Making the Sale Sooner
While the social-networking sites show promise, however, they are unlikely to capture all of our connections. There will always be people who decide not to join any network. And prominent people often don’t want to make themselves easier to find: you shouldn’t count on running across a Warren Buffett or a Bill Clinton at LinkedIn or Friendster.
But many key connections might just show up in networks built with more sophisticated analytical tools. As businesses have moved onto the Internet and become more dependent on software for communications, they’ve already digitized huge amounts of contact data, in the form of e-mail archives, calendar appointments, corporate phone lists, customer databases, and Web pages. Companies like Spoke Software of Palo Alto, CA, are building applications that automatically sort through this data and then apply social-networking-analysis techniques to weight connections and generate “corporate sociograms” showing the strongest paths to target customers. Mapping those relationships can get salespeople in the door more quickly, freeing them from low-yield activities like cold calling. In fact, the software should help close sales almost 25 percent faster, the companies claim.
Tim Connors, a venture capitalist at U.S. Venture Partners, got the idea for Spoke when he saw how hard it was for technology startups to get the time of day from their target customers-corporate information technology managers. He realized that no tool existed to help with this problem, so he started recruiting programmers to build a public networking site that infotech insiders could join. But Connors’s first choice for technical whiz, Andy Rosenbaum, was concerned that the new network would run into the same revenue problems that sixdegrees had. “I was like, Who’s going to pay for it?’” Rosenbaum says. Connors responded by adding features directly aimed at sales departments-most importantly, the ability to build a closed, proprietary network of contacts, supplemented by access to the public network. Rosenbaum, however, needed a stable job to help support impending twins and went to Yahoo! to build its personal-ads service. But within nine months, Connors had won venture funding for his project, and Rosenbaum was sufficiently wowed by Spoke’s prototype to join the company as chief architect.
Spoke launched its software in October. Rather than charging a standard license fee, it collects a percentage of the sales revenues it enables. It was building proprietary networks for two corporate customers by the end of 2003 and had signed contracts for trial-run projects at another eight companies, typically for $50,000 to $75,000 each.
Spoke’s closest rival is Brydon’s company, Visible Path, whose development team is squirreled away in a back room with eight cubicles and a conference table in a bland office building in Manhattan’s Chelsea neighborhood. Chief technology officer Jeff Patterson and platform architect Cliff Rosen worked on the company’s software with Stanley Wasserman, a University of Illinois statistician who literally cowrote the book on social-network analysis-an 857-page tome that’s considered the leading text in the field. Unlike other social-network products, Visible Path is only available to companies and only plots data from their internal resources. Its software runs on a network server and communicates with a small program installed on each employee’s PC that works in conjunction with a standard Web browser. This plug-in monitors the employee’s communications and sends data back to the server, where it’s folded into social-network maps that all employees can search. The system, which is being tested by about a dozen beta customers, gauges the strength of each relationship based on things like which e-mail messages users respond to, how long it takes them to respond, and what acquaintances they have in common.
Corporate executives say the potential for increasing revenues is obvious, and big. “It’s intuitive that these relationships exist within corporations,” says an executive at one mid-size company testing Visible Path. “I have a lot of contacts, and rarely does sales call me to ask who I know.” He says Visible Path is beginning to change this: in his company’s first three weeks using the software, he received two requests from colleagues in the sales department asking him for introductions to people the software said were close to him. In both cases these were, in fact, people he knew well enough to get the salespeople in the door.
It’s too early for the executive to say whether Visible Path’s software will deliver on its sales promises. But from what he’s seen of its ability to correctly gauge contacts that can be parlayed into meetings, he’s optimistic that some type of social-network analysis will soon help his company close lucrative deals. When that happens, he says, “There is no question we’ll spend money on it.”
Getting to know you: Visible Path’s software shows employees how many people they can reach through colleagues or friends of colleagues. (Courtesy of Visible Path)