Bpifrance Large Venture
Why did we invest (WDWI) — Episode #1 Contentsquare
By Maïlys Ferrere and Yassine Soual
This is the first article of our series Why Did We Invest. In this article, we’ll go through some of the key drivers of our investment in Contentsquare! (other than the SaaS KPIs that the company shows 🚀).
First things first, for those who are not familiar with the company and its activity. Contentsquare is an experience analytics software that tracks and visualises digital behaviours, delivering recommendations that brands, marketers and publishers can use to grow revenue, increase loyalty and optimise experience and features.
When we first met Jonathan, the CEO and founder of Contentsquare, he simply explained his roadmap towards becoming The experience analytics category leader. It took about 5 minutes, covered value proposition, product-market fit, clients’ pain point and the company’s long-term objectives. You could feel his passion in talking about the company’s journey and the excitement about the challenges to come.
Product and Value Proposition
If you ask any company if they sell (or generate leads) through their website, most likely, the answer will be “yes.” You’ll get the same answer if you ask whether they monitor conversion performance. But when it comes to taking data-driven measures to improve conversion, the odds are the answer will be “no.” Most brands focus on bringing the customer to their sales channels, but very few go towards enhancing each component of the user experience to optimise conversion.
This is where Contentsquare plays a key role. Contentsquare’s product continuously analyses every data point related to a visitor behaviour on a website or an app. In terms of value proposition, this is a complete change of paradigm.
Without Contentsquare, Marketing used to think about what items to track, then ask IT to implement the appropriate trackers, a few weeks later, IT would implement the appropriate code. Only from this point on, data would be collected. Marketing teams then would have to wait for enough data to be collected for their analytics to be statistically significant. If they wanted to track something else, then it would all start again … (sounds like a scene from The IT Crowd 🤓 but it’s close enough to reality — with the exception of some pre-existing session replay or a/b testing point solutions).
With Contentsquare, IT implements beforehand a tag to their websites and apps, and from this point on, every single data is collected (pageviews, mouse movements, hesitation, hovers, revenue generated, conversion per zone, etc.) regardless of specific marketing needs. Once users have identified items to track, visitors’ interactions are already stored, and analyses can be conducted immediately. It is sort of a “Boil the Ocean” approach but thanks to Contentsquare’s comprehensive view, clients are not only able to reach high standards of customisation but can also benchmark performance vs. their own industry’s.
Contentsquare’s ability to collect such a large set of interactions is made possible thanks to a best-in-class data and backend architecture allowing very high standards in terms of functionality, performance, storage optimisation and security. The latter is one of the key focuses of the company.
Market positioning
Contentsquare is a B2B SaaS company focused on the “experience analytics” space. A sector which at first sight is seen as a nice to have. We can genuinely state that experience analytics is nice to have vs. SaaS solutions focused on IT performance, payment processing, cybersecurity and other low-level business needs. At least, that was our initial guess 🤷♂️!
At the time of our investment, the “UX optimisation” market was estimated at around $8bn, a market large enough to see multiple competitors, and investors’ money pouring into it, but not too large that traditional analytics giants (Adobe, Google, IBM) would prioritise it too soon.
In terms of future growth, obviously most drivers pointed towards a growing need for digital experience analytics tools (not to mention the current Covid-fuelled race towards digitisation and “phygitization” for all brands and retailers).
What clients think
Contentsquare offers one of the widest product ranges in terms of functionalities vs. most of the solutions in the market. This seemed to be one of the key purchasing criteria for customers. Marketers are overwhelmingly confronted to thousands of point solutions and there is a clear trend towards preferring one-stop-shop solutions in the Martech space (see marketing technology landscape — way too many point solutions 😱).
To address this need, Contentsquare continuously adds new features, thus answering more and more of their customers’ needs (new features being 100% driven by customer feedback). This not only enhances the product experience but also allows Contentsquare to expand its user base from marketers only to new categories of users (IT, devs, site designers, etc.) => UPSELL UPSELL UPSELL 💸💸💸 ?
Diving into topline performance, we expected to see the following: a long sales cycle as for most B2B SaaS companies focused on large accounts, a ~6 figure ACV, and as a result of this seemingly “nice-to-have” space a relatively high churn and some difficulty in upselling clients. Looking at usage metrics, we quickly understood how wrong we were. For users, Contentsquare is a must-have tool. Connections per user were skyrocketing and users were definitely sticky. Current users even acted as ambassadors of the solution in their companies and ecosystem.
While we were looking at Contentsquare as this nice tool of optimisation, customers were using it on a ROI approach. Conversion increases are seen as a result of changes conducted thanks to Contentsquare. With Contentsquare having developed a range of new features to offer alerts, site zone qualification, recommendations, event-triggered analyses etc. Contentsquare clearly became in the eye of clients a must-have to understand and quantify the impact on conversion of each website/app evolution.
Team
Most investors value experience, with a choice to rather trust serial entrepreneurs (with successes or failures in the past) rather than first-timers. While this may be a great way to track great executives that would have built on their previous journeys, most great companies are still found by first-time entrepreneurs. In our experience, serial entrepreneurs seem to take faster routes to success or failure (vs. first-timers), but serial entrepreneurship does not seem to be the most critical factor to success.
Jonathan Cherki is a first-time entrepreneur, a passionate one, who managed to build a remarkable team doing two things, (i) retaining first key employees (as long as he could) while (ii) strengthening the team with new experienced executives. Achieving both in tandem is not that frequent.
One of the reasons that might explain Contentsquare’s success is the corporate culture instilled by Jonathan, which drives the whole company, from top management to every team in Contentsquare. Jonathan and his team managed to retain a culture driven by passion, ambition and team spirit. The acquisition (and integration) of Clicktale, one of Contentsquare’s key competitors, would not have been such a success without this great leadership and corporate culture! 🦄
