Last year, AI -powered sales automation startup 11X appeared at an explosive growth speed.
However, about two dozen sources, including investors and current and former employees, told Tech Crunch that the company had experienced financial struggle, which is largely formed.
Several people in the United States and the UK told Tech Crunch that the situation has become so tough that the 11X lead series B Investor, Anderson Horwatez, may also consider legal proceedings. However, a spokesman for Anderson Horwiots denied such rumors, told Tech Crunch that A16Z was not sue.
11 X -outbound offers an AI boot for cold sales duties, which include identifying possibilities, producing customs messages, and scheduling sales calls. This is one of the AI sales sales in the hot area known as AI Sales Development Representatives, Or AI SDRS.
11 X said, Hassan was founded in 2022 by Skker Million approached 10 million Just two years after the launch, the annual revenue (ARR). It had moved from London to Silicon Valley last July and announced that Million 24 million Series A Benchmark headed in September. Tech Crunch broke the news of A. Million 50 million Series B This month, headed by Anderson Horwiots.
Three current and former 11 -X workers told Tech Crunch that most of its initial consumers have taken advantage of “break clauses” in their sales contracts to stop using the product. According to sources, consumers have faced problems as the emailing product is not working as expected or faces frauds.
There was also some internal drama. Employees describe a difficult, stressful work environment – even for those who embrace the stir culture. He pointed out that of the initial employees Photo published on the occasion of the company’s launch by Tikkarch, Only the CEO, the CEO, the rest.
Fake customer verification
Like many startups, 11 X proudly shows the customer logo on his website that indicates customer verification and is usually shown with the consent of a user.
However, Tech Crunch learned that many logo companies on the 11x website were not the original customers and at least one was threatening legal action.
Zoom Info’s spokesman told Tech Crunch, “We have not allowed them to use our logo in any way, and we are not users.” The logo was not removed until March 6, when sources close to the Tech Crunch questioned about it. But even after this date, the company’s phone continued to repeat the customer’s claim.
The spokesperson said Zoom Info, which offers sales data and automation tools, tried a brief, one -month trial of AI SDR from mid -January to mid -February. “During the pilot, 11X products performed significantly worse than our SDR employees, and after that we did not move forward.”
And yet, since November, we have been claiming as a user in a large number of 11 X channels: in sales calls, on our website, and now on its AI diller. We have demanded the last four months to stop showing our people and counting us as users. ”
According to an email looked at by Zoom Info’s lawyer by a Tech Crunch, Zoom Info’s lawyer is now threatening legal action. The lawyer writes that he sees that “there are numerous legal reasons for the proceedings, but they include fraudulent trade methods, trademark violations, misuse of goodwill, and wrong advertisements.”
Similarly, the air table logo was presented on the 11x website a few weeks ago, and by March 20, the 11X website was still named as “Customer” on the company’s “Manifesto” page. The air table told Tech Crunch that it was no user and never allowed 11x permission to use his logo.
The air table spokesman told Tech Crunch that the air table also launched a “very short” case of this product at the end of last year, and eventually decided that it was not suitable for our business. “” It was never used in production nor joined our sales team. ”
And still until March 21, 11X was still claiming as a user on its website as a user. And another company, who asked not to name, told the Tech Crunch a similar story.
Our research showed, however, some consumers’ claims were legitimate. For example, Pelio and RHO confirmed that they were using 11x products.
11 X insists that “when requested, the mention of any unwanted or false customers was immediately removed on their site and within their products” and when it didn’t happen in “very few cases”, it was “due to human error.”
A creative way of calculating ARR
Meanwhile, at least three employees said they left the company in the company.
For example, there was a 11 -X “Atal,” said a potential user who signed a one -year agreement that was wishing to hold pilot programs. “They were resistant to signing a trial or experimenting with us,” this potential user continued.
Instead, 11X offered users a brake clause, usually in three months, making it easier for consumers to break the contract. The former employees and potential customers said it worked primarily as a trial period.
Former and current employees said that when reporting the annual revenue (ARR), the company did not make a difference between trial periods and long -term consumers. The company will calculate the ARR on a whole year basis.
11 X says it “uses the contractor (car)” while notifying the board, and its investors knew that it had used this matriculation. 11 X says investors reviewed consumer contracts, customer data files and talked to consumers during their duties.
They said that even after using a break clause to eliminate their trials of possibilities and to eliminate their payments, the company continued to count the ARR as these companies were completing the entire year’s contract.
The 11 X spokesperson says the startup offers “free trials” and “the majority of middle market users” qualify for it, but they say some enterprise users have “extreme skills” and customized requirements “with 3 months after 3 months with a 12 -month contract.
Many employees said that the number of companies continuing to rotate rate-to-term were high. “We were losing 70-80 % of consumers who came from the door,” an employee said. The man “looks like he is doing better than that,” he continued.
For example, the company can say that its annual repeated revenue has $ 14 million when, in fact, the number of contracts that approved the three -month trial period was only $ 3 million.
Another former employee said, “When it came to development and Mandla, they massaged the number internally.”
11 X says it has been “the most rotating” for “early colleagues at the end of 2023, but its” ideal customer “has improved to improve products and improve sales. 11 X says its “retention rate is currently 79 %.”
Venture investors say the problem was not necessarily that 11X was using the car to showcase their growth, but that investors expect the opt-up revenue-and customer transfer.
Benchmark says it was provided with transparent updates from 11x, including break clauses, a spokesman told Tech Crunch.
Product Underwhelms
According to at least one current and four former employees, many companies canceled after their trial because they were not happy with the product.
A former employee said some drugs were the reason for consumers that consumers had unrealistic expectations, hoping that 11 X could replace a whole outbound sales team, which could save hundreds of thousands of dollars a year.
The person said that 11 x sales spupal often tells the possibility that in several months, they can expect them to see a massive increase in meetings, demo and phone calls booked due to startup technology.
“The actual results of the amount of automatic emails were disappointing than the meetings,” said a company that tried the product.
11 X says it believes that its product improves the human SDR, but says “performance eventually depends on the user’s input standards.” It also says that it does not guarantee savings or taxes in its sales pitches.
Other consumers complained that 11 x products are frauds or their products will not be loaded at all, the former employee continued. A reviewer Medium Handling the product, he said that it is less efficient and still costs more than its rivals.
“The products barely work,” a former engineer told Tech Crunch. Another employee said that instead, consumers will have to manually check and correct the work, which will defeat 11x products for the purpose of buying first.
In addition, the company sometimes faces billing problems. A customer was billed twice for his three -month trial period. The customer said, “It seemed that they were trying to get some past to us.”
One VC considered investing in Series A, which discovered that Tech did not work well during the process of diligence. The current consumers of 11X told the investor that they were initially satisfied, but after a month of use, the startup’s AI failed to produce effective leads.
Talking about this investor’s experience, a current employee defended the company, saying that consumers need time to adopt 11x work. The person said the company is also trying to find ways to encourage more consumers to stay longer.
Employee Manor
Employees also described the work environment with many employees under the founder-CEO Skker.
Employees were generally expected to work at least 60 hours a week, with heavy pressure to be permanently available, according to the messages shown by employees and tech crunch.
Slack messages shows the consumer where everyone was at 8 pm, before telling employees that the work day began at 9am.
“He does not believe in the holidays,” said a current employee. Another former employee said they are expected to work on weekends and national holidays.
A former employee recalled, “You will have a founder on the slack, maybe three in the morning, saying that ‘it needs to be resolved immediately’.
When employees could not be reached immediately – or if something was gathered – the consumer was known to post his disappointments about a worker called in the General Silk Channel to see everyone, at least two employees remembered.
According to two employees, employees who spoke were at risk of removal.
“There is more below the hood,” said a current employee, citing Skker. “One day, there will be a documentary about this boy. I am sure how much he is.”
11 X says it experienced business because it moved from London to San Francisco last July because employees who could not move did not decide to leave the company. He says his head coal has doubled in a period of time so that 50 timely employees are now involved.
At least one former employee we talked said that he was waiting for a salary for months after his departure.
After leaving, the concern over the backpack has become such a part of the culture that a current employee said that the nearest salary is waiting for the nearest salary before leaving.
“We have received a salary today,” said a current employee. “I am expecting a couple of people to resign on the weekend or Monday.”
Note: This story has been updated to include benchmark comments.