KarmaCRM: Building Sales Software for Lean Startups

It’s not often that, here in Detroit, I get an e-mail from a tech player in Boston urging me to check out a new company in my neck of the woods, but that’s exactly what happened in the case of Ann Arbor-based KarmaCRM.

My source met KarmaCRM’s founder, John Paul Narowski, on a flight back to the States from London. “Ever since,” he wrote, “I’ve admired his extremely lean startup. The CRM [customer relationship management] system he built is falling-down simple and he has 11,000 users without any full-time employees.”

Narowski and his company are totally unknown, the source admitted, but talking to him is a breath of fresh air because he’s a “genuine, caring, thoughtful young business leader” who wants to better the world. OK, I thought—a down-to-earth, idealistic developer of sales software? That’s at least worth a cup of coffee.

So I met with Narowski, and my Boston connection wasn’t wrong. Narowski has a concrete vision to one day pivot into a sort of all-purpose entity to help small startups in southeast Michigan get off the ground, and he hopes to support it with earnings he makes from KarmaCRM.

The idea for his company started a few years ago, when he worked at a Web development firm he helped found. He was in charge of all the sales outreach, so he wanted a CRM system he could use to make his life easier. “I tried the big guys; I tried the small guys,” he explains. “I wasn’t satisfied, and I didn’t think my needs were unique. I needed to be in contact with clients, see deals close, be in touch with salespeople, and have a shared calendar.”

Instead, he took a week and build his own system to use internally, with simplicity as the goal. Narowski put the software online to garner feedback “before it could barely walk,” and it got the attention of a few relevant blogs and those interested in being beta testers. So he sold his equity in the Web development company to build KarmaCRM full-time and landed his first paid accounts about a year later.

KarmaCRM operates on a freemium subscription model. “I’m a small business, so I wanted our software to be cheap, easy to set up, and not complex to learn,” Narowski adds. “Our pricing model accommodates small businesses. When you’re penny pinching, every bit counts.” All prices are per company, not per user, and those prices depend on the number of users and the number of contacts. Most popular, he says, is the package that is $49 per month for companies with five to 15 users.

Coming as soon as next month is a new and improved version of KarmaCRM, which will maximize customer service, Narowski says. “We’ve been able to grow based on customer feedback, and now I want to figure out exactly what we are to customers.”

OK, but what about his company’s name? What does the Karma part mean? Narowski says that throughout his startup’s lifecycle, he’s been disappointed with the amount of support he’s gotten from local VCs. He was turned down for investment, or he declined it because what was being asked in return for a seemingly small amount of support seemed like a bad deal. More than once, he became discouraged and questioned whether he should continue. So now that he’s bootstrapped his whole operation, he wants to be able to support entrepreneurs facing similar struggles—and he even hopes to take it a step further.

“I want to build KarmaCRM to wrap around your business, your company’s language, and we’ll give you the tools to do your business,” he notes. “It factors into my long-term goal of helping companies. I want to use it to help people. I want to take the name Karma and build it into a set of business practices instead of just a cutesy name.”

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