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Full Transcript of Andy McLoughlin Interview

Recorded via conference call in New York City and San Francisco
September 29, 2009
Jim Hopkinson, Wired’s Marketing Guy
Andy McLoughlin, Huddle.net

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Hi, this is Jim Hopkinson, Wired’s Marketing Guy, bringing you the marketing trends that matter. Welcome.

Today my guest is Andy McLoughlin of Huddle.net, a UK-based start-up in the online collaboration space. Let’s take a listen.

Jim Hopkinson: OK, today we’re talking with Andy McLoughlin who is from Huddle.net. Huddle.net is an online collaboration provider based in the UK, and its product, ‘The Huddle’, is an online workspace where users can share files, collaborate on ideas, manage projects, and organize virtual meetings. Welcome, Andy.

Andy McLoughlin: Hey, Jim, how are you doing?

JH: I’m doing great! So, why don’t you start out, tell me a little bit about yourself, how you got involved with The Huddle, and how you got to this point.

AM: Cool, OK. So, my name is Andy, I’m one of the two co-founders; years ago as a founder of the business with me, his name is Alastair. I’m currently out in the States; I’ve been in San Francisco for about a month or so now; and poor Ali has a young baby, so he’s back in the UK. I’m heading back there again next week; I think we’ll be out again soon.

My background is, I did ‘a three’ in economics, but, kind of my first love to do would be in the internet, and I’ve been kind of messing around with websites, and kind of building stuff, and so on, since I was about 16. But, when I graduated, I decided to something online, and I managed to wing a job doing all of the online marketing and websites, and intranets and extranets for a telecom in the UK called Fibernet. And, one of the big jobs I did there was I put in a collaborative document management internet system for them; and, then the company that I did that for, asked me to come and work for them in a ‘three piece’, so, I was doing work for them for banks and insurance companies all over the UK, in London, and Europe, and Bermuda. That was great, but then I got a bit bored about wearing suits everyday, I felt like I was doing too much kind of internal-type work. And what I saw was that these kinds of big systems we were putting in that cost $200K, only a very small percentage of them were ever being used.

So, yeah, the Huddle really came about how could we hit the best parts of these systems, and deliver them online in a kind of low cost, easy to use system; and that’s really where the idea for the Huddle came from. So, Alastair I’d known through a mutual friend, and I remember going out with the mutual friend one evening and saying I was a bit bored at work, and I wanted a new challenge. He said, “Well, why don’t you have a chat with Ali, I kinda know that he’s kind of feeling the same way, and he’d like to do something new.” So, we went out, we went to the pub, we drank a load of beers, we went for some Indian food, and, ‘put the world to rights’, and that was kind of really where, that was the day the Huddle was born. And, that was back kind of in mid-2006. And, then we launched the service, roughly, at probably in April, 2007; so, it’s about two and a half years old now.

JH: And why is there a need for this? Why is online collaboration so hard, what problem are you guys solving?

AM: It’s really still, “Why is it so hard to work together?” Collaboration is such a big dirty word; it means so many different things to so many different people. And, the problem we’re trying to solve is, there are loads of great tools out there that do one or two things well. But, there’s still nothing that lets you do everything in one place; nothing which kind of brings the Web 2.0 ease of use with the kind of featured in security that the enterprise demands; and, that’s really what we try to do with Huddle is give the features and the power that the demanding users need, but make it so easy to pick up that anybody can use it. And, price it contestedly, so that any company, regardless of the size, can afford to use it.

JH: And, what types of companies have you found that have been using it most often?

AM: We have thousands of companies, thousands and thousands of companies that pay for Huddle and use it every day; where we’ve kind of seen great traction is in big corporations, in their marketing departments, where they have a need to collaborate with people outside their organization. Perhaps, they might be, they’re working with partners, they’re working with agencies on new campaigns. And, then, off the back of that we’ve seen great traction with agencies, big and small, which need a secure kind of client extranet that they can share files, and can collaborate online.

We’ve seen great, really good success in governments, both in the UK and the U.S., both talking about central and local government organizations using it; we do a lot of work with charities, and with education, as well. But, really, it’s a very horizontal product that can be used by pretty much any industry where people have got a need to collaborate. The kind of classic use case we talk about is, “I’ve got a document, and I’m working on a new project, and I need to get five or six people to make a change to it.” So, traditionally, I would have emailed that document out to five or six people; they would have made their changes, and then emailed it back to me, and then I’d be left with six different versions that didn’t stack up, and spend the rest of my day trying to piece it all back together.

Or, as with Huddle, you upload the file, you use our automated approval workflow process, can I get the feedback and the changes from everybody, and, then you’ve just got one version which you just store it online in the file that you can access from anywhere.

JH: You guys have has some pretty big milestones and accolades here, and now. BusinessWeek called you the next Google, is that true? What was the conversation around that?

AM: That was a little quote we love to pull out, that was an article where BusinessWeek had pulled out 50 of their kind of global start-ups to watch, and said, “Which one of these could be the next Google?” That was from that, I think we’re one of only one or two or three companies in the UK, and probably one of only four or five in Europe that made that list, so, that was really pleasing.

JH: And, then TechCrunch recognized you for an award, as well, correct?

AM: That’s right, yes. So, we won the TechCrunch EMEA, best B2B application.

JH: Now, being from the UK, how have you found the entrepreneurial community in the UK? A lot of people think, “Oh, this company isn’t from the Silicon Valley, they’re not from New York City, what kind of entrepreneurial community is in the UK?”

RH: I think it’s still small compared to the granddaddy of the Silicon Valley, I think that London is almost like an up-start, but it’s definitely there, and it’s definitely growing. So, Alastair and myself, and our marketing lady, Susanna, we host an event from London every month, called, ‘DrinkTank’ – DrinkTank is basically an event for entrepreneurs when they can get together, they can meet up, they can talk business, they can talk to bloggers, they can talk to journalists, they can talk to investors; we get a VC, or we get a Microsoft, or somebody like that to stick somebody behind the bar, and everybody gets a bit drunk and has a great time.

We have, every month there, we have about 150 people that come to that. And, we have a mailing list of almost a thousand, so, there is a big active community. There are loads of great companies in the UK right now, as well. You just look around and see ‘Move'[?], who are based in London; SongKick’, based in London; ‘PlayFish’; all fantastic UK companies.    

JH: Now speaking of events like that, we met through a ‘super connector’ – Sarah Prevette, who runs her own kind of entrepreneurial site, ‘Sprouter’, and is trying to get in Toronto, and other areas, that entrepreneurial community together. So, we met and we went to this event called, ‘The Hatchery’, where there were three different companies presenting their business plans, and the way it works, on stage there were three kind of industry gatekeepers, they were VC companies, and people that would look to fund a new business.

And, you had to present first, to these three people who would ask you questions about your product plan, then the audience would be able to ask a question, and then back to the VC people to give you criticism. And, I was telling someone, “I’ve got friends in New York, and they say, I have these business ideas”, and, they’re like, “Oh, yeah, I got this great idea, what we should do is come up this idea, and go to mobile, and then we’ll sell it to Verizon; it’ll be great!” And, just seeing you up there on stage; and, all the information that you had to have prepared; and, how do you differentiate yourself; and, how are you going to get funding; and, the numbers and the finance, all the preparation you’ve had to have in order to, kind of, defend your company, what was that like preparing for that, and how did you get all that information together?

RH: I guess we’re kind of lucky because, I think compared to the other two companies that were presenting, we’re probably a little bit further on down the line, cause we’ve raised, our first round of VC funding already, and we’re kind of just in the process of going out to market on our ‘B round’, which we will be raising toward the backend of this year. And, I guess because of the fact that we know we have this upcoming where we are having to get all of our numbers ready, it means this would just the case of me talking to Alastair and saying this is the information I need for the event, and can you give it to me.

I think that any company, though, that thinking about raising money would need to have that information at hand, because if you don’t have a great plan for how you develop your product, if you don’t have accurate numbers around revenue forecasting, and how you modify your users, and everything like that, then, any good VC will completely rip you apart. And, I think we saw that on stage with one of the other companies where they just had lots of questions around how they were going to raise revenue, and, then, how they were going defend their position in the market, and so on.

JH: Well, one of the questions someone in the audience asked that, kind of a difficult one, was about ‘Google Wave’, that they’re doing something somewhat similar, and everyone should be afraid of Google was entering a certain market that you’re in, how do you respond to Google, and, like who are some of your other competitors, and how do you differentiate between them?

AM: So, I think for any young company, obviously you have to be very aware of what’s happening in the market, but if you were living in constant fear about what the big players were doing. So, for us, what are all the Googles doing or all the Microsofts, or the IBMs, or the WebExs are doing, you’d never do anything, and, innovation would just be stifled. I think the Google Wave product looks really interesting; the technology that sits behind it we’ve had access to from the very start, and I think that our technology teams are very excited about using that to build some great stuff within Huddle.

Depending on what they announce in that few weeks around that kind of Google Wave product, it gets VC. I think from our end of sound that the possibility that users might be able to kind of put different elements of waves together to create, say, a collaboration workspace-type tool. But, I think that the market we’re going after there is very different for them. The market that we go for is really the businesses, so, the people that have a business need, and that don’t have time to spend off time messing around trying to cobble together a solution which then they’re going to have to manage. If the guys on the bleeding edge want to go ahead and do that, and that’s great, and we’ll be playing with those, as well. Our core market are actual real business people that have a solution need to be met – a solution which is enterprise worthy and scalable that can make it look like their own tool; all the things Huddle does really, really well.

JH: I agree with that. I think one of the things they mentioned in their press release is that users could get together and play Sudoku online together. And, I’m like, “That’s great, if it’s fun, if you and your mom want to get on and play a game, or something”, but, you’re really solving business problems and working with agencies, and government and different major businesses that are collaborating like that.

AM: Yeah, the other thing as well, and like this is kind of like a real technical point, but, as far as I understand it, Google Wave doesn’t actually support Internet Explorer 6. So if you go to Google Wave using IE6, it will prompt you to install that new kind of IE6 Chrome extension. Now, we do loads of work with big companies and government, and so many of those guys are still on IE6 now, not IE7, not IE8, but IE6 from 2003 or something like that. I’m not going to immediately discount the fact that they’ll never be able to use Google Wave because they simply won’t.

The collaboration marketplace is huge, we reckon it’s probably worth in excess of about $10B a year, and I think then there’s lots of space for the players that are fixing to do a variety of different niches, so, it’ll be interesting to see where people come out and how it positions itself.

JH: You must have done a lot of research in kind of founding this company, and doing that presentation. What trends are you seeing? I did read something that with the recession, with the economy, there’s going to be a lot more companies, even though they’re letting people go, they might come back as consultants. So, you’re going to have a lot of people, kind of a fractured workplace where a lot of people are coming in remotely. Is that some of the trends that you’re seeing?

AM: Yeah, absolutely, more and more everything happens within companies is being distributed, so it can be a distributed workforce across the globe, it can be people that are coming in as consultants, it can be companies who are working together on a partnership effort. Traditional software just doesn’t really deal with that issue very, very well. Some of the companies will have some kind of intranet that they can collaborate and they can share documents internally. But, the problem being that as soon as they need to work with people outside the organization or partners or clients, they revert back to this kind of one tool everybody has which is email, which is a fine tool for communications, but, an awful tool for collaboration. Just the amount of time that people lose by having these huge email chains, and having documents being sent back and forth, and inboxes becoming bloated, it’s huge. That’s really the issue that we’re trying to solve there.

JH: And, I think when we were talking you were saying is it usually the marketing department that’s starts out with it? And, they’ll be collaborating on a project and getting this together, and then other departments in that company will say, “Hey, I want to use what they’re using.”

AM: Absolutely, we find that the marketing department, generally, these guys are fairly forward thinking in a company, they’re happy to work with software as a service,      and I think the whole kind of backlash against SAS is really kind of beginning to die down now. Had we been doing this six or seven years ago, it would have been very, very hard. But, thanks to the likes of Sound Sports, even big companies are happy with the idea of kind of software ‘being hosted in the cloud’ for them by somebody else. And marketing departments they understand the solution their need they have for it, and generally, they’re happy just to get on and use it.

And, then as you say, what happens is, in other parts of the company or other partners actually look and say, “Hey, we could do this, this tool.” So, they’d even get in contact with us and say, “How can we expand the kind of infrastructure we have, we need to make sure we have the access to it, as well.” And, then, generally, we’ll get a phone call from the IT departments or the CIO saying, “Now, we’ve got a few hundred people within our organization using this, how can we get our arms around it?”, but that will make it a corporate solution; and that’s when it gets really exciting.

JH: Yeah, that’s how it looks like you have your pricing structured, you’re basing it on kind of the number work spaces. So, is it just $15 per month?

AM: We go from about $15 a month to about $75 a month, and that’s to kind of buy it online, on the web. And that gives you increasing number of workspaces; more security; more kind of customization features; more storage space; and then once you go above that, then you get to our enterprise packages which is where we can hunt through the spoke pricing based upon what your needs are. So, we find that within the enterprise, generally, you need multiple people who are going to administer the account, not just one person who does everything, but maybe a team of four or five people that can create workspaces and kind of invite people and kick them out if needed. They want customized branding, and additional security, and they want to have kind of training and support, and have SLAs on the service, and that’s everything we can offer for the enterprise. You’re talking there from $200 a month, or so, and that increases by the number of administrators you want to have running your site for you.

JH: What do you find people using most, I’m looking at your list of features, it’s fantastic, so you can, you don’t have to have that endless email thread of people ‘replying all’, you can discuss topics, you’ve got document creation, you can store files, so, if you’ve got large files they’re all in one place; you can set up project alerts, you’ve got whiteboards so people can share ideas, what’s been the most popular feature would you say?

AM: I think it really depends what people are trying to do with it, if it’s, say, a creative agency who may be using it as an asset management system for kind of sharing files with their users, then the file system will probably be really important with them. Their lawyers and professional services they love the document control and the version control, and the auditing, and the workflow; and, then the people that are running projects they really like the project tools and the whiteboard tools, kind of quickly need to be sharing information and deadlines. The next big thing which we’re launching is the integrated life collaboration, so, the WebEx-type tools which you can create a meeting inside Huddle, and then kind of quickly immediately share your desktop and video camera with other people inside your webspace.

JH: Well, it sounds like a fantastic product; people can check it out for free, correct?

AM: That’s right, yes. So, we have a version which is free forever; so, if you go to www.huddle.net you can check it out there. The free one gives you one workspace and a gigabyte of storage, advertising and so on, on there; but, then you’re talking, if you find it useful and you want to use it with more people, more workspaces, more projects, you want more storage, then, it’s really just $15 a month. So, you know, we’ve got companies, small creative agencies they pay $15 a month and that gives them everything that they need.

JH: Sounds great. So, I urge everyone to check out huddle.net, you can check it out for free, and check out all the tools that they have offered, and if you have a small business, and you want it just for four or five people, like you said, just $15 a month up to medium and large sized business, or even a department within your company if you’re sick of making changes in Word, or forwarding large documents, and this endless email thread, huddle.net sounds like a pretty good solution to solve your online collaboration needs.

So, thanks very much, Andy, anything else left to add?

AM: The other thing is that all of our premium packages, if your users want to sign up using the “1MonthFree” promo code – that will give them a month free of any of our premium ones that they can try out.

JH: Excellent, thanks so much for that offer, and thank you for being on the Hopkinson Report.

AM: Thank you very much, Jim.

[End of transcript]

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