Author: Thomas Crown

Over the past few years, the old language of “customer support” has been supplanted by the new language of “customer success.” In the old model, companies would essentially disappear following the conclusion of a sale, merely handling customer problems when they arose. Now, companies are actively reaching out to customers, engaging them with education and training and monitoring them with analytics to ensure they have the best time with the product as possible.

What’s changing is the nature of product and services today: subscription. Customers no longer just make a single buying decision about a product, but instead must actively commit to using the product, or else they churn.

New York-based Catalyst, founded by brothers Edward and Kevin Chiu, wants to rebuild customer success from the ground up with an integrated software platform. They have received some capital success of their own, securing $2.4 million in venture capital from Phil Black of True Ventures with participation from Ludlow Ventures and Compound.

New York has had something of an increase in founder mafias, as TechCrunch reported this weekend. Catalyst is no exception to this trend, with the Chiu brothers both working at DigitalOcean, one of New York’s many high-flying enterprise startups. Edward Chiu was director of customer success at the company for a number of years, but had a unique background in sales and also in coding before starting.

Kevin Chiu was head of inside sales at DigitalOcean . “I brought my brother on to do sales at DigitalOcean,” Edward Chiu explains. “We always knew that we wanted to start a company together, but wanted to see if we would kill each other.” The two worked together, and lo and behold, they didn’t kill each other.

Edward Chiu wanted to match the product experience of using DigitalOcean with the experience of using its internal customer success tools. Nothing on the market fit. “Given that DigitalOcean was a very technical product,” Chiu explained, “we decided to build our own tool.” Chiu thought of customer success at DigitalOcean as its own product, and his team built up the platform to improve its functionality and scalability. “We just used the tool and we loved it,” he said, so we “started to show this tool to a bunch of other customer success leaders I am connected with.”

Other customer success leaders said they wanted the platform, and “after the 20th person told me that,” he and his brother spun out of DigitalOcean to go on their own. Unlike enterprise startups in New York a couple of years ago who often struggled to find any investors, Catalyst found cash quickly. “Two weeks in we had more offers than we knew what to do with,” Chiu explained. The two said they had originally targeted a fundraise of $750,000, but ended up at $2.4 million.

Catalyst is a platform that integrates between a number of other major SaaS services such as Salesforce, Zendesk, Mixpanel and others to create a unified dashboard for data around customer success. From there, customer success managers have a set of automated tools to handle engagement, such as customer segmentation and email campaigns.

A major challenge in the customer success world is that these managers often don’t have the skills required to do advanced data analytics, so they often rely on their friends in engineering to run scripts or perform database lookups. The hope is that Catalyst’s feature set is powerful enough that these sorts of ad-hoc tasks become a thing of the past. “Because we aggregate all this data, you can run queries,” Chiu explains.

Chiu says that Catalyst doesn’t just want to be a software platform, but rather a movement that pushes every company to think about how they can make their customers successful. “There are so many companies that are starting to understand that it is not something that you do once you raise a Series A, but something you do from day one,” Chiu said. “If you take care of your very first customer, they will constantly promote you and constantly promote your business.”

The company is based in Flatiron, and has eight employees.

from TechCrunch

In the era of fake news and controversies over how brands’ advertising — via programmatic platforms — unwittingly ends up alongside content with which they’d rather not be associated, Oracle has made an acquisition to beef up its ability to help customers with these marketing challenges.

It has announced that it will acquire Grapeshot, a startup out of Cambridge, England, that has developed a platform to help ensure “brand safety”, along with solutions to help brands, agencies, publishers and ad platforms to match ads to more specific placements overall.

The startup will become a part of the Oracle Data Cloud, Oracle said, working specifically in the area of Audiences and Measurement, which already provides a number of other tools to marketers, such as data for custom segmented audiences.

The terms of the deal have not been disclosed but we are trying to find out. According to Pitchbook, Grapeshot’s last post-money valuation was around $59 million (£42 million) in May of 2017. The company has raised less than $10 million from investors that include IQ Capital Partners and Albion.

Grapeshot, via its Contextual Intelligence Platform, says it works with some 5,000 marketers globally, covering some 38 billion programmatic ad impressions. It’s been growing at a rate of over 100 percent year-over-year, it says. It looks like it will continue to work with existing customers, who will in turn become potential targets for the cross-selling of other Oracle services.

The rise of Grapeshot and its acquisition by Oracle speaks to a growing challenge in the area of adtech and corresponding marketing technology: while programmatic advertising has largely become the norm across the web, there are some unintended consequences from all that automation.

For one, it’s harder to specifically match ads to content in every case — and this might potentially become even more difficult with the rise of stronger data protection and increased scrutiny on how are data is used for ad targeting. One of Grapeshot’s services helps marketers solve this with technology that helps match ads not just to basic sites, but to keywords on pages.

But in the worst-case scenarios, brands are finding their ads running alongside content that is outright damaging to their images. In a recent scandal, advertisers were forced to freeze some ads on YouTube when they were found to be running alongside videos of kids with obscene comments from viewers.

Ideally both for the brands and YouTube, the ads would have never been there to begin with — and that is the kind of outcome that Grapeshot (and now Oracle) is going to be helping achieve.

There are, of course, a lot more controls in place now to try to prevent situations like this, and products aimed at generally making it easier to match ads to content. Search giant (and YouTube owner) Google, the world’s biggest online advertising company, earlier this year launched a new AdSense product that uses machine learning to “read” content on specific pages to understand the context before it serves an ad to it.

The interesting thing about Grapeshot is that it’s working a layer back before this. By not being tied to any specific ad platform, Oracle has the potential to play a strong hand as an unbiased helper to customers to achieve the best results.

Oracle has made a number of acquisitions to expand its digital marketing and advertising solutions business, to tap into the rise of social media and also to compete better against Salesforce. They have included Compendium, Moat, Involver, Vitrue, Netsuite, Market2Lead and many more.

from TechCrunch

Kidbox, a clothing-in-a-box startup aimed at a slightly younger crowd than StitchFix, has raised $15.3 million in Series B funding to expand and scale its business.

The round was led by Canvas Ventures, and includes participation from existing investors Firstime Ventures and HDS Capital, as well as new strategic partners Fred Langhammer, former CEO of The Estée Lauder Companies Inc., and The Gindi Family, owners of Century 21 department stores.

To date, Kidbox has raised $28 million.

The company was founded in October, 2015, then shipped its first box of clothing out of beta testing during the back-to-school shopping season the next year.

Similar to StitchFix, Kidbox also curates a selection of around half a dozen pieces of clothing and other accessories (but not shoes), which are based on a child’s “style profile” filled out online by mom or dad. The profile asks for the child’s age, sizes, and questions about the child’s clothing preferences – like what colors they like and don’t like, as well as other styles to avoid – like if you have a child who hates wearing dresses, for example, or one who has an aversion to the color orange.

“Those answers feed into a proprietary algorithm – we’re very data science and tech focused,” explains Kidbox CEO Miki Berardelli. “That algorithm hits up against our product catalog at any given moment, and presents to our human styling team the perfect box for – just as an example, a size 7 sporty boy. And from there, the styling team looks at the box that’s been served up, the customer’s history, if they’re a repeat customer, the customer’s geography, and any notes [the customer] added to their account,” she says.

The box is then put together and shipped to the customer.

Berardelli previously worked at Ralph Lauren, Tory Burch, and was President of Digital Commerce for Chico’s (Chico’s, White House Black Market, and Soma). She joined Kidbox in September 2016, after meeting founder Haim Dabah while he was searching for Kidbox’s CEO.

“It resonated with me as a consumer, as an early adopter of all things digital, and as a multi-time operator of e-commerce businesses,” she says, of why she decided to join the startup.

Today, Kidbox’s boxes are sent out seasonally for spring, summer, back-to-school, fall and winter. However, unlike StitchFix, Kidbox isn’t a subscription service – you can skip boxes at any time, and you’re not charged a “styling fee” or any other add-on fees.

However, if you keep the full box, Kidbox donates a new outfit to a child in need through a partnership with Delivering Good, a nonprofit that allows customers to choose the charity to receive their clothing donation.

At launch, Kidbox carried around 30 kid’s brands. It’s since grown its assortment to over 100 brands for kids ages newborn through 14, including well-known names like Adidas, DKNY, 7 for All Mankind, Puma, Jessica Simpson, Reebok, Diesel, and others.

Kidbox launches its own private labels

With the next back-to-school box, Kidbox will insert its own brands into the mix. The company will be launching multiple private labels across all ages, and every box will get at least one own-label item. The brands will include everything from onesies for babies to graphic tees to denim to basics, and more. 

“We believe we’ve identified a void in the children’s apparel marketplace,” notes Berardelli. “The style sensibility of our exclusive brands will all have a unique personality, and a unique voice that’s akin to how our customers describe themselves. It’s all really based on customer feedback. Our customers tell us what they would love more of; and our merchandising team understands what they would like to be able to procure more of, in terms of rounding out our assortment,” she says.

On a personal note, a customer of both Kidbox and Rockets of Awesome, two of the leading kid box startups, what I appreciate about Kibox is the affordable price point – the whole box is under $100 – and its personal touches. Kidbox ships with crayons and a pencil-case for kids, and the box is designed for kids to color. It also includes a print edition of its editorial content, and sometimes, there’s a small toy included too.

Kidbox rival Rockets of Awesome is a little pricier, I’ve found, but has some unique pieces that make it worth checking out, as well.

With the new funding, Kidbox aims to further invest in its technology foundation, its data science teams, its own labels, its customer acquisition strategy and marketing.

The company doesn’t disclose how many customers it has or its revenues. Instead, it notes that the Kidbox “community” – which includes fluffy numbers like Facebook Page fans and people who signed up for emails – is over 1.2 million. So it’s hard to determine how many people are actually buying from Kidbox boxes.

Kidbox has potential in a market where brick-and-mortar retailers are closing their doors, and e-commerce apparel is on the upswing. But it – like others in the space – faces the looming threat posed by Amazon. The retailer has also just launched its clothing box service, Prime Wardrobe, which includes kids’ clothing.

“Kidbox is at the head of a trend that sees a world in which every person will have their own personalized storefront for literally anything — be it kids clothing, furniture, or weddings,” says Paul Hsiao, General Partner at Canvas Ventures, about the firm’s investment. Hsiao has also led investments in Zola and eporta while at Canvas, and in Houzz while at NEA.

“Kidbox is growing at atypically high multiples. I think it is because of their deep connection with their customers – the kids, the parents, and grandparents,” Hsiao continues. “The Kidbox Team is also remarkable at logistics. Sounds boring, but ecommerce is fundamentally a logistics business,” he adds.

Kidbox is currently a team of 35 based in New York.

from TechCrunch

Xiaomi and Ant Financial are two of a cluster of major tech names being linked with IPOs in Hong Kong. But, despite a burst of upcoming tech listings and new measures that are tipped to encourage more, the country still has some way to go to match the U.S. as a destination for startup exits, according to one of its star graduates.

Gaming hardware firm Razer raised over $500 million when it went public on the HKSE last November, but its CEO Min-Liang Tan has warned that the country’s investor base needs education on how tech companies perform and develop.

“[Going public] was an exciting time for us, but [now] our focus is getting the Hong Kong investment public to be more educated on tech companies,” Tan told TechCrunch in an interview this week. “The U.S. [public markets] are probably more cognizant of tech companies.”

Razer, which is backed by Hong Kong’s richest man Li Ka-Ching among other investors, saw an 18 percent pop on IPO day, but its share price has steadily decreased since then. It is trading up six percent today — after the company bought $100 million-valued payment provider MOL yesterday — but its price of HK$2.59 is down on its initial list price of HK$3.88.

The company isn’t alone.

China Literature, the e-publishing unit of Tencent, is another lauded IPO darling that has struggled to find its feet since going public.

Its listing was the most profitable Hong Kong debut in a decade with shares leaping 86 percent in value on the first day of trading as China Literature raised $1 billion. But today the price of HK$68.10 is down substantially on a debut figure of HK$102.5.

Going back further, shares of selfie app and smartphone-maker Meitu — which led the tech rally with an HKSE listing in late 2016 — have stayed flat.

The share price closed today at HK$8.48, down slightly on a HK$8.50 valuation at the close of trading on its December 15 2016 debut.

Those three stories should offer some caution to Ant Financial, the Alibaba fintech affiliate reported valued up to $150 billion by private investors, and Chinese smartphone star Xiaomi, which is reportedly close to listing in Hong Kong at a valuation that could reach $100 million.

We’ve written before that Hong Kong’s unique positioning bridging China and the international market gives it appeal as a crossway for Chinese brands to go international, and global firms to enter Mainland China. Added to that, there markets like India and Southeast Asia are incubating billion-dollar tech firms that will need destinations for exits perhaps beyond the scope of what the location options can offer. However, with facts like higher burn rates, iterative product development, large R&D budgets and varying business models, many tech companies don’t function like more traditional enterprises or industries.

In Razer’s case, the company sells gaming laptops and accessories for gamers such as specialist mice, keyboards, headsets and gaming pads. It recently branched out into mobile with its first smartphone and Tan teased the potential for other new product launches this year.

The challenge of educating investors is acuter for Razer than most tech companies since the company focuses on emerging industries such as gaming and e-sports. Case in point, that space is so nascent and under-the-radar that Razer had to commission its own surveys and research from third-parties ahead of its IPO to get market and competition data for its prospectus.

Still, Tan said things are going well for the business.

“We out-performed our expectations quite a bit in 2017 and there’s a lot of excitement around gaming and e-sports,” he told TechCrunch.

“The phone has done very well for us,” he added. “With games like PUBG and Fortnite coming to mobile, it’s probably the best timing ever for us to be first movers in this space. Now with virtual credits [from the MOL acquisition], we see a way to help games companies in various areas… we’re building an entire ecosystem for our games partners.”

Tan declined to comment when asked if Razer would consider additional listings in other markets, although he said there’s “a lot of interest in the work we do.”

from TechCrunch