Why We Invested in Lantern, the Platform Giving B2B SaaS the Fidelity of Customer Data Platforms
As a former CRO, I’ve seen first-hand that data ingestion is the fatal faltering point for most SaaS tools focused on customer success and sales use cases.
In my past life as a Chief Revenue Officer, I regularly preached the gospel about retention being the cheapest form of growth. If we could achieve 125% net dollar retention, I reminded my team, we could theoretically never sign another new customer again and still grow 25% year-over-year—pretty incredible! In today’s market climate, I’m not alone with my enthusiasm: in an environment where every company is being pushed to get more efficient and prove a path to profitability wildly earlier than ever before, the concept of net retention has become the talk of the town.
Much to my chagrin, though, the playbook for reducing churn and driving growth from an installed base of customers often relies heavily on spreadsheets and elbow grease despite companies having access to customer success software that promises an easier way.
Today, we couldn’t be more excited to introduce Lantern and to announce its $6.8 million seed round we led with participation from Moxxie Ventures, Coalition Operators, 8-Bit Capital, and strategic angels such as Adam Evans, David Fisher, Siqi Chen, and Immad Akhund. Lantern’s Founder and CEO David Bromberg will undoubtedly revolutionize the way that sales and customer success teams take control of their installed bases of customers but far more importantly, will challenge what’s possible in the world of B2B Customer Data Platforms and make the entire SaaS enablement ecosystem stronger as a result.
The typical problem with customer success SaaS solutions
During my tenure at Sailthru, I inherited, fired and hired a variety of customer success SaaS solutions.
The common theme was that those software solutions helped with day-to-day account management, but not with our ability to scale our net retention optimization levers. The set of incumbent customer success solutions all share one common obstacle: they struggle with data ingestion.
The journey of cycling through too-similar non-solutions went something like this:
- Solution 1 - inherited a contract with Solution 1, only to realize that the software had trouble ingesting our product data and was thus pretty useless for volume alerting, etc. Terminated contract with no plan to replace it.
- Solution 2 - new head of CS begs me to try another CS platform; I agree on the condition that we negotiate a deal whereby we don’t pay Solution 2 a single dollar until they’ve successfully ingested all of our data into their platform. Fast forward nine months later, we still had not paid Solution 2. This company did ultimately get us live, but we still found ourselves manually marrying internal data with their exports.
- Ongoing research - despite two unsuccessful attempts with the incumbent solutions, I remained curious about this space and studied newer entrants to this market. In talking to their customers, I heard the same feedback: these tools are “garbage in, garbage out,” and even the newest players to the game really struggle to build a 360-degree picture of the customer due to data ingestion challenges.
Don’t get me wrong, these “legacy” platforms had their merits; the customer view they offered was far more digestible and actionable than what one would find in Salesforce. But quarter in and quarter out, my team had to run manual regression analysis to understand the key drivers of customer stickiness, to devise churn forecasts from manual line-by-line reviews of every account, to map out white space opportunities on a manual 2x2 of NPS and expansion potential, etc.
The solution David created with Lantern: data that’s more than the sum of its parts
I remember exactly where I was sitting when I met David for a Zoom introduction to his company Lantern in the fall of last year, predominantly because it was the first time in my then three years on the VC side of the table where I hung up a first call and thought, “I have to invest in this company.”
At Primary we talk extensively about the importance of founders being a “learning machine” in their category, and David’s story is a compelling one. As a data analyst at Menlo Security, he was tasked with implementing Solution 1, and was pained by the process of doing so. He grew convinced that he could figure out a way to leverage Menlo’s data in a scalable way to produce even more compelling customer predictions and insights, and ultimately did just that. Throughout our process of getting to know each other, I was in awe of how much David taught me.
But this story is about so much more than net retention. When I saw my first Lantern demo, I immediately appreciated how David’s narrative was heavily focused on the platform’s ability to easily ingest data from a variety of sources—its customers’ product data, Zendesk, and so forth. With that data nicely intact, David explained, Lantern could unleash a world of use cases ranging from champion chasing (i.e. understanding when power users leave their current jobs) to automated ticket sentiment analysis and customer churn or upsell predictions. Upon seeing the product, I said to David, “this almost feels more like a customer data platform (CDP) for B2B than it does a CS solution,” to which he said, “that’s exactly how I think of it!” And that was my aha moment. Our GTM thesis at Primary is focused on the combination of a data moat and a novel workflow, and Lantern was a slam dunk for both.
Consumer companies regularly talk about the power of CDPs, but B2B companies have been laggards in adopting such technologies. Salesforce is an incredibly powerful platform, but it’s still a CRM, not a CDP. The lack of B2B CDP adoption not only explains some of the challenges faced by the aforementioned CS platforms, but has also proven to be an implementation blocker for a number of other B2B SaaS categories (e.g. the recent “CRM for PLG” wave). Sure, Lantern can offer a host of its own recipes and plays on top of the customer data but way more importantly, its novel approach to data ingestion will allow other platforms to take advantage of its unparalleled single view of the customer. This is where we see the solution becoming truly transformative for not just Lantern customers but for the advancement of the entire SaaS enablement ecosystem. We are excited to build alongside David and his growing team and to empower every B2B SaaS company to do more with less when it comes to growing their installed base of customers.