Is CRM Software Useful For A Startup?

CRM is useful if you develop a discipline around it and know what you want to get out of it. (I spent a number of years working for a CRM company) The best perspective on the potential value of CRM I've ever heard came from a VP of sales for a client - 'I know all about the customers/jobs we win, CRM doesn't help me with that, it's knowing about all the ones we didn't win, that's the knowledge I want'.

Right size what you do for your business, If you sell airplanes (Fewer large $ sales with long relationships), it makes sense to know as much as you can about a given prospect and it's worth investing into gathering that knowledge. On the other hand if you sell small $$ items to non-repeating customers, it probably makes more sense to gather some basics that help you understand your market and move on.

It depends a lot on the type of start-up you're talking about. If you think you'll soon need many full-time sales people (incl. sales engineers, assistants, etc.) then you definitely need some centralized system to manage the sales cycle and the projects afterwards.

Personally I use Podio. It's free for up to 5 users IIRC. It's not perfect but it does the job. It's more flexible than a traditional CRM, e.g. it's easy to customize how the data is organized. 

CRM is good even for small companies with several employees... Management get the most benefits from it.

The first is documenting the sales/presales process in one place to avoid several copies of same data and data loss.

The second, avoiding constant waste of time during countless meetings with the single question "tell me what is going on". Management can just login and look through... without any disturbance of employee productivity. Working in several big companies I spent about whole workday each week for "bla-bla-bla" and "what have you done today"

And the third, role or employee change. CRM avoids monopolization of relations to customer and protects company from "bye-bye customer database" along with leaving sales person. We have situations when "good personal relations" have left the company but not the customer itself. Deals and other critical information could be easily restored and processed by new employee.  

I would say it depends on what you're looking to grow your company too.   I wish we would have started on our CRM day one and not making the switch 10 years in.  Our CRM Connectwise can manage every aspect of the business from leads, contacts, accounting, quoting, POs and support.