Next Coast Ventures
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TrustRadius, a customer-generated B2B software review platform, raises $12.5M
Customer reviews play a key role in helping people decide what to buy on consumer-focused marketplaces like Amazon or app stores, and the same tendency exists in the B2B world, where nearly half a trillion dollars is spent annually on software and IT purchases. TrustRadius, one of the startups capitalising on the latter trend, with total feedback sessions today standing at close to 190,000 reviews, has now picked up a Series C of $12.5 million led by Next Coast Ventures, with existing investors Mayfield Fund and LiveOak Ventures also participating.
The funding, which brings the total raised by TrustRadius to $25 million (modest compared to some of its competitors), will be used to build more partnerships and use cases for its reviews, as well as continue expanding that total number of users providing feedback.
In addition to its main site — which goes up against a huge number of other online software comparison services like TrustPilot, G2 Crowd, Owler and many others — TrustRadius is already working with vendors like LogMeIn, Tibco and more (including a number of huge IT companies that have asked not to be named).
TrustRadius mainly works with them on two tracks: to source a wider range of reviews from their existing customer bases to improve their profiles on the site; and then to help them use those reviews in their own marketing materials. Partnerships like these form the core of TrustRadius’s business model: people posting reviews or using the site to read them access it for free.
Vinay Bhagat, founder and CEO of TrustRadius, believes that his company’s mission — to help IT decision makers vet software by tapping into feedback from other IT buyers — has found particular relevance in the current market.
“I think that gravity is on our side,” he said in an interview. “If you think about how the tech industry is evolving and getting things done, IT decisions are getting decentralized and moving out of the CIO’s office. Millennials are ageing into positions of authority, and it means that the way people had previously bought software — by way of salespeople or on the basis of analyst reports — are changing. There is pent-up demand to hear the roar of peers and that’s where we come in.”
User-generated reviews have come under a lot of criticism in recent times. Regulators have been going after companies for not being vigilant enough about policing their platforms for “fake” reviews, either planted to big-up a product, or by rivals to knock it down, or coming from people who are being paid to put in a good word. The argument has been that the marketplaces hosting those reviews are still bringing in eyeballs and product conversions based on that feedback, so they are less concerned with the corruption even if it longer term can likely sour consumers on the trustworthiness of the whole platform.
That belief is not wholly true, of course: Amazon for one has recently been making a huge effort to improve trust, by going after dodgy reviewers and setting up systems to halt the trafficking of counterfeit goods.
And Bhagat argued to me that it doesn’t hold for TrustRadius, either. The company has a focused enough mandate — B2B software purchasing — within a crowded enough field, that losing trust by posting blindly positive reviews would get it nowhere fast.
At the same time, he noted that the company has held a firm line with its customers on making sure that the “truth” about a product is made clear even if it’s not completely rosy, in the hopes that they can use that to work on improvements, and also provide more balanced feedback at the least from existing customers in order to give a more complete picture. (It also, like other reviews sites, makes people who provide feedback do so using professional credentials like work emails and LinkedIn profiles.)
That line has so far carried it into relationships with a number of software companies, which are using reviews as a complement to their own sales teams, and the papers and analysis published by analysts like Gartner and Ovum and Forester, to reach people who are weighing up different options for their IT solutions.
“TrustRadius has become an integral part of today’s economic cycle,” said Bill Wagner, CEO of LogMeIn, in a statement. “Software buyers today need detailed reviews to make sure that the product works for a business professional like themselves. TrustRadius provides that in a transparent way, so buyers can make confident decisions, even about enterprise-grade software.”
The recent swing in the digital world toward data protection and people getting increasingly aware of how their own personal details are used in ways they never intended has presented an interesting challenge for the world of online services. Most of us don’t like getting marketing and will generally opt out of any “yes, I consent to getting updates from XYZ and its partners!” boxes — if we happen to spot them amid the dark patterning of the net.
TrustRadius and companies like it have an opportunity through that, though: by targeting IT buyers who have to make complicated purchasing decisions and most likely more than one, and in a way that ensures each purchase works with the rest of an existing tech stack, they represent one of the rare cases where a user might actually want to hear more.
Indeed, one of the company’s plans longer term is to continue developing how it can work with its users through that IT life cycle by providing suggestions of software based on previous software purchases and also what that users’ feedback has been around a past purchase.
“From day one we have been dealing with complex purchasing decisions,” Bhagat said. “Buying technology that will be used to run your business is not the same as buying an app that you use casually. It can be make or break for your company.”
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Submittable raises $10M to help publishers and other organizations manage their submissions
Submittable is announcing that it has raised $10 million in Series B funding.
When I first wrote about the company in 2012, it was focused on helping literary magazines manage their submissions — useful, but maybe not the kind of thing that venture capitalists write big checks for.
Since then, Submittable raised a $5 million Series A and expanded by helping companies in a number of industries manage their submissions and applications. Co-founder and CEO Michael FitzGerald said the company has built products for four main verticals (corporate, academic, philanthropy and publishing) and has signed up big customers like AT&T, HBO, Conde Nast, Harvard and MIT.
And while publishing may no longer be the main focus, FitzGerald — a published novelist himself — noted that “in the publishing world, we’re pretty much the way you do it.” I’ve certainly been seeing more Submittable submissions pages, (although FitzGerald acknowledged that the service hasn’t quite taken hold among science fiction magazines).
He also said the product has been getting increasingly sophisticated, for example, allowing a publisher to review and rank submissions based on very specific qualities like sentence structure and voice.
Besides expanding into additional verticals and launching on mobile, one of FitzGerald’s main goals it to create what he called “ZipRecruiter for Opportunities,” a marketplace that uses Submittable data to connect individuals and organizations that seem like a good fit, whether they’re writers and magazines, scholarships and students or any other pairing for “any opportunity that isn’t a job.”
Submittable is based in Missoula, Mont., and the round was led by Next Coast Ventures, a firm that invests in startups outside the big coastal tech hubs. (Previous investors True Ventures and Next Frontier also participated.) Next Coast co-founder and managing director Michael Smerklo is joining the startup’s board of directors.
“Submittable is a perfect example of what is possible outside Silicon Valley,” Smerklo said in a statement. “The platform is modernizing the often painful undertaking of managing the submission process and leveraging that data for genuine opportunity creation.”
FitzGerald (who’s spoken elsewhere about his experience working as a startup CEO while also facing a Stage 4 cancer diagnosis) said the plan is to expand the Submittable team from 88 to 240 people by the end of 2020. He acknowledged that the location has created some challenges in hiring, particularly when it comes to experienced executives, but he said he’s been assisted by the fact that ClassPass and OnxMaps have also opened offices in Missoula.
Plus, he said that one of the most effective tactics involves searching LinkedIn for executives who went to high school in Missoula between 1985 and 2000: “Everyone is looking for a way home.”
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