PROVO — A remarkable thing happens when a company spends years collecting first millions, then billions and eventually trillions of pieces of data on more than 100 billion interactions between salespeople and their customers.
It acquires the ability to predict the future.
Well, not quite, but in the hands of InsideSales co-founder/CEO David Elkington and his team, this enormous trove of data can be manipulated in just such a way to produce some very, very good guesses about how to approach a customer to do a thing of utmost importance to every business: close the sale.
Dave Boyce, the Provo company's senior vice president of customer success, said Elkington always knew exactly what InsideSales could be, but the journey to the "ah-ha" moment was particularly epic for a tech startup.
"David had all of that vision, but for the first seven years sold this little dialer system that you can buy as an app for like $15 now," Boyce said. "But it was a means to an end.
"That little dialer collected data, and that data had never been organized before."
While his dialer product — which helped streamline duties for sales representatives — sold well, Elkington said, the early phase of his company was no cakewalk.
And doing it all without the aid of outside financing — the so-called "bootstrapping" approach — required some extraordinary efforts, including Elkington and his wife taking on nighttime janitorial work at one point to help cover expenses.
But then InsideSales reached a benchmark moment.
"We were collecting a lot of data, but really for the first seven years, we were selling productivity, not optimization," Elkington said. "Then we hit a tipping point with the data, and all our models started working exactly as we had thought they would.
"It was stunning."
What that modeling showed was that Elkington was spot on in his thinking about how to combine a huge and seemingly disparate number of data points in a way to create accurate, predictive directions for how to approach, engage with and sell any type of product or service to any type of customer — anytime and anywhere.
Elkington's vision seems to have been born of his unique academic arc, which has included undergraduate studies in philosophy and a graduate degree in computer science — both at BYU — with a stint in the banking industry thrown in for good measure.
His core idea for the data engine at the heart of InsideSales, he said, came from the work he did on his senior thesis as a philosophy major.
"I believed I could systematically represent the way people learn and categorize that data and information," Elkington said. "It's based on the idea of propinquity, that similar people act and behave in similar ways."
When you attach a gigantic body of information about how people behave in sales interactions with that philosophical concept, and then push it through the sieve of a proprietary machine learning engine, you get a product that has led InsideSales to garner $250 million-plus in investment and earn a valuation in January 2017 of $1.5 billion, according to tech business data site Crunchbase.
This high level of success has led to widespread prognostication from industry experts that the company is among a handful of tech efforts, including several others from Utah, that could be poised for the next big thing in the realm of public stock offerings.
And questions hovering around the IPO issue have been asked so often that Elkington is not only weary of hearing them, but says they miss the more important issues.
"I think people get wrapped around the axle on the IPO topic," Elkington said. "What matters is building a company that creates value for customers, creates value for employees and creates value for investors.
"Are we driving toward an IPO? We're driving toward becoming the greatest company we can."
Mark Jansen is assistant professor in the Department of Finance at the University of Utah’s David Eccles School of Business.
an assistant professor in the University of Utah's Department of Finance and specializes in private equity, entrepreneurial finance and corporate finance.
Jansen said "going public," while once the pinnacle achievement for startup companies, is no longer the pot of gold it used to be, and it's becoming more common for successful companies to stave off the jump into the public investment market.
"There have been regulatory changes that have occurred over the last few years that have allowed companies to raise more capital," he said. "One of the things it does is allows you to run a lot longer before a public offering."
Elkington seems fine with staying InsideSales' course for the time being and continuing the work to reach his goals of becoming an even better performing company.
Getting there, however, doesn't come without some very tough decisions. One of the hardest that has come along, Elkington said, occurred about a month ago when the company reduced its workforce by about 90 employees. The move was part of a realignment to focus on larger, enterprise customers.
Boyce said InsideSales had reached a point that many businesses encounter when they're growing quickly.
"There are a lot of companies that figure out how to get from zero to $25 million or zero to $50 million in annual revenues," he said. "You get to a certain threshold, and that's when you have to find your next phase of growth.
"And that's when you need to figure out how to crack the enterprise realm."
InsideSales appears to be realizing success by building its enterprise business customer base, and it has a growing client list that includes notable names such as T-Mobile and CenturyLink.
Thriving in Utah
While a commitment to the continued growth and vitality of InsideSales remains Elkington's raison d'etre, there are some other very high-ranking priorities for this entrepreneur that are about the place he calls home and the people who live there.
InsideSales has embraced the growing "1-1-1" philanthropic model of giving back 1 percent of company profits, time and product to programs that help make their home base of Utah a better place, especially for those with extra challenges.
Company employees are teaching coding to students at two local schools and are active in numerous charitable efforts. They've even incorporated service time into their new employee orientation program.
And for Elkington, being based in Utah is not a matter of happenstance.
"I'm from Utah, and I love this place," he said. "Our tech space is one of a kind. You can't just take Silicon Valley people and plug them into Utah."
Elkington said the state's multi-generational tech legacy, going back to advanced industry pioneers like WordPerfet and Novell, has laid the groundwork for a very particular brand of entrepreneurial spirit.2 comments on this story
"Utah has something that is very special," he said. "There's a tenor here that is completely unique, and I think you either embrace that and build a company around that culture, or it just won’t work."
Val Hale, executive director of the Governor's Office of Economic Development, noted InsideSales' contribution to Utah's growing — and increasingly visible — technology and advanced industry sector.
"Silicon Slopes is recognized as a leading tech hub thanks to homegrown companies like InsideSales," Hale said. "Utah’s secret for success is our ability to collaborate.
"InsideSales is not just a tech innovator, but a leader actively engaged in building our community."