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How Intercom rose from the ashes by betting everything on AI | Eoghan McCabe (founder and CEO)

How Intercom rose from the ashes by betting everything on AI | Eoghan McCabe (founder and CEO)

37 segments available

Eoghan McCabe is the founder and CEO of Intercom, a customer service platform that has successfully pivoted to become an AI-first company with its agent product, Fin. After stepping away from the CEO role in 2020 due to health issues, Eoghan returned to find the company’s growth had stalled. Just one month after his return, ChatGPT launched, and within six weeks, Intercom had a working prototype of what would become Fin. In this conversation, Eoghan shares the brutal reality of transforming a late-stage SaaS business valued at multiple billions into an AI-first company that’s now growing faster than most public software companies. *We discuss:* 1. Why Eoghan believes most late-stage companies won’t survive the AI transition 2. The “founder mode” transformation that required firing 40% of staff and resulted in 98% employee satisfaction 3. Why having “nothing to lose” is the ultimate advantage in AI transformation (and why comfortable companies will fail) 4. How Intercom transformed from a plateauing SaaS business to an AI-first company growing at 300%+ 5. How Intercom’s pricing evolved from “the most hated in SaaS” to a model that charges just $0.99 per resolved ticket 6. The cultural transformation required to compete with AI-native startups 7. How 12 years of therapy and a period of “ego death” shaped Eoghan’s leadership approach *Transcript:* https://www.lennysnewsletter.com/p/how-intercom-rose-from-the-ashes-eoghan-mccabe *My biggest takeaways (for paid newsletter subscribers):* https://www.lennysnewsletter.com/i/170710700/my-biggest-takeaways-from-this-conversation *Brought to you by:* Great Question—Empower everyone to run great research: https://www.greatquestion.com/lenny WorkOS—Modern identity platform for B2B SaaS, free up to 1 million MAUs: https://workos.com/lenny DX—The developer intelligence platform designed by leading researchers: https://getdx.com/lenny *Where to find Eoghan McCabe:* • X: https://x.com/eoghan • LinkedIn: https://www.linkedin.com/in/eoghanmccabe/ • Website: https://eoghanmccabe.com/ *Where to find Lenny:* • Newsletter: https://www.lennysnewsletter.com • X: https://twitter.com/lennysan • LinkedIn: https://www.linkedin.com/in/lennyrachitsky/ *In this episode, we cover:* (00:00) Introduction to Eoghan (05:00) The state of Intercom (09:53) The decision to pivot to AI (12:33) Why Eoghan is "anti-bot" in customer service (16:19) Pricing strategy evolution (19:26) Implementing the AI transformation (26:11) Cultural and organizational changes (31:18) Surviving a coup attempt (40:05) The future of AI and business (45:11) AI's impact on jobs (48:44) AI and human creativity (50:26) The importance of young AI talent (55:00) The cultural shift in AI adoption (58:00) Personal growth and leadership (01:04:34) Intercom’s success in producing product leaders (01:11:05) Intercom’s unique company culture (01:14:11) Lightning round and final thoughts *Referenced:* • Intercom: https://www.intercom.com/ • Fin: https://fin.ai/ • Des Traynor on LinkedIn: https://www.linkedin.com/in/destraynor/ • The art and science of pricing | Madhavan Ramanujam (Monetizing Innovation, Simon-Kucher): https://www.lennysnewsletter.com/p/the-art-and-science-of-pricing-madhavan • Pricing your AI product: Lessons from 400+ companies and 50 unicorns | Madhavan Ramanujam: https://www.lennysnewsletter.com/p/pricing-and-scaling-your-ai-product-madhavan-ramanujam • Brian Chesky’s new playbook: https://www.lennysnewsletter.com/p/brian-cheskys-contrarian-approach • Behind the founder: Marc Benioff: https://www.lennysnewsletter.com/p/behind-the-founder-marc-benioff • Anthropic co-founder on quitting OpenAI, AGI predictions, $100M talent wars, 20% unemployment, and the nightmare scenarios keeping him up at night | Ben Mann: https://www.lennysnewsletter.com/p/anthropic-co-founder-benjamin-mann • Fergal Reid on LinkedIn: https://www.linkedin.com/in/fergalreid/ • How Perplexity builds product: https://www.lennysnewsletter.com/p/how-perplexity-builds-product • Yosi Amram’s website: https://yamram.com/ • (Nathaniel Russell) Ego Death Now: https://heythereprojects.shop/products/copy-of-nathaniel-russell-space-is-a-place • Daniel Kahneman: https://en.wikipedia.org/wiki/Daniel_Kahneman • Palantir: https://www.palantir.com/ • Stripe: https://stripe.com/ • Revolut: https://www.revolut.com/en-US/ • Paul Adams on LinkedIn: https://www.linkedin.com/in/pauladams • What AI means for your product strategy | Paul Adams (CPO of Intercom): https://www.lennysnewsletter.com/p/what-ai-means-for-your-product-strategy ...References continued at: ⁠https://www.lennysnewsletter.com/p/how-intercom-rose-from-the-ashes-eoghan-mccabe⁠ _Production and marketing by https://penname.co/._ _For inquiries about sponsoring the podcast, email podcast@lennyrachitsky.com._ Lenny may be an investor in the companies discussed.

Segments Timeline

1
0:00 - 2:15
2:14 duration463 words

The Urgency of AI Transformation

Eoghan McCabe emphasizes the critical need for late-stage SaaS companies to embrace AI or face extinction. He shares how Intercom pivoted to an AI-first model with their agent product, Fin, after experiencing stagnation. The urgency of this transformation was underscored by the launch of ChatGPT, which prompted a complete cultural and operational overhaul at Intercom.

"You don't have a choice. AI is going to disrupt in the most aggressive, violent ways. If you're not in it, you're about to get kicked out of all of it. You have very successfully shifted latestage SAS..."

2
2:15 - 4:55
2:40 duration481 words

From Stagnation to Innovation

Eoghan discusses the state of Intercom before the AI pivot, highlighting the challenges of slow revenue growth and a bloated structure. He reflects on his return to the company after health issues and the immediate need to innovate. The launch of ChatGPT served as a catalyst for Intercom's transformation, leading to the rapid development of their AI agent, Fin.

"push back and even a soft coup attempt, what he believes people still don't understand about what is happening in software and AI, and so much more. If you enjoy this podcast, don't forget to subscrib..."

3
4:55 - 7:00
2:04 duration365 words

The Birth of Fin: A Game Changer

In this segment, Eoghan shares the rapid development of Fin, Intercom's AI agent, just six weeks after the launch of GPT-3.5. He explains how the existing AI team recognized the potential for disruption and leveraged their extensive customer base to create a product that would redefine customer service.

"more. That's works.com. [Music] Thank you so much for being here and welcome to the podcast. >> Thank you. Great to be here. >> You have done something quite extraordinary with intercom something that..."

4
7:00 - 9:30
2:30 duration433 words

Navigating the AI Landscape

Eoghan reflects on the competitive landscape post-GPT-3.5, discussing how AI is set to disrupt traditional SaaS models. He emphasizes the importance of being proactive in adopting AI technologies to avoid being left behind, sharing insights on how Intercom positioned itself to thrive in this new environment.

">> Okay. Uh this sounds like the dream for a lot of founders especially ones that are stuck with their existing business that isn't going very far. So let's get to that. Let's talk about the beginning..."

5
9:30 - 12:00
2:29 duration424 words

Cultural Shift: Embracing AI

Eoghan discusses the cultural transformation required at Intercom to embrace AI fully. He highlights the need for a 'wartime' mentality, making tough decisions, including significant staff reductions, to ensure the company's survival and success in the AI-driven market.

"announced. So it would be really neat and tidy to be able to say that the AI transformation came. I knew I couldn't be on the sidelines. I had to save this thing from the coming disruption. Actually, ..."

6
12:00 - 14:50
2:50 duration430 words

The Irony of AI in Customer Service

Eoghan addresses the irony of Intercom's shift towards AI, given his previous stance against bots in customer service. He explains how AI can provide a more personal and efficient customer experience, challenging the traditional notions of human interaction in support roles.

"having nothing to lose. So, you know, like we certainly are unique. I I don't know a a single company of our size and age that has pivoted this hard to AI and being as successful as we have been, but ..."

7
14:50 - 16:10
1:20 duration215 words

AI vs. Human Interaction

In this segment, Eoghan discusses the advantages of AI over human agents in customer service. He shares insights on how AI can enhance customer experiences by providing instant, reliable support, and reflects on the broader implications of AI in various industries.

"Yeah, maybe it's a bunch of fancy postrationalization, but honestly, that's that's really where I stand. >> Yeah, I think I think data has shown people often prefer not to talk to humans to just to so..."

8
16:11 - 17:15
1:04 duration199 words

Transforming Pricing Strategies

Eoghan reflects on Intercom's historically unpopular pricing strategy and the need for a shift towards simpler, more transparent pricing. He shares insights on how the company moved towards a model that aligns pricing with customer value, ultimately fostering better relationships with clients.

"when it comes to practical, productive, efficient, and effective value, the glue in between the human parts of our lives, I actually want AI and robotics. Before we start talking about how you actuall..."

9
17:15 - 19:21
2:05 duration360 words

The Pain of Pricing Changes

Eoghan discusses the challenges faced when changing Intercom's pricing strategy, including the decision to sacrifice short-term revenue for long-term customer satisfaction. He emphasizes the importance of customer-centric pricing and how it can lead to improved retention and loyalty.

"Super unfocused. As you said, we're trying to do all the things for all the people. And when you're trying to do all the things for all the people, your efforts to capture all that different types of ..."

10
19:21 - 20:43
1:22 duration274 words

Going All-In on AI

Eoghan shares the pivotal moment when Intercom decided to fully embrace AI technology. He describes the urgency and dissatisfaction that fueled this decision, as well as the strategic shift towards focusing on AI as a core component of the company's future.

"Also, >> let's save that because that's a really important topic that I think people need to hear. >> Let's talk about the the shift and how you made this actually happen. You make you make it sound l..."

11
20:43 - 22:31
1:48 duration265 words

The Messy Reality of Transformation

In this segment, Eoghan candidly reflects on the complexities and emotional turmoil involved in leading Intercom through its transformation. He discusses the internal struggles and the need for decisive leadership amidst the challenges of shifting company culture and strategy.

"my own kind of anger and dissatisfaction with how the company was being run and the mistakes that I made myself. I made a lot of compromises as a lot of founders and founding CEOs do toate employees o..."

12
22:31 - 24:45
2:13 duration348 words

Building a Customer-Obsessed Culture

Eoghan outlines the steps taken to reshape Intercom's culture towards being customer-obsessed. He explains the importance of aligning company values with performance metrics and the impact of these changes on employee satisfaction and company morale.

"was desperation saying we're doing the AI thing. The AI thing exciting and and and sex exciting and sexy. We need some new energy thing here. The new AI thing makes sense. And also just my intuition s..."

13
24:45 - 26:12
1:26 duration264 words

The Shift to Outcome-Based Pricing

Eoghan discusses Intercom's innovative approach to pricing, which focuses on outcomes rather than costs. He explains how this strategy not only benefits customers but also aligns the company's revenue model with the value delivered through its AI solutions.

"customer far happier. And so we actually started to lean into a price that we thought would be, you know, was the nexus between us earning the most and it being the most palatable. We basically said t..."

14
26:12 - 30:18
4:06 duration759 words

The Power of Leadership Decisions

Eoghan reflects on the leadership decisions made during Intercom's transformation, including the need for a top-down approach to drive change. He shares insights on the importance of decisive action and the positive outcomes that resulted from a clear vision and strong leadership.

">> Okay. So, going back to how you actually did this thing. So, you basically you just you described what many people think of now as founder mode. just top down as you said the truth and just here's ..."

15
30:01 - 32:32
2:31 duration425 words

The Founder’s Responsibility: Making Tough Decisions

In this segment, Eoghan shares his belief in the necessity of a strong hierarchy within a company, where the CEO must make bold decisions. He reflects on the friction that arises when transitioning from a democratic to a founder-led structure, highlighting the importance of taking responsibility for outcomes and the unique advantages of founder-led companies.

"employee survey like I think 15 or 16 months after I started aggressively working through the or rebuilding the or rebuilding the culture and we had a 98 to 99% approval of management leadership and n..."

16
32:32 - 35:00
2:27 duration445 words

Navigating Employee Turnover and Cultural Fit

Eoghan discusses the significant employee turnover at Intercom during the cultural transformation, which he estimates at around 40%. He emphasizes the importance of aligning employees with the company's ambitious goals and the need for a cultural fit that fosters engagement and happiness among staff.

"it should work. And I, for one, don't know of a great company that doesn't work that way. You'll see from time to time, I did this a couple years ago, people will construct these indexes of the perfor..."

17
35:00 - 37:19
2:18 duration406 words

The Reality of Corporate Life for Founders

Eoghan reflects on the challenges of corporate life after returning to Intercom, acknowledging the stress and dissatisfaction that can accompany leadership roles. He shares his commitment to a broader mission that makes the challenges worthwhile, despite the mundane aspects of corporate responsibilities.

"companies like Google that do that. There are startups that hire the crazy, you know, young, wild, messy, early startup people and that's great for them and the company too. So it's really all about h..."

18
37:19 - 39:02
1:42 duration248 words

The Catharsis of Returning to Leadership

In this segment, Eoghan expresses the cathartic experience of returning to Intercom after a period of absence due to health issues. He discusses the emotional weight of leaving the company and the fulfillment he finds in leading it again, despite the challenges that come with the role.

"and the, you know, high agency, you know, unilateral dayto-day movement where you're trying to make big wild bold decisions. The reality is that if you're successful, most your days will not be that. ..."

19
39:02 - 40:02
1:00 duration158 words

The Future of AI in Business Operations

Eoghan shares his vision for the future of AI in business, emphasizing the potential for automation to transform various operational roles. He discusses the implications of AI on customer experience and the broader organizational structure, predicting a future where agents play a central role in business operations.

"broader mission that makes it worthwhile for now. And that's why you see so many of our best founders get to a point where they're like, "Okay, I've had enough corporate fun." So that's the most authe..."

20
40:02 - 45:01
4:58 duration731 words

A Collaborative Future: Humans and Agents

Eoghan envisions a future where humans and AI agents collaborate seamlessly across various business functions. He discusses the potential for increased efficiency and competition in the market, highlighting the need for a balance between human oversight and automated processes to drive economic growth.

"That's getdx.com/lenny. One of the interesting things about this space of agents, there's all stock agents are taking over. It's the future of software. SAS is going to be replaced with agents. CX is ..."

21
44:58 - 46:40
1:41 duration286 words

Jobs at Risk: The Impact of AI on Employment

In this segment, Eoghan addresses the sensitive topic of job displacement due to AI advancements. He argues that while some roles, particularly in customer service and repetitive tasks, may vanish, technology has historically improved overall job quality and economic conditions. He advocates for a future where technology liberates humans from mundane tasks.

"as just a beautiful collaboration between humans and agents in every direction. >> I love the optimism. Uh someone described this once as a a society uh what is it agentic society >> where it's us and..."

22
46:40 - 48:02
1:22 duration230 words

Embracing Change: The Role of Technology in Job Evolution

Eoghan reflects on how technology has historically replaced dangerous and repetitive jobs, leading to improved quality of life. He asserts that the future will see a shift away from demeaning work, allowing individuals to pursue more fulfilling roles, thus enhancing human creativity and potential.

"past, no doubt people who were gainfully employed in dangerous work in mines had to find new work and so uh I don't take that for granted but I think that this is part of the long arc of humanity flou..."

23
48:02 - 49:57
1:55 duration300 words

The Value of Human Connection in Sales

Eoghan shares insights on the irreplaceable value of human connection in sales roles, despite the rise of AI. He discusses the importance of trust and personal interaction in sales, suggesting that while some repetitive tasks may diminish, the need for genuine human relationships will persist.

"I'm not polyianish here, like I said, and I'm suggesting that there won't be friction, but for the most part, we're doing good. And to get specific, there will be CX roles and a lot of basic repetitiv..."

24
49:57 - 51:43
1:46 duration272 words

The Relentless Pursuit of AI Talent

Eoghan emphasizes the necessity for companies to adapt and embrace AI, highlighting the importance of hiring young talent who are well-versed in AI technologies. He discusses the competitive landscape and the hard work required to succeed in this rapidly evolving field.

"opinions and is a little imperfect, but they'll pay more for it. The abundance of AI is going to make automated things worth zero. Just like you the value of cheap content on YouTube. Why do people su..."

25
51:43 - 54:00
2:16 duration398 words

The Hard Truth: Competing in the Age of AI

In this candid segment, Eoghan outlines the rigorous demands of competing in the AI landscape, stressing that success requires dedication and hard work. He contrasts the work ethic of younger AI companies with that of established firms, urging leaders to fully commit to the AI transformation or risk falling behind.

"strongest advice is roll your sleeves up, figure out what's going to disrupt you, have fun with it. You need to bring in actual talent. We and I would be nothing if we didn't have actual AI scientists..."

26
54:00 - 57:02
3:02 duration531 words

Finding Balance: Hard Work vs. Quality of Life

Eoghan reflects on the balance between hard work and a fulfilling life, advocating for a holistic approach to success. He acknowledges the pressures of the AI industry while emphasizing the importance of personal well-being and the value of taking time for oneself amidst the hustle.

"what's interesting is you talk about 12 hours a day every day. It's like we're trying to get close to what agents are doing. Uh, which is half that's basically 50% agents. >> But that that's not just ..."

27
57:02 - 1:00:12
3:09 duration509 words

Personal Growth Through Therapy

Eoghan shares his transformative journey through therapy, highlighting its role in shaping his leadership style and personal development. He discusses the misconceptions surrounding therapy and how it can enhance one's effectiveness without compromising edge or ambition.

"I'm simply saying that if you want to compete and and enjoy success in this age, which means you need to be doing AI, that is the price. So you either decide to pay the price or get out. Don't halfass..."

28
1:01:06 - 1:02:50
1:43 duration267 words

Ego Death and Leadership

In this segment, Eoghan McCabe shares his experience of 'ego death' during a challenging period in his career. He explains how confronting his insecurities and the pain of public scrutiny led to a more grounded and effective leadership approach. Eoghan reflects on the significance of letting go of a perfect self-image to foster better communication and understanding with others.

"And then the third part is two years away where I ran away where I was sick. Revenue growth wasn't doing so hot. I unsuccessfully tried to defend myself from a bunch of fake in the in the newspapers. ..."

29
1:02:50 - 1:05:02
2:12 duration460 words

Intercom's Culture of Product Leadership

Eoghan McCabe reveals the factors contributing to Intercom's success in cultivating product leaders. He discusses the company's product-centric culture, the autonomy given to product managers, and the emphasis on first-principles thinking. Eoghan attributes the high rate of successful alumni to the environment that encourages innovation and ownership among team members.

"really helped." >> Thank you for sharing all that. Um, >> yeah, >> I'm glad I went there. I want to show you something that I randomly have in my office, my wife just got me, that I think you're going..."

30
1:05:02 - 1:06:36
1:34 duration275 words

Hiring Founder Types

Eoghan McCabe explains Intercom's strategy of hiring 'founder types' who thrive in a startup environment. He discusses how this approach has led to a high number of successful entrepreneurs emerging from Intercom. Eoghan reflects on the evolution of the company's hiring practices and the balance between attracting ambitious individuals and fostering a stable work culture.

"next to like Palunteer and Stripe, Revolute. So the question this begs is what are you what are you guys doing that produces such great product leaders? There's kind of like the hiring piece and then ..."

31
1:06:36 - 1:09:32
2:56 duration514 words

Frameworks for Success

In this segment, Eoghan McCabe discusses the importance of frameworks in Intercom's approach to product development and strategy. He highlights how creating structured methodologies has led to thoughtful decision-making and effective execution. Eoghan emphasizes the role of these frameworks in nurturing a culture of innovation and collaboration within the company.

"mini CEO to some degree. I think there's one other thing which is you know part to our approach was this deeply first principles uh thinking methodology almost to a fault although I don't think it's a..."

32
1:09:32 - 1:14:10
4:37 duration836 words

Intercom's Future and Growth Trajectory

Eoghan McCabe shares his optimistic vision for Intercom's future, predicting it will become the fastest-growing company among public software firms. He reflects on the company's recent growth and the transformative impact of their AI product, Fin. Eoghan invites listeners to reconsider Intercom's identity as a 'large old startup' that continues to innovate and compete effectively in the market.

"wild. I did see some of that research by you, particularly the one where you show the the companies ranked by the number of founders that they have, and I'm like, what is happening? I was as surp I wa..."

33
1:14:01 - 1:15:00
0:58 duration196 words

Lightning Round: Quick Insights

In a rapid-fire segment, Eoghan answers fun questions about his favorite books, movies, and products. He shares his thoughts on the impact of stress on reading habits and discusses his recent enjoyment of the movie '28 Days Later,' highlighting its unique qualities.

"be feeling a genius >> or underelling it. This is just reflects back on exactly how I started our conversation. You've done something extraordinary in intercom and I'm really happy that we're hearing ..."

34
1:15:00 - 1:16:59
1:59 duration333 words

Perfectionism in Product Development

Eoghan discusses his high standards for products, mentioning his recent purchases, including a Porsche 911 and coffee products from Fellow. He reflects on the challenges of perfectionism in product creation and how it influences his approach to building successful offerings.

"was True Detective 1. It was just like incredible. But the last movie I watched was 28 Years Later and that's by Danny Bole. I'm I'm like I you know I was born in the 80s grew up as a kid in the 90s a..."

35
1:17:00 - 1:19:05
2:05 duration402 words

Life is Short: A Personal Motto

Eoghan shares a personal motto about the brevity of life, emphasizing the importance of living authentically and pursuing one's true desires. He reflects on how time perception changes with age and encourages listeners to make the most of their time.

"Including with the Porsche 911. >> I think that's the third time someone recommended a car. Someone recommend I think Bos at Facebook recommended this fancy Mercedes and then someone once suggested a ..."

36
1:19:05 - 1:20:01
0:56 duration191 words

The Journey of Building Twitter

Eoghan recounts his experience creating an app that tracked Twitter followers, discussing its success and the lessons learned about product-market fit. He emphasizes the importance of understanding the value of what you're building as a founder.

">> Fun fact, I built an app once called savorable that helped you savor the moment. It's called savorable, and it sent you a text every few hours, I don't know, maybe once a day uh with a little remin..."

37
1:20:01 - 1:22:46
2:44 duration522 words

Finn: The Future of Customer Service

Eoghan invites listeners to try Finn, Intercom's AI product, highlighting its unique value proposition in enhancing customer service. He stresses the importance of real-world application and encourages businesses to adopt Finn for improved customer satisfaction.

"like 14K. >> Wow. >> Um on some >> on one of these I think there's a website called Flip It where you could sell websites. It really blew up. It was like a little experiment. >> Kind of a social exper..."

How Intercom rose from the ashes by betting everything on AI | Eoghan McCabe (founder and CEO) — Eoghan McCabe | Searchlore