Interview with Steve Yeich, CEO of HostedSupport

I recently caught up with Steve Yeich, CEO of, a provider of online customer support software based in Los Angeles. HostedSupport just received an initial round of funding.

BK: What is doing nowadays, and what does your product offering look like?

SY: We just renamed the company Hosted Support, Inc., which does a much better job of describing our product offering than our old name (Qualte). All of our marketing materials reflect the name change, and we now drive online visitors to

We provide businesses with an easy-to-use, hosted, online service that eliminates most of the email and call workload for customer support reps, while providing customers with better support. Hosted Support provides the software-delivered as an online service--but not the customer support reps.

Our ezSupport and ezSupport Pro products offer businesses a complete solution for automating their customer support. Some of our features include automatically answering customer questions via email and automatically updating website FAQs. In addition, our system automatically tracks the status of all customer tickets/cases to their resolution. Our products greatly reduce the number of emails/calls that have to go to a support rep. And for the few emails/calls that do go to a support rep, our products provide a knowledgebase for quickly finding answers and tools for quickly responding to emails. In addition, because customer communications are handled by our products rather than standard email, support reps have zero spam to contend with!

Companies using Hosted Support products see a huge improvement in their business. As an example, one of our Internet retail customers used to have several people handling hundreds of customer emails and calls daily. Now, with our ezSupport Pro product, they have only one person spending half her day handling a small number of emails and calls. The support reps that were a large "cost center" for the company are now doing telesales and have become a "revenue and profit center."

BK: What kinds of customers are using your product, and how long has it been available?

SY: Most of our customers are small and mid sized companies, or branch offices of larger companies that use the Internet for some/all of their customer support. Our customers tell us that "enterprise software" products are too costly and too complex for their needs. These businesses want an easy-to-use product like ours that can be up and running in minutes. And our pricing of $49 / month per support rep is attractive and affordable for them. Because we are an online service, there is no software to install or maintain--it's all delivered via the Internet. Our customers can actually have our product up and running--supporting their customer base--in less than an hour. The current versions of our ezSupport and ezSupport Pro products have been available since mid 2004.

BK: How many customers do you have?

SY: We began some small-scale marketing initiatives in late 2004, and we already have over 60 companies using our products. These 60 companies license approximately 150 seats in total. Our subscriber base of accounts and seats will grow rapidly in 2005 as we ramp our marketing and Partner programs.

BK: Is there much competition in the hosted support space, and why do your customers decide to use your hosted services instead of purchasing a customer support/CRM software suite?

SY: The "competitors" we usually see are Post-It Notes, manual emails, and spreadsheets. In other words, most of our customers attempted to keep up with customer inquiries using manual efforts and inefficient tools before they learned about our products. Now, with our ezSupport and ezSupport Pro products, they provide better support while eliminating the vast majority of their workload with features like auto-answer email and automatic ticket tracking to resolution.

The majority of our customers are small and mid-size businesses that can not afford to purchase, install and maintain enterprise software due to the high cost and complexity of this approach. Most of our customers thought they could not afford a complete customer support solution until they learned about us. Our hosted delivery model (with software accessed via the Internet) allows our products to be priced so that they are affordable to our customers and still profitable for our company. Instead of hundreds of costly installations for each and every customer, all our customers use a common infrastructure, complete with highly reliable server "clusters," multiple ISP connections, and other infrastructure that ensures high scalability and reliability.

BK: Why the latest round of funding?

SY: This $3 Million round of funding will be used mainly for direct marketing and partner marketing that drives revenue. We have done very little marketing in the past in order to focus on product development and ensure that the product is ready for "prime time." Now we are ready to ramp our revenues by building our marketing and business development teams and spending money on direct marketing and partner marketing programs.

BK: How did you hook up with your investors?

SY: There has been a long standing personal and professional relationship between our Founder, Dr. Hiri Etessami, and Philip Kamins, the Founder of PMC. Through this connection PMC learned we were looking for funding, and after going through an extensive diligence process, this led to the PMC investment and to Gary Kamins, President of PMC, joining our Board.

BK: A lot of entrepreneurs tell me that it's still taking awhile to fundraise and go through due diligence. How long did it take you to raise this round of funding and how difficult was it to finalize?

SY: We began our fund raising efforts about 6 months before closing the latest funding round. We anticipated that the diligence process would be extensive and time consuming. We found this to be true with PMC-after agreeing to the overall terms, the detailed diligence process spanned several months.

BK: Finally, what's the next big goal for HostedSupport?

SY: Our main priorities for 2005 are building up our marketing and business development teams, and executing direct marketing and Partner marketing programs that continue to drive our revenues higher.

BK: Thanks!


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