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John and Amer discuss Klaviyo IPO

John and Amer discuss Klaviyo IPO

by john roman

9 months ago

 Slight delay in posting this, as this was recorded the day after their IPO.

Transcript from video:

Amer: big day yesterday
John: yeah they went public klaviyo went public yesterday first big IPO of an econ brand in a really long time
Amer: I I think probably since Shopify I mean it's a unicorn uh by all means and uh and I I think they wanted to do it earlier a couple years back but given the markets and what was happening in the world they they rated
John: the Corona
Amer: yes yes um and uh they went public yesterday opened at 30 bucks a share and uh what does it then a half into it a little bit more
John: like 32 they've gone up and down today
Amer: yeah
John: up and down they were up five points down three points but they did it
Amer: there what's your main reaction to it Klaviyo goes public as I'll answer the question as an agency I will answer a question as for the marketing and you can as well but you're Klaviyo customer right
John: I am
Amer: you migrated from one I remember from MailChimp a couple years ago
John: I went I went MailChimp Klaviyo MailChimp
Amer: Oh
John: Klaviyo
Amer: so why did you first time go from MailChimp to Klaviyo and then why did you abandon ship with Klaviyo
John: so initially we were when we were migrating over to Shopify plus to recharge um the email discussion got um talked about and you know everybody was singing the Praises of Klaviyo this is a long time ago they were the they were the rebel at the time right they weren't part of the swamp they uh um we went there we had major deliverability issues um couldn't really get straight answers from them and we were losing Revenue so we went back to the you know what we knew which was MailChimp and uh we stayed with Mailchimp for a few years we didn't go to Klaviyo until about a year and a half ago um we you know there were some features functions that we wanted um some segmenting that we really couldn't accomplish anymore our MailChimp was better than everyone else's because we had custom Integrations with it and it was it was kind of a beefed up version of MailChimp so we had some major segments in segmenting that most people don't have but we just wanted to go with Klaviyo it was time and um we've been with them since but uh I think yeah they made public congratulations to them but they're starting to become I don't know if their eyes on the ball anymore
Amer: yeah I think the interesting part is uh I was was a 10 I I started to get into e-commerce like shift from the B2B uh brochure websites nothing complicated maybe about 11 12 years ago maybe a couple of years before Klaviyo even came around and I remember at that time I mean um uh it was funny at that time MailChimp was considered considered a rebel because they were taking on Constant Contact that was the big one in the small business sector and then when Klaviyo came out you had what I really liked about them they were to my knowledge the first e-commerce first email solution you had the military that kind of did it the constant contacts um the Broncos of the world all of that
John: sure
Amer: but all of these guys were at that time pretty big given MailChimp I I will never ever forget the moment um in the trends report Total Trends reports where uh MailChimp surpass Constant Contact I thought it was the coolest thing I was like go freaking MailChimp
John: yeah
Amer: the monkey the monkey's on the back um and then you kind of had this Resurgence of the rebels and Klaviyo came along and it was really cool to see see that but I do agree now Toronto is no longer around MailChimp is MailChimp but not what MailChimp used to be and they got acquired by into it so that product's gonna even move slower than it used to
John: sure
Amer: and um I mean you have um omniscient right now they're kind of mid-tier I think they're doing well but nowhere near Klaviyo I don't think um like that Klaviyo is what Constant Contact used to be what MailChimp had become what Bronto used to be um so and I almost remember they remind me a little bit of um uh what is the Salesforce solution um uh you had the Marketo because of the world and then there was another one I can't think of name I think they were a Salesforce company um long story short that's what they are now and now going public my question as an agency and somebody that is going to be recommending Solutions and this is a question for you is are they going to start answering to the shareholder and or the merchant and I think once that shifts tilts one way too much
John: yeah
Amer: I think um the writings on the wall
John: uh well I think I I think they're gonna have to answer to the shareholder moving forward and looking at their financials um they're definitely gonna have to answer to the shareholder
Amer: yeah I mean they have a lot of cash on hand which is good from what I remember from looking to finance financials um one interesting part is you we spoke about it not too long ago the Ubers of the world and Uber getting after 14 years uh showing profit um can they do it as well I'm 100 sure they can but I think with the exposure of finances is how do you get to that point when you know Revenue requiring Revenue costs you you know 100 million dollars when your payroll might be 300 000 a 300 million dollars where all of these things compile at some point you got to start making Cuts somewhere uh to satisfied shareholders I think they invested 100 million research and development I mean that's a lot of money research and development what I'm excited about because it tells me amazing things should be coming
John: amazing things that's a lot of a lot of money
Amer: yeah
John: that's wild um so maybe they are going to continue innovating but um I don't know I I feel like lately um and maybe it was preparation for going public but I feel like they've been a a little stale and they raise prices to to everyone and even people that were um originally grandfathered now are on the new pricing and
Amer: Oh I know that
John: yeah so we we were given a year at our negotiated pricing before we went and got moved into the new pricing
Amer: when you switch from MailChimp to Klaviyo did you see a significant impact positive negative to the business I know the first time it was negative because deliverability the second time has there been a significant impact
John: not significant
Amer: okay
John: not not significant it's um you know they they train you to um during onboarding to to look at things a little bit different so we're not um you know we're following probably more best practices so we're not touching the entire list as much as we used to um we're we're much more highly segmented um but yeah I don't I wouldn't say it's a significant uptick because it wasn't
Amer: I know you have
John: now to be fair um it saved us money
Amer: okay
John: switching from MailChimp to Klaviyo it saved us um I think annually it was maybe like fifty thousand dollars um so it was it was it was a number big enough to to justify the changed um and and Peyton and and Ben pay for itself as opposed to um uh expected uptick it saved us a lot of money
Amer: fifty thousand dollars I would not expect that number I would have exp I was ready for you to say five to ten thousand dollars
John: if it wasn't if it wasn't 50 it was it was in the middle to high 40s it was it was a big number um it was it was a few it was a few thousand dollars
Amer: I'm just shocked like what is MailChimp charging for
John: they were charging us a lot um now to be fair when they knew we were leaving they they sharpened their pencil but um I when I make the decision and we when we make the decision that we were going like you can't stop us
Amer: yeah
John: it's too little too late like and it's it's insult to injury it's salt in the wound when you're like oh we can do it for this I was asking for that why why didn't you do that why did we have to go through the process and spend time and resources to make the change
Amer: that's one thing I can't stand um technology service whatever you look at it is you know allowing somebody to pay for such a long time and then saying we can do better and the cool part is you probably would have thought about it if MailChimp came to you and said hey John you've been with us for such a long time we appreciate it um we thought we just knocked down your price by five percent you've been like what like you're practically coming to me and trying to give me a better deal or ten percent wouldn't be significant but I think maybe you you would have not taught about moving to another platform is hard
John: yeah be proactive none of them are none of them are proactive
Amer: did you have a I know with uh Klaviyo I'm a lot more familiar with them to MailChimp if you have an account manager that I'm assuming you guys touched race with and things like that did you have that in MailChimp
John: um so we we did but not with consistency um they were I feel like we might have swapped a few times and the new one doesn't reach out it wasn't to give credit where credit's due um Klaviyo is a better experience on that side I think I think one of the issues is um you know they they definitely did some major layoffs um leading up to being to going public um during you know during this downturn and we had I think our account manager one of the times was affected um so it wasn't it wasn't a great experience when you lose your account manager and you don't know that you don't have one so not perfect but way better experience than than with MailChimp
Amer: If given that clavia has gone public as a client that there's a consumer as a user if Klaviyo ears are listening what would you want them to know as they kind of go through this process and they go public
John: um don't forget don't forget what got you there I think you know it's it's they're they're moving on right like I feel like be careful because you're you're no longer the rebel right that you're not no longer the the the Cool brand like you're losing that a little bit right and if you're not careful and you don't listen to your customers you're not engaged with your customers so ones that are coming someone's gonna take your lunch someone someone's gonna kind of innovate someone's gonna be more engaged with customers they're going to be able to turn Tech around faster and new features quicker and you'll you'll be dethroned um and the flip side of that is coming from I guess choose my words carefully here um but there the the Nuance of of having to make decisions when when quarterly earnings matter it's really difficult and sometimes decisions are more short-sighted than they should be and coming from that world and seeing that um knowing that the challenges that they that they have coming ahead I don't know um I'm tempted to short the stock I'm being honest
Amer: that's bold
John: I I pay I sure I've only shorted One stock previously I shorted um Snapchat and you knowshorting a stock is a is a is a bold move because the the losses you could have are you know technically unlimited right um but it uh it I spent about a year talking about wanting to short the Snapchat stock and the the the the reason it happened the thing that occurred we had a uh a call with them with their with our account team for for advertising and the results we were getting were horrible they made some changes to the algo and we weren't getting good return on ad spend and good customer acquisition costs um tldr we don't advertise with them anymore but they were trying to tell us that it was that the results didn't matter and not to look not to be so short-sighted on on the results and the men and it was it was very clear it was a script that they had been told to read um like he was making it his own words but you could tell like this was like coming from the top and it was just a horrible horrible approach and at that point I wanted to short the stock I wish I would have been because it took me about a year to short it and I lost I could have made I didn't lose but I could have made so much money I would have shorted it when my gut said to Short
Amer: so it's interesting to mean uh to kind of get into your head so you're using Klaviyo you're Klaviyo Klaviyo customer
John: yeah
Amer: um I'm assuming when you shorted snap you were no longer a snap customer
John: I still was
Amer: oh you were so
John: I was using a might stopped prospecting we were only using them for retargeting marketing was so effective
Amer: okay um so it's even with Klaviyo um you're more embedded maybe with Klaviyo than you are would snap
John: yeah
Amer: and what would make you what changes would you want to see from Klaviyo not too short
John: um Innovation right so I'm wearing two different hats here right there's the hat is the consumer and and there's the hat is the the investor um so it's it's two two different two different answers as the as the investor I'm just looking at their financials and then taking my understanding of them in the ecosystem and feeling that they're up for disruption and as the consumer it's a it's me be short again there's nothing to do with me being a customer I'm a customer until until someone um comes and disrupts them which I think is possible
Amer: okay so we're talking about Innovation with Klaviyo um Klaviyo's obviously started as a email marketing platform um they involved it did a good job with it obviously what we said earlier uh then I believe I can actually I can't remember did they acquire did they develop their own SMS platform but then they added SMS as a service offering after that I believe came mobile push certifications as an offering then recently they announced reviews and entering the review space um and then I believe maybe not even a month ago they um announced a CDP uh customer data platform I mean they kind of already did that but to a larger extent has this progression of services and Innovation is that not what you're looking for
John: no so what I'm not looking for is I'm not looking for um a mile wide I'm looking for a mile deep um what I don't like is milewide right it it it just screams that they're just trying to make you sticky in stock and try to extrapolate as much revenue from you as possible yeah um that just doesn't give me warm and fuzzies go a mile deep right like let's talk about email there's um let's innovate there right you're looking at um I've seen some posts the last couple of days um ironically from from send Lanes conference that they that they had and there was a lot of Buzz about interactive emails and um I don't know if per se send Lane's doing it but there's a bunch of platforms that I guess you can build these interactive emails in and then import them into whether it's Klaviyo or send Lane but if I'm Klaviyo like I'm I'm trying to think how can we up the email game how can we up the SMS game how can we up where we're currently doing really really well and make it make it better and I just don't know if if they're doing that I think instead of trying to innovate with their core competencies they're trying to add additional competencies
Amer: and it seems like companies have started doing that um they tend to focus more on marketing and messaging rather than product development in a sense it's almost like they compensate for not being able to do certain things and and I've been looking like especially the AI space now it's an easy one but even prior you have these like supplementary products that I think I shared one with you that just comes to mind to me that was really cool called Maverick where you can basically uh record a message um and then say like hey John uh so glad you subscribed with us and then the AI replaces your name and creates a video
John: you showed it to me yeah
Amer: yeah yeah I think it's very Innovative very innovative and stuff like that I think being added as these tools and and aspects that teams can use to maybe more effectively uh Market to people I think would be great one thing and I don't know if Klaviyo is doing this or MailChimp or anybody else but I haven't ever heard of hey we're going to partner with Gmail uh from a marketing standpoint because they have now or had for a while different inboxes for different purposes and we're going to create some rules or agreements with them that allow us to penetrate the inboxes better but with a strong Cadence in different certain rule sets so that if I love battlebox and I want to make sure battlebox always hits my inbox that those rules can be better created or better implemented
John: yeah why aren't they doing things like that
Amer: uh not necessarily they're not but I I we haven't heard anything
John: it's true maybe that maybe they are
Amer: yeah yeah
John: but if you are if you are even if you're just working on a communicate it share it
Amer: absolutely like even if it doesn't work out you know they're trying and I and I think that's a that's an issue
John: I agree