Catalyst Software Co-founder and Chief Operating Officer Kevin Chiu ’14, a marketing graduate from Cal State Fullerton’s Mihaylo College of Business and Economics, has been named a Forbes 30 Under 30 honoree for the Enterprise Technology 2019 list. The 27-year-old’s startup provides an integrated platform enabling client-focused account managers in companies to track, identify, and respond to customer metrics and trends. By consolidating data, emails, notes, reminders and memos, the platform enables their customers to easily identify churn risks and upsell opportunities, which include small- to medium-sized enterprises, in addition to larger corporations.
Chiu discusses the features of the platform, his entrepreneurship story and what grads should know about starting a business in today’s competitive environment.
What is the unique value add and features of the Catalyst customer success platform?
The problem Catalyst is solving is that customer data typically lives in more than 10 places, which makes it very difficult for them to understand if a user is “healthy” or “unhealthy.”
We’ve taken a unique approach in building one-click integrations with many of these tools, such as Gmail, Zendesk (customer support), Salesforce (CRM), and Mixpanel & Segment (usage analytics). By making it very easy for our customers to consolidate their customer data into a single pane of glass, they are able to get an accurate picture of what the current state of the customer is. They can then set alerts to be proactive on reducing churn with triggers such as “if a customer is spending more than $20,000 per month but decreases their usage for this specific feature for five days in a row, send an alert to their respective customer success manager.”
Without having an automated workflow like this, customer success managers are spending hours trying to look at this data in multiple applications and then manually reaching out to the customers. But by that time, it may be too late.
According to an article you wrote on LinkedIn, you launched Catalyst with your brother, Edward, as the fulfillment of a lifelong desire for a tech startup, founded after a number of ups and downs in the process. How did this come about?
My brother and I have always wanted to start a company together but did not know what concept until Catalyst came around. Prior to this, we worked together at Digital Ocean to make sure we would not “kill” each other since working with siblings or significant others can be difficult. It ended up working nicely and when he pitched me the idea, I immediately knew this would be an opportunity we couldn’t miss.
How did you establish the capital necessary for Catalyst?
We were extremely lucky in our fundraising process. Based on everything we read and heard from other founders in tech, it was known that it would take six months to a year to fundraise, but we did it in 30 days.
To keep it short and sweet, investors look for three things: domain expertise, founding team and market opportunity. You can bucket points one and two together, but investors look at the founders to make sure they have the technical expertise to execute on the mission they are trying to solve. And from a market opportunity perspective, they’re venture capitalists at the end of the day and are looking to make a 50 to 100 times the ROI on their original investment.
For us, we built the product previously for Digital Ocean, and my brother spent the last four years of his career building out a customer success team. The venture capitalists also asked their portfolio companies what they were doing for customer success, and every single one of them said the tools they had previously used were way too expensive, had a long implementation time, and never provided enough value. In short, they were dying to use something like Catalyst.
After pitching a few venture capitalists, we had all of the rebuttals down and knew exactly what to say when they tried to throw an objection to poke holes in our story. By the fourth or fifth pitch, we were getting offers from everyone, and our round was oversubscribed. We ended up raising a $2.4 million round to get things going.
Looking back at your education at Mihaylo College of Business and Economics, what is one experience or aspect that stands out as especially helpful?
The Titan Sales Competition of the Sales Leadership Center. I placed second with my team if I remember correctly. The one skill you need to have as a founder is the ability to sell. Sell your dream on why candidates should join you. Sell the investors on why they should invest when they get pitched by thousands of startups. Sell the product.
What should young graduates know about launching their own business?
Learn how to recruit. I became an exceptional recruiter over time by making many mistakes and practicing. As a startup founder, the only thing that is stopping you from getting to the next milestone is having the right team. You can have capital and never make it to the next stage because you hired all the wrong people. You can have no capital but with the right people, you will figure out how to make revenue.
If you are thinking about starting a tech company, find some computer science major friends and do it fast. That was the biggest setback for us as entrepreneurs. We had no real knowledge of how tech worked on the backend and did not start with a strong enough technical team. It took two years to get us where we are today, but we could have saved at least a year if we had a strong technical co-founder.
Catalyst has since raised an additional $3 million in venture capital funding led by Work-Bench, with participation from True Ventures, Compound Ventures and Ludlow Ventures.