The Best SaaS Product I Ever Saw was built by a Towtruck Company in 2006

tow_truck

Towtruck-as-a-Service in 2007.

In 2002, after joining a former customer in the electronics industry which had raised $30 million, we went through a CRM evaluation.  The VP of Sales and VP of Engineering were at odds over the rate at which we were qualifying customers for production, and it seemed logical that taking the data out of .xls and into a more modern method of analysis would help answer the necessary questions.  Many vendors wanted our business.  Oracle’s presentation included speakers, dim lights, fancy videos, and the first over-the-ear microphone I’d ever seen someone wear in person.  It also came with a ridiculous price, as did all of the other options save for one.

Salesforce.com came with a reasonable pricetag, and even if we failed, we would know quickly, and be able to sign up Oracle or one of the other vendors within half a year.  There was low penalty for failure.  Two years later working for  a private equity fund-of-funds, I turned to Salesforce.com again to build our internal CRM infrastructure.

“Excel is your tool.  Like a hammer for a carpenter.  It is your tool.”  This had been guidance as an analyst starting in investment banking.  I turned to Salesforce.com as a tool – my most recent implementation was just in 2015, and that was in the most challenging industry and cultural dynamic that could be encountered.  I didn’t understand that Salesforce.com was SaaS until in 2004 the team at Emergence Capital approached the fund-of-funds I was with and pitched that a venture capital fund focused on the SaaS space would outperform others.  They defined SaaS – I’d never heard the term before.

“It is going to be possible to buy everything, anything, in the same way you pay for Salesforce.”

They were right.

I was fortunate enough to then spend some time with Internet Capital Group out of Philadelphia.  Their name had been spoken in whispers while working in banking as their market cap crested at astronomical values, before dipping down to reality.  They pivoted to focus on SaaS, which remains their focus as Actua.

Philadelphia is also the home of Milestone Partners, a buyout fund – and they invested in the best SaaS business I ever saw.  United Road Towing (“URT”) did not sell software.  Rather, they were a provider of towing services both to individual locations and to municipalities.  URT had invested heavily in software, and in so doing had built out a SaaS capability that was extraordinary given the timeframe.

In 2006 a URT driver could:

  •  Access their Panasonic Toughbook(TM)
  • Get route guidance to minimize traffic and fuel
  • Optimize loads for outbound and inbound trips to maximize profitability
  • Provide real time input to other drivers – “traffic stinks”, “there are lots of vehicles to tow here”, etc.

The tow truck industry wasn’t ready to be Uber-ized.  The team at URT had developed their capabilities internally.  They didn’t go sell them to other wrecker services.  Instead, they used what they had to dominate their competition.  Now they are the largest provider in the US.  They could use their know how to bid intelligently on large municipal deals.

Maybe now the world would be ready for ‘Towing-as-a-Service’, but at the time it wasn’t. URT didn’t try to force the X-aaS business model onto the rest of the world.  Instead, they just dog-fooded and won their market.  They are still winning today.

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