00:00 Introduction and meeting virtually during lockdown

so alex welcome to the show the virtual show as it is i was actually thinking about this this morning when i knew you were coming on you and i have only known each other during lockdown we’ve never met we’ve never in fact this is the first time you’ve seen me when i’m not in my home office i’ve never seen you not anywhere but that other room for all i know you might live in that room that might be your entire existence but it’s so i’m six and a half feet tall you know i normally have a lot more hair outside of this it’s just the the glare of the light

00:50 What Pendula does: bridging the gap in business-to-consumer SMS

let’s talk about pendula i’m still learning about it obviously we’ve only been working together for what probably three weeks two weeks not long at all why don’t you give us your version of not necessarily how you got to where you got to we’ll come back to that but what pendula does as a business and where it’s going

we’re a software focused business what we’re really looking to do is bridge the gap in sms with consumers and businesses and allow consumers to respond back to messages but do it in a platform way where people can easily build out a multi-stage conversational journeys and really create an interaction with really b2c businesses that can be pushed out at scale where someone can respond back and have a voice instead of it just being about broadcasting information

04:00 Use cases: telco upgrades, NDIS appointments, education renewals

you’ve got some great use cases out there of telcos who will text a customer when they hit their data limit and asking them do you want to upgrade or do you want to change your plan consumers free texting back saying yes and i’d love to do that or can you share more information or hey can you give me a call we have a lot of appointment confirmation activities happening as well ndis face consumers who are getting physiotherapy at their home are you available this time do you need to change your appointment confirming that it happened

the technology behind it is really interesting there’s lots of different flavors of different streams or disciplines of technology that find their way into our platform everything from understanding language to the workflow that’s underlying these conversations if you want to upgrade a plan you can’t just say yes sure we’re gonna upgrade you without actually doing it so the workflow technology is really important the context matching and what are you saying and what is it about

06:00 Response rates, unprompted feedback and conversion stats

we’ve just clicked over 25 million conversations managed it’s a pretty exciting milestone that’s been facilitated through a little over 100 customers predominantly within australia new zealand but a few little flutters overseas in asia and the uk and in the us

the response rates are just crazy you’re getting 35 to 40 percent of the people who are receiving a text message or whatsapp or a facebook they’re actually responding back compare that to email click through rates are like six percent we can go to a business and say hey do you want to ask a third of your customer base how they feel about you and actually get the feedback and that’s a pretty powerful thing

about 17 percent of them are going to give you unprompted and unvetted feedback and that’s invaluable to some of these big consumer brands in energy in health in telecommunications and media

the conversion rates when you use our technology in a use case that’s revenue focused so think about cross-selling up selling everything from a telco upgrade to a masthead cross-sell from a newspaper to a renewal of an education cycle that starts sitting around at 15 16 conversion rates in telco which that’s cream on top of the pie that’s new revenue that they wouldn’t have had before

08:20 Cybersecurity in SMS and the 25 million conversations milestone

some interesting cyber security components that are now starting to enter into the texting world where links are untrusted how do you get around the issue with someone sending you a phishing link on a text message because it’s so easy to mask a different number how do you solve that the answer is really simply who controls the phone number it’s the business at the end of the day the end user that we enable owns that phone number when you respond back to it we’re the only ones getting it so that is embedded security it’s a better experience

10:00 The competitive landscape: API players versus platform builders

the relative competitive environment’s fairly weak a lot of api players out there you’ve got your developer-led sales approaches that are moving out of the market really akin to the way the email industry evolved the same thing’s happening now in the text world

back in the early 2000s you had sendgrid that was dominating sending 80 percent of the world’s email traffic and there is an api what happened after sendgrid well you had this democratization and we had these players like campaign monitor and mailchimp enter what did they do well they solved the challenge within emailing and that was templating how can the everyday punter build an easy template without knowing how to code the answer was drag and drop template builders

text world’s different different challenges and templates are easy we’re just sending free text there’s no challenge to make that look beautiful our challenge is we can’t communicate as much information we can’t have nice buttons you click on so it comes into context and intention what are we talking about what do you want to do

12:00 Alex’s background: BearingPoint, tutoring, go-to-market for US tech

very few founders get it right on their first in their first go i certainly fell into that category have been involved with a whole bunch of different businesses over the years from your big global consultancy businesses bearingpoint that’s where i started my corporate life out of high school was running tutoring businesses teaching high school kids how to get through maths exams in the hsc went into a few other technology businesses that were more or less focused on the go-to-market side of the world bringing players that had been operating in the us down into australia and setting up a local sales team did my dues in a bit of system architecture and solution architecture with some billing solutions

14:00 The first version of Pendula: invoice recovery via channel hopping

the first embarrassing version of pendula really all we were focused on in the first version of the platform was sending invoices and a common challenge where we came across was what happens if it’s not delivered what happens if you email someone that bounces people change jobs their emails then they have the automatic reply saying joe smith doesn’t work here anymore there’s no help within that

what we would do back in those days is do a classic customer communication management technique known as channel hopping try email fails what’s the next thing you try we text the customer try them there the thing we did back then which was kind of unique was asking the customer for their email address so we try and send you an invoice if it bounced you’d get a text message saying steve we tried to email you it failed we’ll at least ask you what your email address is that’ll then come back to us we validate the type of string that comes back pull out the predictable structure of an email give it a little validation plug it back into the crm billing system and send that email again

16:00 The pivot: from email cleansing to full customer lifecycle management

the aha moment that we really had was the interaction rates are really high but much higher on the sms compared to the email and the response rates were just exceptional pretty much everyone who got the sms responded to it we had a bit of a light bulb moment we sat down and we said this is great we’re recovering email addresses but the value of the use case is not that significant how do we generate revenue for businesses how do we create our footprint within their customer lifecycle

you look at these other customer lifecycle management tools that are out there and they’re really segregated you have your comms layer which is send an email send an sms there might be a little bit of journeying involved but ultimately all the business process that would happen underneath would be a different system the second someone became a customer a feedback loop was required you couldn’t just keep sending them information eventually you need to ask them what do you want to do

20:00 Building conversation management: context, intent and exception handling

our vision really came back to how can you manage that whole lifecycle across the service operations onboarding cross-selling up-selling surveying customer service all of these aspects and the answer was you need a workflow tool that is flexible enough that you can enable a business to trigger business process that’s generally managed within their core systems be it a crm or a billing system or a specific vertical solution

the next thing you’d need to be able to do is have native connection to those systems and remove the need to go and create massive custom integrations third layer on top of that is you then need a business user who can go and build and manage this thing the real concept of a human conversation is we can talk about multiple topics and just swap and change between them and conversations that build so how are you doing today i’m good well that’s nice to hear you can’t just say that it’s nice to hear as a default answer if someone says they’re bad

23:00 What happens when someone replies “banana”

what happens if someone replies banana good question there’s two parts of the technology that we use to manage that the first is the what we call the first stage exception manager so we will prompt you back saying that doesn’t make a lot of sense what you’re talking about there did you mean this or this so we subscribe to a thing called intention for every single person

if that fails and you say banana and we say what do you mean you say monkey bananas and again it makes no sense to a yes no question then what we do is we defer to really the most effective communication tool that any business has in its arsenal and that’s people we’ve got a manual console that an individual can communicate with generally integrate that with some kind of case management tool unfortunately there is so many exceptions within free communication that you’re never going to get away from you have to have some people interface

26:00 Impact of the pandemic on different industries

it’s coming in waves we operate across a few different industries some of them have been hit fairly hard by the pandemic others are absolutely flourishing three of the core industries being health telco utility and education obviously health and telco utility they’re going bananas right now everyone wants help and everyone needs telecommunications and their power to be running as much as possible

the education side of it depending on what institutions we’re talking to some of the small ones are struggling course related education has taken a real hit businesses are not investing as much in training their staff as they used to because they’ve tightened their budget constraints we as a business have seen phenomenal growth we still certainly feel for some of our customers who haven’t had the best luck throughout the pandemic

30:00 The challenge of hiring and showing culture over Zoom

biggest challenge we’re finding is hiring people in this climate it’s just a completely different experience having to interact with people over zoom you don’t get the same experience you can’t walk someone into our office and they can’t see the energy in the business they’re just seeing me sitting in a room they don’t know anyone they have no other perspective about the business

whenever we look at candidates our approach to hiring is one where there’s always got to be a mutual benefit on both sides of the fence that individual who is going to be joining us needs to see the culture that’s operating within our business is something that’s going to add to their lives see the opportunity and the ability to grow within the bounds of that opportunity and then obviously conversely we’re a business that’s investing in people and that’s our most important asset

34:00 Biggest lesson: scaling yourself as a founder

the ability to scale and grow with the business at every stage is really difficult and people are suited to different sizes and environments you go from starting your business with yourself or one or two others and how your role is focused and how the business is organized is so different to when you have five people or 10 or 15 or 30 or 50 or 100

the people who were previously doing were now managing and the culture that we had within our business was so focused on rolling those sleeves up and getting the job done that we found ourselves at certain stages where there were three cooks in the kitchen and every single activity that we were doing that was a result of rapid growth

even for myself letting go of responsibility and giving the ability for someone who is more specialized more skilled more experienced in a certain discipline to go and act upon that in a better way that was a really difficult activity because we were so focused on doing it right

39:00 Letting go: hiring a CFO, revenue leader and engineering managers

people in my team who are running finance a fantastic cfo alan he came in he’s much better at the financial modeling and the operational aspects of the business than i am having me trying to drive a direction or an agenda there doesn’t actually add to it eventually it takes it away so giving him the space that he needs to go and do that

to another alex in our team who runs the revenue components of the business giving him the space that he needs to be able to experiment with initiatives that he’s thinking are going to add to the effectiveness of our sales engine but also enabling him and giving him the resource to double down on the things that we know do work

we’ve found a really good balance between having our technology evangelists who really hold the title of leadership but more focused on the architecture of the product and the innovation behind it and natural people management so building in engineering management and product management to help support that engine

42:00 Why the most important metric is employee satisfaction

most vcs or investors out there would say it’s all about the revenue number or your ebitda or your net rate of retention whatever it would be and it’s not the most important metric is employee satisfaction employee enablement and empowerment because at the end of the day without them you’re not going to be having good ebitda results or good net rates of retention or great revenue so that foundation is probably the most difficult thing that we’re trying to balance out

we’re always going to have problems everyone has problems you just get better problems to solve when you get bigger and now our problems are better the challenges that i’m focused on as the leader within the business really is around people and the environment that everyone’s working in and making that environment work as effectively as possible

44:00 Why someone should work at Pendula

why would someone come and work at pendula it comes down to a few things first you’ve got to have an interest within the world that we’re sitting within if someone just wants to come and work for a startup we’re probably not the right startup for you if someone is really interested in how people engage with each other and they get excited by changing the way that countries and customer bases interact that’s a real big checkbox for us

we’re at a stage where we’re forming some of the key fundamentals of scale within the business so the ability to grow as an individual in your career this foundation is significant you’ve got the capital unlocked to run at initiatives in a meaningful way you’ve got so many different incredible individuals within the business you’ll be sitting in a room working either virtually or physically with different people from engineers to people in finance to sales to marketing to customer delivery and support that multidisciplinary environment is super important to broaden one’s horizons

47:00 Fewer people, above market pay, everyone a shareholder

we want fewer high quality people that are paid above market rates because that’s a better team than a very large head count at or below market rates and that methodology sets us up to enable the three other things that i just mentioned

one other really important aspect every single employee is a shareholder so verbatim if you join this business you’re getting on an option plan obviously scales depending on what level of seniority but we’re all in this together and that’s kind of core to how we have built success to now and we’re wanting to double down on that

alex look thank you so much for coming on i’m glad we got to do this so quickly after we met it’s a shame we didn’t get you in the studio it’s such a cool studio but another time thanks for coming on the show thank you cheers