Bessemer is excited to announce our recent investment in Electric, the New York City based startup that provides intelligent IT support solutions to small and mid-sized businesses.
We first met Electric's founder and CEO, Ryan Denehy, on a snowy Friday afternoon in the West Village as he inhaled a piece of pizza in between meetings – he clearly hadn't had a chance to eat lunch. It was immediately obvious that Ryan is a scrappy entrepreneur on a mission. As a serial founder, Ryan has learned a ton from his past two companies and is eager to capitalize on past lessons learned with Electric. Ryan and his team have spent an enormous amount of time studying the SMB IT market, and impressed us with the business model they developed to fix the broken customer experience that’s so common with traditional IT support services.
From a venture perspective, Electric isn't exactly a typical investment. They are selling to SMBs, which is notoriously difficult, and IT support has traditionally been a services-heavy business. But there is no denying that Electric has something special going on.
In addition to Ryan and his stellar team, three key things got us particularly excited about partnering with Electric:
- The macro trends of SMBs moving to the cloud
- The team's relentless focus on user experience
- The rave reviews from customers
Let’s dig a little deeper into each:
1. SMBs are moving to the cloud: With SMBs spending tens of billions on IT services annually, this is a massive industry that's well overdue for change and better solutions.
This is an opportune time for a company like Electric to enter the market as the ever-increasing migration from on-premise to cloud-based productivity applications (such as G-Suite, Microsoft Office 365, etc.) are increasing Electric’s total addressable market at a rapid pace. The traditionally poor customer service in the SMB IT sector has also set the bar low for Electric to delight customers with a great user experience. These trends, combined with users’ increasing comfort with modern chat interfaces, set the stage for a powerful market shift that Electric is poised to capitalize on.
2. User-obsessed engineering creates products people love to use: Electric's customer-centric approach to building automation technology is inspiring and a great model for other product builders. The company got their product into their customers' hands as fast as possible and started collecting data on user behavior data from day one. By leveraging this ever growing body of user behavior data, Electric stayed in lockstep with how customers were actually interacting with the product. Then they had the quantitative evidence to make data-informed product and engineering decisions, rather that making choices fully based on intuition.
In addition to being customer obsessed, Electric has also embraced keeping humans in the loop even during moments of automation. Rather than setting out to replace humans altogether, Electric has designed an intelligent system that not only makes human customer success representatives more successful and responsive, but the system also learns from every customer interaction and uses those data points to take on more and more of the automation load over time.
3. Customers love using Electric: We had the privilege of speaking with a number of Electric customers and heard nothing but phenomenal reviews. At most of these companies, the CEO had been the person responsible for managing a lot of the IT issues, and in many cases, was the system administrator for all of their SaaS tools. This left them in the position of either dealing with IT headaches on a daily basis or paying large fees to keep an IT contractor on retainer, only to be disappointed by slow response times when issues came up.
Electric not only offloads all of these concerns from the person who was previously fielding IT help requests, but also serves customers in a quick, seamless fashion that the modern SMB employees have desperately needed. Electric’s customers gave us rave reviews like the ones below over and over again:
- “I continue to be surprised and delighted by how much Electric can do for us!"
- "Speaking personally as a CEO, the amount of time that it has saved me from adding people to different SaaS tools as the system admin has made Electric incredibly convenient."
- "Electric is the first thing I think of recommending to new founders.”
We are extremely excited to partner with the great team at Electric. We look forward to watching them continue to grow the business and transform the way people think about IT support from a painful process to an effortless experience, punctuated by the occasional emoji. ⚡️