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Braze co-founder Mark Ghermezian: “Whatever CRM is, that’s what we need to build”

Here's how founder persistence and ability to anticipate customers’ needs helped Braze dominate the developer-customer market.

Av Adam O’Donnell, Host of the Sit Down Startup podcast

Senast uppdaterad July 27, 2023

Startup founders often say the same thing about the early days: listen to your customers. Listen to your customers, and VCs will follow. Listen to customers to ensure product-market fit. But Braze co-founder Mark Ghermezian reminds us to listen to what customers don’t say, too.

In 2008, when iPhones were just coming into the market and mobile apps were the new talk of the developer community, Ghermezian had an idea: to build a bridge between the growing population of app developers and their end users. The platform would enable developers to understand who was using their platforms, when, and why, and help them engage meaningfully with those customers. That was the seed for what Ghermezian then called Appboy, for which he bought a domain for $8.99. In 2017, the company rebranded as Braze. It’s still a customer-engagement platform with more than 1,200 employees and a global footprint.

Ghermezian, now an investor in early-stage startups, joined the Sit Down Startup podcast to talk about his experience and what he’s seeing in the founder community today.

From “CRM for apps” to ideal product-market fit

Once he raised his first million after a productive meeting at SXSW, there was a domino effect of investment. He met co-founders Bill Magnuson (today Braze CEO) and Jon Hyman (today Braze CTO), and the team focused on achieving that all-important product-market fit.

The term CRM—customer relationship management—is everywhere now, but it wasn’t in the early days of Appboy. Ghermezian said he even had to look it up; once he did, though, the lightbulb went off.

“Whatever CRM is, that’s what we need to build,” Ghermezian recalled saying. “This is where it’s going.”

While that was the lightbulb moment, Ghermezian reminds founders that getting there is an iterative process and requires going through the motions: that means listening to customers, but also to early adopters, design partners, and potential customers in the market.

Listen to what customers don’t say

At the time, Ghermezian says the market wasn’t looking for a customer retention or customer lifecycle management platform. Business leaders were instead looking for analytics and attribution platforms to support customer acquisition. Some said that they didn’t need what Ghermezian was offering, citing companies like Mixpanel. But the question remained: what about the customers they just got? Here, Ghermezian demonstrated an ability to anticipate future needs, knowing that his product would be optimized when the market was ready.

“There is no price you can put on retaining your customers that you just spent money acquiring…Your best customers are the ones you’ve already got.”Ghermezian

That was another watershed moment, when they knew they had product-market fit, they knew their core ICP (ideal customer profile), and they were signing bigger and bigger deals.

Logo-hunting isn’t the only way to grow

Going after big logos early and often is a strategy that many business leaders deploy successfully. Swag.com founder and CEO Jeremy Parker is just one person who made it a point to get in the door with big names in order to drive growth. But Ghermezian reminds founders that big or even up-and-coming names aren’t the only ways to grow.

Founder teams often focus on other new startups to be their first customers. Ghermezian instead focused on what they called mobile titans—the ones that were already “breaking walls and growing quickly.”

It was a decision grounded in logic as much as gut feeling. Early-stage startups are often focused on customer acquisition because their customer base is still very small or even nonexistent. A customer-engagement platform to support retention then feels like a future step. Established startups with a round or two under their belts were more interested—of course we need to retain these customers now that we’re making money.

In the long run, Ghermezian reminds startups to look beyond a company’s IPO or valuation and always remember the foundational elements of those success stories. Braze, he says, was 12 years in the making.

“You’re not building for tomorrow—you’re building for two years, three years from now,” he says.

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