Smith.ai combines live agents and AI to provide superior virtual receptionist, intake, and outbound calling services to small businesses. Pulse 2.0 interviewed Smith.ai founder and CEO Aaron Lee to learn more about the company.
Aaron Lee’s Background
What is Lee’s background? Lee said:
“I’ve been very fortunate in my career. I earned my Ph.D. in computer science from Princeton, joined Google when it was a 2,000-person team and watched it scale to a 20,000-person company, and have successfully founded two startups.”
“My passion for computer science started at a young age. I was a big fan of online games and learned to code in the assembly language so I could build games myself. That led me on the path to getting my Ph.D. in computer science, and after graduating, I decided to join Google on their video team. I became the founding engineer pre-YouTube and helped to develop their monetization features.”
“In 2008, I decided to leave Google to found my first startup, RedBeacon. It was born out of a personal frustration I was facing at the time: I was trying to find a contractor to help renovate my house and was struggling to find someone who was available. I realized there was an opportunity to connect people like me with home services professionals, and RedBeacon was born. It was a remarkable ride — we won TechCrunch’s startup competition in 2009 and were eventually acquired by The Home Depot. While there, I worked my way up to CTO, and RedBeacon became the “Pro Referral” at every Home Depot location. In 2015, I decided I was ready for another venture and started my second company, Smith.ai, with my co-founder, Justin Maxwell.”
Formation Of Smith.ai
How did the idea for Smith.ai come together? Lee shared:
“The idea with Smith.ai is that we can bring humans and AI together to manage all aspects of customer engagement for businesses in a cost-effective way. When I was the CTO of The Home Depot, it was my job to speak with home services pros to understand the challenges they were facing and how technology within the Home Depot umbrella could help. Those personal conversations helped me understand the challenges small- and medium-sized businesses face. I learned that it’s hard to be good at what you do if you don’t have time to do it, and many business owners were weighed down by other tasks, like managing and responding to client inquiries.”
“In looking at the existing solutions to this problem, there weren’t any that seemed to address this challenge of taking customer engagement off the business owner’s plate. Most virtual receptionists, answering services, and traditional call centers relied on scripts. We’ve all experienced how scripts make conversations feel forced, distant, and inflexible. However, SMBs need a cost-effective way to manage this problem because they lose out on valuable revenue if they don’t respond to inquiries quickly, which in-house staff rarely have the time to do. I realized that if we empowered remote agents with AI tools, we could offer a better service that didn’t operate like typical outsourced agents. And that’s how Smith.ai came to be.”
Core Products
What are Smith.ai’s core products and features? Lee explained:
“We offer multiple services to ensure that we can support businesses with every type of customer engagement: inbound and outbound calls and messages.”
“The first product we brought to market was Virtual Receptionists. When a customer calls one of our clients, that call gets routed to a human Smith.ai agent 24/7 who handles the customer interaction. Our clients can personalize their greeting and instructions, so it feels like an extension of the business.”
“We saw significant traction and found that more of our customers were looking for support with outbound sales. Fast follow-up is the key to securing new business, and data shows that to convert 90% of leads, sales teams or outsourced providers need to make five call attempts! Almost no in-house staff are following these protocols and stop their outreach attempts far too soon. So, in 2021, we launched another tentpole product, Outreach Campaigns. Our agents have the same AI support as our Virtual Receptionists but are trained as sales development representatives.”
“We also know that not every potential client wants to engage with a business on the phone. That’s why we introduced Website Chat, which is powered by AI but also includes live human support to make sure that no message goes unanswered. Web Chat scans your website to answer common questions about your business. If it encounters a question it can’t answer, a human agent steps in. Our clients integrate Web Chat on their websites, and it allows website visitors and potential customers to directly message a business 24/7. We provide the technology and the human agents, so there’s no need to train in-house staff on a new software program or delegate yet delegate to them yet another responsibility — we take it all on.”
Differentiation From The Competition
What differentiates Smith.ai from its competition? Lee affirmed:
“We’ve set ourselves apart by finding the right balance between humans and AI. Our technology allows our agents to feel like a natural extension of a business rather than an outsourced operator.”
“We’ve invested heavily in technology that allows us to personalize our services for each business and navigate many different scenarios. Often, our clients have nuanced customer interactions: They are dealing with a high-value situation or something very emotional, like a flooded house or divorce. Human agents, guided by AI, best navigate these interactions because compassion and emotional intelligence are innate and ever-present. AI helps agents feel supported — they know that they will have guidance on what to say or do next in a conversation — and AI also helps them remain present while handling calls.”
Customer Success Stories
After asking Lee about customer success stories, he highlighted:
“I have many I could talk about, but I will share two that illustrate how we help businesses:
We started working with Ziegler Diamond Law with our Web Chat tool so they could capture more online leads. We later added on our outreach campaigns, so if a potential new client completes a form on their website, a Smith.ai agent will automatically make an outbound call within minutes. This setup has been highly successful and led to a 52% conversion rate. They even had to hire a new employee to help support all of the new lead conversions and retention, and it has contributed to major growth at the firm.”
“Another is Colorado Snoring and Sleep Apnea Center, a Denver-based healthcare provider. When the COVID-19 pandemic forced their team to work from home, they needed a virtual solution that could support new patient intake calls. Previously, their average patient intake call would take one patient coordinator between 30 to 45 minutes. Now with Smith.ai’s receptionists on the phones and in this intake role, their staff can simply review the patient intake after each call, saving at least 30 hours per month for patient coordinators, allowing them to focus on other essential work.”
“You can check out other success stories on our website.”
Total Addressable Market
What total addressable market (TAM) size is Smith.ai pursuing? Lee assessed that the TAM for this market is $330 billion.
Evolution Of Smith.ai’s Technology
How has Smith.ai’s technology evolved since launching? Lee noted:
“Even back in 2015, we knew AI would be impactful for this space, but candidly, we were a bit ahead of our time. AI just wasn’t advanced enough to handle the tasks we wanted it to. For example, we would try using AI to create automatic transcripts of customer calls, and only 90% of it would be accurate. It sounds like a high percentage, but imagine that one in every ten words you read is wrong. It would get very frustrating!”
“Today, AI has come a long way, and so have our applications of it. We use technology for many tasks: For each call, we provide our agents with prompts and relevant information that is tailored to the specific business and current conversation. Our AI is also trained on over eight years of proprietary customer engagement calls, so our models have become very sophisticated at navigating all of the different nuances of a business. We can tell when someone says ‘gross’ if they’re referring to it in a legal context (“gross negligence”) or simply saying that something is dirty.”
“We used to present all of the relevant information to our agents at once, but we found that people were overwhelmed by that, so over time, we adapted our AI tools to give agents select, tailored prompts based on the flow of the conversation. That way, agents could provide callers with the right details while also collecting the relevant information and knowing exactly what to say at the right time.”
“We also transcribe and record calls today with 99% accuracy, so if a client opts in, they can have a searchable database of all caller engagements. As part of these transcriptions, we’ve incorporated technology that automatically identifies and blocks out personally identifiable information (PII) like Social Security numbers and credit card numbers. One other very popular feature with our agents is that we use algorithms to block over 20 million spam calls — a service we offer free to our customers.”
“We also integrate with thousands of apps, so the work we do can naturally fold into how our customers work. We can put call transcripts in a CRM like Hubspot, book a meeting through Calendly, or set up other automation with tools like Make and Zapier.”
Future Company Goals
What are some of Smith.ai’s future company goals? Lee concluded:
“Our goal is to support more businesses across many aspects of customer engagement. Engaging with customers and clients is a critical component of running a business, but it can also be very time-consuming and take away energy from other aspects of the work. We want to reach a point where we can equally support a one-person shop and a large enterprise team. That means continuing to diversify our offerings and finding new ways to leverage AI and technology so we can cater to more markets.”
“We are still in the early stages of AI, and I am optimistic about the ways it will allow us to take our work and apply it to other aspects of business. For example, using our findings to inform marketing and customer acquisition strategies. We have some of those features already, but there is more we can do here.”
Favorite Memory
What has been your favorite memory working for Smith.ai so far? Lee concluded:
“I have a few favorite memories, and one similarity across all of them is how we’re helping people accomplish new milestones.”
“I am a firm believer in promoting from within. I learned this playbook while I was at Home Depot and learned to appreciate how much people can grow and accomplish when provided with training and support. At Smith.ai, we have promoted multiple very talented individuals from receptionists to leadership positions in the company. To see them rise through the ranks is very rewarding.”
“As for our clients, it’s just amazing to see them grow their companies three- or even four-fold within a few years, solely by relying on Smith.ai as their growth strategy. Some of our clients have even been acquired by larger firms, which has life-changing outcomes. Knowing that we played a role in that growth motivates us to continue to do the work we do.”
