How Klaviyo’s billionaire built his empire and his advice to Aussie entrepreneurs

Company founders should stay small, stay lean and focus on building products, but raise either nothing or the minimum amount needed, says Klaviyo’s billionaire boss, Andrew Bialecki.

Klaviyo chief executive and co-founder Andrew Bialecki studied astrophysics at Harvard University before venturing into technology.

Andrew Bialecki is an unlikely billionaire. He studied astrophysics at Harvard University – and even worked on a project in Western Australia while he was studying, where he was in awe of the unhindered view into the heavens.

“There is no light pollution, no other kinds of issues,” the self-confessed “maths/science nerd” told The Australian.

But galaxies are slow moving. “They don’t change much every day or like millions, maybe billions of years,” he said.

So Mr Bialecki applied for an internship at Microsoft, where he worked on some of the tech behemoth’s internet products in the early 2000s. It was a dizzying pace compared with star gazing.

Then in 2012 he founded his own company, Klaviyo, which the Boston native last year floated on the stock exchange at $US30 ($44.14) a share, valuing the company at more than $US9bn.

Mr Bialecki, visiting Australia to meet Klaviyo’s customers – which include JB Hi-Fi and Bellroy – owns about one third of the company, which harnesses artificial intelligence to allow companies to create personalised marketing campaigns for potentially millions of customers. His stake is worth about $US3.2bn.

And he has some advice to fledgling entrepreneurs who are often quick to celebrate capital raising, particularly when they’re over subscribed.

Andrew Bialecki.

“The funding that a software company needs is relatively less … unless you’re training your own large-language model maybe there are some real capital expenses, otherwise a lot of it goes back to the first-level people who are going to be the builders,” Mr Bialecki said.

“So the advice I give to founders is you should stay small, stay lean, focus on building products, focus on getting close to customers … and raise either nothing or the minimum amount you need.

“People look at fundraising as kind of a vote of confidence, and it is. But the thing is, the day after you finish the fundraise, you get a little bit of press, get an article in The Australian, then it’s back to work for me,” he said.

“I still have to build the business. Fundraising is not success.”

This approach can also pay off for potential funders, particularly in the current environment where venture capital-led raisings remain subdued.

“A lot of the best companies, you know, if you look over the last couple of decades they’ve come out of these periods where funding was harder to get. I think it forces folks to be a little bit scrappier, think a little more creatively,” Mr Bialecki said.

“Klaviyo was founded not too far after the recession in the late 2000s. There were some folks getting capital but it was not nearly what it was in the late 2010s and 2020-21 where I think there was probably too much noise in the system.”

How Klaviyo can help gauge review sentiment.

Mr Bialecki said Klaviyo’s platform can help retailers discover new pockets of customers they never knew existed as well as keep existing ones sticky, as AI revolutionises eCommerce.

“We built Klaviyo for retailers but really any kind of consumer business; it could be a restaurant, it could be a media publication,” he said.

“What we thought about was for any consumer business, usually what happens is you have a relatively small number of people reaching a really large audience and you want to personalise that end experience. You want to personalise that to hundreds of thousands, or millions, or even tens of millions.

“And the only way to that, we thought, was through software. Our goal was we wanted to make it feel like every single customer of a business could feel like they’re getting the same level of personalisation as if you had the owner of that business, the expert of that business, sitting right beside them, giving them a white-glove service.”

Klaviyo can help produce personalised advertising or marketing campaigns.

This helps reduce spam-like emails from retailers, where they send a mass email about a new product or offering to a customer, regardless of whether they are interested or not.

“We define space as not just things that maybe end up in your spam folder or that you legally cannot do. Spam is anything that the customer doesn’t want.

“Take JB Hi-Fi; there are so many customers for a wide variety of products and services. One of our products allows you to take that database, the store of all those customers, and create clusters of ‘what kinds of customers do I have and what products are they interested in?’

“So when you’re releasing a new product, you make sure that you at least start with the folks that you think have the highest affinity, the most likelihood to engage.”

Klaviyo managing director and vice-president APAC Suzy Nicoletti.

And this is where software and artificial intelligence can help.

“It’s something that everybody wanted to do but they either say it’s really expensive or only the largest companies can do it, or it’s too time consuming – ‘we’ll just skip all that and well send everyone the same message’,” Mr Bialecki said.

“The drive was always there. I think the technology was just kind of letting people down. So what we want to do is like, ‘let’s level everybody up so they can be themselves to their customers, no matter whether they have 10 or 10 million’.”

Suzy Nicoletti, who was the local managing director of Twitter, now X, for five years, is managing director and vice-president of Klaviyo’s Asia Pacific operations.

“There are unique challenges … for brands have to drive this top-line growth; they’ve got to build this personal connection in a really simple, agile and accessible way,” Ms Nicoletti said.

Originally published as How Klaviyo’s billionaire built his empire and his advice to Aussie entrepreneurs