How This Tech Startup CEO Turned A Profanity-laced Email Into $23M In Funding

For most entrepreneurs, the path to getting funded involves crafting a business plan and cajoling investors into forking over enough capital to build and sell your product. But one entrepreneur found he could only qualify for funding if he’d already been rejected — and his reaction backfired, to the tune of $23 million.

“There was a certain grant we were going after, but you had to prove that you were rejected by investors,” remembers Michael Sharkey, CEO of San Francisco-based Autopilot, a startup that builds marketing tools for small businesses.

So he sent the worst email he could come up with to investors, rife with f-bombs and an “arrogant, horrible” tone that Sharkey was convinced would turn off any sane venture capitalist.

“In Australia especially, it’s not very endearing to speak that way,” said Australian-born Sharkey, who relocated his company to San Francisco in 2012.

But the ruse backfired auspiciously, when one investor came away intrigued instead of mortified. And ultimately, that connection helped to land the business millions in venture capital, with a total of $23 million raised thus far. The company’s investors include Salesforce Ventures and Tim Draper.

Since moving the company to San Francisco, Autopilot has grown to 32 employees in its SoMa headquarters, and has landed a number of big customers including Lyft and Microsoft ( NASDAQ: MSFT). But its main focus are the small- and medium-sized businesses that “can’t afford to pay thousands of dollars per month” for customer management systems like Salesforce (NYSE: CRM) or Marketo (NASDAQ: MKTO), which charge on a per-user basis, or that simply don’t need complex systems.

“The customer we’re most excited about is the guy in Texas selling cars, and using Autopilot to win more customers,” he says. “It’s become accessible and affordable to launch a really successful business. We like to target small businesses because they’ll become the enterprises of the future.”

Despite a proliferation of email tools like MailChimp, the majority of businesses still don’t do email targeting at all, according to a 2015 survey, with many viewing the technology as inaccessible or too expensive.

Autopilot’s product runs anywhere from $20 to $40 per month, and offers tools for highly targeted marketing that you don’t need to be tech-savvy in order to use, Sharkey says, likening his product’s approach to “Robin Hood tactics.”

Its technology emphasizes an “event-based” approach that folds in metadata about customers, like how many times they’ve visited your website or their behavior within a company’s app.

It also goes well beyond email marketing, helping businesses to reach customers via SMS or on social media and the right time, and with the right messages. That can include offers, or requests to write an online review, all customized to help a small businesses expand their reach without overloading customers.

“It’s filling this gap where people who can’t afford (Salesforce’s) marketing cloud or Marketo are able to get much more creative with their marketing,” Sharkey says.

“Salesforce was successful in bringing people into the cloud, but the next 15 years of innovation are going to be about understanding the customer,” he adds. “No one wants to be blasted and treated like everyone else.”

Source: San Francisco Business Times, Annie Gaus
Photo: Autopilot, an S.F.-based startup, sees itself as the ‘Robin Hood’ of marketing technology for small businesses who can’t afford tools like Salesforce or Marketo.