The Customer Service Revolution: Building Fin, with Eoghan McCabe & Fergal Reid of Intercom
Today Eoghan McCabe and Fergal Reid of Intercom join The Cognitive Revolution to discuss building their AI customer service agent Fin, exploring how they achieved a 65% resolution rate through rigorous optimization and custom model training rather than relying on base model improvements, while pioneering outcome-based pricing at $0.99 per resolution.
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CHAPTERS:
(00:00) About the Episode
(03:43) Keeping Up With AI
(09:56) Evaluating Models and Evals
(13:04) Incumbents vs. Startups
(18:54) Product Risk and Judgment (Part 1)
(19:00) Sponsors: Linear | AGNTCY
(21:34) Product Risk and Judgment (Part 2)
(23:42) The Klarna Layoff Story (Part 1)
(32:11) Sponsors: Claude | Shopify
(36:13) The Klarna Layoff Story (Part 2)
(36:14) Driving Resolution Rate
(45:00) Intelligence Isn't the Bottleneck
(50:10) Closing the Automation Gap
(56:20) Human vs. AI Accuracy
(01:01:03) The Nuance of Speed
(01:04:48) Considering Paradigm Changes
(01:09:31) Outcome-Based Pricing Model
(01:19:12) Casual Hacking and Insights
(01:26:05) AI Adoption and Ambition
(01:36:00) Outro
Inside Intercom’s AI Turnaround, Why Software Companies Must Train Their Own Models | Eoghan McCabe, Co-founder and CEO
Eoghan McCabe is the Co-founder and CEO of Intercom, building Fin.ai, the AI customer service company.
This was an extremely candid, two hour conversation going inside every detail of how Intercom was the first late stage software company to successfully re-architect itself to be AI-native.
Intercom just announced they’ve built their own customer service-focused AI models, and Eoghan explains why most software companies will have to do the same.
We also talk through the lessons he learned coming back to run Intercom in 2022 after stepping back in 2020, why many AI companies have strong negative gross margins despite the narrative, how Intercom designed AI’s first outcome-based pricing model, the challenges of buying AI software today, the importance of brand when building new products, and we get in the wayback machine, talking through the pain raising Intercom’s initial million dollar Seed round, and how venture capital has changed since then.
Thank you to Eoghan’s Co-founder Des Traynor for helping me brainstorm topics for the conversation.
Special thanks to Ramp for supporting this episode. It's the corporate card and expense management platform used by over 40,000 companies, like Shopify, CBRE and Stripe. Time is money. Save both with Ramp. Get $250 for signing-up here: https://ramp.com/ThePeel
Timestamps:
(4:18) We’re at peak SaaS
(9:11) Inside early days of Intercom’s turnaround
(16:43) AI will beat humans at everything
(21:17) Making trade-offs building AI products
(24:25) Why Intercom trained their own AI models
(28:33) Lessons from returning as CEO
(34:19) Overcoming initial AI skepticism in 2022
(40:02) Creating AI’s first outcome-based pricing
(45:15) Intercom’s best-in-class gross margins
(49:25) Why its so hard to buy AI software today
(51:28) Unpacking AI’s negative gross margins
(58:12) Being perfectly positioned for AI
(1:09:47) Why AI products need their own brand
(1:16:13) Founder CEOs vs Manager CEOs in AI
(1:21:29) AI startup opportunities
(1:24:57) Lessons running a team in Dublin and SF
(1:28:25) How media has changed over time
(1:37:32) Raising Intercom’s first $1 million Seed round
(1:43:53) Why there are so many VC’s
(1:47:38) Advice for investors
Referenced
Intercom: https://www.intercom.com/
Fin: https://fin.ai/
Intercom Careers: https://www.intercom.com/careers
Eoghan’s website: https://eoghanmccabe.com
Intercom’s first pitch deck: https://www.slideshare.net/slideshow/intercompitchdeckpdf/253317574
Follow Eoghan
Twitter: https://x.com/eoghan
LinkedIn: https://www.linkedin.com/in/eoghanmccabe
Follow Turner
Twitter: https://twitter.com/TurnerNovak
LinkedIn: https://www.linkedin.com/in/turnernovak
Subscribe to my newsletter to get every episode + the transcript in your inbox every week: https://www.thespl.it/
How Intercom rose from the ashes by betting everything on AI | Eoghan McCabe (founder and CEO)
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
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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
—
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
• Which companies accelerate PM careers most: https://www.lennysnewsletter.com/p/which-companies-accelerate-your-pm
• N26: https://n26.com/en-eu
• Notion: https://www.notion.so/
• Coinbase: https://www.coinbase.com/
• True Detective on Max: https://www.hbomax.com/shows/true-detective/9a4a3645-74e0-4e4d-9f35-31464b402357
• 28 Years Later: https://www.imdb.com/title/tt10548174/
• Trainspotting: https://www.imdb.com/title/tt0117951/
• 28 Days Later: https://www.imdb.com/title/tt0289043/
• Fellow: https://fellowproducts.com/
• Porsche 911: https://www.porsche.com/usa/models/911/
• Making Meta | Andrew ‘Boz’ Bosworth (CTO): https://www.lennysnewsletter.com/p/making-meta-andrew-boz-bosworth-cto
—
Recommended book:
• Nuclear War: A Scenario: https://www.amazon.com/Nuclear-War-Scenario-Annie-Jacobsen/dp/0593476093
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.
To hear more, visit www.lennysnewsletter.com
EP 123: Intercom CEO on Endorsing Trump, Reinventing The Company, and the Future of AI in Software
Eoghan McCabe returned to the CEO seat at Intercom with a mission to shake things up. Over the past two years, he's been reinventing the company’s culture, leading with zero apologies, and transforming Intercom into an AI-driven powerhouse.
In my latest conversation, we dive into Eoghan’s journey back to Intercom after a two-year break, his blueprint for turning a software company into an AI leader, and the tactics he uses to keep Intercom running like a high-intensity startup. Eoghan also shares his thoughts on personal freedom and his controversial endorsement of Donald Trump.
[0:00] Intro
[1:33] Eoghan McCabe's Return to Intercom
[3:01] Challenges and Learnings
[10:44] Cultural Reset at Intercom
[29:23] AI and the Future of Customer Service
[31:11] Adapting to AI and Market Changes
[43:00] Competitive Landscape and Strategy
[48:29] Future of AI in Customer Service
[50:24] The Evolution of Work
[52:18] Challenges and Rewards of Leadership
[56:45] Media and Public Perception
[1:00:40] Political Endorsements and Reactions
[1:10:11] Freedom Club and Cultural Influence
[1:12:33] HR and Company Culture
[1:29:35] Fundraising and Investor Relations
[1:33:01] Final Reflections and Advice
Executive Producer: Rashad Assir
Producer: Leah Clapper
Mixing and editing: Justin Hrabovsky
Check out Unsupervised Learning, Redpoint's AI Podcast: https://www.youtube.com/@UCUl-s_Vp-Kkk_XVyDylNwLA
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About the Show
Logan Bartlett is a Software Investor at Redpoint Ventures - a Silicon Valley-based VC with $6B AUM and investments in Snowflake, DraftKings, Twilio, and Netflix. In each episode of The Logan Bartlett Show, we sit down with the people behind today’s most important startups and extract the tactics, lessons, and frameworks they’ve learned the hard way. Conversations span hiring to GTM, product, growth, fundraising and everything in between - collectively forming the ultimate playbook to make you a better CEO, investor or board member.
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20VC: Why Most AI Investments Will Do Worse than the S&P 500 | Why Early Stage VC is F******* | The Danger of Kamala Harris and Why Trump and Vance are Best | Freedom of Speech, Censorship and Government Control with Eoghan McCabe @ Intercom
Eoghan McCabe is the Co-Founder and CEO @ Intercom, one of the largest private software companies in the valley with hundreds of millions in revenue and thousands of customers. To date, Eoghan has raised over $238M from Index, Kleiner Perkins, ICONIQ, GV, Bessemer and more incredible firms. Intercom's goal is to reinvent customer service with AI agents replacing human agents over the next 10 years.
10 Questions with One of the Largest Private Company CEO's:
AI Investing: Why will most AI investments not do better than the S&P 500?
Building SaaS Tools with AI: Why is it crazy for companies to follow Klarna and use AI to build their own tools?
Going Public: Why is Bill Gurley wrong that more later stage companies should go public? Why did Intercom shelve plans to go public in 2022?
Early-Stage is F*******: Why is the early-stage venture ecosystem as an asset class f******?
Founder Mode: Why does Eoghan believe all of the best founders are unbalanced? What is the difference between Founder vs Manager mode?
Political Voice: Why did Eoghan decide he had to voice his political opinions now?
The Danger of Harris: Why does Eoghan believe a Harris administration would rob the US of immense freedom, democracy and civil liberty?
Why Vote Trump: Why does Eoghan believe that Trump will regain immense freedom for the sovereign individual?
Freedom of Speech: How does Eoghan determine right vs wrong when freedom of speech leads to harm and injustice?
Middle East and Nuclear War: Why does Eoghan believe that nuclear war is much closer than we think? Will we see the Middle East descend into war?
Great Builders & Success First with Intercom’s Eoghan McCabe | E1962
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Todays show:
Intercom’s Eoghan McCabe joins Jason to discuss: the state of the business at Intercom and his return as CEO (8:33), the future of customer service with AI (24:28), what makes a great manager (59:36), and more!
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Timestamps:
(0:00) Intercom’s Eoghan McCabe joins Jason.
(1:50) Family history of the two McCabe’s: Jason and Eoghan.
(5:49) The kindness and dedication of Intercom’s co-founder Des Traynor.
(8:33) What Intercom is, the state of the business and Eoghan’s return as CEO.
(10:41) LinkedIn Ads - Get a $100 LinkedIn ad credit at http://www.linkedin.com/thisweekinstartups
(12:37) Looking at overlap and adjacencies when you are building SaaS products.
(16:36) The brilliance of the pre-seed pricing model, and is it broken?
(19:47) .Tech Domains - Apply for the “Jam with JCal” contest today at https://www.jamwithjcal.tech
(22:16) What is next for companies with. SaaS-based pricing.
(24:28) The future of customer service and AI.
(30:30) Northwest Registered Agent - For just $39 plus state fees, Northwest will handle your complete business identity. Visit https://www.northwestregisteredagent.com/twist today.
(36:09) Expectations from AI one year from now.
(45:23) Breaking down the negative press and social reaction to the Humane Pin.
(52:34) What the world will look like as conversational AI develops.
(59:36) What makes a great manager and the “return of the king” at Intercom.
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Check out Intercom: https://www.intercom.com/
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Follow Eoghan:
X: https://x.com/eoghan
LinkedIn: https://www.linkedin.com/in/eoghanmccabe/
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LinkedIn: https://www.linkedin.com/in/jasoncalacanis
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Great 2023 interviews: Steve Huffman, Brian Chesky, Aaron Levie, Sophia Amoruso, Reid Hoffman, Frank Slootman, Billy McFarland
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#191 CEO & Co-Founder Intercom, Eoghan McCabe: Second Beginning
Guest: Eoghan McCabe, CEO, Chairman, and Co-Founder of Intercom
“We are not ready for the degree to which our world is going to change,” says Intercom CEO Eoghan McCabe, “in insane and incredible ways.” When he co-founded the company in 2011, the Irish-born entrepreneur was making it easier for companies to offer human customer service to their customers. But Eoghan believes “every single type of knowledge work” will soon be done by AI, and Intercom is well on its way to that destination: 45 percent of all tickets are being answered by bots now, and he expects that number to climb to 70 percent by 2026. “The agents no longer have to do the repetitive, painful, boring work,” Eoghan says. “They can focus on the more human, creative, interesting work that requires their empathy and creativity.”
In this episode, Eoghan and Joubin discuss fitting in, Archana Agrawal, authentic comms, taking risks, returning to the company you founded, politics at work, celebrating innovation, therapy for founders, and Ram Dass.
Chapters:
(01:04) - Insecurity and success
(06:16) - What Intercom does
(08:20) - Reinvention and “big company values”
(15:50) - Becoming an AI company
(16:53) - 2011 vs. 2024 in San Francisco
(21:03) - AI for customer service — and more
(25:07) - “The shitty gift that being attacked brings”
(30:25) - Expectations vs. reality, part one
(33:16) - What success means now
(36:08) - Running away
(39:56) - Coming back
(41:58) - Being busy is BS
(44:10) - Expectations vs. reality, part two
(45:44) - Self-mastery
(50:38) - Sanding off the rough edges
(55:08) - Who Intercom is hiring and what “grit” means to Eoghan
Links:
Connect with EoghanTwitter
LinkedIn
Connect with JoubinTwitter
LinkedIn
Email: grit@kleinerperkins.com
Learn more about Kleiner Perkins
This episode was edited by Eric Johnson from LightningPod.fm
20VC: Intercom Founder, Eoghan McCabe on How To Deal with the Weight of Expectation, Having Your Identity Tied To Your Company, How To Be Your Authentic Self Even with Stakeholders & Why There Are No Rules
Eoghan McCabe is a technology entrepreneur. He's started a number of companies, the most notable of which is Intercom, the conversational relationship platform. He was CEO of Intercom for nearly 10 years, during which he grew the company to hundreds of millions in annual revenue, nearly 700 employees, and raised nearly $250M from the likes of Kleiner Perkins, Index, Bessemer, and ICONIQ. He's also invested in dozens of companies including Stripe, Figma, SuperHuman, and Coda. In the summer of 2020 he moved to the role of Chairman of Intercom.
In Today's Episode You Will Learn:
1.) How Eoghan made his way into the world of startups from Ireland and came to build one of the Valley's greats with Intercom?
2.) How does Eoghan thinking about living and thriving with a chip on one's shoulder? What does Eoghan advise in terms of one's search for their true selves? What were his biggest learnings in his search? What does Eoghan advise people who maybe feel they have lost themselves?
3.) Having been CEO of a $Bn company for close to 10 years, how does Eoghan think about dealing with the weight of expectation placed on shoulders? How did he manage it? How does he think about his identity being so tied to his company?
4.) In terms of being one's authentic self, how can one achieve this while also respecting their stakeholders who may hold different views? How does Eoghan think about being an authentic leader vs bowing down to the demands of your team? What is the right balance?
5.) Why does Eoghan think that vision can actually be limiting? How does Eoghan think about stress testing one's vision and ambition? What adversity from early VCs did Eoghan have to fight against? How does Eoghan encourage dissent and debate within his teams?
Items Mentioned In Today's Show:
Eoghan's Fave Book: Breathe: simple breathing techniques for a calmer, happier life
As always you can follow Harry and The Twenty Minute VC on Twitter here!
Likewise, you can follow Harry on Instagram here for mojito madness and all things 20VC.
SaaStr 183: Intercom CEO, Eoghan McCabe on The Right Way To Structure Your Org Chart, The Secret To Scaling From SME To Enterprise Successfully & How To Create A Culture of Experimentation Without Fear
Eoghan McCabe is the Co-Founder & CEO @ Intercom, one of the fastest growing saas companies of the day providing a new and better way to acquire, engage and retain customers. Due to their phenomenal growth they have raised over $240m in funding from some of the best in the world including Kleiner Perkins, Social Capital, Bessemer and Index, just to name a few. As for Eoghan, prior to co-founding Intercom, he founded an award-winning software design consultancy called Contrast, and co-founded Exceptional, a developer tool startup acquired in 2011 and now a part of Rackspace.
In Today's Episode You Will Learn:
How did Eoghan come to be founder of one of the hottest growing startups in SaaS from founding a software design firm in Ireland?
What does Eoghan believe are the core pillars for success in making the move from SME to enterprise? How does one reinvent oneself to make this transition? How has Eoghan seen te org structure and internal decision-making change with the adoption of many more enterprise clients?
How does Eoghan determine between the decision to hire the young jack of all trades vs the much more experienced senior exec? Why does Eoghan believe you can never be too early to bring someone more senior than you onto the team? What makes Eoghan say, "we are all learning on the fly"?
How does Eoghan look to create a culture of experimentation and accountability without the fear of failure? What must the leader do to imbue this culture? Where does Eoghan see many going wrong in trying to make this happen?
How does Eoghan think about "transparency" with SaaS companies today? Why does he think that not only is it not healthy but also largely not possible? Instead, what is a better, more sustainable solution to transparency?
Read the full transcript on our blog.
If you would like to find out more about the show and the guests presented, you can follow us on Twitter here:
Jason Lemkin
Harry Stebbings
SaaStr
Eoghan McCabe
20VC: Intercom's Eoghan McCabe on What Makes A Truly Great CEO & What Founders Should Look For In Their Investors
Eoghan McCabe is the CEO and co-founder of Intercom. The customer communications platform that has taken the SaaS world by storm in the last few years with 116m in VC funding from truly some of the world's best including Bessemer, Social Capital and Index Ventures. Prior to Intercom, he founded Contrast, an award-winning software design consultancy, and co-founded Exceptional, a developer tool startup acquired in 2011 and now a part of Rackspace.
In Today's Episode You Will Learn:
1.) How Eoghan came to found Intercom?
2.) Question From Andy McLoughlin: What were the biggest lessons from your previous startups?
3.) How did Eoghan find the early fundraising process? How did he come to meet his angel investors? How did he get them to look beyond the product and invest in him?
4.) Eoghan raised his Series B just 6 months after his Series A. Why was this so quick? How did he select his investors?
5.) What separates good from truly great CEOs? How has Eoghan seen his own management style changed over the Intercom journey?
Items Mentioned In Today's Show:
Eoghan's Fave Blog: SaaStr, The Intercom Blog
As always you can follow Harry, The Twenty Minute VC and Eoghan on Twitter here!
Likewise, you can follow Harry on Snapchat here for mojito madness and all things 20VC.
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Cooley are the global law firm built around startups and venture capital. Since forming the first venture fund in Silicon Valley, Cooley has formed more venture capital funds than any other law firm in the world, with 50+ years working with VCs. They help VCs form and manage funds, make investments and handle the myriad issues that arise through a fund's lifetime. So to learn more about the #1 most active law firm representing VC-backed companies going public. Head over to cooley.comand also atcooleygo.com.
SaaStr 058: Intercom's Eoghan McCabe on Why There Are No Rules For Building a SaaS Company, How To Turn Every Challenge Into An Opportunity & Why You Will Never Have As Much Empathy For Others As You Do For Yourself
Eoghan McCabe is CEO and co-founder of Intercom. The customer communications platform that has taken the saas world by storm in the last few years with 116m in VC funding from truly some of the world's best including Bessemer, Social Capital and Index Ventures. He previously founded Contrast, an award-winning software design consultancy, and co-founded Exceptional, a developer tool startup acquired in 2011 and now a part of Rackspace.
In Today's Episode You Will Learn:
How did Intercom break out in the early days with seemingly lots of competition and an install before you buy process?
In terms of category creation, in the early days how did Eoghan convince people of a product that had previously never existed? At what stage did Eoghan and Des stop selling the product themselves? When is the right time to hire your VP of Sales?
How did Eoghan establish a pricing mechanism for Intercom? Why is Eoghan such an advocate for value based pricing?
Why it is so important for founders and sales teams to have empathy for the customer? How can you practice empathy? How can you cheat empathy?
How does Eoghan manage a distributed workforce so well? What does he do to create links and culture between both the Dublin and SF office?
60 Second SaaStr
Biggest advice to SaaS founders?
Fave SaaS reading material?
Most proud moment of Intercom's journey?
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Jason Lemkin
Harry Stebbings
SaaStr
Eoghan McCabe