A Q&A with Altocloud CEO Barry O’Sullivan. The Mountain View, California-based startup, which has built a predictive analytics platform for sales teams, announced earlier this month that it has completed a $2 million Seed funding round. Investors include Delta Partners, Digicel Group and ACT Venture Capital. It was founded in 2013 by O’Sullivan, Joe Smyth, and Dan Arra, and previously raised $1 million in initial funding.
SUB: Please describe Altocloud and your primary innovation.
O’Sullivan: Altocloud helps companies increase sales, whether it’s more conversions on an ecommerce website or higher-value leads on inside sales. We do this by profiling their prospects and customers, and using machine learning to predict the best way to communicate live with the right prospects and customers.
Online visitors use Altocloud by responding to personalized messages and invitations to talk or chat to a representative. These appear in their normal use of the existing website or app and are targeted to their needs.
Sales representatives using Altocloud can see live visitors on the site, ‘persona’ categories that they match, and the live page-by-page journeys the customers are taking. Live interactions are automatically routed to the right representatives who are alerted and can then interact with the prospect through chat or voice or video directly within their browser.
Traditionally, companies have built call centers to handle live interaction. These have been completely separate from their online presence, leading to high expense and bad customer experiences. It’s an analog experience in a digital world.
SUB: Who are your target markets and users?
O’Sullivan: Sales and customer care. For ecommerce businesses, Altocloud helps them to increase sales conversions by enabling live interactions with just the right visitors at the right moment.
Inside sales teams also benefit from Altocloud. We allow their sales reps to talk to highly-qualified prospects while they are interested and live on the website, versus just collecting addresses and trying to call them back later when they have moved on.
Altocloud is also valuable to traditional customer care centers as they work to transition to new digital business models and align with their company’s CMO and online marketing initiatives. Altocloud integrates with Cisco Customer Collaboration solutions to help these companies, often large and traditional, make this transition.
SUB: Who do you consider to be your competition, and what differentiates Altocloud from the competition?
O’Sullivan: Altocloud is the first company to bring together the combination of machine learning with real-time communications, so we don’t compete directly with the traditional communications companies like Avaya, Cisco, and Genesys. Our objective is to deliver a digital communications alternative for digital businesses.
SUB: You just announced that you’ve raised $2 million in Seed funding. Why was this a particularly good time to raise funding?
O’Sullivan: We have had a lot of interest given our team and the customer success so far. The timing is right given that we have proven the value of what we have.
SUB: How do you plan to use the funds, and do you have plans to seek additional outside funding in the near future?
O’Sullivan: We have 20 customers, including SaaS company AppDynamics and Smyths Toys, the largest online toy retailer in the UK. The product is now generally available and we are investing in increasing our sales and marketing, strengthening our partnerships with ecommerce and marketing automation vendors, and continuing to invest in expanding our SaaS product.
As examples of recent marketing investment: We were a sponsor at the leading enterprise communications conference, Enterprise Connect 2015, where we won the ‘Innovation Showcase’ award, and in April we are a Silver sponsor at the Magento Imagine Commerce conference. In fact, I believe we are the only vendor sponsoring both conferences, showing that we truly are a bridge between the previously separate digital and real-time communications worlds.
SUB: What was the inspiration behind the idea for Altocloud? Was there an ‘aha’ moment, or was the idea more gradual in developing?
O’Sullivan: I’ve been in the communications industry for a long time and I think that as an industry we have missed the mark with the horrible disjointed experiences that traditional phone call centers deliver. Press one for this and two for that, then wait in queue for an agent who is not aware of your previous online journey, so you have to start all over again. Putting ‘800’ phone numbers on web pages and letting prospects and customers, many of whom won’t call, have horrible disjointed experiences cannot be the right way forward for digital business.
Real-time communications clearly has to be embedded right within websites and applications, providing reps with the entire online context when they interact with a customer. The next big question was: “There are a million visitors on your site, who should you talk to?”
The ‘aha’ for us was realizing that instead of just waiting and hoping that people would press a button, machine learning and predictive analytics approaches can be used to predict which customer journeys will most benefit from live interactions, and using this information to proactively make offers to the right visitors to personalize their journeys. This then became the core of our ‘predictive communications’ product.
SUB: What were the first steps you took in establishing the company?
O’Sullivan: First steps were building the right team and validating our ideas with initial customers. I teamed up with co-founders Joe Smyth, who has some of the original VoIP patents, and Dan Arra, an entrepreneur with significant sales and customer service experience. We put together data scientists and communications developers—a unique team that has built a unique product.
SUB: How did you come up with the name? What is the story or meaning behind it?
O’Sullivan: Our company motto from the start has been “aim high.” Alto means ‘high’ or ‘tall’ in Spanish. We had those initial conversations in my kitchen in Palo Alto, so it all seemed to make sense.
SUB: What have the most significant challenges been so far to building the company?
O’Sullivan: There is no shortage of opportunity. The biggest challenge is choosing which opportunities to focus on. We now have a filter on opportunities we call ‘digital ready.’ For example, ‘born digital’ customers like AppDynamics move fast, experiment with new technologies, and engage positively in terms of feedback. We now take a pass on opportunities if we think the company is not ‘digital ready.’ If their focus is solely on standard processes, large IT projects, and making lots of old technology ‘interoperate,’ then we know they are not ready for digital technology like ours and move on to the next opportunity.
SUB: How do you generate revenue or plan to generate revenue?
O’Sullivan: Altocloud generates revenue by selling monthly subscriptions to our SaaS services that can be easily and rapidly deployed into websites and mobile applications. Customers can easily sign up today right on our website. Simply by adding a snippet of code to a site, Altocloud immediately starts to monitor visitors and provide analytics to the business. Organizations can then quickly add sales representatives to the system, allowing them to start personalizing customer journeys, proactively inviting the right visitors into live interactions, and then continuously learning from the results to make better decisions.
SUB: What are your goals for Altocloud over the next year or so?
O’Sullivan: Our goal for 2015 is to grow our customer base and to continue to show the business value of predictive communications to the marketplace. Increasing our presence in the ecommerce and sales lead-generation communities will be key for this.