a16z- and Benchmark-backed 11x has been claiming customers it doesn’t have
Last year, the start of the 11x sales automation operating from an explosive growth path.
However, he told nearly twenty sources – including investors and current and former employees – Techcrunch that the company has witnessed financial conflicts to a large extent of its manufacture.
Several people in the United States and the United Kingdom told Techcrunch that the situation has become so weak that the leading investor in 11x, Andrei Horwitz, may consider legal action. However, a spokesman for Andressen Horowitz categorically denied such grumbling, telling Techcrunch that A16Z did not sue.
It provides 11x robots of artificial intelligence for external cold sales duties, including identifying horizons, formulating allocated messages, and sales call scope. It is one of the number of startups in the hot area known as actors of artificial intelligence sales development, or SDRS AI.
Founded in 2022 by Hassan Sukar, 11x she said she approached $ 10 million in repeated annual revenues (ARR) just two years after launch. She moved from London to Silicon Valley last July and announced a $ 24 million chain, led by Benchmark in September. TECHRUNCH Series Battroach B vaired $ 50 million led by Andressen Horowitz later that month.
Three current and former workers of 11x Techcrunch that most of its first customers have benefited from “break items” in their sales contracts to stop using the product. Customers have problems such as the email product that does not work as expected or hallucinations, according to the sources.
There was some internal drama as well. Employees describe an arduous and exhausting work environment – even for those who adopt a culture of crowding. They pointed out that among the first employees in the photo published by Techcrunch at the launch of the company, SUKKAR, CEO.
Fake customer approvals
Like many startups, 11x exposed customer slogans on their website, which indicates customer approval and is usually displayed with the customer’s approval.
However, Techcrunch learned that many companies with slogans on 11x were not actual customers and that at least one company threatens to take legal action on it.
“We have not given them permission to use our logo in any way, and we are not a customer,” Zoomfo spokesman told Techcrunch. The logo was not removed until after March 6, when a source close to Techcrunch inquired about it. But even after that date, AI’s AI’s phone agent continued to repeat the customer’s claim.
The spokesman said Zoominfo, who provides sales data and automation tools, had a short -month experience from AI SDR from mid -January to mid -February. “During the pilot, the performance of the 11x product was much worse than our SDR employees, and we didn’t advance after that.”
However, “since November, 11x have been demanding us as a customer in many channels: in sales calls, on its website, and now even in the artificial intelligence student. We have spent the past four months, demanding that they stop displaying our slogan and falsely calculated as a customer.”
Zoominfo’s lawyer now threatens to take legal action, according to an email seen by Zoominfo’s lawyer to Sukkar. The lawyer wrote that he sees “several legal reasons for work, including but not limited to deceptive commercial practices, violation of brands, embezzlement of goodwill, and wrong ads.”
Likewise, the Aartable logo was shown on the 11x website until a few weeks ago, until March 20, the 11X website is still called Artable as a “client” on the company’s “Manifesto” page. I told Aartable Techcrunch that he was not a customer and did not give 11x permission to use his logo.
“Aartable also conducted a” very short “experience of the product late last year,” said Aartable spokesman for Techcrunch, and ultimately decided that it was not suitable for our business. “” It was never used in production and was not presented to our sales team. ”
However, even on March 21, 11x was still demanding an air virus as a customer on his website. Another company, which asked not to be called, told Techcrunch a similar story.
Our research showed, however, some customer claims were legitimate. Pleo and Rho have confirmed, for example, that they use 11x products.
11X insists that “removing any unwanted or inaccurate customer on their location and inside their products on request” and in “a small number of cases” when he did not do so, it was “because of the human error.”
Creative way to calculate ARR
Meanwhile, at least three employees said they left the company because of what they considered unborn tactics in the company.
For example, 11x “Mashar” was that the possibilities would like to make experimental programs signing a one -year contract, a possible customer said. “They were resisting to sign any kind of trial or allow us to experiment,” this potential customer continued.
Instead, 11x customers offered a break, usually in three months, which made it easy for customers to break the contract. This former employees and the potential customer said this was mainly done as an experimental period.
But when reporting the annual repeated revenues (ARR), the company did not differentiate between experimental periods and customers in the long run. The company will count on the full year.
11X says he “uses the contract with ARR (CARR)” when reporting to the council and that its investors were aware that he was using this scale. 11x investors say they reviewed customer contracts and customer data files and spoke with customers during due care.
These people said that even after I used the prospects for the resting condition to end their trial-and its payments-the company continued to account the Arr as if these companies were completing the entire year.
The 11X spokesman says that the start of the operation provides “free experiences” and “most of the intermediate market customers” are qualified for that, but he says that some customers with institutions with “very specialized” needs and custom needs “require a 12 -month contract with the cancellation of the subscription after 3 months.”
Many employees said. One of the employees said: “We were losing 70-80 % of the customers who came across the door,” said one of the employees. This allowed 11x to “seem to work better than it is,” the person continued.
For example, the company may say it has received 14 million dollars of repeated annual revenues, as the number of contracts that passed the trial period that lasted for three months reached about 3 million dollars, the employee said.
Another former employee said: “They have completely massaged the numbers when it comes to growth and marking,” said another former employee.
11X says that “the highest chewing” occurred for “initial groups in late 2023”, but the improvements in the product and the refining of sales to its “perfect customer” have improved their retain. 11X says “its retention rate is currently 79 %.”
Capitalists in adventures say that the problem was not necessarily that 11X was using CARR to showcase their growth, but investors expect companies emerging for potential cancellation revenues-and customer Churn.
Benchmark says transparent updates have been provided from 11x, including rest conditions, a Techcrunch spokesman.
Limited product
Many companies were canceled after their experience because they were not satisfied with the product, according to one current employees and at least four former employees.
A former employee said some of them were because customers have unrealistic expectations, in the hope that 11x will replace a full external sales team, and provide hundreds of thousands of dollars annually.
This person said that 11x sales representatives have often told the possibility that within several months, they could expect a significant rise in the number of meetings, experimental offers and phone calls that were booked due to startup technology – although employees believe this is unrealistic.
One of the companies that tried the product said: “The actual results of the amount of automatic email messages against the seized meetings were disappointing.”
11X she says she believes that his product is outperforming human private drawing rights, but he says “performance ultimately depends on the quality of the user input.” It also says it does not guarantee savings or revenues in its sales.
Other customers complained that the 11x product was hallucinated or that the product would not be loaded at all, and this former employee continued. One of the average auditors divided the product, saying it was less effective, yet it cost more than his competitors.
“The products are barely working,” a former engineer told Techcrunch. Instead, customers will have to verify manually, correct work, and defeat the purpose of buying a 11X product in the first place, another employee said.
In addition, the company sometimes had bills issues. One customer bill has been released twice for a three -month trial period. The client said: “It seemed as if they were trying to overcome something.”
The VC, who is considering investing in the series A, discovered that the technology did not succeed well during the due care process. The current 11x customers told the investor that they were initially satisfied, but after a month of use, the starting start of AI failed to generate effective threads.
He narrated the experience of this investor, a current employee defended the company, saying that customers need time to adapt to how 11x works. This person said that the company is also trying to find ways to encourage more customers to stay longer.
Mix employee
Employees also described an approximate work environment with many employee staff under the founder-CEO Sukkar.
Employees were generally expected to work at least 60 hours a week with severe pressure to be constantly available, according to employees and messages that Techcrunch.
Slack Sukkar’s messages show a question about everyone’s whereabouts at 8 pm, after he told the employees previously that the working day started at 9 am
One of the current employees said: “He does not believe in people who spend leave.” Another former employee said he was expected to work on the weekend and on national holidays.
One of the former employees recalls: “You will have the founder on Slack, perhaps three in the morning, and sends messages saying” This must be resolved urgently, “adding that the mentality has always been so widespread that some employees sleep simply in the office.
When employees cannot be reached immediately – or if something wrong – it was known that SUKKAR is publishing his frustrations towards the aforementioned worker on the SLACK public channel for everyone to see, and at least two employees remember.
The employees who spoke at risk are threatened with dismissal, according to employees.
“There is a lot under the cover,” said one of the current employees. “One day, there will be a documentary on this man. I think this is the extent of a scandal.”
11X says he suffered from his rotation while moving from London to San Francisco last July, where the employees who could not move to leave the company decided. She says that the number of employees has doubled in that time period to now include 50 full -time employees
At least one former employee told him that they were still waiting for the payment months after his departure.
Anxiety about the rear push after quitting smoking has become a part of the culture that a current employee said most of them are waiting for the closer day to be paid before being taken off.
“Our salaries today.” “I expect two people to resign during the weekend or Monday.”
Note: This story has been updated to include a comment from Benchmark.
2025-03-24 23:03:00
