Strategic business decisions can make or break a company. In particular, marketing choices and expenses can either bring new customers and majorly increased revenue… Or they can just be wasted money with little to show for it.
Jonathan Stern founded SnapStrat because he recognized that many businesses were using outdated technology for their strategic decisions. Instead of using manual methods (like Excel) or limited AI or BI tools, SnapStrat was developed to be a holistic platform with data ingestion and AI that streamlines the decision making process.
We sat down with Jonathan to discuss what kind of decisions SnapStrat can be used for, who the average SnapStrat customer is, and where the company is heading.
For those who don’t know, what is the genesis story of snapstrat?
I spent 25 years in strategy consulting and as the pace of business changes increased exponentially, I found the half-life of the PowerPoint or Excel model we were delivering was getting shorter and shorter. Clients were increasingly looking for sustainable solutions that would help them not only make the right strategic decisions once, but allow them to continue to make them over time.
I recognized that technology had advanced to the point where building a fit-for-purpose platform that would address a broad set of strategic decisions was not only possible, it could be done in a way that gave customers the custom applications they were looking for all from a single platform that could rapidly and economically scale.
How do you plan on allocating funds raised in this round to scale the business?
We have done the hard work of building out our product and building a base of high-profile, paying customers. The key word you used in the question was “scale” This round is focused on go-to-market and building increased scalability into the platform — driving down the time and cost of new customer activations, enhancing our data science and machine learning capabilities, and acquiring the next generation of SnapStrat customers through investment in both direct and indirect go-to-market channels.
Can you walk us through one example of a strategic decision snapstrat would tackle?
For SnapStrat to be appropriate for a strategic decision the following must be true:
- It is a recurring decision — i.e. weekly, monthly, quarterly, annually.
- There are multiple criteria, often a combination of qualitative and quantitative used to make the decision.
- The decision must have significant value at stake ($5M+) in either improving the decision outcome or reducing manual work.
- It must be strategic.
One of our core use cases is the strategic allocation of marketing spend. Typically today that decision is pushed down in the organization and allocation is done at the channel or campaign level. The high-value marketing allocation question that SnapStrat addresses is:
“How should I allocate marketing spend across customer segments, products, or geographies to best enable my business strategy?” This hits all the factors we discussed:
- Recurring: Typically starts with an annual allocation, then flows through to quarterly adjustments, and from there to lower level campaign optimization.
- Multi-criteria: Should we optimize for short-term EBITDA? Long-term? Retention? Brand Equity? Growth in a specific market segment?
- High-value: Marketing spend in the US alone is estimated at ~$400B so increasing the ROI on this spend unlocks massive value.
- Strategic: Marketing spend allocation is critical to enabling customer, product, and geographic strategy.
Do you have any competition, if so, how do you differentiate?
The most frequent way these decisions are made today are either manually, with spreadsheets and meetings, or by using expensive consultants. Some organizations may try to assemble different technologies, using AI tools like DataRobot, BI tools like Domo or Looker, or functional process management tools like FICO, Planview (Strat planning) or Allocadia (Mktg allocation). SnapStrat has a unique product that holistically addresses a customer’s most critical, high-value decisions. Our product approach is differentiated in several key areas:
- We are decision-focused. Many analytics providers focus on collecting and viewing data. While this provides useful information on what has happened in the past, SnapStrat believes that executives want just the right prescriptive analytics and modeling tools to make their specific decisions.
- We provide end-to-end solutions. Most software providers focus on either decision analytics or process management. SnapStrat delivers an end-to-end application that ensures the alignment of strategy and execution.
- Fast time-to-value. We leverage low-code app builder technology to be able to deliver enterprise-class, feature-rich applications within weeks of a customer commitment. Our data ingestion and transformation tools allow us to demonstrate value with pilots even faster than that.
- Commitment beyond initial delivery. We knew from the beginning that the key to successful customer relationships in our space was going to be based on understanding their business problems. We view our mission as making individual executives more successful in their careers by providing them the tools to make better decisions. That commitment starts at delivery but extends across the life of the relationship — a philosophy that we have embedded in our subscription model.
Can you describe your average customer?
Our customers are C-level executives or functional strategists (e.g. CMO or Marketing strategists) who are trying to transform their business functions. For proactive marketing, we focus on specific use cases: Marketing Allocation, Subscription Pricing, and Product Investment Allocation. This allows us to target specific executives in specific industries with a tailored value proposition.
What are the biggest risks associated with your business?
We are providing senior executives in large enterprises with the tools to improve their most important decisions. The bar for successful delivery is high and we have to continually ensure ourselves that we are well over that bar — getting our first 10 customers to be evangelists for our platform and our company is critical to our success and we absolutely have to be on our game to make that happen.
How is your team uniquely positioned to win out in this market?
I count myself incredibly fortunate to have the team around me, both leaders and advisors, that I do. Our team possesses two qualities which are critical to our success: persistence and experience.
Despite the common view that startups are about luck and instant billions, what it really takes to win is a refusal not to win. We are creating a new product category, our mission and our technology are not simple, we have had plenty of obstacles and we will have plenty more. Our team sees obstacles [as opportunities] to learn, improve and adapt, not to shy away from or as cause to change our core mission. Collectively, we view success as a “when” not an “if” and that is incredibly empowering as a CEO.
Between our leadership and advisors, we have well over 100 years of incredibly rich and diverse experience that supplements my 25 years of technology enabled business strategy experience.
Francis Upton IV, our CTO, brings 35 years of enterprise SW experience. His ability to envision and execute on a product that has never been built before is unparalleled. Alan Becker has led business operations functions in fortune 500 companies and is a master at building empathetic relationships with customers grounded in deep business understanding.
We have attracted a cadre of advisors who provide energy, expertise and an unwavering belief in what we do. Ryan Fuller, who has been an investor and advisor from day one, built Volometrix from the ground up and had a very successful exit to Microsoft. David Allen is a Partner at Bain and the former CTO at Visa, and [he] brings expertise in technology and partner relationships. Ori Gal led product at FICO and Sabre and has deep product knowledge. Our newest advisor, Jeff Wallace, is a serial entrepreneur who has founded two accelerators and has incredible experience in helping companies like SnapStrat scale.
What does your business model look like?
We sell directly and will add a consulting channel. Direct sales allow us to take specific value propositions and target appropriate executives in that industry (e.g. Marketing Allocation in retail/CPG). Once we have built a relationship with an executive we will support adjacent decisions in their function or a different function in the organization. Working with consultants allows us to limit the size of our GTM organization as well as avoid providing services — both of these will help our medium-term scalability. For the consultants, SnapStrat provides a way for them to deliver a higher value outcome to their clients without trying to transform themselves to software companies.
Our pricing model is flexible. We target $300K/year for our price point, though we expect that will increase as we start to scale on specific value propositions that have proven returns. We can price as a bundle (e.g. 2 years in advance) or completely on a monthly basis depending on whether the customer wants to spend capital or expense funds. If we work with a pure SaaS customer we can get AR financing on the deal to bring the revenue forward.
As you think about the business 5-10 years down the road, what do you see exit opportunities looking like?
Three [possible] scenarios:
1) IPO: What you have to believe — Strategic decisioning market reaches its full potential, horizontal apps win.
When I launched SnapStrat it was with the belief that there was a multi-billion dollar market that could be captured with the right value proposition — 3 ½ years later that belief is as strong as ever. If we execute in the way I know we can, stay focused, and the market continues to evolve as we are seeing, SnapStrat has the ability to become a highly successful public company. Our unit economics will allow us to reach profitability early and while we do not yet have a timeline for an IPO, as we start to inflect into rapid growth over the next 12 months we will start to consider that path.
2) Consulting or enterprise SW acquisition: What you have to believe — Strategy consulting converges with the analytic software market as assets become more critical than advice.
Consulting firms make their money through marking up labor and generating IP. Enterprise SW has typically been sold to technology based on transactional capabilities. As the decisioning market matures, the two worlds will collide. Consulting firms will need SW capabilities, enterprise SW companies such as Google, Microsoft, and others will want offerings that appeal to C-level executives. SnapStrat is uniquely positioned to take advantage of that convergence.
3) Functional acquisition: What you have to believe — Functional apps win and are able to successfully migrate upstream to provide strategic capabilities.
This is often the conventional wisdom, particularly with venture investors. While we believe that a coordinated strategy, and therefore an integrated decision platform, will be critical for the C-Suite, we will also benefit if in fact the conventional wisdom proves correct. Our focus on a specific set of use cases will make us a strong target for an functional enterprise SW provider that wants to move upstream but has limited capabilities.
We are excited to see where Jonathan and his team take the company. SnapStrat is currently raising on SeedInvest.
About: Olivia strobl
Olivia comes to KingsCrowd with a background in venture capital and technology. She spent time at Glasswing Ventures, an AI-focused venture fund in Boston, before joining the KingsCrowd team. There she helped develop machine learning algorithms for the opportunity qualification of preseed and seed-stage startup companies. Prior to her time at Glasswing, Olivia worked in a lab studying the neural correlates of attention. She holds a degree in Neuroscience from Wellesley College.