1Mby1M Virtual Accelerator Investor Forum: With Mark Achler of MATH Venture Partners 2021 (Part 3)

Sramana Mitra: If you look at the public market, the tech stocks have done well. Their earnings have been good. It’s not like they are missing a lot of their numbers. Many are overshooting their numbers. It’s striking how well people have adjusted to buying technology without human interaction in person even in large sales.

Mark Achler: It’s interesting to see how that happens. One of the things that I’m working on is business continuity. There are a couple of concepts here.

The first is whether you can make the sale. The second is whether you can upsell, land, and expand. Can you grow within that account? The third concept is retention. One of the things that I’m particularly interested in following is the impact an enterprise sale has on retention when it is done remotely.

A lot of VCs don’t like services or consulting. I like it. I like being closer with the customer. I’m working with my companies on this business continuity service that manages uptime and utilization. When I see a drop-off, you can figure out that there is a dropout in utilization. I’m finding that there are a lot of employees that either leave or are reassigned to another task. If there is some specific knowledge that they have and there is no one else trained in that way, retention tends to suffer. We also have to adjust our business model. It can be high margin, but I think it’s important to stay close to your customer at all times. 

Sramana Mitra: I think the bias against services comes from the old-fashioned VC world where people always have more margin. They think that services have less margin because you need a human being involved.

In a world where people are buying stuff on the internet, the chances of things not sticking are high even if there are sales people involved online. Having some services to shepherd things requires some handholding and so forth. I resonate with what you are saying completely.  

Mark Achler: If VCs do not like services for the reasons that you have said, then they don’t like lower retention rates. It’s expensive to get a customer. It’s just common sense. 

Sramana Mitra: Let’s talk about some interesting portfolio companies. What are investments that you are excited about? What are they doing and what are you seeing there?

Mark Achler: There are some interesting companies in that portfolio. We have over 55 investments. Some of the big ones that people may know is Acorns, which is a financial services company helping people save money. They are doing really well. Built In is growing leaps and bounds. They build tech communities in many cities and help find jobs.

EatStreet is based in Maddison, Wisconsin. They decided to go after secondary markets. They didn’t want to compete with GrubHub in Chicago, New York, or San Francisco. They went to small to midsize college towns. During the pandemic, their business just took off like crazy.

Apervita in healthcare. They are a company that creates a platform that allows entities to exchange data and analytics safely and securely. If you think about the cloud, once you put out information in the cloud you do three things. You can retrieve it, store it, or you can share it outside of your entity. Apervita allows hospitals and payers of healthcare to share data and analytics with other entities in a safe way. They have huge leverage in customer acquisition because they have partnered with the joint commission that certifies the hospital. The joint commission standardized Apervita and forced every single hospital in the country to use Apervita to submit their data to them.

Another one that we are excited about is Retrium. They are a company that takes all of your training documentation, company manuals, HR documents and puts them in the cloud. It allows any company to share all of their important information with their employees. 

This segment is part 3 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Mark Achler of MATH Venture Partners 2021
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