A little primer before we begin, Cambrian refers to an age in Earth’s history over 500 million years ago. The Explosion part refers to a period of extraordinary evolutionary change over a “short” 20-million-year time span that saw the emergence of a multitude of new life forms. In the same way that life on Earth blossomed during this compressed time period, we are seeing a similar type of expansion in sales technologies, and we are living in that moment right now.
Whenever you think a market is fully saturated and there is no more innovation to be had, the market has a way of kicking you in the ass. Several years ago, I was involved in the HR tech industry and it was truly moribund. The last great wave had been talent management solutions, but by the late 2000’s it was already a mature market. The biggest “innovator” was Workday, one of the first cloud-based SaaS HRIS platforms. But most of the market was status quo. Most of the real activity was happening in M&A circles rather than in fostering new ideas and innovative technologies. Fast forward some years later, and HR tech is now a center of innovation. It’s the new hotness, with tons of startups entering the space, VCs making big bets, and truly disruptive entrants making waves in the market.
A similar history can be traced for sales technologies. As soon as Oracle acquired Siebel in 2005, the market moved in a big way towards the cloud, with Salesforce leading the way. Others followed close behind such as Sugar and Microsoft and others to blanket the market with SaaS CRM. That was nearly a decade ago and since then, the story has been all about another flavor of CRM.
Over the past ten years, three key trends occurred in the SaaS CRM world:
- Marketers jumped off the CRM boat and started using this new platform called marketing automation. Vendors such as Marketo, Pardot, and Hubspot, created tools that were oriented towards what marketers really needed, such as email marketing and website tracking.
- Salesforce created the App Exchange. This fostered an ecosystem of partners and developers that could easily build tools that connected and added value to Salesforce.
- Sales Enablement began to take shape as a separate software category. Analysts, vendors, and customers took notice of tools that were not CRM, but were very useful for sales reps to enhance productivity. Think of tools for email, content management, sales contests, etc.
In this cauldron of technology awaited the most disruptive of changes to sales tools; the mobile phone. To understand exactly why, think back to the introduction of laptops. With a computer you can take on the go, sales reps were able to be just a productive out of the office as in the office. Instead of carting around transparencies, paper brochures and pitchbooks, reps had it all in digital format ready to instantly email or present. It was a 10X multiplier for sales productivity.
Mobile is the next 10X multiplier for helping sales reps and teams be more productive. They are always on and always connected to the Internet. They ride with us in our pockets or purses, so it is immediately available. Those two reasons alone make it more convenient than lugging around a laptop. But what is it about mobile that makes it a 10X productivity technology? It boils down to the three SaaS trends mentioned above converging into mobile and a fracturing of suites into more purpose driven applications.
Mobile apps have matured to enable experience as powerful as full-fledged SaaS apps. What is different is that the best-in-class apps are more focused and significantly less complex. Many legacy SaaS companies continue to put out apps that are simply miniaturized versions of their full browser experience. That is the completely wrong way to deliver mobile apps as does not model the real-life user experience. The right way is to think about the mobile experience first and optimizing for the power of the device while overcoming limitations.
When the iPhone came out, the truly innovative aspect was a store that anyone could access to find and download apps. It not only improved the user experience by having an integrated ecosystem, but it also fostered an extensive developer community to create apps for the platform. In the same way, the Salesforce AppExchange allowed developers to create apps that connected to Salesforce but went beyond the core capabilities of Salesforce. It gave a boost to the B2B technology world, allowing developers to quickly build highly focused apps without building out an entire backend.
The AppExchange launched in 2006 and since then, apps that tie into CRM have taken off. Salesforce counts over 3 million downloads across 2700 apps alone. This has given rise to a plethora of tools specifically built to improve some aspect of sales around prospecting, account management, forecasting analytics, and numerous other applications. At the same time, analysts such as Forrester and IDC coined a new category around 2008 called “Sales Enablement” that described the growing confluence of sales execution with value added content as a role and process within companies. Once Sales Enablement became a sanctioned category, technology vendors had a definition by which to hang their hat and gain instant credibility.
This leads to the last part of the story, which is the fracturing of CRM into functional units. The debate between all encompassing suites versus point solutions has been an active one for many years. Siebel would famously mock SAP and Oracle as old school ERP suites that did not understand CRM. It was best of breed CRM! Of course, CRM is itself a very large category covering sales, customer service, marketing, and anything else that is customer facing. Thus marketers started dropping off of CRM to use their own tools. Then customer service got their own technologies spun out from CRM. And now sales organizations are starting to go the same direction. Sales people of all stripes, account executive, sales development reps, customer success managers, et al., may use “CRM”, but the day-to-day operations and experiences are happening outside of the traditional CRM suite. And lot of “CRM” like activity is actually happening on a mobile device.
So where are we now and what does the future hold?
We have already started to see numerous entrepreneurs exploit the new category of “sales development” to create entirely new software to help manage the entire outbound prospecting process. There are tools for doing sales emailing at scale. We have well over 50 different tools to deliver content to reps on a mobile device. A few vendors are just starting to tackle the thorny issue of the CRM experience for outside sales teams, stripping the features and complexity down to something anyone can use easily. I could go on, but the last survey of sales tools I saw back in 2013 already listed quite a few, and left off many more. Since 2013, that pool of startups has at least doubled in size.
With more focus on sales tools, investors have started to take a serious look at the emerging sales tools market. In the past year, there has been some eye popping funding rounds. Clari raises $20 million. Toutapp snags $15 million back in March. Salesloft nets a $10 million Series A. Pipedrive pulled in a $9 million round just yesterday. Investors are starting to smell the opportunity, and it is in this post-CRM sales tools universe.
Everything happens in cycles. Now that investors are noticing, so are more would be entrepreneurs, so expect to see even greater momentum in the sales technology space. Money is sloshing around, events like Sales Hacker are thriving off of sales tech vendor largess, and it is becoming ever easier to build technologies that can gather an audience. More importantly though is a ready market of sales reps and leaders seeking something significantly better than CRM, something that is easy to use, not bogged down in complexity, tailored for the way they work, and cuts out the tedium of admin work.
It is a new era of sales productivity. With a greater emphasis on sales enablement in the corporate world and more opportunities to improve upon earlier eras of sales technology, it is starting to become a very crowded field. It will be very interesting to see how this all plays out, but as the nature of cycles go, what goes up must come back down again. It’s just a matter of where in the cycle we are.
Image credit: CC by Jeff Zelaya