A couple of industry heavy weights have pooled their talents and assembled $8 million in funding resources to launch Aviso, a new kind of analytics company this week. K.V. Rao, co-founder and CEO, and Andrew Abrahams, co-founder and CTO, are Ph.D. scientists taking on risk assessment for modern enterprises. Rao, has a string of successful tech startups including founding Zuora, the subscription commerce company. Abrahams recently retired from JPMorgan Chase where he was “Firm-wide Head of Quantitative Research and Model Oversight, reporting to the firm’s CRO,” according to Jeff Yoshimura, the company’s CMO. Believe me that’s just the tip of two rather large icebergs.
These two talents raised an A series led by Shasta Ventures; First Round Capital; Cowboy Ventures; Bloomberg Beta; Subrah Iyar, founder and CEO of WebEx; Roger Sippl, founder and CEO of Informix and Vantive; Dave Hersh, founding CEO of Jive Software; and Ron Gill, CFO of NetSuite.
So what makes Aviso special?
First off, I like the way they were in stealth mode for two years while they made version one bullet proof. They wouldn’t even give me a briefing under NDA. Second, their initial customer list reflects a bunch of thinkers that want more advanced analytics and are willing to roll up their sleeves to work on a good idea. They include: RingCentral (RNG), Saba Software (SABA), FireEye (FEYE), Damballa, Replicon, and Zuora.
Third is the approach to the product itself. While most analytics packages work with a limited dataset that has to be refined and scrubbed, Aviso takes a different approach. Reflecting the founders’ interest in a broader range of influences on business results, Aviso uses a portfolio model that can just as easily interrogate company-wide data as it can also use market data about general economic trends before it serves up its results.
So, for example, if I understand what’s going on, a sales forecast should be primarily based on sales data that a company’s sales team collects. But it ought to also reflect what’s knowable about the general economy, but often not included. If for instance, the economy is heading for the exits, say job creation is down, interest rates and inflation are up, and just for fun, new housing starts are going sideways, how secure do you think your 80 percent probability sales orders are six weeks before the close of the quarter? More importantly, which of your deals conceals hidden risk? Hmmm? That’s the kind of scenario that is totally resistant to sleeping pills.
As you might expect, gathering all of that outside data might import a great deal of noise into your analytics process and noise can be the enemy of a strong signal. This has been the bane of data scientists since the earth cooled. But it’s also a problem the founders are quite familiar with — you don’t run Quantitative Research and Model Oversight at JPMorgan Chase unless you have a strategy for dealing with noisy data.
Rao tells me that back analysis of old data plus the work they did in beta shows great promise and I believe him. The immediate goal is to focus on revenue forecasting with what they are calling Total Revenue Intelligence to provide insights into all types of revenue streams in an organization. This tells me Aviso will be useful in both conventional and subscription companies but most especially in the years ahead in companies that are supporting a hybrid business model consisting of their traditional business and a new-fangled subscription business.
Think about it, one of the hardest things in business is changing your business model especially from something that brings in whales to something that uses a big net to capture sardines. Wall Street doesn’t like downside revenue surprises of the kind that early subscription businesses can provide. So a portfolio strategy that identifies risk across a company’s whole revenue stream makes a lot of sense. We’ll see if Aviso is the tool to provide it. So far, the early promise seems to be panning out.
(Cross-posted @ Beagle Research, LLC)