Configure, Price, Quote, or CPQ for short. That is what it is called when a sales rep has to navigate a potential customer, build quotes, send proposals and close the deal on the spot. Colony Logic, comfortably backed by private equity investor Blackstone, is the maker of a mobile-first CPQ application that is rapidly becoming a player in the $B sales automation software market.
CEO of Colony Logic, Geoff Stevens, sits down with LA Tech Watch and tells us about his successful CPQ application, Swarm
Tell us about your product or service.
We build sales automation and intelligence software, which is a fancy way of saying we have mobile-first cloud solutions that make sales organizations more efficient.
Swarm is our CPQ (Configure-Price-Quote) application, which ingests a company’s product catalog and allows sales reps to build quotes, send proposals and close deals on the spot, from any mobile device.
We’ve transformed CPQ software by making it … easy. With an award-winning user experience, out-of-the-box implementation and streamlined admin, Swarm makes sales automation uncomplicated and affordable. Swarm takes aim at expensive, complicated offerings and old-school, time-wasting methods of order entry by hand.
How is it different?
If you had to describe current CPQ applications in three words, those words would be: complex, expensive and difficult. For the small handful of industries with incredibly complicated product offerings that include thousands of variables, this type of software can be well-suited. But for the vast majority of organizations, legacy CPQ offerings makes as much sense as purchasing a Lamborghini as a grocery-getter—the cost, complication and resource barriers are through the roof.
So what results from this? A huge market of organizations that are still leaving money on the table by continuing to sell through manual processes, email and spreadsheets. Studies by Marketo show that the average sales rep squanders 45% of their day on inefficient tasks, when a simple 5% increase in selling time could increase company revenues by 20%. And that’s where Colony Logic’s Swarm application comes in.
Swarm makes all of the benefits of traditional CPQ—guided selling, pricing accuracy, automated quotes and proposals, and optional CRM integration—accessible to companies of all shapes and sizes, through user-friendly, cost-effective Cloud-based software. With many companies facing a drought of IT resources, Swarm emphasizes mobility and streamlined admin over exhaustive customization—all packaged behind an award-winning user experience that’s geared towards the salesperson.
What market are you attacking and how big is it?
We’re moving on the entire sales automation market, focusing on organizations with sales forces of 10+
We estimate our addressable market at $7B, targeting many of the industries and midsize businesses that have been underserved by traditional CPQ solutions. We see our biggest opportunity among the large numbers of companies that are still writing orders by hand or calculating pricing on spreadsheets.
What is the business model?
Our business model is based on SaaS per-seat licensing. We have three subscription tiers, with each step up including more features and customization.
What inspired the business?
We were inspired by the sheer number of companies that are still going to market using outdated and inefficient methods, like order forms and spreadsheets, to sell. Even amongst the most tech-minded companies, it’s not uncommon to see turnarounds for sales proposals numbering in the days, if not weeks, or having orders passed through emails, which often leads to mistakes and missed customer expectations. Companies that sell this way are literally leaving sales, and by extension, money on the table. And that’s not because they’re incapable of adopting technology-based alternatives, but because the options out there don’t generally meet their needs.
For most organizations, the status quo makes more economic sense than the outright replacement of legacy systems or practices. We’re addressing this inefficiency with a low-barrier-to-adoption, mobile-first solution that emphasizes user experience, simplicity and ease of integration.
What are the milestones you plan to achieve within six months?
On the product side, we’re planning to launch our self-service analytics application, Harvest, while adding more features to Swarm, our CPQ offering.
On the business side, we’re expanding our sales and support teams to handle the growing inbound demand.
If you could be put in touch with one investor in the community who would it be and why?
While we’re not currently seeking capital from new investors, I have a lot of respect for the imprint that Upfront Ventures has established within SoCal, both because of the positive feedback that I’ve heard about them from other entrepreneurs and their track record with SaaS models. Similarly, Clearstone Venture Partners has made their mark and has a great rep with LA’s tech community.
What does being “Made in LA” mean to you and your company?
It’s no secret to anyone that Silicon Valley can be a bit inward-focused. Here in Downtown LA, we’re influenced by so many relevant sources—the entertainment industry, cultural diversity, an excellent quality of life—that can’t help but seep into our team and products.
To answer your question, even though we’re building business software, at the end of the day, we’re trying to build applications that people actually want to use (versus being forced to use). As the world’s tastemaker, if something can catch on in Los Angeles, it will catch on everywhere.
What else can be done to promote early stage entrepreneurship in Los Angeles?
LA already has the universities, the weather and the investors. All it needs now is more precedent.
Snapchat, TrueCar, Tinder and Rubicon Project are just some of the great LA stories, and we wouldn’t be having this conversation if there already wasn’t a buzz about LA as a tech hotspot. But it won’t be until we have more success across a diversity of business models, including B2B, that people will begin to see LA as a no-brainer for early-stage tech
Where is the best place to watch the sun set in Los Angeles?
Can I say Colony Logic’s office, or is that too biased? You wouldn’t know that the Staples Center blocks our west-facing view unless you’ve actually been to our office.
I’ll go with sitting along the first-base line in Dodger Stadium.