By Dan Primack
September 27, 2011

Do corporate salespeople need a new type of email? A new start-up says “Yes!”

Yesware came out of stealth mode today, offering a cloud-based email productivity solution for salespeople. It also formally announced a small round of seed funding from Google Ventures and Foundry Group. So I spent some time on the phone with company founder and CEO Matthew Bellows, to understand why salespeople need better apps. What follows is an edited transcript of our conversation.

Fortune: Why did you launch Yesware?

Bellows: The basic idea was inspired by my experience as a sales guy and running a sales team. I spent so much of my time asking my guys to update their CRMs, so that they could report it to me and I could report it to the board. It became frustrating not only for me, but for them too – which led to a ‘garbage in, garbage out’ situation.

Even when they got to it, I felt terrible. These were hardworking guys who should have been getting clients, not doing data entry. We were using Salesforce (CRM), but we started looking at other CRMs to see if they had a better solution. They didn’t.

Sales guys live in email. Their data is in email. Their contracts, and redlined contracts, are in email. But it’s isolated from the rest of the organization – because the enterprise doesn’t have access to the stuff in Gmail accounts of .PDF files. It was baffling to me that salespeople use generic email tools whereas other types of professionals have highly-toned tools.

So that’s the idea: Give salespeople tools optimized to do their jobs, and then extract out of that information for the enterprise.

Your initial product is focused on Gmail. Will you expand to Outlook Exchange?

There are about four million businesses on Gmail, which is a reasonable-sized market but we won’t be Gmail only forever. We will definitely do Outlook Exchange, since that’s the other 97% of the market and we need to be there. We chose Google Apps and Gmail as the launch platform because it’s a great testing environment. Once we get the feature set really right, then we’ll expand.

One of your new investors is Google Ventures, whose team happens to feature the original creator of Gmail. How important has that type of expertise been so far?

It was a fantastic thing to be able to get Google Ventures on our team. They really distinguish themselves among VCs by having a whole staff of people who are experts in their fields. People like Braden Kowitz in UI design or David Krane in PR. And, as you say, they have built the products and know intimately how they function. They treat us like a portfolio company – not doing anything weird or pulling any Google (GOOG) strings – but have been super-helpful. 

You had a regulatory filing in April showing a bit less than $1 million raised. Is that this round?

Yes. We never announced back then because we wanted to wait until the product was actually being used by salespeople. I had a small heart attack when I saw you announced it, but things worked out okay – and we topped off the round with a total of $1 million.

What is your near-term plan for additional funding?

We’ll be raising a Series A later this year that we plan to close by the holidays. Probably in the $4 million range.

Consumer apps just go into the app store, but don’t you need a real marketing team for an enterprise app? And maybe people to train users?

To date we haven’t done any marketing, it’s just been word of mouth. The product is free to use for individuals, and we’ve seen a lot of viral spread among sales colleagues. We will need to have some marketing, so that we can look at a sales team, identify the hot spots – the people using it – and then say to the VP of sales, “Hey, a few of your guys are using it, don’t you want your entire group using it? And we charge for that.

What if they all sign up individually for free?

We’re totally happy if they all sign up. At some point we might offer a pro version with extra features, but we aren’t there yet.

The main way we earn revenue is by giving an enterprise the ability to see reports about how salespeople conversations are going, whose emails are getting opened or links getting clicked. Plus they can create a team library of templates they can share so that all salespeople are speaking on the same page. Or if there’s a breaking event or product launch, the marketing department doesn’t have to put information on a wiki no one really sees. That’s our basic value proposition.

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