Editor’s note: Insightly provides a CRM and project management solution — combined in one application — for small businesses. This interview of Insightly’s CEO, Anthony Smith, reveals the story of why they combined the two spaces and why the company, when already successful, moved from Australia to the United States. Smith also shares other tips for startups.
SandHill.com: What was your original vision for your company and what made you realize that you wanted your product offering to be not just CRM but also a project management system, all rolled into one solution?
Anthony Smith: I was lucky enough to have sold a previous company (technology for mining) and was looking around for what I wanted to do with the next few years of my life. In that former business we had looked for a customer relationship management tool that would suit a small business, but we couldn’t find one. So after I sold that business to my partner, I decided to build tools that I thought would be suitable for small companies (100-200 employees).
One of the insights I had at my previous business is that small businesses normally don’t have any tools apart from something like Microsoft Project and that it would be great to have the CRM and project management functionalities in one app rather than having to manage multiple applications. With all the functionality in one application, sales, for instance, can wean some opportunities and convert them straight into a project with the sales materials or any proposals or other information, keeping it in the same system, and then flow that straight into the execution stage of a project.
SandHill.com: Other than combining two solutions into one, is there anything else that differentiates your product in the market?
We provide the ability to track all customer interactions from any device, anytime, anywhere. Some of our competitors are not quite there yet. Also, Insightly is very well integrated with digital apps platforms (such as Gmail).
An important distinction is that Insightly was specifically designed for small businesses rather than larger businesses. So it’s very easy for small businesses to use our toolsets and features. And companies don’t have to spend days setting up Insightly or learning how to use it. It’s very easy to pick up without any training at all.
SandHill.com: You bootstrapped your company until recently when you received $3 million in funding from Emergence. When did you launch Insightly?
Anthony Smith: We had a soft launch in Perth, Australia two years ago. We were lucky that when we launched Insightly Google already had its App Marketplace for add-ons to Google Apps. So we paid to get our app in their marketplace, and we really got a lot of traction through that mechanism.
SandHill.com: In January 2012, you moved your company to Silicon Valley. Was that part of the plan all along, or what led up to that decision?
In 2011 we came to a juncture where we could either keep the business in Australia and start hiring employees and build up our base there, or move the business to the United States. And it was a good point in time to move since we didn’t have a lot in the way of assets and employees.
I thought the likelihood of having more success was greater in the United States than in Australia. After a long discussion with my wife about whether or not we should move the business, I flew to the United States and met with some investors in Silicon Valley, New York and Boston. Some of the skillsets in Silicon Valley, especially in scaling companies to the size of Google, Yahoo or Facebook, aren’t plentiful elsewhere. Also, I found that VCs like their startups to be pretty close so they can keep an eye on them.
In December 2011 we decided to move the business. We ended up choosing San Francisco because we liked the city more and thought it would be an easier city to live in than New York. Also, it is close to Google, which is one of our major partners, and just down the road from San Mateo, the location for Emergence, the VC firm that we eventually elected to accept funding from.
SandHill.com: What has happened since you moved to the United States? Have you scaled up the business, hired employees or changed your marketing direction?
Anthony Smith: The first thing was to figure out where we were going to open an office. I hooked up with a good real estate agent who showed us a few areas that startups frequent. We settled in a great location in the South of Market area of San Francisco in a building where there are quite a few other startups.
We started hiring employees and now have 11 employees, developers and support people to help us build the business.
In terms of the growth of the business, we’ve seen some phenomenal growth in 2012 via the Google Apps platform. Just recently we expanded our business to anyone with an email address, so they no longer have to be Google Apps customers in order to be Insightly customers. And we’ve seen huge growth in that greater marketplace.
Recently we also hired our vice president of marketing. Up until now we haven’t really done a lot of marketing. But now we’ve managed to get a great person on board who can help us really get our name out there.
SandHill.com: Have you run into any regulatory issues since you moved to the United States?
Anthony Smith: We have. And also some immigration issues as well. But we’ve had some great support from lawyers and immigration agents over here that have helped us get through those issues.
SandHill.com: Your customers are global, correct?
Anthony Smith: Yes, we have customers in more than 100 countries around the world.
SandHill.com: Is your product localized for those various countries?
Anthony Smith: No, it’s not. You can always input information in any language that you wish, but all of the labels and the text within the product are only in English. One of our initiatives in the first quarter of 2013 is to localize it into some of the popular languages that our customers use.
SandHill.com: Do you have a personal role model in the software industry?
Anthony Smith: I’m a big fan of what Jeff Bezos has done with Amazon.com in taking it from a small online bookseller into a global retail behemoth as well as pioneering technology in Amazon Web Services products. He also has done extremely well in hardware. I’m a big fan of the man. I’ve not met him yet, but I look from afar and I really take my hat off to what he’s managed to do from a very small company.
SandHill.com: What has been the most frustrating challenge you’ve had so far in this business, and how did you overcome that?
Anthony Smith: The most frustrating challenge that we’ve had is in hiring quality developers to help us build the product. In San Francisco and in the Bay area there are a lot of very good developers. But there are also a lot of companies that are looking for developers.
Sometimes you might interview a couple of developers and then five or six hours later they may be snapped up by one of the other companies. So you really have to move fast and be able to work with a limited amount of information. Sometimes you don’t even have time to check references and things of that nature before you get an offer out.
It continues to be reasonably difficult to get really good people on board to help build the product, which is one of the key things that you need to do as a startup. That has been extremely frustrating.
SandHill.com: When you personally encounter challenges or setbacks, how do you pull yourself back up and become inspired again?
Anthony Smith: One of the advantages of starting a software business in 2011-2012 is that there are a lot of resources and a really great community around how to build a startup. I use a forum on a website called Hacker News, which is a popular community that has advice on things that you might not normally hear in the industry. I really got some great information on some of the challenging things that CEOs might have to encounter when dealing with software developers or scaling up a business.
SandHill.com: What’s the best advice you’ve received so far?
Anthony Smith: It came before I started my business. The advice was to go as far as you can without taking an investment from someone else or from another company. If you’ve got the skills to do it yourself, then definitely do it yourself. Because you end up bargaining from a much better position if you do take capital down the road. But also you get to try things out and determine whether or not what you thought was a good business model or a great opportunity for a business is indeed the case. We certainly found that with Insightly. I probably spent nine or 10 months developing it and getting some traction before really considering whether or not it was going to be a good long-term business instead of kind of a hobby.
Entrepreneurs can do a lot on their own these days with some resources such as Amazon Web Services. You can even rent computers. So all it really requires is a lot of time. And the Internet is a great resource for finding out how to do things.
SandHill.com: Your product is currently a freemium SaaS offering. Are you experiencing challenges in getting customers to convert to paid customers instead of the free model?
Anthony Smith: We give our software away for the first three users in a company for free. If a company wants to go beyond three employees, they just pay us a monthly fee. We’re not experiencing challenges. They’re happy to use some of the great tools that we provide them. I’m a very big advocate of freemium for the small business market because small businesses have a lot of costs and might not necessarily be profitable when they’re set up.
SandHill.com: Is there any particular segment of small businesses that are particularly attracted to the Insightly solutions?
Anthony Smith: It’s across the board, as the cloud provides a lot of advantages for small businesses. We’re seeing new, greenfield businesses coming into the market and using our tools to help them get up and running.
But we’re also seeing quite a migration of businesses that have been around for a few years that are using some of the old school CRM tools that are not Internet-enabled. They are converting their older applications to a cloud-based model where they can more easily share information and have it backed up automatically and administered by someone else.
Anthony Smith is CEO of Insightly, a San Francisco-based SaaS CRM application. He built the first version of Insightly in six months from his home in Perth, Australia, after identifying a market need for a CRM solution focused on small business. He has previous experience designing and building CRM software for enterprise use. Prior to Insightly, Anthony worked as a consultant for IBM and as a software engineer for global mining consultancy Snowden.
Kathleen Goolsby is managing editor at SandHill.com.