Today businesses must not only continue to be on top of customer interactions across traditional channels (phone, email, chat, forums, etc) but must now also carefully monitor and react to developments about their products and services across social networks. In a huge departure from the past, social networks are making the need to engage with customers more (a) real-time; (b) public and personal.  An unattended customer complaint can spread like wildfire and cause tremendous brand damage, while positive reverberations may represent effective sales & marketing opportunities to latch on to. This is true whether you are selling to consumers or enterprises. The challenge for businesses is to provide their often overwhelmed and distributed customer service teams with the collaborative tools they need to pro-actively and effectively manage these new customer touch points in real time.

While researching the space last year, we came across Assistly thanks to a pointer by Fusion-io’s Gary Orenstein (@garyorenstein).

Three characteristics immediately stood out for us:

1. Great founding team: Alex, Gary, Jeremy and Brad are repeat entrepreneurs with deep domain knowledge, having previously started two other customer-service companies
2. Killer product: Not only did the product already look very good, the team shared a religious product and customer focus
3. Willingness to experiment: The founders had no preconceived notion about how to best market the solution and were willing to experiment and learn (e.g. their innovative pay-as-you-go pricing)

This led to very rapid adoption with Assistly adding hundreds of customers per month including 37Signals, Bonobos, Spotify, Typekit, Yelp, OneKingsLane and Square as well as several Index portfolio companies like Songkick, Path, Squarespace and Groupspaces. Alongside Zendesk, the first mover in the space, Assistly quickly emerged as a leader in next-generation SaaS customer service. In particular, customers rate the platform’s real-time architecture and administrative capabilities highly.

On the back of its active corporate development program, Salesforce made a strategic investment earlier this year. A couple of months ago, witnessing how the company was developing ahead of expectations, Salesforce decided it was time to move aggressively and acquire the business. It is a logical step: Salesforce announced its ambition in social media management with their Radian6 purchase early this year and is acutely aware of the importance of customer service through ServiceCloud. Assistly will now enable Salesforce to effectively serve a larger base of customers, starting with SMEs.

We are obviously thrilled for Assistly’s founders and team and congratulate them on their vision and flawless execution. Congratulations also to Salesforce for having successfully acquired a fantastic team and product. Finally, we must thank the early investors True Ventures, Social Leverage and Kenny van Zant for inviting us to participate in the Series B last year.

We’ve been really fortunate over the years at Index to be involved with some real pioneers in enterprise software; in open source with MySQL, DimDim, Pentaho and OpenX; in cloud with RightScale, Gluster, and Cloud.com and we’re really excited to see how lightweight SaaS services like Mimecast, Assistly, Chartbeat and Erply are starting to solve real problems at low cost for businesses of all sizes. Social CRM is an area of particular interest where we expect to see significant innovation as social media creates a customer-centric open world in which every customer interaction is a marketing interaction and audiences can be targeted in a much more contextual and granular way. We plan to invest further into customer and product-focused companies aiming to tightly integrate social media into enterprise processes.

Bernard

What got us interested in this company was 3 things:

(1) The entrepreneurs. David and Andy are smart guys who have built a company that was already near-breakeven with limited funding. Both were very scrappy about how they built the service (Groupspaces is the leading group management service among UK universities) and they did so with minimal resources and on a very tight budget, managing to pull together a strong team. We felt they had a very clear idea about building a monetizable service from the beginning which also offered great value to the consumer.

(2) The space. With the advent of Facebook, Ning, and other social networks, it would seem like there is no room for anyone trying to build site that helps groups manage themselves. The interesting thing is that all of the social networking tools are build to connect people in the “virtual” world. But, as it turns out, human beings still connect (quite a bit!) in the real world. People plan events, belong to societies, fraternities/sororities, have kids soccer (excuse me, football) teams, and church groups. All these “real life” groups have heavy needs around email, calendaring, events management and payments, group databases, etc. It seems like this market had been long forgotten after Yahoo Groups. We thought this was a good market to go after because it had requirements that were different than those of a virtual group

(3) Monetization. It turns out that “real life” groups need to pay for things – tickets, apparel, membership dues, etc. By providing for the ability to make payments for these groups, there is an opportunity to capture a sliver of each transaction. Lots of slivers add up to real revenue. Not to mention that from an advertising perspective, groups are really handy because they are easy to target with specific products or services.

We are also privileged to be joined in this investment with fellow travelers – Dave McClure, Ariel Poler, Chris Sacca, Quincy Smith, Meagan Marks and Simon Levene. Groupspaces is very lucky to have the combined experience of these advisors to count on.

Since we made the investment, the Groupspaces team has introduced their new site and has been accumulating a nicely sized and growing userbase. We have lots more in store as the team expands and we add lots of new features form the diverse needs that groups have. So, if you have a group that needs managing – communication, calendaring, payments, database, or other things…. Give http://www.groupspaces.com a go – you will find a very useful service for your needs.

Mike Volpi