By: Dan Zehr
October 28, 2011
Paul Pluschkell knew he had the right product at the right time.
When he finally figured out how to convince customers of that fact, Spigit Inc. erupted.
“We got so caught up in the complexity of what our product could do and where our market was at instead of leading with what a disruptive technology we had,” said Pluschkell, Spigit’s founder and CEO.
Spigit’s sales have skyrocketed since the change. The company — which makes a crowd-sourcing technology that companies can use to reap and analyze feedback from large groups of people — now counts some of the world’s largest corporations among its customers.
Its revenue jumped an absurd 1,884.9 percent in 2010 from 2008. And it received a second, $10 million investment from Warburg Pincus in March 2011, bringing Spigit’s total venture capital haul to $26 million.
Pluschkell founded Spigit in 2007, just as the corporate world realized that crowd sourcing and other social media forces would have an enormous influence on their businesses. Spigit developed a platform that could help those increasingly social companies tap into the collective brainpower of all their customers and employees. And it could help companies take that vast pool of ideas the crowd would generate and distill them down to the most-credible and most-promising concepts.
Despite all the favorable trends for the company, its performance wasn’t blowing anyone away. Spigit remedied that about 18 months ago, and its growth has been nothing short of spectacular since.
Rather than sell customers on its nitty-gritty technological advantages, Spigit started to tout its ability to generate greater rates of engagement among employees and customers alike. It showed prospective clients how users were much more willing to interact on the Spigit platform because it looks and feels more like a game or a social media application than like boring corporate software. And it demonstrated how the platform sits atop a company’s existing applications, such as Salesforce or Microsoft’s SharePoint, so it can reach across the entire company and its customer base to bring together input from the largest crowd.
And Spigit flexed its technical muscle, demonstrating how the algorithm behind the platform could lift out the best and brightest ideas.
“The key to all of this is the collision of ideas, and we can make them happen faster,” Pluschkell said. “When those collisions happen faster, you can find out if they’ll succeed or fail faster.”
“The analogy I use is that Spigit brought to social media what Google brought to search — a better way to organize unstructured information,” said Vishnu Menon, a principal with the Warburg Pincus technology, media and telecommunications practice in San Francisco.
Even organizations with little online presence have started to understand that virtually all their customers and employees use social media, and use it to discuss the company, Menon said. Companies are realizing they need to capture as much of that dialogue as they can, he said, and they need a way to sift through that information and pull out the useful nuggets.
The twin capabilities of Spigit’s platform — to engage a larger, more-active crowd and distill that larger pool of feedback down to the most-promising innovations — has given it a powerful story to tell. And now that the company is telling the right story, its sales are soaring.
“It’s been one of the most remarkable growth stories I’ve seen as an investor in the last 12 or 13 years,” Menon said.