2135 - Transforming B2C Communication for Modern Businesses with respond.io's Gerardo Salandra

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1:05With us right now, it's Gerardo Salandra. Gerardo, you are the founder and CEO of Respond.io. Found on the web, fittingly enough, Respond.io. Gerardo, it's great to have you. It's a pleasure to be here. Excited to have this conversation. Yeah. Well, tell us a little bit about, you know, let's talk just briefly about what Respond.io is, and then let's kind of get into the meat of, like, why this is so critical right now. Sounds good. about ourselves. We're a software that allows businesses to communicate with consumers where the consumers really are, which is not an email or phone calls anymore.

1:41It's on WhatsApp. It's on Facebook Messenger, most importantly on TikTok right now. That's what we created. We created eight years ago, so we started super early. At that time, there was not even an API for WhatsApp, so it was a pretty rough start, I would say, as a startup. But eventually, we got that product market fit going and will be growing ever since. Yeah. Okay. Well, let's talk about outreach platforms. Are you talking about sales? Are you talking about customer support? Help me understand. It's a great question. So what you would see is that any sort of business is right now conducted over WhatsApp or over Facebook Messenger or over chat in general.

2:21Interestingly, the way the industry is developing is mostly B2C businesses that truly get to leverage these channels. and it's normal that that would happen because if you're B2B, you operate in low volume, you don't really need the need for like fancy tools and automation. But if you're a B2C business and you're talking to like a thousand consumers per day, without the proper like CRM for messaging, AI and chatbot automation, you wouldn't be able to handle the load. So that's mostly the type of business that we work with. So it's in the B2B side and it's in the very high volume. Some of our customers process millions of messages per month.

3:00so it's mostly on that side you can imagine that SMEs work pretty well with us but it's mostly though with the mid-market but we found that that sweet spot where businesses have very complex requirements while at the same time they're like relatively modern and they want to they want to adopt the latest technologies and they want to work with WhatsApp TikTok or any other modern channel that is currently progressing. Yeah. Well, you've worked with brands like Toyota, McDonald's, Radisson, Subway, Hertz, I mean, British Airways. And what is it that they are, what are they realizing right now? And I'm hoping you're going to say that they're used to, here's my, I'll kind of tee you up here, right?

3:50Is that, you know, customers, it was, you know, phone and mail and then email, right? And then, you know, then obviously SMS and texting. But there's been a lot of changes in SMS only. And a lot of people don't, they don't, like, if I get a phone call from a company, boy, you better be pretty important because I do not like getting phone calls, certainly from someone trying to sell me something, forget it, right? You know, just send me a message. But not everyone even likes to use SMSs. And again, there's a lot of rules around that. I mean, there's so many platforms. And I think your point here is on your website is that your customers, they have platforms for communication that they prefer.

4:36And if you can meet them where they're at, well, you're much more likely to engage with them. And you don't have to try as a business. The customers are already searching for you there. So if you're a business and you already have a TikTok channel, a Facebook account, just open your inbox and you're going to see that this is like you're drowning of leads that you're probably ignoring at the time being. And then you just hook your channels up to respond to the right and then you can start processing the leads. And it's like this like hidden source of revenue that most businesses are currently ignoring um so definitely true that uh consumers are they don't they actually they don't want you to be there they expect you to be there um and if you send a message and you they you don't answer yeah you know a lot of business do that a lot of businesses you send them a message over facebook whatsapp or whatever channel do you find them in and you just get no reply um and that's that's pretty bad customer experience.

5:35Yeah. Would you maybe speculate on where we're going? I mean, is it going to keep getting more and more and more fragmented with communications platforms? We operate in 110 countries. So it will be very difficult for me to tell you worldwide where this is going. But what I can tell you is that over the last eight years, I've observed how messaging channels have come and gone. For example, there was channels that, well, out of the US, you might not know Viber, but Viber was like this super strong channel worldwide a couple of years ago. They were one of the first ones that provided like voice calling.

6:15So everyone who had families abroad will be using Viber to do calls over Skype. Skype became a little bit slow and legacy. So everyone started moving to Viber. There was this time that Viber really threw. And in some countries, it's fascinating, is today the dominant messaging channel. And nobody can move to WhatsApp. Nobody can move to SMS, whatever it is, because your friends are not there. Now, what has happened over the last eight years? I've seen how countries move from one messaging channel to another one entirely. The Philippines is a very interesting one, a very specific example where Viber was winning.

6:51And I don't know what happened over the last three years and WhatsApp just completely took over the market. you would see some very unique places like for example Korea where they use cacao talk they're not going to lose the market they completely dominate in Taiwan and in Japan you have line so across the world you're going to see a lot of messaging channels that are really dominant and what would end up happening is that in most countries there's going to be one winner because it's a network effect in Latin America there is a clear winner right now is what's up in fact you're based out of orlando i'm sure that if you go to your local latino community what you're going to see is big whatsapp signs uh outside every shop um it's for a reason it's for reasons because that's where your customers are and that's where your customer expects you to be um interestingly what has happened is that before there was uh the channels were not allowing businesses to be there yeah whatsapp was solely for persons so people to people and um at some point they just realized that uh no business wanted to be there and most importantly they were willing to pay to be there.

7:53So they opened the channel. It's not a free channel. It costs money. And if you see actually Meta's prospectus and you see where they think that the market is going to go, they expect messaging to be one of the main revenue drivers for Meta. I'm talking Meta, right? And it's not surprising to see other messaging channels, other social medias saying, hey, wait a second. Meta knows where the money's at. And you see all the other channels just coming forward and saying, you know, I also have a lot of people using messaging. I want to release my own messaging API and help businesses make money there.

8:28And by the way, take a piece of that. So I would expect that generally speaking, what's going to end up happening is that the markets where there's a clear winner in messaging, they're just going to dominate. And there's some markets where the clear winner has not been established. In the US, US is particularly interesting for me because for some reason, SMS continues to be like one of the main methods of communication. I never understood that. You go anywhere around the world, you're not going to see people using SMS whatsoever. I hate SMS. Explain to me. Explain to me. Yeah, it's just, it's an old antiquated system.

9:06I mean, obviously, you know, Apple and others have layered on iMessage on top of it and so forth. Yeah, I agree with you. Boy, thank you. I'm grateful that we're having this conversation because you're right. We currently don't prioritize WhatsApp and we probably should be in terms of like how we communicate with our folks. So what a great reminder. Okay, so for someone, Harada, how tough is this? Can you talk about, and I'm going to do something I've never done before because I actually have to go another room for just a second to fix something. I'm going to give you my host microphone. Okay, here you go.

9:44And what I want you to do is talk about implementation. And would you please tell me a story or two to fill up about two minutes? You're going to be the host. And please teach my audience about how easy this can be to implement and open up this new channel and what this could potentially do for your business. All right, you ready? It's the Gerardo Show. Go! okay fair enough um what we have seen is that uh most businesses already are in one way or another in already messaging perhaps they already have uh their whatsapp business app installed but they cannot handle large volumes or they have a very active facebook or tiktok page and they're receiving a lot of messages but they're probably ignoring them or worse, they're just telling them, hey, sorry, I cannot answer via TikTok.

10:39I cannot answer via Instagram. Please send me an email. That's probably one of the worst experiences as a consumer when you reach out to someone in a channel and they redirect you to another one, like, oh, call this number if you need any help. So most businesses, in a way or another, they already are in the channels that we enable them to facilitate. And for most businesses, the story is relatively simple. they just realized that if they are in if they are responding to the messages where the consumers are they just make more money think about it think of the next last time that you went to um i don't know a hair saloon and you probably reach out to two three hard hair saloons at the same time figuring figuring out who's going to give you the appointment the fastest um whoever answered the message first has a 50 to 75 percent high chances of getting the deal now obviously i'm using hair saloon as an example because everyone has to go to the hairdresser.

11:34But generally speaking, that's the truth for any business. When they're searching for you, when your customers are searching for you, they're typically not searching for you specifically. They're searching for your service. And if you were to suddenly be the last of all your competitors to answer, you immediately have significantly lower chances to win the deal. So I think generally speaking, that's where customers come over to us and they just realize, hey, I'm wasting leads. I'm spending all this money marketing oh yeah i'm doing all these activities and at the end of the day um i'm not even leveraging the deals and the leads i'm paying for um so that's typically where customers would come to us uh we'll help them connect all the channels we'll set up the initial level of automation uh especially if you operate a very high volume what you're going to see is that uh without some sort of level of ai or chatbot it's impossible to handle uh messages messages do have a problem right if you message someone if you message your business your expectations on their response are drastically different than if you email someone think if you email your bank when do you expect their response you expect it's okay if it takes one or two days right it wouldn't bother you it's an email but if you if you send that bank an sms you're chatting with um i go go back to your hairdresser wouldn't it bother you if it takes two to three days for them to get back to you in your last message.

12:57So that's the challenge of the channels that we're enabling. And that's really where the whole conversation around AI gets exciting. Enabling business to answer are very large scale, but the same level of personalization as an agent was answering. It's probably been one of the most exciting conversations over the last couple of years. Yeah. Yeah. And obviously, AI has a big role in all of these messaging platforms, too. Like I just saw something about, you know, what's possible in, you know, better working with, you know, back in the day, you'd have, you know, just phoned, oh, back in the day, we still do, right?

13:36You call a number and you have a phone tree and you have to listen to eight different options. And then based on that, you got eight more options. And it's just really cumbersome. Press one for English, press two for Spanish. What's that? Oh, yeah, yeah, yeah. Press one for English, press two for Spanish. So, you know, with messaging and with AI, we can be far more intelligent. So, you know, again, it could be, you know, just like the virtual version of yourself just saying, hey, thanks so much for contacting us. You know, tell me what's going on. You know, what are you looking for? How can I help or whatever?

14:08And they're just like, yeah, you know, I want to learn about this or whatever. And it's good, right? I've been using a lot more of the support bots and they've really improved quite a bit because now, you know, with generative AI, you could build an LLM, you could build, You know, it's like you've got this library, your knowledge base, and now the AI can work on your behalf. And so your support, you know, you could be so much more thoughtful about your investments. So you can maybe open up some of these other channels and really reach who you want to reach. Tell me, Arado, do you implement with AI solutions?

14:46No, we do work very closely with a lot of AI partners like OpenAI. And yes, we do enable the level of chatbots that you're referring to. Now, I've been in this industry for a while, and it's very funny because I've seen AI get hot and cold a few times. And the last time it got hot, we were talking about something called NLP, natural language processing. And at that time, it seemed like it was the future. But those are the chatbots that when you ask anything that they don't recognize, it would just say, sorry, I don't get it. Sorry, I don't get it. And it becomes very repetitive. Gen AI is a completely different technology.

15:19It's truly impressive because it will never give you the same robotic answer of, sorry, I didn't understand. Instead, it will just genuinely have a conversation with you. We have been working with OpenAI as soon as JGP 3.5 came out. We're one of the first ones to implement it in the region. But here's something super interesting. It works, and it works great. Yet, most businesses don't want to implement it. They're afraid. and it kind of makes sense that they're afraid, right? There's a lot of skepticism around AI. And to be fair, Gen AI still has a little bit farther to go before I could say it's like 100 % safe for a business to implement.

16:00There's a concept of hallucination. There's a concept of like hypnotizing AIs, which can happen. So what we're seeing on the ground right now is that while the AI technologies are very promising, business are skeptical and they are they don't necessarily want to be the first one to implement it um yeah so what we have seen is that this like this 10 20 percent uh early adopters but the remaining 80 are waiting to see what happens yeah yeah and i think we're all afraid of you know just some bad pr where our ai goes rogue and someone's screen captures that posts on social media and saying look what wendy's just said to me now wendy's not a good example because you know Wendy's social media is already a little off the hook, which is great.

16:46But still, like they've already built that energy. But still, you know, if it's a buttoned up, you know, if you're messaging with Charles Schwab, for example, yeah, they might be a little concerned or an attorney. You know, it's like, whoa, our bot just told people to go ahead and oh, no, that's right. You know, so, yeah, I can understand the concern. Hey, talk about really quick because we only have about a minute or two, a couple of minutes left. um tell me about the you know so um the enterprise uh level opportunity and and how are these folks connecting with you or tell me about that side of your business and how you've grown into enterprise so well we historically come from a very product-led growth background what would mean that when we first got started we genuinely were just like not even providing sales demos or anything like here's a product if you don't like it go away um so that took us to our first 1 000 customers It was like five years ago, without a sales team, without a marketing team.

17:42That was great up to a point that we just realized, hey, small businesses don't need this. Small businesses are better off with free or no solutions at all. So we started moving slowly into mid-market and into enterprise. As of right now, about 50 % of the revenue comes from mid-market. For me, mid-market is anything between 50 and 1 ,000 employees. and we do have this 20 % layer of big enterprise deals. Now, interestingly, most of our big enterprise deals, we don't close them directly. We have a network of resellers worldwide. So you mentioned some interesting names at the beginning. So you have Toyota or you have McDonald's.

18:21For example, in Latin America, most McDonald's, if you see a WhatsApp phone number and you try to order burger or your meal to that number, it will go through our systems. um that's most countries in latin america and and that's so interesting because i never met anyone from mcdonald's it's just one of our resellers uh who grab a product and say hey this is the best product in the market but you need an implementer i will go and implement it for you and uh so right now we have like a network of 120 resellers around the world and most of our enterprise deals come through that we have like giant banks uh airlines and And all of them are coming.

18:59As a CEO, it's nice to see that they're getting the level of service that they need without me having to spend the time and resources to provide it. So I can focus on building a better product. That's where our enterprise momentum comes from. Yeah. And for SMBs, pricing starts at$79 a month. So the website is respond.io. and what happens in a free trial? Oh, during seven days, you have on-gated access to all the features. You can try it out, try the AI, connect your channels. You can see all your messages coming in and then you can start inviting your agents and inviting your human agents first.

19:45That's usually my recommendation. See if it works for them. We have a from CRM to inbox module. And if you're comfortable with that, probably even the lower plan will work for you. Now, if you're a slightly bigger business and you say, hey, human agents are amazing, but I need an extra layer of automation. That's when we have the mid-tier, we call it the growth plan, specifically for companies who are growing and grow and growing fast. And then we have the advanced plan, which is basically all the features that you need on a self-service model. And it only starts, I think, at$349 per month, if I'm not mistaken.

20:20Yeah,$349. That's what I see here, anyway. Yeah, excellent. Well, Gerardo Salandra, again, founder and CEO of respond.io. That's the website. To our friend that's listening, go try a free trial right now. You can click there. If you're enterprise, click on talk to sales. And my speculation is that you're probably going to like the messaging experience when you reach out to respond.io. So I would imagine you have your own message. Go on trials. Yeah. So if you want to see a demo of it in real time, there you go. Go click on Talk to Sales or just click around the website, and I'm sure you'll see exactly how it works and watch a demo.

21:04So awesome. Well, Gerardo, great conversation. Thank you so much. You've already inspired activity. Listen, we've already been frustrated with SMS already. And so you've gained at least one customer here in our conversation. So thank you so much. I hope so. I hope that's the$249 plan. And by the way, thank you for taking over hosting duties for a minute and a half. All is well. Thank you, Gerardo. No, it's been a pleasure being here.

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