Data-Driven Decision Making with Klue CEO Jason Smith
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Our guest is 5x start-up entrepreneur Jason Smith. He's the CEO of Klue, a competitive intelligence platform used by Cisco, Dell, and Hootsuite. They’ve raised $19M in venture funding so far.
Jason is the Ernst & Young Emerging Entrepreneur of the Year Award Winner, and Klue was off to great before the pandemic hit. He quickly realized that they needed to raise another round of funding to survive.
The problem was he could only do it through video-conferences, which everyone advised against. But he had no choice. So he went for it. And he learned that pitching investors on Zoom meetings had some advantages.
Remote meetings eliminated the need to travel back and forth, so he could meet with more investors in less time. Plus Zoom brought in a surprising level of humanity. You don’t usually see kids with sock puppets in the boardroom, but when you’re working from home and the schools are closed, everyone understands because we’re all in the same boat.
For the first time in a long time, it was no longer all about data-driven startups. Obviously, the data was still key, but there was a very real human connection that didn’t always exist in the conference room. But that doesn't mean he didn’t get grilled on his numbers,
For those unfamiliar software-as-a-service startups like Klue, whether you’re an enterprise sales or product-led startup, one of the most important numbers investors want to know is monthly recurring revenue or MRR.
To be attractive to investors, SaaS startups have their own unique set of requirements. Whereas investors considering a B2B online marketplace would be looking at growth on the supply and demand sides, SaaS investors are interested in net customer growth. “You’ve got to prove that customers care about what you have enough to keep paying. And that’s gonna be reflected in your MRR,” says Jason.
The other thing they’re looking at is churn. You have to distinguish new customers from departing customers. You’re looking for overall expansion. That’s the net. New customers less departing customers.
If they like what they bought they’ll stick around. But if they’re saying ‘I overbought, and I want less now” that’s a negative. Some customers may be around for a while and then leave, which also causes a reduction of MMR.
What is Klue?
“Klue is a competitive intelligence solution. What we’re trying to do is understand what your competitors are up to,” says Jason.
The complexity comes from scripting the analyzed company – What’s happening on their website, what are they doing on Twitter, profiles on their employees, pricing, etc.
The other side comes from analyzing the client – Emails and Slack conversations that they have about the competitor or rich text notes they’ve put into their CRM. “We combine everything we find from the external web and internal data into one continuously updated dashboard of activity on what they’re doing.”
Klue uses unstructured data — which is more difficult to work with than financial data — to create competitive intelligence profiles, competitor analysis templates, and target customer research that helps B2B tech companies generate and close more deals.
Eighty percent of the data that’s currently generated inside companies is unstructured. This is data that’s composed of rich text, voice to text translations, SMS messaging grists, Slack conversations (in Slack, podcasts, etc.), and other forms of natural language, which Klue analyzes with AI technology for competitive differentiation.
AI is moving from understanding images to understanding words. “And Klue looks at 3 million pieces of data every day. There’s no way that a human is gonna crunch that down to something of relevance,” says Jason.
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