Venture capital investment exploded across a number of geographies in 2019 despite the constant threat of an economic downturn.
San Francisco, of course, remains the startup epicenter of the world, shutting out all other geographies when it comes to capital invested. Still, other regions continue to grow, raking in more capital this year than ever.
In Utah, a new hotbed for startups, companies like Weave, Divvy and MX Technology raised a collective $370 million from private market investors. In the Northeast, New York City experienced record-breaking deal volume with median deal sizes climbing steadily. Boston is closing out the decade with at least 10 deals larger than $100 million announced this year alone. And in the lovely Pacific Northwest, home to tech heavyweights Amazon and Microsoft, Seattle is experiencing an uptick in VC interest in what could be a sign the town is finally reaching its full potential.
Seattle startups raised a total of $3.5 billion in VC funding across roughly 375 deals this year, according to data collected by PitchBook. That’s up from $3 billion in 2018 across 346 deals and a meager $1.7 billion in 2017 across 348 deals. Much of Seattle’s recent growth can be attributed to a few fast-growing businesses.
Convoy, the digital freight network that connects truckers with shippers, closed a $400 million round last month bringing its valuation to $2.75 billion. The deal was remarkable for a number of reasons. Firstly, it was the largest venture round for a Seattle-based company in a decade, PitchBook claims. And it pushed Convoy to the top of the list of the most valuable companies in the city, surpassing OfferUp, which raised a sizable Series D in 2018 at a $1.4 billion valuation.
Convoy has managed to attract a slew of high-profile investors, including Amazon’s Jeff Bezos, Salesforce CEO Marc Benioff and even U2’s Bono and the Edge. Since it was founded in 2015, the business has raised a total of more than $668 million.
Remitly, another Seattle-headquartered business, has helped bolster Seattle’s startup ecosystem. The fintech company focused on international money transfer raised a $135 million Series E led by Generation Investment Management, and $85 million in debt from Barclays, Bridge Bank, Goldman Sachs and Silicon Valley Bank earlier this year. Owl Rock Capital, Princeville Global, Prudential Financial, Schroder & Co Bank AG and Top Tier Capital Partners, and previous investors DN Capital, Naspers’ PayU and Stripes Group also participated in the equity round, which valued Remitly at nearly $1 billion.
A number of other factors have contributed to Seattle’s long-awaited rise in venture activity. Top-performing companies like Stripe, Airbnb and Dropbox have established engineering offices in Seattle, as has Uber, Twitter, Facebook, Disney and many others. This, of course, has attracted copious engineers, a key ingredient to building a successful tech hub. Plus, the pipeline of engineers provided by the nearby University of Washington (shout-out to my alma mater) means there’s no shortage of brainiacs.
There’s long been plenty of smart people in Seattle, mostly working at Microsoft and Amazon, however. The issue has been a shortage of entrepreneurs, or those willing to exit a well-paying gig in favor of a risky venture. Fortunately for Seattle venture capitalists, new efforts have been made to entice corporate workers to the startup universe. Pioneer Square Labs, which I profiled earlier this year, is a prime example of this movement. On a mission to champion Seattle’s unique entrepreneurial DNA, Pioneer Square Labs cropped up in 2015 to create, launch and fund technology companies headquartered in the Pacific Northwest.
Boundless CEO Xiao Wang at TechCrunch Disrupt 2017
Operating under the startup studio model, PSL’s team of former founders and venture capitalists, including Rover and Mighty AI founder Greg Gottesman, collaborate to craft and incubate startup ideas, then recruit a founding CEO from their network of entrepreneurs to lead the business. Seattle is home to two of the most valuable businesses in the world, but it has not created as many founders as anticipated. PSL hopes that by removing some of the risk, it can encourage prospective founders, like Boundless CEO Xiao Wang, a former senior product manager at Amazon, to build.
“The studio model lends itself really well to people who are 99% there, thinking ‘damn, I want to start a company,’ ” PSL co-founder Ben Gilbert said in March. “These are people that are incredible entrepreneurs but if not for the studio as a catalyst, they may not have [left].”
Boundless is one of several successful PSL spin-outs. The business, which helps families navigate the convoluted green card process, raised a $7.8 million Series A led by Foundry Group earlier this year, with participation from existing investors Trilogy Equity Partners, PSL, Two Sigma Ventures and Founders’ Co-Op.
Years-old institutional funds like Seattle’s Madrona Venture Group have done their part to bolster the Seattle startup community too. Madrona raised a $100 million Acceleration Fund earlier this year, and although it plans to look beyond its backyard for its newest deals, the firm continues to be one of the largest supporters of Pacific Northwest upstarts. Founded in 1995, Madrona’s portfolio includes Amazon, Mighty AI, UiPath, Branch and more.
Voyager Capital, another Seattle-based VC, also raised another $100 million this year to invest in the PNW. Maveron, a venture capital fund co-founded by Starbucks mastermind Howard Schultz, closed on another $180 million to invest in early-stage consumer startups in May. And new efforts like Flying Fish Partners have been busy deploying capital to promising local companies.
There’s a lot more to say about all this. Like the growing role of deep-pocketed angel investors in Seattle have in expanding the startup ecosystem, or the non-local investors, like Silicon Valley’s best, who’ve funneled cash into Seattle’s talent. In short, Seattle deal activity is finally climbing thanks to top talent, new accelerator models and several refueled venture funds. Now we wait to see how the Seattle startup community leverages this growth period and what startups emerge on top.
Salesforce turned 20 this year, and the most successful pure enterprise SaaS company ever showed no signs of slowing down. Consider that the company finished the year on an $18 billion run rate, rushing toward its 2022 revenue goal of $20 billion. Oh, and it also spent a tidy $15.7 billion to buy Tableau this year in the most high-profile and expensive acquisition it’s ever made.
Co-founder, chairman and CEO Marc Benioff published a book called Trailblazer about running a socially responsible company, and made the rounds promoting it. In fact, he even stopped by TechCrunch Disrupt in San Francisco in September, telling the audience that capitalism as we know it is dead. Still, the company announced it was building two more towers in Sydney and Dublin.
It also promoted Bret Taylor just last week, who could be in line as heir apparent to Benioff and co-CEO Keith Block whenever they decide to retire. The company closed the year with a bang with a $4.5 billion quarter. Salesforce, for the most part, has somehow been able to balance Benioff’s vision of responsible capitalism while building a company makes money in bunches, one that continues to grow and flourish, and that’s showing no signs of slowing down anytime soon.
The company just keeps churning out good quarters. Here’s what this year looked like:
Salesforce announced today that it has named Bret Taylor as president and chief operating officer of the company. Prior to today’s promotion, Taylor held the position of president and chief product officer.
In his new position, Taylor will be responsible for a number of activities including leading Salesforce’s global product vision, engineering, security, marketing and communications. That’s a big job, and as such he will report directly to chairman Marc Benioff.
Taylor has had increasing responsibilities over the last couple of years, taking the lead on many of Salesforce’s biggest announcements at Dreamforce, the company’s massive yearly customer conference. In fact, Benioff said in a statement that Taylor has already been responsible for product vision, development and go-to-market strategy prior to today’s promotion.
“His expanded portfolio of responsibilities will enable us to drive even greater customer success and innovation as we experience rapid growth at scale,” Benioff said in the statement.
Brent Leary, founder at CRM Essentials, who has been watching the company since its earliest days, says it feels like this could be part of succession plan down the road. This promotion could be a signal that Taylor is being groomed to take over for Benioff and co-CEO Keith Block whenever they decide to move on.
“It’s been feeling like he’s being groomed for the big chair somewhere down the line. He’s a generation behind the current leadership, but his experiences at startups and creating iconic technologies at iconic companies uniquely positioned him for a move like this at a company like Salesforce,” Leary told TechCrunch.
Taylor came to Salesforce when the company purchased Quip in August 2016 for $750 million. He was promoted to president and chief product officer in November 2017. Prior to launching Quip he was chief technology officer at Facebook.
The global industry potential of artificial intelligence is well-documented, yet the vision of this AI future is uncertain.
AI and automation trends are generating significant debate among economists and governments, particularly around employment impact and uncertain social outcomes. The mainstream attention is warranted. According to PwC, AI “could contribute up to $15.7 trillion to the global economy in 2030, more than the current output of China and India combined.”
AI is at a crossroads, and its long-term outlook is still hotly debated. Despite social media giants, automotive companies and numerous other industries investing hundreds of billions of dollars in AI, many automation technologies are not yet directly generating revenue and instead are forecasted to become profitable in the coming decades. This creates additional uncertainty of AI’s true market potential. The realistic potential value of AI is unknown, yet, as the technology advances, the ultimate impact could be of great consequence to virtually every economy.
There are many reasons to view AI’s future from an optimistic lens, however: chatbots provide significant evidence for AI’s positive impact on both business growth and employment markets. Today, chatbots are increasingly capable of mimicking human interactions and conversations to assist business-to-business, business-to-consumer, business-to-government, advertising audiences and other diverse groups. The evolution of the cognitive computer science behind conversational chatbots is perhaps one of the best examples of AI technologies driving revenue. Further, chatbot technology shows some of the greatest promise for augmenting, rather than replacing human workers.
Chatbots are delivering real revenue today for some of the world’s leading financial services (Bank of America), retail (Levi’s), and technology companies (Zendesk) . We’re seeing more consumers taking the next step in a transaction or even making a purchase decision based off conversations with chatbots. Beyond driving sales, chatbots have numerous applications to a wide range of organizations. Nonprofits, NGOs, and even political campaigns find value in deploying chatbots to help handle the influx of inquiries from stakeholders and relevant audiences.
Rather than these chatbots replacing human workers, organizations are finding chatbots to be a helpful and value-creating opportunity that frees employees to focus on more strategic tasks. Apple’s Siri, Amazon Alexa and Microsoft Cortana aren’t replacing executive assistants today, but these technologies are all capable of supporting the executive assistant function in the workplace.
Gartner predicts AI augmentation, defined as a “human-centered partnership model of people and AI working together to enhance cognitive performance,” could generate $2.9 trillion of business value by 2021. Many industries see potential for chatbots to augment functions like sales, customer support and IT, enabling workers to create value in more strategic ways. Bain & Company finds chatbots to be among the most notable examples of artificial intelligence and automation in practice: “Companies use AI applications to understand industry trends, manage their workforce, address problems, power chatbots and personalize content to enable self-service.”
Clearly, the implications of scaled, human-like engagement are stunning in their capacity to carry out tasks. A chatbot’s ability to simultaneously hold tens of thousands of conversations — pulling from many millions of data points — is comparable to what a human customer service rep could accomplish in more than 1,000 years of nonstop work. Scaling customer service via AI allows service professionals to focus on big picture and more complex issues, and it provides rich data on customer interactions. We anticipate seeing more companies look to build better customer service experiences through chatbots, as Google and Salesforce announced in April.
From our research and work with leading global companies, it’s clear that enterprises are finding that chatbots bring about tremendous value while supporting both people employment and long-term business growth opportunities today. Ultimately, chatbots are on track to showcase some of the most optimistic examples of AI augmentation. Consider three examples:
A startup that’s built cross-channel growth marketing platform — used by businesses to capture customers across whatever digital media they happen to be using — is today announcing funding to do some growing of its own. Iterable — which uses email, push and in-app notifications, SMS and other sources to interact with users and deliver them targeted, personalised marketing messages — has closed another $60 million in funding, a Series D that it’s going to use to continue scaling its business into more markets (it’s recently expanded in Europe with a London office), and with more hiring.
“This is about being prepared because of the uncertainty in the wider market,” said co-founder and CEO Justin Zhu said in an interview. “We are not sure what might happen next year.” The bigger trend in marketing tech is around consolidation and the building of “marketing clouds” by large players like Adobe and Salesforce, so it’s notable that Zhu said that while Iterable is continuing to grow — it has the startup’s focus will be on remaining independent and turning profitable.
“It’s about getting to breakeven and then beyond that,” he said.
This latest round, a Series D, is being led by Viking Global Investors — the huge investment firm and hedge fund that has backed the likes of Facebook and security firm Druva, but also a range of biotech and pharma companies — with participation from previous investors CRV, Index Ventures, Blue Cloud Ventures, Harmony Partners, and Stereo Capital.
The company has now raised $140 million in total. Zhu described the valuation as a “very healthy increase,” and while he is not talking specific numbers, Iterable’s Series C came in at $275 million post-money, according to PitchBook, which makes this latest round definitely higher than $325 million. (We’ll keep trying to get a more specific number.)
A lot of marketing startups have their beginnings in the world of — no surprises here — marketing, which is to say that of the people who have had direct experience in dealing with the pain points of how legacy marketing products work, some of the more enterprising go on to found companies to try to solve those problems.
Iterable has a bit of a different origin story in that its founders come from technical backgrounds. Zhu co-founded Iterable with Andrew Boni six years ago, but before then, both of them cut their teeth as engineers, at Twitter and Google respectively (and they are both young: they started the company while in their twenties, and this is only Zhu’s second job out of university).
It was at Twitter that Zhu identified a gap between the amount of data that a company has on users, and how it’s not used as well as it could be to grow that company’s business, especially when that business is not already a tech company — and sometimes, even when it is: Twitter has yet to sign on as an Iterable customer, but Square, the other business led by Jack Dorsey, is.
“There are a lot of great ideas and things that became experiments at Twitter,” he said, “but I noticed that only a very few companies — the biggest, most qualified technology companies — could execute a variety of different growth marketing efforts. Many most likely don’t have the right people or experience.” As Zhu describes it, there are not that enough people building significant innovations in how marketing works, because they lack the technical chops to do so (they instead come from development and marketing backgrounds).
That challenge further has become a little more complicated in more recent times, for another reason, which is that we’re in a moment where it feels like marketing is the bad guy. The rise of stronger data protection and privacy rules, for example with GDPR in Europe, plus consumers’ wider awareness and subsequent have led to a collective rejection of too much tracking of their online activity.
The idea with Iterable — as its name implies — is that you’re given a platform to iterate, to try out lots of different approaches across a range of different platforms, leveraging data that you already have and can use, or that you are able to get from users as part of the campaign, to build out your relationships and engagement, to see what works and what definitely does not.
This can either be to bring in more eyeballs and visitors (in the case of a company that, say, offers ‘free’ services and makes money on advertising), or more straight sales by way of offering discounts, insights on offers for things you might want or other incentives to buy things.
The company’s customer list includes companies like Zillow, Priceline Care.com and Fender, which speaks to how it targets companies that span not those who are digitally native businesses (but not necessarily the newest of the pack), but also those that are legacy companies that need to figure out how to leverage digital channels better to continue connecting with more, newer, and younger audiences.
There are upwards of 7,000 companies in the wider space of marketing technology today, Zhu estimates, which speaks to just how much more activity we’re likely to see in this area: the big fish will eat the tastiest smaller fish, while other fish will not manage to grow and will disappear.
But equally, we’re also seeing an interesting evolution, where paths are emerging for the most promising of the lot to carve out independent places for their particular services, independent of the biggies (en route to becoming biggies themselves, perhaps). For example, the data warehousing startup Snowflake — covering one of the big components that martech efforts need to work — is now valued at around $4 billion and is showing no signs of slowing down.
That’s a path that Iterable wants to follow, too, with this round to help it get there.
We live in the world of ‘best of breed’ coming together, which for us is about partnering with the best analytics and data warehousing companies,” Zhu said. “There are many options today that don’t entail getting acquired by a bigger player.”
E-commerce now accounts for 14% of all retail sales, and its growth has led to a rise in the fortunes of startups that build tools to enable businesses to sell online. In the latest development, a company called VTEX — which originally got its start in Latin America helping companies like Walmart expand their business to new markets with an end-to-end e-commerce service covering things like order and inventory management, front-end customer experience and customer service — has raised $140 million in funding, money it will be using to continue taking its business deeper into more international markets.
The investment is being led by SoftBank, specifically via its Latin American fund, with participation also from Gávea Investimentos and Constellation Asset Management. Previous investors include Riverwood and Naspers; Riverwood continues to be a backer, the company said.
Mariano Gomide, the CEO who co-founded VTEX with Geraldo Thomaz, said the valuation is not being disclosed, but he confirmed that the founders and founding team continue to hold more than 50% of the company. In addition to Walmart, VTEX customers include Levi’s, Sony, L’Oréal and Motorola . Annually, it processes some $2.4 billion in gross merchandise value across some 2,500 stores, growing 43% per year in the last five years.
VTEX is in that category of tech businesses that has been around for some time — it was founded in 1999 — but has largely been able to operate and grow off its own balance sheet. Before now, it had raised less than $13 million, according to PitchBook data.
This is one of the big rounds to come out of the relatively new SoftBank Innovation Fund, an effort dedicated to investing in tech companies focused on Latin America. The fund was announced earlier this year at $2 billion and has since expanded to $5 billion. Other Latin American companies that SoftBank has backed include online delivery business Rappi, lending platform Creditas and property tech startup QuintoAndar.
The common theme among many SoftBank investments is a focus on e-commerce in its many forms (whether that’s transactions for loans or to get a pizza delivered), and VTEX is positioned as a platform player that enables a lot of that to happen in the wider marketplace, providing not just the tools to build a front end, but to manage the inventory, ordering and customer relations at the back end.
“VTEX has three attributes that we believe will fuel the company’s success: a strong team culture, a best-in-class product and entrepreneurs with profitability mindset,” said Paulo Passoni, managing investment partner at SoftBank’s Latin America fund, in a statement. “Brands and retailers want reliability and the ability to test their own innovations. VTEX offers both, filling a gap in the market. With VTEX, companies get access to a proven, cloud-native platform with the flexibility to test add-ons in the same data layer.”
Although VTEX has been expanding into markets like the U.S. (where it acquired UniteU earlier this year), the company still makes some 80% of its revenues annually in Latin America, Gomide said in an interview.
There, it has been a key partner to retailers and brands interested in expanding into the region, providing integrations to localise storefronts, a platform to help brands manage customer and marketplace relations, and analytics, competing against the likes of SAP, Oracle, Adobe and Salesforce (but not, he said in answer to my question, Commercetools, which builds Shopify -style API tools for mid and large-sized enterprises and itself raised $145 million last month).
E-commerce, as we’ve pointed out, is a business of economies of scale. Case in point: While VTEX processes some $2.5 billion in transactions annually, it makes a relatively small return on that — $69 million, to be exact. This, plus the benefit of analytics on a wider set of big data (another economy of scale play), are two of the big reasons VTEX is now doubling down on growth in newer markets like Europe and North America. The company now has 122 integrations with localised payment methods.
“At the end of the day, e-commerce software is a combination of knowledge. If you don’t have access to thousands of global cases you can’t imbue the software with knowledge,” Gomide said. “Companies that have been focused on one specific region are now realising that trade is a global thing. China has proven that, so a lot of companies are now coming to us because their existing providers of e-commerce tools can’t ‘do international.’ ” There are very few companies that can serve that global approach and that is why we are betting on being a global commerce platform, not just one focused on Latin America.”
Slack makes customer acquisition look easy.
The day we acquired our first Highspot customer, it was raining hard in Seattle. I was on my way to a startup event when I answered my cell phone and our prospect said, “We’re going with Highspot.” Relief, then excitement, hit me harder than the downpour outside. It was a milestone moment – one that came after a long journey of establishing product-market fit, developing a sustainable competitive advantage, and iterating repeatedly based on prospect feedback. In other words, it was anything but easy.
User-first products are driving rapid company growth in an era where individuals discover, adopt, and share software they like throughout their organizations. This is great if you’re a Slack, Shopify, or Dropbox, but what if your company doesn’t fit that profile?
Product-led growth is a strategy that works for the right technologies, but it’s not the end-all, be-all for B2B customer acquisition. For sophisticated enterprise software platforms designed to drive company-wide value, such as Marketo, ServiceNow and Workday, that value is realized when the product is adopted en masse by one or more large segments.
If you’re selling broad account value, rather than individual user or team value, acquisition boils down to two things: elevating account based-selling and revolutionizing the inside sales model. Done correctly, you lay a foundation capable of doubling revenue growth year-over-year, 95 percent company-wide retention, and more than 100 percent growth in new customer logos annually. Here are the steps you can take to build a model that realizes on-par results.
Account-based selling is not a new concept, but the availability of data today changes the game. Advanced analytics enable teams to develop comprehensive and personalized approaches that meet modern customers’ heightened expectations. And when 77 percent of business buyers feel that technology has significantly changed how companies should interact with them, you have no choice but to deliver.
Despite the multitude of products created to help sellers be more productive and personal, billions of cookie-cutter emails are still flooding the inboxes of a few decision makers. The market is loud. Competition is cut throat. It’s no wonder 40 percent of sales reps say getting a response from a prospect is more difficult than ever before. Even pioneers of sales engagement are recognizing the need for evolution – yesterday’s one-size-fits-all approach to outreach only widens the gap between today’s sellers and buyers.
Companies must radically change their approach to account-based selling by building trusted relationships over time from the first-touch onward. This requires that your entire sales force – from account development representatives to your head of sales – adds tailored, tangible value at every stage of the journey. Modern buyers don’t want to be sold. They want to be advised. But the majority of companies are still missing the mark, favoring spray-and-pray tactics over personalized guidance.
One reason spamming remains prevalent, despite growing awareness of the need for quality over quantity, is that implementing a tailored approach is hard work. However, companies can make great strides by doing just three things:
The holy grail of customer experience these days involves gathering all of the data on an individual customer into a single record. Today at Dreamforce, the company’s massive customer customer conference taking place in San Francisco, Salesforce announced the latest iteration of Customer 360, its platform of tools designed to create that single record.
The goal here is to be able to have all your customer data in a single place so that you can build a deep understanding, and deliver meaningful experiences based on that knowledge. The company is not alone in this. Adobe announced genera availability of a similar product last week and startups like Segment are also trying to solve this issue.
Salesforce has been working on this problem for the last year, and today it announced Customer 360 Truth. “What we’ve been working on for the last year is some new capabilities and some existing capabilities, and bringing them all together to actually go and try to create that single source of truth of your customer,” Patrick Stokes, EVP of platform and shared services at Salesforce explained.
This isn’t just about pulling Salesforce data into this record. “We are connecting to every application, not just within Salesforce, but external to Salesforce as well. We are helping you authenticate and govern the customer data that you have. And then ultimately getting it into a state where you can use it to really deliver personalized experiences,” Stokes said.
The Salesforce solution involves four main components, which generally are part of any solution like this. The first is Customer 360 Data Manager, which provides a way to connect to and gather data from a variety of data sources. Next is Salesforce Identity, which is designed to create a unified login, which could help make it easier to identify who the person is. Customer 360 Audience, which helps you identify all of the different online identities an individual has, and finally there is Salesforce Privacy and Data Governance, which lets you control how the data is used.
The solution also encompasses MuleSoft’s tools to help connect to various data sources and pull them into a single view, and the Cloud Information Model, an open source data model introduced last week with AWS and Genesys also involved. The Customer 360 Truth platform is built on top of this model.
All of the components are generally available starting today, except Audience Manager, which is expected some time in the first half of next year.
All of this is hard to do, and while Salesforce is providing all the base level tools you need for a solution like this, time will tell how well all of these components fit together to build the kind of complex customer profile this promises.
Salesforce and AWS announced an expansion of their on-going partnership that actually goes back to a $400 million 2016 infrastructure services agreement, and expanded last year to include data integration between the two companies. This year, Salesforce announced it will be offering AWS telephony and call transcription services with Amazon Connect as part of its Service Cloud call center solution.
“We have a strategic partnership with Amazon Web Services, which will allow customers to purchase Amazon Connect from us, and then it will be pre-integrated and out of the box to provide a full transcription of the call, and of course that’s alongside of an actual call recording of the call,” Bill Patterson, executive vice president for Service Cloud explained.
It’s worth noting that the company will be partnering with other telephony vendors as well, so that customers can choose the Amazon solution or another from Cisco, Avaya or Genesys, Patterson said.
These telephony partnerships fill in a gap in the Service Cloud call center offering, and give Salesforce direct access to the call itself. The telephony vendors will handle call transcription and hand that off to Salesforce, which can then use its intelligence layer called Einstein to “read” the transcript and offer the CSR next best actions in real time, something the company has been able to do with interactions from chat and other channels, but couldn’t do with voice.
“As this conversation evolves, the consumer is explaining what their problem is, and Einstein is [monitoring] that conversation. As the conversation gets to a critical mass, Einstein begins to understand what the content is about and suggests a specific solution to the agent,” Patterson said.
Salesforce will begin piloting this new Service Cloud capability in the spring with general availability expected next summer.
Only last week, Salesforce announced a major partnership with Microsoft to move Salesforce Marketing Cloud to Azure. These announcements show Salesforce will continue to use multiple cloud partners when it makes sense for the business. Today, it’s Amazon’s turn.
At its annual Dreamforce mega-conference in San Francisco, Salesforce today introduced the next steps in its Einstein Voice project, which it first announced last year. Einstein Voice is the company’s AI voice assistant. You can think of it as Salesforce’s Alexa or Google Assistant, but with a more focused mission.
During a briefing ahead of the event, Salesforce Chief Product Officer Bret Taylor showed off an Einstein and Alexa enabled Einstein speaker (Salesforce chairman and co-CEO Marc Benioff was supposed to be at the meeting, too, but for unknown reasons, he didn’t show) — and yes, it looked like Salesforce’s Einstein cartoon figure and its voluminous white hair lit up when it responded to queries. The company isn’t planning on making these devices available to the public, but it does show off the work the company has done with Amazon to integrate the service (though is by no means an Amazon -exclusive since the company is also working to bring Einstein to Google devices).
The theory here, as Taylor explained, is that having access to Salesforce data through voice will enable salespeople to quickly enter data into Salesforce when they are on the go and to ask the system questions about their data. The company argues that while voice assistants have found a place in the home, there are a lot of upsides to bringing it to businesses as well. That means a system has to account for the security needs of enterprises, too, as well as the fact that there is a wide range of different user personas it has to account for.
“We’re really excited about the idea of voice in businesses — the idea that every business can have an AI guide to their business decisions,” Taylor said. “I view it as part of this progression of technology. Computers and software started in the terminal with a keyboard, thanks to Xerox Parc moved to a mouse and graphic user interface, and then thanks to Steve Jobs, moved to a touchscreen, which I think is probably the dominant form factor for computers nowadays. And voice is really that next step.”
This next step, Taylor argues, will allow companies to rethink how people interact with software and data. With voice, Einstein, which is Salesforce’s catch-all name for its AI products, has a “seat at the table,” he noted because you can simply as the system a question if you need additional data during a conversation. But the real mission here is to bring these tools to every business — not just to Salesforce’s executive meetings.
To enable this, Salesforce is launching a tool that will allow anybody within a company to quickly build basic Einstein skills to pull up data from Salesforce. These skills focus on data input and relatively basic queries, for now. During a demo ahead of the event, the team showed off how easy it would be to enable a manager to ask about the current sales performance of his team, for example. By now means, though, is this tool as rich as products like Google’s DialogFlow or Microsoft’s Azure Bot Service. It’s nowhere near as flexible yet, but the team notes that it’s still early days and that it is working on enabling the ability to have more complex dialogs with Einstein in the future, for example.
To be honest, it’s hard not to look at this as a bit of a gimmick. There are probably real use cases here, that every company will have to define for itself. Maybe there are salespeople who indeed want to use a voice interface to update their CRM system after a customer meeting, for example. Or they may want to ask about the value of an account while they are in the car. In many ways, though, this feels like a technology looking for a problem, despite Salesforce’s protestations that customers are asking for this.
Some of the other uses cases here, which the company didn’t really highlight all that much in its briefing, seem far more compelling. It’s using Einstein Voice to coach call center agents by analyzing calls to pull out insights and trends from sales call transcripts. It’s also launching Service Cloud Voice, which integrates telephony inside the company’s Service Cloud. Using a built-in transcription service, Einstein can listen to the call in real time and proactively provide sales teams and call center agents with relevant information. Those use cases may not be quite as exciting, but in the end, they may generate for more value for companies than having yet another voice assistant for which they have to build their own skills, using what is, at least for the time being, a rather limited tool.
A year and a half after getting acquired by Salesforce for $6.5 billion, MuleSoft is beginning to resemble a Salesforce company — using its language and its methodologies to describe new products and services. This week at Dreamforce, as the company’s mega customer conference begins in San Francisco, MuleSoft announced a slew of new services as it integrates more deeply into the Salesforce family of products.
MuleSoft creates APIs to connect different systems together. This could be quite useful for Salesforce as a bridge between older software that may be on-prem or in the cloud. It allows Salesforce and its customers to access data wherever it lives, even from different parts of the Salesforce ecosystem itself.
MuleSoft made a number of announcements designed to simplify that process and put it in the hands of more customers. For starters, it’s announcing Accelerators, which are pre-defined integrations that let companies connect more easily to other systems. Not surprisingly, two of the first ones connect data from external products and services to Salesforce Service Cloud and Salesforce Commerce Cloud.
“What we’ve done is we’ve pre-built integrations to common back-end systems like ServiceNow and JIRA in Service Cloud, and we prebuilt those integrations, and then automatically connected that data and services through a Salesforce Lightning component directly in the Service console,” Lindsey Irvine, chief marketing officer at MuleSoft, explained.
What this does is allow the agent to get a more complete view of the customer by getting not just the data that’s stored in Salesforce, but in other systems as well.
The company also wants to put these kinds of integration skills in the hands of more Salesforce customers, so they have designed a set of courses in Trailhead, the company’s training platform, with the goal of helping 100,000 Salesforce admins, developers, integration architects and line of business users develop expertise around creating and managing these kinds of integrations.
The company is also putting resources into creating the API Community Manager, a place where people involved in building and managing these integrations can get help from a community of users, all built on Salesforce products and services, says Mark Dao, chief product officer at MuleSoft.
“We’re leveraging Community Cloud, Service Cloud and Marketing Cloud to create a true developer experience platform. And what’s interesting is that it’s targeting both the business users — in other words, business development teams and marketing teams — as well as external developers,” he said. He added that the fact this is working with business users as well as the integration experts is something new, and the goal is to drive increased usage of APIs using MuleSoft inside Salesforce customer organizations.
Finally, the company announced Flow Designer, a new tool fueled by Einstein AI, which helps automate the creation of workflows and integrations between systems in a more automated fashion without requiring coding skills.
MuleSoft Flow Designer requires no coding (Screenshot: MuleSoft)
Dao says this is about putting MuleSoft in reach of more users. “It’s about enabling use cases for less technical users in the context of the MuleSoft Anypoint Platform. This really requires a new way of thinking around creating integrations, and we’ve been making Flow Designer simpler and simpler, and removing that technical layer from those users,” he said.
API Community Manager is available now. Accelerators will be available by the end of the year and Flow Designer updates will be available Q2 2020, according to the company.
These and other features are all designed to take some of the complexity out of using MuleSoft to help connect various systems across the organization, including both Salesforce and external programs, to make use of data wherever it lives. MuleSoft does requires a fair bit of technical skill, so if the company is able to simplify integration tasks, it could help put it in the hands of more users.
Last year at Dreamforce, Salesforce’s enormous annual customer conference, Apple and Salesforce announced the beginnings of a partnership where the two organizations would work together to enhance Salesforce products running on Apple devices. Today, the companies announced the fruits of that labor with general availability of two new tools that were first announced at last year’s event.
For starters, Apple has been working with Salesforce to redesign the Salesforce Mobile to build in Apple iOS features into the app like being able to use Siri shortcuts to get work done faster, using your voice instead of typing, something that’s sometimes awkward to do on a mobile device.
For instance, you could say, “Hey Siri, next sales meeting,” and Siri can interact with Salesforce CRM to tell you who your meeting is with, the name of his or her company, when you last met and what the Einstein opportunity score is to help you predict how likely it is that you could make a sale today (or eventually).
In addition, the Mobile App takes advantage of Apple’s Handoff feature to reflect changes across devices immediately, and Apple’s Face ID for easy log on to the app.
Salesforce also announced a pilot of Einstein Voice on Salesforce Mobile, allowing reps to enter notes, add tasks and update the CRM database using voice. Einstein is Salesforce’s general artificial intelligence layer, and the voice feature use natural language understanding to do what the rep asks.
Salesforce reports that over 1000 companies participated in piloting the updated app, which constitutes the largest pilot in the history of the company.
The company also announced its new mobile development platform SDK, built specifically for iOS and iPadOS using the Swift language. The idea is to provide a tool to give Salesforce developers with the ability to build apps for iPad and iPhone, then package them up with a new tool called Swift UI and Package Manager.
Trailhead Go is the mobile version of the company’s online learning platform designed specifically for iPad and iPhone. It was built using the new Mobile SDK, and allows users to access the same courses they can on the web in a mobile context. This includes the ability to “handoff” between devices along with support for picture-in-picture and split view for multi-tasking when it makes sense.
Salesforce Mobile and Trailhead Go are available starting today for free in the iOS App Store. The Salesforce Mobile SDK will be available later this year.
As this partnership continues to develop, both companies should benefit. Salesforce gets direct access to Apple features, and can work with Apple to implement them in an optimized way. Apple gets deeper access to the enterprise with help from Salesforce, one of the biggest enterprise software vendors around.
When Salesforce announced this week that it was moving Marketing Cloud to Microsoft Azure, it was easy to see this as another case of wacky enterprise partnerships. But there had to be sound business reasons why the partnership came together, rather than going with AWS or Google Cloud Platform, both of which are also Salesforce partners in other contexts.
If you ask Salesforce, it says it was ultimately because of compatibility with Microsoft SQL.
“Salesforce chose Azure because it is a trusted platform with a global footprint, multi-layered security approach, robust disaster recovery strategy with auto failover, automatic updates and more,” a Salesforce spokesperson told TechCrunch. “Marketing Cloud also has a long standing relationship with Microsoft SQL which makes the transition to SQL on Azure a natural decision.”
Except for the SQL part, Microsoft’s chief rivals at AWS and Google Cloud Platform also provide those benefits. In fact, each of those reasons cited by the spokesperson — with the exception of SQL — are all part of the general cloud infrastructure value proposition that all the major cloud vendors provide.
There’s probably more to it than simply compatibility. There is also a long-standing rivalry between the two companies, and why in spite of their competition, they continue to make deals like this in the spirit of co-opetition. We spoke to a few industry experts to get their take on the deal to find out why these two seeming rivals decided to come together.
Tony Byrne, founder and principal analyst at Real Story Group, thinks it could be related to the fact it’s a marketing tool and some customers may be wary about hosting their businesses on AWS while competing with Amazon on the retail side. This is a common argument for why retail customers in particular are more likely to go with Microsoft or Google over AWS.
“Salesforce Marketing Cloud tends to target B2C enterprises, so the choice of Azure makes sense in one context where some B2C firms are wary of Amazon for competitive reasons. But I’d also imagine there’s more to the decision than that,” Byrne said.
In the world of enterprise software, there are often strange bedfellows. Just yesterday, Salesforce announced a significant partnership with AWS around the Cloud Information Model. This morning, it announced it was moving its Marketing Cloud to Microsoft Azure. That’s the way that enterprise partnerships shimmy and shake sometimes.
The companies also announced they were partnering around Microsoft Teams, integrating Teams with Salesforce Sales Cloud and Service Cloud.
Salesforce plans to move Marketing Cloud, which has been running in its own data centers, to Microsoft Azure in the coming months, although the exact migration plan timeline is not clear yet. This is a big deal for Microsoft, which competes fiercely with AWS for customers. AWS is the clear market leader in the space, but Microsoft has been a strong second for some time now, and bringing Salesforce on board as a customer is certainly a quality reference for the company.
Brent Leary, founder at CRM Essentials, who has been watching the market for many years, says the partnership says a lot about Microsoft’s approach to business today, and that it’s willing to partner broadly to achieve its goals. “I think the bigger news is that Salesforce chose to go deeper with Microsoft over Amazon, and that Microsoft doesn’t fear strengthening Salesforce at the potential expense of Dynamics 365 (its CRM tool), mainly because their biggest growth driver is Azure,” Leary told TechCrunch.
Microsoft and Salesforce have always had a complex relationship. In the Steve Ballmer era, they traded dueling lawsuits over their CRM products. Later, Satya Nadella kindled a friendship of sorts by appearing at Dreamforce in 2015. The relationship has ebbed and flowed since, but with this announcement, it appears the frenemies are closer to friends than enemies again.
Let’s not forget though, that it was just yesterday that Salesforce announced a partnership with AWS around the Cloud Information Model, one that competes directly with a different partnership between Adobe, Microsoft and SAP; or that just last year AWS announced a significant partnership with AWS around data integration.
These kinds of conflicting deals are confusing, but they show that in today’s connected cloud world, that companies, who will compete fiercely with one another in one part of the market, may still be willing to partner in other parts when it makes sense for both parties and for customers. That appears to be the case with today’s announcement from these companies.
Last year, Adobe, SAP and Microsoft came together and formed the Open Data Initiative. Not to be outdone, this week, AWS, Salesforce and Genesys, in partnership with The Linux Foundation, announced the Cloud Information Model.
The two competing data models have a lot in common. They are both about bringing together data and applying a common open model to it. The idea is to allow for data interoperability across products in the partnership without a lot of heavy lifting, a common problem for users of these big companies’ software.
Jim Zemlin, executive director at The Linux Foundation, says this project provides a neutral home for the Cloud Information model, where a community can work on the problem. “This allows for anyone across the community to collaborate and provide contributions under a central governance model. It paves the way for full community-wide engagement in data interoperability efforts and standards development, while rapidly increasing adoption rate of the community,” Zemlin explained in a statement.
Each of the companies in the initial partnership is using the model in different ways. AWS will use it in conjunction with its AWS Lake Formation tool to help customers move, catalog, store and clean data from a variety of data sources, while Genesys customers can use its cloud and AI products to communicate across a variety of channels.
Patrick Stokes from Salesforce says his company is using the Cloud Information Model as the underlying data model for his company’s Customer 360 platform of products. “We’re super excited to announce that we’ve joined together with a few partners — AWS, Genesys and The Linux Foundation — to actually open-source that data model,” Stokes told TechCrunch.
Of course, now we have two competing “open” data models, and it’s going to create some friction until the two competing projects find a way to come together. The fact is that many companies use tools from each of these companies, and if there continues to be these competing approaches, it’s going to defeat the purpose of creating these initiatives in the first place.
As Satya Nadella said in 2015, “It is incumbent upon us, especially those of us who are platform vendors to partner broadly to solve real pain points our customers have.” If that’s the case, having competing models is not really achieving that.
Convoy, the digital freight network that connects truckers with shippers, has raised $400 million in a Series D funding round as it aims to scale its business amid an increasingly competitive market.
The funding round brings Convoy’s post-money valuation to $2.75 billion.
The round was co-led by Generation Investment Management and previous Convoy investor T. Rowe Price Associates. Asset management firm Baillie Gifford, which has fondness for pre-IPO tech companies, Fidelity and Durable Capital Partners, as well as Series C investors CapitalG and Lone Pine Capital, also participated in the round.
Convoy has managed to attract a slew of high-profile investors — and their capital — such as Jeff Bezos, Salesforce CEO Marc Benioff and even U2’s Bono and the Edge. In the four years since its founding, Convoy has raised a total of more than $668 million. Early investors include Greylock Partners, Y Combinator, Cascade Investment (the private investment vehicle of Bill Gates) and Code.org founders Hadi and Ali Partovi.
And that money has been put to work. Convoy co-founders Dan Lewis and Grant Goodale set out in 2015 to modernize freight brokerage, a fragmented and oftentimes analog business that matches loads from shippers with truckers.
The company has gone from hundreds of loads per week in 2016 to tens of thousands per week across the U.S. Notably, Convoy’s platform handles 100% of the matching, as opposed to having humans complete the task.
Convoy also has about 100 routes, many of them concentrated around economic hubs such as Chicago, Michigan and California, Lewis told TechCrunch.
The 850-person company wants to accelerate those efforts with capital raised in this latest round. However, it’s bound to face more competition. Uber Freight, Loadsmart and Flexport are just a few online marketplaces that are targeting freight.
Convoy has added new features to its platform as part of its scaling strategy. The company launched in 2019 an automated reloads feature that allows truckers to book multiple loads at a time. It also added Convoy Go, which allows drivers to bring their truck cab and hook up to a trailer pre-filled with cargo.
In September, Salesforce Ventures, the venture of arm of Salesforce, announced a hefty $300 million investment in Automattic, the company behind WordPress, the ubiquitous content management system (CMS). At the same time, the company was putting the finishing touches on Salesforce CMS, an in-house project it released last week.
The question is, why did it choose to do both?
One reason could be that WordPress isn’t just well-liked; it’s also the world’s most popular content management system, running 34 percent of the world’s 10 billion websites — including this one — according to the company. With Automattic valued at $3 billion, that gives Salesforce Ventures a 10 percent stake.
Given the substantial investment, you wouldn’t have been irrational to at least consider the idea that Salesforce may have had its eye on this company as an acquisition target. In fact, at the time of the funding, Automattic CEO Matt Mullenweg told TechCrunch’s Romain Dillet that there could be some partnerships and integrations with Salesforce in the future.
Now we have a Salesforce CMS, and a potential partnership with one of the world’s largest web content management (WCM) tools, and it’s possible that the two aren’t necessarily mutually exclusive.
We’ve seen our fair share of shocking headlines recently: tenuous IPOs, the “retailpocalypse” and a fickle market have reset the way we size up subscription businesses. Recurring revenue models have their pitfalls, and 2019 has certainly taught the industry a few lessons.
Next year, retention is set to be a top priority for companies looking to keep customers engaged and drive growth. From niche products to personalization, how companies deliver on and measure the success of their customer experience will separate successful subscription businesses from the next unflattering news story.
These seven trends will emerge to shape the way companies delight and retain customers in 2020.
We’ve all seen articles detailing the financial fall of many brick-and-mortar stores. The retail crunch predicted years ago is coming to fruition as we’ve watched household names like Sears, Toys R Us and Barney’s consider bankruptcy or go up for sale.
Consumers aren’t letting up in their preference for convenience; they want easier ways to buy, and that means stores must develop better online experiences and offer subscription options or risk losing revenue. We’ll see big brands like Nike and Ikea continue to experiment and expand innovative subscription offerings.
For struggling brick-and-mortar businesses, subscription services could very well be a lifeline to retain a dwindling customer base. The shifting retail industry presents an opportunity for traditional companies to fully embrace recurring revenue models next year — smart organizations will do so.
We’ve experienced a rapid period of subscription adoption, with more options launching everyday. And that’s led us to a point of max fragmentation where companies and consumers alike are subscribed to so many niche products and services, they can no longer manage or afford new offerings.
Because the proliferation of subscriptions are so vast, specialized products and services will need to do prove their worth or risk being replaced. B2B (project management, martech, ecommerce) and B2C (clothing, streaming, meal delivery) companies alike must offer far better experiences in 2020 than in years past. For B2B organizations, products must be integrated with larger systems to justify their existence. One-off point solutions that silo information and create broken customer experiences will no longer be accepted. And for B2C companies, pricing will have to be spot on as more competition vies for the budgets of consumers who haven’t budgeted for increased spending.
Ultimately, not every company will be able to compete in the age of subscription fatigue, so we’ll see more consolidation, partnerships and mergers occur in the coming year.
It’s impossible to ignore the IPO press around WeWork, Blue Apron, Uber, Peloton and others. If 2020’s tech and consumer unicorns have poor unit economics and aren’t turning a profit, they need to prepare to be the next ugly headline. Marketers can be a force for change by focusing on the long-term retention of the customers they acquire. And I believe they’ll do so happily. Why?