Salesforce announces new Service Cloud workforce planning tool

With a pandemic raging across many parts of the world, many companies have customer service agents spread out as well, creating a workforce management nightmare. It wasn’t easy to manage and route requests when CSAs were in one place, it’s even harder with many working from home.

To help answer that problem Salesforce is developing a new product called Service Cloud Workforce Engagement. Bill Patterson, EVP and General Manager for CRM Applications at Salesforce points out that with these workforces spread out, it’s a huge challenge for management to distribute work and keep up with customer volume, especially as customers have moved online during COVID.

“With Service Cloud Workforce Engagement, Salesforce will arm the contact center with a connected solution — all on one platform so our customers can remain resilient and agile no matter what tomorrow may bring,” Patterson said in a statement.

Like many Salesforce products, this one is made up of several key components to deliver a complete solution. For starters, there is Service Forecast for Customer 360, a tool that helps predict workforce requirements and uses AI to distribute customer service requests in a way that makes sense. This can help in planning at a time with a likely predictable uptick in service requests like Black Friday or Cyber Monday, or even those times when there is an unexpected spike.

Next up is Omnichannel Capacity Planning, which helps managers distribute CSAs across channels such as phone, messaging or email wherever they are needed most based on the demand across a given channel.

Finally, there is a teaching component that helps coach customer service agents to give the correct answer in the correct way for a given situation. “To increase agent engagement and performance, companies will be able to quickly onboard and continually train agents by delivering bite-size, guided learning paths directly in the agent’s workspace during their shift,” the company explained.

The company says that Service Cloud Workforce Engagement will be available in the first half of next year.


By Ron Miller

Salesforce applies AI to workflow with Einstein Automate

While Salesforce made a big splash yesterday with the announcement that it’s buying Slack for $27.7 billion, it’s not the only thing going on for the CRM giant this week. In fact Dreamforce, the company’s customer extravaganza is also on the docket. While it is virtual this year, there are still product announcements aplenty and today the company announced Einstein Automate, a new AI-fueled set of workflow solutions.

Sarah Franklin, EVP & GM of Platform, Trailhead and AppExchange at Salesforce says that she is seeing companies facing a digital imperative to automate processes as things move ever more quickly online, being driven there even faster by the pandemic. “With Einstein Automate, everyone can change the speed of work and be more productive through intelligent workflow automation,” she said in a statement.

Brent Leary, principal analyst at CRM Essentials says that combined these tools are designed to help customers get to work more quickly. “It’s not only about identifying the insight, it’s about making it easier to leverage it at the the right time. And this should make it easier for users to do it without spending more time and effort,” Leary told TechCrunch.

Einstein is the commercial name given to Salesforce’s artificial intelligence platform that touches every aspect of the company’s product line, bringing automation to many tasks and making it easier to find the most valuable information on customers, which is often buried in an avalanche of data.

Einstein Automate encompasses several products designed to improve workflows inside organizations. For starters, the company has created Flow Orchestrator, a tool that uses a low-code, drag and drop approach for building workflows, but it doesn’t stop there. It also relies on AI to provide help suggest logical next steps to speed up workflow creation.

Salesforce is also bringing Mulesoft, the integration company it bought for $6.5 billion in 2018 into the mix. Instead of processes like a mortgage approval workflow, the Mulesoft piece lets IT build complex integrations between applications across the enterprise, and the Salesforce family of products more easily.

To make it easier to build these workflows, Salesforce is announcing the Einstein Automate collection page available in AppExchange, the company’s application marketplace. The collection includes over 700 pre-built connectors so customers can grab and go as they build these workflows, and finally it’s updating the OmniStudio, their platform for generating customer experiences. As Salesforce describes it, “Included in OmniStudio is a suite of resources and no-code tools, including pre-built guided experiences, templates and more, allowing users to deploy digital-first experiences like licensing and permit applications quickly and with ease. ”

Per usual with Salesforce Dreamforce announcements, the Flow Orchestrator being announced today won’t be available in beta until next summer. The Mulesoft component will be available in early 2021, but the OmniStudio updates and the Einstein connections collection are available today.


By Ron Miller

Salesforce buys Slack in a $27.7B megadeal

Salesforce, the CRM powerhouse that recently surpassed $20 billion in annual revenue, announced today it is wading deeper into enterprise social by acquiring Slack in a $27.7 billion megadeal. Rumors of a pending deal surfaced last week, causing Slack’s stock price to spike.

Salesforce co-founder and CEO Marc Benioff didn’t mince words on his latest purchase. “This is a match made in heaven. Together, Salesforce and Slack will shape the future of enterprise software and transform the way everyone works in the all-digital, work-from-anywhere world,” Benioff said in a statement.

Slack CEO Stewart Butterfield was no less effusive than his future boss. “As software plays a more and more critical role in the performance of every organization, we share a vision of reduced complexity, increased power and flexibility, and ultimately a greater degree of alignment and organizational agility. Personally, I believe this is the most strategic combination in the history of software, and I can’t wait to get going,” Butterfield said in a statement.

Every worker at every company needs to communicate, something that Slack can ably empower. What’s more, it also facilitates external communication with customers and partners, something that should be quite useful for a company like Salesforce and its family of offerings.

Ultimately, Slack was ripe for the taking. Entering 2020 it had lost around 40% of its value since it went public. Consider that after its most recent earnings report, the company lost 16% of its value, and before the Salesforce deal leaked, the company was worth only a few dollars per share more than its direct listing reference price. Toss in net losses of $147.6 million during the two quarters ending July 31, 2020, Slack’s uninspiring public valuation and its winding path to profitability and it was a sitting target for a takeover like this one. The only surprise here is the price.

Slack’s current valuation, according to both Yahoo and Google Finance is just over $25 billion, which given its very modest price change after-hours means that the market priced the company somewhat effectively. Slack is up around 48% from its valuation that preceded the deal becoming known.

The new deal also puts Salesforce more on par — and in competition — with its arch rival and sometime friend Microsoft, whose Teams product has been directly challenging Slack in the market. Microsoft, which passed on buying Slack in the past for a fraction of what Salesforce is paying today, has made Teams a key priority in recent quarters, loathe to cede any portion of the enterprise software market to another company.

What really has set Slack apart from the pack, at least initially, was its ability to integrate with other enterprise software. When you combined that with bots, those intelligent digital helpers, the company could potentially provide Salesforce customers with a central place to work without changing focus because everything they need to do can be done in Slack.

The company’s historic growth helped Slack raise over $1 billion while private, earning an impressive $7 billion valuation before going public last year. But while the Glitch-to-unicorn story appears simple, Slack has always faced entrenched competition from the likes of not only Microsoft, but also Cisco, Facebook, Google and even Asana and Monday.com.

Today’s deal comes after Salesforce’s purchase of Quip in 2016 for $750 million. Quip brought a way of socially sharing documents to the SaaS giant, and when paired with the Slack acquisition gives Salesforce a much more robust social story to tell than its internal option Chatter, an early attempt at enterprise social that never really caught on.

It’s worth noting that Salesforce was interested in Twitter in 2016, the same year that Microsoft was reportedly interested in Slack, but eventually walked away from that deal when shareholders objected, not wanting to deal with the controversial side of the social platform.

Slack was founded in 2013, but its origins go back to an online multiplayer game company called Glitch that was founded in 2009. While the game was ultimately a failure, the startup developed an internal messaging system in the process of building that company that later evolved into Slack.

For Slack, the path to the public markets was fraught with hype and outsized expectation. The company was famous, or as famous as an enterprise software company can be. At the time it felt like the its debut was the start of a long tenure as an indie company. Instead, that public life has been cut short by a huge check. Such is the dog-eat-dog world of tech.


By Ron Miller

Vista acquires Gainsight for $1.1B, adding to its growing enterprise arsenal

Vista Equity Partners hasn’t been shy about scooping up enterprise companies over the years, and today it added to a growing portfolio with its purchase of Gainsight.  The company’s software helps clients with customer success, meaning it helps create a positive customer experience when they interact with your brand, making them more likely to come back and recommend you to others. Sources pegged the price tag at $1.1 billion.

As you might expect, both parties are putting a happy face on the deal, talking about how they can work together to grow Gainsight further. Certainly, other companies like Ping Identity seem to have benefited from joining forces with Vista. Being part of a well capitalized firm allowed them to make some strategic investments along the way to eventually going public last year.

Gainsight and Vista are certainly hoping for a similar outcome in this case. Monti Saroya, co-head of the Vista Flagship Fund and senior managing director at the firm sees a company with a lot of potential that could expand and grow with help from Vista’s consulting arm, which helps portfolio companies with different aspects of their business like sales, marketing and operations.

“We are excited to partner with the Gainsight team in its next phase of growth, helping the company to expand the category it has created and deliver even more solutions that drive retention and growth to businesses across the globe,” Saroya said in a statement.

Gainsight CEO Nick Mehta likes the idea of being part of Vista’s portfolio of enterprise companies, many of whom are using his company’s products.

“We’ve known Vista for years, since 24 of their portfolio companies use Gainsight. We’ve seen Gainsight clients like JAMF and Ping Identity partner with Vista and then go public. We believe we are just getting started with customer success, so we wanted the right partner for the long term and we’re excited to work with Vista on the next phase of our journey,” Mehta told TechCrunch.

Brent Leary, principle analyst at CRM Essentials, who covers the sales and marketing space says that it appears that Vista is piecing together a sales and marketing platform that it could flip or go public in a few years.

“It’s not only the power that’s in the platform, it’s also the money. And Vista seems to be piecing together an engagement platform based on the acquisitions of Gainsight, Pipedrive and even last year’s Acquia purchase. Vista isn’t afraid to spend big money, if they can make even bigger money in a couple years if they can make these pieces fit together,” Leary told me.

While Gainsight exits as a unicorn, the deal might not have been the outcome it was looking for. The company raised over $187 million, according to Pitchbook data, though its fundraising had slowed in recent years. Gainsight raised $50 million in April of 2017 at a post-money valuation of $515 million, again per Pitchbook. In July of 2018 it added $25 million to its coffers, and the final entry was a small debt investment raised in 2019.

It could be that the startup saw its growth slow down, leaving it somewhere between ready for new venture investment and profitability. That’s a gap that PE shops like Vista look for, write a check, shake up a company and hopefully exit at an elevated price.

Gainsight hired a new chief revenue officer last month, notably. Per Forbes, the company was on track to reach “about” $100 million ARR by the end of 2020, giving it a revenue multiple of around 11x in the deal. That’s under current market norms, which could imply that Gainsight had either lower gross margins than comparable companies, or as previously noted, that its growth had slowed.

A $1.1 billion exit is never something to bemoan — and every startup wants to become a unicorn — but Gainsight and Mehta are well known, and we were hoping for the details only an S-1 could deliver. Perhaps one day with Vista’s help that could happen.


By Ron Miller

As Slack acquisition rumors swirl, a look at Salesforce’s six biggest deals

The rumors ignited last Thursday that Salesforce had interest in Slack. This morning, CNBC is reporting the deal is all but done and will be announced tomorrow. Chances are, this is going to a big number, but this won’t be Salesforce’s first big acquisition. We thought it would be useful in light of these rumors to look back at the company’s biggest deals.

Salesforce has already surpassed $20 billion in annual revenue, and the company has a history of making a lot of deals to fill in the road map and give it more market lift as it searches for ever more revenue.

The biggest deal by far so far was the $15.7 billion Tableau acquisition last year. The deal gave Salesforce a missing data visualization component and a company with a huge existing market to feed the revenue beast. In an interview in August with TechCrunch, Salesforce president and chief operating officer Bret Taylor (who came to the company in the $750 million Quip deal in 2016), sees Tableau as a key part of the company’s growing success:

“Tableau is so strategic, both from a revenue and also from a technology strategy perspective,” he said. That’s because as companies make the shift to digital, it becomes more important than ever to help them visualize and understand that data in order to understand their customers’ requirements better.”

Next on the Salesforce acquisition hit parade was the $6.5 billion Mulesoft acquisition in 2018. Mulesoft gave Salesforce access to something it didn’t have as an enterprise SaaS company — data locked in silos across the company, even in on-prem applications. The CRM giant could leverage Mulesoft to access data wherever it lived, and when you put the two mega deals together, you could see how you could visualize that data and also give more fuel to its Einstein intelligence layer.

In 2016, the company spent $2.8 billion on Demandware to make a big splash in e-Commerce, a component of the platform that has grown in importance during the pandemic when companies large and small have been forced to move their businesses online. The company was incorporated into the Salesforce behemoth and became known as Commerce Cloud.

In 2013, the company made its first billion dollar acquisition when it bought ExactTarget for $2.5 billion. This represented the first foray into what would become the Marketing Cloud. The purchase gave the company entree into the targeted email marketing business, which again would grow increasingly in importance in 2020 when communicating with customers became crucial during the pandemic.

Last year, just days after closing the Mulesoft acquisition, Salesforce opened its wallet one more time and paid $1.35 billion for ClickSoftware. This one was a nod to the company’s Service cloud, which encompasses both customer service and field service. This acquisition was about the latter, and giving the company access to a bigger body of field service customers.

The final billion deal (until we hear about Slack perhaps) is the $1.33 billion Vlocity acquisition earlier this year. This one was a gift for the core CRM product. Vlocity gave Salesforce several vertical businesses built on the Salesforce platform and was a natural fit for the company. Using Vlocity’s platform, Salesforce could (and did) continue to build on these vertical markets giving it more ammo to sell into specialized markets.

While we can’t know for sure if the Slack deal will happen, it sure feels like it will, and chances are this deal will be even larger than Tableau as the Salesforce acquisition machine keeps chugging along.


By Ron Miller

Grouparoo snares $3M seed to build open source customer data integration framework

Creating a great customer experience requires a lot of data from a variety of sources, and pulling that disparate data together has captured the attention of companies and big and small from Salesforce and Adobe to Segment and Klaviyo. Today, Grouparoo, a new startup from three industry vets is the next company up with an open source framework designed to make it easier for developers to access and make use of customer data.

The company announced a $3 million seed investment led by Eniac Ventures and Fuel Capital with participation from Hack VC, Liquid2, SCM Advisors and several unnamed angel investors.

Grouparoo CEO and co-founder Brian Leonard says that his company has created this open source customer data framework based on his own experience and difficulty getting customer data into the various tools he has been using since he was technical founder at TaskRabbit in 2008.

“We’re an open source data framework that helps companies easily sync their customer data from their database or warehouse to all of the SaaS tools where they need it. [After you] install it, you teach it about your customers, like what properties are important in each of those profiles. And then it allows you to segment them into the groups that matter,” Leonard explained.

This could be something like high earners in San Francisco along with names and addresses. Grouparoo can grab this data and transfer it to a marketing tool like Marketo or Zendesk and these tools could then learn who your VIP customers are.

For now the company is just the three founders Leonard, CTO Evan Tahler and COO Andy Jih, and while he wasn’t ready to commit to how many people he might hire in the next 12 months, he sees it being less than 10. At this early stage, the three co-founders have already been considering how to build a diverse and inclusive company, something he helped contribute to while he was at TaskRabbit.

“So, coming from [what we built at TaskRabbit] and starting something new, it’s important to all three of us to start [building a diverse company] from the beginning, and especially combined with this notion that we’re building something open source. We’ve been talking a lot about being open about our culture and what’s important to us,” he said.

TaskRabbit also comes into play in their investment where Fuel GP Leah Solivan was also founder of TaskRabbit. “Grouparoo is solving a real and acute issue that companies grapple with as they scale — giving every member of the team access to the data they need to drive revenue, acquire customers and improve real-time decision making. Brian, Andy and Evan have developed an elegant solution to an issue we experienced firsthand at TaskRabbit,” she said.

For now the company is taking an open source approach to build a community around the tool. It is still pre-revenue, but the plan is to find a way to build something commercial on top of the open source tooling. They are considering an open core license where they can add features or support or offer the tool as a service. Leonard says that is something they intend to work out in 2021.


By Ron Miller

Boostrapped Clearfind wants to cut your software spend, for a small fee

Software is eating the world, and that grub can be costly. As the market for enterprise tools and software continues to balloon, organizations are spending more and more on that software across an increasingly complicated and rapidly evolving landscape.

That’s where Clearfind comes in.

Clearfind was founded (and bootstrapped) by James Layfield and Jocelyn Simon. The startup aims to provide clarity and transparency to organizations looking to buy enterprise software. Over the past two years, Clearfind has been building out its backend, which is a mix of machine learning and humans, to distill a software offering down to its features.

When clients join the Clearfind platform, they give the startup access to their backend through integrations with products like Sage, Quickbooks, SAP, etc. so that Clearfind can take a look at their overall software spend. CIOs or CTOs can then see if there are any redundancies in their current software suite. These executives can also input the use case their looking to solve and Clearfind will deliver a detailed report on which SaaS products have the features to solve for it.

Before Clearfind, this process could be incredibly manual or costs tens and sometimes hundreds of thousands of dollars through a consultancy. And even then, those consultants may likely be recommending the products that have paid for top placement, not necessarily the best fit.

Image Credits: Clearfind

Clearfind makes money by charging 1.2 cents per dollar of annual software spend. The company says that it usually reduces spend by about 30 percent for most of the companies it works with by helping them optimize their software ecosystem and eliminate redundancies.

Clearfind also generates revenue through referral fees that come from search within Clearfind. Layfield and Simon were clear that vendors can not pay to influence search results or for placement on the Clearfind front-end, but rather pay for the leads that come through. These fees vary from vendor to vendor.

“When a vendor gets a lead from us, they prioritize it because it’s the most qualified lead they’ll ever get,” said Layfield. “That vendor will know everything. about the buyer and that the buyer is looking for all the criteria their product meets, and how much the buyer is willing to pay. That’s a level of qualified lead that just does not exist.”

Layfield explained there is an even more important reason for vendors to pay a referral fee, which is the implied LTV of a Clearfind lead. A customer that actually wants and needs the product, and the features it provides, is far less likely to churn.

Clearfind isn’t alone in the space. YC-backed Vendr, which is already profitable, is also looking to reduce SaaS spend and Intello, which doesn’t just give a view of software in use but also includes a compliance component.


By Jordan Crook

IBM CEO Arvind Krishna wants to completely transform his organization

When IBM announced it was spinning out its infrastructure services business last month, it was surely a sign that the company was going all in on hybrid cloud. Today in an interview with Jon Fortt at the CNBC Evolve summit, IBM CEO Arvind Krishna made it clear that his whole focus is going to be on transforming his organization into a hybrid cloud management vendor moving forward.

That means that instead of trying to primarily sell its own infrastructure or software services — although it will continue to do that — it will concentrate on leveraging Red Hat, the company it bought for $34 billion in 2018, to help customers manage their hybrid environments regardless of location. That could be on prem or it could be with any of the public cloud providers or anything in between.

Krishna sees this acquisition as a key part of the transition strategy to capture what he estimates is a trillion dollar opportunity in the hybrid cloud management market, and he believes his company is well positioned to grab a piece of that. “The Red Hat acquisition gave us the technology base on which to build a hybrid cloud technology platform based on open source, and based on giving choice to our clients as they embark on this journey. With the success of that acquisition now giving us the fuel, we can then take the next step, and the larger step, of taking the managed infrastructure services out. So the rest of the company can be absolutely focused on hybrid cloud and artificial intelligence,” Krishna told CNBC.

While he recognizes that Microsoft and Amazon are powerful players in the public cloud, he doesn’t see them as competitors, so much as partners in this new approach. In fact, mixing in a broad variety of third party partners is a big part of this.

“I look at both Microsoft and Amazon as likely partners in this journey, not as being the one and two [in market share]. In the hybrid world the question is where does the client want to decide where the workload runs? They could run it on Amazon. They can run on Microsoft. They can run it on IBM or they can run it on premises,” he said.

He believes that Red Hat can be the glue to hold this environment together and let customers have a single way of managing this complexity. The key question for IBM is whether customers see IBM and by extension Red Hat, as the key vendor for this role.

He recognizes that this isn’t just about adding and subtracting technology pieces. When it comes to transforming the way you do business in this way, it requires a massive cultural shift, one we saw Satya Nadella pull off when he took over as CEO at Microsoft in 2014. Much like Nadella, Krishna was promoted from within. He understands how things operate and that he needs to change the way things have traditionally been done at Big Blue if he’s going to succeed.

“I’ve talked a lot internally about a growth mindset, and about being much more entrepreneurial. And we can be entrepreneurs, even within large companies. But it comes from having extreme focus. So when we provide the focus of being focused on hybrid cloud and artificial intelligence, which I believe are the two fundamental forces, then you say how do you unlock everybody being able to go after that,” he said.

That’s going to be the big key for him moving forward as transforming a company the size of IBM is going to be a tremendous challenge for him as a leader. As Fortt pointed out, IBM salespeople are used to focusing on IBM products. This approach means they have to look at the market much more broadly, and that requires a new mindset. It will be up to Krishna to lead the way and make sure that his employees are on the same page about this. The success of this approach depends on that.


By Ron Miller

Leena AI nabs $8M Series as it expands from chatbots to HR service platform

When we covered Leena AI as a member of the Y Combinator Summer 2018 cohort, the young startup was firmly focused on building HR chatbots, but in the intervening years it has expanded the vision to a broader HR policy platform. Today, the company announced an $8 million Series A led by Greycroft with help from several individual industry investors.

Company CEO and co-founder Adit Jain says that in 2018 the company was concentrating on building an intelligent virtual assistant for HR-related questions. It allowed employees to ask the bot questions like how many vacation days they have left or what holidays they have off this year.

Over the last couple of years since leaving Y Combinator, the company has moved into broader HR service delivery. “So I’m talking about having an intelligent case management, knowledge management and document management system, which is backing the virtual assistant as well,” Jain explained.

He says that users should think of it as an entire system where the chatbot is the user interface for employees to interact with the HR information on the back end. For example, he says that the knowledge management component is where the chatbots find the answers to questions, and as employees interact with the chatbot, it grows more intelligent based on the feedback from them.

The document management piece enables HR to write or import HR policies and the case management system comes into play when the situation is too complex for the chatbot to handle and it has to be escalated to a human HR representative.

When we spoke to Jain in September 2018 at the time of his startup’s $2 million seed round, he had 16 customers and hoped to have 50 in the next 12-18 months. Today the company actually has 100 enterprise customers with 300,000 employees using the platform worldwide.

In fact, the pandemic has fueled business with more than half of those customers coming on board this year. He says this is because companies are looking for ways to digitize processes like HR as employees are working from home more.

“This is a trend that’s going to continue as organizations have realized the value of doing things with more and more digital applications taking care of your processes […] especially mundane, repeatable tasks being handed over to technology more and more,” Jain said.

As the business has grown this year, the company has expanded from 30 to 75 employees and he hopes to double that number in the next year. As he does, he has discussed with his lead investor how to build a diverse and inclusive culture at Leena AI .

One thing he is trying to do is raise some money from a diverse group of investors, approximately $400,000, and his hope is that these diverse investors can help him build solid diversity programs as he adds employees to his growing company.

That the startup hasn’t only grown during these turbulent times, but thrived shows that companies are looking to modernize every part of the enterprise technology stack, and that includes HR.


By Ron Miller

Lightyear scores $3.7M seed to digitize networking infrastructure procurement

Lightyear, a New York City startup that wants to make it easier for large companies to procure networking infrastructure like internet and SD-WAN, announced a $3.7 million seed round today. While it was at it, the company announced that it was emerging from stealth and offering its solution in public beta.

Amplo led the round with help from Susa Ventures, Ludlow Ventures, Mark Cuban, David Adelman and Operator Partners.

Company CEO and co-founder Dennis Thankachan says that while so much technology buying has moved online, networking technology procurement still involves phone calls for price quotes that could sometimes take weeks to get. Thankachan says that when he was working at a hedge fund specializing in telecommunications he witnessed this first hand and saw an opportunity for a startup to fill the void.

“Our objective is to make the process of buying telecom infrastructure, kind of like buying socks on Amazon, providing a real consumer-like experience to the enterprise and empowering buyers with data because information asymmetry and a lack of transparent data on what things should cost, where providers are available, and even what’s existing already in your network is really at the core of the problem for why this is frustrating for enterprise buyers,” Thankachan explained.

The company offers the ability to simply select a service and find providers in your area with costs and contract terms if it’s a simple purchase, but he recognizes that not all enterprise purchases will be that simple and the startup is working to digitize the corporate buying process into the Lightyear platform.

To provide the data that he spoke of, the company has already formed relationships with over 400 networking providers worldwide. The pricing model is in flux, but could involve a monthly subscription or a percentage of the sale. That is something they are working out, but they are using the latter during Beta testing to keep the product free for now.

The company already has 10 employees and flush with the new investment, it plans to double that in the next year. Thankachan says as he builds the company, particularly as a person of color himself, he takes diversity and inclusion extremely seriously and sees it as part of the company’s core values.

“Trying to enable people from non-traditional backgrounds to succeed will be really important to us, and I think providing economic opportunity to people that traditionally would not have been afforded several aspects of economic opportunity is the biggest ways to fix the opportunity gap in this country,” he said.

The company, which launched a year ago has basically grown up during the pandemic. That means he has yet to meet any of his customers or investors in person, but he says he has learned to adapt to that approach. While he is based in NYC, his investors are are in the Bay Area and so that remote approach will remain in place for the time being.

As he makes his way from seed to a Series A, he says that it’s up to him to stay focused and execute with the goal of showing product-market fit across a variety of company types. He believes if the startup can do this, it will have the data to take to investors when it’s time to take the next step.


By Ron Miller

DataFleets keeps private data useful, and useful data private, with federated learning and $4.5M seed

As you may already know, there’s a lot of data out there, and some of it could actually be pretty useful. But privacy and security considerations often put strict limitations on how it can be used or analyzed. DataFleets promises a new approach by which databases can be safely accessed and analyzed without the possibility of privacy breaches or abuse — and has raised a $4.5 million seed round to scale it up.

To work with data, you need to have access to it. If you’re a bank, that means transactions and accounts; if you’re a retailer, that means inventories and supply chains, and so on. There are lots of insights and actionable patterns buried in all that data, and it’s the job of data scientists and their ilk to draw them out.

But what if you can’t access the data? After all, there are many industries where it is not advised or even illegal to do so, such as in health care. You can’t exactly take a whole hospital’s medical records, give them to a data analysis firm, and say “sift through that and tell me if there’s anything good.” These, like many other data sets, are too private or sensitive to allow anyone unfettered access. The slightest mistake — let alone abuse — could have serious repercussions.

In recent years a few technologies have emerged that allow for something better, though: analyzing data without ever actually exposing it. It sounds impossible, but there are computational techniques for allowing data to be manipulated without the user ever actually having access to any of it. The most widely used one is called homomorphic encryption, which unfortunately produces an enormous, orders-of-magnitude reduction in efficiency — and big data is all about efficiency.

This is where DataFleets steps in. It hasn’t reinvented homomorphic encryption, but has sort of sidestepped it. It uses an approach called federated learning, where instead of bringing the data to the model, they bring the model to the data.

DataFleets integrates with both sides of a secure gap between a private database and people who want to access that data, acting as a trusted agent to shuttle information between them without ever disclosing a single byte of actual raw data.

Illustration showing how a model can be created without exposing data.

Image Credits: DataFleets

Here’s an example. Say a pharmaceutical company wants to develop a machine learning model that looks at a patient’s history and predicts whether they’ll have side effects with a new drug. A medical research facility’s private database of patient data is the perfect thing to train it. But access is highly restricted.

The pharma company’s analyst creates a machine learning training program and drops it into DataFleets, which contracts with both them and the facility. DataFleets translates the model to its own proprietary runtime and distributes it to the servers where the medical data resides; within that sandboxed environment, it runs grows into a strapping young ML agent, which when finished is translated back into the analyst’s preferred format or platform. The analyst never sees the actual data, but has all the benefits of it.

Screenshot of the DataFleets interface. Look, it’s the applications that are meant to be exciting.

It’s simple enough, right? DataFleets acts as a sort of trusted messenger between the platforms, undertaking the analysis on behalf of others and never retaining or transferring any sensitive data.

Plenty of folks are looking into federated learning; the hard part is building out the infrastructure for a wide-ranging enterprise-level service. You need to cover a huge amount of use cases and accept an enormous variety of languages, platforms, and techniques, and of course do it all totally securely.

“We pride ourselves on enterprise readiness, with policy management, identity access management, and our pending SOC 2 certification,” said DataFleets COO and co-founder Nick Elledge. “You can build anything on top of DataFleets and plug in your own tools, which banks and hospitals will tell you was not true of prior privacy software.”

But once federated learning is set up, all of a sudden the benefits are enormous. For instance, one of the big issues today in combating COVID-19 is that hospitals, health authorities, and other organizations around the world are having difficulty, despite their willingness, in securely sharing data relating to the virus.

Everyone wants to share, but who sends whom what, where is it kept, and under whose authority and liability? With old methods, it’s a confusing mess. With homomorphic encryption it’s useful but slow. With federated learning, theoretically, it’s as easy as toggling someone’s access.

Because the data never leaves its “home,” this approach is essentially anonoymous and thus highly compliant with regulations like HIPAA and GDPR, another big advantage. Elledge notes: “We’re being used by leading healthcare institutions who recognize that HIPAA doesn’t give them enough protection when they are making a data set available for third parties.”

Of course there are less noble, but no less viable, examples in other industries: wireless carriers could make subscriber metadata available without selling out individuals; banks could sell consumer data without violating anyone in particular’s privacy; bulky datasets like video can sit where they are instead of being duplicated and maintained at great expense.

The company’s $4.5M seed round is seemingly evidence of confidence from a variety of investors (as summarized by Elledge): AME Cloud Ventures (Jerry Yang of Yahoo!) and Morado Ventures, Lightspeed Venture Partners, Peterson Ventures, Mark Cuban, LG, Marty Chavez (President of the Board of Overseers of Harvard), Stanford-StartX fund, and three unicorn founders (Rappi, Quora, and Lucid).

With only 11 full time employees DataFleets appears to be doing a lot with very little, and the seed round should enable rapid scaling and maturation of its flagship product. “We’ve had to turn away or postpone new customer demand to focus on our work with our lighthouse customers,” Elledge said. They’ll be hiring engineers in the U.S. and Europe to help launch the planned self-service product next year.

“We’re moving from a data ownership to a data access economy, where information can be useful without transferring ownership,” said Elledge. If his company’s bet is on target, federated learning is likely to be a big part of that going forward.


By Devin Coldewey

Customer experience and digital transformation concepts are merging during the pandemic

Customer experience and digital transformation are two terms we’ve been hearing about for years, but have often remained nebulous in many organizations — something to aspire to perhaps, but not take completely seriously. Yet the pandemic has been a forcing event for both concepts, thrusting the ideas front and center.

Suddenly startups that help with either of these concepts are seeing rising demand, even in a year with an overall difficult economic climate. If you are fortunate enough to be helping companies digitize a process or improve how customers interact with companies, you may be seeing increased interest from customers and potential acquirers (and this was true even before this year). A case in point is Twilio acquiring Segment for $3.2 billion recently to help build data-fueled applications to interact with customers.

Even though building a positive customer experience has never been completely about digital, at a time where it’s difficult to interact with customers in person, the digital side of it has taken new urgency. As COVID-19 took hold this year, businesses, large and small, suddenly realized the only way to connect to their customers was digitally. At that point, digital transformation became customer experience’s buddy when other ways of contacting one another have been severely limited.

Pandemic brings changes

Just about every startup founder I talk to these days, along with bigger, more established companies, talk about how the pandemic has pushed companies to digitally transform much faster than they would have without COVID.

Brent Leary, founder at CRM Essentials, says that the pandemic has certainly expedited the need to bring these two big ideas together and created opportunities as that happens. “The coronavirus, as terrible as it has been in so many ways to so many people, has created opportunities for companies to build direct-to-consumer (D2C) digital pipelines that can make them stronger companies despite the current hardships,” Leary told TechCrunch.

The cloud plays a big role in the digital transformation process, and for the last decade, we have seen companies make a slow but steady shift to the cloud. When you have a situation like we’ve had with the coronavirus, it speeds everything up. As it turns out, being in the cloud helps you move faster because you don’t have to worry about all of the overhead of running a business critical application as the SaaS vendors take care of all that for you.


By Ron Miller

Vivun announces $18M Series A to keep growing pre-sales platform

Vivun’s co-founder and CEO, Matt Darrow used to run pre-sales at Zuora and he saw that pre-sales team members had a lot of insight into customers. He believed if he could capture that insight, it would turn into valuable data to be shared across the company. He launched Vivun to build upon that idea in 2018, and today the company announced an $18 million Series A.

Accel led the round with participation from existing investor Unusual Ventures. With today’s investment, Vivun has raised a total of $21 million, according to the company.

Darrow says that the company has caught the attention of investors because this is a unique product category and there has been a lot of demand for it. “It turns out that businesses of all sizes, startups and enterprises, are really craving a solution like Vivun, which is dedicated to pre-sales. It’s a big, expensive department, and there’s never been software for it before,” Darrow told TechCrunch.

He says that a couple of numbers stand out in the company’s first year in business. First of all, the startup grew annual recurring revenue (ARR) six fold (although he wouldn’t share specific numbers) and tripled the workforce growing from 10 to 30, all while doing business as an early stage startup in the midst of a pandemic.

Darrow said while the business has grown this year, he found smaller businesses in the pipeline were cutting back due to the impact of COVID’s, but larger businesses like Okta, Autodesk and Dell Secureworks have filled in nicely, and he says the product actually fits well in larger enterprise organizations.

“If we look at our value proposition and what we do, it increases exponentially with the size of the company. So the larger the team, the larger the silos are, the larger the organization is, the bigger the value of solving the problem for pre-sales becomes,” he said.

After going from a team of 10 to 30 employees in the last year, Darrow wants to double the head count to reach around 60 employees in the next year, fueled in part by the new investment dollars. As he builds the company, the founding team, which is made up of two men and two women, is focused on building a diverse and inclusive employee base.

“It is something that’s really important to us, and we’ve been working at it. Even as we went from 10 to 30, we’ve worked to pay close attention to [diversity and inclusion], and we continue to do so just as part of the culture of how we build the business,” he said.

He’s been having to build that workforce in the middle of COVID, but he says that even before the pandemic shut down offices, he and his founding partners were big on flexibility in terms of time spent in the office versus working from home. “We knew that for mental health strength and stability, that being in the office nine to five, five days a week wasn’t really a modern model that would cut it,” he said.

Even pre-COVID the company was offering two quiet periods a year to let people refresh their batteries. In the midst of COVID, he’s trying to give people Friday afternoons off to go out and exercise and relax their minds.

As the startup grows, those types of things may be harder to do, but it’s the kind of culture Darrow and his founding partners hope to continue to foster as they build the company.


By Ron Miller

YC grad DigitalBrain snags $3.4M seed to streamline customer service tasks

Most startup founders have a tough road to their first round of funding, but the founders of Digital Brain had it a bit tougher than most. The two young founders survived by entering and winning hackathons to pay their rent and put on food on the table. One of the ideas they came up with at those hackathons was DigitalBrain, a layer that sits on top of customer service software like Zendesk to streamline tasks and ease the job of customer service agents.

They ended up in Y Combinator in the Summer 2020 class, and today the company announced a $3.4 million seed investment. This total includes $3 million raised this round, which closed in August, and previously unannounced investments of $250,000 in March from Unshackled Ventures and $150,000 from Y Combinator in May.

The round was led by Moxxie Ventures with help from Caffeinated Capital, Unshackled Ventures, Shrug Capital, Weekend Fund, Underscore VC and Scribble Ventures along with a slew of individual investors.

Company co-founder Kesava Kirupa Dinakaran says that after he and his partner Dmitry Dolgopolov met at hackathon in May 2019, they moved into a community house in San Francisco full of startup founders. They kept hearing from their housemates about the issues their companies faced with customer service as they began scaling. Like any good entrepreneur, they decided to build something to solve that problem.

“DigitalBrain is an external layer that sits on top of existing help desk software to actually help the support agents get through their tickets twice as fast, and we’re doing that by automating a lot of internal workflows, and giving them all the context and information they need to respond to each ticket making the experience of responding to these tickets significantly faster,” Dinakaran told TechCrunch.

What this means in practice is that customer service reps work in DigitalBrain to process their tickets, and as they come upon a problem such as canceling an order or reporting a bug, instead of traversing several systems to fix it, they chose the appropriate action in DigitalBrain, enter the required information, and the problem is resolved for them automatically.  In the case of a bug, it would file a Jira ticket with engineering. In the case of canceling an order, it would take all of the actions and update all of the records required by this request.

As Dinakaran points out they aren’t typical Silicon Valley startup founders. They are 20 year old immigrants from India and Russia respectively, who came to the U.S. with coding skills and a dream of building a company. “We are both outsiders to Silicon Valley. We didn’t go to college. We don’t come from families of means. We wanted to come here and build our initial network from ground up,” he said.

Eventually they met some folks through their housemates, who suggested that they apply to Y Combinator. “As we started to meet people that we met through our community house here, some of them were YC founders and they kept saying I think you guys will love the YC community, not just in terms of your ethos, but also just purely from a perspective of meeting new people and where you are,” he said.

He said while he and his co-founder have trouble wrapping their arms around a number like the amount they have in the bank now, considering it wasn’t that long ago that they struggling to meet expenses every month, they recognize this money buys them an opportunity to help start building a more substantial company.

“What we’re trying to do is really accelerate the development and building of what we’re doing. And we think if we push the gas pedal with the resources we’ve gotten, we’ll be able to accelerate bringing on the next couple of customers, and start onboarding some of the larger companies we’re interested in,” he said.


By Ron Miller

Slack introduces new features to ease messaging between business partners

Slack is holding its Frontiers conference this week — virtually like everyone else in 2020 — and it’s introducing some new features to make it easier to message between partners. At the same time, it’s talking about some experimental features that could appear in the platform at some point (or not).

Let’s start with some features to help communicate with partners outside of your company in a secure way. This is always a tough nut to crack whether it’s collaboration or file sharing or any of the things that trusted partners do when they are working closely together.

To help solve that, the company is creating the notion of trusted partners, and this has a few components. The first is Slack Connect DMs (direct messages), which allows users inside an organization to collaborate with anyone outside their company simply by sending an invite.

“You can now direct message anyone in the Slack ecosystem. That means that anyone that has a Slack license can connect to one another,” Ilan Frank, VP of product at Slack told TechCrunch. While the company is introducing the new capability this week, it won’t be widely available until next year as the company wants to make sure this is used for business purposes only in a secure and non-spammy way.

“We’re going to be focused on, before we make this widely available, a lot of different information privacy and security [components] to make sure that we account for things like spam and phishing attacks and all that. This should not be a LinkedIn or Facebook Messenger where anyone can connect with you. This is [going to focus on] business for business work,” Frank explained.

Slack is introducing a couple of concepts to help ensure that happens. For starters, it’s adding Verified Organizations, which works a bit like verified users on Twitter, to help ensure you are dealing with someone from an organization you trust and work with before you start exchanging information on Slack.

“So if someone connects to you through direct message or through a channel, before you even make that connection, [you can ensure] if they are [from] a verified Slack organization versus someone who has just signed up on the internet, and you have not heard them, don’t have a relationship with them and don’t know who they are,” Frank said.

The last piece is called Managed Connections, which lets Slack admins control which organizations and individuals can connect with people inside your organization on Slack in a streamlined manner, which helps ensure that the other two new features are used in a responsible way.

“Organizations have told us that they want to go even deeper into the granularity of control, and they want to have different policies by external organizations that they’re connected to,” he said. Managed Connections lets admins set policies around different types of relationships with outside organizations.

All of these new tools are being introduced this week, but will be released later this year or early next year.

Among the other things the company working on in is enabling customers to embed video or audio in a Slack channel, extending it beyond a pure text messaging tool. The company was careful to point out that these features are just experiments for now and may or may not end up in the product  in the future.


By Ron Miller