Adam Marchick, CEO of mobile marketing automation provider Kahuna, says companies are failing miserably at their goal to send the right marketing messages to the right people at the right time. He likens push notifications, a hugely popular method for reaching customers, to the early days of email itself.
"Push is where email was 12 yrs ago. It’s like the Hotmail days. Priority inbox, white and black listing – none of that exists for push," he says. "Push notifications are relatively new. I've got to believe it will ultimately mimic email's sophistication. Kahuna is helping bring it there."
Marchick, a Stanford University grad who did stints at Oracle and Facebook and also spent time as a venture capitalist, has convinced plenty of high-profile investors. The list of those who contributed to Kahuna's $2 million seed funding round in October includes: SoftTech VC, Costanoa Venture Capital, Tim Kendall (head of product management at Pinterest and former director of monetization at Facebook), BloomReach CEO Raj De Datta and Lee Linden (head of commerce at Facebook).
Today the company announced it has secured $11 million in Series A funding from Sequoia Capital, with Sequoia partner Omar Hamoui, the founder of AdMob, joining Kahuna’s board of directors. As if that wasn't enough to flag it as a young company to watch, the Mountain View, Calif.-based startup also announced two new tools for its flagship product and a new partnership.
Engaging Mobile Consumers
Marchick and Jacob Taylor, a co-founder of SugarCRM, founded Kahuna in 2012. Last October the company introduced its first product, a Customer Engagement Engine that analyzes consumers' Web and mobile behavior and then helps companies send automated marketing messages based on that behavior. The platform is available for iOS, Android and the mobile Web. Early customers include 1-800-Flowers, the New England Patriots and Yahoo.
The product was inspired by the founders' conversations with retailers and technology companies, who Marchick says were largely just blasting their customers with email promotions and hoping for the best. "The current state of push marketing is 'when in doubt, send it out.' The engagement engine is designed to be the opposite of that. It's not about sending 10 messages, but about sending the one best one," he explains.
The product was tough to build because servers at Apple and Google, two of the largest "funnels" for push messaging, "are built by design to not have lot of reporting," Marchick says, noting that "it required a lot of work to get the answers our marketers needed from those systems."
Kahuna's newest tool, AtoE Testing, is designed to improve upon A/B testing, a practice marketers use to compare the effectiveness of their campaigns. AtoE Testing will allow marketers to simultaneously test five different messages against a control group to determine which messages resonate with consumers, Marchick says.
Push Response Testing, also introduced today, shows marketers how their campaigns are received by consumers by tracking several inputs, including reactions to every push message, and then running a proprietary algorithm to offer visibility into how audiences respond to campaigns.
"In talking to some of the biggest push senders, we found they had no idea how many customers liked their messages, how many converted because of them or how many uninstalled an app because of them," Marchick says. "If you do not understand every response, you can't run a marketing campaign."
In addition to the $11 million funding round and its two new tools, Kahuna today announced a partnership with mobile commerce platform provider Branding Brand, a company whose client roster includes retail brands like American Eagle Outfitters, Crate & Barrel, Ralph Lauren and Sephora.
"Kahuna has built unique technology that has 'wow' factor when marketers use it. We are rolling this out with a dozen clients to begin, but I see no reason that every one of our 250 clients wouldn’t benefit from this powerful technology," said Chris Mason, CEO of Branding Brand, in a statement.
Kahuna has a "big vision" around bringing its key tenets, understanding and engagement, to channels other than push notification, Marchick says.
"Push is just the first channel. We are interested in a bunch more, some of which are already in production," he says. "Mobile marketing is so new, and there is so much opportunity. I've got about nine years' worth of backlogged ideas."
Quick Facts about Kahuna
Co-founders: Adam Marchick and Jacob Taylor
HQ: Mountain View, Calif.
Funding: $13 million, with investors including Sequoia Capital, SoftTech VC, Costanoa Venture Capital, BloomReach CEO Raj De Datta.
Flagship Product: Customer Engagement Engine
Product Category: Mobile Marketing Automation
Customers: 1-800-Flowers, New England Patriots, Yahoo
Ann All is the editor of Enterprise Apps Today and eSecurity Planet. She has covered business and technology for more than a decade, writing about everything from business intelligence to virtualization.