11x, a new startup founded by Hasan Sukkar in 2022, has been getting blasted. Serious allegations have surrounded its business practices and the effectiveness of its products. The startup quickly approached $10 million in annualized recurring revenue (ARR) within two years of starting out. Now it is being skewered for including on its website customers it doesn’t truly serve. When 11x in July 2023 relocated its operating base from London to San Francisco, it triggered an unprecedented wave of voluntary employee turnover. The firm managed to continually maintain investor attention by touting its contracted ARR (CARR) in these board reporting periods. The company’s approach and product efficacy have caused alarm among customers and investors at the same time.
Potential customers are already raising alarms over 11x’s new AI offering. They do raise a number of concerns such as hallucinations, loading errors, and unsuccessful lead generation. At first people were very happy with the service. Users’ hopes dashed as they attempted to fact-check and edit the AI’s output themselves, defeating the purpose of using it in the first place. Some consumers reported being charged late or being charged twice during their three-month trial. As criticism eerily grows, the company’s most visible investor Andreessen Horowitz is said to be preparing to sue the company.
Allegations of Misleading Practices
Additionally, damning reports have emerged that 11x has been putting companies on customer lists without their consent. As of March 20, Airtable was still listed on 11x’s website as a customer. There was no evidence in support of this link. A ZoomInfo spokesperson remarked on a similar situation:
"We did not give them permission to use our logo in any manner, and we are not a customer."
The spokesperson further stated:
"During the pilot, 11x’s product performed significantly worse than our SDR employees, and we did not move forward afterward."
Whether this was intentional mismanagement or poor transparency, these revelations have called into serious question 11x’s success and stakeholder transparency.
Customer Retention Issues
11x brags about a 79% customer retention rate – but don’t believe that internal report. An employee revealed:
"We were losing 70-80% of customers that came through the door."
This gap reflects an overhyping of customer loyalty. Customers too have taken to social media to complain about the product, including its efficacy. One customer stated:
"It almost seemed like they were kind of trying to get something past us."
The unexpected challenges with the product have led to dissatisfaction among users:
"The actual results of the amount of automated emails versus meetings booked was disappointing," a former employee reported.
These challenges have led to a mounting stack of grievances against 11x.
Product Performance Concerns
The utility of 11x’s AI product has been consistently criticized. Initially the new, creative approach piqued users’ curiosity. Soon enough, though, they found it didn’t perform as well as human sales development representatives (SDRs) and it was more costly than competing alternatives. A prospective customer noted:
"They were resistant to signing any sort of trial or letting us experiment."
Customers have complained that the AI hallucinates, or won’t load at all. A current employee suggested that users need time to adjust:
"Customers need time to adapt to how 11x works."
Few of their customers have been persuaded as to the product’s reported powers.
Investor Frustration
Against all of these controversies, according to reports Andreessen Horowitz, 11x’s lead Series B investor, is weighing legal action of its own against the startup. This decision comes after frustration towards 11x’s corporate behavior and the functionality of 11x’s product. A current employee hinted at deeper issues within the organization:
"There’s a lot more under the hood."
Another employee painted a stark image of the company's internal challenges:
"One day, there will be a documentary about this guy. I do believe that’s how scandalous he is."
There are presage an environment of chaos and Shakiness inside of 11x.