Last year, 11 times the AI-powered sales automation startup appeared to be on an explosive growth trajectory.
But nearly twenty sources, including investors, current and former employees, told TechCrunch that the company has experienced financial struggles, mainly because of its own production.
Many in the U.S. and the UK told TechCrunch that the situation has become so vulnerable that 11 times the Series B investor Andreessen Horowitz may even be considering legal action. However, a spokesman for Andreessen Horowitz stressed the denial of the rumble and told TechCrunch A16Z that it was not prosecuted.
11 times provides AI robots for outbound cold sales responsibilities, including identifying potential customers, creating custom messages and scheduling sales calls. It is one of many AI startups in a popular area called AI sales development representatives, Or AI SDR.
11 times founded by Hasan Sukkar in 2022 Nearly $10 million Two years after release, in annual repeat revenue (ARR). Last July, it moved from London to Silicon Valley, announcing $24 million Series A September is led by Benchmark. TechCrunch breaks $50 million Series B Leaded by Andreessen Horowitz. (Basic declined to comment.)
Current and first 11 times workers told TechCrunch that most of its early customers took advantage of the “interruption clause” in their sales contracts to use the product to stop using it. Sources say the problems faced by customers, such as email products, are not working properly or hallucinating.
There are also some internal dramas. Employees describe a difficult and stressful work environment, even for those who embrace the noisy culture. They pointed out that in early employees Photos posted by TechCrunch at the company’s press conference, Only CEO Sukkar still exists.
Fake customer approval
Like many startups, 11 times proudly display the customer logo on their website, which represents customer approval, usually with the customer’s consent.
However, TechCrunch learned that multiple companies using the logo on the 11x website are not actual customers and that at least one threatens legal action.
A Zoominfo spokesperson told TechCrunch: “We did not allow them to use our logo, we are not customers.” The logo was not removed until after March 6, when a source close to TechCrunch asked about it. But even after that date, the company’s telephone AI agent continued to repeat customer claims.
Zoominfo, which provides sales data and automation tools, conducted a brief one-month trial of AI SDR, a spokesperson said. “While the pilot, the 11x product performed much worse than our SDR staff, and we haven’t moved forward since.”
However, “Since November, 11 times have claimed we are customers in many channels: on sales phones, on websites, and even on their AI dialers. We have asked them to stop displaying our logos and mistakenly treat us as customers,” a spokesperson said.
According to an email seen by Zoominfo’s TechCrunch, Zoominfo’s attorneys are now threatening legal action. The lawyer wrote that he believes “several legal litigation factors, including but not limited to deceptive trade practices, trademark infringement, misappropriation of goodwill and false advertising.”
Similarly, until a few weeks ago, the Airtable logo had been on the 11x website, and as of March 20, the 11x website still named Airtable as the “customer” on the company’s “Proclamation” page. Airtable told TechCrunch that this is not a customer and has never allowed 11 times the license to use its logo.
Airtable also conducted a “very brief” trial of the product late last year and “finally decided that it wasn’t suitable for our business,” an Airtable spokesperson told TechCrunch. “It has never been used in production and has never been introduced to our sales team.”
However, even as of March 21, there are still 11 times the claim to be a customer on its website. Another company that asked not to be named told TechCrunch a similar story.
However, our research does show that some clients claim to be legal. For example, Pleo and Rho confirmed that they are using the 11x product.
11 times insisted that it “immediately deleted any unwanted or inaccurate customer mentions on its website”, in which, when requested, it was “due to human error, minority cases.”
An innovative way to calculate ARR
Meanwhile, at least three employees said they left the company because they believed the company was considered a dark strategy in the company.
One potential client said, for example, 11 times is “firm” and hopes to carry out the pilot program to sign a one-year contract. “They resist signing any kind of trial or letting us experiment,” the prospect continued.
Instead, 11 times provides a rest clause for the client, which usually allows the client to easily breach the contract. These former employees and potential clients say it’s basically a trial period.
But when reporting annual recurring revenue (ARR), the company did not distinguish between probationary and long-term clients, former and current employees said. The company will calculate ARR based on the full year.
11 times said it “used the contract’s ARR (Carr)” when reporting to the board, and its investors knew it used the indicator. 11 times said investors reviewed client contracts, client data files and spoke to clients during due diligence.
The people said the company continued to calculate ARR even after the prospect uses the interruption clause to end the trial and their payments, as if the companies were completing full-year contracts.
The 11 times spokesman said the startup does offer a “free trial” and that “most intermediate market customers” are eligible for this, but said some enterprise customers with “highly specialized” and customization needs “need to exit a contract that takes 12 months after three months.”
Several employees said the churn rate – the number of companies that no longer last long is high. “We lost 70-80% of our customers through the door,” one employee said. This made 11 times “looks better than before.”
For example, the company might say that the company has annual recurring revenue of $14 million, when in fact, the number of contracts that passed the three-month trial period totaled about $3 million.
“They absolutely massage numbers internally when it comes to growth and churn,” another former employee said.
11 times said its “highest churn” occurred in the “initial population at the end of 2023”, but improvements in the product and sales to its “ideal customers” increased retention rates. 11 times means “retention is currently 79%.
Venture capitalists say the problem is not necessarily 11 times utilizing Carr to show its growth, but investors hope startups can disclose potential exit revenue and customer churn.
Product at a loss
According to at least one current and four former employees, many companies were canceled after trial due to dissatisfaction with the product.
A former employee said some people hope that 11 times will replace the entire outbound sales team and save hundreds of thousands of dollars a year because their customers’ expectations are unrealistic.
The person said 11 times salespeople often tell the prospect that after a few months, due to the startup’s technology, they’ll see a considerable increase in the number of meetings, presentations and calls booked, although employees think it’s unrealistic.
“The actual results of automated emails with scheduled meetings were disappointing,” said a company trying the product.
11 times said it believes its products perform better than human SDRs, but said “performance ultimately depends on the quality of user input.” It also says it cannot guarantee savings or revenue from its sales input.
The former employee continued that other customers complained that the 11x product was hallucinating or that the product wouldn’t load at all. A reviewer Medium The product pierced, saying it works much worse, but it costs far more than its competitors.
“These products are hardly working,” a former engineer told TechCrunch. Instead, customers will have to manually check and correct the work, first defeating the purpose of buying 11 times the product, another employee said.
Additionally, the company sometimes encounters billing problems. A client was charged twice during a three-month trial period. “It seems like they kind of want us out of the way,” the client said.
A venture capital investing in Series A found that the technology was not working well during the due diligence process. 11 times existing customers told investors that they were initially satisfied, but after a month of use, the startup’s AI failed to generate effective clues.
A current employee defended the investor’s experience and said it took clients time to adapt to the 11-fold way of working. The company is also trying to find ways to encourage more customers to live longer, the person said.
Employee churn
The employees also described a difficult working environment, with a large number of employees losing a lot of employees under the leadership of founder Ceo Sukkar.
According to employees and news seen by TechCrunch, employees are usually expected to work at least 60 hours a week and are under constant stress.
Slack message shows Sukkar asks everyone at 8 pm, after telling employees that workdays start at 9 a.m.
“He doesn’t believe people are on vacation,” said one current employee. Another former employee said they are expected to work on weekends and national holidays, too.
“You’ll have Slack’s founder on Slack, maybe at three in the morning and send a message saying ‘This needs to be resolved urgently,'” one former employee recalled.
When it is known that when it is impossible to reach the staff immediately – Sukkar posted a frustration for the said workers in the general Slack channel, and everyone recalls at least two employees.
Two employees said the loudly clamored employees threatened to be fired.
“There’s a lot more under the hood,” said a current employee. “One day, there will be a documentary about this guy. I believe this is his scandal.”
11 times said it experienced turnover because employees who could not move decided to leave the company because it moved from London to San Francisco in July last year. It said the total number of employees in that time period has doubled and now includes 50 full-time employees
At least one of the former employees we spoke with said they are still waiting to leave for a few months.
The concerns of the betrayer after the exit have become so part of the culture that incumbent employees most await the most recent payday passes before the exit.
“We just got paid today,” said one current employee. “I hope there are a few people quit on weekends or Mondays.”
