Houston software startup pivots to provide digital networking solutions
Several years ago, David Grimes had a business partner who played dirty. It wasn't until the trial that followed the business wrongdoing that Grimes discovered the man had a history of cheating companies out of money. Grimes envisioned a software service that used public information to research potential investors or associates before signing on the dotted line of a partnership.
"I wanted to find a tool that would alleviate that pain and that risk of doing business," Grimes says. "I couldn't find that tool."
When Grimes met private investigator, Daniel Weiss, at a Christmas party, he picked his brain about this idea of vetting business partners or investors. Turns out, that's exactly what Weiss did already. Together, the two co-founded Houston-based Snap Diligence, a software-as-a-service company that uses its custom algorithm to digitally investigate these potential associates.
The technology would data mine various public information avenues, such as Secretary of State documentation of business owners, managers, and directors, state district court records, and insurance records. It would look at all filings and legal cases of both the person and all the companies they have been associated with. It would even look at that person's contacts and see who you have in common and who you don't know about.
Now that the tool the Grimes wanted finally existed, and Snap Diligence went into beta in April of 2017. The team reached out to all ages and industries to use the software. In January of 2018, they reconvened and looked at who was using the tool and how they were using it.
"They were mostly people in their 30s," Grimes says. "I didn't think they would have enough experience with risk to appreciate the tool. But what they were using it to connect to new opportunities."
Snap Diligence allowed the users to access new business connections and potential clients based on their already established networks.
"It's not LinkedIn where you sat next to your connection four years ago at a breakfast club," Grimes says. "This is information on people who are actually involved in a business together."
A banker approached Grimes and asked him to datamine all his clients to see all the potential business he could have by finding other companies a client is involved in but that doesn't yet use the bank for.
So, with this new tool, Snap Diligence pivoted about 3 to 4 months ago and now looks at first and second degree of existing relationships for the purpose of targeting new business clients.
"We started running this customer analysis work — and we had to rework our algorithm some — to spit out this batch mining process for customers and how you expand an existing customer relationship into a new opportunity," Grimes says.
The tool has been most popular with commercial insurance and commercial banking, Grimes says. Private equity has been a big player too, although it's not as big as a proponent since they have smaller client bases.
Growth plans on the horizon
The company has a few major clients coming in, Grimes says, and also expects to be able to mine third degree connections soon too. Snap Diligence operates in several states, but as more information is able to be pulled in, the tool will soon grow to more markets.
"SEC data is something we want to add fairly quickly, as well as real estate data," Grimes says. "The key is just importing more and more data that can further fill in the picture of someone's footprint."
With growth on the mind, Grimes recognizes that Houston has with venture and talent. Both are aspects the local innovation community has but needs more of.
"We have plenty of talent here in Houston, but it's harder to find the talent that doesn't mind going into a startup with the risk that comes with it," Grimes says. "Finding the right talent is difficult."