InsightSquared raises $13.5m Series C Round to further develop SMB Business Intelligence offering
InsightSquared provides business intelligence software to SMBs, with a particular strength in dashboards and pipeline analysis for the Salesforce platform. Hot on the heels of the Salesforce Analytics Cloud announcement last month, and following funding announcements by a number of new BI entrants like Domo, ThoughtSpot, Tidemark, and Looker earlier this year, this funding provides further evidence that the BI market is red hot.
This new infusion of cash brings the total raised by InsightSquared over its four-year lifespan to $27m. The company has been growing quickly, doubling headcount and revenue over the last year.
BI software was historically something that only large-enterprises had the capacity to use. The category was dominated by enterprise vendors like IBM Cognos, SAP Business Objects and MicroStrategy. More recently, data discovery and visualization tools like Tableau and QlikView, along with cloud BI vendors like Birst and GoodData, have succeeded in making BI accessible to the mid-market, but these tools still require a level of technical sophistication that is beyond the purview of many small organizations. This is the challenge that InsightSquared has taken on: making BI a feasible option for small, unsophisticated organizations.
Are SMBs ready for BI?
InsightSquared’s sole focus is the small and mid-sized business segments of the market where, to use CEO Fred Shimolver’s words, “companies are still suffering in Excel hell”. According to Fred, there is limited competition in this space, which he defines as companies in the 10 to 2,000-employee range, with at least three sales reps on staff. This is a similar market targeted by Hubspot in the marketing automation space, and it’s possible to draw some analogies with how that space has evolved.
In Marketing Automation, companies like Teradata, Unica, and Aprimo started the category by targeting Fortune 1000 companies. Eloqua was the next big player on the scene almost 15 years ago and they too focused on enterprise customers. Marketo subsequently entered the market and succeeded in expanding the market opportunity to the mid-market before vendors like Infusionsoft, Hubspot, later and Act-On emerged to focus on the SMB segment. The BI market has developed in a similarly top-down fashion and, currently, InsightSquared has the SMB segment pretty much to itself. But the jury is still out on whether there is a significant BI opportunity in this segment of the market.
How InsightSquared Approaches the Market
The specific difficulties of selling to and serving SMBs are well known. The first hurdle is customer acquisition as it takes a lot of effort to evangelize and educate buyers on a new (to them) product concept like business intelligence. Secondly, it can be difficult to control costs and achieve profitability in a market where users tend to be relatively non-technical, with little access to IT or data specialist resources to make sure that everything works as advertised.
InsightSquared’s director of Marketing, Brian Whalley says that InsightSquared has tackled these challenges head-on through three main strategies:
- Functional Focus: InsightSquared has elected to build specialized function-specific offerings rather than a horizontal solution that can be used by a broad range of different industries. The company currently sells separate solutions for the Recruiting, Finance, and Sales analytics segments – the latter product exclusively focused on Salesforce analytics. The corporate goal is to provide sophisticated analytics to the broad base of small businesses who today rely on Excel. While the Salesforce product generates the majority of revenue, this is still just one vertical. The company believes that customers at this end of the market need packaged tools with built-in vertical-specific best practices to enable customers to derive real value from the tools.In pursuit of this vision, the company is just about to launch a new vertical product in the customer service space. This product has been in beta with existing InsightSquared customers for several months and will be generally available early in the new year
- Usability: InsightSquared’s products are unusually easy to use. The company’s user base is business people who might be comfortable with using productivity software but they are not data analysts or database engineers. Products have been designed to answer potential user questions before they are ever asked. Additionally, each of the products has been built with a large number of pre-built reports to meet the needs of virtually all customers so that customers don’t have to struggle to build their own. New reports are constantly being added, frequently at the request of customers. Most recently, a package of four new reports has specifically been designed for B2B SaaS vendors including things like cohort churn, MRR, and customer retention heat maps.
- Rapid deployment: The company makes getting started as easy as possible for new customers. In addition to the broad range of canned reports which makes it unnecessary for customers to spend any time learning how to build reports, the support team provides hands-on technical assistance during deployment handling things like data mapping and configuration support as a standard offering at no additional charge.
Use of Funds
The company intends to use funds on many different fronts at once: Sales and marketing are obviously crucial as they target new vertical markets that are equally underserved at the lower-end. Immediate product development goals include a full-scale launch of the new customer service product and development of new connectors to additional data sources for existing products. Further out, is a plan to develop an existing marketing–focused product offering that has somewhat languished. Although the product is currently available, there has been little effort to market or sell it. This platform will now be aggressively expanded to offer analytics for marketing automation platforms like Hubspot and Act-On.
Reviews of Insight Squared’s Salesforce Analytics product on TrustRadius are overwhelmingly positive. Reviewers mention how effective the tool is for tracking the pipeline and lead flow, and how well it works for small businesses. However, the focus on usability and making things as simple as possible for users has a flip side, with some reviewers chafing at lack of customizability, and the need to work with support to make changes.
Here are some excerpts:
“If you want to spend most of your day working your Salesforce reports into Excel for a limited understanding of what’s happening in your pipeline, that is your prerogative. Unfortunately, the market isn’t going to wait up for you. If you want instant insights of vast proportions so you can make immediate adjustments to your strategy, then you need look no further than InsightSquared.”
“InsightSquared is perfect for quickly growing businesses. As long as business intelligence is not big enough to be a department, don’t bother with Salesforce Reports but use InsightSquared instead. I feel every business with less than 200 employees can greatly benefit from InsightSquared.”
Given the potentially huge number of small organizations who could benefit from a more rigorous, data-driven approach, and the relative lack of competition in this segment, InsightSquared appears well-placed to address the market for SMB analytics. Maintaining the focus on usability and excellent customer service will be key success factors. It will also be interesting to see if the company departs from a solely direct sales model and adds OEM relationships.