BILL MAGNUSON in conversation with STEPHEN CUMMINS TRANSCRIPT:
Bill Magnuson: walking down an alleyway and you come up to a big wall and you can’t see what’s on the other side. And sometimes in life, you gotta just take off your baseball cap and throw it over the wall if for no other reason than to force you to climb over and see what’s on the other side. Fundamentally, this problem that we’re trying to solve which is; “How do we understand people better while they’re interacting with the brand in order to communicate with them in a way that’s more valuable to them?”
Stephen Cummins: Okay.
Bill Magnuson: That’s a fundamental human reality and it’s one that’s not tied to any particular generation of technology. And it’s also one that’s not tied to a category of business really. And I think that that’s been really important or our durability and our ability to continue to innovate and adapt to a changing technology ecosystem; changing consumer preferences because our foundation is in that human problem.
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!
This is episode 118 of 14 Minutes of SaaS, the first of 2 episodes where I chat with Bill Magnuson, Co-Founder and CEO of Braze, a customer engagement platform. Braze says that context underpins every Braze interaction, helping brands foster human connection with consumers. It was founded in 2011 and has revenues well north of 100M USD.
It has 49% employee growth in the past 12 months, with growth every month through the pandemic – the model and business appear to be on the right side of history with Pandemic Growth Fit as not a single month has not featured employee numbers growth. It’s in the leadership quadrant in mobile marketing G2 grid. It’s Glassdoor performance is very strong and it’s obviously a big promoter of employee success with 88% of employees past and present recommending working there to a friend and Bill has an outstanding CEO approval of 90%.
Stephen Cummins: Bill Magnuson, Co-Founder and CEO of Braze customer engagement platform here at the Web Summit in Lisbon. Great to have you on the show Bill.
Bill Magnuson: Thanks for having me. It’s great to be here.
Stephen Cummins: Brilliant. Okay. Well, I’m wondering if you could tell us a little bit about your formative years all the way from childhood, let’s say, to graduating in MIT. Tell us a bit about yourself?
Bill Magnuson: Yeah, absolutely. So I grew up in Minnesota which, if you’re not familiar with the United States, most people know about is the frozen north portion of the country. And I grew up in a relatively rural area. I was actually a first generation college student. And so I grew up just about a mile away from where my ancestors when they emigrated to the United States originally homesteaded. And grew up canoeing and hunting and camping in the summer. And snowmobiling and skiing in the winter. But also had a strong affinity for computers. And so, I think something that was encouraged by my teachers and by parents and such, which was me spending a lotta time on my computer. It would probably nowadays be called a screen-time addiction. But it was really formative for me in terms of getting very interested in technology, especially in the early days of the internet and such. And so after leaving high school there, I ended up going to M.I.T. in Boston. The first one to leave the nest and move away from the original homestead area… and study computer science there. So I did both my undergraduate and masters at M.I.T. And I graduated right around when Android was launching, which ended up being pretty formative.
Stephen Cummins: Okay. I’m not surprised you’re from that area, of course … partly because I can hear a tiny twinge of Fargo in there, maybe? Twin cities. Not much though … but also the name Magnuson, there’s a huge amount of Nordic migration to that part of the world
Bill Magnuson: Yeah, absolutely. And actually the… the cafe in my hometown still serves lutefisk even to this day.
Stephen Cummins: Actually, you moved to New York. Living and working in New York, compared to a rural part of Minnesota; do you ever wake up in the morning and go: “This is different!”?
Bill Magnuson: It’s unimaginably different. And actually my parents come out to visit every once in a while, and my Mom really revels in the culture of the city, but my Dad I would say tolerates it. He enjoys coming out and spending time with me and my wife and the kids, and such; but I think he always can’t wait to get back home to the woods and to his garage.
Stephen Cummins: Fantastic. How many kids?
Bill Magnuson: I’ve got two kids.
Stephen Cummins: Great, what age?
Bill Magnuson: They’re 14 and 16.
Stephen Cummins: Wow. You were Young. You’re a pretty young guy. You grew up very …
Bill Magnuson: Yeah. So, I’m actually a Stepdad. The kids have lived with my wife and I full-time since they were eight and ten, but they were her kids originally.
Stephen Cummins: Fantastic. I have two kids myself. Nothing better in life, nothing better in life. You went from M.I.T. … So tell me about M.I.T. actually. What drew you to M.I.T.? And I suppose the interest in computing and engineering, I guess.
Bill Magnuson: Yeah. honestly, it was because I saw M.I.T. in movies that I liked. Like I said, I was a first generation college student so I didn’t have much to go on in my family and not much from a high school guidance counselor type perspective. And I, what I would now refer to as foolishly … it was the only school I applied to.It sounded like an awesome school. I’d seen it in movies and so I applied and then I got in. And there had been an option to go to the University of Minnesota which was in the Minneapolis-St. Paul area – I grew up about 30 Miles outside of there. And I had done some programs with them when I was in high school that just gave me an automatic ability to go there. And that had actually been the plan the whole time. Meanwhile, I had applied to M.I.T without really thinking about it a lot. But when I got in, it really changed the thinking for my whole family. It wasn’t something that even seemed like something I was ever going to do. I was just gonna default into that path; going to the University of Minnesota, and when that acceptance letter came, I actually had this feeling of… of this like opportunity was sitting there at my doorstep. And I was gonna ignore it. And I almost got angry at myself, where I was just like I had been on this path my whole life. And then felt like it wasn’t the right thing to do to just default into what the plan had been the whole time … here was this opportunity that existed.
And I remember I had this conversation with someone… in… in that senior year of high school when I had to decide where I was going to go and he told me this anecdotal story of you’re walking down an alleyway and you come up to a big wall and you can’t see what’s on the other side. And sometimes in life, you gotta just take off your baseball cap and throw it over the wall if for no other reason than to force you to climb over and see what’s on the other side. And that story really stuck with me because… it was an unknown, it was a total unknown. Going to Boston. Moving halfway across the country. Going to this school that I’ve only seen the movies. Like a lot of unknowns, a lot of risks but, there was nothing to do really other than go check it out. And so, ultimately, that was what I decided to do.
Stephen Cummins: Yeah. It’s amazing how many founders I’ve interviewed that have gone to M.I.T. and I’ve met the co-founders in M.I.T. So there’s no doubt it’s… it’s a remarkable place. I’ve been in the museum there actually; it’s quite a remarkable museum as well. So you, after that, you got an internship with Google as a software engineer and you had a similar role – slightly more senior probably – with Bridgewater Associates for a short time. Were there any experiences, during that time that, you know, influenced you in becoming an entrepreneur quite early in life?
Bill Magnuson: Well yeah. I actually … I’d wanted to really start something of my own right when I graduated. The condensed version of the history was that I finished my undergrad and then I was actually recruited by one of the professors from M.I.T. that I had worked with during my undergraduate … (He) was at Google as a visiting faculty, he was on sabbatical from M.I.T. and was…had assembled a small team that were working on something in Google research around Android. And so he actually invited me to come and join that team and so I went there after I finished my undergrad. And it was a visual programming language for building Android applications that was being done with a team of past students of his that he had brought together into this small team. And it was out in Mountain View in the Android building. And so when I had originally been planning to go and do something for the summer and then come back and join a research group in the PDOS group at M.I.T. (which is a distributed systems group) and then finish out a Masters. And I ended up actually changing plans to go and work on this project with Google and it was right at the dawn of Android. So to bring you back; the G1 which was the slider phone with the horizontal qwerty keyboard, if you remember that one, had just come out that fall.
Stephen Cummins: Okay.
Bill Magnuson: And I had been involved in building early Android applications in the first launch of the app store before they had any documentation. It was definitely a frustrating experience to say the least. And … was able to be in the Android building in Mountain View This is obviously post Google acquiring Android, but it was right when it was starting to come to life commercially. The myTouch 3G came out. The Cupcake which was Android 1.5 came out that summer. And it really started to build momentum. And so I went there and, as you mentioned, it was about a nine months’ stint that I worked on that project for … and then the faculty … this guy named Hal Abelson, he actually returned back to M.I.T. to continue teaching. And, I managed to finish my Masters at the same time because I… I just did this great situation where I was able to write my thesis on the work that I was doing at Google.
Stephen Cummins: Perfect.
Bill Magnuson: And so I had this decision making point and it was either stay at Google and go find another project to work on or go somewhere else. And Google had gone from 5,000 to 15,000 employees in the short history right before that. And it was definitely a place where the culture was changing quite a bit and I wanted to just go see what a smaller company looked like. I had interned at Bridgewater Associates, which is the world’s largest hedge fund, the summer before that which was 2008. It was an auspicious time to be in finance Definitely exciting to see the inner workings of such a large financial institution as the financial crisis started to unfold… and affect global markets. In the global financial sector. And the team that I worked with there was a really inspiring and intelligence group of people.
And so when I left Google, I decided to go back to Bridgewater and I learned a lot there. And I actually .. that was where I met the person that would become my other technical co-founder, John Hyman. He was one of my colleagues at Bridgewater … actually my manager when I first started, and after about 15 months there, I had learned a lot. Came up to speed on a lot of really important topics around building software. Bridgewater has a very open culture and so it gives you a really good purview into understanding the inner workings of the rest of the business, as well. As long as your ears are open and you’re paying attention you’re able to actually impart, even as a junior employee, a lot about how a giant company is being run. And I found that to all be incredibly valuable in terms of the knowledge that I imparted, and have now been able to apply, to building my own company.
But I couldn’t shake the feeling that the entire world was changing on the back of mobile and I was sitting in an industry decades old that was not moving very fast. And I had this front row seat by and large the birth of Android and the birth of mobile and the modern smartphone revolution. So I had the strong conviction that it was going to fundamentally change the world and wanted to make sure that I was going to be there and be a part of it.
Stephen Cummins: You’re at this point in life where you have that conviction. What problem did you spot initially? What initially did you set Braze up to try and solve?
Bill Magnuson: This actually stemmed from the experience that I had had at Google as well in that we had built this visual programming language for building applications. And, that had a really democratising effect in terms of who could build things. But actually building things that were useful was obviously a big step up from merely being able to create things that were kinds of toys and gimmicks. And in the early days of the app store, when you looked at it, you probably remember back to like 99 cent flashlight apps that were making a meaningful amount of money. Or like sound boards with Arnold Schwarzenegger quotes; things like that, right? Like, things that were… toys and gimmicks but they were successful because there weren’t that many apps in the app store. And I had this fundamental belief that real meaningful at scale businesses would be built in mobile and that mobile itself would also disrupt already operating giant,generational enterprises in the world. But it wasn’t being realised in the early days of the mobile ecosystem. And so, what I wanted to do was build something that assumed that that future was coming. Huge businesses would be built in mobile… mobile would disrupt existing enterprise. What are those businesses going to need when they get there?
Stephen Cummins: And were are you keeping your eye on … I was working at a startup focused on “I-mode” in Japan around that time. Were you focused in that domain because of course, they were ahead at that point in… in the game.
Bill Magnuson: So, I think that one of the critical things about where we started was that … and really where we’re going in the future … is that we weren’t really tied to a specific generation of technology or specific platform. I think a really big and important part of certainly resource allocation over time has been an ability to read the tea leaves and figure out which one of all of these different shiny things is really gonna hit scale and… and get a lot of investment so that we can stay ahead of that. But fundamentally, this problem that we’re trying to solve which is; “How do we understand people better while they’re interacting with the brand in order to communicate with them in a way that’s more valuable to them?”
That’s a fundamental human reality and it’s one that’s not tied to any particular generation of technology. And it’s also one that’s not tied to a category of business really. And I think that that’s been really important for our durability and our ability to continue to innovate and adapt to a changing technology ecosystem; changing consumer preferences because we’re our foundation is in that human problem. As well as expand across all these different categories. And so in the early days, what we really looked at was how was the world changing with respect to that core problem, understanding people better and communicating with them.
Stephen Cummins: Okay.
Bill Magnuson: And if you think about mobile, the key thing about this is that we’ve got these devices in our pockets now that we’ve brought into our lives. We have this intimate connection with technology that we didn’t have before and it’s not really specific to the form factor or any sort of operating system. The fact of the matter is that we’ve attached technology to our personal lives now. And what that means is that through that technology, we can understand people better. And we’ve also been given this opportunity to communicate with them through it.
Stephen Cummins: Yeah.
Bill Magnuson: And that obviously comes with it a high level of responsibility. We need to be able to if we’re going to get that permission to talk to people, if we’re going to get that permission to understand people better, we better do something valuable with it. Otherwise we’re violating that implicit contract that exists. And so we saw that there was this opportunity to be much more personal, to be much more human, to interact with people in a lot more valuable way. On the flip side, though there was also a higher expectation. And the only way to really solve the tension of that higher expectation from the customer, and indeed, a much larger and more diverse customer base then probably a lot of companies were used to … because the app store meant that you could sell to the whole world all at once … the only way to really solve that tension of the opportunity and the challenge, was to take a more sophisticated approach and really apply technology to the problem. And so that was where we wanted to land and where we started.
Stephen Cummins: In the next episode, episode 119 of 14 Minutes of SaaS and the concluding part of this chat, Bill talks about why lean start-up methodology was not a major part of his start-up it’s early years, and why it took a few years before scale really kicked in.
You’ve been listening to 14 minutes of SaaS. Thanks to Mike Quill for his creativity and problem solving skills, to Ketsu for the music and 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 ratin
You’ve been listening to 14 minutes of SaaS. Thanks to Mike Quill for his creativity and problem solving skills, to Ketsu for the music and 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
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