Klaviyo's CEO Founder on the Journey to an $800,000,000 ARR Leader in Marketing

Hey everybody. I'm super excited to have the co-founder and CEO of one of the companies that I've admired from a distance for many years, Klaviyo. And Andrew Bilacki is here. Now, crazy, a $9.5 billion— I wrote this up— a $9.5 billion leader in email and multichannel marketing for e-commerce and more, right? Is that a fair summary?

Crazy. Yeah, we still have a long— we still have a lot— well, thanks for having us. We still have a long way to go, but yes, I think we're I know we definitely feel like we're further along than we were a few years ago. Yeah, we're, we're getting somewhere.

So what's fun for me, we'll, we'll dig in here for folks that I'm, I'm interested in personally one piece of e-commerce, which is the B2B side. And if, if you're not in it, you will find Klaviyo fascinating, like the scale and what it's learned. If you are in it, what's interesting is Klaviyo is one of these hero companies and the B2B, the B2B in e-commerce is huge, but it's, it is a vertical, which we'll dig into. And I invested early in Algolia, which is a search API, which became very e-commerce focused. And I was the first real investor in a company called Gorgias, also on Shopify that Andrew knows. And if, and granted, I wasn't, I wasn't a merchant back in the day, but you would see a few years ago, Klaviyo starting to be a de facto choice, which we'll talk about, right? You go from the upstart to kind of a leader and it's very interesting transition point. And I think everyone that's now in especially in the Shopify ecosystem, looks to learn and steal and borrow and emulate a lot of the Klaviyo playbook. So it's pretty, it's gonna be pretty funny to dig into it. But first, before we get there, I'm sorry, and I'm embarrassed to say this, but what is a Klaviyo? Just so, just so I know. What does the title mean? What's the name of the company?

What, what, what? Oh, well, what is a Klaviyo? Okay.

So what is a Klaviyo?

Yeah. So when we started, and I, my co-founder, we wanted to pick a name for our company that we felt like would be durable and agnostic enough, general enough that we wanna get kind of lumped in with, you know, companies that are either about like, oh, about marketing specifically or email or sales. And we were like, what we want to build is something more abstract than that. So the name Klaviyo comes from the word clavija, which in Spanish is a pin or a mountaineering spike. So we like this idea of if you want to climb a mountain, you need like tools to do it. And so that's what we want Klaviyo to be is like tools to get hard things done.

So maybe the Amazon of marketing.

Yeah. Or I mean, hopefully much more than just marketing. We think about it's like, hey, how do we just help more businesses be successful independently? So in that case, maybe a little bit of anti-Amazon in there.

All right. So let's get into the footprint in a bit. Let's just spend a little bit of time in the early days so we can, we can understand the company today. So you're— so not an overnight success story, right? Founded in 2012. What was the original idea and what was the 10x feature? Like the one thing that clicked where the product became sellable? Like what was your special 10x feature when you were feature-poor?

Amp. So when we started in 2012, Seriously, we, everybody knows us for kind of marketing and messaging, but we actually started the first year, all we did was we built a, we built a database. So our, our kind of view on the world was, you know, we wanted to make it possible that rather than have to talk to customers yourself, like, you know, you know, synchronously, you could basically take the way you want to treat people and program it into software. We felt like there was this mismatch, you know, especially in, we talked about like in commerce and retail. In consumer businesses where you can, you have to choose, do I either help all of my customers and aim for scale? Or do I aim for giving a really great, super personalized experience to like my VIPs? Yep. It's obviously you want to do both, but it's like, well, how am I ever going to do both? I mean, do I just have to hire, you know, thousands of people? Like what's the model? And because the, you think about the, you know, uh, let's say the LTVs, the annual spend is so low in consumer, right? Relatively, you can't afford to build out big teams to do it. You need something in between. So we actually started out, you know, we had this idea that what was missing was kind of like the right way to store data. So you could, you know, you think about like when you and I are talking, we answer questions like in real time, there was no database that was good at kind of analytical queries, but also like really low latency, like a few milliseconds. So we spent actually the first year just building that. And so if you actually, if you talk to our early customers, they're like, oh yeah, we built, we got Klaviyo because they basically had an API or a UI that would allow us to just run queries against our customers and then they got exported out. And what's funny was I remember walking, you know, walking around outside, doing some customer calls, checking in with folks. This is like back in late 2012 and all of our customers were like, hey, so would you ever think about integrating with like ExactTarget or, you know, Constant Contact or MailChimp? And I remember I asked them, I'm like, well, how much do you like love those pieces of software?

Yeah.

And They were like, well, I don't know, we don't have any special affinity for it. It's actually kind of hard to do, you know, the kind of the more complex, more personalized stuff that you guys are enabling. I said, okay, crazy idea. What if I just built, what if we just built, you know, those, you know, kind of marketing messaging, you know, email, you know, email first now SMS tools. And like, oh yeah, sure, go for it. And I remember calling my co-founder after a couple of these calls and saying, I have a crazy idea. How about we just build both the database and the marketing messaging tools? We'll combine it into one platform. And like, that will be our product. I think that was, you know, when, when we, when we started to do that, because I mean, earlier, you know, we were fortunate that we, you know, at the time, like SendGrid, you know, now Twilio, like existed. So we have to solve all the same problems that a lot of folks earlier had to solve. You know, we almost instantly saw folks that would come to us and say, I have this idea for, you know, some personalized, you know, messaging or marketing I want to do. And all of a sudden they were like, boy, because of the database you built, And because of the, you know, the fact that I can then design messages and send them programmatically, you've kind of solved all this. And like, I don't have to build anything anymore. And we actually started in SaaS. So I mean, just like every other, you know, I don't know, probably entrepreneur or developer, like I want to sell, you know, to other SaaS companies. And so we started down that path. I just got lucky that a buddy of mine had a Shopify store actually. And you know, he said, hey, can I try to try this out? And we said, yeah, let's go for it. And it turned out actually that that was an even bigger market or let's put it like the use cases were even better defined. So it was really easy to get into, you know, like all of a sudden we realized we're solving for his one store and there were thousands of other people that had more or less the same kinds of issues and same use cases. And so we could go really fast.

So that's interesting. So you didn't, certainly didn't start, well, I guess, did you start with an e-commerce perspective as, as a database API or did you figure this out when you got brought into Shopify store?

Yeah, the big unlock for us was When we were working with other software companies like us, one of the things we realized was because they did so many, had so many different functions, it was actually, you know, our technology was fine. The hard part was kind of teaching people how to map, you know, the way they wanted to treat customers, help figure that out. I mean, in some sense, if you think about in the SaaS world, defining what customer success is, they didn't really have a customer success playbook. They were figuring it out as they went along. In e-commerce, everybody knew kind of the standard playbook.

Yes.

And so they were just more about like, hey, how do I scale it? How do I automate it? How do I make it more, you know, personal, personalized?

So, so, so it sounds like, so at first blush, building a very sophisticated, robust database and then adding email seems like too much work, right? But it sounds like at the end, and I should know this, this is the secret sauce for Klaviyo because you, as starting perhaps as from a technology center as a database, that's very different than most email or, or SMS companies. They're starting off. As a, a basic easy-to-use product, but without that incredible core, right? And that may be the special sauce 'cause personalization's hard.

Yeah, that was basically, that, that was our big bet was, you know, and I remember I talking, uh, with our team about this. We said, hey, we think we can add, you know, messaging and some of the marketing primitives on top of our database faster than all of the existing, say, marketing tech companies that just did you know, you know, uh, marketing stuff faster than they could figure out how to build or integrate with somebody kind of the data parts. And, uh, we think that proved, I mean, yes, that, so we're big believers in that case. This was a very much a both and. So one of the things I tell, you know, entrepreneurs all the time is you have to be a little careful. I know people aim for MVPs, but sometimes you cut off parts that are really important. In our case, you know, having that kind of clarity of like, okay, it has to be both of these two things together. And then just setting it up where, I mean, for a long time, you know, our product teams, our engineers, thought that way. You know, we had teams that were just focused on building database tech and that was awesome. Yes. You know, other teams that were just focused on building marketing messaging and creative tech and that was awesome. And the coolest part was when you combined the two together and everybody knew that. And so it was exciting because you almost had these like two companies working together to build kind of something that was gonna be greater than the pieces.

And I probably should know this, but when you talked about SendGrid and Twilio, when you first bolted email on, were you using third-party APIs for email? How does, or did you have to build it all from day one? Or how did you phase in what you did yourself versus what you used as a service.

Yeah. So, I mean, our story was, I mean, the first 3 years of our company, almost 3 years, it was just 2 of us. So, I mean, we really had to figure out anything that was slow.

You need a few APIs. There's 2 of you. Yeah.

I mean, constraints are awesome. You know, you just, so you really, I think the more you automate things away in the early days, like it just compounds over time. Right. And so we really were forced, like anything that took any amount of time, we had to write code or whatever, just get to find a way to either outsource it or automate it away. So when we started, I mean, I'd read up enough on, you know, gosh, like setting up SMTP servers and MTAs and, you know, obviously SendGrid, we'd known about them. I'd used them at previous companies. We said, well, this makes way too much sense. I mean, this kind of solves all the gross problems and allows us the flexibility we want. So yeah, we had a great relationship with them. I mean, from day one, even to today. And what we decided, what it turns out is like when you get into messaging, the hard part is not so much actually sending an email. Like that's pretty straightforward. There's like plenty, you could actually, you could do that yourself if you want. The really difficult part is getting it delivered. It's kind of the same way that we think about with Google. It's like, hey, there's a web spam team. When it's Facebook or social media, there's like content moderation teams. Well, okay, when a decentralized world with email or now the same thing as SMS, there's always going to, there's going to be some sort of spam filtering somewhere, right? And people call it deliverability, but it's all the same problem. And so the thing that we realized was, you know, if you're sending just So let's say, you know, you know, I don't know, purely like transactional emails or things that, you know, like that's very straightforward to literally, you never have any issues because everybody opens them, all this kind of stuff. When you get into being proactive, you get into marketing. I mean, the lines between what is spam, what somebody wants and what somebody doesn't want start to get gray really fast. And it turns out, I mean, it's a really cool evolution amongst email clients. Gone are the days where it's like, if you use the word Viagra, like that's spam and everything else is like good. Now it's, it's actually very personalized where, hey, you know, you, Jason, you'll stop getting emails if you just stop opening them. And it's the responsibility of the person sending it to figure that out. And if you don't, then you get penalized kind of at large. And so that was something we actually, we had to build all on our own. And so that was where we kind of drew the lines. Like, you know, we could use, you know, SendGrid to help us like deliver the emails and kind of like deal with some of the technical details. But at the end of the day, the really hard part was, okay, how do you increase relevance and make sure that from a consumer's point of view, that was really good. And those are systems that, I mean, obviously we had data to help, you know, make things more relevant, but we had to figure out like compute, build our own scores and our own systems to figure that out.

Yeah, that makes sense. So you never had to build some of that base level functionality yourself though?

Yeah. I mean, we've kind of looked at it as like, I think every, you know, every monster engineer has to figure this stuff out is where are you going to draw the line? Like, what are you going to be really good at? What are you not? And so we always took the stance of, okay, we are going, like, you know, we have a much more like, let's build things ourselves or use open source and really understand it. But in cases where we saw an opportunity where, you know, we kind of knew how a service worked, but we just didn't have the time to build it, that was a good opportunity for us to partner up. And especially with companies that we thought were kind of moving fast. I mean, 'cause the other thing is you want to pick a service that, you know, innovate is, is right. It's going to keep moving forward, right? So you don't get rate limited by them. 'Cause like we've certainly, I mean, not with SendGrid at all, but like we've had that happen with others where, you know, we got stuck because we kind of needed more things than they faster they can move. Then you end up having to build it yourself anyways. So yeah, but that worked, definitely worked well for email and SMTP.

So let's talk, and then we can fast forward to the future, just about some inflection points. So it takes you a while, you're bootstrapping for a couple years. We could chat about that or not if you want. You fit, you, you, you, you lean into Shopify when you have a buddy that exposes you to the system. Did it take off from there? Did it take off when you got 100 Shopify merchants? And like pre-COVID, what were the inflection points? Then we could talk about COVID Yeah, sure.

So it's interesting. I kind of divide, you know, the first The first 3 years of Klaviyo were really, it was our kind of bootstrapping phase, right? I think when we were about, after about 3 years, we'd gotten to around, you know, maybe about 1,000 customers, maybe around a million dollar run rate. For Klaviyo. It took a long time compared to like how fast people expect to go now. It took a long time.

Yeah.

But we just had this, I guess, I think it's a nice part about bootstrapping is we just had this point of view that's like, look, We're just gonna focus on making sure we really understand our customers, getting, building a product they love. So product market fit, and then we're gonna expect that growth will come from there. Like we wanted, we always felt like, you know, word of mouth, like every, you know, we could, we did a bunch of content marketing. We did a little bit of SEO. We did a lot of work with, you know, partnerships, Shopify and others. We always felt like the best channel for us to be like, somebody cares about us. We want them to be raving about it. You know, customers, you know, whether there's, you know, we have a fair number of partners that are like, Martin, yeah. Consultants, agencies, we just wanted them to be raving about us. So we kind of focused in on that. And to be honest, we kept trying to forecast growth, but we didn't really know what good looked like or didn't. So it just, the business kind of kept going. Once we got about 3 years in, we said like, we actually at this point we're like, all right, so we gonna like, are we gonna raise money or is this just gonna be, you know, I hate the term, but like kind of a lifestyle business? Are we just gonna kind of grow it as much as the 2 of us can handle? And I think we were both of kind of the opinion that it was cool once we got profitable, it's like, Okay, we know we're going to survive, but now like, let's go for it. I mean, we've got this, you know, we've got this, we've got this product, everything's pretty good. We have the ability to hire people who really want to work with, like, let's go for it. And so definitely, you know, we were, you know, we, we really, I don't think we even understood until we were maybe about half a million, just how great e-commerce and kind of, you know, retail was as a segment. And certainly like, I mean, we were really fortunate to get to meet the folks at Shopify really early days. I mean, I remember We built our first kind of integration into Shopify and then others, you know, BigCommerce, Magento, and, you know, you know, WordPress. We did all that stuff way back in 2012, 2013, and Shopify just like exploded. And all of a sudden, you know, we just realized, boy, we're talking to so many Shopify businesses just every week. And so that was, I mean, that was a really fun period because we, I remember one year we were kind of forecasting like what revenue growth would be. And my co-founder and I both had different estimates and we ended up like blowing away both of them.

And this, what year was this?

Sorry. That was, gosh, like maybe 2015. I think it was, yeah, I think it was, it was year and a half before this one.

Shopify was really pulling away from the pack, right? It was that, that's what people don't get from the outside. Shopify did not immediately pull away, right? It was quite a ways into its journey when it became this de facto platform.

Yeah. I mean, we're, I mean, they obviously are well past this point now and got there way before we did, but I, you know, we're big believers in the kind of the, like the, in, in SaaS, you know, there's kind of this, you know, it's instead of like, things like kind of aggregating towards the mean, there's this kind of like aversion to the mean. So once you kind of break through and people kind of know who you are, which obviously, I mean, we were lucky that we were kind of there when Shopify was doing that, right? It had broken through that barrier. You sort of become a little bit of this default, like you become, I think it's word of mouth. People start to say, oh yeah, I've used that. I know what that is. So that's right. I think we were kind of in the right place at the right time. And with like a, I mean, we, with a very similar kind of product ethos of, you know, okay, let's focus on small businesses and have a really great, you know, really usable product. And yeah, things just took off.

And then I don't, back when that happened, what was the Shopify ecosystem like? I mean, were you, were, were you able to like integrate on day one with new merchants or how did they find you as this sort of smaller but breakout leader? How did they find you in as this part Shopify partner?

Yeah, that's a great question. I mean, so we, we became, you know, so we did a lot of content marketing around, you know, personalized messaging. And then we start, once we realized that, you know, e-commerce was gonna be a bigger thing, we said, okay, we started to focus there. So we said, okay, let's go with this vertical playbook. We felt like that was good. 'Cause it would also, at the time, a lot of, you know, marketing messaging, marketing tech was very horizontal. So we felt like there was an advantage to aiming vertical and starting that way. And so it was a combination of things like that helped create some of the background noise. But then, yeah, I mean, one of the things I give, you know, credit to Shopify for big time. They had really built out the kind of all of the plumbing to make a great ecosystem. So we, it was, it was interesting. Like when we, I mean, we were, we had this database and we said, hey, we're gonna build as many connectors as we can to help people get data in. We'll sort of save them the time having to do the integration. So we built, you know, 40, 50 different, you know, connectors into all sorts of different kinds of systems, CRMs, e-commerce platforms, payment platforms, all this kind of stuff. What was amazing was, you know, relative to others, you know, some people, there's a lot of like, artificial red tape. You had to talk to people. They'd like maybe take, maybe be slow in responding. With Shopify, they had like a great set of APIs. It was all self-serve at that point. There was a bit of a review process, but it was quick. And then they actually, you know, because they were growing, they were happy to help, you know, if they found things and you kind of could show them proof points, they wanted to help you, you know, get distribution. So they were great in terms of just, you know, at the time, whether it was, you know, kind of recommending through their teams or just, you know, I mean, obviously had like a, like kind of a, a listing page, a directory. Just, you know, kind of promoting us there. So that in the early days, that definitely helped a bunch.

And do you have a sense, 'cause when you look at partner ecosystems and we could flip it around and talk about Klaviyo's partner ecosystem too. Yeah. It's almost always a long tail distribution. You could have 1,000 apps on Shopify or Salesforce, but it's probably 10 that get half the installs and then it goes there. Right. And back when Shopify took off and you were taking off, do you think you got 20%, 30%? How much of your new business do you think you got directly from Shopify? Do you have a sense back in the day?

Oh, I don't know. Yeah. I mean, it's probably something like that.

Like, yeah.

Yeah. I mean, to be honest, we weren't, we weren't as good at measuring it as we probably should have been, or we would be today.

Yeah.

But I think that's, I think that's right. I mean, we always felt like, you know, we, what we wanted to do was if, if somebody had, had kind of the operational side of their business kind of nailed down. Yes. So an e-commerce, that meant like, hey, you have a, you have a, you have a website, you have a way to take payments, you have a way to kind of keep all of your, you know, to track orders and inventory and shipping. If you could do all of that, like we wanted to complement that and be the kind of customer side of it. Like, okay, so how do you, how do you interface with your customers? What did that experience look like? And you know, we just felt like that was going to be a super important like complement to any kind of stack. And that I think is true in e-commerce retail. It's true in other, in other areas too. And so in that case, like, yeah, we think, you know, it was a mix of folks finding us. I mean, certainly in the early days, a lot of people found out about us through Shopify and through other partnerships we had. And then over the years, I think it slowly migrated where it became this like, okay, we just have this brand around like, okay, if you're doing e-commerce and you're doing, you know, either it's wrangling your customer data or doing customer messaging, we're just kind of a good place to do it. Now it's, I think it's, it's a, it's almost like it's so intertwined, it's hard to pull apart. But that's why, I mean, I would tell folks like, when you're building stuff, like you want to invest in both, right? I mean, certainly like the partnerships we've built have been fantastic. And at the same time, like we've built more of our own content in our own kind of like, I don't know, case studies and resources. If you have those two things together, I think it's the best of both. That's how you can go the fastest.

Yeah. And when, just a bit of a perpendicular question on just like the strategy of pricing and economics as you talk, I'm thinking when you have Klaviyo or something like it, where some of your competitors are not only horizontal, but pseudo commodities, right? And then you're providing focused value. How do you, how do you compare pricing? How do you anchor around sort of known pricing points in the industry?

Yeah, that's a good question. So it was actually something we spent a bunch of time thinking about when we started. So at the time, you know, messaging, email was very commoditized. I mean, the feeling, the kind of the feeling was, well, email's free, doesn't cost anything to send. So, you know, there's maybe some infrastructure you need to do it, but it just, whatever. I mean, it should, it should become pennies and then, you know, fractions of pennies and all sorts of stuff. What we felt was different was we actually invested a lot in not just adding in like personalization, but also in doing the attribution side of helping you figure out what worked. So it was, I think about it, it was almost like the cost-based model, which is what like email had become. And we wanted to flip it to a value-based model. Yep. So if we felt like if we could say, hey, the value of the, you know, the message you just sent was, I don't know, it was a dollar, right? Because I don't know, on average, you know, you send it to 100 people and like 20% of them respond to it. And on average they spent, you know, X dollars. Like if you could do the math and do the attribution correctly, we felt like that could, you could change the whole calculus. 'Cause at the end of the day, what people were really after was growth. And that was actually, that was the big distinguisher or differentiator was we felt like a lot of what marketing tech had become was it was basically just to do stuff. But if you ever want to figure out like, well, what's the ROI? Nobody wanted to make that easy. So probably I think it was year number 2 for us. We invested a bunch in how do we make sure we can handle attribution internally? So you didn't have to use Google Analytics or something, or, you know, pay for some other software to do it. And that's actually been really true for today. So if you talk to a lot of our customers, you know, for years I'd get questions like, what's a good open rate? Now those questions are gone. Everybody asks, it's like, hey, what, what's a good return? You know, what's a good, you know, we, we talk a lot about like revenue per email sent or per campaign.

Yes.

And people just came obsessed with it. We actually. In our product, we just deleted or kind of hid and deemphasized all of the classic kind of email metrics, things like open rates, click rates, all that stuff. We just said, hey, you can, you can find it, but it's a couple of pages deep. Instead, we just said, hey, here's the dollars that came out of this. And I think people loved that because finally they felt like they had something that's okay. The reason I spent so many hours, right, building out this campaign or building out this automation. Is because I can see the, I can see the results. We also think it helped kind of gamify things. It made it a little more fun when you had something that it's like, hey, every month I'm going to try to drive this number up. And then we found like the cool part was a few years in, we talked to customers and they'd say, yeah, we've now taken those metrics that you show us. Those are now like the KPIs for our business. Like that's how we drive. That's, that's how we, our whole team operates. You know, if last month, you know, 20% of our revenue came from Klaviyo, the goal for the next 3 months is let's get to 25.

So you're the dashboard, you're the dashboard for the ROI of the company, right?

That's right. That's right. That's right. Yeah.

So how, so make, so sorry, go ahead.

I was gonna say maybe one other point that led to a big theme that we figured out a few years in, since 2013, 2014, that we realized a lot of companies looked at their customers as very transactional. It was, I, you know, I drive traffic, I run ads, I get somebody to show up, they buy, and that's the end of it. They didn't realize, you know, the value of either pre-purchase or post-purchase, that relationship. And so all of a sudden. We said, it's like, hey, you actually, you can drive this yourself. And by the way, you know, Klaviyo is a lot more cost-effective, much better ROI than any advertising you're ever going to do. And so that's where, I mean, we started getting around this idea of, hey, instead of like paid advertising or paid marketing, what if we got into like owned marketing, you know, kind of at the idea of like owned media. And so we said, okay, what percentage of your revenue is being driven from owned channels, right? So that's where we think about things that are direct email. You know, your website, text messaging, all these kinds of bits. And now our obsession is like, how do we drive that percentage up and up and up to try to give more of those businesses more control, more ball control? Where in the past they felt like, if I don't have somebody else kind of driving traffic to me, if that ever shuts off, you know, I'm kind of dead to rights. Now they feel like they're building a community, you know, a brand, an ecosystem onto themselves.

And does that push you a little bit more upmarket so you could have those more mature conversations, or can you stay close to your SMB roots and do that?

I, so it's interesting, like you, people used to feel like that was only a thing that big enterprise customers cared about 'cause they had scale. But we very strongly believe, and the good news is I think all of our partners do too, it's really something you should be doing from day one. I mean, once you have one customer, that's somebody that can start talking about you and your products.

Yes.

So I think a thing, a thing we've realized with a lot of businesses is they said, we want to get started early on. It just, nobody's given us a playbook. It's so hard to do. Like, I mean, running an ad campaign on Google or Facebook or selling on Amazon is so straightforward. If we can't match the user experience of that, nobody's going to, I mean, just, you know, entrepreneurs when they're starting out, they don't have the time. So we felt like if we could match that, more people could start from day one and actually it would make it easier for them to, you know, there's no reason why they can't be driving a lot of their sales, you know, from either repeat customers or helping convert more customers from day one, which just makes the whole business more likely to succeed.

Yep. And does, and just 'cause it's a fun topic, as you, you know, pricing based ultimately around the lift you give, right? Is the magic in e-commerce marketing, right? It's the magic, right? You either get, you can either send a trillion emails, but what you really want is the lift, right? And even modest changes can have dramatic, if anyone sold anything, the effects are dramatic, right? But if you're pricing that way, did it, does it, did it slow down sales because you had to talk through it more rather than a hyper transactional model? And, and how did you, with SMBs, how did you weigh that trade-off of having to educate folks more in the buying process?

Yeah, that's a good question. So I, so this is one where we just used a heuristic. So I'm sorry, I didn't finish your answer to your question about pricing. So we wanted to switch from this like cost-based to value-based model.

Yeah.

And so what we decided was, you know, we wanted to be viewed as, you know, more advanced, really more of a premium product. It wasn't necessarily that we were more advanced or we had more bells and whistles. We just wanted to like, we would get you the, you know, the return that you were looking for. We were for serious companies that really want to grow. So we actually just came up with this heuristic that was, hey, we're going to take kind of the, we looked at this, you know, we kind of looked at the pricing models of everybody else that was out there and said, hey, we're just going to charge, you know, 50% more, 100% more. And we just made that our model. And we felt like that kind of put us in this like premium spot. It's worth it.

You're providing more value, right? So you're anchoring high. You're anchoring high.

What we found is it was hard to get people to wrap their, I mean, everybody loved the attribution, but you know, it's, it's always hard to you know, to be convinced, it's like, well, is this, is that exactly the right way to, you know, you know, do people want to pay based on, you know, what they see and what if the math changes and all this kind of stuff. So we decided it's like we still would do it. Our pricing model is still today is based on effectively the number of customers you have and how frequently and potentially how frequently you message them. But what we wanted to measure internally is we looked for every single, you know, business we worked with, what was their ROI? And we had kind of targets of, hey, we want it to be at least You know, at least 10x, at least 20x. And so we target that. And so in a way that's like, right, so rather than have like kind of a pure take rate or something like that, you pay some percentage, like payment processing is really easy one, right? Where you can just do that. It's clear value add. It makes a lot of sense. In our case, because we were one step removed, like, you know what, we'll measure that and we'll make sure that we kind of tune it so it's in the right ballpark. It's never too expensive. But we felt like that gave us a lot, like we felt comfortable knowing when we talked to customers, hey, We can afford to charge a little bit more because we can draw a, you know, pretty straight line between the activities they're doing inside of Klaviyo and then actual growth.

Yeah. And are you usually at this point, I mean, we're all veterans. Have they used other products before and then they're seeing that Klaviyo can give them more? Is that the typical flow in today's world?

I think that's, yeah, I mean, probably the bulk of our customers fit in that bucket of, they're, I mean, they're aware of, they're actually aware of email. They've used it for their business in some way, but they, They, they looked at, you know, gosh, doing automated email just felt so unapproachable. It's like there's so much data work to be done. And then, well, I mean, how do you do the logic and can you do content? I mean, how does all that stuff work? And we just made that easy. There are definitely, I mean, as we've grown, an increasing number of businesses have come to us kind of from day one. And that is, it's a really interesting group because in that case, I mean, everybody obviously knows what email is, but they're not used to, you know, like, how do I get going from the start? Right? So in that case, it's, it's been, it's been more fun because we've, we've set ourselves a goal of, okay, in an hour, how do we make it possible for somebody that's starting from zero knowledge to be not just, you know, know enough, but have set everything up where we can get them their first customer off an email or text message based on whatever just content design they can do in one hour.

Yeah.

And that's been really cool. 'Cause when people see that kind of like that, that eureka moment of like, oh my gosh, I can't believe I just made a sale. Really good things happen. One, they start talking about us like crazy, but also two, you know, they're hooked, right? They're gonna be looking for that second, that 10th, that 100th. And now they think is, okay, this is part of how I'm gonna grow.

There's like a related question I was thinking about, just we're all, we're coming out of COVID right? So now there's this new world, we're this post-COVID world, like e-commerce, obviously we don't have to talk about it exploded during COVID right? But why was Klaviyo a huge beneficiary? And the reason I asked the question is I'm assuming a lot of your customers, look, everyone knows that come March of everyone went online, like every store had to go online, but some customers already were online. It's not the same. And I assume a lot of your customers were second-generation users. They'd already used marketing products. So. Why did Klaviyo get a huge benefit? Right? Because weren't folks already using other products beforehand?

Yeah. So I mean, there are kind of two classes of folks. There were, you know, more digital natives.

Yes.

And certainly that probably indexes towards, correlates with younger, like, you know, just, you know, businesses and brands that have started more recently. And then secondly, so we saw a big uptick in last year is businesses that were maybe originally brick and mortar businesses that had always been thinking about moving online, but just didn't have a reason to pull the trigger or it was on their list, but all of a sudden it became hurt, right? The, like, so we look at, we kind of think there are two big trends that happened last year. The first is like, where does the transaction take place? And obviously that shifted from being in a physical store to online. And there's all the things about, okay, logistics, shipping, all like all the things that make that complicated.

And do they need Klaviyo the next day? Is it a first purchase? Like there's like a couple apps you gotta buy to go online. Is, is Klaviyo one of those? And there's others you phase in later, right?

Yeah. I, right. So I mean, we, we definitely feel that like, yeah, if you're gonna, you need to, you need to know your customers and start building relationships with them from day one. I mean, you could wait till later, but you're wasting time. So that, that was trend number one. The other trend that Klaviyo really plays into is not so much for the transact, because we actually, you know, Klaviyo's not, we don't, we don't take the actual order or process the payment, so we don't actually care where that happens. What was interesting to us is we felt like what online adoption was accelerating was the kind of the identification or the de-anonymization of who the consumer is. So the analogy we made is like if you walk into, you know, say a big box retailer, I mean, whether it's your first time in there or your hundredth time, Nobody has any idea. It's, it's entirely anonymous transactional kind of experience, which may be what you want, but it does mean that it's like there's no opportunities to contextualize or know who you are or do any kind of personalization, which can be sometimes frustrating. The cool part about online-wise is now, you know, because we have this kind of, whether it's an email address or a phone number or some basic information, now all of a sudden, like if you want, there's the opportunity for that business to actually contextualize your, like, you know, when you visit your website. Any messaging you get. And so we felt like the kind of online, a single online transaction kind of catalyzes that whole relationship because now you know each other. And obviously it's on the business to make that useful. If it's just spam and it's not interesting, like, well, that's fine. Like everybody's just going to unsubscribe or block it.

Yes.

But it gave you an opportunity to do that. And so now we think about like post-COVID, I mean, the big thing was now we have all these businesses that whether they're, whether entirely digitally natives or there's some sort of hybrid, they now have the opportunity to go actually know more about their customers and they're finding ways to stitch that together into the physical, right? Experience as well as the digital experience. So it actually, we have people sending emails where sure, a lot of it is happening where the transaction's happening online. It's also a lot where the call to action is like, hey, come visit us in store. And by the way, because we know who you are or you've told us something about yourself, we can kind of point you to the right place.

Yeah.

And so especially for, you know, larger, more mature brands, I think that's really interesting. So this whole de, de-anonymizing who the consumer is, making it so that consumers, if they want to be known by that business, they can start to build that direct relationship. We think that's a really big trend and that definitely really took off last year.

Yeah, that's interesting. Let's just, for, for other founders, an interesting, let's talk about platforms. Let's first talk about the platforms you build on and then let's talk about you as a platform. It's a fun topic. The first one you talked about how you exploded with Shopify, right? I feel like there's a paradox for founders today, right? Which is you want diversification. You want to be in an ideal world, you'd be on Shopify, you'd be on WooCommerce, you'd be on Magento, you'd be on BigCommerce, you'd be on whatever just launched out of YC or on TechCrunch, right? But Shopify's market share has grown, right? And so I see more and more folks who, no matter what they say, it makes sense to just bet on Shopify, right? And so what have you learned? You've diversified, right? You're on all the platforms, but what, what's, what are the learnings behind the learnings on, on where these different platforms are going?

Yeah. So maybe a couple things. First is I think you, yeah, you definitely want to build, I think it's, it's a good idea to build, you know, your underlying tech so that it's kind of agnostic, right? So there's a level of indirection in between what you solve for and the other folks that today and tomorrow can solve that, you know, can integrate with you or help solve the problem. So in our case, the issue was we built this database. It was great at storing customer data and helping you use it, but we had to find some way to get it in. And so what that meant was we had to build basically a separate layer that made it easy to connect to all the different— and our bet was, you know, whether it was SaaS or open source, people were going to choose sort of rather than build themselves, they were going to start to choose from a handful of platforms.

Yes.

So I would definitely recommend doing that. Like it's kind of worth the extra investment. Now the counterpoint to that is, I mean, certainly like you talked about like power laws, like there are going to be businesses that just, you know, win because they, they build the best products, they build the best technology. And certainly Shopify has been one of those. And so we knew that was going to be the case. And that was part of it, honestly, was part of the calculus was, hey, there's, you know, even if there's, there's not going to be, there may be, you know, 100 different, let's say, e-commerce platforms. But the reality is there's probably going to be 5 or 10 that most people standardize on. And the top 1 or 2 are probably going to have huge market share just because people don't want to have to make endless numbers of decisions. So we, like, what we tried to do was we went to every single partner of ours. And so we could start with the e-commerce ones. And basically looked at like who was forward thinking, you know, wanted to invest in building relationships with other, you know, soon to be hopefully like us platforms out there. And the cool part was, like I said, like Shopify and a few others, they made it so easy to get started.

So easy.

And we could just tell that a lot of the ethos was similar. So I think like you kind of, I look, good partnerships, it's kind of like pulling on a string, right? If both sides aren't pulling, it just, it very easy, very easy. Kind of, it doesn't stay tight anymore. So we always looked for partners that, you know, kind of were as equally as invested as we were. And if they weren't, that was okay. We just, it's like, we probably weren't gonna, probably wasn't gonna bear a lot of fruit. So in this case, like it was definitely like, nope, everybody's working in the same direction or like, you know, helping keep that string tight. And yeah, that really took off. And again, I give Shopify a lot of credit for, they, I think were early to this game of realizing developers and building ecosystem mattered. I think a lot of folks have now tried to rinse and repeat their playbook. And, and that probably gets to like how we think about it. You know, as we've grown, like I remember when we started and we realized there were developers coming to us saying, hey, can we integrate with Klaviyo? And whether it's to pull data out so we can personalize the experiences we're powering, or we want to help push more data in so you people can use that for marketing messaging. I mean, we looked at companies like Shopify, like Twilio, like Salesforce as examples of companies that had done this really well and understood developers. And I think it's still early days for us. But, you know, those were companies where like, hey, how do we replicate the kind of magic they built where people say, this is the, it's the best, it's the most efficient way for somebody else to build their own business, right? Integrated with us. And we're not the only, I mean, we're not the only company that has APIs for into a database to do analytics or to do marketing messaging. But if we make, if we're the easiest to integrate with, I mean, you know, any small startup, they're going to put, they're going to put their time on what's likely to, you know, what is kind of the greatest mass, but it's also the easiest to do.

And if they can get it out, there's going to be a temptation as you become a system of record to, to make it easier to deposit data inside than to remove the, at least the structured form of the data. Right.

Yeah. I hope that's, I mean, like a trend that, I mean, something that we also believed in, you know, when we were building, you know, effectively B2B software was, you know, in, in the consumer world, you know, there's this kind of, it's becoming less implicit now, but there's this kind of, this deal that, hey, you could use the platform, but the data was never yours.

Yes.

So, you know, you take a picture and you put it on Facebook, like it's not really your data anymore. I always felt like with B2B software, it's like, you know, for a business it's gonna be so important that you get that data interoperability. So we've just, we've really tried to partner up with companies that have the same belief that felt like, okay, what matters is data portability matters. And you know, the best part about APIs is that you can, yeah, you can edit the data and you can pull it out for other use cases. The interesting part is how do you do a really good job of making sure that the people you're working with care about, let's say, privacy and security to the same extent that you do. That's a really fascinating, I think, trend that's happened the last couple of years that we're really very focused on. But at the end of the day, I mean, yeah, we look at ourselves as we're just an extension of, I mean, hopefully a business could build what we're building. It just would take them a while. So hey, if we can help, you know, thousands, you know, hopefully millions of small businesses, you know, not have to pay that cost, all the better. Yeah.

And just one, let's talk about just for one second, 'cause another topic that's super interesting, I think. And I may be misdescribing it for Klaviyo, but it's co-opetition. So as you scaled, and this is natural, Shopify adds some low-end functionality, right around email marketing for sure, right to its whole base. Salesforce Commerce Cloud has always had more enterprise functionality going back to ExactTarget and others. I've found that typically that benefits folks like Klaviyo because worst case, the customer outgrows some of that solution and they become a lead, like they start to generate leads for you that you might not otherwise get, even if on day one it's a little stressful to have a little more competition. What, what were your learnings on that sort of competition?

Yeah, totally. I mean, well, first of all, I, yeah, I think it's, it's probably generally true that, you know, it's, it's sort of like, you know, any press is good press. So the more people that are thinking about this is like, it's something that matters. Um, yes, definitely helps. You know, in the case of the folks we work with, I, we've always just had very kind of upfront conversations that, hey, you know, if, if you want to build what we built, then like, just let us know. I mean, the world is big enough, like, We believe the technology we're building is like, I mean, it applies to so many different industries, different verticals. Like there's a lot of ways we can direct ourselves. So there's no point to be, you know, kind of enemies here. Like we can, let's, let's be friends. And if it doesn't make sense, just let us know. The other part is, is like, yeah, I mean, because of this like openness of, you know, at least B2B software, I'm just a big believer. It's like if you build the best product, like consumers are going to kind of, your customers are going to demand getting to interoperate with it. And so I think competition is great because it's, it's kind of boring if we just, you know, if you end up in these kind of walled gardens, you know, and we talk about even inside of Klaviyo, like if we can't build the best feature or the best, you know, the best use for, you can't solve for some use case in the best way, then we're just going to interrupt. We're going to, you know, integrate with whoever is the best. And that's frankly makes things more fun, right? I mean, we talk about our product teams, our engineering teams, we're more interested in building like whatever the best possible experience is rather than the ones that we know the customers will buy because it's, I know it comes bundled with Klaviyo or or whatever. So I think it's just a more fun way to work. Especially when we got, when Mike Kovarai, when we got into Klaviyo, we weren't doing it so much to, you know, I don't know, build a big business as we just wanted to build some of the technology that we wished existed. And so that's, I tell, you know, all the engineers that work at Klaviyo the same thing. Look, if you're here, you know, just to kind of build competitive moats, that's just not that exciting. It's way more interesting. And I think for folks like you and I that care about technology, just want to see as much technology in our lifetimes as we can. So let's keep, you know, the more we can actually encourage competition, the better. And certainly when you get the co-optation, it's great because, you know, people will do things, you'll learn from them, you know, kind of some, I don't know, some cool user experience or some way to do something that's kind of helps us leap forward. I mean, we've seen that with Klaviyo where, you know, in the early days there was a lot we, you know, kind of borrowed from others, right? Stole that we thought were great ideas and we don't get upset when people they see, you know, ideas or paradigms we've introduced and they want to use them, we think that's awesome. Right. That's all the same. And we're excited when people kind of enter and want to kind of help level us up too.

And how many employees do you have today?

Gosh, I think we're up to maybe 600, 700. It's a little weird working remote, right? Because you, I get to meet everybody, you know, over Zoom and it's, you know, that's kind of fun. But when you're like, we used to do these big all-hands every Friday. And so you kind of got a sense for how big we were, or at least, you know, at least in main office in Boston, but now it's, yeah, it's a little tough. You just get the like little, like, you know, you get the little Zoom ticker, right? Of how many people are in a, you know, in a, in a room. Yeah.

The funny thing is I didn't, I mean, I want to talk about your platform next before we run out of time, but people forget as you're growing, co-opetition is great. I think it's a winner. It makes you better, right? It makes you more open. And then we forget a moment. You'll have 1,000 employees soon enough, right? No one will have 1,000 employees, no partner yet working on your problem, right? This is what you start. It's fascinating. Like you, you have this scale and and no one can catch you, right? The amount, the amount of man hours and engineering hours you're looking to solving this problem by the end of this year, no one on the, like, there are other folks in the broad category, but no one will be spending as many smart hours as you are solving your customer problems. And that, that becomes, that lasts for decades, right? That lasts for decades. And it's, we forget you, you're still a startup in some ways, but in your segment, you may have more people working on a distinct set of problems than anyone on planet Earth, even today, right?

Yeah, I think that the challenge, I mean, culturally is, especially as you grow, is how do you make sure every person, you know, every Klaviyo for us, every team feels like a startup within this like constellation of that is this like this larger company. I mean, everybody talks about that. It's, and I think there's a lot of companies that have done a great job of really like, so what are the organizational structures that allow you to do that? We really think about that way. I mean, if you, you know, in some sense, if it feels like we've kind of won or we've, you know, we, solve the problem, it's not very interesting. I mean, we're all gonna get bored and, you know, like I, I would just quit, like, let's go work on something different. So what makes it fun is when you feel like you're on a, you know, a really small team. And for us, it's really small. I mean, we try to keep teams like, you know, 2, 3, 4, 5 people and you, you're like, you're just this David versus Goliath. Like you're trying to solve this massive problem that there's whole companies out there that are trying to solve and it's your job to be creative and, and, you know, figure out how do you embrace those constraints. And the cool part is you're working in this constellation of all these other teams that are doing other bits. And we know that when you combine 'em all together, it's better. Like that's, I think what makes things fun.

Um, yes.

So we, yeah, we, anyways, we, we try to keep it that way. I mean, certainly like, yes, there's, it's true, like we're focusing more than others, but the more that just feels small, feels tight, it feels a little impossible. Like that's a fun way to work.

All right. Just two one things I wanna hit before we run outta time, but let's just briefly, or not, talk about you as a platform. So now it's flipping around, right? Are, are there a few partners that are making millions and millions of dollars off you, right? And how are you nurturing your own ecosystem? Are you there yet? Do you have a big team? What are you thinking about to nurture your ecosystem?

Okay. It's a great question. So we are, I mean, so we are, this is a big focus for us this year. So, you know, well, I wish I had the exact names and numbers. I know there are companies that, and none of this is, you know, our doing, like these are great engineers, developers, you know, product folks doing it themselves that yeah, certainly have built, you know, companies and applications around Klaviyo that are, that have, you know, hundreds of thousands of customers that are doing really well. One of the things I think honestly, we've not done a great job is being there for those, you know, those those companies, really those, those entrepreneurs as they're growing up and building, you know, whether it's specific to Klaviyo or just like adjacent to us. So we're really putting a lot into that this year. And yeah, I mean, at the end of the day, we think about Klaviyo done right, we should be providing, I mean, go back to day one, we should be providing this database that makes it like really easy. I mean, we think about it as like a brain for your business. It just allows you to treat people the way you want to treat them, but just at massive scale. And so what would you do with that brain and how should it act? Well, there are so many different customer experiences, all different types of media, all different types of use cases, different industries. There's no way we can possibly get to all of those. And so if we can end up being the way that you store all that data and use it federated out, that's really powerful. And so we think there's existing technology platforms that can leverage what we're doing. We also think there's a whole bunch of technology, you know, companies or platforms that don't exist yet. That can, that can help build around us. So our big goals for this year is how do we make sure we've kind of opened up? I don't think anybody's ever done this. Give you all of the APIs into our customer database. So it's a little bit like a SQL database, but just really designed for kind of customer, you know, event data, activity data, all of our marketing messaging bits, and then say, go nuts. And so we know we working with some, a bunch of, you know, startups now, you know, or some larger platforms on those APIs, designing those. And then, I mean, we really wanna see, it's like, can we help hundreds, thousands of other, you know, developers go off and build like self-sustaining businesses that help in all sorts, you know, both within retailing and outside, you know, help end businesses or end consumers do more with their data. So it's very early for us there, but I think this is, that's why I really admire, you know, a bunch of the companies we talked about that are true, like API-driven, tech-driven platforms. I think it's just how you could go the furthest and the fastest. So this should be the year, hopefully, that we start to have that inflection and, uh, start to take off. So hopefully it's maybe for us, you know, we think about those platforms, they got there much earlier, but for us, 2021 is gonna be the year that we finally take off.

Got it. It's interesting timing. Okay. Last with our couple minutes, 'cause I know I'm curious and other people, can we just talk a little bit about how sales works at the company, right? And marketing. So are you, I should know how much, how much is self-serve versus sales and how does that just kind of the nuts and bolts work of how you're selling the product?

Yeah, it's great. So I mean, for us, we're, I don't know if we're unique, but we have a very wide distribution.

Very wide.

So we have, you know, we have, you can think of big iconic brands, right? That are, you know, are, have a very high touch, you know, salesperson where they're trying to figure out like they're going to rip and replace their database technology along with a whole bunch of marketing. We're a real revenue driver and it could be hundreds of millions or billions of dollars for them. We have those kinds of customers. Then we have the, you know, entrepreneurs who are starting something on the weekends. Where they're, where they need to start for free. So our pricing model starts out as premium. We've always felt strongly about that. We think it like holds us honest, like on our products and really like forces us to let the product lead.

For sure.

And so with that, we've got, yeah, a big chunk of our customers. I mean, definitely the majority of our customers come into us all self-serve. So they figure out how to use our product all on their own. And again, we just think it's a good kind of baseline that we are always trying to like, how do we raise that bar that you can do more without not feeling like you have to wait for us to be around, right? At the same time, you know, I remember when we, you know, first built out our, you know, sales team, our first couple of, you know, reps. We said like, look, we want this to be a very consultative process. We want you to know our product cold, understand our customers cold. And so, yeah, I think then we, we have different, like, kind of to match up to customers where they want to be met. We have folks that are for smaller businesses. I mean, typically for them, they're, they kind of know what they want to do. They have a couple of ideas. How do we help them, you know, show some value like upfront, right? So our sales team will, I know this is not normal, but like they'll actually get into the product, help people set up a few, you know, whether it's a few emails, a few automated workflows, get them to show them some ROI all before we ever ask them to, you know, swipe a credit card.

And so we'll do that of any size. You're, you're, you don't, you almost don't, you don't care what size the customer, you have the manpower to cover the smaller customers there.

No, well, that's why, I mean, our product does most of the lifting for us. Yes. On the, on the small side, you know, I don't, usually it's like when a business is doing, we think about small businesses as a business that's maybe getting close to $1 million a year, like in, in retail. Like that's usually a good time where they're, yeah, it's a bit of a bigger move for them, so they kind of wanna prove things out. But yeah, we've always looked at it as like, I mean, how do we go faster? Right? How do we keep things really high velocity? So we're, we're constantly thinking about like, how do we take the best learnings from our sales team, our marketing team, our customer success team that are, in a lot of cases we talk about those trailblazers. They're figuring out the patterns and then how are we building that back into our product either so that people can figure things out on their own or it just makes us faster. And I think that makes, that makes things fun. Kind of keeps things fresh rather than feeling like you're kind of retreading the same problems over and over again. Got it. Yeah.

So the sales team's mostly observing customers, jumping in to help them, right? And then, you know, in theory, driving more revenue from the largest folks, the folks paying a couple thousand bucks a month? Is there a line in terms of sort of ACV or deal size where you, where you, where you draw the line for sales at the end of the day?

I think it's a couple, I mean, so I think it's a couple hundred bucks a month is roughly where we draw the line of where it's self-serve versus I gotta just talk to somebody in sales. But it's, we're, I mean, it's, we try to be very, we, we talk, we think a lot about like, how do we think, work from the customer backwards? So be customer first. Like one of the challenges is it's very easy to set up a sales org that kind of meets the way that you want the world to look. At the end of the day, you have customers from all over the place. I mean, it's not unusual for us to have some huge brands come in and say, hey, look, I'm only willing to spend a few hundred dollars with you today, but that's kind of because I want to proof of concept and really grow this out. And we would hate for some like simple heuristic, right? In a, in a form or something that they did inside the product to block that out. And sometimes you can, the cool part about, you know, let's say retail and direct to consumer is businesses grow so fast. Like you can't just look at somebody's email address and know, oh, that's a huge company or not. I mean, some of these companies grow so quickly. The other thing we have to do is really stay on top of who are the companies that are, who have that really high trajectory and how do we make sure that we're sticking with them? So that, that's where it almost like, you know, between our sales team and our customer success team, you just really have to match up and kind of watch. 'Cause I mean, some companies are kind of slow growers or lower growers. Some of them just grow really quickly and we have to kind of tease all that out.

Yeah, it was funny when I, I remember the first time I ever bought a seat of Salesforce, one seat. I had a rep, he called me. I said, Chris, bless your soul, you can't afford to talk to me. He's like, no, we think you might grow bigger. He's like, it's okay. And that, that Salesforce, I don't know if Salesforce does that today when the big deals are 9 figures, but it shocked my mind in 2006 when an AE in San Francisco, I, I, I blow my mind. I'd never had that experience in software before. Right. But it was smart. That was a good early investment by Benioff. Right.

Totally. I mean, I mean, it's all about, I mean, like this goes back to a piece of video, which is like, how do you do personalization at scale? Right. And so obviously they can, that experience, I mean, obviously it was, you know, A lot of you still remember that. Finding a way to deliver that, like, I mean, obviously that's what we're doing internally is a little bit of doctoring our own stuff is how do we make sure we can do that, right? Make it as efficient as possible to still get that kind of magic. Yeah.

All right. One last question. I know we're out of time, but just to finish up on sales and marketing, and maybe the answer is no, but are partners and channels a big part of your revenue mix? They're, they're a huge part of HubSpot, right? Other folks like Gorgeous that I know get a huge amount through agencies and partners. What, what have you learned there, if anything?

Definitely. Yeah. So I mean, the short answer is yes.

Yeah.

You know, I think it's, it's all be, it's so why is that? I mean, certainly Klevio is because we interoperate with so many other systems that drives a lot of partnerships. But then, hey, a lot of people when it comes to, you know, this category we call marketing, right?

Yeah.

It's a, a lot of folks not understanding or not sure, they don't have the expertise yet about like what's the right tech stack. There's so many options out there and what's, what are the right strategy. And one of the fun parts about marketing and messaging, it's so creative. There's so many different ways to grow. Yes. And so a lot of people are looking for what those playbooks are, and especially when you're small, like, you know, you may not have, sometimes we find a lot of entrepreneurs that just don't have that expertise yet. They're the product person. They just haven't figured out that side of it. So yeah, we, we've, I mean, from gosh, many, many years ago, we found that like marketing agencies, you know, folks who were helping on the development side, system integrators were great fit. I think the key thing for us was you have to, it's a lot of people will be kind of interested, but you have to do a little bit of the work for them of helping them figure out, especially let's say, somebody that's selling services. What are the services they're going to sell and how you can help them package those up? One of the things I think is pretty cool about what we've been able to do is we put together a program where we've actually taken a lot of like traditionally like SEO or SEM or advertising agencies and said, hey, you know, like, look, those are all paid strategies. We think owned strategies, you know, email and SMS are really interesting too. We've helped them define kind of a way to set up the different kinds of packages that are valuable to them because it helps them, you know, set up the kinds of engagements they want. but they also prove a lot of ROI for their, you know, for the end customers. So it's a way for us to basically help people adopt our things faster. That's been awesome. So I think you have, you do have to invest some time to basically, I think, set up that playbook. And the other thing too is you have to hold the line on, you know, this is the playbook that we care about. Like in some sense, if you're not, you know, kind of on, if you don't believe in what we believe in, for instance, with email, you know, we've definitely worked with some folks that, you know, still felt like, gosh, the best way to do email is just to to everybody all the time, which obviously doesn't work anymore. You know, helping people coach you up on what the right way to do things are. We found some people were kind of willing to be those quick learners and those create, I mean, once kind of had a handful of folks that could show that you could build a business, you know, around Flavio, a service business. Obviously lots of other folks came to us and said, hey, how do we get involved in this? And that's been awesome. Yeah.

And you have a big partner enablement team that kind of works with those folks. Is that, you have a layer on top of that or is that still early? Like, like the the platform.

Yeah. I mean, we're, we're, I mean, we're very, I think, efficient and scalable in how we do it, but like, yeah, I mean, we've had, we've had that team for, you know, a team working with partners, working with agencies again on this exact kind of stuff, right?

Yeah.

How to think about the services you want to provide, how you're going to price and package them. I think you, if you decide you want to go down that route, and I think it's, it's definitely a really good one. I think you can't invest early enough in that. The sooner you do that, you'll just, you'll get more scale a little bit faster.

Yeah. Andrew, this was incredible. Thanks for spending all the time with us. And let me, let me know, let us know if we can help and we'd, we'd love to have you. On stage at SaaStr Annual, but thanks for all this time. This was great. Awesome.

We'll do it. Thanks.