Why SAP selected this LA company for its exclusive Startup Focus program
Retention Science is every bit one of the startup building real technology in Los Angeles. The two year company uses big data to automate customer retention for ecommerce businesses. Recently it was recognized for its technical prowess, being selected to participate in the SAP Startup Focus program, an exclusive honor for the best of the best in the fields of big data, predictive, and real-time analytics.As one of a select few Southern California program participants, Retention Science will get access to SAP’s HANA in-memory real-time computing product, which will dramatically enhance its ability to analyze and extract value from of large quantities of data. The product typically costs hundreds of thousands to millions of dollars but program participants are able to avoid this expense. The startup will also receive in-person training around the use of the platform and will work closely with SAP’s clients to create custom solutions to their business problems.
In addition to joining SAP Startup Focus, Retention Science recently deepened its data science bench with the addition of Dr. Alex Liu as its Chief Data Scientist. Dr. Liu previously held similar positions with IBM, RMA, Shopzilla, and RentPayment, and helped build early predictive models underlying ZestFinance (previously ZestCash). Most recently, Dr. Liu has been an adjunct professor at UC Irvine and USC.
Retention Science has been in private beta for over a year, but recently began taking on paying customers including The Honest Company and another unnamed LA juggernaut. Co-founder and CEO Jerry Jao claims the company has been receiving inbound interest from numerous Fortune 1,000-level brick-and-mortar retailers as well as other established ecommerce companies.
This is not terribly surprising given the problem it’s solving. Companies spend enormous sums of money acquiring customers, targeting those who they believe will be the most profitable. Yet few spend similar amounts to understand and retain their existing customers, despite the fact that it is a far less costly proposition.
Retention Science bases its customer retention methods on a proprietary Frequency, Recency, and Monetization model that analyzes customer behavior to predict the likelihood of churn and of transaction. With each new merchant customer, the machine learning-based platform grows more efficient and effective. Earlier this year, the company introduced its proprietary Retention Score to quantify and illustrate each customer’s satisfaction level and to benchmark ecommerce companies against their industry competitors.
The Santa Monica-based startup is up to 19 employees, nearly all of which are engineers and data scientists. Retention Science graduated from the inaugural class of the MuckerLab accelerator in April 2012, and subsequently raised $1.3 million in Seed financing from Baroda Ventures, Mohr Davidow Ventures, Double M Partners, and multiple angel investors.
It may be less common for LA startups to solve big data problems than those of the subscription box of the month variety, but as a prolific ecommerce and consumer media market, this is a natural place for Retention Science to exist. Jao and co-founder Andrew Waage continue to build one of the best big data teams around and are solving a core problem for commerce businesses. It’s recognition by SAP should come as no surprise.