When I originally posted this piece I never dreamed that other competitors like VINSolutions would use it to slam DealerSocket. I hate smoke but I hate fakers even more: If you are not considering iMagicLab the only other real CRM in our industry that comes close is DealerSocket (mind you I don't think they come close to us). They have a real company with real vision and although I don't believe in their current plans I would buy them anyday before I thought about VINSolutions. VIN is really the only CRM in our space that delivers nearly nothing to the marketplace. Just my opinion but I'd love to face off against them to prove it :)
It's funny that today I write about a competitor on this BLOG because normally all I do is bash the Obama Administration. Since Barak is getting his teleprompters fixed today, I figured I had time to talk about the curse of the venture capitalist and how it affects businesses like DealerSocket (or Dealer Socket, I am never really sure if there is supposed to be a space between the words).
For those of you who don't follow the CRM business and more specifically the CRM business targeting car dealers, the players move and disappear as fast as a Hollywood starlet with a hit song. Seems every year or two some big money comes into a company like DealerSocket or BZ Results, they con a lot of dealers into buying old stale technology before selling the company to the highest bidder. Then, true to form, the new owner see's the smoke and mirrors and lets it wither on the vine until the revenue can be transferred to the next acquisition. This cycle has hit every CRM company in our space and even the good firms like AVV and Autobase have not been spared: Sold to "professional investors" and ruined.
Enter DealerSocket, or Dealer Socket, who's ample "investor" money is today buying every salesperson and advertisement they can lay their checkbook on. Nevermind that they haven't made a significant technology improvement since Clinton was President, their Microsoft-based product has signed more dealers to the program in the past 6 months than they can handle (according to a well placed spy I have in their management team) and is fast moving to surpass the big guys on promises unfulfilled and dissatisfied customers.
Here's where the rub is: Explosive sales targets and the mentality to sell at "any cost" does not come from technology founders, it's the profiteers or the venture capitalists that push for this. I've been there and I'm sure Jonathan Ord and the other founders of DealerSocket heard lines like "You need to ramp up sales and act like a billion dollar company" or "The Board feels that you should take any deal the locks a competitor out regardless of profit". It's not the way you build a business, not the way you built a solid reputation and in the end I promise the only people that will be happy will be the "professional" investors. Did we not learn anything from the Wall Street fiasco? It's sad that dealers will have to change their CRM again because some VC needed a new Ferrari.
So, why am I writing about this? Am I looking for a competitive slam here? No, I think it's imperative that where possible we blow the smoke away and see the truth (besides they'll be sold soon). DealerSocket just hired the ENTIRE sales team from the last failed CRM company in our space, HigherGear, and have begun to use the same tired lies and dishonesty that Higher Gear made famous during their short time fleecing dealers. When will dealers learn? When will they pick the best technology over the best dinner and party at NADA?
P.S. The headline asks how we can fix DealerSocket and the answer is clear: Reduce spending on salespeople and kick the VC's out. Then, after terminating all the liars-for-hire on their payroll they can focus on building the best software they can and making dealers happy. Not rocket science really but for those who only care about the money made when a CRM company changes hands it's an unnecessary distraction.