Can you imagine being offered $390 million dollars for anything?
While most of us will never know what that type of success feels like, Steve Loughlin and Adam Evans, are part of the minority who do. These two Stanford Graduate School of Business alumni started RelateIQ, a data-driven company that produced an intelligent email client, calendar, and work dashboard that automatically determined which salesperson at your company had the best relationship with a customer, among other things.
The Palo Alto-based company was acquired by Salesforce, a larger company many saw as a competitor of RelateIQ, for nearly $400 million dollars in 2014.
RelateIQ: An Origin Story
But before we get into acquisitions and mergers, let’s learn a bit more about Laughlin, Evans and RelateIQ.
According to the company’s VentureBeat profile, RelateIQ began in 2011, motivated by Evans and Laughlin fatigue with manually entering data. It was difficult for them to justify all the hours spent weekly manually adding contact info and status updates to lifeless relationship management tools.
RelateIQ launched its public beta in 2013, it’s mission being to help people build better relationships and make smarter decisions. When Loughlin was interviewed for an article on FastCompany, he recounted how he developed the product out of his house with a few coworkers when his wife went into labor.
In product marketing materials, the software is branded as something that “manages the details of every customer and prospect for you. We even enter info automatically from email, calendar, marketing automation systems, and many other data sources so you don’t have to.” In other words, it sits on top of inboxes, calendars, and productivity software and automatically builds maps of who’s talking to who and what’s due when.
“This jumps on the trend of sales reps being overwhelmed by customer data,” Loughlin, who acts as the company’s CEO, told FastCompany. “Every time they schedule something in their calendar, it’s an explosion. Sales reps spend more time filtering data and less time selling. On average, they spend 28 hours weekly reading and answering emails, and representatives update their CRM (customer relationship manager) four times a week.”
The company’s software automatically logs progress on the phone, in email, and inside calendars so salespeople and their bosses retain the most accurate information.
“When professional relationship managers interact with each other, there is a huge amount of kind of data exhaust that is being created and left out there,” Evans, who acts as the company’s CTO, said in an interview with VentureBeat.
RelateIQ proved to be an instant success, bringing in hundreds of customers and enticing investors to show their support. By early 2014, the company had raised $69 million, including a $40 million round of funding and was evaluated at $240 million. As the software grew more popular, larger companies in the corporate data game — giants like Microsoft, Oracle, and Salesforce.com — started to take notice.
But as the classic adage goes, if you can’t beat them, join them.
Salesforce Acquisition of RelateIQ
As RelateIQ threatened to unseat Salesforce’s standing in the marketplace, Salesforce — a company that makes around $1.63 billion per quarter, according to FastCompany — did what so many companies do to upstart rivals, and purchased RelateIQ for nearly $400 million in 2014. This wasn’t a unique instance either, as Salesforce purchased three other companies in 2015 to both expand their product portfolio and acquire talent.
Following the acquisiton, billionaire CEO of Salesforce.com Marc Benioff told Wall Street analysts how and why the acquisition happend.
“I have a dinner every month that I attend with 10 to 15 CEOs of mostly very strong and emerging companies. … And two of them looked me in the eye – and this never happened before – and they said, ‘You really need to buy RelateIQ.’ I said, ‘Why?’ They said, ‘We use Salesforce but we use RelateIQ also. It’s an incredible compliment to your future.’ I knew about RelateIQ. I used it. I started to spend a lot more time with it and I saw exactly what they were talking about.”
Following news about the acquisition, Loughlin wrote in a blog post,
“Salesforce.com pioneered the shift to enterprise cloud computing, redefining modern CRM as we know it. As you know, RelateIQ is pioneering the next generation of intelligent computing through data science and machine learning. Looking ahead, salesforce.com’s acquisition of RelateIQ will extend the value of salesforce.com’s #1 CRM apps and platform with a new level of intelligence across sales, service, and marketing.”
According to VentureBeat, Salesforce.com had been lagging behind the competion becasue of their lack of innovation in the big data intelligence department. Now they have one with RelateIQ and it’s impressive team, which includes DJ Patil, a top data scientist, and Heather Phillips, a talented designer.
“One of the key reasons we bought RelateIQ. It really makes SalesCloud so much better, Benioff told Business Insider, ”We had no choice but to acquire the company and make that happen,” Benioff said, adding that he has a “huge vision” for the product and expects to announce new products around it within six months.
Following the acquisition, RelateIQ’s main product was rebranded as a new tool called SalesforceIQ for Small Business. According to FastCompany, the company is making a new mobile app and Chrome extension for Salesforce’s existing larger customers called SalesforceIQ for Sales Cloud.