* Attentive is a buzzy New York ad tech startup.
* But it might never have been born if investor Scott Friend, a partner with Bain Capital Ventures, hadn't told founder and CEO Brian Long that his original idea for the company was mediocre.
* Friend and Long had met and grew to trust one another when Friend invested in Long's previous startup, TapCommerce, which sold to Twitter for $100 million in 2014.
* Long had VCs pounding down his door offering excellent terms for his second idea, he told Business Insider. He had the product built and a big customer.
* But Friend convinced him that his idea wouldn't pan out in the long run, Friend told us.
* Because Long trusted Friend, he listened and Attentive was born: a company that makes a mobile messaging app used by over 3,000 brands and organizations, including Coach, Sephora.
* Here's how their friendship helped turn Attentive into a company that might "go on forever."
* Visit Business Insider's homepage for more stories.
Attentive is a New York startup with pedigreed founders and fast success that ad tech VCs are watching.
Attentive offers a mobile messaging app used by over 3,000 brands and organizations, including Coach, Sephora, and Urban Outfitters. Founded in 2016, it has raised a total of $163 million from firms like Bain, IVP, and Sequoia, including an oversubscribed $110 million round that closed in April, raised while the economy was melting down from the pandemic.
But such success might not have happened if Bain Capital's Scott Friend hadn't told Attentive CEO Brian Long that Long's original idea for Attentive was mediocre. This even though Long had already launched a product and signed a big customer.
Friend and Long forged a friendship back in 2013, when Long was running his previous startup TapCommerce and Friend became an investor and board member.
Long and the TapCommerce team were rising stars, Friend thought at the time.
"They were firing on all cylinders," Friend told Business Insider. At the first board meeting, Friend recalled, the startup's revenue projections were actually higher than what they had originally pitched. It didn't take long for Friend to develop a "fundamental trust" in Long,
Soon after, in 2014, TapCommerce sold to Twitter in 2014 for $100 million.
With that kind of track record, when Long set out for his second venture, he had lots of VC suitors knocking on his door, Friend said.
Long acknowledged that other investors were offering bigger, more tempting term sheets, but he selected Friend because they had already built up a lot of trust with one another.
"The analogy to it being marriage is a good one," Long said of the relationship between founder and VC, "but I actually think that it's more than a marriage. There's no way to really end your relationship with an investor."
While Friend was game to invest in Long's company again, he was underwhelmed with it.
"The category they were experimenting in with mobile workforce management was a robust category," Friend said. The founders "could've raised money for that, for sure."
But Friend had previously met with over half a dozen other startups working in the area and felt that the idea would not lead to an attractive exit. The VC thought this even though Attentive had already obtained the Holy Grail for startups: traction.
"They had built something," Friend explained. "They were getting early trials." The startup even scored a multi-year contract with a major public company.
Still, Friend advised the co-founders to switch gears.
Despite the early signs of success, Long said he wasn't "feeling great about" the startup's direction either.
When he heard Friend's advice, he, to the surprise of the customer, pulled out of the contract and "pivoted into what became Attentive," he said.
"Relative to what they're doing now," Friend said, their first idea "would've been a disaster."
Nice vs candid
Far too often, Long explained, founders are too nervous to seek out candid feedback about their products.
"You get a lot of false signals when you meet a friend of a friend," Long said, referring to the types of people entrepreneurs often lean on at first to seek advice. Usually "they're just being polite."
Another major challenge is that many VCs, especially when funding seed and Series A rounds, prioritize founders' previous successes rather than the actual products they've pitched.
Long's track record with TapCommerce meant that he could have raised funds for just about any idea he had, including mobile workforce management, but that doesn't mean his new company would have automatically turned into "the large-scale, high-growth business" that Attentive has become today, Friend said.
Now, "Attentive may be in the rare situation where the company goes on forever," Friend said, hinting that an IPO might be on the horizon.
SEE ALSO: 2 Bain VCs say the firm is on the hunt for early-stage founders. Here's an exclusive look at Bain's plan to support 'outlier' entrepreneurs and nurture unicorn-track startups https://www.businessinsider.com/bain-venture-capital-vcs-explains-strategy-for-early-stage-investments-2020-8
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