Software Executive magazine by Abby Sorensen, Executive Editor
Slimming down and specializing its team after shifting from direct sales to a reseller model has set this SaaS company up to double revenue every quarter.
Most founding stories start with a pain point. The idea for DropBox was formed when one of its cofounders kept forgetting a USB drive as a college student, which was long before the company hit a $1 billion annual revenue run rate. FastSensor was born trying to answer, “How do you get a customer to buy one more beer?” It’s evolved into a growing software startup doing much more than helping clients boost drink sales.
How does FastSensor AI help businesses harvest ROI?
Four years ago, a large beverage manufacturer approached FastSensor looking for deeper insight into customer purchase behavior. Founder and CEO Daniel Bichara was already using IoT and sensor technologies to track things like refrigeration and distribution logistics, and he realized he could adapt this to analyze how a customer’s physical movement was indicative of purchase behavior. To do this, the solution uses sensors to track radio frequency signals emitted from personal devices. This triangulated data creates billions of vectors, which are shot up to the cloud and run through a machine-learning algorithm. The end result is a dashboard of data about things like unique visitors and customer frequency. Sounds like a complex way to sell a beer, right? Apply that tech to a retail environment, and this startup had an opportunity to provide actionable business intelligence at scale.
Make no mistake — FastSensor isn’t a hardware company. “Some people look at us and say, ‘Wait, you’re selling sensors,’ and we say, ‘No, we’re selling software and business intelligence and data and dashboards,’’’ says Kalon Welch, co-owner and EVP of business development. The solution has many moving parts, which is why it took nearly 45 people to build it. Today, the team is less than a fifth of that size. Once the product launched, a robust engineering team wasn’t necessary, and the team focused on creating other operational efficiencies. For example, the setup guide is designed to take 60 to 90 minutes to complete. That process was solid, but customers kept asking if the installation was done correctly even when it was, which caused unnecessary support calls. To streamline this, the company developed a self-check algorithm where a single click will tell the installer a success rate and identify any incorrect actions. This eliminated countless hours of customer support time. “Looking at the entire process and reducing friction points are how you create that exponential growth curve every business is looking for,” Welch says.
Two years after launching, FastSensor saw an internal friction point: its direct sales model. As of September 2016, FastSensor’s primary focus has been building an international reseller channel, and it already has upwards of 40 resellers across 10 countries and four continents. “I’ve built and managed multiple global direct sales teams, and the energy and pace compared to a reseller model are just painfully slow,” says Welch. His advice to other software companies interested in resellers is to simplify as much as possible. For example, resellers pay the same price for the solution regardless of vertical or region. This prevents end users from shopping resellers for a lower price. “I wanted our pricing to be so easy that any reseller could understand it in 5 minutes. You need resellers to be able to quickly calculate how much money they made at the end of every day,” says Welch.
FastSensor has put a stake in the ground that it will succeed through resellers. And it’s putting its money where its mouth is: Resellers are paid on the lifetime recurring revenue of the client. Welch isn’t looking for just any reseller, either. He’s focused on supporting “A” resellers instead of trying to onboard “C” resellers. “You have to help resellers see immediate wins, because the first customer they close will help them realize how easy it can be if they do it right. Then, all you need to do is replicate, rinse, and repeat.”