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An old boys network of 0s and 1s?

By Alorie Gilbert
Staff Writer, CNET News.com
April 17, 2003, 2:05 PM PT

Let's say you're a salesperson trying to land a big account. Wouldn't it be nice to know if the prospective customer was, by chance, an office mate's tennis partner or neighbor?

Sussing out such social and professional connections among employees to help clinch a sale is the mission of Spoke Software. The Palo Alto, Calif., start-up recently closed a $5 million round of venture capital financing, bringing the total it has raised since opening its doors in July to $9.2 million. Lead investors include US Venture Partners, Sierra Ventures and Partech International.

Spoke plans to release the first version of its product this fall, joining numerous software companies, including big names like Siebel Systems and SAP, in the business of selling applications designed to make salespeople more productive.

The Spoke software "discovers" relationships that could come in handy in a sales situation, according to Spoke cofounder Chris Tolles. A key feature is that although the system requires very little effort on the part of employees entering data, it's able to gather detailed information about how well people know each other and in what context, Tolles said.

"There is a huge amount of social capital that is not utilized by businesses," Tolles said.

Tolles said the software is designed to protect workers' privacy by allowing them to opt out of being part of the system. It also lets employees control information related to their relationships, though Tolles would not elaborate on exactly how. The company is keeping further details of the technology and how it works under wraps until it launches in the fall.

But what can be gained from exploiting the random social connections of employees? Does it really help, for instance, if the son of the human resources director and the son of an executive at a prospective client play on the same soccer team? According to Tolles, it does. Being able to drop a name, make a personal connection or just pick the brain of someone in-the-know in preparation for a sales pitch translates to higher sales and a faster sales cycle, said Tolles. In other words, it's like tapping an old boys network programmed in 0s and 1s.

Although demand for so-called customer relationship management (CRM) software has waned over the past two years, Tolles is optimistic. Five Fortune 500 companies, which Tolles declined to name, are already testing the software, and the company has a patent pending on its technology. Spoke management also plans to tap the CRM industry expertise of one of its investors and board members, Tim Guleri. The general partner of venture capital firm Sierra Ventures was a cofounder of Octane Software (acquired by Epiphany) and a former executive at Epiphany and Scopus Technology (acquired by Siebel).



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