CRM Watchlist 2015 Winners: Coveo and Infusionsoft - ready, able, breaking new ground
The note repeats, and repeats, and...: CRM Watchlist 2016 registration is still open and you have time to get the registration form required to get the questionnaire. Please email me at paul-greenberg3@the56group.com for the registration form. The clock is ticking....
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The last two software vendors -- though we have two consulting SI vendors to go yet -- it makes me nostalgic. I've been covering all these Watchlist winners for the last nine months and I've concluded there are some amazing companies out there.
Previously
There are those who spend a lot of time bashing companies - as if there is something inherently wrong with this form of institution. But, whether or not we like them, they are the foundation for commerce and are the vehicles we use to acquire and transact pretty much everything we own, unless we live off the land. Even then, we are impacted by it because the tools we use to live off the land come from them. So we need them. They aren't inherently bad, but they aren't inherently good either.
It's hard to run a company - and it's hard to combine all the elements that it takes to run a good or great company - one that employees and customers, investors and the competitors, like and respect.
I realize that I'm not telling you something that you don't already know. So be it. I'm doing so to explain the Watchlist. The Watchlist has always been about that: A company that is well run and that provides the right products, services, tools and consumable experiences, to have a true market impact, now and over time. Sometimes, the impact is universal - meaning impact on "the market" and sometimes, it's particular. The two final winners in the software/services group are both "impact in particular" - Coveo for its impact on technology markets around relevant knowledge and search; Infusionsoft for its impact on the small business world.
Let's start digging and seeing what is there - and of course what I think they can do to help their own cause.
Coveo
Coveo has always been hard to typecast. That is both a good thing - because they are on the move - always improving and creating and at times, though not often, rough sledding, because while they keep winning both the Watchlist and lots of deals, it's at times hard to put them in a market that is actually sufficiently big enough to showcase what they do. They are most often placed in Enterprise Search but that is actually limiting given the many use cases that Coveo is valuable for. For example, the other market where you see them, which is actually a very powerful use, is customer service. They are big there and recognized there. But there are so many other uses of Coveo. Before I tell you we can deal with that, I'm going to tell you my favorite Coveo use case.
A little known fact (it was to me at least): Johnson & Johnson has a division that manufactures contact lenses. To manufacture those contact lenses, takes 3,600+ steps in the manufacturing process. Coveo is embedded in every single one of those steps so that if something goes wrong, Coveo can suss out where the problem needle is in that 3,600+ step haystack and thus, save Johnson & Johnson incredible time and money.
I love that example.
The reason I do is that it is indicative of the value of Coveo to an enterprise. It operates across internal systems, across engines, across sources, across the web, across the universe (thank you, John Lennon) and takes incredible amounts of information and in a near instant, makes sense of that information for the party looking for it and gives you the basis for at minimum some quick action and optimally for insight leading to serious, strategic actions. It captures and organizes data from an incredible number of places and responds to that data. What makes it also interesting is that the data being used continues to reside at its various sources and Coveo effectively pipes it in and uses it and you see its organized results and yet it never rests in storage on a server at the site that sent the query.
Their most common customer facing use case is a customer service query. A Coveo response to the query not only gathers the internal information available to answer the query but the information out on the web and assesses who the subject matter experts are for the appropriate category. It takes all that and bundles it up into an easy to navigate package including a stack ranked list of the named subject matter experts - and all the answers of course.
It does that really fast. Louis Tetu, CEO of Coveo, calls what it finds "contextual and relevant" which it is and what it is delivering an "ecosystem of record" - a great name for what Coveo succeeds at doing and providing.
This is an award winner of a product too. It has been a named a Knowledge Management Leader and a Trend Setting Product of the Year, by KMWorld; a Contact Center Search leader by CRM Magazine, A Product of the Year by TMC, and won 2 Stevies, and has been a leader two years running in Gartner's Magic Quadrant for Enterprise Search, besides being a multiple Watchlist winner.
But, the industrial strength and ballistic toughness of Coveo is, as always, not the whole story of the company. The Watchlist would be simple if that was all there was to it. But there are a lot of companies - a lot - with good to excellent products that don't win the Watchlist, because they are missing other key ingredients.
One of the most important ingredients of any company is the people who run it. That means management and employees. Coveo has a very strong and eminently likeable leadership. They are experienced. They are willing to make decisions that can be difficult but they are aware of the human impact of those decisions. They are cool - meaning that they understand the contemporary world that they live in and don't tie themselves to archaic outmoded ways of doing things because they used to work. They have been successful in their lives. They are also fun to hang out with.
Three that I'm going to single out for the sake of this post are the CEO and founder Louis Tetu, the President and CTO Laurent Simoneau and the Chief Knowledge Officer (CKO) and SVP of Market Strategy Diane Berry.
I'm diverting from where I normally go about a company to specifically name the leadership because I think that I don't emphasize enough how much leadership impacts the company's impact on the world. Not only are leadership responsible for their assigned tasks and make decisions, but often they are the public face of the company - whether in the role of thought leader or just plain good (or not) person. They are arguably more responsible for how people feel about a company than any other single group of people at the company. They are certainly who the love or the disdain gets attached to. See Marc Benioff and Larry Ellison, Steve Jobs, three larger than life leaders. Love 'em or hate 'em they are the personalities that drive the impression of the company but a lot more than just extroverted heads, are also responsible for making the decisions that drive the company itself.
I'm not saying Louis Tetu, Laurent Simoneau and Diane Berry have the visibility that Marc Benioff does. No one I know in the technology world does or did except maybe the late Steve Jobs - at least in this millennium. But each of Coveo's trio has the chops and the personality they need to be the drivers at the company. Louis, for example, was the founder and chairman of HR in the cloud company Taleo, sold to Oracle in 2012 for $1.9 billion. But they also have the personalities - they are among the three nicest successful people who you might ever want to meet. All three have things that distinguish them as good and very interesting human beings. I'm not going to reveal them because these things are aspects of their personal lives that are truly interesting, but theirs to talk about, not mine. But suffice to say, this is a strong, decisive, strategic and good-hearted management team. A huge plus when it comes to the kind of impact companies have in the marketplace.
Coveo is another one of those companies that is growing and has a leg up on the speed of growth (300% year over year) because they understand the concept of "ecosystem." For example, their partner relationships are built around the idea that they are not a slot in a channel but, similar to Thunderhead (though they don't do the same things), they are glue for another ecosystem. So they have some go to market partners like Sitecore and Salesforce and a bevy of technology providers, consulting partners and systems integrators who integrate and/or implement them (30 of them so far). They are one of the best at outreach when it comes to their analyst program with a huge number of relationships to the institutional analysts, boutique firms, independent analysts and influencers. It's genuinely remarkable in its scope - 57 who specialize in either customer service/CRM and enterprise search. They know that having a great product is only part of the equation when it comes to being a great company that has an impact in a market or on a marketplace.
But, as always there are things that can be done to make them even stronger.
What they can do
Streeeeeeetch - Interestingly, one area that Coveo doesn't emphasize particularly is customer engagement, yet, there are few products built for it as much as Coveo is. Because they have such a broad range of uses and yet are focused on customer service and enterprise search - at least in the analysts' schemas - they should begin to expand a bit. Start brainstorming around use cases that stretch them even more - and pick a couple that work to go after. I'd be looking at customer engagement. There is nothing more engaging for customers to get quality contextual information that actually seems to mean something to them. Right? Am I right? Am I? Yes, I am. So I would be looking at this now.
It's so sensate - Human beings love what the five senses bring them. More recently, when it comes to what we respond to, especially in business environments, the word visual comes to mind. Videos, more than even documents. While I don't expect Coveo to develop a product that searches videos the way that it handles digital print media (though why not?), what I think they can do more of is thought leadership and marketing in a video-responsive world. That means videos like what Adobe does (see this one and this one) and at the same time, a day in the life video about the value of Coveo to outcomes leading to results, something like the iconic product marketing video, Corning Day Made of Glass. They should take advantage of the tools out there to capture attention in a market that is full of noise. Coveo's technology creates signal or finds signal from noise. Now would be time to use the contemporary means to do the same on their own behalf.
Infusionsoft
Infusionsoft, throughout its decade plus history has almost always - at least the last seven or so years, been a dominant company in the small business world. Very few companies have been as overt market leaders in their space. Granted, through all its history, until very recently, they have had a strong and absolutely precise focus around companies with 25 or less employees (more on the change later).
What makes them remarkable is not just that they have a laser focus but they have this mesmerizing way of making believers out of businesses and influencers - and Wall Street. Think about it. Over the last three years, Infusionsoft has gotten more than $100 million of dollars from the likes of Goldman Sachs and most recently Bain Capital Ventures (lead investor)- not exactly the types of investors who invest in companies whose revenue stream comes from tiny little businesses.
But invest they did, and as of the third quarter of 2014, Infusionsoft had 25,000 customers and 87,000 user and a ultra-strong base group of thousands of advocates, who passionately believe in the company as well as use the products and take advantage of the service offerings. What makes this even more remarkable is that they are present (via software usage) in 100 countries. Powerful indeed. While their revenue is confidential, let's just say they aren't a small business anymore.
Those numbers are great and inspire investor and market confidence, but ultimately the success of a company depends on the level of trust it engenders from its employees and customers. So the culture of the company remains of paramount importance.
Infusionsoft culture is clearly a strength of the company. It is borne out in the awards they win. They were #13 on Fortune Magazine's prestigious "Great Place to Work" list in 2014 as one of the best mid-sized companies in the U.S. What makes their culture fascinating is that they understand that the needs of contemporary employees are not what they were 20 years ago or even 10 years ago. The younger employee base treats work (rightfully) as part of life, not separate from life and they are looking for an environment that is more nurturing than employees did in the past. Even though I've mentioned this before, the Infusionsoft approach is best indicated by them paying a mid-management person whose job is to help employees achieve their personal dreams with the help of the company. There is even a dream wall at the company HQ in Scottsdale, AZ that has the employees dreams written (handwritten) on it so that all can see what the aspirations are whether it's to be a CEO or to learn to play the piano or the climb a mountain in the Himalayas.
But there is much more to the company than just a cool, smart, culturally rich and financially secure technology company. Because, over their history, they've put a lot into their research on how small businesses work and didn't waste the lessons they learned from when they were a small business to how they evolved to more than that, they have a keen understanding of the amalgam of technology and services that it takes to build, operationalize and grow a small business into more than that. As a result, they place a big emphasis on the services that they provide that go beyond the sales and marketing technologies that they sell.
Don't get me wrong. They have the paradigms that small businesses understand and thus, the capabilities that the small businesses need to use when they sell and market down pat and built into their software - which is made as easy as possible and as organic as possible when it comes to the flows that very small businesses are likely to need to intuit use of the applications. They are smart enough to know they can't do everything technologically either. For example, they use Walkme for their guided help - and that is easily the best product on the market for that. But Infusionsoft also provide services that go beyond technology. For example, they provide a free Lifecycle Marketing model that customers can use to develop a marketing plan. They provide what I have to summarize as "business development (meaning "evolution" not drive sales per se) services" - actual educational services on how to succeed in business (with really trying though).
As I have stated relentlessly every year, this is a company that can and should be a hub for small businesses that goes well beyond the technology they offer. The technology becomes part of an ecosystem of first and third party systems and technologies, services and tools, that any small business can get involved with and can spend time over years growing with. Infusionsoft is one of the few companies that I see having that capability in their particular part of the universe.
But that's a tricky and potentially risky value proposition, so here's what I think they can do to keep making an impact while they either do or don't make this effort.
What they can do
This is arguably the oddest set of what they can do's in the entire Watchlist because it is focused on suggesting a strategic direction which I don't usually do. Usually, what I am suggesting are tweaks or significant changes or improvements to the existing infrastructure. They are tactics in service of strategy. In this case, both suggestions are strategic and not necessarily what Infusionsoft is thinking. But then, what good am I, if I don't say what I think? I want the Watchlist companies to succeed so whatever it takes for me to support that, I will do. Plus, I'm a New Yorker. I have a big public mouth.
Stay the course - The incentive to grow, to extend one's reach - even if what they are reaching for is immediately out of their grasp - is powerful. When you've achieved what you feel is a pinnacle, gone beyond the penultimate to the ultimate, the desire to go further to new territory, to take the risk and the chance to get there is often intoxicating. You've been so successful so where you are that going to a place you've never been with the promises of riches (Tomorrowland) can be blinding. But there are times that those you serve as well as you have been, are providing a market with a lot of room to grow as of yet. Infusionsoft is in one of those markets. At their last conference, they began to talk of serving companies that were 100 employees or less (if the relationship with the company started with the below 25). Infusionsoft, which long ago outgrew 25 employees has managed to not only carve a niche but dominant a market that still needs a lot. For the time being I'd continue to serve that market if I were them. See right below on what that means. In the meantime, I'd be creating a crisper vision and mission if I were planning on going to new places never conquered.
Speed it up - One of the unique aspects of Infusionsoft has been that their vision is based on serving the 25 or under employee set. For a technology company, the way that they are structured is highly unusual. They are really more of a services company that is providing technology as one of their services. This is a brilliant model for them because small businesses, without a doubt, need to learn how to be businesses and how to grow. Infusionsoft is uniquely positioned to both teach them that and to help them enable it via the technology they provide. But there are lot of services still needed to get the small business ecosystem in place. They have been talking about doing this for several years. Time to step it up. Sit down, map out the ecosystem, and figure out what they can natively provide, what they want to build and who they want to partner with or even acquire for the rest - and go to town.
That's it for the technology vendors portion of the Watchlist. The final two coming up next week are consulting companies/systems integrators - and that would be Accenture and The Pedowitz Group (TPG).
See ya.