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Raising Funding on AngelList: Contactually CEO Zvi Band (Part 4)

Posted on Thursday, Jan 5th 2017

Sramana Mitra: Talk to me a bit about customers before October 2011 and the 500 Startups funding. It sounds like you managed to get some customers to resonate with your idea. Who were those first customers? How did you get to them and what specifically did they tell you about what they wanted to see in your general idea?

Zvi Band: Great question. A customer is someone who pays you money. We didn’t have any customers, but we did have people who said they would pay for it. We didn’t build any credit card systems but had a pricing page. People could actually see how much it cost. That helped us. They didn’t like what we built and that was okay, but they did like the idea that we were pursuing. They were able to come to us with their own pain points. For example, let’s say, we have a real estate agent using the product.

They said, “Most of my business comes via people I know. I have to do a good job of staying in touch with them. Otherwise, they’re going to refer me or do business with me a few years later. I have to stay in touch with these people. Can you help me?” I had venture capital firms saying, “We’re meeting all these people all day long. We may not be ready to invest in them for years. How do we stay in touch with them?” One of the core pain points was staying in touch. We then pivoted the company a little bit from being a proactive CRM to instead helping people stay in touch. That ended up being what we do today.

Sramana Mitra: Were you doing this on top of a different CRM system like Salesforce? Was this a plug-in or was it something from scratch?

Zvi Band: We initially built it as an add-on to Highrise and Salesforce. Highrise for small to medium businesses and Salesforce for enterprise. What we learned, however, is customers would come in and say, “I like the value you’re providing. There is only one problem. I don’t have a database. I dont’ have a CRM. I have contacts in my email, calendar, and my phone.”

We said, “You don’t need a CRM. We’ll pull in the data for you.” We saw that our initial idea of being an add-on on top of a CRM didn’t make sense because the markets we were going after and the people we were trying to serve didn’t have CRM. There’s still so many millions and millions of professionals in the world that are still using a spreadsheet as their CRM. We can do better than that.

Sramana Mitra: You have positioned this company to go for those people who don’t have CRM yet?

Zvi Band: Exactly. I was speaking to a number of CRM influencers and founders of very big and well-known CRM companies. One of the things they said is, “CRM is such a big market. It is still a fraction of the size that it could be because most people aren’t using CRM. A lot of the companies that deploy CRM are not happy with it. It’s an ineffective product.”

Only 40% of CRM installations actually succeed within the first year. Most of them fail. They fail because they usually end up not solving the actual problem. People say, “I’m just going to go back to using an Excel spreadsheet.” Building a product that people would actually use and benefit from, especially people who have not been able to successfully implement CRM, ended up being our audacious goal.

Sramana Mitra: What segments did you get traction in? Is it the real estate agents that you mentioned?

Zvi Band: It’s really anyone who can connect their ability to build and maintain relationships for long-term success. Specifically, that means a lot of real estate agents- individual agents up to the big 2,000-person brokerage. We sell to a lot of those. We also sell to the long-tail of other industries whether it’s lawyers or financial advisers or consultants. We have people who call themselves startup witch doctors. All these people fit the general mold of someone who, if it weren’t for their relationships, would be dead in the water. We’re able to help with that.

This segment is part 4 in the series : Raising Funding on AngelList: Contactually CEO Zvi Band
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