One on One: Mike Muhney, Co-Founder of ACT!

Welcome to another in our One on One series of conversations with some of the most thought-provoking entrepreneurs, authors and experts in business today. Mike Muhney, co-founder of ACT! and one of the creators of the contact management industry, recently founded mobile relationship management application VIP Orbit. Muhney spoke with Brent Leary in this interview, which has been edited for publication. To hear audio of the full interview, page down to the loudspeaker icon at the end of the post.

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Mike Muhney, Co-Founder of ACT!

Small Business Trends: Tell us what was it like starting ACT in the late 1980s and how it compares to starting a business today.

Mike Muhney: I started my career with IBM in the mid-70s selling mainframes. I was taught the techniques of relationship management with no technology other than a Day-Timer. In 1985 my partner and I started a company with another software product that failed. We had to come up with another idea or close down the business. At a four-hour breakfast, we conceived what became ACT!.

By 1987, ACT! was on the market. With it, we actually created the category of contact management, although we didn’t quite know what to call it then.

Small Business Trends: You are starting a new company, VIP Orbit, and instead of saying it is contact or customer relationship management, you talk about mobile relationship management. Can you tell us what that is?

Mike Muhney: If you add up the global user base of content management and CRM customers from the “Big 7” – Seibel, SalesForce, ACT!, Gold Mine, etc. – fewer than 20 million people in the world use those products; most are salespeople. That is a tiny market against the backdrop of what Forrester Research claims by the end of 2011 will be 1.4 billion smartphone users.

Those people are not immune from, nor should they be out of the reach of, the benefits and value that relationship management provides. Since we are a mobile society, with tablets and smartphones, it made sense to call it mobile relationship management.

My business plan is to go after that market neglected by the big vendors–the mobile professional or the “prosumer” who is using their phone to organize their life, relationships and activities.

Small Business Trends: How has the customer – vendor relationship changed from the days when you created ACT!?

Mike Muhney: The problem with CRM [solutions] is they are very complicated. They intrude on salespeople’s lives. Salespeople don’t like to give all the information they know to the company, because then they [lose] their exclusive value. The companies that are attempting to do a better job with CRM still have a 50 percent failure rate because salespeople sabotage the intended use of the system.

With VIP Orbit, I am going back to the individual. Because we carry these devices with us now, the company is less in control and I, as an individual, am more in control of what information I keep. Over time, personal use of mobile relationship management products, of which VIP Orbit is the first, is going to become evident in companies through a Trojan horse process.

Small Business Trends: Explain what the Orbit part of VIP Orbit is.

Mike Muhney: Webster’s dictionary defines orbit (as it relates to relationships) as your sphere of resource and influence. I know you, but you know a lot of people that I don’t know. If I provide value to you, I may, as a result, penetrate into your orbit. We all walk amongst many orbits. Orbit is a way of very efficiently, effectively and instinctively categorizing people with which to work with.

The [orbit] is not focused on me. Social media is all about me–How many friends do I have? What power do I have? That is not what relationship management is about. It’s about you, [the customer]. My job [as a relationship manager] is to keep as good of information as I can that is unique and exclusive, not publicly portrayed on people’s Facebook pages.

Small Business Trends: VIP Orbit has no desktop application, no laptop application–it is all the mobile device in the cloud, right?

Mike Muhney: Yes. My database is literally on my phone. Also in the cloud, so I have collaborative benefits like sharing information with other colleagues. The one thing that is with me at all times is my phone. That is why I started [VIPOrbit with] the phone.

Small Business Trends: In the end, is mobile relationship management a replacement for contact management, or an enhancement to it–do they work together?

Mike Muhney: The answer could be yes to both. I could easily describe it as an extension into the market of contact management, but I hesitate to, because I don’t think that the current CRM and CM vendors will ever reach that market. They are focused on the enterprise realm. The mass market is a brand new opportunity.

What Excel did for people who deal with numbers, I’m doing for people who deal with people. Fundamentally, that is what any relationship manager is about. There is something called the Dunbar Limit. Scientists concluded that we have a capacity of about 150 people that we can keep information on [in our heads]. You and I deal with a whole lot more than 150 people. What do I do about keeping that same quality of information, beyond what I can [remember] on my own, so I can deal with more people?

Selling has always been about numbers. The more people I deal with, the greater my chances of success.

With ACT!, we equipped people to extend their memory to deal with more people more effectively without sacrificing quality. I am doing it today for the user who is unaware of the value of contact management, but since they have the device already, to enlighten them and let them share those same benefits that the longtime users of CRM systems have enjoyed.

Small Business Trends: Where can people learn more about VIP Orbit?

Mike Muhney: VIP Orbit is on the [Apple] app store. You can also go to our website at VIP Orbit.

This is part of the One-on-One Interview series with thought leaders. The transcript has been edited for publication. If it's an audio or video interview, click on the embedded player above, or subscribe via iTunes or via Stitcher.

Brent Leary Brent Leary is the host of the Small Business Trends One-on-One interview series and co-founder of CRM Essentials LLC, an Atlanta-based CRM advisory firm covering tools and strategies for improving business relationships. Brent is a CRM industry analyst, advisor, author, speaker and award-winning blogger.