THE co-founder and chairman of the Irish unicorn tech firm Intercom, Eoghan McCabe, is returning to the company for a second stint as its CEO.
cCabe will replace the current CEO, Karen Peacock, who will take up an advisory position on the board.
McCabe’s move may be considered by some as a surprise.
Why is he returning to the job now?
“The board members asked me whether I would consider coming back,” he says, speaking to Independent.ie.
Intercom is a specialist in customer communication software. Its most recognised feature is its messenger customer chat bubble, used by thousands of companies on their websites.
The company, founded by McCabe, Des Traynor, Ciaran Lee and David Barrett, divides its hundreds of employees between its engineering hub in Dublin, and San Francisco, where it focuses on sales and marketing.
“I left the CEO role in summer 2020,” says McCabe.
“At that point, I felt I had achieved everything. When we started Intercom I hoped it could be a $50m business. By 2020, it was well past a billion dollars. The time was right. I was ready for a break to try new things. I had brought Karen [Peacock] in as COO with the expectation that she would become CEO at some point. So I got my break and started some new fun projects.”
But he stayed on as chairman of the company.
“It was remarkable to see just how much I still cared and still felt very attached to it,” he says.
McCabe spent much of the last two years as an angel investor, backing several software startups, including trucking logistics firm TrueNorth, CRM firm North and AI text analysis firm Monkeylearn.
As he returns to the CEO role, his plans now for the company are “aggressive”. Intercom, he says, has been a successful – but secondary – player in key markets it is chasing. It now wants to scale up again to become the giant in the sector. That means targeting Zendesk.
We’re deciding we’re going to be one of the big leaders in the space
“For me, finishing what I started means getting super aggressive,” he says. “We’re picking a lane and picking a fight. We’re deciding we’re going to be one of the big leaders in the space. In particular, we’re going after Zendesk in customer support. They’ve been the leader and have done a phenomenal job. And yet their technology, you know, represents a way of doing things that hasn’t really changed for a couple of decades. We know that we’ve got a new way of solving that same problem. So we’re going to go after them.”
Zendesk is around 10 times the size of Intercom and has a Dublin office with hundreds of staff.
“Intercom is used by a lot of really big, well-respected brands,” says McCabe. “But it’s often used as a companion to tools like Zendesk. If this big next step works, it will no longer be a companion. It will be the platform.”
Asked what a ‘next big step’ might mean, McCabe says the company will launch a major product refresh next week.
“The big highlight is a total refresh of our messenger,” he says. “You see it now on every website, and it has just become a core expectation of consumers when they want to reach out to businesses. There are plenty of copycats. So it’s really important that we stay ahead of the pack. This refresh will leapfrog the competition all over again.”
McCabe’s return as CEO marks the end of a two-year period under the guidance of Karen Peacock, who stepped up from being the company’s chief operating officer to take the top job in 2020. Ms Peacock, who jointly made the announcement to staff today, will remain as an advisor to the board. Did she agree with Mr McCabe returning as CEO?
“Karen has been a phenomenal executive and leader for us,” he says. “We matured a lot under her. She really has fundamentally changed the company and is now a key part of our story. We’re just super grateful to her.”
In a statement, Ms Peacock said: “Serving as CEO of Intercom has been a privilege and I want to thank the Intercom team for everything we were able to accomplish together. I am excited about where Intercom is heading and what its next chapter looks like.”
Last year, Peacock said the company was in the early stages of preparing for an IPO. Is that still on the cards?
“Everyone can see that the IPO window is closed right now,” says McCabe. “Technology is just facing this insane headwind. So I feel everyone’s on the back burner.”
The company is 12 years old at this point. It’s like a milestone for the company to reach this point
But McCabe says that the company is committed to “achieving an outcome for all the thousands of stakeholders involved”, including “investors and employees. past and present”.
“That could be an IPO or it could be something else,” he says. “The company is 12 years old at this point. It’s like a milestone for the company to reach this point.”
The tech industry has seen slumping valuations this year, hitting privately-held companies such as Stripe as much as some publicly-traded multinational giants, such as Google.
How is Intercom’s ‘unicorn’ valuation holding up?
“I really couldn’t say,” he says.
Is Intercom profitable right now?
“Well, we’ve always been close to it these last few years,” he says. “There have been periods where we have been profitable and some where we haven’t been profitable. I think at the moment we might not be.”
Intercom still intends to forge ahead with a new giant headquarters building adjacent to St Stephens Green, he adds.
It counts more than 25,000 companies, including Amazon, Microsoft and Atlassian, as customers. The company says that its platform is used to send over 500 million messages per month and that it “enables interactions” with over 600 million monthly “active end users”.
Its last valuation, at $1.27bn, is based on $240m of funding from global venture capitalists that included Kleiner Perkins, Bessemer Venture Partners and Social Capital.
Nevertheless, McCabe’s return to the helm of Intercom is also likely to revive questions around a controversy he was associated with. In 2019, he was named in a US publication in connection to the harassment of a female colleague at a social event in 2015. After the story was published, McCabe apologised for what he described as “poor judgment” in the “early years of the company”.
A resulting investigation by the company, aided by outside counsel from a prominent US law firm, cleared him of wrongdoing. No official complaint was lodged. However, the investigation did urge some improvements to Intercom’s internal policies. These included a set of recommendations “putting a stronger focus on our anti-harassment provisions and “building on current harassment training”.
The story attracted a lot of attention in Ireland. Was it the reason that he stepped down as CEO when he did?
I think my record for creating cultures that are inclusive and open speaks for itself
“Absolutely not. I left a whole year after the conclusion of the investigation into that.”
So it didn’t contribute at all, even tangentially, to the reasons he wanted to step back?
“It had no relation to it whatsoever. I made an advance on someone in the very early days of the company. I was naive. I thought we were all on the same level. But it was thoroughly investigated by HR and the board and outside lawyers brought in by the board, after which the board determined that there was no action required against me and they voted unanimously to support me as CEO.”
Does he think that this is the kind of thing that can linger as an issue?
“I think my record for creating cultures that are inclusive and open speaks for itself,” he says. “Everyone who I worked with in the early days will tell you that I’m passionate about curating a good, healthy, open environment. When I left, something like 46pc of all directors-and-above promotions and hires were women. That was without any kind of directive. It was just because of the culture and environment. So I think that that is the thing that will be most pervasive and on the minds of employees.”
McCabe describes the next period in Intercom’s chapter as one where it needs to become a bigger company.
“Our big innovation was making it really easy for businesses to be personal with their customers,” he says. “We had the messenger and we had bots and that type of thing. But we have never been the defining leader. Yes, we’re a multi-billion dollar business, but there are higher levels.”
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