David Cancel and Elias Torres may have moved on from HubSpot, the Cambridge inbound marketing software firm that they helped transform into a major force in the tech world. But they haven’t moved too far—at least in a geographic sense. The pair’s new startup, Driftt, is just across First Street from the HubSpot HQ. I spoke with the two of them last week in a room overlooking their former company, whose success and eventual IPO has in many ways set the stage for what Cancel and Torres are doing now.
Which, after more than a year in heads-down mode, the two are now ready to talk a lot more about. The short version is that Driftt aims to dramatically improve the way companies interact with their customers after they’ve signed on as customers. The goal: retain a lot more customers and get a ton more referrals.
More on how Driftt works in a moment, but before we go there I should note that Cancel and Torres are being unusually open about the huge things they believe are in store for their company.
“The goal is to create the next anchor company in Boston, or die trying. It’s going to be binary, guaranteed,” Cancel said.
By anchor company, he means another firm that goes public, dominates their space, hires in huge numbers and sticks around over the long term. I.e., the sort of company HubSpot (HUBS) itself is on the path to becoming. “I would not start another company otherwise,” Cancel said.
Driftt’s product is set for general availability release in mid-November, in tandem with a presentation the startup will be doing at the Boston Innovators Group (formerly WebInno). The company employs about 20 right now, half of them hired in the past few months.
Here’s more on the company from my chat with the founders:
How Driftt works. Targeted for use by software companies, Driftt provides a piece of Javascript for companies to install that collects data about interaction with and actions by customers. Companies get a dashboard that looks like a CRM, but is for tracking actual customers (not leads); the dashboard lets companies select and segment customers and decide what sort of actions to take to engage with them.
The use cases. Driftt is targeted initially for product marketers—the people who’s job is to build the company’s relationship with customers. A product marketer using Driftt, for instance, might send a message within their own company’s application to a customer to make them aware of a new feature—or just to make sure they’re happy. The idea, Torres said, is that right now most companies have no mechanism for working to keep customers happy other than sending out surveys or emails (both of which often go ignored). Driftt then collects all the data on what's happening and puts it back into the CRM-like system, to provide a unified profile on customers.
Room to experiment. Driftt raised $15 million in funding as its very first round, an unusually large amount for an initial funding, thanks in large part to the founders’ previous success; this is the fifth company founded by Cancel, for instance, with previous ones including Compete and Performable, which HubSpot acquired for $20 million. Torres said the investors in the company—which include CRV, General Catalyst, NextView, Founder Collective and HubSpot executives—have allowed for a “lot of experimentation.” The company has a “special opportunity with our investors,” Torres said. “They trust us … They’ve said, ‘Don’t rush, as long as it’s huge.’”
"They’ve said, 'Don’t rush, as long as it’s huge.'"
Why the opportunity is so big. Tech companies everywhere are looking to transform into software-as-a-service businesses, and that necessitates having a recurring relationship with customers, Cancel said. “When we talk to customers, we’re seeing the same patterns that we saw early in the marketing automation space at Performable, before the explosion in the marketing space,” he said. “Every business is trying to move to this recurring revenue model. They’re all going to subscription models, even stores. If everyone is trying to move to that model, someone somewhere will have to develop a unified approach like has been done on the marketing and sales side, but for the customer side.”
On setting high expectations. Cancel said he’s amazed that, for as long as he’s been in the Boston tech community, he still regularly comes across Boston companies that are doing great stuff who he’s never heard of before. “We’re awful at marketing in Boston,” Cancel said. “We need more chest thumping, so we’re going to do the chest thumping.”
