When Tactile’s founder and CEO, Chuck Ganapathi, left Salesforce.com in 2011 after five years, one thing seemed clear: enterprise software may have made a lot of progress in helping companies but it had left end users behind.
“That’s represented in the low adoption rates [by end users] that you see in a lot of categories of enterprise software. CRM, specifically, is one of the biggest culprits in that,” Ganapathi said.
“Companies buy a CRM system expecting a sales person will use it as the way they do their business every day. But they end up actually not using it and they’re forced to, just to keep the data flowing back into management for better visibility in their reporting.”
Ganapathi was behind the development of SaaS vendor Salesforce.com’s flagship Sales Cloud, Chatter, and Mobile products. His 15 years in enterprise software also include six at Siebel Systems, where he helped the company shift from client-server to the web.
His latest venture, Tactile, was started in early 2012 and its Tact product went on general availability in late March this year, along with the announcement of $11.2m in series A funding for the startup.
The idea behind Tactile is initially to tackle the problem of poor uptake of CRM systems by targeting the employee rather than the employer with a product that complements the way sales staff use phones, email and contacts software.
The new app is designed to automate those processes to remove much of the manual input involved in using corporate CRM software, in the process resolving conflicts between the organisation and the employee over the pain of data entry.
“That was the genesis of the company. We started by saying, ‘Let’s flip this model by focusing on the end user and building user-centric applications’,” Ganapathi said.
“You have this conundrum if you’re a company that, ‘Yes I’ve spent all this money putting the CRM system in place but my reps aren’t putting any data into it, so what do I do? How do I get any RoI, how am I going to get any visibility into this thing?’.
“What they have to do is find tactics to blackmail their users to enter this information. ‘We won’t pay you your commission if the deal is not in Salesforce’, or ‘You’re not going to receive a salary increase if you don’t keep your Salesforce up to date’.”
Ganapathi saw that approach as a poor way to drive employee productivity. By syncing with Salesforce.com, email, calendars, tasks, contacts, and LinkedIn, the free Tact app has been designed to capture conversations sales staff are having with customers, pushing information into the CRM system by, for example, sliding a switch on their iPhone.
“What’s really enabled us to do this is the iPhone. For the first time that was a device that people were able to procure themselves and it took away BlackBerry as a standard device from the enterprise. Because every iPhone comes with an app store, people are now trained to go look for apps,” Ganapathi said.
“Obviously, they start with games and entertainment and music. Now what we’re seeing is more and more are thinking about, ‘I’ve brought my device to my work but what about the applications that I use?’ — sort of now bring your own device is moving more towards to bring your own service or bring your own cloud.
“We think the right model for the future is, ‘Let’s start with something that the end users love by going directly to them, to the app stores, to the direct channels, just like a consumer company might, and from there go up into the organisation as opposed to top down.”
Behind the Tact app is what Ganapathi describes as complex sync technology, which the company has spent the past two years building, in an attempt to achieve for structured data what Dropbox has done for file data.
For the moment, Tactile is adopting a freemium model, in the expectation that a premium model will eventually appear.
“With consumerisation and mobility, the pattern that’s emerging is that you start with an application that people find through the App Store. It’s free, it gets them hooked. They say, ‘This really makes me more productive at work. This is a way I want to work’,” Ganapathi said.
“Then when they become active users, they start to adopt a premium product and they bring it into the company, at which point they plug it into the corporate cloud.”
That is the Dropbox model, evolving from free, to premium, and eventually to an enterprise product, Ganapathi said.
He argues that employers will have no problem with staff using a business app such as Tact because suddenly the company will benefit from more information flowing into its CRM system.
“The initial response we’ve got from organisations is they love the fact that now their reps are entering a lot more data, and they are getting a lot more visibility in analytics than they ever did before,” Ganapathi said.
He doesn’t believe that a company such as Salesforce.com could simply pull the rug out from under Tactile’s feet by replicating its application.
First, his company is not trying to create a competing CRM system but is doing something broader that sits at the intersection of CRM, LinkedIn and email productivity systems.
Secondly, Salesforce.com’s technology is built around databases whereas Tactile’s approach is to say customer information is everywhere — emails, calendars, CRM systems and Sync binds that together.
Finally, Salesforce.com’s business model is entirely different.
“That’s the hardest thing in my mind for a company like Salesforce to change, because their business model, which is in their DNA, is all about selling to the company,” Ganapathi said.
“I used to work there as a product person. I ran and built a lot of their products and I would tell myself, ‘Yes, we care about the end user’ but at the end of the day who we really care about is the person writing the cheque and the person writing the cheque is IT or the company.”
As evidenced by the rise of Dropbox, Ganapathi believes changes are afoot in the way business end users are being targeted rather than necessarily their employers.
“The one that is probably furthest along is Dropbox. People think of Dropbox that it started out a consumer tool. But their strategy increasingly is about work and about business and professionals using Dropbox for themselves and then becoming premium users and ultimately the whole company using Dropbox as an alternative to SharePoint,” he said.
“They are one company that has done it for files. There are other startups like us that are focusing on different areas. There is another company called Quip that is trying to do the same model for word processing.
“They are a mobile first, consumer first or user first word processor that is first building a free app for the end users and then trying to get into the corporation with a business application.
“We’re doing the same thing for sales people and CRM. There’s a pattern here that’s emerging.”