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Needle sales chat gets big name retailer, looks for new funding (exclusive)

Needle, a crowdsourced sales chat service, announced it has partnered with retailers SkullCandy and Under Armour.

Online shopping has become a staple of our consumer life. Sites like Amazon and eBay reported positive third quarter financial earnings, with Amazon reaching 51 percent net sales over last year. But with all this available product eyeing our wallets, Needle is betting there is need for clarity in whether a brand is right for you.

Needle is, in essence, a chat service, with options for text, video and voice chats. The company installs a Needle button on its various product pages and assigns an “expert” to the page.

“You’re talking to the guy who actually rides mountain bikes, or who uses avalanche ski gear,” Morgan Lynch, chief executive of Needle told VentureBeat.

Needle crowdsources its representatives completely, but Lynch prefers to call it “fan sourcing.” According to him, Needle experts are people who are already visible on the internet and are passionate about a certain topic. They raise their hands, they blog, they go to forums. But they are not customer service representatives, and Needle doesn’t expect them to fill those shoes. Instead, they are dedicated to sales only, to show knowledge of a product and be able to point people toward other products as well.

One of those products is sportswear company Under Armour, which has already given Needle a boost in “expert” applications. When Under Armour put up a post on its Facebook page, Needle saw 120 applications to be the page expert within a few hours.

So, how do you scale a digital company so reliant on manpower? You pay in points. Needle has gone the way of gamification, and offers points to its experts that can used to buy products they chat about and like. This is a bonus for Needle as well.

“Points are potent because unlike games, [experts] can get more [physical] products and services. If you love active gear, you want more of that gear. That reinforces the passion for what they’re doing and makes them more knowledgeable.”

Needle’s first round of funding helped it scale its current product. Its investors included Josh James of Omniture, Adify co-founders Russell Fradin and Larry Braitman, as well as Lightbank, the venture firm created by Groupon’s co-founders.

“We’re investing the bulk of our technology just in managing people,” said Lynch, who mentioned that most of the company’s first round of funding went toward engineering, which he says is 75 percent of the company. “We’re very good at managing people in the cloud.”

Lynch also mentioned that the company is actively looking for a second round of funding, which he would like to use for marketing and exposure. The company already has interested investors. And with its gamification model and the new retail partners, Lynch is confident in his search for another round of funding and in the crowdsourcing product already.

“No one’s really cracked the code [on crowdsourcing]. A lot of people try doing stuff like this and there’s frankly a lot of dead bodies out there. But you have to have the right model to do it, and we have it.”

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