Big Data

RelateIQ and Salesforce: It’s not just about data science

Above: The RelateIQ team.

Image Credit: RelateIQ
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By observing the reactions to a big acquisition, you can typically learn a lot about the broader market. In the case of Salesforce.com’s acquisition of RelateIQ, the reactions I’ve heard from customers and influencers have fallen into two camps:

  • “Why did RelateIQ — one of the hottest enterprise startups in a dynamic segment of the market — sell so early, when it still had so much potential for growth?” Unsurprisingly, I’ve heard this largely from the Valley cognoscenti.
  • “Who is RelateIQ, and why was Salesforce willing to pay so much money for them?” This reaction tends to come from people outside the Valley, including influential sales enablement professionals and well connected customer-relationship management analysts.

When an industry gorilla pays top dollar for a company whose impact has not yet been felt in the broader market, you can be confident that we are (a) in the very early days of (b) a big tectonic shift in the market.

Most of the articles written to this point about RelateIQ and Salesforce have confined the tectonic shift to data science. We see the revolution taking place in the enterprise as much, much bigger than that. Yes, data science and predictive analytics are part of it … but only as a means to providing a dramatically better experience for users. To achieve that end goal, you need more than a better, more insightful back end. You must combine a top-notch back end with a beautiful mobile-first design to create products that are not only easy to use, but that people naturally want to use. Don’t get me wrong: I believe RelateIQ has this. We just aren’t reading about it.

If you’ve spent any time with salespeople, you know they aren’t fans of CRM data entry. They would rather be selling — no matter how incredible the data science-powered report is for the team back at the office. To succeed in the post-PC era, enterprise software needs to serve end users first. CRM is only as good as the data it contains, and in order to ensure that quality data goes in, you need to get your sales reps excited about the entry process. If you can do that, the broader insights and predictive analytics fall into place. It may sound simple, but think about the enterprise apps you use daily and consider how many of them you enjoy using and benefit from. It will likely be a very short list.

This shift has broader structural implications for the enterprise software industry. The new generation of enterprise app companies will crush slow-moving incumbents by being able to demonstrate, prior to purchase, significant levels of user engagement and enjoyment. Such engagement then translates into quantifiable benefits.

Going back to RelateIQ and Salesforce, I must refer to what we call the “golden triangle” of sales: the sales rep, the sales manager, and the ops/executive team and the communication and workflows that span between them. What questions do the sales teams we talk to want answered?

  • Sales reps: “What action can I take right now to significantly increase the likelihood of closing a critical deal?”
  • Sales managers: “Where should I spend my time to have the biggest impact on my team’s performance in the last 30 days of the quarter?”
  • Sales ops/execs: “How strong is the forecast I’m looking at right now — which deals are likely to close, and which are at risk?”

In its earliest days, data science was largely focused on abstract problems related to relevance and search. But our customers’ problems, like the problems of most enterprise users, are extremely real and tactical and can only be answered by combining data science and predictive insights with a highly engaged experience that actually reaches each endpoint.

With this in mind, we believe that a data science solution must do much more than optimize the way sales reps build relationships.

Salesforce gets that this shift is happening. That’s why they paid so much for a company that the mainstream market hasn’t heard of. Now comes the hard part: integrating a nascent, next-generation platform and user experience with a mature infrastructure that was built for a different time. It won’t be easy, but you have to give credit to Salesforce for making a bold move to stay at the forefront of the evolution of enterprise software.

Data science can do a lot for customers, and “relationship intelligence” is a great place to start. But it is a piece of a much larger puzzle. In the case of RelateIQ, I’m sure their “relationship intelligence” for small and medium-sized businesses is the tip of the iceberg. We are still in the early days of the data science and sales marriage. The outcome of this relationship will be game-changing — using predictive insight to figure out exactly what actions will help the team exceed its current quarterly quota and which approaches will be most effective in future quarters. Understanding the strides yet to be made, Tomasz Tunguz recently wrote on the wave of acquisitions still to come as we usher in the next era of software as a service. With that in mind, I can’t help but think … did RelateIQ sell too early?

Andy Byrne is chief executive of Clari, a mobile-first sales productivity platform.

More about the companies and people from this article:

With more than 100,000 customers, salesforce.com is the enterprise cloud computing company that is leading the shift to the social enterprise. Social enterprises leverage social, mobile and open cloud technologies to put customers at t... read more »

RelateIQ began in 2011 when co-founders Adam Evans and Steve Loughlin got fed up with manual data entry. In the age of big data, cloud-computing, and mind-blowing consumer electronics, they couldn’t understand why they had to spend h... read more »

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2 comments
Nicolas Vandenberghe
Nicolas Vandenberghe

Great post Andi.

"Now comes the hard part: integrating a nascent, next-generation platform and user experience with a mature infrastructure that was built for a different time" 

Indeed it was quite easy for relateIQ to build a cool-looking app from scratch. It's much harder when you have to integrate with an incredibly complex system - Salesforce's CTO stated that their regression testing involves more than 1 million automated test cases. The relateIQ engineering team seems very strong, I'll be very curious to see how they handle this challenge!

Chris Finlayson
Chris Finlayson

Many people saw startup value in developing a mobile CRM product because Salesforce's offering was so terrible. I wonder if the launch of Salesforce1 made the RelateIQ guys reconsider the size of the opportunity? It's really hard to get companies to switch software if their current provider is even remotely adequate. The endgame was likely always going to be selling to Salesforce.