Today, I’m
excited to announce that Shasta Ventures has invested in Skilljar, a
Seattle-based customer enablement platform. We’ve invested alongside our
friends at Mayfield as well as existing investor Trilogy Equity Partners.
Investing
in Skilljar was an easy decision. The reasons why shed light not only on my
approach to investing in enterprise software but also something bigger—namely,
how changes in customer behavior have created new challenges and opportunities
for modern enterprises today.
4 Reasons Why We Invested
Co-founders
Sandi Lin and Jason Stewart cut their teeth working at Amazon together. While
running Amazon Marketplace, Sandi, who’s an MIT and Stanford Business School alum,
noticed how hard it was to onboard merchants. If the merchants didn’t learn
quickly how to use Marketplace’s core features, Sandi would lose them. Keeping
customers requires training them, Sandi concluded.
Enter
Skilljar. In 2013, Sandi and Jason left Amazon and launched the company as an
advanced learning management system for the 21st century. Its
cloud-based software allows companies to create online courses and universities
tailored for customers to learn their products.
And
that’s where our Reason Two for investing in Skilljar comes into play.
Sometimes
we invest before a team even has a product, but that’s for another blog (this one, actually). Often, though, we
invest in great teams that have market-leading products. After speaking with
customers of Skilljar, which were among the best I’ve done in 17 years of
investing in software companies, I realized that’s exactly what Skilljar has created.
Reason
Three: traction. Skilljar revenues grew 3X year over year in 2017. And despite
little marketing effort, more than 100 companies, including Verizon, Cisco, Zendesk
and U-Haul, are currently using Skilljar’s platform. These are large companies
that need to on-board customers at scale. After evaluating the competition, Skilljar
is their preferred tool.
Reason
Four: Rajeev.
Venture Capital
today has a lot of sharp elbows, but cooperation between firms used to be a lot
more common. Fred Wilson recently wrote about his own nostalgia for
splitting deals, and I agree 100% with him about the benefits—shared risk,
resources and networks. Yes, believe it or not, I still believe this industry can
and should be a team sport. My friend Rajeev Batra at Mayfield and I co-invested
and worked together on Marketo and Newscred, so Skilljar represented a great, new
opportunity for us to repeat success.
New Economy. New Tools
Underlying
all of these reasons, however, is how Skilljar fits into a new world of customer
behavior—and into my investment strategy.
Over the
last decade, both enterprise and consumer-facing software companies began
shifting away from selling packaged software through a one-time license payment
and moved toward selling a subscription continuously (i.e., they moved from a
pay-for-product world to a pay-for-service one). You now rent software.
Welcome
to the Subscription Economy!
And, this
isn’t a trend that’s restricted to software. The most hardware intensive of all
industries—auto—has pivoted towards subscriptions. BMW calls itself a service
company these days, and GM began trying a subscription plan for Cadillacs last
year. The Wall Street Journal called
it a $1,500-dollar-a-month “Netflix for Cars.”
This move towards
recurring sales also means a seismic shift in the way companies advertise and
market. For one, the relationship with the customer has changed dramatically. It’s
no longer a one-time occurrence, it’s an ongoing, ever-evolving exchange. Accordingly,
companies increasingly demand better tools to optimize customer success.
Skilljar focuses
on the core aspect of the customer journey: getting customers engaged with
products! After investing in many companies over the years, I know that the
biggest determinant of customer success is how well and how fast customers are
on-boarded. The trick is training customers quickly and easily – but at their
own pace. Skilljar’s platform does just that. It integrates seamlessly with Salesforce.com,
Marketo, Totango and other customer success platforms and personalizes
tutorials based on the learning needs of its customers.
Skilljar
offers the best new learning platform to help companies take advantage of the subscription
economy and better serve their customers.
On behalf
of Shasta, congratulations to Sandi, Jason and the entire Skilljar team! We’re
looking forward to seeing Skilljar help enterprises better serve their
customers and do it at scale.
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