DirecTech Labs

AI-Powered Platform For Sales Companies

Company Information

Website:

https://www.directechlabs.com/

Sector:

Direct Sales

Location:

Santa Monica, CA

DirecTech Labs is helping sales-based companies better communicate with and retain customers.

Specifically, its software-as-a-service platform uses a combination of Artificial Intelligence, behavioral science, and interactive “bots” to make sales reps in the rapidly-growing “gig economy” more successful.

Within the gig economy, large enterprise software providers like Salesforce, Adobe, Oracle, and SAP are vying for market share within a $189 billion sector known as “direct selling.”

Direct selling refers to products and services sold directly to the customer in a non-retail environment. Examples of direct selling companies include Mary Kay and Avon for cosmetics, and Tupperware and The Pampered Chef for cookware.

There are more than 1,000 direct selling companies in the U.S., and an estimated 5,000 around the world.

These companies use independent sales representatives who promote the products and services to their online and local communities. For example, these reps often host events in their homes, or promote products online through Facebook and Instagram.

Direct-selling companies typically excel in areas like customer acquisition, and can grow to become huge businesses (Avon, for example, generates more than $10 billion in annual revenue). The challenge is that the current tech landscape lacks competitive, data-driven offerings to help these companies retain the sales reps and customers they acquire.

Many of these companies attempt to use the same technology that e-commerce companies and retail-based companies use to attract customers and gather valuable data. The problem is this technology isn’t right for the direct selling market. As DirecTech Labs notes, it’s like trying to cram square pegs into round holes.

Companies in this type of business need to incorporate their unique assets: personal relationships between sales reps and customers.

DirecTech Labs provides this solution by helping direct selling businesses use these relationships in order to better understand and motivate their independent sales reps and customers. Its solution is its platform called “Distro.”

Distro features the same type of Artificial Intelligence technology used by companies like Netflix, Facebook, Amazon, and Google. Specifically, DirecTech Labs builds deep behavior profiles about a company’s customers and sales reps. Then, it uses those profiles to deliver value in two ways:

First, it delivers behavioral insights that directly affect how companies interact with customers. These insights help companies improve personalized training and communication efforts to their sales reps that result in deeper engagement and a higher customer lifetime value.

Second, the platform sends hyper-targeted alerts to sales reps, informing them about customers and teammates who need their support. This is done through a series of what DirecTech Labs calls “focus alerts.”

For example, Distro identifies a specific customer who is in the last 30 days of their sales lifecycle. Distro then uses influencer scoring to select a sales rep best suited to help the customer.

It alerts the representative with a personalized, interactive text message, and includes tips on how to retain the customer. If the sales rep doesn’t take action, Distro will remind them. If they continue to be unresponsive, Distro will escalate the alert to another sales rep, a corporate employee, and (soon) to that company’s contact center.

In addition to these alerts, DirecTech Labs’ platform involves the Distro Dashboard. This is where companies segment their sales reps and customers into behavioral groups and gain insights into how to create more engaging training, promotions, and communication. It also contains a global “heat map” which shows where sales and customer retention efforts are the most active.

In 2017, DirecTech Labs graduated from the Techstars Los Angeles accelerator program. The company has since received two separate investments from Techstars Ventures.

In 2018, DirecTech Labs generated $770,000 in revenue, a 350% increase from the year before. Its Distro platform is assisting companies whose business extends to 70 countries. And notable clients include six of the largest direct and social selling companies worldwide, including Plexus Worldwide, Modere, and Oriflame.

Distro has already helped businesses retain more customers, and enhance the productivity of their sales reps.

One of its customer, for example, generated $100,000 in new revenue over a two-day period, and $1 million in just over two months.

DirecTech Labs offers its SaaS through monthly subscriptions ranging between $18,000 and $50,000. Companies can purchase additional modules for $10,000 per month.

For example, DirecTech Labs is working on a module that would enable direct selling sales reps to communicate with customers using WhatsApp, a popular messaging platform. This module is slated for late 2019.

Moving forward, the company is working on evolving its focus alerts into a complex, interactive “bot.” Specifically, these bots will alert companies and sales reps if business is slowing down.

It will also give more personalized information to sales reps regarding how to deal with individual customers. For example, it might inform the sales rep that customer “Jane” is an extrovert, and advise to let her talk throughout the conversation.

Team Background

Michel Bayan - Co-Founder & CEO

DirecTech Labs is Michel’s third venture-backed startup.

His first business introduced mobile customer relationship management (CRM) software to companies in the direct selling industry. This company was eventually acquired by eBay/Stubhub.

His second company, FragMob, was another mobile CRM business. At this job, Michel led sales, marketing, and product vision and increased company sales by 400% in just over a year.

For 11 years, he served as Founder of Mingling Media, a company focused on strategic planning and technology development for media brands. Most recently, he was an advisory board member for Bringhub, an advertising consulting company.

He earned a Bachelor’s degree from Florida Atlantic University.

Jordan Zommick - Co-Founder & CTO

Jordan has spent his career leading software development teams for startups and Fortune 500 companies.

He began his career as Chief Technology Officer for CASINO CASH, a virtual Internet casino. After that, he spent five years as President of The Zommick Group, his own software consulting business.

Notably, he spent seven years as Executive Director of Enterprise Strategy for Las Vegas Sands Corporation, where he led software development and helped the casino entertainment company scale from $1 billion in revenue to $30 billion.

Most recently, Jordan served as Vice President of Business Relationship Management for EDMC, a provider of post-secondary education instruction.

He earned a Bachelor’s degree in Information Sciences and a Master’s degree in Management Information Systems from Carnegie Mellon University.

Anoop Jain - VP of Development

Anoop joined DirecTech Labs in 2016.

In addition to his role with the company, he is a co-founder of gNxt Systems, a software company building solutions for India-based businesses. He has been with this company since 2013.

Prior to that, he worked for Dell, serving as a project manager and program manager.

Anoop spent seven years as a project manager for R Systems Int Lt, a software development company. He began his career as a software engineer for Infozech Software Private Limited.

He earned a Bachelor’s degree from Hemwati Nandan Bahuguna Garhwal University, and a Master’s degree in Computer Application from Babasaheb Bhimrao Ambedkar University.

Will Ackerman - VP of Product

Before working for DirecTech Labs, Will was Director of Digital Strategy and Communications for JAFRA Cosmetics International, a company that generates more than $500 million in annual revenue. He worked there for four years and led the company’s global digital strategies.

Prior to that, he spent five years as a partner at Digital Sky, a marketing company. While there, he worked with notable clients including Toyota, American Media, Sole Mates, and Borba.

Will began his career with Outlook Amusements, a group of companies developing technology solutions for businesses. He served as Vice President of Marketing and Vice President of New Media.

He earned a Bachelor’s degree in Film and Television from Temple University.

Travis Stock - VP of Customer Experience

Travis has been in his role with DirecTech Labs since April 2019.

Prior to joining the company, he founded The CX Life, a consulting company focused on developing brands.

Before that, he served as Head of Customer Experience at Teal Drones, a company designing hardware and software systems for drones.

From 2012 to 2017, Travis was Sr. Global Customer Success Manager an InMoment, another consulting company for brands. Before that, he worked for Overstock.com, an e-commerce platform, as a program manager and senior logistics analyst.

He earned a Bachelor’s degree in Mechanical Engineering from the University of Utah.

Co-Investors

TechStars

Prominent accelerator for tech companies. Investments include Uber, ClassPass and Twilio.

Raising
$2 million
Committed
$660.517K (33%)
Current Valuation
$11.525 million
Min. Investment
$1000
Deal Type
Title III
(For all investors)
Offering Type
Equity
Finance History
  • $250K
    2017-07-17
    Unknown
  • $1 million
    2017-12-20
    Unknown
  • $125K
    2017-12-22
    Unknown
Notable Investors
  • TechStars
Learn more on SeedInvest