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Startup Aviso Is Using Big Data To Help Companies Meet Their Sales Goals
What’s the best way for salespeople to meet their goals? Go for the big deal that could blow the year’s results if it falls through – or wrap up a few little ones that seem less risky even if the dollars aren’t as high? For most businesses, these are difficult questions that are often made based on intuition, emotion and basic number-crunching on Excel spreadsheets.
K. V. Rao, chief executive and co-founder of Aviso, thinks there’s a better way. He wants to parse the data and create models that lead companies to make better – more efficient, less risky – decisions on how to reach their revenue targets. “Machine learning and statistical techniques can extract these patterns that are not so easy to extract and present them to the salesperson,” he says.
Since its 2012 founding, Menlo Park, Calif.-based Aviso has received $23 million in funding from Scale Venture Partners, Next World Capital, Shasta Ventures, Bloomberg Beta and others to pursue its predictive analytics approach. With some 25 customers – including Zuora, Pandora, RingCentral, DataStax and HubSpot – shelling out an average of nearly $100,000 a year for its software, Aviso’s own revenues are in the $2 million range.
Rao, 57, is older than most Silicon Valley CEOs, and has a more varied background. He grew up in Bombay, and studied at IIT – where he spent many hours playing bridge – before moving to the United States for his graduate education. After getting a PhD in engineering from Iowa State University, Rao worked as a rocket scientist at NASA, in sales at Silicon Graphics, and as a senior engineer at online meetings firm WebEx.
His first entrepreneurial venture was subscription-management firm Zuora, which he cofounded with chief executive Tien Tzuo and a colleague from WebEx. (See my profile of Zuora here.) At Zuora, Rao recalls, he worked on building the sales and marketing teams, and came to realize just how difficult it was to design a sales plan – and just how wrong he and other engineers had been to dismiss sales as easy.
“I realized that sales was actually harder than solving these science problems,” Rao says. “Sales is completely uncontrolled. There’s very little you have as a sales rep that’s in your control. That to me was just fascinating. The more I learned about it, the more fascinated I was.”
Rao left Zuora in 2010, and, after taking some time off, kept coming back to the knotty problem of sales. “He had an idea about doing better forecasting and predictive analytics around quarterly sales because it was a pain point he had lived,” says Jason Pressman, a partner at Shasta and Aviso (and Zuora) board member. Rao, he adds is like a duck, calm and graceful on the surface, yet paddling like crazy under the water. “He’s very soft-spoken, but he’s a silent assassin. He’s totally driven,” Pressman says.
Rao brainstormed with Andrew Abrahams, who he’d met 15 years earlier when he was helping to sell supercomputers for SGI, and Abrahams was in charge of computational modeling for derivatives and risk analysis for J.P. Morgan and needed those supercomputers to do it. “We exchanged various ideas, some crazier than others, for startups and so forth,” recalls Abrahams, 49, who retired from Wall Street, moved to California and opened a dairy-and-egg farm. In 2012, they cofounded the company that became Aviso.
Abrahams, who is Aviso’s chief technology officer and developed its software prototypes, argues that the problems of sales forecasting are very similar to those of capital allocation and risk management in a financial portfolio. “It’s not like you can control every risk, but it’s very important to have an objective benchmark to evaluate your forecasts that is different than what you get asking your salespeople,” he says. Aviso’s software can not only help companies determine a plausible overall scenario for sales, but can also drill down into regions, sales teams or even individual salespeople.
That type of analysis can help salespeople figure out where to spend their time and energy. “If you have 10 customers you’re chasing, but don’t have time to chase them all, we can give you a list of deals that are a credible path to making your number rather than the path you might come up with on your own using intuition and emotion,” Rao says.
Nutanix, an enterprise storage firm, started using Aviso late last year, and now relies on its analysis for everything from planning out sales territories to allocating resources. Rickie Goyal, Nutanix’s senior director of worldwide sales operations, says he originally bought Aviso simply to ditch the sales spreadsheets that had taken over his weekends. But over the past year, he’s used its forecasting, for example to hone in on discrepancies between what his sales reps say they expect and what the software predicts. “Now we can focus on the areas that matter,” Goyal says. “It’s been really revolutionary for us.”
Unlike most Silicon Valley entrepreneurs who raise money on an idea, Rao waited until he had customers on board before doing his first round of funding, for $8 million, in 2014. “Even though he was working out of our office, I had to convince him to take the first million from us. He was investing out of his own pocket, and he wanted to make sure there was a really big business to be built before he took anyone’s money,” Pressman says. “I think it goes back to my roots — I’m an immigrant,” Rao says. “I am wired toward the mindset of being capital-efficient. I have no interest in raising $250 million.”
Instead, his focus is on adding customers, and then figuring out whether the framework Aviso uses for making sales decisions could be used in other areas of business, such as cost analysis or hiring. ”It took me a long time to figure out what I really enjoy doing,” Rao says. “I found such delight in trying to solve these hard problems and build up businesses around them, so now it’s crystallized for me. It has to be a hard problem, and it has to have the potential to make an impact.”