Behind the Brand®

[00:00:00] Jeff Adamson: This episode of Behind the Brand is brought to you by DMZ, a world-leading startup incubator that equips the next generation of tech entrepreneurs with the tools needed to build, launch, and scale highly impactful startups. By providing connections to customers, coaching, capital, and a community, DMZ's customized approach helps innovators reach the next milestone in their entrepreneurial journey – whatever that might be. Through its award-winning programming, DMZ has helped more than 800 startups raise $2.54 billion in capital and create over 5,000 jobs. To learn more, head to DMZ.to.

Welcome to Behind the Brand, a podcast where we shine a spotlight on the entrepreneurs and change makers behind successful Canadian businesses. Today, we are excited to have Mike Murchison with us.

As the co-founder and CEO of Ada, the world's foremost customer service automation company, Mike's story is marked by ambition, innovation, and relentless determination. His extensive experience spans startup incubation to innovation consulting and technology, placing him consistently at the forefront of cutting-edge technological advancements.

In this episode, we'll dive deep into Mike's remarkable journey, exploring the beginnings and evolution of Ada and gaining insights from his unique perspective on the ever-changing landscape of AI and customer experience. Mike embodies the spirit of innovation from the early days of humble beginnings to his current position as a key figure in Canadian entrepreneurship and technology.

[00:01:39] I was looking through what you've done, and one of the things I was always curious about is people talk about serial entrepreneurs and whether you're born an entrepreneur or not. And I look at what you've done. Like, you've how many companies have you started? There's Nucleus, there's Atlus, there's WhatsNext, Volley, and now Ada.

Were you the kid selling lemonade on the street, hustling people as they walked by? How did you fall into entrepreneurship? What's the beginning of the journey?

[00:02:11] Mike Murchison: For me, the beginning of my entrepreneurial journey actually started with my perspective of entrepreneurship being challenged. Like, I used to think that I needed permission to be an entrepreneur, and I used to subscribe to this view that I needed to have all the requisite knowledge and skills in order to be prepared to start my own company.

I've always been interested in starting my own things and dabbled with it, but I didn't really think I could become an entrepreneur until I… in my case, it meant getting an MBA, it meant getting my CS degree, it meant getting all these things I thought I needed before I could go and do it. And it was someone actually in New Zealand, I was on an exchange, I went to the University of Toronto and I did an exchange in New Zealand. And it was someone in New Zealand who I pitched an idea I was working on. I was thinking about it too, and I pitched him the idea, and I said, you know, so what do you think? And I thought he was gonna say, well, you should go get a commerce degree. You should, you know, work on this technical skill set. And he just said, you should do that. You should just do it. It's not an understatement for me to say that, like, my life changed forever with those words. And I've been trying to do it sort of ever since.

And so I guess that's the first part of my answer is that, like, I've always been interested, never thought I was allowed to, and, you know, I hope other people are inspired to just do it because you don't need permission. The second thing for me that that comes to mind when I think about entrepreneurship and why I do it is, I think at a relatively young age, I associated the difficulty of a problem, like, with the afforded learning opportunity. I think we're probably similar in this way. We both love doing hard things.

And I love doing hard things because I get to learn new things. That's why I get out of bed in the morning. That's why I love my job at Ada because I'm just inundated with hard problems that I don't know how to solve, and I have to roll up my sleeves and solve them. And that's what that's what entrepreneurship gives you. It gives you access to problems that are really hard to solve that, in my case, at least, for the kind of problems I like to solve, I can't find anywhere else.

[00:04:14] Jeff Adamson: When you had that first conversation about you had this idea, and I'm sure you get people who also pitch you ideas now. I'm always unsure of how I should show up when someone tells me an idea because I think most people's tendency is to not be too hard on the person, maybe not be that direct, try to kinda protect their feelings.

So I feel like a lot of times, maybe someone will have already pitched 10 people who all told them it was an amazing idea and they should just go do it. But no one's really telling them the things that they maybe should consider. When you're getting pitched an idea, is your default response “Just go and do it”? Or do you say, “Hey, that's a really cool idea. Here's all the things you should think about”?

How do you show up when someone pitches you something?

[00:04:56] Mike Murchison: I tend to believe that any sort of negative feedback or scrutiny I can apply to an idea on surface is going to sort of pale in comparison to the value of the learning one gets from actually talking with real customers and actually, like, going and executing on the idea.

[00:05:12] Jeff Adamson: True.

[00:05:13] Mike Murchison: So I tend to err on the side of just being really encouraging. And, because I think the hardest thing to do is actually go and, like, leave your house and go and talk to a first potential customer.

Like 99.9 percent of people will not do that. It's so much more safe and comforting and fun to just dream about your idea in your head and have a bunch and keep it perfect.

[00:05:33] Jeff Adamson: Because they're not going to care about your feelings. When you pitch a real customer, they don't give a shit.

[00:05:38] Mike Murchison: Exactly! Exactly, it's very rare that someone's pitching me an idea and I'm the target customer. If I actually am, then I tend to be like, I'm not going to buy a piece of software from someone unless I actually need it. And so, you know, I try to make sure I'm aligned with what their actual, you know, the actual idea and their goals are. But I tend to default to being highly encouraging.

I think, in general, like, by the way, I think a cultural difference between Canada and the US, on one dimension at least, is how Canadians show up when their friend is pitching them an idea versus how Americans show up. And I think, in general, Canadians in my experience, as someone who's grown up in both countries, my experience has been that Canadians tend to show up negatively.

Do you see that the same way?

[00:06:19] Jeff Adamson: When you say show up negatively, do you say that Canadians are much more likely to say, what's wrong with your job? Stay in your lane, keep your head down, versus Americans are much more like…

[00:06:29] Mike Murchison: Yeah. That'll never work. Someone else is doing that already. It's not gonna succeed. There's, I think, a level of, like, scrutiny that's applied that's not that helpful. And there's, like, this tall poppy syndrome, I think, at play at times.

[00:06:41] Jeff Adamson: I was gonna ask you that. If you, do you think we have a bit of the tallest poppy syndrome in Canada?

[00:06:45] Mike Murchison: I think we do. I think it's getting better, but I think I think we do. I think there's a, there's more of a cultural hesitancy to be different from the crowd than there is in the US where it's more celebrated.

[00:06:59] Jeff Adamson: Why do you think that exists? I have a wonky theory on it, but I wanna hear yours.

[00:07:02] Mike Murchison: I think it is the shadow side of our bias for the group. I think it's the same things that make Canada a very community-oriented society or a country that's rooted in the value and protection of the group.

You know, look at our health care system, for example. That ideology, the flip side to that is that it makes it less likely for us to celebrate the individual. And I think that celebration of the individual also has a lot of strength associated with it, and we see that in entrepreneurship. What what do you think?

[00:07:35] Jeff Adamson: Well it's interesting because I remember growing up, Canada was really celebrated as the cultural mosaic versus the melting pot of the US. But it's like, that mosaic doesn't go down to the granularity of an individual. It goes down to only the granularity of a group identity versus, you know, someone who stands out from the crowd a little bit. My theory is a bit more historical, and I have no basis for it at all. Historically, when Canada was settled, and this is maybe more relevant to the prairies than it might have been for Vancouver Island or some of the more temperate places in Canada.

I mean, it was really hard for one. Like, I've read some of the stories of people breaking the prairies. You know, my wife's from Ukraine and the early Ukrainian settlers who came to Canada and, like, got here expecting kind of a pretty well-built-out civilization. And it was just literally, like, a field full of rocks and minus 40 [Celcius] and they had to figure out how to grow food. The stakes were quite high on risk-taking. And so maybe it's not Tallest Poppy Syndrome, maybe it's more just our penchant for taking risks.

I felt like, well, if you take a risk and you don't get it right, the consequences are really high because you just can't survive. Like, you just don't have food. You don't have employment, and then your family's at risk, and then and then you're you're kinda done. And I thought maybe that could have something to do with it versus the US, which was a little bit more temperate. Like, if you took a risk and it didn't work out, you may have a chance to take another risk in the future. And if you expand that over hundreds of years, people know, yeah, you took a risk, it didn't work out, but you've got, like, three or four more tries.

Whereas in Canada, you may have only gotten one try because you took a risk, it didn't work out, now you're a failure. Versus the US, like, you look at Adam Neumann. I think he just raised, like, another 2 billion dollars or something, this the founder of WeWork. Like, you know, colossal I don't wanna say it's a failure, but, like, WeWork's story is pretty infamous at this point. I kinda thought he was a bit of a pariah. And then now you look at it and he's back again. That story doesn't happen all that much in Canada, I feel like.

[00:09:31] Mike Murchison: That's such a great theory. The interesting thing about that is that, you know, you fast forward to the present, and Canada has a much safer, much more secure safety net…

[00:09:42] Jeff Adamson: Yeah.

[00:09:43] Mike Murchison: Than America does.

[00:09:44] Jeff Adamson: Totally.

[00:09:45] Mike Murchison: And so the risk-taking should be higher here. We have a system that is way more likely to catch you if you fall than in the US. So yeah, it's very interesting how we may, you know, based on your theory, be, like, tethered to a historical past that is just isn't really that relevant to us anymore.

[00:10:05] Jeff Adamson: How did you like, so Ada is not your first startup. Like, you've done multiple startups, so you definitely have taken the advice of just doing it and done it. So, I mean, like, I think you're a great example of someone who's kind of gone after it so many times. And I, and, honestly, I respect people like you so much who are taking the chances and taking the risks and trying to push, you know, the economy and society forward by starting new things. How did you continue to have that spirit and drive when so many people give up after one try or never try at all and here you are on your fifth or sixth company still getting after it?

[00:10:42] Mike Murchison: Yeah. I think it comes it comes down to like why am I doing this? For me, like, I'm very intrinsically motivated. I'm motivated by learning. A number of the government companies I've started, you know, didn't meet any sort of extrinsic measure of success at all. You know, the first couple were, you know, on paper, just, like, flaming failures, but I learned a ton from them.

Like, I would, I wouldn't, I'm very grateful for the experience that I had with them, and I wouldn't be able to start the companies that I had since. Each one afforded me very concrete, valuable lessons. And so that's kind of what it comes it comes down to. I think there's this assumption that, at least for I think for some people this might be the case, but there's this assumption in the world that, like, we are motivated by the successes of our companies. The reality is that there's some value that confers.

But, like, when I think about the true motivation, for me, it comes down to the learning. And there's a lot of evidence for this, and you've interviewed a lot of founders. You're a successful founder yourself. Like, how many founder friends do you have who sold their companies and have been completely depressed afterwards? You know? It's very common. Like, people…

[00:11:45] Jeff Adamson: It’s true.

When you lose your relationship with this thing that you're working so hard on and learning so much from, you know, and you've, quote, unquote, won, Many people wake up and realize they haven't actually won. They've actually lost something.

[00:11:57] Jeff Adamson: And do you think that is a function of not defining success properly?

[00:12:02] Mike Murchison: I do. I don't know if it's about properly, but I think I think everyone needs their own definition of success. I think it's important to be calibrated with yourself around what success means.

I've thought a lot about this. I'd welcome your take on it too as a founder, but I've reflected a lot over the years on my relationship with my company. And I think it's very easy as a founder to associate your own sense of self-worth with your company's performance. You know, that can be both a very good thing, that can lead to very high highs. It can also lead to very low lows. It's also very dangerous psychologically.

[00:12:34] Jeff Adamson: Mhmm.

[00:12:34] Mike Murchison: And it puts you out of control, I think, as a leader. And I think it takes active work, it certainly has in my case, to really ensure that I am not measuring my own sense of self-worth or my own value that I see in myself in what I've created, you know, with what, a given thing I've shipped or given impact I've had, you know, externally.

What I'm in control of is what have I learned. You know, what problems have I solved and how have I grown as a person over the course of solving those? That's like a real indelible impact that you have on yourself. For me, that's what kinda carries me through things. That's kind of why I'm pretty sure I'm always gonna be working on companies, I think Ada for a very long time.

[00:13:17] Jeff Adamson: So let me read that back to you then. So for you, and I have this conversation sometimes with employees where if you are assigning that your own value, your own success by the success of the company, it feels a lot like riding the dragon. You know, like you're up and down and things outside of your control can influence what's going on in your business. It can feel like you're really just barely holding on.

But for you, I heard the words learning and so it sounds like if you're solving difficult problems, if you're learning, that to you is kind of more a sign of your own self-worth and success than just, hey, what's what's Ada worth today or what's our revenue this month?

[00:13:56] Mike Murchison: Yeah, exactly. Exactly. I get my energy, my juice comes from reflecting on who Mike was 6 months ago and going, I can't believe I would have approached it that way. That's just foolish.

[00:14:11] Jeff Adamson: I remember I was digging up, I had to go look back for some old emails and I got back all the way to 2012. And it was when I had first kinda got together with Josh and Chris Simair, who are the co-founders of Skip, and I was like, oh, what's this email about?

And I clicked on it, and it was an email that I had sent to them where I had told them that I was in, and I was gonna join them and co-found the business with them. And it was really interesting because it was, this was probably 8 years after I had sent it and Skip was already, like, a massive business. And I said, hey, I'm gonna join, but here's my 2 goals. Here's my 2 reasons for joining. And number 1 is I wanna learn. And so I just wanna be exposed to as many difficult things, and I wanna learn as much as I can.

And then number 2 is I wanna build strong relationships and, you know, I wanna be around people that I like being around. And I was like, oh my god. I can't believe I was that mature back then. I must have had, like, a blackout moment or something [laughing].

[00:15:12] Mike Murchison: That's amazing! Yeah well, I mean, and Skip clearly was that for you, which is pretty pretty amazing.

[00:15:16] Jeff Adamson: Well and that's the thing that people, I think you've absolutely nailed it on your definition of success, and I feel like that's so hard for so many people because it so often is how much am I making, what's my title, how is the company doing, and probably the best gift that starting a company will give you is you'll learn faster than anyone because the lessons are so painful.

Through your journey like what, there's probably too many lessons to count, but are there common themes across your journey to Ada that by the time you got to Ada, you were like, here's how I'm gonna do it differently. Here's the painful lessons I've learned.

[00:15:52] Mike Murchison: Like, one that stands out is I learned the hard way about the difference between commitment and attachment. I used to think that starting a company and, like, being the CEO of it meant being attached to this vision you have of the future and just willing it into existence. We are going to democratize access to the capital markets, you know, whatever. Investing is cumbersome, it needs to be easier, and I know the way. Follow me.

And what I learned is that being attached to something is very different than being committed to it. I now believe that and I try to lead in a manner where I'm very committed to solving a problem, but I'm actually not at all attached about how to how we actually solve it. I'm very open excited and curious to learn about other paths that could exist.

And in fact, I think that's what innovation looks like, particularly in, like, later stage, bigger companies. It actually can be boiled down to an openness to alternative ways of doing things, alternative ways of of solving problems. Interestingly, I learned that lesson starting my own companies, but as I've come to sell more enterprise software over the years, I've started to see that's a common trade-in in bigger, older companies that are starting to atrophy. That was a very very painful lesson and it’s one I’m glad I learned. And I encourage anyone who’s thinking of starting a company, be committed to the problem you wanna solve, not attached to how you solve it. And you'll move a lot faster and learn a lot more.

[00:17:18] Jeff Adamson: It'll be easier on yourself, it won't be as hard on yourself. And it'll be easier for other people, there'll be more space for them to come in and contribute.

[00:17:25] Mike Murchison: Yeah, exactly! Exactly. It's, there was this heaviness. In my case, it wasn't because I didn't care about other people's ideas. I just thought it was my job.

That it was my job to say, like, you know, this is actually how we've got to do it. If this is the way the world's gonna work, we gotta figure it out this way. And the types of problems that people were solving were underneath that and it wasn’t, you’re right, it was heavy and it was slower and it was harder.

[00:17:45] Jeff Adamson: Tell me a bit about Ada. So what was the inception for Ada, what's the founding story for Ada?

[00:17:51] Mike Murchison: Well, we were working on a very different company that was growing quite quickly, and we encountered a customer service problem. We couldn't figure out how to offer great customer service at scale.

We started to see our company go from treating customers as real people, you know, whose names we all knew when we were a small company, whose feedback we all craved, to treating our customers as anonymous numbers that we were trying to keep at bay. I literally woke up one day, and I saw this like, what are we doing? Like, what is going on here? And I became very curious.

Like, why is it that our customer service strategy is focused on reducing customer service contact? Why are we trying to talk to our customers less? And I cold-called as many VPs of customer experience as I could get my hands on, and I asked them all, are you talking to your customers more or less as you grow? And everyone said we're talking to our customers less. Customer service is a cost center, I'm personally compensated to the extent to which I can reduce my customer contact every year. So it's a, I'm motivated to do this.

And when I heard that maybe the twelfth time in a row, I felt quite strongly that I now understand why customer service experiences are so bad around the world. And it struck me that there probably could be a different way. And that maybe in the eyes of history, the best businesses wouldn't be avoiding customer contact as they grow, they'd actually be craving it.

And that's what sorta led to the idea of there being opportunities, and to reinvent customer service. Ada wasn't really born until we spent the better part of a year doing customer service ourselves manually and as agents, David and I both. And we gradually built software that made our own lives more productive as agents once we felt like we really understood the problems at, like, an agent level really well.

[00:19:30] Jeff Adamson: That I think is so key too. Like, because [after] a year of doing tickets, [and] taking calls, you just understand the problem so well. You're so close to it. And it becomes fun, the more you learn about it and the more, like, the harder the call, and then you start seeing patterns.

And like I just remember in the early days of Skip, and even at Neo, where you get these spikes, and like Skip is like real-time food movement. You know, minutes matter. And people, I've had grown men cry to me on the phone because their pizza is late. And so there's an urgency to fix the problems. And, but it'd be all hands on deck. And then you've got, like, everyone experiences the pain when operations goes off the rails and you have to hop into the trenches and talk to customers.

But I feel like, and tell me what you think Mike, but do you feel like some people skip the step of getting extraordinarily close to the problem and try to skip to the solution and the product?

[00:20:25] Mike Murchison: Definitely. I think it's a symptom of this success definition, Not for the individual, but for the company. And I worry a little bit that in entrepreneurial culture, startup culture, we have the wrong idea of what company progress looks like in the early days. Like, we've celebrated this idea of, like, shipping an MVP and having this, like, early product that is a, somehow is getting you closer to building a generational, you know, multibillion-dollar business. But in reality may not actually be a reflection of the right type of progress you should be making.

And I think it boils down to what is in your control as a founder when you're starting a company. Like, what can you truly own? What can you truly be? You may not be able to recruit the best people around the world. You may not be able to raise, have the same amount of money, or raise the same amount of capital. You know, there may be a myriad of other things that are stacked against you.

But the one thing you can control is you can understand the problem your business is gonna solve better than anyone else. Like, you are in control of that. And I think that everyone takes different paths to understanding the problem best. But I really think that, like, the most successful founders, they look at themselves in the mirror, and they're able to go, I actually understand this problem better than anyone. I'm confident of it.

[00:21:34] Jeff Adamson: Once you were answering thousands and thousands, maybe hundreds of thousands of tickets over that year, how did the solution start coming to you in terms of, like, what product are you gonna offer?

[00:21:45] Mike Murchison: Well, interestingly, like, when you experience in our case, it was just repetitive, mundane pain over and over again, and a desire to be the best agent. David and I had a goal of being the top-rated agent on each one of the companies we were working for. You know, there's a leaderboard inside these agent desktop applications.

It turns out that, like, solutions, the solution kind of becomes obvious when you're experiencing so much pain. In our case, we were waking up, out of bed in the morning, like, 3 in the morning regularly to answer our, like, you know, hundred and fiftieth, how do you reset your password, you know, customer support inquiry. And but it was putting ourselves in a situation that really enabled us to to understand and diagnose for ourselves, like, what are the most meaningful problems to solve? Like, what's gonna take the pain away?

That's led me to kinda really reflect a little bit on, like, what is great software? Kinda like, one way to think about great software is, like, great software is kinda like medicine. It takes pain away. And I think the best software understands the underlying pain better than its competitors. And so it's got a greater ability to target the right type of pain and take it away.

So for us, what did that actually look like? Well, it looked like increasing our productivity as agents so we could handle way more tickets. And, you know, that started first in what ended up looking like this would have been, like, 8 years ago, building what was effectively like a copilot for agents that augmented our own productivity using different machine learning models. And then we learned graduated into what became full automation of customer service inquiries so that, you know, the maximally productive position we could put ourselves in wasn't to answer any of the simple tickets ourselves at all but to focus on just the more complicated and more complex customer service inquiries.

[00:23:28] Jeff Adamson: Which are more rewarding too, for agents.

[00:23:29] Mike Murchison: Very rewarding. Teams loved that. Like, our colleagues were all like, this is amazing. A huge problem, as you know, in the customer service world is agent attrition. You know? The rate at which customer service agents leave their jobs, that's on the industry, but it's north of 50 percent annually.

Meaning, half your colleagues will leave within 12 months. And a big reason for that is because of the repetitive nature of the job. But if you remove the the repetitive, boring inquiries and you leave the complex, very relational inquiries, ends up being a much more valuable and much more stimulating job. And so that was very rewarding. And it's also like

[00:24:07] Jeff Adamson: And it’s also like, there's only so much grind you can put into pure repetitive. Like, it's hard to have a 10x agent when it's just password resetting. It's like, how fast can you type? You're gonna max out all every human's gonna max out relatively at the same level. But then on the creative, where you actually have to really think about the problem, then you can get a 10x agent.

So there's almost a multiplier effect that if you can take out a lot of that repetitive grind, find the people who get a thrill out of that difficult problem solving, then you're gonna start attracting better people, the job is more satisfying, your turnover is gonna be lower. That's the promised land.

[00:24:44] Mike Murchison: Hundred percent! Yes, it's exactly right. And you also end up realizing organizationally, the companies tend to learn, Woah customer service isn't a cost center. Look at Jeff. Jeff used to answer these repetitive inquiries. Now he's handling way more complicated ones, and half the customers he's spoken to have all purchased more from us in the last 6 months. Like, it turns out Jeff is driving upsells and cross-sells.

Oh, wow. Customer service can be more than just a cost center. Like, maybe this is a source of revenue generation for our business. Like, that all those things start to happen too. So there's the there's the team learning, then there's the organizational learning. And, I think that many of our customers are on that path as we speak. And I think a lot of the industry will be there in the next decade.

[00:25:26] Jeff Adamson: A lot of B2B SaaS, it's a chicken and egg problem. You may have a great solution, but you need to get a customer. And oftentimes, you're selling into enterprise, they only wanna work with IBM or SAP. And it's like, who have you worked with? So you have no credibility. You have no revenue. You just have a product, probably just an idea.

And then you're like, okay, we're gonna try to reel in a whale, but then you can't just build your product or your solution specifically for that one company and get kind of, like, the white whale syndrome. So you're under all these pressures. How did you go about getting your first client in a way that enabled you to actually have a company that you can scale afterwards?

[00:26:06] Mike Murchison: Well, I'll tell you a story. In our case, and I stand by this, it comes down to authenticity, the authenticity with how you're selling, and platform, building in a manner that allows you to build on top of subsequently for other customers and, you know, building in, like, a true platform first manner.

Let me talk about the story about the authenticity side of things. So very early in Ada’s history, you know, we were just a team of a couple people. We had zero customers. I had managed to catch the attention of a very large bank. This exact same scenario you're talking about. And this bank was like, we are very interested in up-leveling our customer service. Seems like what you're doing is exactly what we need. We spend a lot of money on our customer service. Not very good, and we're trying to improve it. Thanks for reaching out, Mike. We would be happy to swing by your offices to learn more about what you guys have to offer.

[00:27:00] Jeff Adamson: Uh-oh!

[00:27:01] Mike Murchison: And I said, responded and I'm like, great. Instead of you guys coming towards us, I'm actually going to be in your city, and neck of your woods in a little while. I'm happy to come to your office. This is a, there's a guy in this case, like, the VP of customer service. He's like, No, no, no. We insist. We'll come to you.

[00:27:17] Jeff Adamson: Gotta get out of mom's basement! [Laughing]

[00:27:19] Mike Murchison: [Laughs] That's right. So we had you know, David and I were renting this terr… like, it was $500 a month, terrible live-work office, east end of Toronto, and we're faced with this conundrum. And the conundrum is, you know, what kind of company do we show up as? Because the entire team, in this case, it was like 8 people, is like 4 times the size of our entire company, and they're coming to visit us at our headquarters, quote, unquote.

And so I actually asked for some advice around the scenario, and I said, what should we do? Like, we're gonna lose the deal. They're they're gonna find out that we're not IBM. They're gonna find out that we're this tiny little company, and they don't know anything, you know, that we're we're just getting started. Like, what do we have? And so the advice I got was, well, Mike, fake it till you make it. Why don't we go out? We'll hand some Ada t-shirts out to a bunch of people on the street. We'll pack our little office, make it seem like we're full of employees, that we're busting at the seams, everything's super exciting and big, and they'll be none the wiser, and they'll sign a contract with us, and they'll think we're bigger than we are, and we'll win. And we almost did that. Like, we almost did that.

And then at the eleventh hour, David and I said, Look if Ada becomes anything, we are going to sell authentically. We're gonna be transparent about who we are and what we're about and what our intentions are, and we're gonna work with customers who value that in us. And so instead of going in and packing our little office with a bunch of fake employees, I went across the street to this grocery store, and this is dumb, I don't know why I did this, but I bought some flowers, some tea towels, and a bunch of cherries. And I tried, I made this, like, little welcome area in our shitty office with some flowers and a bowl of cherries and stuff.

And sure enough, you know, the bank's team comes in. They knock on the door. They come into our office. They look around, and they go, where the hell are we? Like, you could see it on their face. They were like, this is a mistake, where are we?

[00:29:15] Jeff Adamson: Yeah.

[00:29:16] Mike Murchison: I hand them the bowl of cherries. No one takes a single cherry. They're like, why would we eat cherries? It's an uncomfortable thing to eat in the lobby [laughing]. Put the cherries, they sit down at the, they sit down and they're all very uncomfortable. And then what do we express? We show them our product. We explain how we've been working as customer service agents, and we feel like we're at the frontier of applying AI to customer service and we demoed to them how we think we can help them uplevel their customer service.

The authenticity with what we showed up led the VP to go to bat for us, believe in us. He ended up signing a 500-dollar-a-month contract for our services, with our discount tiny little brand. And over the next 3 years, that contract grew and grew and grew to become a multimillion-dollar contract, and it would not have happened had it not been for the importance of being authentic.

[00:30:09] Jeff Adamson: That's an awesome story, and props to you for not kind of putting up the front. It's interesting because if you had gone and, you know, got all the fake employees, now all of a sudden, you have to keep that charade up for quite a while. And I think it's probably better sooner than later for them to understand what kind of, what type of company they're gonna be working with because they're gonna find out or their expectations will be totally out of line.

Which was more important at that point? Was it the revenue? Or was it just basically being able to say, Hey, someone is buying this product?

[00:30:42] Mike Murchison: For sure, the validation.

[00:30:44] Jeff Adamson: Yeah.

[00:30:45] Mike Murchison: It's the validation, not the amount of revenue by any means. The endorsement of having a real company that people know using your software in their early days is, it's hard to understate the value of that.

[00:30:54] Jeff Adamson: How did you go about finding or building your founding team? Like, what were the attributes that you were looking for in the people that you know, the seven others that you had in that room, at that time?

And this is something a lot of people struggle with is they'll often think that you know, Okay, I'm gonna be an entrepreneur. It's a one-man show, one-girl show. You know, they don't bring enough people in on it. So you've got a founder. How did you go about, maybe to start with David, why David?

[00:31:17] Mike Murchison: Well, we had a real passion for building and we worked together for quite some time. And so, you know, in David, I've always seen someone who's highly complimentary to myself from a skillset perspective, and he would say the, I think he would say the same, but also who shares a high level of self-awareness and a ridiculous drive. That's what we look for in everyone we work with. High level of self-awareness, ridiculous drive. You know, if you have both those things, it's just really fun to be around someone like that, right? They're low ego, they're highly coachable, they're hungry to learn. They have so much energy, and they don't take themselves too seriously.

[00:31:55] Jeff Adamson: Mhmm.

[00:31:56] Mike Murchison: And I think it's, that's that level of humility that I think leads to better decision-making.

[00:32:00] Jeff Adamson: Completely agree. And one of the things that I see kind of repeatedly, I face it, this is the largest company that you've built now, Ada. How many employees are you up to roughly now?

[00:32:11] Mike Murchison: About 300.

[00:32:12] Jeff Adamson: One of the things that I've always struggled with, and I see employees that we've hired early on struggle with as well, is scaling yourself. Because sometimes the things that you're good at, 0 to 1, those things aren't as important from 1 to 2 and 2 to 3, or they have to change and then changing is very painful sometimes.

What are some of the things that, like when you think about how you've had to change from 0 to 8, from 8 to 300, what are some of those things or what advice would you have to people who may be going, may be in a company that's growing and changing and trying to figure out where is their place here and how do they react to what they're seeing happening around them and how do they scale?

[00:32:55] Mike Murchison: So I have a couple of reflections on this. One is it's important to set the expectation for oneself that growth is uncomfortable. But being uncomfortable is a good thing. It means that you're in unknown territory and you have the opportunity to learn.

So I think we, if you first apply that perspective, then it turns out that your relationship, at least in my case, with expertise starts to change. Instead of being threatened by all this change and all this all this discomfort, you start to become very curious about it, and you start to realize, wow, there's lots of other people in the world who have experienced this before that I can learn from. And some of those people are gonna be great people you should just hire because they know what the next year of your company looks like, and they've been able to do it before. Put them in the seat.

So that's like my first initial thinking on that front. I also think that, like, when it comes to learning and, like, scaling yourself, I've learned that it's really important to be very prescriptive about how decisions get made in your company. I actually think I could have fast-tracked a lot of my own learning as a leader if I had said in the early days, like, just on a piece of paper, like, here's how this company makes decisions. And turns out, it's a very difficult question to actually or a question to answer for many companies still today.

But if you get into the habit in the early days of just answering that question, like, here's how we make decisions. It's like it's ultimately, it's just Jeff's decision. Or, oh, we now have an e-team. If it's a finance question, it's Mike's answer. You got finally, you got final authority. If it's so and so, it starts to become a lot more complicated. Oh, now we've got three levels. Like, you can see how it starts to become more and more and more complicated. But in my own case, my learning as a leader has been connected to, you know, how decisions get made at the company and being opinionated about how they should get changed. I wish I was more opinionated about that in the early days.

[00:34:47] Jeff Adamson: When we were lining you up to come on the show, I was like, so we're a client of Ada, so obviously I like you guys. But I also wanted to know, is Ada a real AI company or not? So I actually went and used the Wayback Machine and tried to go, and I spent about 2 minutes going back and, like, when was the first mention of AI? Because I’m like, if it was 2022, I was gonna be like, Oh no, Mike! Like, No, he's one of the, he's just, he got caught up with the herd mentality. But, no, you were way back in, like, 2017, 2018, so you're OG AI.

But what do you kind of think about the current kind of gold rush that's happening in AI and, like, for you being a real AI company, like a company that was talking about AI long before it was kind of the cool thing? And for context, I think it's like Antigua is the country that has the pre like the .ai is the domain.

[00:35:56] Mike Murchison: That's right.

[00:35:47] Jeff Adamson: Yeah. And so as soon as ChatGPT came out, like, they literally had, like, a billion dollars in revenue from people going out and buying the .ai domain name. But you guys have been doing it for a long time. How does it kind of hit you seeing a lot of these companies coming out and being like, oh, we're AI for dog walking now, and we're AI for Uber? And everyone's AI now, but, like, you know as well as I do that they're not. How do you feel about that?

[00:35:59] Mike Murchison: Well, I think that every company is gonna be an AI company, like, in the same way, that every company became a web company or a mobile company. Like, there was this period of time where you could say, I'm a web company or I'm an Internet company because, you know, most of the industry didn't have a website, but you did. So you were an Internet company. Now, no one says they're an Internet company. You're not even really a company unless you have a website. So I think we're just in the early days of this technology being [a] foundational part of how businesses run and how they work.

I do think that Ada has been very early and was amongst the first companies that really built-in in an AI-native capacity, where, like, we believe from the, from day one that the foundational component of our software is not actually a human being, it's a machine-learning model. That has served us well over the NLP evolution to the LLM evolution and whatever comes next. That's my second thought.

I think my third point is that if, you know, every company is an AI company and will be an AI company, Ada may be early. I think my third point is that, like, the AI doesn't really matter. At the end of the day, like, our mission is to make customer service extraordinary for everyone. It just so happens that, like, our strategy is to employ AI to do that because we firmly believe that AI is going if harnessed properly, and if put in the right hands and the right folks and the right application, you're gonna be able to achieve this. But it's really the how. It's not the what.

And there is a version of the future, I think it's highly unlikely, but there could be a version of the future, speaking of being committed and not attached, where, you know, Ada doesn't use any AI at all and we have successfully made customer service extraordinary for everyone.

[00:37:42] Jeff Adamson: What is something about Ada that people can't just find out about you from reading about you guys that you'd want people to know about Ada?

[00:37:49] Mike Murchison: I think it's probably the level of sophistication underneath the hood. We're gonna do a better job of bringing some of the crazy things our product is really pushing the industry forward about. We're gonna try to brag about that a little bit more. That's often one of the things that when people join our company and actually see how we build, they go, Wow, I can't believe that was actually happening. I think that's a problem to solve.

[00:38:13] Jeff Adamson: It's how you talk about the things that it's like the iceberg.

[00:38:16] Mike Murchison: Yeah.

[00:38:17] Jeff Adamson: People only see the very small fraction above the surface, but underneath it, there's just a lot of depth in how you've architected the business.

[00:38:25] Mike Murchison: Yeah, and our opinions about where the market is going and where our product is going. I think that both those things in combination are something that our newer members of our team tend to be frequently pleasantly surprised about.

[00:38:37] Jeff Adamson: Where can people find out more about Ada?

[00:38:38] Mike Murchison: Ada.cx. Simple, um, I don't know what country CX is from [laughing].

[00:38:44] Jeff Adamson: Do you own the domain for AI? Do you know do you own ada.ai?

[00:38:48] Mike Murchison: We don't own ada.ai. I think we own, there's some derivative of AI we own. Maybe getada.ai or something. I can't remember. But ada.cx is our primary URL. You can learn more about us there.

[00:38:57] Jeff Adamson: Really grateful that you came on, Mike. Looking forward to cheering you guys on. I mean, as a client, really looking to see how, we're excited to see how the product evolves and also see how our own CX evolves as well. And what you guys are doing is great and really enjoyed this conversation.

[00:39:14] Mike Murchison: Great talking to you Jeff, this was super fun.

[00:39:22] Jeff Adamson: Thank you for tuning into Behind the Brand. If you enjoyed today's show, please subscribe and leave a review on your preferred podcast platform. If you’re interested in learning more about Neo Financial, visit us at neofinancial.com.

Behind the Brand is a production of Neo Financial and MediaLab YYC. Hosted by Jeff Adamson. Strategy, research, and production by Keegan Sharp, Alana Tefledzuk, and Kyle Marshall.