Mikkel Svane co-founded customer service and support software company Zendesk with two other entrepreneurs back in 2007. Now, the company has raised nearly $100 million in funding, and counts some of the world’s biggest companies as its customers including Disney, Tumblr, and Twitter.
The business won’t reveal revenue, but SmartCompany calculates its annual turnover as in the tens of millions. Over the past few years, Svane has faced all the problems of growing into a large company, including a hacking attack which left some customers vulnerable earlier this year.
Now preparing for an initial public offering, Svane spoke to SmartCompany about founding the business, and what’s changing in the customer service scene.
Our founding isn’t one of these stories where we had this fantastic business plan, where we were completely targeted on disrupting an industry. We knew the products working in this space, and we just felt it could be done better.
Companies didn’t really care too much about customer service at the time. You just didn’t put your best players there.
But that also meant there wasn’t really any innovation. There was very little focused on the customer service experience. The product we made, there was really no need to think much about configuration or set-up. It was a better product.
Most of the companies we got initially were those which thought they didn’t have the skills to implement something like this themselves.
Everything is so difficult when starting a business. You have to start over with everything. Your customers don’t take you seriously, but we had three founders who have families and lives. Living with uncertainty is complicated when you start a company.
There’s a temptation to pivot. That’s become a modern thing to do. But you have to keep pushing your agenda, and make sure not to do that. You have to do what you believe in.
You have to find the balance between when you’re just spending more money on something that won’t succeed, and spending on something that simply takes time.
Because we’re cloud-based, it’s easier to go global. We always thought about where we could find early adopters, and they were everywhere. Our first customer was in Ireland, our second was in Texas.
Whenever you build a company, there’s always a mountain to climb. And there’s always a mountain behind that mountain.
We’re preparing for an IPO. We’re adding the equivalent of a new company in staff every six or nine months. It’s a challenge but it’s one of the challenges that makes you want to keep doing it.
Five years ago, it was so hard to get in contact with companies. Today, customer service is a different shade. There is such an empowerment of the consumer. If you don’t have a good customer service experience, you’ll let people know about it.
The voice of the customer has never been stronger. Companies are just beginning to realise how important that is.
At the same time, business models are changing. They’re catering for the lifetime value of a customer relationship. You’re seeing more subscription businesses.
Ten years ago, customer service was about spend. Today it’s much more about your ability to create that long-term relationship, and therefore value, around the consumer.
Being hacked makes you feel terrible. You compare it to coming home and seeing your house being burglarised. We doubled down on managing what happened and tracing exactly what had taken place.
It’s one of those wake-up calls. It brings you together as a team and makes you stronger. But it’s also one of those things that makes you take an extra walk around the house and see where the weak spots are.
The customers feel the same way. But we’re lucky in that we have good relationships. They feel like we’re working this together.
But this is going to happen more and more. If you’re in the industry, you’re not surprised to see it happening more.