Meet Intercom: The Company That Introduced a New Way of Customer Support

Hey Everyone Harry here 👋 

Welcome to Issue #21 of Deep Dive with Inquisition. In this edition, we’ll cover the story of Intercom, one of the world’s largest AI-first customer service providers and a key player in the enterprise software sector, serving over 25,000 global organizations, including Atlassian, Amazon, and Microsoft. Intercom’s customers send more than 500 million messages per month and interact with over 200 million people worldwide through the platform. We’ll explore everything from its founding story to the strategies that have helped it become the company it is today.

Early days of Intercom:

Intercom is a customer communication platform built to help businesses interact with their customers through messaging across different channels. The company was founded in 2011 by Eoghan McCabe, Des Traynor, Ciaran Lee, and David Barrett in Dublin, Ireland. The founders were inspired by Colin Harmon, the founder of 3fe Coffee Shop, who grew his business by talking with his customers and building relationships. Harmon’s business made the founders of Intercom realize that every business depends on some form of loyalty, which can lead to creating superfans. At the time, the founders were running a different internet company with thousands of customers and wondered if what Colin was doing in his coffee shop could be applied to online businesses—and that became the starting point for Intercom.

Intercom provides tools for companies to manage customer support, sales, and marketing conversations by letting them directly talk to their customers. Today, the platform is used by over 25,000 companies, including Atlassian, Amazon, and Microsoft, alongside a growing focus on being an AI-first customer service solution.

Overview of the Global Enterprise Software:

1. The projected revenue for the Enterprise Software market is expected to reach approximately $294.3 billion globally by 2024.

2. Among the different segments, Customer Relationship Management (CRM) software leads the market, with a projected volume of approximately $89.03 billion in 2024.

3. It is expected that the United States will generate the highest revenue, amounting to approximately $150.5 billion in 2024.

4. The market is projected to grow at an annual rate of 6.35% from 2024 to 2029, reaching a total volume of approximately $400.4 billion by 2029.

5. According to the 2024 Hubspot State of Service Report, “82% of the customers expect immediate problem resolution from customer service agents.”

6. According to the 2024 Hubspot State of Service Report, “77% of the CRM leaders believe that AI will handle most ticket resolution by 2025.”

The Rise of Intercom: How It All Started:

Intercom's rise can be summed up in three words: Personalization, Communication, and Customer. From the beginning, Intercom aimed to deliver real value to businesses by allowing them to connect directly with their customers in a personalized way. Much like the story of Coinbase, Intercom's founders identified industry needs by feeling the pain points themselves—juggling customer communication while managing various software products.

Back in the early 2010s, personalization was almost nonexistent, and it was tough for online businesses to engage with their customers effectively. Websites were often cluttered with information, making it hard to navigate—especially when trying to find customer support. Email and phone calls were the main ways to handle support, which led to inefficiencies in managing customer relationships and mailing lists.

To tackle these challenges, the founders initially built the concept for Intercom as a direct messaging feature within their existing product, Exceptional, which was a bug-tracking software. This feature aimed to simplify communication. After selling Exceptional in 2011, they decided to turn this messaging capability into a standalone startup.

Once they validated the concept and got some early interest, they took several steps to secure their first users:

• They reached out to former Exceptional customers via email, personally onboarding interested clients one by one over Skype.

• They hosted webinars without any automation, fully engaging with potential users.

• They prioritized content marketing, creating 100+ valuable and entertaining pieces that included calls-to-action (CTAs) to draw in their target audience. As co-founder Des Traynor famously said, "Content First, Marketing Second."

By leveraging their network and creating content that resonated with their audience, the founders successfully scaled Intercom during its early days. Personalized onboarding played a crucial role in Intercom's initial growth too.

As they continued to acquire new customers and demonstrate the platform's value, Intercom secured a $1 million seed round in 2012 from notable investors, including Biz Stone (co-founder of Twitter) and 500 Startups. Shortly after, they raised $6 million in Series A funding in 2013 and followed it up with another $23 million in Series B funding, which fueled their growth even more. By the mid-2010s, Intercom's ARR had surpassed $50 million—a significant milestone that laid the groundwork for its transformation into an AI-first, complete customer service platform. This achievement marked just the beginning of their journey.

For many companies, hitting $50 million in ARR with strong investor backing and steady growth would be seen as the ultimate success. But for Intercom, it was merely the first step toward realizing their bigger vision.

How Did Intercom Become One of the Biggest and Fastest - Growing Enterprise Software Company?

Effectively leveraging things while thinking about the long-term vision at the same time. The founders of Intercom had the advantage of having experience in building Exceptional from scratch.  This experience along with the knowledge and network built over the years definitely provided an advantage; however, this doesn't guarantee success at all.

The factors that contributed to Intercom's growth and success include the prediction of the future through identification, validation, personalization, and focus on providing value and entertainment to its target users - one of many notable factors for the company's growth and success.

We must remember the following things:

1. The Internet was very different from now - from designs, layouts, availability, and more.

2. Increase in e-commerce and online shopping.

3. Internet usage globally has doubled over the last decade. In June 2010 there were 1.97  billion users and in 2020 there was a recorded 4.54 billion users.

By leveraging these factors, Intercom not only attracted users and experienced rapid growth but also shaped the future of Customer Support. As the world experienced a rapid increase in the usage of the internet with services like shopping, entertainment, and the transition to cloud-based services, all have contributed positively due to the rise of internet usage globally. As the usage increased, this also positively impacted the number of businesses that were:

1. Increasing in the number of SaaS companies.

2. The E-commerce industry experienced rapid growth.

3. Physical Shop-focused companies have expanded into providing online shopping experiences.

By having the above factors introduced to the market, the need for more powerful and frictionless customer support methods has also increased. This demand allowed  companies like Intercom to simplify the customer support experience for small businesses to enterprises and influence the market by providing the solutions that the market needed, along with becoming the market leader itself.

By 2024, Intercom has over 25,000 customers in over 140 countries, ranging from early-stage startups to enterprise companies like Amazon, Atlassian, and Microsoft. Each month, Intercom supports more than 500 million messages and facilitates interactions with an average of 200 million users. The company is backed by top venture firms such as Bessemer Venture Partners, Kleiner Perkins, and Social Capital.

Below are the strategies that contributed to Intercom’s growth:

1. Effectively Leverage Your Personal/Professional Network:
    → When the founders first validated the idea of Intercom after experiencing the pain point themselves, they decided to reach out to their personal and professional networks along with customers from their previous venture Exception via personalized emails one by one. By doing this, Des (Co-Founder of Intercom) was able to send around 100 emails per day and receive around 40 replies, successfully validating the idea, which could also be used as a list of potential customers for the product;  a classic method to validate and identify potential customers for every company, whether in the B2C or B2B space.

2. Product-led Growth:
    → One of the reasons why Intercom was able to grow was simply due to the problem that the product was solving and the quality of the product. No matter how good the team, design, marketing, or how much the team has raised in capital - it all comes down to the product and, most importantly, the problem the product is solving, along with the value propositions it is providing to its target users.

3. Thinking Long Term:
    → Intercom was first started as a company that focused on connecting businesses and customers directly via chat on the specific business website - providing direct, personalized connection. However, in recent years, the company has shifted its focus to AI, becoming an "AI-First Platform" - allowing its users to leverage AI to address customer support faster, help teams gain instant insights, and make the general experience smooth for both ends. The implementation of AI was only possible due to the company having a clear vision and thinking long-term - a crucial lesson for every company. Having a clear vision and thinking ahead allows the company to be prepared and, most importantly, adapt to the rapidly changing world of technology and markets.

4. “Content First, Marketing Second”:
    → One of the most powerful combinations is having a strong network that can generate early leads with content that provides value and entertainment to target users. Having a strong network that can generate leads is crucial, but equally important is having high-quality content that provides value and entertainment to target users. This can generate leads during both the short and long term - something Intercom excelled at. By creating content that ranged from blog posts to webinars, the company was able to provide value firsthand via its content even before having their users experience the product. This eliminated the friction that sets back lead generation while also creating a reason for specific potential customers to check out the product in general.

Challenges for Intercom:

1. Navigating through the Intense Competition:
    → As the company navigates the market, it is experiencing intense competition from local and global competitors like HubSpot and Zendesk, which are also leaders in the customer support sector. Intercom is likely to face an increase in competitors due to the rapid rise in funding and the launch of AI-based companies seeking to leverage technology to address customer support challenges. It is crucial for Intercom to enhance its value propositions for customers and continue its AI-first transition in order to evolve while navigating this competitive landscape.

Future of Intercom:

1. Becoming Positive on Cash Flow:
    → According to a TechCrunch article from 2022, Eoghan McCabe (Co-Founder and CEO) stated that the company had been "on and off" cash flow positive since 2018, highlighting the company's challenges with its financials. This suggests that the company will need to invest more effort in its financials to become consistently cash flow positive, especially following its focus on becoming an "AI-First" company. While Intercom's financials are unclear, it is estimated that the company is growing its revenue by around 25% YoY. The next big task will be generating profit, and strengthening its financial position will be crucial for the company.

2. Further strengthening as an “AI First” Company:
    → After the announcement of becoming "AI-First" and the launch of Fin AI Agent, an AI agent that allows Intercom customers to handle customer support and internal tasks, we can predict that the company will invest more in its AI agent in an attempt to achieve continuous growth and improve its financials.

Key Takeaways from the Story of Intercom:

The story of Intercom teaches us an important lesson: Leveraging what we have determines the future of many things, especially when you are running your own company. For Intercom's founders, this meant quickly validating the idea by actually talking to potential target users via their personal and professional networks, alongside putting in personalization for every outreach to show genuine interest in their target users.

Most people tend to only focus on the end results, but what determines the result in the end is the process and the willingness to endure the process that leads to success - whether it is writing 100+ blog posts, sending over 100 emails per day, or hopping on calls with hundreds of people per week. Startups are a long journey like a marathon, and those who will succeed are the ones who treat it like a marathon.

Below are the key - strategies that Intercom used to become the company it is today:

1. Pay Attention to the Small and Big Details:

   → Intercom was born from the founders' experience with the lack of personal communication methods with customers at their previous company, alongside observing how physical interactions happen in places like cafes. By paying attention to both small and large details, the founders were able not only to identify the next pain point to solve but also to uncover an entirely new opportunity to create impact.

   One reason the company was able to successfully transition to an “AI-first” approach was its attention to the rapid changes happening in the world and its commitment to taking action. Intercom’s founding story and continuous focus on details offer an important lesson for both early-stage startups and enterprises: change can happen anytime, from anywhere, and those who successfully navigate it are the ones who pay attention to the details.

2. What is your Secret Sauce? Identify and Leverage it:

   → Intercom's secret sauce when it was first starting was its network, drawn from personal connections, professional contacts, and previous company client information. Everyone has their own secret sauce or a yet-to-be-developed one; it is crucial to identify and take action by leveraging it or developing the secret sauce to leverage in the future.

3. Network + High Quality Content = Superpowers:

   → Intercom was able to validate its approach by having the founders leverage their network and previous company customer information. Then, the company focused on producing high-quality content in the form of blog posts, webinars, and more for its target users, using this as a method to acquire new customers. The lesson here is that synergy is created when two factors are combined, with neither being more important than the other. When these two factors come together, the synergy can be seen as a superpower, producing both short- and long-term results—especially in 2024, with so many platforms and communities available to leverage through content.

4. Product and Distribution Matter Equally:

   → No matter how valuable your content, marketing, or sales strategies are, if the product doesn’t provide value—either by solving the problem for your user or offering a better experience than the existing solution—it won’t succeed in the long run. Intercom is a successful example of not only achieving Product-Led Growth (PLG) but also excelling in both the product and distribution aspects.

5. Personalize Everything from Customer Onboarding to Support:

   → Personalize everything from outreach to onboarding and support. Intercom’s early success was due to the founders providing personalized outreach instead of using automated mass outreach services, taking time to truly understand customer pain points, address them, and offer 1:1 personalized onboarding calls. The company has used distinct strategies for each target customer segment, providing ultimate personalization not only during onboarding but also in targeting, onboarding, and support. This serves as a lesson on the method and importance of personalization in every aspect when running a company, whether an early-stage startup or an enterprise.

Thank you so much for reading!

-Harry