Personal blog of Yzmir Ramirez

The world has been turned upside down the past few weeks, but one lesson of business remains as important as ever: treating your customers well is the best avenue to future business strength, particularly at a moment of extreme stress.

As businesses come to terms with the economic crisis underway, executives are moving resources from customer acquisition to customer retention — and that’s proving very lucrative to startups that service the customer success market.

Case in point: New York City-based Catalyst, which I profiled just last summer following its $15 million Series A led by Accel’s Vas Natarajan, has seen huge revenue growth the past few months. The data-driven customer success platform has seen its revenue grow by 380% since the Series A financing according to CEO Edward Chiu.

Steep revenue growth is (unsurprisingly) attractive to investors, and in a moment of fortuitous timing, the company signed a $25 million Series B term sheet with Spark Capital just as the COVID-19 crisis was getting underway.

Chiu said Catalyst wasn’t seeking the investment, having much of its Accel round still in the bank, but he ultimately decided that having the extra capital in hand through a looming economic recession was the right decision. The capital officially hit the bank account at the end of March, and was led by the firm’s growth investor Will Reed.

While the company didn’t disclose the valuation, a source with knowledge of the matter quoted a valuation of $125 million. That’s a serious valuation for a company that launched just two years ago in April of 2018.

Outside of more funding, the core story of the company’s product remains the same. Catalyst wants to bring together all the data sources and team members who interact with customers — everyone from designers and engineers to customer success managers — into one dashboard to ensure that everyone has accurate and up-to-date access to all the information they need on the health of every customer.

The one airbrush: the company’s previous URL of getcatalyst.io has become catalyst.io, and officially re-launched this morning.

One growth area that the company is exploring outside of the B2B space of its existing customers is in healthcare, where the company has seen some inbound interest. Chiu says that Catalyst is exploring the steps required to reach HIPAA compliance with its platform, and hopes to expand to more sectors over time with the capital from its Series B.

When we last checked in with the company, Catalyst had 19 employees and was targeting 40 employees by July 2020. Chiu said that Catalyst is already at 35 employees, and will likely hit 60 to 70 employees by the end of the year.

The job of an early-stage startup founder is challenging in good times, never mind a crash like the one we are experiencing today.

While most expect private investing to slow down, it’s clear that some investments are still happening in spite of the pandemic, if the stories we are writing on TechCrunch are any indication.

But the downturn is bound to have an impact on the types of deals that receive funding; any startup that offers a good or service requiring human interaction or installation will face an uphill battle, at least in the short term. That said, enterprise SaaS vendors, especially ones that solve hard problems, help with work-from-home or collaboration, or better yet, help increase efficiency and save money, are still very much in demand.

Nobody can do anything about the CIO who is hunkering down until things improve — but that’s not everyone. Companies might be thinking twice about where they spend money, but some are still helping drive the net-new, post-COVID-19 investments happening from seed to late stage across many sectors.

We looked at data and spoke to a couple of enterprise-focused, NYC-based seed investors to better understand their investing cadence. Nobody painted a rosy picture of today’s climate, but seed investors were never about immediate gratification, especially where enterprise startups are concerned. That means, if a seed-stage investor believes in the founders and their vision and the company can ride out today’s economic upset, there’s still money in the till — at least for now.

Seed investment generally in decline

BackboneAI, an early-stage startup that wants to help companies dealing with lots of data, particularly coming from a variety of external sources, announced a $4.7 million seed investment today.

The round was led by Fika Ventures with participation from Boldstart Ventures, Dynamo Ventures, GGV Capital, MetaProp, Spider VC and several other unnamed investors.

Company founder Rob Bailey says he has spent a lot of time in his career watching how data flows in organizations. There are still a myriad of challenges related to moving data between organizations, and that’s what his company is trying to solve. “BackboneAI is an AI platform specifically built for automating data flows within and between companies,” he said.

This could involve any number of scenarios from keeping large, complex data catalogues up-to-date to coordinating the intricate flow of construction materials between companies or content rights management across an entertainment industry.

Bailey says that he spent 18 months talking to companies before he built the product. “What we found is that every company we talked to was, in some way or another, concerned about an absolute flood of data from all these different applications and from all the companies that they’re working with externally,” he explained.

The BackboneAI platform aims to solve a number of problems related to this. For starters, it automates the acquisition of this data, usually from third parties like suppliers, customers, regulatory agencies and so forth. Then it handles ingestion of the data, and finally it takes care of a lot of actual processing from external sources, while mapping it to internal systems like the company ERP system.

As an example, he uses an industrial supply company that may deal with a million SKUs across a couple of dozen divisions. Trying to track that with manual or even legacy systems is difficult. “They take all this product data in [from external suppliers], and then process the information in their own [internal] product catalog, and then finally present that data about those products to hundreds of thousands of customers. It’s an incredibly large and challenging data problem as you’re processing millions and millions of SKUs and orders, and you have to keep that data current on a regular basis,” he explained.

The company is just getting started. It spent 2019 incubating inside of Boldstart Ventures . Today the company has close to 20 employees in New York City, and it has signed its first Fortune 500 customer. Bailey says they have 15 additional Fortune 500 companies in the pipeline. With the seed money, he hopes to build on this initial success.

Managing your customers has changed a lot in the past decade. Out are the steak dinners and ballgame tickets to get a sense of a contract’s chance at renewal, and in are churn analysis and a whole bunch of data science to learn whether a customer and their users like or love your product. That customer experience revolution has been critical to the success of SaaS products, but it can remain wickedly hard to centralize all the data needed to drive top performance in a customer success organization.

That’s where Catalyst comes in. The company, founded in New York City in 2017 and launched April last year, wants to centralize all of your disparate data sources on your customers into one easy-to-digest tool to learn how to approach each of them individually to optimize for the best experience.

The company’s early success has attracted more top investors. It announced today that it has raised a $15 million Series A led by Vas Natarajan of Accel, who previously backed enterprise companies like Frame.io, Segment, InVision, and Blameless. The company had previously raised $3 million from NYC enterprise-focused Work-Bench and $2.4 million from True Ventures. Both firms participated in this new round.

Catalyst CEO Edward Chiu told me that Accel was attractive because of the firm’s recent high-profile success in the enterprise space, including IPOs like Slack, PagerDuty, and CrowdStrike.

When we last spoke with Catalyst a year and a half ago, the firm had just raised its first seed round and was just the company’s co-founders — brothers Edward and Kevin Chiu — and a smattering of employees. Now, the company has 19 employees and is targeting 40 employees by the end of the year.

In that time, the product has continued to evolve as it has worked with its customers. One major feature of Catalyst’s product is a “health score” that determines whether a customer is likely to grow or churn in the coming months based on ingested data around usage. CEO Chiu said that “we’ve gotten our health score to be very very accurate” and “we have the ability to take automated action based on that health score.” Today, the company offers “prefect sync” with Salesforce, Mixpanel, Zendesk, among other services, and will continue to make investments in new integrations.

One high priority for the company has been increasing the speed of integration when a new customer signs up for Catalyst. Chiu said that new customers can be onboarded in minutes, and they can use the platform’s formula builder to define the exact nuances of their health score for their specific customers. “We mold to your use case,” he said.

One lesson the company has learned is that as success teams increasingly become critical to the lifeblood of companies, other parts of the organization and senior executives are working together to improve their customer’s experiences. Chiu told me that the startup often starts with onboarding a customer success team, only to later find that C-suite and other team leads have also joined and are also interacting together on the platform.

An interesting dynamic for the company is that it does its own customer success on its customer success platform. “We are our own best customer,” Chiu said. “We login every day to see the health of our customers… our product managers login to Catalyst every day to read product feedback.”

Since the last time we checked in, the company has added a slew of senior execs, including Cliff Kim as head of product, Danny Han as head of engineering, and Jessica Marucci as head of people, with whom the two Chius had worked together at cloud infrastructure startup DigitalOcean.

Moving forward, Chiu expects to invest further in data analysis and engineering. “One of the most unique things about us is that we are collecting so much unique data: usage patterns, [customer] spend fluctuations, [customer] health scores,” Chiu said. “It would be a hugely missed opportunity not to analyze that data and work on churn.”

FireHydrant, an NYC startup, wants to help companies recover from IT disasters more quickly, and understand why they happened — with the goal of preventing similar future scenarios from happening again. Today, the fledgling startup announced a $1.5 million seed investment from Work-Bench, a New York City venture capital firm that invests in early-stage enterprise startups.

In addition to the funding, the company announced it was opening registration for its FireHydrant incident management platform. The product has been designed with Google’s Site Reliability Engineering (SRE) methodology in mind, but company co-founder and CEO Bobby Ross says the tool is designed to help anyone understand the cause of a disaster, regardless of what happened, and whether they practice SRE or not.

“I had been involved in several fire fighting scenarios — from production databases being dropped to Kubernetes upgrades gone wrong — and every incident had a common theme: ?absolute chaos?,” Ross wrote in a blog post announcing the new product.

The product has two main purposes, according to Ross. It helps you figure out what’s happening as you attempt to recover from an ongoing disaster scenario, and once you’ve put out the fire, it lets you do a post-mortem to figure out exactly what happened with the hope of making sure that particular disaster doesn’t happen again.

As Ross describes it, a tool like PagerDuty can alert you that there’s a problem, but FireHydrant lets you figure out what specifically is going wrong and how to solve it. He says that the tool works by analyzing change logs, as a change is often the primary culprit of IT incidents. When you have an incident, FireHydrant will surface that suspected change, so you can check it first.

“We’ll say, hey, you had something change recently in this vicinity where you have an alert going off. There is a high likelihood that this change was actually causing your incident. And we actually bubble that up and mark it as a suspect,” Ross explained.

Like so many startups, the company developed from a pain point the founders were feeling. The three founders were responsible for solving major outages at companies like Namely, DigitalOcean, CoreOS and Paperless Post.

But the actual idea for the company came about almost accidentally. In 2017, Ross was working on a series of videos and needed a way to explain what he was teaching. “I began writing every line of code with live commentary, and soon FireHydrant started to take the shape of what I envisioned as an SRE while at Namely, and I started to want it more than the video series. 40 hours of screencasts recorded later, I decided to stop recording and focus on the product…,” Ross wrote in the blog post.

Today it integrates with PagerDuty, GitHub and Slack, but the company is just getting started with the three founders, all engineers, working on the product and a handful of beta customers. It is planning to hire more engineers to keep building out the product. It’s early days, but if this tool works as described, it could go a long way toward solving the fire-fighting issues that every company faces at some point.

The heated debate around Amazon’s recently announced Long Island City “HQ2” is showing no signs of cooling down.

On Monday morning, the Retail, Wholesale and Department Store Union (RWDSU) hosted a briefing in which labor officials, economic development analysts, Amazon employees and elected New York State and City representatives further underlined concerns around the HQ2 process, the awarded incentives, and the potential impacts Amazon’s presence would have on city workers and residents.

While many of the arguments posed at the Summit weren’t necessarily new, the wide variety of stakeholders that showed up to express concern looked to contextualize the far-reaching risks associated with the deal.

The day began with representatives from New York union groups recounting Amazon’s shaky history with employee working conditions and questioning how the city’s working standards will be impacted if the 50,000 promised jobs do actually show up.

Two current employees working in an existing Amazon New York City warehouse in Staten Island provided poignant examples of improper factory conditions and promised employee benefits that never came to fruition. According to the workers, Amazon has yet to follow through on shuttle services and ride-sharing services that were promised to ease worker commutes, forcing the workers to resort to overcrowded and unreliable public transportation. One of the workers detailed that with his now four-hour commute to get to and from work, coupled with his meaningfully long shifts, he’s been unable to see his daughter for weeks.

Various economic development groups and elected officials including, New York City Comptroller Scott Stringer, City Council Speaker Corey Johnson, City Council Member Jimmy Van Bramer, and New York State Senator Mike Gianaris supported the labor arguments with spirited teardowns of the economic terms of the deal.

Like many critics of the HQ2 process, the speakers’ expressed their beliefs that Amazon knew where it wanted to bring its second quarters throughout the entirety of its auction process, given the talent pool and resources in the chosen locations, and that the entire undertaking was meant to squeeze out the best economic terms possible. And according to City Council Speaker Johnson, New York City “got played”.

Comptroller Stringer argued that Amazon is taking advantage of New York’s Relocation and Employment Assistance Program (REAP) and Industrial and Commercial Abatement Program (ICAP), which Stringer described as outdated and in need of reform, to receive the majority of the $2 billion-plus in promised economic incentives that made it the fourth largest corporate incentive deal in US history.

The speakers continued to argue that the unprecedented level of incentives will be nearly impossible to recoup and that New York will also face economic damages from lower sales tax revenue as improved Amazon service in the city cannibalizes local brick & mortar retail.

Fears over how Amazon’s presence will impact the future of New York were given more credibility with the presence of Seattle City Council members Lisa Herbold & Teresa Mosqueda, who had flown to New York from Seattle to discuss lessons learned from having Amazon’s Headquarters in the city and to warn the city about the negative externalities that have come with it.

Herbold and Mosqueda focused less on an outright rejection of the deal but instead emphasized that New York was in a position to negotiate for better terms focused on equality and corporate social responsibility, which could help the city avoid the socioeconomic turnover that has plagued Seattle and could create a new standard for public-private partnerships.

While the New York City Council noted it was looking into legal avenues, the opposition seemed to have limited leverage to push back or meaningfully negotiate the deal. According to state officials, the most clear path to fight the deal would be through votes by the state legislature and through the state Public Authorities Control Board who has to unanimously approve the subsidy package.

With the significant turnout seen at Monday’s summit, which included several high-ranking state and city officials, it seems clear that we’re still in the early innings of what’s likely to be a long battle ahead to close the HQ2 deal.

Amazon did not return requests for immediate comment.

Empires rise and fall, and none more so than business empires. Whole industries that once dominated the planet are just a figment in memory’s eye, while new industries quietly grow into massive behemoths.

New York City has certainly seen its share of empires. Today, the city is a global center of finance, real estate, legal services, technology, and many, many more industries. It hosts the headquarters of roughly 10% of the Fortune 500, and the metro’s GDP is roughly equivalent to that of Canada.

So much wealth and power, and all under constant attack. The value of technology and data has skyrocketed, and so has the value of stealing and disrupting the services that rely upon it. Cyber crime and cyber wars are adding up: according to a report published jointly between McAfee and the Center for Strategic and International Studies, the costs of these operations are in the hundreds of billions of dollars – and New York’s top industries such as financial services bear the brunt of the losses.

Yet, New York City has hardly been a bastion for the cybersecurity industry. Boston and Washington DC are far stronger today on the Acela corridor, and San Francisco and Israel have both made huge impacts on the space. Now, NYC’s leaders are looking to build a whole new local empire that might just act as a bulwark for its other leading ecosystems.

Today, the New York City Economic Development Corporation (NYCEDC) announced the launch of Cyber NYC, a $30 million “catalyzing” investment designed to rapidly grow the city’s ecosystem and infrastructure for cybersecurity.

James Patchett, CEO of NYCEDC, explained in an interview with TechCrunch that cybersecurity is “both an incredible opportunity and also a huge threat.” He noted that “the financial industry has been the lifeblood of this city for our entire history,” and the costs of cybercrime are rising quickly. “It’s a lose-lose if we fail to invest in the innovation that keeps the city strong” but “it’s a win if we can create all of that innovation here and the corresponding jobs,” he said.

The Cyber NYC program is made up of a constellation of programs:

• Partnering with Jerusalem Venture Partners, an accelerator called Hub.NYC will develop enterprise cybersecurity companies by connecting them with advisors and customers. The program will be hosted in a nearly 100,000 square foot building in SoHo.
• Partnering with SOSA, the city will create a new, 15,000 square foot Global Cyber Center co-working facility in Chelsea, where talented individuals in the cyber industry can hang out and learn from each other through event programming and meetups.
• With Fullstack Academy and Laguardia Community College, a Cyber Boot Camp will be created to enhance the ability of local workers to find jobs in the cybersecurity space.
• Through an “Applied Learning Initiative,” students will be able to earn a “CUNY-Facebook Master’s Degree” in cybersecurity. The program has participation from the City University of New York, New York University, Columbia University, Cornell Tech, and iQ4.
• With Columbia University’s Technology Ventures, NYCEDC will introduce a program called Inventors to Founders that will work to commercialize university research.

In addition to Facebook, other companies have made commitments to the program, including Goldman Sachs, MasterCard, PricewaterhouseCoopers, and edX.org. Two Goldman execs, Chief Operational Risk Officer Phil Venables and Chief Information Security Officer Andy Ozment, have joined the initiative’s advisory boards.

The NYCEDC estimates that there are roughly 6,000 cybersecurity professionals currently employed in New York City. Through these programs, it estimates that the number could increase by another 10,000. Patchett said that “it is as close to a no-brainer in economic development because of the opportunity and the risk.”

From Jerusalem to New York

To tackle its ambitious cybersecurity goals, the NYCEDC is partnering with two venture firms, Jerusalem Venture Partners (JVP) and SOSA, with significant experience investing, operating, and growing companies in the sector.

Jerusalem-based JVP is an established investor that should help founders at Hub.NYC get access to smart capital, sector expertise, and the entrepreneurial experience needed to help their startups scale. JVP invests in early-, late-, and growth-stage companies focused on cybersecurity, big data, media, and enterprise software.

Erel Margalit, who founded the firm in 1993, said that “If you look at what JVP has done … we create ecosystems.” Working with Jerusalem’s metro government, Margalit and the firm pioneered a number of institutions such as accelerators that turned Israel into an economic powerhouse in the cybersecurity industry. His social and economic work eventually led him to the Knesset, Israel’s unicameral legislature, where he served as an MP from 2015-2017 with the Labor Party.

Israel is a very small country with a relative dearth of large companies though, a huge challenge for startups looking to scale up. “Today if you want to build the next-generation leading companies, you have to be not only where the ideas are being brewed, but also where the solutions are being [purchased],” Margalit explained. “You need to be working with the biggest customers in the world.”

That place, in his mind, is New York City. It’s a city he has known since his youth – he worked at Moshe’s Moving IN NYC while attending Columbia as a grad student where he got his PhD in philosophy. Now, he can pack up his own success from Israel and scale it up to an even larger ecosystem.

Since its founding, JVP has successfully raised $1.1 billion across eight funds, including a $60 million fund specifically focused on the cybersecurity space. Over the same period, the firm has seen 32 successful exits, including cybersecurity companies CyberArk (IPO in 2014) and CyActive (Acquired by PayPal in 2013).

JVP’s efforts in the cybersecurity space also go beyond the investment process, with the firm recently establishing an incubator, known as JVP Cyber Labs, specifically focused on identifying, nurturing and building the next wave of Israeli cybersecurity and big data companies.

On average, the firm has focused on deals in the $5-$10 million range, with a general proclivity for earlier-stage companies where the firm can take a more hands-on mentorship role. Some of JVP’s notable active portfolio companies include Source Defense, which uses automation to protect against website supply chain attacks, ThetaRay, which uses big data to analyze threats, and Morphisec, which sells endpoint security solutions.

Opening up innovation with SOSA

The self-described “open-innovation platform,” SOSA is a global network of corporations, investors, and entrepreneurs that connects major institutions with innovative startups tackling core needs.

SOSA works closely with its partner startups, providing investor sourcing, hands-on mentorship and the physical resources needed to achieve growth. The group’s areas of expertise include cybersecurity, fintech, automation, energy, mobility, and logistics. Though headquartered in Tel Aviv, SOSA recently opened an innovation lab in New York, backed by major partners including HP, RBC, and Jefferies.

With the eight-floor Global Cyber Center located in Chelsea, it is turning its attention to an even more ambitious agenda. Uzi Scheffer, CEO of SOSA, said to TechCrunch in a statement that “The Global Cyber Center will serve as a center of gravity for the entire cybersecurity industry where they can meet, interact and connect to the finest talent from New York, the States, Israel and our entire global network.”

With an already established presence in New York, SOSA’s local network could help spur the local corporate participation key to the EDC’s plan, while SOSA’s broader global network can help achieve aspirations of turning New York City into a global cybersecurity leader.

It is no coincidence that both of the EDC’s venture partners are familiar with the Israeli cybersecurity ecosystem. Israel has long been viewed as a leader in cybersecurity innovation and policy, and has benefited from the same successful public-private sector coordination New York hopes to replicate.

Furthermore, while New York hopes to create organic growth within its own local ecosystem, the partnerships could also benefit the city if leading Israeli cybersecurity companies look to relocate due to the limited size of the Israeli market.

Big plans, big results?

While we spent comparatively less time discussing them, the NYCEDC’s educational programs are particularly interesting. Students will be able to take classes at any university in the five-member consortium, and transfer credits freely, a concept that the NYCEDC bills as “stackable certificates.”

Meanwhile, Facebook has partnered with the City University of New York to create a professional master’s degree program to train up a new class of cybersecurity leaders. The idea is to provide a pathway to a widely-respected credential without having to take too much time off of work. NYCEDC CEO Patchett said, ”you probably don’t have the time to take two years off to do a masters program,” and so the program’s flexibility should provide better access to more professionals.

Together, all of these disparate programs add up to a bold attempt to put New York City on the map for cybersecurity. Talent development, founder development, customer development – all have been addressed with capital and new initiatives.

Yet, despite the time that NYCEDC has spent to put all of these partners together cohesively under one initiative, the real challenge starts with getting the community to participate and build upon these nascent institutions. “What we hear from folks a lot of time,” Patchett said to us, is that “there is no community for cyber professionals in New York City.” Now the buildings have been placed, but the people need to walk through the front doors.

The city wants these programs to be self-sustaining as soon as possible. “In all cases, we don’t want to support these ecosystems forever,” Patchett said. “If we don’t think they’re financially sustainable, we haven’t done our job right.” He believes that “there should be a natural incentive to invest once the ecosystem is off the ground.”

As the world encounters an ever-increasing array of cyber threats, old empires can falter – and new empires can grow. Cybersecurity may well be one of the next great industries, and it may just provide the needed defenses to ensure that New York City’s other empires can live another day.

There is nothing meritocratic about sales. A startup may have the best product, the best vision, and the most compelling presentation, only to discover that their sales team is talking to the wrong decision-maker or not making the right kind of small talk. Unfortunately, that critical information — that network intelligence — isn’t written down in a book somewhere or on an online forum, but generally is uncovered by extensive networking and gossip.

For David Hammer and his team at Emissary, that is a problem to solve. “I am not sure I want a world where the best networkers win,” he explained to me.

Emissary is a hybrid SaaS marketplace which connects sales teams on one side with people (called emissaries, naturally) who can guide them through the sales process at companies they are familiar with. The best emissaries are generally ex-executives and employees who have recently left the target company, and therefore understand the decision-making processes and the politics of the organization. “Our first mission is pretty simple: there should be an Emissary on every deal out there,” Hammer said.

Expert networks, such as GLG, have been around for years, but have traditionally focused on investors willing to shell out huge dollars to understand a company’s strategic thinking. Emissary’s goal is to be much more democratized, targeting a broader range of both decision-makers and customers. It’s product is designed to be intelligent, encouraging customers to ask for help before a sales process falters. The startup has raised $14 million to date according to Crunchbase, with Canaan leading the last series A round.

While Emissary is certainly a creative startup, its the questions spanning knowledge arbitrage, labor markets, and ethics it poses that I think are most interesting.

Sociologists of science generally distinguish between two forms of knowledge, concepts descended from the work of famed scholar Michael Polanyi. The first is explicit knowledge — the stuff you find in books and on TechCrunch. These are facts and figures — a funding round was this size, or the CEO of a company is this individual. The other form is tacit knowledge. The quintessential example is riding a bike — one has to learn by doing it, and no number of physics or mechanics textbooks are going to help a rider avoid falling down.

While org charts may be explicit knowledge, tacit knowledge is the core of all organizations. It’s the politics, the people, the interests, the culture. There is no handbook on these topics, but anyone who has worked in an organization long enough knows exactly the process for getting something done.

That knowledge is critical and rare, and thus ripe for monetization. That was the original inspiration for Hammer when he set out to build a new startup.“Why does Google ever make a bad decision?” Hammer asked at the time. Here you have the company with the most data in the world and the tools to search through it. “How do they not have the information they need?” The answer is that it has all the explicit knowledge in the world, but none of the implicit knowledge required.

That thinking eventually led into sales, where the information asymmetry between a customer and a salesperson was obvious. “The more I talked to sales people, the more I realized that they needed to understand how their account thinks,” Hammer said. Sales automation tools are great, but what message should someone be sending, and to who? That’s a much harder problem to solve, but ultimately the one that will lead to a signed deal. Hammer eventually realized that there were individuals who could arbitrage their valuable knowledge for a price.

That monetization creates a new labor market for these sorts of consultants. For employees at large companies, they can now leave, take a year off or even retire, and potentially get paid to talk about what they know about an organization. Hammer said that “people are fundamentally looking for ways to be helpful,” and while the pay is certainly a major highlight, a lot of people see an opportunity to just get engaged. Clearly that proposition is attractive, since the platform has more than 10,000 emissaries today.

What makes this market more fascinating long-term though is whether this can transition from a part-time, between-jobs gig into something more long-term and professional. Could people specialize in something like “how does Oracle purchase things,” much as how there is an infrastructure of people who support companies working through the government procurement system?

Hammer demurred a bit on this point, noting that “so much of that is being on the other side of those walls.” It’s not any easier for a potential consultant to learn the decision-making outside of a company than it is for a salesperson. Furthermore, the knowledge of an internal company’s processes degrades, albeit at different rates depending on the organization. Some companies experience rapid change and turnover, while knowledge of other companies may last a decade or more.

All that said, Hammer believes that there will come a tipping point when companies start to recommend emissaries to help salespeople through their own processes. Some companies who are self-aware and acknowledge their convoluted procurement procedures may eventually want salespeople to be advised by people who can smooth the process for all sides.

Obviously, with money and knowledge trading hands, there are significant concerns about ethics. “Ethics have to be at the center of what we do,” Hammer said. “They are not sharing deep confidential information, they’re sharing knowledge about the culture of the organization.” Emissary has put in place procedures to monitor ethics compliance. “Emissaries can not work with competitors at the same time,” he said. Furthermore, emissaries obviously have to have left their companies, so they can’t influence the buying decision itself.

Networking has been the millstone of every salesperson. It’s time consuming, and there is little data on what calls or coffees might improve a sale or not. If you take Emissary’s vision to its asymptote though, all that could potentially be replaced. Under the guidance of people in the know, the fits and starts of sales could be transformed into a smooth process with the right talking points at just the right time. Maybe the best products could win after all.

Over the past few years, the old language of “customer support” has been supplanted by the new language of “customer success.” In the old model, companies would essentially disappear following the conclusion of a sale, merely handling customer problems when they arose. Now, companies are actively reaching out to customers, engaging them with education and training and monitoring them with analytics to ensure they have the best time with the product as possible.

What’s changing is the nature of product and services today: subscription. Customers no longer just make a single buying decision about a product, but instead must actively commit to using the product, or else they churn.

New York-based Catalyst, founded by brothers Edward and Kevin Chiu, wants to rebuild customer success from the ground up with an integrated software platform. They have received some capital success of their own, securing $2.4 million in venture capital from Phil Black of True Ventures with participation from Ludlow Ventures and Compound.

New York has had something of an increase in founder mafias, as TechCrunch reported this weekend. Catalyst is no exception to this trend, with the Chiu brothers both working at DigitalOcean, one of New York’s many high-flying enterprise startups. Edward Chiu was director of customer success at the company for a number of years, but had a unique background in sales and also in coding before starting.

Kevin Chiu was head of inside sales at DigitalOcean . “I brought my brother on to do sales at DigitalOcean,” Edward Chiu explains. “We always knew that we wanted to start a company together, but wanted to see if we would kill each other.” The two worked together, and lo and behold, they didn’t kill each other.

Edward Chiu wanted to match the product experience of using DigitalOcean with the experience of using its internal customer success tools. Nothing on the market fit. “Given that DigitalOcean was a very technical product,” Chiu explained, “we decided to build our own tool.” Chiu thought of customer success at DigitalOcean as its own product, and his team built up the platform to improve its functionality and scalability. “We just used the tool and we loved it,” he said, so we “started to show this tool to a bunch of other customer success leaders I am connected with.”

Other customer success leaders said they wanted the platform, and “after the 20th person told me that,” he and his brother spun out of DigitalOcean to go on their own. Unlike enterprise startups in New York a couple of years ago that often struggled to find any investors, Catalyst found cash quickly. “Two weeks in we had more offers than we knew what to do with,” Chiu explained. The two said they had originally targeted a fundraise of $750,000, but ended up at $2.4 million.

Catalyst is a platform that integrates between a number of other major SaaS services such as Salesforce, Zendesk, Mixpanel and others to create a unified dashboard for data around customer success. From there, customer success managers have a set of automated tools to handle engagement, such as customer segmentation and email campaigns.

A major challenge in the customer success world is that these managers often don’t have the skills required to do advanced data analytics, so they often rely on their friends in engineering to run scripts or perform database lookups. The hope is that Catalyst’s feature set is powerful enough that these sorts of ad hoc tasks become a thing of the past. “Because we aggregate all this data, you can run queries,” Chiu explains.

Chiu says that Catalyst doesn’t just want to be a software platform, but rather a movement that pushes every company to think about how they can make their customers successful. “There are so many companies that are starting to understand that it is not something that you do once you raise a Series A, but something you do from day one,” Chiu said. “If you take care of your very first customer, they will constantly promote you and constantly promote your business.”

The company is based in Flatiron, and has eight employees.

While most people probably would not think of New York as a hotbed for enterprise startups of any kind, it is actually quite active. When you stop to consider that the world’s biggest banks and financial services companies are located there, it would certainly make sense for security startups to concentrate on such a huge potential market — and it turns out, that’s the case.

According to Crunchbase, there are dozens of security startups based in the city with everything from biometrics and messaging security to identity, security scoring and graph-based analysis tools. Some established companies like Symphony, which was originally launched in the city (although it is now on the west coast), has raised almost $300 million. It was actually formed by a consortium of the world’s biggest financial services companies back in 2014 to create a secure unified messaging platform.

There is a reason such a broad-based ecosystem is based in a single place. The companies who want to discuss these kinds of solutions aren’t based in Silicon Valley. This isn’t typically a case of startups selling to other startups. It’s startups who have been established in New York because that’s where their primary customers are most likely to be.

In this article, we are looking at a few promising early-stage security startups based in Manhattan

Hypr: Decentralizing identity

Hypr is looking at decentralizing identity with the goal of making it much more difficult to steal credentials. As company co-founder and CEO George Avetisov puts it, the idea is to get rid of that credentials honeypot sitting on the servers at most large organizations, and moving the identity processing to the device.

“The goal of these companies in moving to decentralized authentication is to isolate account breaches to one person,” Avetisov explained. When you get rid of that centralized store, and move identity to the devices, you no longer have to worry about an Equifax scenario because the only thing hackers can get is the credentials on a single device — and that’s not typically worth the time and effort.

At its core, Hypr is an SDK. Developers can tap into the technology in their mobile app or website to force the authorization to the device. This could be using the fingerprint sensor on a phone or a security key like a Yubikey. Secondary authentication could include taking a picture. Over time, customers can delete the centralized storage as they shift to the Hypr method.

The company has raised $15 million and has 35 employees based in New York City.

Uplevel Security: Making connections with graph data

Uplevel’s founder Liz Maida began her career at Akamai where she learned about the value of large data sets and correlating that data to events to help customers understand what was going on behind the scenes. She took those lessons with her when she launched Uplevel Security in 2014. She had a vision of using a graph database to help analysts with differing skill sets understand the underlying connections between events.

“Let’s build a system that allows for correlation between machine intelligence and human intelligence,” she said. If the analyst agrees or disagrees, that information gets fed back into the graph, and the system learns over time the security events that most concern a given organization.

“What is exciting about [our approach] is you get a new alert and build a mini graph, then merge that into the historical data, and based on the network topology, you can start to decide if it’s malicious or not,” she said.

The company hopes that by providing a graphical view of the security data, it can help all levels of security analysts figure out the nature of the problem, select a proper course of action, and further build the understanding and connections for future similar events.

Maida said they took their time creating all aspects of the product, making the front end attractive, the underlying graph database and machine learning algorithms as useful as possible and allowing companies to get up and running quickly. Making it “self serve” was a priority, partly because they wanted customers digging in quickly and partly with only 10 people, they didn’t have the staff to do a lot of hand holding.

Security Scorecard: Offering a way to measure security

The founders of Security Scorecard met while working at the NYC ecommerce site, Gilt. For a time ecommerce and adtech ruled the startup scene in New York, but in recent times enterprise startups have really started to come on. Part of the reason for that is many people started at these foundational startups and when they started their own companies, they were looking to solve the kinds of enterprise problems they had encountered along the way. In the case of Security Scorecard, it was how could a CISO reasonably measure how secure a company they were buying services from was.

“Companies were doing business with third-party partners. If one of those companies gets hacked, you lose. How do you vett the security of companies you do business with” company co-founder and CEO Aleksandr Yampolskiy asked when they were forming the company.

They created a scoring system based on publicly available information, which wouldn’t require the companies being evaluated to participate. Armed with this data, they could apply a letter grade from A-F. As a former CISO at Gilt, it was certainly a paint point he felt personally. They knew some companies did undertake serious vetting, but it was usually via a questionnaire.

Security Scorecard was offering a way to capture security signals in an automated way and see at a glance just how well their vendors were doing. It doesn’t stop with the simple letter grade though, allowing you to dig into the company’s strengths and weaknesses and see how they compare to other companies in their peer groups and how they have performed over time.

It also gives customers the ability to see how they compare to peers in their own industry and use the number to brag about their security position or conversely, they could use it to ask for more budget to improve it.

The company launched in 2013 and has raised over $62 million, according to Crunchbase. Today, they have 130 employees and 400 enterprise customers.

If you’re an enterprise security startup, you need to be where the biggest companies in the world do business. That’s in New York City, and that’s precisely why these three companies, and dozens of others have chosen to call it home.