In this episode of Zipcast, you’ll hear a segment from Folk Stories, a podcast that explores the lives of interesting people from all walks of life with host Kevin Lin.
Lin recently sat down with Zipwhip’s CEO John Lauer for a conversation that spans Lauer’s lifelong passion of entrepreneurship, the makings of Zipwhip, the state of texting and what it takes to start a business.
Below, you’ll hear a 15-minute bite of the conversation. Lauer discusses why the landline phone isn’t dead, the evolution of the business-texting market, why Zipwhip is different than other texting ecosystems, and opportunities for the texting medium in the next five years.
Listen to the segment below. For the full episode, click here to visit the Folk Stories podcast website.
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Scott Heimes: Welcome to the Zipcast, where we talk about the latest trends in texting for business, customer communication strategies, and technology. I’m your host, Scott Heimes, Chief Marketing Officer at Zipwhip. Thanks for tuning in.
Kevin Lin from the podcast, Folk Stories, recently paid a visit to Zipwhip’s HQ in Seattle. He spoke with Zipwhip CEO, John Lauer, who gave a behind the scenes peek at Zipwhip’s Texting for Business software and API Solutions. We’re giving you the best 15 minutes of their chat, where John takes us from the ground level of texting for business, all the way up to a 10,000-foot view of customer communication theory and has predictions for the future of technology. Stick around.
Kevin Lin: So let’s talk about Zipwhip, where people who might not be familiar with what you guys do, what is your pitch?
John Lauer: Okay, so the easiest way to describe it is that we’re business texting software and APIs. When you kind of break that down, businesses need to communicate with their customer, and historically they’ve used phone calls and email, and those communication mediums are not what they’ve been in the past. Texting is actually the number one way to talk to people now. It is the most ubiquitous medium out there. It is the quickest. People actually read the stuff you send.
So, the world has changed. Consumer behavior has changed, and businesses have to change with it. But they need software to give them access to the texting communication medium, and that is what Zipwhip does.
Kevin Lin: When I think of texting via software, I think of what about Google Voice? What about other people that do this? What makes Zipwhip different?
John Lauer: First of all, the texting app for the consumer is the native texting app that comes on their phone. On iPhone, it’s the iMessage app. On Android, it’s just the built-in app. Maybe it’s Android Messages, maybe the app Samsung gave you. Of course, there’s software out there, but what about on the business side of the equation? Now, you’ve mentioned Google Voice, but if Google Voice were really the answer, every business would have just completely moved to Google Voice. It’s a free service. So why has barely any business moved to it?
I think Google Voice serves a purpose in a certain niche arena, but broadly. Businesses still have phone numbers. They put their phone number in the biggest font in their ads. They put their phone number in the biggest font on their glass window at the strip mall. That phone number represents their identity in the telecom world. It’s like a .com domain name. It’s a big deal, and I think people don’t realize what a big deal it is.
So, that phone number is the way to do traditionally voice communication, but now consumers would actually prefer to text you on that number rather than call you. Even just think about how loathe you are to get voice mails now. You don’t even really want to listen to them. Wouldn’t you way rather have a text from the business saying, “Hey, your appointment’s tomorrow.” And then you’re able to reply back and be like, “Oh man, I’ve got to move that. I’ve got a last minute thing.” I mean, that’s just the convenience that we want.
Whether you like it or not, you still have to talk to businesses, and they still have to talk to you.
Kevin Lin: If you’re going to talk to them, why not text them?
John Lauer: Exactly.
Kevin Lin: When you started Zipwhip … You mentioned this has been a 10-year journey now. At the very beginning of that journey, was Zipwhip focused on business texting, or how did it change over time?
John Lauer: Yeah, no. Initially, we were focused on consumer texting. Although, the core thesis of texting is an open communication medium, humanity needs it versus what we saw with instant messaging, was we kept seeing companies kind of come and go in the instant messaging space. The first example would be like AOL Instant Messenger, and then we had Yahoo Messenger, and MSN Messenger and all these different sort of closed ecosystems.
At least what I took away from that is that humanity needs a quick, short format high priority communication medium, but texting emerging as the open version of that standard. So, it is going to stand the test of time. But solving some of the problems that still exist in the industry are worth solving. Initially, when we started doing Zipwhip, you were getting texts on your phone, no problem, but you couldn’t get them on your laptop. You couldn’t get them on your desktop computer. You couldn’t get them on your tablet.
We were trying to solve that by moving texting to the cloud. I always described how texting was sort of stuck in jail on your phone. In a large way, it’s still kind of stuck in jail on your phone. Different providers will try to solve it. Apple now has the iMessage app that put it on your MacBook. The problem is, if you have a Windows laptop and an iPhone, you’re totally stuck. You have no solution.
So, it’s still pretty broken out there for the consumer, but at least it’s in good enough shape that everybody uses it. Ultimately, we couldn’t solve that problem because of technical hurdles, mostly because of technical hurdles with the infrastructure, and with the devices themselves. So, we pivoted to doing business texting because the premise was, okay there’s 200 million business phone numbers in the US that cannot text, but there’s 330 million mobile phones that text like crazy. That’s a problem. That’s a big problem. Let’s go solve it.
Kevin Lin: When you say those business numbers cannot text, do you mean that they were not capable of sending text messages, or there’s not a software-based solution in which you could do that in a scalable way?
John Lauer: There were a few layers. One is, the wireless operators invented texting, and they interconnected, but they didn’t interconnect with any landline operators, or any landline numbers. We had to go initially talk to the wireless carriers and say, “Hey, would you technically enable us to turn on a landline number or a VOIP number, or a toll-free number?” That took about a year of different discussions to finally make headway, and indeed we solved that problem lock, stock and barrel.
That created the layer where we could then create the software to give to the businesses, so that was really the second problem set we had to go solve. And, indeed we did. Then, we were able to go to market and start selling it.
Kevin Lin: When you guys were doing that, it seems that before Zipwhip came into the industry that, that really was impossible, the whole landline to mobile. I’m wondering, did nobody else think of this? Why was it that nothing was done in that space?
John Lauer: Yeah, it was not possible. I ask myself that question a lot too, like, “Wow, why was that opportunity just sitting there? Why hadn’t it been solved?” I think that’s just the nature of some industries, where things are just broken, and nobody thinks that it’s fixable. We had sort of the audacity to say, “Let’s go fix it.”
Kevin Lin: It seems like when you made the pivot from consumer to business, there were lots of things you could have tackled like just doing the consumer version of the business. That would have been a big deal. Why was it important to connect landlines and mobiles?
John Lauer: When you think about will every business just move to a mobile phone, and you just kind of run that simulation in your head, you conclude no, they will not do that. So, you’re still going to have phone numbers that aren’t attached to an iPhone. We still see it today. A lot of people are like, “Oh, well landlines are dying,” but really if you look at the numbers, they’re not. Businesses are still completely buying phone numbers for everybody.
Even if some of that use is moving to mobile phones for employees, the main phone number for a business doesn’t just go to an iPhone. It goes into a complicated system. It goes into an IVR. It goes into PBXs. So, it’s a gigantic market. Even if you look at the shift… Or companies have gone IPO in the last few years, like a Ring Central or an Eight by Eight, it kind of indicates, or even Vonage, it indicates that there is just more of a technology shift in terms of how you got the voice traffic to the business user, but the phone number doesn’t go away.
Even think about the most revolutionary device, arguably ever invented, with the iPhone, it comes with a phone number. Phone numbers are just this innocuous thing that people don’t really think about because they take it for granted, and yet it’s a massive ecosystem out there. Here we are, enabling texting on these 200 million numbers, and growing a massive business around it.
Kevin Lin: It always fascinates me about how important … I’m not going to call it “landline legacy”, though it seems like it fits the title. But how these technologies, once you have them, they never go away. I’m speaking in my former life. I used to work at AWS, and I know that we supported companies of all different stacks, lending FGP servers on Cobalt, and an on-premise data center, and how these things once they’re built they will keep running and figuring out some way to service the seemingly out of date technologies turns out to be a huge opportunity because nobody else does.
John Lauer: I agree. I think there’s a lot of billion-dollar businesses still serving stuff that we would consider out of date, but I think it actually still goes more back to the power of human communication, and how we need common language. A communication medium just manifests the common language. You and I are speaking the common language of English right now. We don’t have to pay a royalty for every word we speak.
Had a private company invented the English language, we wouldn’t be using it. So, voice communication, email communication, texting equal our modern- day version of common language. That’s why as much as we might say “landline” and think old school, we’re really just talking about a common language, which is what the difference between these open communication mediums enclosed. Closed ecosystems, closed communication mediums do die over time. Open ones continue to flourish.
That’s why even the voice calling system, no matter all the cool stuff that folks like AWS do, or Microsoft, even Skype started to have most of its success with Skype Out and Skype In, when you could actually attach a phone number, because they went from their closed ecosystem to the open one, and that’s what worked.
It’s hard, because I don’t think there’s a lot of people who talk about open versus closed communication mediums, but there’s a lot of sort of theory around it.
Kevin Lin: When you look at the dominant communication platforms of today, I’m thinking specifically on the consumer end. You have people on WhatsApp, you have people on Messenger. All of China is basically on WeChat. What do you think of that? Do you see that as something that connects us side by side with traditional texting? How do you see that moving in the future?
John Lauer: Yeah, so I think based on history repeating itself, all closed ecosystems for communication die eventually. I predict right here and right now, those eventually die. It’s because of this premise of open versus closed. When you think about different economies, and different cultures, sometimes the monolith still sustains itself. WeChat could be here for a while.
Even today, as much as people talk about things like WhatsApp and Facebook Messenger, in a lot of countries, there’s a lot of move to innovate on the open ecosystem and make it work. Arguably, they maybe never had an open ecosystem. Maybe the carriers always charged way too much money per text messages in a certain country, and that’s why the consumer was incented to move to a WhatsApp. At least in the US and other markets where texting was essentially free, we got the essence of an open communication medium, and that it’s continued to flourish.
Kevin Lin: When you look at texting, what are the open problems, or opportunities that you see in the next five years from now?
John Lauer: If you think about it just as fundamental human communication between businesses and consumers, and then adding value, there’s a lot of stuff we have to do in our lives that’s just annoying. We need to order pizza every now and then, because we’re hungry. At that moment in our life, it’s the most important thing in the world to us. But we also want it to be easy. So, should you just be able to text your pizza order in saying, “Hey, give me the same thing as last time,” and they reply back, “Yep, gotcha. Two larges, breadsticks, a thing of Coke. We got your credit card on file. We’ll be there in 35 minutes.” Done.
It was one text in and one text back. That’s the dream. That’s the utopia. I think that on the business side, you need a lot of software to make that perfect. That’s where Zipwhip comes in. You need not just basic messaging, but you need automation and workflow, you need it to connect to everybody’s business systems, you need payments, you need intelligence around it. This is a pretty exciting arena with all sorts of things to go solve, and to append the human conversation with automation.
Kevin Lin: When you look at your current customer base, who are your primary customers and how do they use Zipwhip?
John Lauer: We have kind of a broad span of customers today. We’ve got a lot of small businesses, and that’s where we started. I remember our first sales guy walking across the street and selling the dentist office across the street, called Super Tooth, they became our first customer, and we opened up the bottles of champagne and we were like, “You know what? We think we can scale this.”
Over the years, we’ve started selling to more mid-market customers, to enterprise, and to a lot of channel partners. We have a lot of the carriers, like landline operators, that re-sell our software. We have a lot of different CRM systems that embed or re-sell our software. We’ve figured out a lot of different ways to get our software out into the marketplace.
Kevin Lin: Zipwhip. I like saying it just because of the name. It sounds very zippy.
John Lauer: It’s got a lot of alliteration to it, yes.
Kevin Lin: I’m wondering, how did you come up with the name? Was that a loud discussion? What were the alternatives? How did you finally land on this one?
John Lauer: Early on when we needed a name, we started brainstorming sort of synonyms for things that represented the essence of texting; so fast, quick, zippy. Then we started even going off and like, “What are some sentences that kind of describe what we do?” We would talk about how texting is the closest thing to telepathy. If I want to get a thought from my head into your head, what’s the quickest way to do it?
Well, telepathy is, but maybe the second best way is texting. Or, I want to get that thought into your brain at the crack of whip. So, we just started throwing a lot of words on Post-It notes. I think at one point, in my kitchen we had like 300 Post-It notes with different words on it. Then, my wife, God bless her soul, started combining the words and searching GoDaddy to see if the .com domain name was available.
She got it down to three names. I think one of them was like Cloud Hop. I don’t remember the other one. The other one was Zipwhip. After a few hours of her searching she’s like, “Okay, there’s three .com names available. Which one do you want?” So we picked Zipwhip just because of the rhyming, it’s fun to say, and it was short. It was only seven letters.
The rest is history.
Scott Heimes: Thanks for joining us. Special thanks to Kevin Lin, for sharing his audio with the Zipcast. If you’re interested in hearing his full interview with John Lauer, please check out the podcast Folk Stories. Make sure you subscribe to the Zipcast on Apple Podcasts, or wherever you listen, so you get the latest episodes. Feel free to text us with topics you’d like to hear about, or other feedback for the show. Just text 206-582-3740 any time of the day.
Until next time.