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Show 140 – Unicorn Interviews – Kabir Shahani – Amperity

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The 20th in our series of episodes of the csuite podcast that we’re recording in partnership with the European PR Agency Tyto and their Own Without Borders podcast, where we are interviewing leaders of unicorn companies to find out about the key issues, pain points and challenges that start-ups face and how they can address them with a strategic approach to marketing and communications.

Russell Goldsmith and co-host Brendon Craigie were joined online from Seattle by Kabir Shahani, CEO and co-founder of Amperity. Founded in 2016, Amperity provides a customer data platform to its clients. The company raised a $100m Series D round in July 2021, that brought its total fundraising to $187m, reaching a $1 billion valuation.

Kabir began by explaining that Amperity are in the business of helping consumer brands get a single, actionable view of their customer, which he was quite surprised that, in 2016 at the time, with all the advancement in technology, this continued to be a challenge. Their core business is really helping these brands ensure that they can get that single, actionable view and all the tooling around that to be able to unleash these incredible ideas that their customers have about how to best serve their customers and, the insights and analytics to be able to understand how they can be the most effective in that engagement.

He added that he and his co-founder, Derek Slager, were on quite the journey when they decided to jump in. Kabir said that he and Derek were fortunate to work together in building a marketing automation business prior to Amperity, that gave them a lot of perspective on multichannel marketing specifically and how data was being used in all kinds of businesses around the world. After selling that company and integrating it into their larger business, they took some time off. And of course, the thing that you end up thinking a lot about and wanting to go work on is probably the furthest away from what you’ve been spending time on, so, they explored all these issues across a variety of different industries that were not related to customer data and found themselves coming back to this core challenge, which was particularly in consumer businesses, there was not this single view across all the different data that they knew these brands had about them. That came to life for Derek and Kabir and their own experiences as consumers with an airline headquartered in Seattle called Alaska Airlines, which Kabir said is an incredible company known for customer service around the United States – they route into Mexico and throughout North America.

For a company that was so well-regarded for customer service and being customer obsessed, Kabir and Derek were pretty surprised by some of the communications that they were seeing, both from a marketing perspective and from a customer service perspective from the airline. Given how much data they knew they had about them as mileage plan members, as frequent travellers – for example, they got an email at the end of 2015, and it said ‘The one thing you could do this holiday season’ in the subject line.  This is their favourite airline, they travel every week, they go to open it, and it says, ‘download our mobile app’. Their reaction was, ‘wait a minute, I have the mobile app. I’ve used it four hundred times. I used it yesterday’. How did the company not know this?

Kabir then did what he thinks most brazen entrepreneurs would do – they went and found the person at Alaska Airlines who actually had responsibility for this. The front end of the story is that person, her name is Jeanne Jones, who now works at Amperity and runs their entire customer community. But at the time, Derek’s next-door neighbour actually worked in IT at Alaska Airlines, and just as they were taking out the trash, he said, ‘Hey, would you mind if we got together for a beer and we just ask you some questions that we have about some of what we’re seeing from your different communications, both in marketing and customer service?’ That’s what led them to meet Jeanne, they sat down with her, and said, ‘look, we know the spirit of the brand and we know the talent of the company and the people in this company. Help us understand why’, and they had four or five examples like this, and Kabir said that it was it was really a magical experience, because not only were they able to see the real passion and the real creativity that Jeanne and her team had, they also were able to observe the frustration that really talented people have when they don’t have the tools to unleash their best ideas. Not only did Jeanne describe to them the technical challenge of ‘we’ve got seven different places where this data lives and these different silos’, but also their ambition. She opened her laptop and showed them a spreadsheet that they called the wish list. There were forty-five use cases on the list, and Jeanne explained that they keep adding to this list of the things that they would do if they had a 360-degree view of their customer. That really prompted Kabir and Derek’s journey. In addition to that, they did 20 or 30 customer interviews to try to understand the real pain. They were incredibly fortunate that the venture capital firm that backed them the last time was excited about backing them again, and they have the capital lined up to go pursue something. That gave them the opportunity to do something that Kabir thinks is really special, which was really try to understand and focus on the real technical challenge that these companies have had for two decades now, in trying to achieve their ambition for customer experience. That led them down a path of commercializing academic research out of the University of Washington, spending two years trying to create this invention, which they now have six patents on that they own. Three and a half years ago they took the product to market and built a business around it.

The reality is that data is imperfect. Kabir believes that the challenge, whether it’s the Dunnhumbys or the master data management products or business intelligence products over the past 20 years, is we’ve been trying to get to this golden record. We’ve been trying to get to this perfect view. The perfect view doesn’t exist. So, let’s embrace the inherent messiness in the data and the inherent uncertainty in the data. Once we embrace that, then we can start to surface connections in that data in a way that lets users apply their own perspective on where and how to use that data. Instead of trying to merge all this data into one place, Kabir and Amperity have been able to invent techniques that allow them to find patterns across that. He said he often describes it as the perfect use case for machine learning. If you take any of the brands that you love whether that’s at the grocery store where you shop, the airline that you travel, your favourite clothing stores, they’ve got a lot of different indicators of data about you. They’ve got where you’re transacting in-store store or digitally, what you’re browsing on a website, how you’re interacting with a mobile app, the things that you’re engaging in terms of different digital communications and each one of those data sources runs off a different key. So, email address might be the key in one data source, phone number might be the key in another, first name and last name and physical address might be the key and a third. And it turns out that there’s a bunch of contextual information. They can sort through all that data and come up with a pretty accurate representation of a person, training machines to do the same thing. They’ve trained machines to exert that same human consciousness and judgment around these different data sources, turns out, machines are way faster at sorting through that than most people would be! Kabir added that it’s a really cool way to help machines have human intelligence but leverage the speed at which they can complete tasks. By doing that, they have invented a way to connect data where Common P doesn’t exist. He said he often describes this as if you recall, there were hundreds of search engines that were ways in which we use to figure out what web pages to browse and what was really interesting at that time on a 28.8 connection or a 56.6 connection, clicking a link took a long time. And so, people developed their own workflow for how they used the web. For example, Kabir kept a piece of notebook paper in front of his desk, went to three different search engines; Lycos, Dogpile and AltaVista, and inevitably the search results on the first page for each one of those would be really different. He would try to find the link that showed up, at least on the first page of two of those three, that would give him enough of an indicator to say, ‘hey, that’s probably what I’m looking for’. And then Google showed up, and he added it as a fourth search engine. After about a day, it was pretty clear that he didn’t need the other three because every time he executed a query in Google, the search was right on the first page. At the time, he said that we all thought about it as this magic. We couldn’t believe it. How did they possibly do it? It turns out what the founders of Google did was invented a really novel way to look at data across the web and to look at search engine results and how to service those. Amperity have just done the same thing for customer data, they’ve come up with a novel way to look at that, it’s a series of techniques that they have patented and over time, people will try to figure it out. So that’s their innovation. The push has been to constantly be disrupting themselves and increasing their moat. But it’s a really fun time right now, Kabir explained, where they can go, wipe this up for customers and show them their customer data in a way that they’ve never seen before.

Kabir explained that they got their first patent about two and a half years ago, and are up to six now, soon seven. They’ve taken that strategy very early on as they started to invent these techniques. They have also really encouraged their team and built a culture of innovation, really getting everyone across the team excited about putting their names on patents and owning that intellectual property using that as a way to build more and more capability.

Becoming a unicorn

Kabir said that becoming a unicorn has changed the perception of the business in a couple of ways. Number one, the milestone gives you the credibility of staying power, saying, ‘hey, this isn’t a start-up that hasn’t found product market fit yet, this isn’t a start-up that doesn’t have customers actively and aggressively using the product every day’. And so just by reducing the risk, particularly for something as important as customer data, it’s not lost on them the trust that their customers placed with them. Kabir thinks that the size and scale of the business and by extension, the valuation of the business is a good indicator for customers to be able to get security around doing business with them. It also helps to attract talent. Not everybody has the same risk tolerance, and so certainly there is a big segment of potential team members that Amperity can now recruit because they understand the staying power of the company. It also helps them really anchor on who they want to be and the kind of organisation they’re trying to build. Kabir often describes their ambition when they started the company and when you cross that unicorn milestone, it helps you reinforce that original vision and that original idea. And for Amperity, that was ‘how do you solve a really hard problem that creates value for customers with people you love?’ Those three things have fuelled them and propelled them to be able to create a great organisation and a great culture. When you go through this transition, you’re constantly rebuilding the company at every phase, so, when you get to this milestone and you now can see your runway much further than you might have previously, how you think about systems that you’re building, how you think about your organizational structure, how you think about the way in which the operational cadence of the business works, all changes and you’ve got to go through that process.

Industry Trends

There’s been two things that have been really powerful in the business over the past couple of years and then have really accelerated the pandemic, Kabir explained. The first is the push to digital customer relationships and the recognition that if you don’t have a first party digital customer relationship with your consumer, then you’ll be obsolete as a brand. There was awareness of that three to five years ago, he believes that the most strategic companies we’re thinking about needing to own the first party relationship with their customer. In the pandemic that was accelerated, and every brand woke up and said, ‘if I don’t have this right now, because I can’t have my physical locations open, I have to have that digital relationship’. So, that’s a big one that they have been really excited about. Kabir said that they think digital is really dynamic because in this new world, we’re all engaging with the brands we love in so many different ways we might buy online and pick up in store,we might go to a store to see the product, but then go buy it online and want to ship to our house. And that’s just one example, in the distribution piece, you can use that same example in customer service or in other parts of the business. The other one is really around loyalty and the recognition that loyal customers move the needle really meaningfully. There’s enough data now, and there’s been enough of a push around loyalty programming in general that we know that a loyal customer is worth on average, five to seven times a non-loyal customer. So, the investments that companies are making to drive loyalty, whether it’s creating a loyalty program or what they advocate for and work with their customers to do is really build the data infrastructure to be able to drive loyalty through understanding customers and customer analytics and being able to even use that data to drive product development and then think about how all that comes to life in that customer journey. Driving loyalty moves the needle in a really big way. And so, the recognition of those two things have been factors that have helped the business.

Kabir said that data will always get messier. If you think about the amount of data that we’re generating on a daily basis as a society, it is mind blowing the rate and scale at which data is growing and the new ways in which consumers are engaging. There are new channels, new ways in which consumers want to engage with the brands they love, and that is creating dramatically more data, messier data, harder to wrangle data. What Kabir found really interesting and didn’t quite expect candidly when they started deploying this product for customers, and they’ve done it over one hundred and fifty times, the messiest data is the data you have about your best customers. The number of times that they find brands are treating their best customers, highest value customers, as if they’re first-time customers because they have so much data about them that they’re unable to wrangle it and create it into that single view, it’s been staggering. He thinks that we’re going to see this as a continued tailwind and the recognition that this is not core competency for any individual brand. Core competency is what you do with that data, it’s the strategy that you deploy and how you apply analytics to that data. But getting it into a single, actionable view should be a commodity, it should be something that you can just leverage to be able to then go build the real intellectual property in your brand, in your business, which is what they see their best customers doing.

External Communications

Kabir said that they have an excellent marketing team and that’s been a journey as it is building any part of an organization and to really hone in and invest. They are big fans of investing in the brand, investing in marketing, making sure that the market understands what they stand for and what they stand for is helping these companies create exceptional customer relationships and being a partner in that journey. He added that they have been talking a lot about where they are today as a company and where they’re headed, but something he is really proud of is they have best product. They have incredible intellectual property. They will put their product up against any other solution that the customer might be thinking of. They bring expertise in a number of ways:

  1. They are very candid about what their product does and does not do, and that’s uncommon in enterprise software. There’s this pressure to try to be everything to everyone. And Amperity are incredibly clear and specific about where they are best in the world and where they are not.
  2. They work as real partners with their customers to help them make good decisions, that’s going to help them have success. Sometimes that means saying, ‘don’t use our software yet, go do these three other things first, and we’ll talk in a year’ and exercising the patience and discipline to do that has not only helped them create great, long-lasting relationships with customers, but it also helps them over time as they then get those customers as part of their business. They work really closely with them to drive economic value out of these investments, both their investment with Amperity and their investment with the adjacent capabilities that they have in their overall customer experience stack.
  3. Third, is a really big investment in community and making sure that they can get thought leaders across different industries and different brands working together in this area – the Customer Data Professionals Alliance. You don’t have to be an Amperity customer to be part of the CDPA. They’re investing millions of dollars every year in research and programming to help people that have real passion around this space like they do, exchange ideas and learn more about how to apply customer data in their businesses. And, of course, their own Amplifier community, where they can go even deeper and more specific in terms of how you’re leveraging tools and technology to create these exceptional customer experiences and informing their own product roadmap.

Culture

On building their culture throughout the pandemic, Kabir said that it’s about really doubling down on their core values. He said they have more to do in terms of how they think about that programmatically. Where he thinks they’ve had a lot of success is in their core values of play for each other, which is very real in their business. He added that he loves hearing this from new hires, the first few months he will always hear comments from people that say, ‘I’ve never worked somewhere where I’m so encouraged to be vulnerable and be candid about what I know, what I don’t know and when I have a problem or I say I don’t know something, the number of people that run to come help me is just extraordinary’. So that that is a very big part of who Amperity are. The idea of build for durability because they are trying to build a long term, sustainable, everlasting company and make something better today. Their nod to speed, how do they actually make sure that they’re getting better incrementally every single day and building those values into everything, from how they do performance reviews to how they provide awards and accolades every month in their monthly company meetings has been a really big part of emphasizing the culture. The next phase for Amperity is a lot about the systems that they are building. So, what’s the system for manager training? What’s the system for helping managers have the tools to go and then apply these values and their teams? And as they are rapidly scaling up, that’s becoming the most important area for them to spend time with and for Kabir to spend time and ensuring that those values are really clear and evident in how they do their jobs every day.

Internal Communications

As an entrepreneur and as a CEO, Kabir said that internal communications have been probably the most interesting part of his journey and recently it’s recognizing that it moves away from any communication he will do to the system of communications that they establish as a team. For example, if 18 months ago when the pandemic started, he used a blunt instrument for internal communication, which was almost every day, he recorded a video, two to three minutes on ‘here’s what’s on my mind, here are some of the things we need to be thinking about’, and it was a way to just keep connection. That then moved on to frequent town hall meetings, which moved to some frequency of email communication. While all of those things were creative, and Kabir appreciated getting a lot of support from his team and they felt like that was super helpful, none of those things were a system. They were all about his communication to every person in the company. There’s a chasm that they must cross, and they are crossing that now, which is it’s less about Kabir himself and his communication, and it’s more about the system of communication that they build. So, really investing in building their internal communications function now, which for companies bigger than theirs sounds silly that they don’t actually have that formalized and they’re now formalizing that. Those are the things that actually help because there’s so much happening in the business in any one day that Kabir can’t possibly know everything. His co-founder can’t possibly know everything that’s happening in the business. And so how they’re investing in building those systems to report that end and then have a communications function to communicate those things out with the lens of the culture that they have, is the most important thing they can be doing right now.

Kabir explained that their approach throughout the pandemic has been relatively high touch, whether it be videos or email communication. As it’s gotten safer, they have been encouraging people to spend time and gather. Traditionally Amperity do an annual summer event and an annual holiday event, like many companies, and they did their summer event this year and they had 200 people outside. Some were masked, some were not. But they were outdoors. They required vaccination, of course, and it was so important, it was risky. Kabir was thrilled that they had zero cases, zero issues come from that. It was a big risk. But they did it because they have grown so much in the past 18 months, and there are so many people that hadn’t even met their colleagues or hadn’t even been to headquarters. That experience of realizing, this is a real company with real people that you’re building, totally changes your relationship with your work and with the company. He added that he just can’t emphasize how important that is for them as a leadership team because none of them are here for a job. They’re here to build a company. They’re here to build something great and they want everybody that walks through their doors to get the gift of that experience. There’s something very magical about creating something and building something and scaling something and seeing that create value for customers. He said that he feels bad when people only feel like it’s a job and they only feel like they’re just there to complete a set of tasks. It’s not a fulfilling experience, and part of creating that fulfilling experience is driving that human connection.

Learning from previous businesses

Kabir described some of his learnings from previous experiences in creating a business. Number one is the boldness of ambition. In their last business, they bootstrapped that company for the first three years and in retrospect, that was a huge mistake. Not to say that bootstrapping isn’t a viable path, and there’s certainly plenty of examples of incredible companies, such as Mailchimp that raised very little capital along the way, and so it’s certainly possible to do it. But there are types of businesses and categories of businesses where you’re well served to capitalize those businesses and think with ambition about the rate and pace at which you can grow. And that’s one thing they look forward is they said, ‘had we invested more aggressively sooner, had we pushed our vision to be bigger, we could have scaled that business to be larger and done so even faster’. Number two is the importance of focusing on building a great team. One of the hardest parts in the entrepreneurial journey is going from being the first, second, third or fourth person on the ground, doing all the work to making sure that you’re scaling up and getting great people. Kabir said that he is so grateful and excited about their leadership team because they really learnt from that experience and they had a great leadership team at Aperture, and at Amperity, they started with that lens, day one and they said, ‘how do we just recruit exceptional leaders in every part of the business and then give them the autonomy to go run their business and create the systems for that to happen?’ That’s hard to do, particularly in the early stages, because, as a founder, you’re always going in and out of the detail, it’s not always pleasant for everybody. And so, finding the right balance to where you press and where you don’t and how you recruit great leaders is a lot of what they have thought about from day one with Amperity and Kabir believes that has allowed them to get scale much faster.

Kabir explained that he has learned to let go much faster and he is still on that journey. To be clear, as a founder, it’s very difficult, but you can’t achieve scale if you’re not willing to let go. He has always enjoyed the role of evangelizing the work, whether it’s been in either the two companies that he has been fortunate to be a founder or where he has built a career before that. To Kabir, he gets energy from sharing ideas, hearing ideas, collaborating, and iterating. And so being the external face of the company is something that’s always come naturally to him because it’s where he gets his energy. The difference is trying to not juggle every ball or spin every plate to be able to do that. So, being able to build the systems now with an exceptional leadership team, a great president of the company, the way the structure that they have, that’s going to allow them to do that. Knowing who you are as a founder is probably job number one and then hiring around you. Founders that maybe have a slightly different bias where they want to focus on the vision and the idea, but don’t necessarily want to be externally facing, Kabir thinks that’s totally OK. You just need somebody to be externally facing and let them do that job. The trap, and he has seen situations like this in the past is you don’t want to be the one being externally facing, but you won’t let somebody else go do it either, that’s a recipe for disaster.

Kabir explained that he has to give his parents a ton of credit for him being a natural communicator. At a very young age, his parents really encouraged him to participate in drama classes. He said he was never an orator and speechwriter but forcing him to do public speaking and really putting him in a where you’ve got to go, participate in things that build the muscle of external communication. And then even learning languages. The National Public Radio in the United States is really well done. He said that he remembers in fifth, sixth, seventh, eighth grade, at a young age, that’s what’s on in the car, you’ve got to listen to people’s language and how they speak and how they story tell. That builds muscle. He added that he’s not sure that that’s natural for anybody, he does think that that’s a learned behaviour that can either start when you’re four or five years old or when you’re twenty-five years old or forty-five years old. He doesn’t think it matters, but he does think it’s learned.

Advice for Future Leaders

When asked for advice for future leaders, Kabir said he had three things; number one, making sure that you are incredibly self-aware of your strengths and your growth opportunities or your weaknesses. You’ve got to be able to hire people smarter than you and better than you at a bunch of stuff. The trap people often fall into as founders is thinking they’re great at everything, the minute you realize not only are you not great at everything, but it’s also actually impossible to be great at everything allows you the freedom to go build an exceptional team because now you know where you want to go invest and how you want to build around you. Number two is seeking feedback and mentorship aggressively, Kabir talks of his friend Russell Wilson, who plays with the Seahawks in Seattle, who always says you don’t have to be sick to get better. Kabir thinks it’s one of the best ways to think about growth in that you’ve got to be willing to, even in the areas where you’re strong, continually improve and the areas where you are not committed to getting as best as you can be. And one of the few ways to do that quickly is to seek out mentorship and guidance. He added that he has been so fortunate to have incredible mentors in his career and continue to have incredible mentors in his career, and he plans to have incredible mentors through the rest of his life. Number three is putting in the work, and that’s the least popular part and the part, probably, we talk about the least. It’s not about the idea, it’s not about solving some Rubik’s Cube. It’s about grinding it out. If you’re willing to put in the work, you can go very far. And that work comes with a lot of sacrifice and it’s not popular and it’s very difficult to manage. But when done, you can achieve your objectives and your dreams.

Biggest Mistakes

Being really honest, Kabir admitted that the number one mistake he has made has been not creating enough space for people to do their jobs as quickly as he needs to. As a founder, every detail matters a ton to himself in the company. It’s impossible to have an opinion and comment on all of them. The faster that you can create the framework and you can create the standard and you can create the system, the faster the business will scale. He said that he thinks he was really shitty at this for a long time, and he started doing a slightly better job maybe two years ago, he got a lot faster at doing this when their president, joined the company and really pushed him hard in this area. The mistake has been, needing to have a point of view and needing to have an opinion about everything versus picking the things that matter and setting the standard and then giving people the freedom to go execute.

Amperity have got seventy-five, eighty up heads right now, which, for a start-up company, shouldn’t be that that high. So, Kabir said that it’s been super challenging to think about repeatability and scalability in that function. This is an area where over the past couple of months they’re now making dramatic progress in, and he is very optimistic about where they’re headed and what things look like even in the next 90 days. But hiring and recruiting and telling their story and getting people to come at the pace at which they need has certainly been a challenge, especially recently.

Being able to hire from all over has certainly helped a little bit. However, Kabir said that their bias is in a couple of areas. One, it’s just a little harder to build a company when you’re fully distributed versus operate a company when you’re fully distributed. And so, if they were at a scale where the systems were built and they were just plugging away, Kabir thinks they would have a different view on how effective they can be in a remote environment. They’re still building a ton of ways in which they do their jobs, and that requires in-person collaboration and requires building trust.

The model they are starting to think about is how they organize by site, think about the employee experience. And a lot of what’s been talked about and written about, is the hybrid model. Kabir said that this is weird because you’ve got some people in a room and some people on video and it sucks for the people on video and people in the room have to worry about that. So, they’re starting to think about ways they say, ‘OK, how do we have a flexible work environment so people can work in their homes and work in the office in a way that’s going to help them be the most productive?’ That’s the first principle. Imagine a world where you’re based in Seattle, you’re going to be able to see your colleagues and meet in the office when you need to and have that collaboration. But if you’re a remote employee, whether you choose to live in Seattle or live in Chicago or wherever you want to be, you’re mostly working with other people who are also remote. So, they are thinking about it almost like sites. ‘I’m actually at a Seattle site’. They have a big office in New York, so they have a New York site and then you might have a remote site. That’ll take some time to organize that way. But they think that could actually help get the benefit of collaboration, but also the breadth of being able to hire wherever. And so, if you happen to join the company and you’re not in a location where they have a headquarters, you’ll actually have a first-class experience as a remote employee.

Future Plans

What’s next for Amperity is building those systems of scale and ensuring that the systems they have taken them to at least the next two or three years. There’s a lot of value that they still have yet to create for customers with new products that they have in the pipeline, which has been a really fun part of 2021 for them. They have crossed that moment where now they’re able to invest in products that the market won’t see for another two years, similar to when they started the company in 2016. Expect to see a lot of innovation from Amperity. A lot of new capability as they continue to grow in this market.

Finally, Kabir said that if he could go back in time and speak to his younger self, he would give himself very strong feedback around carving out dedicated time to focus on communications and that communications is a job. It’s not something you can do late at night in between meetings on the fly. It has to be a dedicated chunk of your time as a leader that you carve out to be able to focus on communications internally and externally.