FOR THE BILLIONS OF CUSTOMERS; AI POWERED CUSTOMER SUPPORT WILL REVOLUTIONIZE THE INTERACTION, ECONOMICS, AND PROFITS IN THE ENTERPRISE
“How do you say ‘Let’s Go’ in Hindi?” “Chalo Chalo”
It’s a balmy Sunday afternoon in San Francisco in the Fall of 2017, and after a 3-hour brainstorming session on the ‘Future of Customer Care,’ Craig Davis, CEO, and Founder of Agent IQ asks me this question. The question is asked as we take a short break from our deep technology talk and demo of Agent IQ’s stunning User Interface of its AI Powered Customer Support system. While I watch the demo, I am nonplussed; how does an executive that has not grown up in the 30-year old customer support software ecosystem, build such an innovative, useful, and beautiful product? Craig, turns out, besides being an insightful software entrepreneur, moonlights as an author of children novels, and “Chalo Chalo” are words that he needs for a children’s book he’s painting which is set in India. His artistic sensibility flows into the design of this amazingly useful software. Now, all the pieces begin to fall into place.
What had drawn me to this conference room, and to Craig and his ex-Googler CTO, Slaven Bilac, was the gutsy approach they have taken to building an AI-powered Customer Support System at Agent IQ. It was AI at the core and all the other software was written around it, with a closed loop architecture training the AI (more on that later). Disruptive thinking and fearless founders build massive companies and Agent IQ has all that and more.
Therefore, I am ecstatic to announce Sierra Ventures investment in Agent IQ’s Series A today. It is the end of a two-year quest to find the next Customer Support powerhouse, and I can say with confidence that I’ve found that in Craig and his team at Agent IQ. More than 10 enterprise customers in 18 months, cash flow positive, and Fortune 1000 $500K ACV plus customers is more progress than I have seen at any company that’s at this stage. Craig Davis is the definition of a triple threat CEO: product, sales, and leadership, and I look forward to my partnership with him. I am doubly pleased that my former partner and entrepreneur extraordinaire, Ori Sasson, CEO of Scopus (NASDAQ: SCOP) and Genesys (NASDAQ: GEN), is joining me in this investment. The band is indeed back together.
Now, for a bit of background.
Every decade there are multiple billion dollar companies created in Customer Support / CRM
I grew up in Customer Relationship Management (CRM) and helped build two companies in Customer Support and saw $10B in value created in the 90’s. First was Scopus, which we IPO’d in 1995 and sold to Seibel in ‘96 for $750M. In parallel to Scopus, Vantive and Clarify also went public. Soon after, in 1996, I started Octane which in five years and many customers later we exited, selling it to Epiphany for over $3.2B. In the 80’s, there were companies like Dendrite, Brock, ACT that had thrived. After the 90’s and in the 2000’s, Salesforce.com and Zendesk started to thrive, creating tens of billions of market value.
However, since the beginning of this decade, there has not been any fundamental innovation in Customer Support, and as a venture capitalist with interest in the space, I had probably looked at two dozen companies very deeply. Cloud CRM, Mobile CRM, Knowledge Base Mapping using AI, Multichannel CRM, bot-based automation; all these companies felt like features, not companies. They were all living in the shadow of larger CRM players, and I knew in my heart that there was something better out there.
The Market Forces at Play
At Sierra Ventures, we have the luxury of an 80-person strong CIO Advisory BOD consisting of CIOs from some of the most phenomenal brands in the world. As I talked and engaged with these CIOs, a few themes began to emerge.
a) Direct to Consumer is a Dominant Trend
If you are an enterprise executive, you will want to understand why “direct to consumer” is a dominant trend right now and what it means for your organization long term. Enterprises are starting to sell directly to consumers because consumers are purchasing digitally to save time – and it is far easier. For example, Gillette sells its razors to Costco, but now they need to sell razors directly to customers to keep up with competitors like Dollar Shave Club. Companies have to innovate their go-to-market approaches to remain relevant. They need to tap into the power of customer critical infrastructure to efficiently serve these direct customers. This was top of mind to meet shareholder and consumer needs and clearly, this is a problem that Enterprises need to solve quickly.
b) The Paradox of Customer Service in the Face of Billions of Customers
All companies want to serve their customers and serve them well. The issue that was starting to become a headache was the cost of service given that more customers were coming “online.” In the old world, when the only channel to communicate was through a phone, companies were spending $17/call. Now, with a 4x increase in channels (email, chat, in-app messaging, voice) and 10x increase in traffic, the SLA for customer support is starting to force companies to re-look at their customer support infrastructure and look for a change.
c) Customer Service is Becoming a Sales Channel
Because of the advent of ‘conversational’ CRM, the lines between support and sales are now completely blurred, especially in consumer-facing businesses. The interaction is the opportunity. Holding the conversation is important, but retaining the “context” is even more important.
d) B2C Customer Interaction / Support infrastructure is different than B2B Customer Support
All the above points make the case for a fresh relook at Customer Interaction / Support software for consumer-facing businesses. The next billion consumers will put an inordinate amount of pressure on those companies.
Artificial Intelligence (AI) provides the step function jump
Disruption in business software is occurring now. Where the transactional database used to be at the center of the design, now there is AI. AI is improving how software is built and what it can do. We are seeing the emergence of “Next-Generation” leaders that are embracing AI in every category of software development. And in Customer Support for B2C businesses, Agent IQ is leading the pack.
Their product was built by enabling all channels of customer service, text, email, in-app and voice. As the first line of defense, AI will respond to what customer is asking, and if the AI cannot solve the problem, the interaction is seamlessly handed over to a live agent to solve it. As the live agents solve the problem, the resolution is used as training data to help solve the problem for future cases. This iteration allows the AI to get incrementally smarter in real time.
I equate the learning curve of Agent IQ to that of the human brain. Let’s say we install Agent IQ on an airline reservation system? The AI core of the Agent IQ product starts out at approximately the level of a 5-year-old. Through repetitive tasks of dealing with overbooking and customer baggage, the AI brain graduates to a teen brain, then adult, getting smarter with each interaction, and ultimately, the easy questions are automatically handled and only the very complex ones are escalated. This achieves a high response rate at a low cost. This is the Agent IQ innovation!
There’s gas in the jets and the time for talk is over. “Chalo Chalo” Let’s build a MONSTER company!