September 20, 2017
Artificial intelligence technologies are evolving at a rapid pace, remaking everything from vehicles to video games. An Indianapolis startup called Costello, armed with $1 million in investment capital, is launching this month to bring A.I. to deal management software, which the company says will help to better prepare sales reps while also offering managers increased visibility into deals.
Founder and CEO Frank Dale has an extensive background in sales and marketing for software companies, and was the CEO of Compendium when it was acquired by Oracle in 2013. He also spent some time as the Entrepreneur-in-Residence at TechPoint, where he helped build the organization’s startup accelerator.
While he was mentoring startups at TechPoint, the idea for Costello began germinating. One day, he met with two early-stage companies in completely different sectors that had the same problem. “They had to get through multiple decision-makers to make the sale,” Dale explains.
He saw that many sales reps were relying on outdated, piecemeal tools like Google docs, sticky notes, and spreadsheets when what they needed was a sort of automated, digital co-pilot that could help them navigate calls and analyze their performance.
“I realized that I could create that software myself,” Dale says. “My son was born the next day, but I couldn’t let go of the idea. At Compendium, I watched young sales reps struggle with the first conversation [in a potential sale] and asking the right questions.”
Next, Dale set out to prove his hypothesis. He polled fellow sales managers as well as reps at a range of companies, “everything from Series A startups to Salesforce,” he recalls. Each had roughly the same problem.
“The reason salespeople were struggling was because they often didn’t have the right tools,” he says. “They would pick up the phone and pull out post-it notes to try to help with three things: questions to ask, note-taking, and task management. All the things, in theory, CRM [customer relationship management software] is supposed to do.”
Dale calls Salesforce, arguably the most successful CRM platform, an “awesome” database, but he says it’s built assuming all users are salespeople out in the field. “Reps end up creating their own tools, which aren’t built for the job at hand. And because the tools are outside of CRM, that database is locked in there, and it causes problems all the way across the chain. Notes don’t make it back into CRM, reps execute inconsistently, and managers have to figure out why they’re not winning deals. I wanted to build an execution engine around sales.”
Dale says Costello’s software, which can integrate with Google Calendar, Gmail, and Salesforce, helps salespeople research potential leads, structure conversations, compose questions to ask, and track multiple deals from start to close. After finishing a sales call, reps can follow up by accessing relevant marketing materials and syncing their notes back into their CRM. Costello also offers real-time suggestions for improved interactions with decision-makers.
TinyPulse, a Seattle-based employee engagement platform, is a Costello customer. Mavis Norwich, sales manager at TinyPulse, says Costello has helped her company succeed. TinyPulse was considering developing a similar A.I.-driven tool until an investor in the company told Norwich about Costello.
“We were looking for a quick hack, but this was better long-term,” Norwich says. “It allowed us to be agile and pivot.”
As a company administrator, she says her favorite Costello feature is “being able to monitor and change the talk track” for her reps, along with the data and analytics that accompany each sales conversation. “It’s made me a better manager,” she adds.
Costello charges companies an annual subscription fee based on the number of people
they have on staff. Dale says that Costello launched with “customers in hand” after spending five months earlier this year refining the software and incorporating user feedback into the final product. The company officially went live last week with $1 million in venture backing from Dundee Venture Capital, Elevate Ventures, M25 Group, and Service Provider Capital.
The eight-person Costello team plans to spend the rest of the year acquiring customers before adding staff in 2018. Dale is optimistic about the company’s future given the potential size of the market, adding that companies currently spend roughly $12 billion each year on sales enablement technology.
“What’s personally rewarding is watching people be better at their jobs,” Dale says. “At most companies, maybe 20 percent of the salespeople are naturally gifted, and they tend to carry the team. Half the team is usually inconsistent. Sales reps want to be good, and could be good, but they need help. It amazes me that people haven’t already tried to do this.”