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Oleg
Hi, everybody! Welcome to Devico Breakfast Bar! Here we speak with different people involved in the business landscape, share their expertise, delve into the latest tech trends, and explore the ins and outs of IT outsourcing. I'm Oleg Sadikov, and today I'm excited to have Allan Wille, co-founder and CEO at Klipfolio, a widely used fast business analytics platform. Don't forget to subscribe and hit the notification bell so you don't miss a new episode. Hi Allan!
Allan
Oleg, thanks for having me. This is great.
Oleg
Could you start by telling us a bit about yourself and take us back to the beginning of your journey? What inspired you to enter the world of data analytics and data intelligence? And how do you navigate your way to founding Klipfolio?
Allan
Let's say that's a big question, Oleg, that may take us multiple days to answer, right? But...
Oleg
I hope no.
Allan
Let me sort of rewind the clock a little bit. So, this is my second startup. I started a company in 1996. That company actually grew very quickly. We were in the embedded software or embedded Java space. We actually took the company public. But it was also during the boom and the bust in the sort of 2000s. So, it was a wild ride, but it was also a crazy ride. But that's also when we started this company. So, we started this company – Klipfolio – in 2001, probably just about the worst time to start a tech company because there was no VCs, no investors, no angels that wanted to invest in anything to do with tech in 2001, 2002. So, we've been in the dashboarding and the analytics space forever, but the original idea was actually on the consumer side. And if you think back to the early 2000s, for those of you that remember XML and RSS feeds, there were little snippets of news, and it was all very exciting. And the idea was there must be a better way for everybody to monitor and keep track of the few things that they care about. So, what's the weather today? What's the stock price doing? What's new? What are the headlines? What's the foreign exchange? Like, there were a whole bunch of things. You know, what's the comic of the day? So, we actually had a Windows downloadable – this is how old it is – a Windows downloadable app that was set on your desktop. And we had clips that were these little news snippets, these little widgets that you could connect, and you could build your own personal news aggregator, or information aggregator, or a personal dashboard. It was actually wildly popular. We had thousands of downloads every day. We had upwards of 300,000 users. And we were making no money. And back in the day, hosting costs were a lot more expensive.
Oleg
That would be my question about hosting. How did you host it?
Allan
Yeah. Hosting costs were expensive. We weren't making any money, but yet the software was wildly popular with users. And the idea was that we were going to sell it to publishers, news publishers, weather publishers, et cetera. But they didn't have any money. They were trying to figure out how they were going to make money. They're still struggling. Lots of popularity, but no revenue until all of a sudden – and this is one of these things in business: you have to keep your eye open – Lufthansa came to us, the big German airline. They said, 'We have a lot of our employees who are using your desktop widget to monitor their football scores.' FC München, and FC Hamburg, and all the rest, like Barcelona – they were all using our little tool to monitor what the latest scores were. And Lufthansa said, 'We would like to push down business metrics or business information to our employees. Do you have an enterprise license?' And of course, we were starving, and we were desperate. And we say, 'Yes, of course, we have an enterprise license.' And I gave them a quote. I think it was probably one of the earliest companies to ever have a subscription revenue because I gave them a quote that had an annual license. I don't know if I was brilliant or if I was just immature, but I gave them an annual license, and they bought it. And that shifted the company. That single event – them contacting us – shifted the company from a consumer product that was popular but not making any revenue to, all of a sudden, a business dashboarding and analytics tool. We had to change the roadmap a little bit and modify some things. But Lufthansa led to American Express, to Intel, to H&R Block, to Staples. We all of a sudden had a lot of what we would consider enterprise customers that loved our desktop widget tool for its ability to stream real-time data. And, you know, this is 12, 14 years ago – business intelligence was not real-time at the time. It was very much we're going to prep the data, run the cube, analyze. We're going to prepare dashboards. And then maybe at the end of the month, you'll get a report, right? But ours was refreshing on a periodic basis. And this was quite revolutionary for our customers. So, that was sort of the early days. And since then, we've launched into the cloud, and we've taken on a much larger journey. But to answer your original question – what was the vision? The vision was always the same. It was to bring important real-time data to people, to help people be in the loop, to help people succeed, whether that was consumers or whether it was business people. That sort of nugget of vision is still the same today. We want to help people succeed with data. So, that's for me. That's sort of the long or short version.
Oleg
What was your initial vision for the portfolio compared to how it became now? And if you can share the evolution process, that would also be awesome.
Allan
Yeah, absolutely. Again, there's been multiple different stepping stones throughout the years, and it really chronicled how business intelligence has evolved as well. Business intelligence is one of these incredible markets that keeps reinventing itself. And it always seems to be at the top of the IT budget or spending pyramid. Companies need to make decisions. That's how they succeed and how they're competitive. And I think in the early days, we were very real-time. And I think that was what we were going after. That was what was setting us apart. We were small, we were fast, we were real-time. From then, we moved away from the enterprise, and we actually moved a little bit closer to, I think, my true passion – to help as many people as possible to succeed with data. So, we moved from enterprise, we moved into SMB. And that was very successful for us because, at the time, in 2014, there really were no business analytics tools that were targeting small businesses. Either you had to go for MicroStrategy, or Cognos, or BusinessObject, and those big, expensive, heavy tools, you needed a big data team to do it. But there was really no tool, no dashboard tool, no analytics tool that served a small or mid-sized business. And we launched into the cloud in 2012. Honestly, I think we were the only ones in the cloud. We had very accessible SaaS-based pricing. So, I think it was 20 dollars per user per month at the time. And the platform took off. It took off without any salespeople. You could feel it. There was a need in the market – there was a vacuum – a need for this tool that would help small and mid-sized business owners. Often, people that did not have a data analyst, or a data scientist, or anybody technical on their staff needed to figure out how to make sense of the performance or the health of my business. So, for the next eight years, maybe six, seven years, we really were the world's most popular tool for small and mid-sized companies – business analytics tools. And then, I think moving on from there, we see the next wave, and we started this about five years ago. We see the next wave is putting meaning into that data. So, we're the first generation of our cloud tool. It was simply visualizing data. The current vision is that data must have meaning. It must have semantic meaning. So, revenue has meaning to everybody. Everybody, if you talk about revenue, knows what you're talking about. But likewise, most companies have metrics that are specific to them. Those metrics need to be defined. If you go into a meeting, your colleague knows exactly what you're talking about when you're talking about this metric. And this is how it's calculated. This is how it's defined. This is how it's presented. So, we started working on metrics as sort of the atomic building block. That's our vision moving forward. And we're finding that, again, that is resonating in businesses because they're struggling with this idea of a single source of truth. So, that's where we are right now with our sort of third generation of analytics. And the whole analytics world has followed suit, and there's a lot of innovation in this space as well. Not just us.
Oleg
Definitely. Do you have any personal interests or hobbies that you're passionate about, especially the ones that complement your work?
Allan
Yeah, it's an interesting question. I do. I wonder if the personal passions should complement my work or be completely separate so that I have time to think about something else. So, I love cycling. I do a lot of cycling – commute back to work almost every day, or I go on group rides. So, I love cycling. I have lots of too many bikes in the garage. I'm also a designer by trade. So, I have a passion for graphic design.
Oleg
Bike designer?
Allan
Not a bike designer. Although...
Oleg
I'm kidding.
Allan
That would be cool. That would be cool to sort of put those things together. I actually studied industrial design at school. That does have a bit of a combination with what we're doing. So, I've always been passionate about communication design, like visual communication design, and a dashboard, or any kind of way that you present data. The clarity and the visual nature of showing and storytelling with data, I think, maps to that idea of good graphic design. I've got lots of passions like that. I think some of them, yes, maybe they overlap with my work. If I'm riding my bike, I don't want to think about work. I need to relax and think about other things. So, I think both are important.
Oleg
My friends – we work together – and they always say, 'When I'm on a bike, I can clearly think and generate new ideas.' For someone, it works when you are in the shower; for someone, when you are on a bike; for others, something else. So, I totally understand what you're saying.
Allan
I mean, there's a few things, right? If you're riding your bike, you're exercising, you're in the fresh air, right? You're also not thinking about all the little things. There's clarity. And, you know, you want to stay with the rubber side down. You don't want to get into an accident, either.
Oleg
Yeah. What was the defining moment that shaped your outlook on entrepreneurship?
Allan
I don't know if there was a defining moment. I think I've always been entrepreneurial. There's a few things that drive me. I love building things, and I think I've been building things, or companies, or organizations, or groups since I was a kid. I remember having summer jobs where I set it up as a little company, I designed the logo, I had all sorts of different processes. So, I think it was very much something that was just part of who I am. I'm also a generalist. I like being involved in a number of different things, and then I bring in the best people I can to help me. So, I've always enjoyed building things and helping things. Now, I will tell you one thing that I think most entrepreneurs remember. And that is the first time that somebody actually gives you money for the thing that you built or that you service, right? That's a very cool experience, a very humbling experience. Somebody has said, 'I value what you've built. It'll help me succeed. I will exchange that for currency.' That's probably something that a lot of entrepreneurs will remember – their very first real customer.
Oleg
Are there any professionals or leaders in your network who inspire you in your entrepreneurship journey?
Allan
Yeah, absolutely. One of the things that I think is very important is making sure that you surround yourself with trusted friends and other colleagues that you can have an open conversation with. And here in Ottawa, where we're headquartered, there's a group called Fresh Founders. And it's a group that invite only CEOs. And you go to these meetings, and whatever is discussed in this meeting, it doesn't leave this meeting. It's a very good sounding board of amazing people that are all going through the same struggles. There's a number of people there that I've had amazing conversations with, that have the same struggles and the same empathy and can offer advice or guidance. So, there's a few people in that group that I think are truly amazing. We also had a really, really good independent board member. And it's also one of those things that if you can find a very good independent board member to sit on the board and be an advisor to the CEO, who doesn't have money in the company, so they need to be independent, that's a huge win as well. And I'm thinking of this one gentleman, named Michael Weider, just an amazing, down-to-earth, crystal-clear thinker. He was very instrumental in guiding us and guiding me. So yeah, there's definitely been people that have helped me and that I look up to. Absolutely. I think as the CEO, you need that.
Oleg
If you can share a few names, that would be great.
Allan
Yeah, sure. Sure. I can definitely do that. I'm thinking of Michael Weider. You know, he was the board member. I'm thinking of why am I drawing a blank right now. But there's a few people in this Fresh Founders group that I'm thinking of. I'll share some names with you, and then we can include them in the description at the end.
Oleg
What trends do you foresee shaping the future of your industry?
Allan
Well, I think the obvious one is AI. It's already massive...
Oleg
Everyone says that.
Allan
That's right. I mean, that's no surprise. I think what is surprising is how much of a step function we've seen just in the past year and a half with AI. It really has exploded out of the gate. And when I say AI, I am talking about generative AI. I'm not talking about general-purpose AI, but that too is gonna have the interest and investment in generative AI. Right now, it's fueling general AI, and I think that's where we're gonna see some massive, massive application. I think that's definitely a trend. I think there's surrounding trends as well. If you want to have good AI, you need to have good input, good data. And that selfishly, it’s actually fueling our industry. So, this idea that we started five years ago, where data has to have meaning, we started that because people need – you and I – we need to know what metrics mean, and how they're defined, and how they're calculated so that we can make better decisions. But as it turns out, what's driving this trend's semantic meaning more than people needing it is AI, LLMs, need, good meaning. They need good, defined, consistent meaning. I think that too, in the business intelligence and then in the data space, the idea of having semantics and having meaning is actually super, super important. So, all of this comes back down to generative AI. General purpose AI is a massive, massive trend that, of course, everybody is participating in.
Oleg
How do you envision AI and machine learning are shaping the future of data analytics platforms in the context of Klipfolio?
Allan
Yeah, absolutely. So, we've now invested in three separate projects. I think the first one was actually quite straightforward. This was probably about – again, like a year and a half ago – we have a separate community site called metrichq.org. It's separated from Klipfolio because it really is a community expert led metric and KPI experts who are contributing definitions and calculations to this huge library of metrics. It's a great site if you haven't checked it out. On that site, we dabbled with our first experiment with AI, and it's basically a MetricHQ assistant. So, you can ask MetricHQ, you can say, 'Hey, my business is doing this, and this, and this. It's a product-led growth company. We have a Salesforce, or we don't, or whatever it is, I'm using these metrics. Do you have any advice for me? What metrics should I be tracking? Do you have any advice for improving certain outcomes?' So, it's a dialogue system that uses all of the context that we have generated on MetricHQ to give people advice about how to think about metrics and KPIs on their business. It's a very general-purpose tool, but it actually works quite well. It gives you good ideas about how to think about your business and what to do. The second one that we built was a little bit more sophisticated in that we trained the LLM on all of our support documentation. So, all of our support documentation, as well as anonymized customer transcripts of our support team helping customers, we trained the LLM on all of that. So now in the application, if you have a question, you can say, 'How do I hook up my Zendesk data and build a metric?' You can ask AI about that, and it'll give you step-by-step instructions because somewhere in the past 10 years, there's a document or there's a support dialog that has gone through exactly that. So, for the users, this is a much faster and natural language way to interact with our support team and all of the assets that they have built. Now, what it has meant is that you might think, 'Oh, well, does this threaten the work of our documentation team?' Not at all. Because the documentation team is now the input. And they have to really make sure that all of their documents are written properly, they're clear, nothing is outdated. So, we are constantly retraining the AI on that. That was the second approach. And then the third one that we're most excited about – we're actually just about to launch in probably a week or two, or maybe two or three. I always want this stuff out the door sooner than the product team. But it is AI that allows anybody to interface with their own metrics. And this one is very important because one of the things that is very, very important when you're talking about AI and company data is that the data can't hallucinate. If you ask, 'What were my sales last month?' That's a factual number that you get back. This is where a lot of companies are struggling. They're using AI to interpret the data. That's the wrong way to look at it. Right now, you need to use AI to interpret the question and work with the human dialogue and the imperfection of human dialogue, but then use your API to get the data from the known source and return that. So, absolutely, you can not use AI to interpret metrics. You want zero hallucinations there, so you need to return the right data. But can you use AI to be an incredible way for a non-technical person to interface with the data? 100%, and it works beautifully. You can take somebody who is not familiar with the metrics or KPIs. They can ask a question that is relatively ill-formed. So, they don't have to get the product names right or phrasing right, and it will playfully let you work with the data until you get something that is exactly right. But every time, it's returning accurate data. AI is not acting on the data; it's just acting on the interface between the human and the question. So, that one we're just about to launch. And I think, from an accessibility point of view, you don't need to be an analyst, you don't need to ask the analyst or the data team. So, we can now ask questions about the data and get results back.
Oleg
I know that you are using an in-house development team. What factors have led to abstain from considering IT outsourcing so far? And how do you foresee any circumstances in which the decision might change in the future?
Allan
Yeah, it's a good question. We have always tended towards having an in-house development team, but it's never a closed door. I think there's always opportunities to mix and match. Where we have made our decisions in the past is for a few reasons. First of all, there are some very good universities that we have built recruiting relationships with. And we have a very good process where the co-op students, we bring them in, you know, we get matched. I think we're a good brand, so the co-op students want to work at our company. We have this really good recruiting system through the universities. There is a lot of tech in Ottawa as well. This is where Shopify was founded. So, there's a lot of tech talent here in town. We benefit from that. And I think the third one is that, at least in Canada, the government actually spends a lot of time investing in innovation, and they have tax credits. If you are actually producing innovative and scientifically interesting work, you can claim some of the developers' costs back. So, it's a little less expensive for us. We find that we have a very loyal workforce, and the talent in Ottawa has been very, very good. So, for those reasons, the core team has been very, very strong. Now, we also have a small team in India who are amazing. And even though they are contractors, we've been working with them for so long that I consider them part of the portfolio development team family. They're on the support side and a little bit on the development side. Definitely, we started that because we needed time zone support. So, on the support side, we needed to have a larger time zone that we supported our customers. But there's also various other benefits for having things happen outside of office hours that then the dev team can pick up during your local dev cycle as well.
Oleg
Reflecting on your business operations, are there specific tasks or projects that you believe could potentially benefit from outsourcing?
Allan
I think there are. So, I think you can categorize them in different flavors. I think you can categorize certain ones where, if there is a specific deep talent set that you need, is there an outsourcing opportunity to bring in that talent. And either that's a longer-term relationship where that then becomes core to your operations, this outsourcing relationship and that talent, or it's one where your team is actually growing and learning from that outsourced team, and then you take it over. So, I think that's one bucket where there's a gap in talent. And I think that's where a lot of successful entrepreneurs are bringing in the right type of talent. I know a lot of folks that are using – very successfully using – outsourced teams. I think the other group is where you can sort of say, 'Okay, we have a non-core task that has to be done.' So, for example, we interface with a lot of different connectors. We need to ingest data from probably over 300 different sources. So, is there efficiency in saying, 'Let's take that discrete type of work and build up a core competency with an outsourced service provider'? So, they are then the shop that does it the best; they're on top of it; they have this deep knowledge on that specific thing. But it's not core to your business. So, I think the first bucket is this is really strategic to your business, and you bring in talent. And the opposite, I think, is another scenario where you say, 'We need to focus on our core work, and we're going to outsource the things that are important but not core to our own development shop.'
Oleg
As we can include our discussion, drawing on your experience, what advice would you give to those who are still considering IT outsourcing or not?
Allan
I think the world has changed a lot. I think...
Oleg
Definitely.
Allan
Yeah, definitely. I was thinking about…
Oleg
Especially after COVID.
Allan
Yeah, especially after COVID, but even before then. Like when we first started the company, building a product was actually quite hard. The tooling and all of those things were not as refined. Marketing was much easier because there was less noise. And I wonder if that has changed, where building a product is actually not the very, very hard thing anymore, and marketing and selling and getting through the noise is very, very difficult. So, if you're thinking about outsourcing or building a team, I think you have to think about what is core to the strategic value. I think you have to think about IP and ownership. What happens if the company gets sold? How much of that knowledge, that corporate knowledge, is transferred or can be moved into the company? I think there's a number of options. The other thing that I think is different today than a long time ago is it's probably much easier to work with outsourced teams. I think today's environment and today's companies, they probably mesh so beautifully with your own dev team, and the processes, and the tooling, and the communication, and the automation. I think there's probably a lot more opportunity for companies today to say, 'Okay, this is what we're going to focus on. This is our core. This is what we're going to outsource. This is where we need talent.' So, I think for entrepreneurs today, there's probably a lot of opportunity to properly pick what you're going to focus on and what you have to bring in.
Oleg
I totally agree with you. Allan, thanks for your time. Thanks for finding time to join me today.
Allan
My pleasure, Oleg.
Oleg
You're the oldest company I have ever interviewed for.
Allan
And that's a good thing, right?
Oleg
Yeah, definitely. I think you changed a lot of paths. You were there for many, many years. You've passed through a variety of difficulties, peak seasons, tech booms, etc. So, you saw everything, and you're definitely the most experienced company I've ever interviewed.
Allan
Yeah. We have a lot of experience on this roller coaster. We'll say that.
Oleg
Yeah. Thanks for joining me today. If you enjoy our discussion and want to stay updated on future episodes, don't forget to subscribe and hit the notification bell. That way, you will not miss on new insights and conversations from Devico Breakfast Bar. See you in a week!