Startups and the Challenges With CRM

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Startups and the Challenges With CRM


Brian Halligan, my co-founder at HubSpot has a written a thoughtful piece today on the issue of CRM in startups: “Why CRM Initiatives At Small Business and Startups”.  This is on our Small Business 2.0 internet marketing blog, which I also write for regularly.  Its an excellent read and highly relevant for readers of

Some thoughts on the article (and the issue):
  1. I totally agree that the issue with most startups is not counting customers (which most CRM systems are good at), but creating customers.  If you have only a limited number of customers, there’s only a handful of ways that you can slice and dice this data to make it interesting.

  1. Venture-backed startups (i.e. those with investors) have a special kind of problem in that the CRM system is often used to generate pipeline reports for the investors (they like to see how the “sales funnel” is looking).  But, the CRM system really doesn’t tell them anything about how the awareness and visibility of the company is growing.  Most of the interesting stuff is happening on the startup’s website, and likely never makes it into the CRM system.

  1. Startups in the early stage are often having much deeper conversations with their early customers.  It’s not transactional and high volume yet.  As such, classic CRM systems that don’t help capture that “conversation” don’t quite feel right.

What are your thoughts?  Are you using a CRM system today?  What’s your experience been?

Posted by on Thu, Sep 21, 2006


I build sales processes, value propositions, and sales tactics for high-tech startups. I agree that you can't drive statistical data out of CRM systems in new companies for all the reasons stated in your post, but I'm convinced that a Sales Automation system (not necessarily a full-blown CRM system) is essential to sales success in any business-to-business startup effort. Consider that every deal is binary (close probablilties that aren't 1's or 0's are a fiction in these companies), and that the trick of knowing what's going to close is to understand where each opportunity the company is pursuing resides in a systematic sales process. A "funnel-driven" sales process automated with a CRM system can provide that understanding, and also a way to communicate about the activities of everyone who is involved with the opportunity. It's my opinion that using CRM creatively significantly increases the close rate on opportunities. I've implemented for a half-dozen companies, and like it for startups because it's easy to implement, easy to customize, they take care of system administration, and it's intuitive to use.

posted on Thursday, September 21, 2006 at 7:00 PM by Andy Blackstone

I'm about to implement vtigercrm (because I'm cheap) for my own upstart web consulting / software development business (not quite the business this blog focuses on, I know). I'm hoping to prevent the 'feed-the-monster-syndrome' by using the build-in mail client for all my company-related email, so that mails aren't duplicated (duplicating information is destined to fail). Another problem I see is that it's not integrated enough - I'll need more ERP-ish functionality very soon (project management, accounting, timetracking and statistics of the aggregated data - like 'what's the evolution of my hourly profit margin over last 6 months over all projects').
I'm not sure the 'structured vs unstructured' is really a problem. I don't see wiki's living up to the hype (and I've been using them since 2000 for all sorts of purposes). It's just too hard to aggregate data from unstructured sources. I'm not saying wiki's are the only way, but I also don't quite see the alternatives for capturing 'interesting/reusable knowledge about customers/patterns'.

posted on Friday, September 22, 2006 at 3:35 AM by John Doe

We are trying to address some of what Brian mentions, by offering a simpler and more intuitive approach to CRM than some of the more enterprise products on the market. We don't have an integrated email system of client as most of our customers prefer to use their own email applications. But we certainly offer the ability to capture both structured and unstructured data.

Our product is located at You can just go into the Demo Account to test drive it. Please send any feedback or suggestions to me directly. Thanks.

posted on Saturday, September 23, 2006 at 11:45 AM by NIck Bertolino

I am not directly associated with our sales/crm team but from what I hear them talking about (and the little that I have seen) salesforce seems to be a killer option.

Also I think the guys @ 37signals are releasing a crm product sometime this year

posted on Monday, September 25, 2006 at 1:06 PM by Chris Jones

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