Nutshell’s CEO, Founder on Building Startups in Ann Arbor

When I first sat down last spring to talk with serial entrepreneurs Guy Suter and Joe Malcoun about the companies they’ve launched and their plans to boost Ann Arbor’s startup ecosystem as a whole, it was a fun, freewheeling conversation.

Malcoun and Suter have their hands in a number of local companies and projects. They’re investors as well as entrepreneurs, and they want to help make Ann Arbor a place that does a better job of hanging on to the talent it produces by giving early-stage companies affordable office space and a place to go for funding, networking, brainstorming, and moral support.

“Guy and I are an explosive, dangerous mix, because we have a hard time saying no to cool ideas and we love risk,” Malcoun told me.

That risk appears to be paying off on multiple fronts: Notion, the e-mail optimization startup that Suter runs, is currently in beta testing (more on that in a future article); Nutshell, a customer relationship management (CRM) startup led by Malcoun, announced the closing of a multimillion-dollar investment round this week, led by Plymouth Ventures; and a shared downtown co-working and event space in partnership with Coolhouse Labs’ Jordan Breighner is set to begin construction this fall.

Nutshell began as a side-project originally conceived as a “homebrewed” way to tackle CRM at Suter’s previous company, BitLeap. In 2008, BitLeap was acquired by Ann Arbor computer security startup Barracuda Networks. As part of the deal, Suter and two of Nutshell’s co-founders, Lindsay Snider and Ian Berry, were absorbed by Barracuda, so they relocated to Ann Arbor from Pennsylvania.

While at BitLeap, Suter had become frustrated by Sugar and Salesforce, the market leader in CRM software, because he felt they were too labyrinthine for a lean startup. “They were hard to use and hard to train people to use. Salesforce isn’t even CRM anymore, it’s a platform. Our generation is so used to a rich app experience—if you show the average twentysomething Salesforce, they’d probably throw up.”

In 2009, Suter, Snider, and Berry recruited Andy Fowler to serve as Nutshell’s chief technical founder. “Suddenly, what we were working on at Barracuda exploded, and we had no time,” Suter said. “So Andy built the product slowly and without pressure, focusing on the pain points we had at BitLeap.”

Nutshell officially launched in 2010, and with only minimal marketing efforts, it grew to have thousands of users. Nutshell’s co-founders realized the company’s potential was much more exciting—and CRM in general much more susceptible to disruption—than they originally expected, so they began to take the business a bit more seriously.

Malcoun, who worked as an executive at DTE Energy before leaving to try his hand at early-stage investing, came aboard as Nutshell’s CEO in 2014.

“Guy and I met at a David Brophy class on a Tuesday night,” Malcoun said. “I knew everyone on the panel except Guy. Then, about a month later, I read an article about Nutshell and thought, ‘Who are these people?’ Guy was so deep inside Barracuda building stuff that he didn’t know anyone. We became fast friends, and our wives and children became friends, and now we spend a lot of personal time together.”

Today, Nutshell is an industry leader when it comes to providing CRM software services to small and mid-size companies, Malcoun said. “We want to be with the scrappy entrepreneurs and the companies that are growing,” he added. “It’s a really beautiful product, too. There are so many CRM products that are hard to use and badly designed.” (The list of CRM software companies is long, indeed, but some other notable players include Close.io, Insightly, Nimble, and HubSpot.)

Under Malcoun’s watch, Nutshell has secured funding—he declines to say exactly how much— from investors including CKM Capital Partners, Cahoots Holdings, and Plymouth Ventures. The company, which has 24 employees, plans to use the latest investment round to hire about 10 more employees and expand its sales and marketing departments.

Evan Ufer, a partner at Plymouth Ventures who joined Nutshell’s board as part of the new investment round, said the relationship between his firm and Nutshell has been especially collaborative.

Ufer said he got to know Nutshell by being one of its customers, and its technology … Next Page »

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Sarah Schmid Stevenson is the editor of Xconomy Detroit/Ann Arbor. You can reach her at 313-570-9823 or sschmid@xconomy.com. Follow @XconomyDET_AA

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