Johannes Gnauck and the nine floors between selling cars and predicting the sale

Johannes Gnauck’s kitchen table occupied a useful position in the history of automotive software: about nine floors above the Mercedes-Benz Manhattan dealership. Downstairs, he sold cars. Upstairs, he and Marco Schnabl worked on an idea for helping dealerships anticipate a customer’s next purchase. For an aspiring software founder, it was an unusually short commute between the problem and the drawing board.

Schnabl had interviewed Gnauck for his dealership job. He later remembered hiring a salesman who broke the store’s sales records and kept finding ways to get a customer to agree. Some customers also became sounding boards. Lloyd Blankfein and Gary Cohn were among the people the pair spoke with as they considered what predictive analytics might do for automotive retail.

Gnauck’s introduction to the problem came through the people buying vehicles and the work involved in selling them. An entrepreneur could admire the showroom’s polished surfaces. A salesman had to make the next conversation go somewhere.

A salesman’s education

Gnauck’s training was unusually specific to the work ahead. He studied automotive marketing and management at Northwood University, earning a bachelor’s degree in business administration. His career included sales at Mercedes-Benz in Stuttgart and at the brand’s Manhattan location, as well as Master Certified Sales Consultant credentials at Daimler in Germany. Cars were both the subject of his education and the object of his working day.

That background helps explain the business he went on to build. Dealership software has to make sense to people with customers waiting, telephone calls to return and monthly targets approaching. An additional screen earns its place by helping with those tasks. Someone who has sold the vehicle can ask quite pointed questions about what the screen should contain.

Gnauck and Schnabl founded automotiveMastermind in 2012. Their early focus was the relationship a dealership already had with a customer: the information accumulated through purchases, financing and service, and the possibility that it could indicate when another purchase was approaching. The next sale might begin well before anyone walked through the showroom door.

A diagram acquires a workday

The founders brought their concept to software engineer Mohammed Jaleel, known as MJ. His recollection of the starting material was pleasingly modest: a PDF containing a diagram. Jaleel worked from India; Gnauck and Schnabl were in New York. Skype connected their discussions across the time difference. Dealer feedback helped determine what the emerging product should do.

The platform launched in 2013 with six dealer partners. That detail restores a little scale to a story often told through its eventual acquisition. Six businesses had to put the product into daily use. Their questions could expose a confusing feature or reveal something the founders had overlooked. A diagram is admirably cooperative. A working dealership asks follow-up questions.

By 2016, the company counted more than 800 dealers nationwide. The distance from six to hundreds meant that an idea developed around familiar work had found a broader audience. It also created a larger obligation: the product had to keep serving people whose routines and customer bases the founders could no longer know personally.

The number on the screen

Gnauck’s responsibilities became explicit when JMI Equity announced its investment in November 2016. Schnabl would concentrate on sales, service and operations. Gnauck would continue leading product development, technology and the product roadmap. The former salesman was now responsible for what other salespeople would use.

The division gave each founder a distinct job while preserving a shared understanding of the customer. It also put Gnauck at the meeting point between a dealer’s request and the work required to turn it into a feature. More information was available than any individual salesperson could comfortably sift through. Choosing what to present became part of the product itself.

A central device was the Behavior Prediction Score, a ranking from zero to 100 indicating how close a customer was thought to be to a purchase. The score condensed a much larger collection of signals. A salesperson could use it to prioritize attention, then look at the reasons and possible talking points behind it. The number needed to lead to a useful conversation.

In his own writing about predictive analytics, Gnauck described the difference between maintaining a customer’s history and anticipating what the customer might do next. A record of a previous visit was a starting point. He argued for information delivered to the salesperson’s desktop, accompanied by an assessment of buying readiness, relevant talking points and a tailored marketing campaign.

His argument was practical. The information should help shorten the buying process and support a better experience in the dealership. Reading those priorities together, the product brief becomes easy to recognize: give the salesperson enough context to be useful sooner. The customer should not have to wait while an impressive quantity of data introduces itself.

When the customer list grew

The business was expanding quickly. In 2017, automotiveMastermind placed seventh on the Inc. 5000 list. Its 2016 sales exceeded $23 million. A company founded by two automotive retail colleagues had become a subscription software business selling to dealerships across several brands. Gnauck’s product work now sat inside a business with recurring revenue and a growing customer base.

JMI’s investment had been the company’s first institutional capital. It was intended to support technology development, product expansion and customer service. The founders continued to lead and control the business after that investment. For Gnauck, the announcement tied the roadmap to a new financial partner and an expectation of further expansion.

Then came the transaction that makes the small beginnings seem especially distant. In September 2017, IHS Markit acquired approximately 78 percent of automotiveMastermind for an initial purchase price of about $392 million. Additional consideration depended on performance, with arrangements to buy the remaining stake over the following five years. The terms described a company transaction; they do not establish any individual founder’s proceeds.

The new ownership also brought access to additional automotive information. In 2018, the company introduced conquestMastermind, extending its work to prospective buyers beyond a dealer’s existing customer relationships. Its integration of Polk Predictive Audiences helped identify people in a dealer’s area who might be approaching a purchase.

Gnauck emphasized that dealers could see who had been targeted, the reasons for the selection and how to approach them with a relevant offer. That concern with explanation followed naturally from the original sales task. A name on a list is an invitation to do more work. A name accompanied by useful context gives the salesperson somewhere to begin.

The workshop gets larger

At the 2019 NADA show in San Francisco, automotiveMastermind announced Market EyeQ. The platform brought together the customer categories dealers had traditionally handled separately: retention, service and conquest. The ambition was to give a dealer a view across its local market, including existing customers, people arriving for service and prospective buyers elsewhere.

For a former dealership salesman overseeing product, the change enlarged the assignment. Helping with the next customer on a familiar list was one task. Supporting several routes into a sale required a platform that could bring different kinds of information together. The experience at the desk still had to be manageable.

The people building it became a public priority. In 2020, the company announced senior additions across product, software engineering and architecture. Joseph Kacala joined as chief product officer, alongside Chris Long, Tushar Manglik and Yong Li in other product and technology roles. Gnauck described the need for people who could concentrate on building the product as demand grew.

“We knew we needed key individuals to help us focus on building our product.”

Johannes Gnauck, discussing the product and technology hires announced in 2020

A further announcement that year emphasized data science, analytics and infrastructure. These are the less photogenic parts of a founder’s story: responsibilities, specialist teams and the systems beneath the demonstration. Yet they help explain how Gnauck’s work changed. The company needed people with expertise that extended well beyond the founders’ original dealership experience.

Another counter, a familiar question

Gnauck’s interest in retail software also appeared outside automotiveMastermind. In June 2018, he and Schnabl participated in Statflo’s $12 million Series A financing, led by Elsewhere Partners. Statflo provided sales acceleration software for wireless and technology retailers. The investment put them alongside institutional investors in another business concerned with customer relationships and sales activity.

The two businesses worked on related problems at different retail counters. Gnauck helped build software for automotive retail, then backed a company developing software for another retail setting. Both brought technology close to the point where a person had to contact a customer and make that contact worthwhile.

He is now identified as automotiveMastermind’s co-founder and former co-CEO. His place in its story rests on a sequence of concrete changes: from selling cars to defining a product, from a founding partnership to a larger technical organization, from a dealership’s existing records to a broader view of possible buyers.

The kitchen table remains the memorable detail because it keeps all that expansion attached to a person and a place. There was a job downstairs that Gnauck understood well enough to question. Upstairs, he and his colleague began working on an answer. The eventual business traveled much farther than those nine floors.