How Intercom rose from the ashes by betting everything on AI | Eoghan McCabe (founder and CEO) · Lenny's Podcast: Product | Career | Growth summary

Key takeaways

AI is fundamentally reshaping industries, and companies must adapt or risk being left behind.
Transforming a company culture requires bold leadership and sometimes painful reassessments of personnel.
Simplifying pricing strategies can significantly improve customer satisfaction and retention.
AI will automate many jobs, particularly those involving repetitive tasks, but will also lead to the creation of new roles and opportunities.
Personal growth and self-reflection are crucial for effective leadership in navigating complex business environments.

Summary

Intercom's Transformation to AI-First Business

Eoghan McCabe, founder and CEO of Intercom, recounts the company's journey from a struggling SaaS entity to an AI-driven powerhouse. Following his return after a hiatus due to health issues, Eoghan observed that Intercom was on the brink of collapse, experiencing minimal growth and stagnant revenue. The turning point came with the release of ChatGPT, prompting the team to pivot towards AI, leading to the creation of 'Fin'—an AI customer service agent that has rapidly scaled to an impressive ARR.

Cultural Shift and Founder Mode

Eoghan emphasizes the importance of culture during the transformation process. He adopted a 'founder mode' leadership style, which involved making tough decisions such as firing 40% of the staff. This shift was met with resistance, including a soft coup attempt, but ultimately resulted in a more engaged and aligned workforce, where employee satisfaction soared to 98% post-reforms.

Changes in Pricing Strategy

Historically criticized for its pricing model, Eoghan implemented significant changes to Intercom’s pricing strategy, shifting it to a simpler and fairer model. By pricing the AI service at $0.99 per resolved ticket, the company drastically improved customer retention and satisfaction, a departure from their previous complicated pricing structure.

AI's Impact on Jobs and Future Businesses

Eoghan discusses the implications of AI across various industries, suggesting that roles involving repetitive work, especially in customer experience (CX), are likely to be automated. He posits that while some jobs will disappear, AI will also create opportunities for new roles, emphasizing the collaboration between humans and AI to enhance productivity.

Personal Growth and Leadership Insights

Throughout the podcast, Eoghan reflects on his personal growth journey, crediting extensive therapy and a period of 'ego death' as transformative experiences that shaped his leadership style. He advocates for self-awareness and emotional honesty within leadership, suggesting that these qualities are essential for modern business success.

Show notes

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

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My biggest takeaways (for paid newsletter subscribers): https://www.lennysnewsletter.com/i/170710700/my-biggest-takeaways-from-this-conversation

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Where to find Eoghan McCabe:

• X: https://x.com/eoghan

• LinkedIn: https://www.linkedin.com/in/eoghanmccabe/

• Website: https://eoghanmccabe.com/

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Where to find Lenny:

• Newsletter: https://www.lennysnewsletter.com

• X: https://twitter.com/lennysan

• LinkedIn: https://www.linkedin.com/in/lennyrachitsky/

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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

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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