Morgan (Host): Hey, everyone, welcome to the latest episode of Client Horror Stories, our friendly educational podcast for younger versions of ourselves. So all you listeners can watchers can avoid the mistakes we’ve made. I’m honored and excited today to have Scott Kveton. I hope I pronounced your name right.
Scott Kveton (interviewee): You nailed it !
Morgan (Host): Yeah. I contacted him after I read a great article about his process setup. And I was like, I’m sure he has lots of great stories. Let’s do an interview and find one. And here we are.
Scott Kveton (interviewee): Thanks for having me. I appreciate it. And I think you’re the first person to read that blog post in about ten years, but it’s okay. It was about me and some rules and all that kind of stuff, which is vital.
Morgan (Host): On the one hand, I think some things are timeless and essential. And also, I’m pretty good at getting to page 100 of Google results to find obscure stuff.
Scott Kveton (interviewee): Totally!
Morgan (Host): So let’s jump right in. I’m sure you have chosen an exciting story. Tell us the context. And then what happened?
Scott Kveton (interviewee): Yeah, you know, it’s funny. I talked to a couple of my Urban Airship co-founders and asked them about our past significant challenges like client horror stories, and they brought one to my mind that I thought was fun. It was our very first customer. I wouldn’t call it a horror story so much as overestimating our ability, or rather, overpromising our ability. So I’ll dive into the story. Back in 2009, the iPhones were out for a while; Steven Osborn called them cute. And everybody thought of it as a joke. But there was some momentum there.
And then Apple announced iPhone OS 3.0, which was going to have two new things. One was called Push Notifications, and the other one was In-app purchases. Everybody knows about In-app purchases now, but we didn’t know about it back then. We thought it was really
Morgan (Host): Innovative
Scott Kveton (interviewee): Yes! And, at the time, the four of us were technically unemployed. We had been working for another company. I was the VP of engineering there, and the company just folded. It was a rough time regarding the financial crisis. Our CTO and co-founder Steven told us about Apple’s upcoming push notifications feature, which was about to be released in a month. We were under NDA with Apple due to the way they do things so that the developers could learn about it. But you can’t talk about it. You can’t tweet about it. You can’t write an email about it. So we had some insight into how things were.
We found the new feature pretty interesting. So we started talking about starting an iPhone agency and doing app development for $300 an hour. And, as you may be aware, the market was enormous. I informed the team that I prefer to make money while we sleep. So Stevens said, “OK, I think there’s an interesting product here, but I’m not sure.” And I said, “No, that is exactly what we are doing. Let’s get started”. And I said, “Let’s do this,” rather than wasting time by saying, “You know, we’re going to do this in three months, or six months, or whatever.” And let’s get something up to run in 30 days.
Morgan (Host): I liked the challenge.
Scott Kveton (interviewee): Yeah. And it’s funny because we had started another company, about a year before, that was selling bacon online. And we did the same challenge. We said, “Okay, let’s launch this company in 30 days”, and we did it in 21 days. So that was something that just stuck with us. I like it too because it’s a small outlay to dedicate 30 days. And if you fail, you can shut it down quickly. Also, if you get it to market and nobody buys it, guess what? You only spent 30 days, you can pivot or you can try something else.
I get exhausted listening to founders who say they have been working on their product for a year and a half but haven’t launched yet. It’s private or whatever. I don’t have time for that stuff. So I said, let’s launch in 30 days. As a result, the team thought, “Wow, that’s crazy, but let’s do it. It won’t be sexy. We’ll have an API (Application Programming Interface). We won’t have a better dashboard or anything but we will have an SDK (Software Development Kit) and all other good stuff”.
So we’re about three weeks in, a week away from Apples’ announcement, and a week away from our deadline, and the team looks at me and says, “Yeah, we’re going to do it. We’re almost there. And, sure enough, we’re getting closer and closer.” And, my job now is to find out how we will market this thing, how we will get this into people’s hands.
At the time, there was a huge Developer’s Conference called WWDC, and they would do this thing called “Steve notes” or keynotes. I said, “Okay, great, I’ll go down there, and I’ll raise a ruckus and get into the show and do all that stuff.” Well, it was so oversubscribed, it was impossible to get a ticket, especially a week out. As a result, I was in a bit of a pickle. But I was determined to go there. So I flew down and ran into several people who suggested that I go down to the line. And I asked, “Which line?” They said, “People start lining up festival seating, around midnight, the night before the keynote, since it’s festival seating at the event. ”
So I said, “Oh, alright, that’s fantastic.” So, I went to Costco and spent around $1,500 on doughnuts and Danishes, as well as on a variety of napkins and other supplies. And I printed a little placard that said, “We do push notifications.” I showed up at the line at 4:30 in the morning, got out of a cab, and started scooting around. There were probably 2000 people in line already at 5 a.m. But it turned out fantastic.
So, I was just handing out Danishes, and I reached the very end, where it was around Moscone, which is a whole, you know, city block around it. So I get done, I hand out all my things. The doors open at 9 am. Everybody goes in. And I just sort of let the keynote went off. Everything was really exciting. And while I was there, there were probably three or four other companies that I saw were launching the identical Push Notification Service because they all saw the same thing.
Morgan (Host): Oh!
Scott Kveton (interviewee): What’s that?
Morgan (Host): I just said, Ooh,
Scott Kveton (interviewee): So, we sat there, freaked out a little bit. I was like, Oh, God, these people are launching these products that will crush us. And I looked at their websites, and they had sexy design websites, and ours was so cheesy. We had a logo that we begged, borrowed, and stole to get made. And it was super funny. An interesting factor was that when Steve Jobs would get up on stage, he announced a bunch of features.
The event was in June. The developers will play with the updates over the summer, and then the full release will happen in the fall. And this time, because these were in such high demand, Steve Jobs said instead of September, these would be available in seven days. All of a sudden, we were all surprised and excited at the same time. And sure enough, I started getting inbounds from that little card that I had. And the first call that I got was from a company called Tapulous, and I knew the CEO back in the day. Tapulous had a game called “Tap Tap Revenge” about a Guitar Hero, and it was the number one game on the App Store. So, Bart Decrem, the CEO called me, and he said, “Hey, we want to be the first app in the App Store with Push Notifications. Can you do that?”
I assured them that we would assist them and work with them. Because his team had looked at the documents and realized they couldn’t get it done in a week. So they needed to partner with somebody. So I said, “Okay, well, let’s go ahead, Bart, and we’ll figure out the terms of the deal later. But at the end of the day, at least throw us a bone on the press side of things”. We agreed, and I called my team and told them that we got Tapulous as our first customer. And they went dead silent on the other end of the phone.
Everyone was so happy that our first customer had the biggest app on the App Store. So, we connected the engineering teams. They had a phenomenal head of engineering, and it was Jessica Kahn. And she was a saint to work with because she knew that we didn’t have everything together. And that was okay because they knew that they just needed something to work. And sure enough, the team was able to pull everything together. And over the next five days, they were able to ship it for Tapulous. There were definitely some ins and outs and some pains, and then Bart and I negotiated a deal, which was, from cash perspective was, about $1000 bucks a month.
In the end, we got some press, and it ended up being a TechCrunch article, and that spiraled things. But along the way, pretty much every week with Tapulous, I kept promising that the engineering team wasn’t quite ready to deliver. As a result, I had to give them some credit in the form of monthly credits, but I did not have to pay for anything. I talked a little out of turn with our press releases, so I kind of turned them into a pain in the rear. It is not a horror story, but we had to deal with that on a semi-regular basis.
Morgan (Host): So, I have a question. I always find the introspective, especially interesting angle. However, being ten years younger, your first job, you have less experience than them. I’m intrigued by your hint that you did some things that turned them into a challenging client. What are some things that you did and that you’ve learned? So now you no longer do, hopefully?
Scott Kveton (interviewee): One thing that I learned was to balance act early on. If we watch WeWork or Theranos documentaries, they always have a fine line between brilliance and fraud. And Steve Jobs made a bunch of promises that he wasn’t sure he would be able to deliver. Bezos did back in the day, but they ended up succeeding. I looked at Theranos and realized that we operate in the same way. Granted, I didn’t do anything as insane as that. But, I pushed the edge in terms of features that we could give deadlines for, and it was interesting because my co-founders would be in meetings with me, and I’d promise something or say, “Well, yes, we can do that. It’ll take a couple of weeks. We have time, or we can buy time.” And they’d flinch.
They act as if they want to visibly flinch next to me. And pretty soon, within about six to nine months, my co-founders started hearing me do that in a meeting, and then they would pile on and go, “Oh, yeah. And in addition, we can do this, this, and this.” The whole situation was unbelievable and funny to watch. TechCrunch reached out to do the story on us. This guy named Marshall Kirkpatrick was a phenomenal writer. He asked me, “So did you guys save their bacon?” He played on the fact that we were selling bacon before. The next day the headline was, “Urban Airship saves Tapulous’ bacon!”
And that made Tapulous look like crap with their investors. I had to beg and plead with Bart not to turn us off. At the end of the day, the ink that we got from that was so freaking huge and pushed us so far ahead of our competitors. The other exciting thing was that everybody flooded on us because we had a downloadable SDK.
We had documentation and a support team on an IRC channel (Internet Relay Chat), like Slack. So, we had people flooding in asking us questions. All the other competitors that had their big sexy swanky parties that first night with beautifully designed websites had one thing on their website, and that was “Enter your email, and we’ll let you know when the beta is ready.”
And there was probably a 45-60 days gap between them releasing and us being live on App Store. And that got us to lock up that market for the first three years. And we even had one of our competitors end up handing all their customers over to us because they just wanted to get out of the business. However, they wanted to treat their customers’ right. So, things were really exciting back then.
Morgan (Host): So I like picking out what I find interesting and diving in it for a little bit. This anecdote in TechCrunch is fascinating because the joke about bacon turned into a headline, which embarrassed the client. This detail stands out to me as a really good lesson, which is that most people always try to be funny, so boring situations become more entertaining. And it shows us your cleverness, so everyone is entertained. But the other side can often misinterpret the humor. One took a minor joke and turned it into a literal headline, entirely changing the tone of the joke.
Scott Kveton (interviewee): Yeah, I mean, they could have buried it in the third or fourth paragraph. But it was a clickbaity line for folks. Mark Marshall wasn’t known for doing that, but this time it caught people’s attention and got them talking about it. It was interesting because many customers who were in that line ended up reaching out to us weeks after that event. The $1,500 we spent on doughnuts and danishes was probably the best money we’ve ever spent at the company.
Morgan (Host): It reminds me a bit of the famous Airbnb Obama O’s story. So, there are a few lessons here. One lesson is to be careful when making jokes that can be taken out. I want you to elaborate on another point you made in passing that I find interesting: you mentioned Jessica, the project manager on the other side. How was your interaction with them? And you said she was awesome. And I think that’s important because when you’re inexperienced or younger, having had a great counterpart on the client-side likes smoothes over so many problems.
Scott Kveton (interviewee): Yeah, for sure. That’s a lesson we learned early on both with Tapulous, but also as we moved forward. We learned that so many people had been moved into mobile as head of mobile or director of mobile, a VP of mobile and had no idea what to do. So they were looking for expertise that they could trust. And what we learned was that if we succeed for them, they would love us and talk about us. And so if we could make them heroes, that was game over.
We had so many customers that we turned into internal heroes, like ESPN, Warner Brothers, Starbucks, who would go on to other roles and places. And the first call they would make would be us to pull us in. It is how we ended up getting the NHL, the NBA because folks would leave ESPN and go to other places, they would call us, and we get that business. That worked well. And I still feel, to this day, that finding that internal champion, someone who’s trying to punch a little above their weight internally and wants to have some ambition is critical. And if you can help them succeed from a product standpoint, you’re going to be tremendously successful.
Morgan (Host): It is an amazing and also a subtle lesson. So I’d love to hear what you did in detail to help Jessica or people in a position, punch above your weight? Because I like what you’re saying makes sense to me in theory. Making them look good is the best way to get them excited about making you look good, but I don’t know how to translate that.
Scott Kveton (interviewee): I guess in the case of Jessica: she was phenomenal. She could have built a team that would have prepared our products in three or four weeks, but she needed things on spot. And the pressure for her was coming both from her CEO bar because they were the number one game in the app store. I was lucky to have some phenomenal technical co-founders.
Adam Lowry was specifically our keel. Steven was our CTO and continues to be. I still work with them to this day. The brainiac comes up with all ideas and can put anything together. He taught himself Mandarin to work with factories in China directly to do printed circuit boards because he taught himself how to build printed circuit boards. And then Michael Richardson was our head of product. And Michael was phenomenal in front of customers. He had a policy degree from Reed, that’s where Steve Jobs went for a couple of years, and they think so outside of the box and phenomenal. He was a bleeding-edge kind of guy who wasn’t super strong technically but was strong enough.
And then Adam had a Master’s in Computer Science. Adam was the direct contact for Jessica, and once she started talking to him, she felt much better. She knew there was an adult in the room who would make sure that everything was alright and the trains would run on time.
Morgan (Host): I love this breakdown of the different personalities of the founders, which I think leads to another interesting that each of you fulfilled a different role, like Good cop, bad cop but in a more sophisticated version. There is one individual who knows how to speak intelligently to this type of person in such a way that everything turns out great and so on. And, and I believe this is a fantastic lesson for your team, make sure you have a variety of people with different communication management styles on your team so you can healthily connect with them.
Scott Kveton (interviewee): Yeah, and I think there are a couple of things that speak to that. We all had worked together at the last company, so we figured out how to work together. They all worked for me because I was the VP of engineering. We made judgments we didn’t want to make because we thought they were bad business decisions. That was frustrating, but it helped strengthen our relationship. And when that company went under: we were all trying to figure out what we wanted to do, but we knew we wanted to start something together because we had worked so well together and gone through the same hardships.
It is not easy to find a new co-founder and go through hard times again. It’s like you are getting married because you are bound to investors’ money. You’ve got a hundred things to take into consideration. From a co-founding team, we were able to hit the ground fast. We just won the freaking lottery. And, in hindsight, if it were 2020, I would have given Michael a far more prominent product job since he eventually stepped up to lead all of our products.
But we kept telling ourselves, “Well, he’s not trained in the product, he’s never done product,” but he had incredible intuition and was so good with the clients that he could figure out what they needed. I think he didn’t know it. And I didn’t know that he could do that. I ended up sending him and his wife for a year to our office in London to anchor that office. He met with so many customers and was brimming with product ideas. When he returned, we put him in charge of the product. The rest is history. He enjoyed his life in London but was glad to get home.
Morgan (Host): Great story! I’m going to extract lessons out of it. You mentioned that one of the reasons you didn’t see Michael’s talent for the product sooner was because he was not trained in it. And I believe this is another lesson learned via experience because if we start doing things like this right out of college, everyone will ask us to major in the field in which we studied. It is just a matter of time before you finally realize that having instincts, intelligence, obsession wrapped together is far more significant and then you can figure out anything after a while.
Scott Kveton (interviewee): Not 100%. I also like to hire people who want to punch above their weight. The other thing is that I used to run a group called Open Source Lab, which I founded. I believe it was about 2004 or 2005. And it was with this group that we worked at Oregon State University. And what happened was that I saved the institution a lot of money by going from digital UNIX and Solaris to Linux. We had a bunch of commodity PCs through redundancy and all that good stuff, and it was a huge transition.
We ended up saving $450,000 a year for the university. And so the provost, the CIO for the university was really impressed. He asked what we could do with some of that money saved. And I said I’d start the Open Source lab because it has done so much for us. He asked us to take 300 out of it and run with it. So we ended up building the Open Source lab and ultimately ended up hosting things like the Linux kernel. We hosted Mozilla, you know, back when Firefox 1.0 was such a huge deal. We hosted the download 1.0 launch day.
Morgan (Host): Wow!
Scott Kveton (interviewee): It was an awesome day. Drupal as well as Debian was there. I’m coming back to your point, don’t worry, I promise.
Morgan (Host): It was awesome.
Scott Kveton (interviewee): We began to receive grants from firms like Google and others because they knew we were on their side. So we’d be able to hire a team of employees. And we just hired students. And I recall having pupils that were 18 years old and had no idea what they could do. We liked it because we could throw projects at them that we couldn’t do ourselves.
And we just ask them to sort it out in a week. And then they would come back two or three days later and say, “Yeah, I got it all done. It’s auto deploys.” I remember we had to build out our LDAP infrastructure. And this guy named Alex Pulvey was probably one of the most amazing hires we ever did. He went on to start a couple of different companies. He would just throw himself in and figure out every issue. And I always loved that about him.
Morgan (Host): So to wrap it around, choose your team carefully. Choose the client carefully. Choose who you work with, who you interface with, carefully. I think these are all significant lessons and great stories as well.
Scott Kveton (interviewee): Totally! You need to put people in a position where they have to figure out for themselves. And they’re usually capable of doing so, especially if they’re motivated and excited about what you’re trying to do. It’s a lot harder to achieve if you’re working on a healthcare startup that isn’t changing the world. But if you’re doing something that’s fundamental to people and makes them feel like it’s changing things, that’s a different story.
Morgan (Host): So, I have a very similar approach. I just throw people into things that I know are above their heads. But I think my twist on them is just curious about their approach. I also fire people very quickly, both staff and clients. Sometimes, as soon as I notice the Yellow Flags, it’s preferable to just cut it two weeks in rather than dragging on. As a result, I think there is a bigger risk of people drowning when they go bent as compared to figuring out how to become an Olympic swimmer.
Scott Kveton (interviewee): Yeah, for sure. In other words, if I were doing it again, I probably would have done something like that where people are on probation. You could say it’s a mutual probationary period. Maybe they don’t like working for us, let’s see what output they get throughout the first 30-60 days, but the interesting thing is if you dig into the sales side of things, they have AI tools that can predict based on email activity, phone activity, how successful a sales development representative will be, and they can determine that without within the first three days. That’s a bit scary.
Morgan (Host): Wow!
Scott Kveton (interviewee): Yes, they have some pretty cool tools nowadays to do this stuff. Now they will fish or cut bait. You know, in three days, it’s crazy.
Morgan (Host): I’d like to face fish or cut bait. I usually use a much more vulgar shit rather.
Scott Kveton (interviewee): Exactly!
Morgan (Host): I appreciate that you want to keep this PG-rated.
Scott Kveton (interviewee): I think I swore already but yeah.
Morgan (Host): I am curious, have you ever tried this? Are the predictions accurate? Or have you only just read about it?
Scott Kveton (interviewee): I have only read about it. I did have one STR that I chatted with, who was at a company that was using that tool, and they all hated it because they couldn’t figure out people quickly. And it felt a little big brother-ish. I understand that you may not know it’s there, but I also understand the tool as it can maximize your productivity.
Morgan (Host): So that tool does the same thing as I do, except I smell it as opposed to a program based on numbers. I think people are scared of the big brother program that only looks at the numbers, while humans at least are theoretically better at taking into contextual data. The first three days were bad, but her mother also died on the first day. I liked your story. It had many great lessons. Any other final thoughts or lessons or a tip to share about dealing with challenging clients to round up today’s session?
Scott Kveton (interviewee): No, I think you nailed it. Hit the nail on the head around, fire both clients and teams quickly. We have never fired any customers at Urban Airship. But boy, there were some folks that I would have loved to because they were a pain for us. For what they were paying, they were asking a lot, kind of choosy beggars. At the end of the day, we do everything right for them because we have to think of the company as a whole.
Morgan (Host): I agree with that. On firing both employees and clients faster, I would add that it’s not just about saving money because the employee wasn’t productive enough or the client was not paying much. But even more than the money, it’s about a waste of energy and emotional distraction. Some employees or clients just suck you into their most negative orbit. It has taken me years with plenty of painful lessons to strengthen my resistance to dollar signs. And now, as an older, perhaps wiser version of me have the strength to resist better.
Scott Kveton (interviewee): It’s interesting. We had a phenomenal customer success team. When we had some challenging customers, we had a woman on our team, who was phenomenal with the customers. She knew that she could defuse a situation. There can be conflicts sometimes between engineers on both sides, so we will bring her on board as a woman, which is a rarity in the industry as it’s a very male-dominated space.
And she knew that she was a ringer. She would come in and defuse the situation every time. And it was awesome that she acknowledged that. She was able to do that as a woman in this space because she was such a rarity.
Morgan (Host): These were all great lessons. This interview is what I enjoyed most because, in my previous ones, many people shared the same kinds of lessons. But all of today’s lessons are a bit in left field, so it’s much more subtle than usual. And I like that.
Scott Kveton (interviewee): I think most of my career has been in the left-field, so let’s be honest.
Morgan (Host): I think that’s the way to do it. Who wants to be in automation, when one day you’re going to die? There are a whole bunch of clichés. I’ll try to avoid the clichés tonight. Everyone can see where I’m going. This was great. I thank you for the time and everyone watching or listening, I hope you all enjoyed it and got as much value out of it as I did.
Scott Kveton (interviewee): Awesome! Thanks, Morgan! Appreciate it!
This article was based on Episode #17: Scott Kveton’s Story, please watch the complete episode here!