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How Qstream Uses Neuroscience, Data And Mobile To Improve Sales Productivity

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A Series of Forbes Insights Profiles of Business Leaders Changing the Business landscape:  Duncan Lennox, Co-Founder and CEO, Qstream

 Recent research reveals that 56% of sales teams are expected to hit growth goals that are at least 20% higher than last year. No wonder organizations are continuing to invest more and more in productivity solutions, spending some $20,000 per sales rep per year. Yet only half of these organizations say they have the means to adequately measure the results of all of this activity and investment.  Could neuroscience and medical research be the answer to the sales productivity challenge?

That’s what the folks at Qstream believe. The innovative Boston-based company combines, mobile, science and software in a simple to use app that they claim is helping its customers, including many of the world’s top brands, outperform their peers by up to three times in average annual revenue growth.

Qstream positions itself as the only sales productivity solution whose effectiveness has been clinically proven in rigorous scientific trials to enhance sales capabilities and durably change behaviors with impact to the bottom line. They do this by letting sales reps participate in 3-minute  challenge competitions pushed to their smartphone or mobile device every few days. Then the app’s analytics engine continuously synthesizes millions of data points into real-time insights providing its users with personalized coaching actions.

“We sell a sales capabilities platform into the salesforces of the world's largest brands. And what we're offering them is a platform that allows them to measure sales force capabilities, in near real-time, in a science-based and data-driven way. Are they effective as salespeople, can they add value when they're out talking to customers and prospects? And we do all of that by having the sales rep essentially practice these challenge-based scenarios in three minutes a day on their phone,” says Duncan Lennox, Qstream’s Co-Founder and CEO.

Science is fundamental to the service. Lennox’s co-founder, Dr. B. Price Kerfoot, is a Harvard Medical School professor who spent the last ten years doing clinical research into the neuroscience of behavior change.  He was teaching at Harvard Medical School, and he knew he had some of the brightest, most motivated students in the world, but decided to ask the question—“are they remembering most of what I'm teaching them?"

To no one’s surprise he discovered the answer is no. As a physician and a scientist he decided to look at the problem by actually measuring what happens in the brain using FMRI technology to watch the processes that take place in the brain when you're remembering something, when we're trying to establish patterns and change behaviors.

Through more than 20 randomized controlled trials, which he conducted to the same level of rigor as a clinical drug trial, he developed and refined this methodology. Lennox got involved when Harvard wanted to take the methodology and spin it out and make it available to the broader world, which would later be commercialized as Qstream.

“I've been doing enterprise software for almost 25 years and I've never seen anything in the technology industry that's literally backed by proven science in terms of its effect on us. What we've then learned over the years is that the ability to practice scenarios in three minutes a day on your phone has enormous impact. The reps are essentially playing a game, they're competing against each other and scoring points, getting onto leaderboards, while the system is adapting uniquely to them. On top of that the data that we gather and the insights we can generate through our analytics technology is actually more valuable to sales leadership and senior leadership in these organizations that we work with. For the first time, they now have actual data on the capabilities of their salesforce and how to address any potential problems,” says Lennox.

The Qstream application can be integrated into CRM systems such as Salesforce.com, so data travels in both directions. “Now you've got this new feed, this real-time capability feed that's coming in as well that you can put into the mix,” says Lennox.

The company came to market with the product in the middle of 2011 and has more than doubled its revenues every year in those five years. Lennox won’t divulge exact numbers today, but he expects to continue on that trajectory going forward. With more than 80 employees, they have over 300 customers using the software. The company initially focused on the life sciences industry to give a focus to their go-to-market strategy on an industry with a large, global distributed sales force. Today they are in more than 60-percent of the top 50 life sciences companies in the world, including 14 of the top 15 pharma firms, and 7 of the top 10 medical device companies.  Early last year they branched out into financial services and the technology sector.

“But the big high profile win for us announced earlier this year was a global multi-year deal for LinkedIn's entire salesforce,” says Lennox.

For a high-growth start-up, the company has been very capital-efficient in how they have built the business. There's only about $8 million in invested capital in the business from Frontline Ventures, Excel Venture Management and Launchpad Venture Group. And most of that only came in about 18 months ago. “We've been very efficient in how we've used that funding and grown to the level that we have with it. Plenty of it is still sitting in the bank, in fact,” says Lennox.  “We've got a model that is working very well. The product works. People love us at solving real problems. So we're investing in getting out there and making sure more and more people know that we exist and that we can help them grow their businesses.”

Dublin born and bred, Lennox grew up in Ireland and started his first company when he was a grad student at the computer science department at the University of Ireland.  I was 23 at the time and wrote one of the first learning management systems in existence in 1994.  We split out a company to commercialize that technology and take it out to the world. And we built that business up to about 3 million people using it in about 40 countries. And initially focused in higher education, but eventually we shifted to the corporate market,” says Lennox.

He then moved to the U.S. to open the U.S. operations. “I was starting to do a lot of work with companies like Apple and Cisco and spending a lot of time in the Bay Area, and it just made sense for me to move here and open the U.S. operation of that company. We had it here for three years, but then we realized and we found that it was just too difficult to manage the eight-hour time difference between a third of the company being here and two-thirds of the company being in Dublin, and so we relocated the U.S. operations in Boston, and that's what brought me to Boston, where I've been now for the last 16 years,” says Lennox.

In 2006 he sold his first company to Avnet for an undisclosed amount and was doing consulting work.  “Lots of people were very kindly offering me jobs, but my standard line had been, ‘I've never had a real job and I'm not about to start now.’ I'm a startup guy, that's what I'm wired to do,” says Lennox.

A friend of Lennox then introduced him to the tech transfer group at Harvard that serves to bring to market and commercialize things that Harvard folks invent out to the world.  "I was told that they've got this professor from the medical school and he's got this idea for behavior change and it's some kind of game, but they weren't sure was there a business there. So they asked me to come in initially just to consult a little bit and give them some views on whether I thought there was an opportunity there,” says Lennox.

Lennox met Dr. Price and they hit it off extremely well, “like a house on fire, as my grandmother would have said. And we just have very similar philosophies about the world and what we wanted to do, and even about education and what we could do for access to education and so forth with technology like this. He's one of my closest friends today, and that was how we got started.”

They put a business plan together and raised $500,000 in seed money in 2008.  Then the financial crisis struck and all additional funding dried up at the time. “It turned out to be the best thing that ever happened to us, because it forced Price and I to really commit to the idea and to figure out how to fund it ourselves if that's what we're going to do. So we put in our own money, a lot of sweat equity and decided to move forward.  On October 1, 2008 we started writing the code for what is now Qstream.”

Lennox attributes much of his success as an entrepreneur to his two mentors—his father and Joe Byrne.  “My father didn't go to college, he didn't even finish high school, but he trained as an auto mechanic and he started his own garage repair business and a gas station. He was very innovative and entrepreneurial. He might not have thought of it that way, but I can look at it now that way.”

Working from an early age at his father’s business taught him a strong customer service ethic.  He pumped gas, cleaned bathrooms, worked the register, washed cars and got exposure to the idea that the business exists to service the customer.  “If you do right by the customer then, all things being equal, good things happen,” says Lennox.

When his father got an Apple II computer to run the back office, he found this little company that had built an accounting package that he bought that he could use and it was written in Applesoft BASIC. “I was nine-years-old and fascinated by all of this, so I went and learned Applesoft BASIC so I could modify the reports stuff for him. So that was my first exposure to, you know, what we now call software engineering, to programming. And that's what kind of got me hooked into this whole computer science thing. So that was a big influence on me.”

Once in college, Lennox went to work for Joe Byrne, an electronic engineer by background and who had been part of the startup team for Apple's manufacturing plant in Cork in Ireland.  Byrne then started his own company creating a clock card for the Apple II. He built a business out of that and then he built an Apple dealership of five dealerships around Ireland.

“I got to go and work for him when I was in college. And I wrote accounting software for him to help pay my way through college. He just went and did this, he built a very successful business. Neither of these were now what we call venture-funded startups, these were classic small businesses, but they were both successful; both built businesses, created jobs, put food on the table for themselves and their families and their employees,” says Lennox.

"I want to be doing something that adds something to the world. I want to add value and then I think we can all get compensated for that value that we've added."

“We've been able to show that value with Qstream. We have a very unique opportunity. We're growing at an incredible rate. We've built an experienced team of people that know how to scale a company. My goal is to build the next billion-dollar company.”

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