It can be cool to be a salesperson. Not only do you have expense accounts and work directly with customers, but you are on the cutting edge of where new software models hit the mainstream. Think software-as-a-service from Salesforce, inbound marketing from HubSpot, e-mail tracking with Yesware—and any number of customer relationship management tools such as Nutshell.
Now sales-related technology has a new player. Allego, based in Needham, MA, is coming out of stealth today after more than two years of work. The company is led by Yuchun Lee, who previously founded and led Unica, a marketing and analytics software firm that was acquired by IBM for $ 480 million in 2010.
Lee (pictured) stayed on at IBM as a vice president through 2012, in a group of 2,000-plus people, before becoming an entrepreneur in residence at General Catalyst Partners and an executive in residence at Summit Partners. That’s right, he’s a venture capitalist as well as a CEO (seems to be getting more common these days). Another nugget: Lee was a member of the famed MIT Blackjack Team in the 1990s.
Allego (pronounced uh-LEG-oh) is mostly self-funded, has 40 employees, and—most importantly—already has 50 corporate customers and about 10,000 end users, Lee says. That translates into being cash-flow positive, he adds. “Even though I’m a VC now, I don’t want to take VC money.”
OK, here’s the problem Allego is solving: how to train salespeople effectively.
As Lee puts it, big companies typically fly out sales teams to a conference center for training, lock them in a room for two days, “put a pipe down their throat, and pump them with tons and tons of content.” Guess what happens to most of that content? It’s forgotten, and the salespeople go back to their old PowerPoint decks and spiels.
As a result, Lee says, they end up “scrambling to find the material” once a potential deal emerges. Salespeople “end up practicing in front of the customer,” he says. “They have to dance on their feet, which a lot of them are good at, but they basically make things up. Marketing has always been frustrated with this.”
What Allego is pushing is “just in time” learning—a video-based software platform that encourages and enables salespeople to practice their pitches, get coaching from managers, and share what works and what doesn’t. As Lee sees it, salespeople need to be trained while they’re in the field and motivated; they need to practice a lot (just like a blackjack player); and they need to learn in “bite-size,” intermittent chunks, not in long, boring sessions.
His company’s technology is designed for mobile devices and on-the-go schedules: a sales rep can take video of herself practicing with a slide deck, for example, and upload it for feedback from her boss. She could also take a selfie video after a meeting, say, while sitting in her car, documenting a new idea or way of presenting something that worked in the meeting, while it’s fresh. To Lee, it seems good sales ideas from the field aren’t being captured in a systematic way. “They’re in people’s heads, and in e-mails,” he says.
He hopes Allego’s mobile app and Web software can remedy that, by letting people capture video and share it on the fly. The key advance seems to be taking massive data streams—in this case, video from smartphones—and compressing them in a way that works in low-bandwidth environments, such as busy airports.
Lee doesn’t give a lot of specifics, but he says the patent-protected system involves “predictively caching [and compressing] video on a local device,” as well as making use of content delivery networks around the world—which allows people to have access to those videos wherever they may be. “I could use it on an airplane, and when I get off the plane, when I have connectivity, it will sync up,” he says.
“This is really, really hard to do,” he adds. “It’s one thing to compress video. It’s another thing to cache it and make it work on mobile devices.”
The concept seems like it would be applicable to other areas as well, like athletic training, education, and maybe even consumer video sharing. Indeed, Allego may have more in common than it realizes with platforms for pro-sports coaching, edtech and professional development, and video messaging. But Lee wants to stay focused on the sales training problem first. “One of the lessons I learned from Unica is that focus is good,” he says. “At Unica I exhausted all the wrong answers. So I can run a lot faster this time.”
Still, Lee admits “the paradigm is not limited to sales training.” He says Allego “wants to nail the hardest problem with the big payoff first. Eventually we’ll move beyond sales, and down market.”
So far, so good. Allego’s customers span fields including high-tech, financial services, pharmaceuticals, and medical devices. They include John Hancock, Pacific Life, Chrysler, Vertex, Kronos, and Demandware. Lee sounds confident when he predicts Allego will “more than double the business” in the next year. Of course, it will also need to prove that its technology consistently boosts the productivity of sales teams.
Although it’s early, Lee’s vision—as well as that of his co-founder, sales training expert Mark Magnacca—goes a long way toward predicting the success of this company. If Allego can tap into big corporate budgets and a real need for training, it could represent the next evolution of video education beyond corporate YouTube channels and e-certification programs.
“This whole trend of using video to learn is happening,” Lee says.
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