well why is that actually happening? Why did Bas [Bas Beerens] and the team actually build WeTransfer? Well because they wanted to get behind great ideas. Okay? That’s why it exists. Right? It’s not to send the file. It is to make a client happy … to get like your music out … to deliver the great video! That’s why they got into this! It’s the same reasons why we got started with Fifty Three! We got into it because people have those ideas locked in your head, and you have to get them out. And that’s sort of where we then, you know, start thinking about … well, what if it’s not about just sending files? But it’s really about the transfer of ideas. It’s about the movement of ideas. We want to be the company that’s behind every great idea. And that’s then what then led to this, sort of, this idea of like building a set of tools to move ideas.
Stephen Cummins: So it was a very strategic acquisition in the proper sense of that word. And it extended you, and it’ll extend them. And made you more complete.
Georg Petschnigg: That’s right,
Stephen Cummins: In terms of being the vector for moving things. For … for … freeing things up. I think you said getting out of the way of things …
Georg Petschnigg: Yeah. So that is, like, in terms of like the design philosophy and product philosophies … I mean, there’s always been like this, you know, this idea of being, like… you know … simple and straightforward, but tools that allow for mastery. And why do you want to design for that? It’s so that, you know, your mind actually can stay in the flow, right? The way how WeTransfer speaks about that is, like, tools have to be, you know, needs to be a beautiful. They need to be beautifully obvious, right? But not shallow, right? But not, and that’s something in Paper and in Paste, in like even our file sharing product … it looks very simple. You just drop a file onto your upload, but behind the scenes, like there is actually high reliability delivery. You get delivery receipts, notifications, tracking… Like, I mean, there’s a very, very complex world behind that product. That makes sure for a sender that this is just an effortless activity, right? But that is sort of like where we are, you know, again the brand needs … those were really a great match.
You know you used the words ‘this was a strategic acquisition’. Right? I like to think of it as actually, like, and we will see more and more of that actually … that this is actually a brand based acquisition. And that’s very unusual for tech. Like, usually it’s like ‘more market share’ or ‘we’re taking this widget here’ or …
Stephen Cummins: Or ‘that’s a threat’
Georg Petschnigg: Exactly! Like a threat, right? But in other industries, you know, in fashion and definitely in entertainment … a lot of decisions were motivated or start with brand. And we’re going to see that, I think, more and more in the tech space too. Because consumers today … we start caring much more about the ‘why’, right? This is where we are. We know how to build now software products. We know how to run services, online services, you know. We know how to build an advertising network, right? But the question is like ‘Well, but is it doing the right thing for us, and for society?’ And we can actually ask ourselves … I think … more deeper questions about responsibility. Like in the past, like the reality was we were so glad to just get anything out and working. Like it’s the truth. Like at the beginning of my career, everyone was just like, “Yay the code compiled, so we are so lucky.”
Stephen Cummins: So, I’ve always argued that … I’ve had this discussion with friends over the years that.. and it’s changing I know … but in technology, I always found marketing in terms of brand equity, in the thought behind it, I always thought it was very unsophisticated. And I always felt that was because it was a new frontier. And when you looked at things …even if it’s beer, you look at Guinness, for example … or you just pick anything. Anything that’s been around for a long time. Because the playing field is largely set… because the differences are more subtle. They become incredibly sophisticated, and incredibly deep about thinking about why they exist, and who they are, and how they can best express that. But I always felt it was unsophisticated over the years in technology with those exceptions like Apple and stuff like that. But is there truth in that do you feel? Because you know more about this than I do.
Georg Petschnigg: Yes it’s correct. Like established … in particular consumables as a product… you know, consumable goods industries like beverages … there is like, there is a high premium placed on brand as a differentiator, right? I mean, there are other reasons for this too.
Stephen Cummins: Sure.
Georg Petschnigg: Especially when you get into like … you do use brands, also, to protect a certain quality of your product. And that I think is actually more the interesting. Like a Coca Cola bottle, right … I mean, you know, everything about that experience is essentially branded so that the good itself, you know, is coming from a particular source. And there’s a guarantee of service. Okay? So, you know it’s sort of .. you know it gives you a guarantee that the product that you’re gonna get is the real thing.
Stephen Cummins: Yeah.
Georg Petschnigg: Right? I mean, it’s very, very, very…
Stephen Cummins: Thought out.
Georg Petschnigg: Thought out, right. You know, with software it is very similar. Like, there is more and more guarantee of what you will get when you’re working with one company over the other. Of what sort service or customer relationship is going to be like, right? I think it’s the way we’re headed now is that, you know, because you can actually buy multiple products. Like at this point, you have multiple note taking products. You have multiple drawing products. You have multiple email products. And, like, the reason why people will choose one experience over the other is ultimately, I think, about ‘What is the type of business and brand relationship you’re going to have with the makers of that?’
Stephen Cummins: Yeah.
Georg Petschnigg: Right? You know, you have a choice of, you know … a free, you document editor that you can get from Google.
Stephen Cummins: Okay. Yeah.
Georg Petschnigg: But be aware of the brand! And the business relationship you’re entering into there. And, you know, we will learn more about that.
Stephen Cummins: A hidden price.
Georg Petschnigg: There’s a price to, you know… 1.9 billion people are getting email for free. There is a price. There’s a price. This is not like a ‘not for profit’ organisation, right? There’s a reason why, you know, Google is giving you email for free. And, you know, I would say like in particular with technology. If it’s too easy, you should double check it. Why it is so easy for you to just create a free email account, right? Because there is usually like, you know … a deal! In this case like … yes you know Google places ads against your content. So that’s sort of where I think it’ll be interesting to see as that evolves, and we’re getting more literate and more mature, I think, about the sort of technologies you adopt …
Stephen Cummins: Yeah.
Georg Petschnigg: I think that’s sort of where brand is just gonna play a more important role. And you can… sorry my going on and on, like …
Stephen Cummins: No, this is interesting …
Georg Petschnigg: Because when you look at, you know, Apple has elevated privacy. It’s one or their brand values. And they’re leaning into this very heavily. Like Microsoft is leaning into enablement. It’s a big deal. They’ve started building, like, game controllers for … I think one of the most terrific designs is actually a highly accessible game controller, right? That makes gaming, you know, more accessible to communities that struggle with sight, or struggling with hands and motion, right? When I look at sort of like some of the brand values at WeTransfer, there’s a huge belief in making creativity more accessible. And also like, you know, the company is willing to take stances behind that. And also empowering and enabling more voices. So I love the fact that like, you know, companies are now taking stronger positions. Or should be taking stronger positions.
Stephen Cummins: In episode 104 of 14 Minutes of SaaS, the fourth in our 6 part series with Georg, we’ll hear why WeTransfer can dance with the Microsofts and Googles of this world. And Goerg talks about the power of having 2 business models operating in tandem. Who says a profitable freemium doesn’t exist?
Stephen Cummins: You’ve been listening to 14 minutes of SaaS. Thanks to Mike Quill for his creativity and problem solving skills, and to Ketsu for the music. Thanks also to Anders Getz for the transcript. This episode was brought to you by me, Stephen Cummins. If you enjoyed the podcast, please don’t forget to share it with your network, subscribe to the series, and give the show a rating.