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How this sales startup is using GPT-3 tech to boost lead qualification

Outreach CEO Manny Medina. (GeekWire File Photo / Dan DeLong)

The economic slowdown and tech layoffs have dealt a double blow to enterprise sales teams.

Outreach CEO Manny Medina thinks AI can help.

The Seattle startup is testing a new feature called Smart Email Assist, an AI tool powered by OpenAI’s GPT-3 model that spits out a draft email to a potential customer based on prior exchanges between the buyer and seller.

Medina explained that the new feature lets sellers automate their initial outreach to potential buyers, allowing them to address qualifying questions before the sales rep fully engages. He added that this automated exchange helps the rep glean insights into the customer’s budget, decision-making authority and pain points.

It’s similar to what Microsoft unveiled this month for its Viva Sales platform. The tech giant, a large investor in OpenAI, is also using GPT tech to auto-suggest emails for sales reps.

One of the challenges of working with GPT has been figuring out the unit economics, Medina said, noting that the technology is not cheap.

Outreach is not releasing pricing information for Smart Email Assist until its debut at the company’s Explore+ event in March.

Other Seattle-area startups and entrepreneurs are also leveraging GPT to enhance products.

Seattle legal tech startup Lexion infused GPT into its Microsoft Word plug-in to suggest edits and create text summaries for legal documents. Seattle entrepreneur and software developer Patrick Husting recently introduced Ghostwriter, a Word add-on that produces a story from user input.

Outreach’s new email generator is rolling out as mass tech layoffs have disproportionately affected sales teams, accounting for around 20% of the total cuts, according to some reports. At the same time, many businesses are slowing their spending, making it harder for the remaining sales reps to locate willing buyers.

Due to the layoffs, Outreach sales have taken a hit, as it operates on a per-user basis, Medina said. However, the tighter spending climate has driven sales reps to rely more heavily on the startup’s tools for buyer qualification, offsetting some of that loss in demand, he added.

Outreach, launched in 2014, has more than 5,500 clients including Tableau, Okta and DocuSign. The startup aims to achieve profitability by the end of the year, Medina said. The company laid off 5% of its staff in August and now has a workforce of about 1,100 people.

Outreach became a unicorn in 2019 when it raised $114 million. Its valuation has more than quadrupled since then, including two additional fundraising rounds in 2020 and 2021. Total funding to-date is nearly $500 million.

The company is backed by Sands Capital, Salesforce Ventures, Operator Collective, Lone Pine Capital, Spark Capital, Meritech Capital Partners, Trinity Ventures, Mayfield, and Sapphire Ventures.

Outreach will only consider a public offering when market conditions are favorable to firms of similar size and business model, Medina said.

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