084: Mike Muhney | The Godfather of the $20 Billion Relationship Management Software Industry

rsz_smart_business_revolution_podcast_artwork_redThe year was 1986.  Mike Muhney’s new startup was on the brink of failure.

He and his co-founder were down to their last $15,000 and they had just decided they had to pull the plug on the software product they had been developing for the previous 9 months.

They were ready to go back to the corporate world, give up on their dream of being entrepreneurs and running their own company.

But before they did, they decided to go back to the drawing board one last time. They did one 4-hour long brainstorming session, during which they came up with a totally different idea, a complete pivot from what they were Mike Muhneypursuing.

The only hitch was, their angel investor was flying in from Boston to Dallas a few weeks later, and they would have to convince him of the new idea first.

So flash forward a few weeks and the investor flies in and Mike and his co-founder take the investor out to lunch.

He and his co-founder explain that they had nothing to show for $85K of the angel investor’s money. They tell him that their previous idea was dead in the water.

But they said they had a brand new idea for a brand new type of software – something that had never been done before.

It was called relationship management software. Also know as CRM or customer relationship management software.

It was a simple idea – software that allows you to manage your relationships, make sure your relationships don’t go cold, and increase income from your contacts and your network.

I’ll let Mike tell you in this interview what the investor said during that lunch, but long story short, Mike’s idea became ACT! software and was the first of its kind and invented an entire new software category.

Today, CRM software is a $20 billion dollar industry.

In fact, major public companies like Salesforce and NetSuite are built on providing CRM Software and other billion-dollar software companies like Microsoft, Oracle and SAP all provide CRM solutions.

Years ago, this software was used just by sales people.

Today, as our economy has changed and people have become less likely to work in one company for their entire career, more people have come to use the software.

Newer companies like Contactually (review of how I use Contactually here), Insightly, and Muhney’s own Vipor CRM are helping professionals to manage their relationships, keep in touch with people in their network, and most importantly, increase their revenue and income.

In this interview, Mike shares the story of how CRM software was invented and explains how using a software to keep track of your relationships may be one of the wisest things you can do.

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Transcript of Interview:

Transcribed by GMR Transcription