The company, much like VC-backed competitors Yammer and Jive Software, helps large enterprises establish internal social networking platforms that allow co-workers to follow and interact with each other’s status updates, links, announcements and other shared items, much like on Facebook, Twitter and other social networking sites.
Socialcast focuses on large enterprises, those with 10,000 or more employees. Among its several thousand customers are Avaya, Guitar Center, Philips Global and Turner Broadcaster.
Last week, PE Week Managing Editor Alastair Goldfisher spoke with founder and CEO Tim Young about his company and the funding announcement. For having so many customers, the company remains small. Young says Socialcast employs less than 20 and he still is directly involved in many sales.
Q: Are your customers spending money, or are they still waiting for more economic recovery?
Spending has opened up quite a bit since the end of the third quarter last year. In previous years, when enterprises spent money, they paid for automation. They automated their sales and accounting functions. But we’re seeing a lot more human interface within companies that is taking up a lot of an employee’s time and that can’t be automated. Large enterprises are seeing that and are focusing on social networking software solutions like ours.
Q: So you see a large market with plenty of potential customers, even though Yammer and others are in the same space?
A: I like to think we’re different than Yammer, which focuses on microblogging.
But, yes, the growth in social networking sites has changed how people communicate and it’s changing how enterprises are using social media. Within the next three years, every company on the Fortune 500 will have installed social media software for its employees.
Q: Is the workforce demographic also changing?
Yes. I was born in 1981, so I’m part of Gen Y [roughly those born between 1980 and 2000]. Without a doubt, we believe Socialcast is serving the needs of this new and growing class of employees. The workforce is changing. More Gen Y are entering the workforce and rising in the ranks. Now, many businesses are seeing the value of social networking and giving employees access to improved communication channels. More enterprises are realizing that this type of networking is how stuff gets done.
Q: How are you doing financially?
We were close to reporting a profit, but we’re aggressively focused on new market penetration and close. I don’t anticipate raising another round anytime soon.
Q: With the new funding, Sonja Hoel Perkins of Menlo Ventures has joined Om Malik of True Ventures on the board. What type of advice has Om given you since he joined the board last year?
He’s not just a partner at True, he’s also the founder of his own startup [GigaOm], so he knows the thrills and chills of launching a startup. He’s given me great guidance on how to grow a company and what to expect. It’s been a great asset to have him.