1Mby1M Deal Radar 2011: Knowlagent, Alpharetta, Georgia

Anyone who’s ever worked in a call center knows that there’s a certain ebb and flow of incoming calls. Often, during the ebb, call center agents have little or no other work to do. Alpharetta, Georgia–based Knowlagent seeks to minimize the amount of down time call center agents have.

Knowlagent provides call center software designed to increase agent utilization by minimizing unproductive idle time. Used by more than 300,000 agents and managers around the world each day, Knowlagent’s RightTime solution turns agents’ idle time into productive “active wait” time, during which period the software sessions for training, coaching, must-read communication, administrative tasks, and other activities. Knowlagent’s integration with a call center’s ACD allows the company to access real-time call volume and service levels. Because it has access to this information, Knowlagent can decide the right content to deliver, the right time to deliver it, and the priority level at which it should be delivered to the employee.

Knowlagent’s CEO, Matt McConnell, graduated from the Georgia Institute of Technology in 1994 with a bachelor’s degree in industrial and systems engineering. After a long day of working in corporate America, McConnell and co-founder, John McIlwaine, identified the problem. They would be plucked out of their jobs to attend classroom training sessions yet were not forgiven their job responsibilities. While they felt the training was necessary, it hindered productivity. They saw an opportunity to deliver training sessions in 15-minute segments on an ongoing basis that would allow workers remain productive while receiving the ongoing training they needed without pulling them offline and paying them to sit in classrooms. One of the founders’ first prospects was a call center that required integration to call center technology. That’s what led to the company’s patented integration of the automatic call distributor (ACD), which is the backbone of any call center. Since the call center is ruled by time, the concept combined with the integration created Knowlagent’s key differentiator in the market.

When Knowlagent was founded in 1995, there was a need for the types of training solutions it provides. Now, many companies, including SumTotal and Saba, offer e-learning solutions, and many operate in call centers. Knowlagent is a delivery vehicle that delivers sessions that can be completed in any of these technologies or others (quality monitoring, coaching, knowledge bases). It works with many vendors that might have previously been considered internal competitors for budget. That competition for budget and mindshare with other priorities has been a consistent competitor for Knowlagent over the years. Since the company opened up the technology to deliver any application to the desktop, its opportunity has expanded beyond e-learning, and any off-phone activity can be delivered at the best time for the call center now. The company’s average ROI increased almost fourfold by opening up the delivery mechanism.

Knowlagent’s top target segments are the largest employers of call center agents, which are, typically, telecommunications, financial services, outsourcing and insurance companies because the largest employers are often hurt the most by lost productivity.

According to McConnell and McIlwaine, there are 13 million call center agents globally. This number helps the company determine market size. With a pricing model of $200 to $300 per user per year, the contact center market is anywhere from $2.6 billion to $4 billion. The founders estimate that the total market for the remaining transactional workers is possibly five times that size. Another way to look at the market, the founders say, is by unproductive time in call centers. The average call center agent earns $25,000 annually. From 10% to 20% of a call center agent’s time is unproductive – spent waiting for a call. For 13 million agents – looking at the low end – roughly $2,500 is lost to idle time for each agent, which adds up to approximately $33 billion in unproductive time each year.

A profitable company earning between $10 million and $20 million annually, Knowlagent has 300,000 call center agents on its system at any given time. The company’s go-to-market strategy includes direct marketing and direct sales for high-end organizations and indirect channels for mid-market companies. Its customer acquisition costs vary due to the varying length of a sales cycle. The founders’ growth strategy is to remain focused on the contact center market as a beachhead in 2011 and 2012 and then expand offerings to companies with field service workers.

Financed with a combination of $20 million of angel investor and venture capital funding between 2002 and 2008, Knowlagent has no exit plans at the moment, and the founders are not seeking any additional funding. Eventually, however, the company will need an exit to give the investors a return on investment.

Related Reading
Saas Companies Growing Nicely
Seven Reasons Why SaaS Would be a Great Success
The 1M/1M Deal Radar 2011: Monarch Media, Santa Cruz, California

This segment is a part in the series : 1Mby1M Deal Radar 2011