Building a SaaS Company with Operational Discipline: Betterworks CEO Kris Duggan (Part 4)

Sramana Mitra: Was there a segment where you were finding traction from a size point of view or any other segmentation parameter?

Kris Duggan: I would say that initially when I first started the company, I thought this might be for companies that are not too big. Maybe if you’re a thousand or ten thousand people, you need Workday or SuccessFactors. What I found was that even these large enterprises have real, major challenges around driving adoption around goals.

Most companies are trying to figure out how to move towards more transparent goal-setting where goals are open and people can see them. Most of these systems, by the way, are very antiquated in terms of their philosophical design around transparency. With Workday and SuccessFactors, you can’t really see what other people are working on easily. It’s not a core tenet of the product. They’re already quite out of data relative to today’s needs. Secondly, companies are trying to move from an annual goal setting to a quarterly goal setting. This needs to be more lightweight and easy, that how it’s been traditionally done.

They want people to be engaged with their goals throughout the quarter. You have to be checking in, marking your progress, integrating with your systems of records like Salesforce. Those systems that we talked about don’t do any of those things. It turned out that it wasn’t just for a couple of hundred employee companies. It was really any company that does any kind of goal setting.

Sramana Mitra: As you were going through this understanding of your product versus SuccessFactors, I imagine you were starting to win clients on the basis of that positioning and that differentiation. Were you winning more in the SuccessFactors customer base or were you winning in accounts that didn’t have any solution for goal setting?

Kris Duggan: I would say it’s mixed. We have over 200 customers today. Most of them are larger companies and most of them already have a homegrown system or SuccessFactors or Oracle systems. They are trying to either use Betterworks to replace the existing module from those existing HRI systems or complement their existing HRI infrastructure with the operational system that we provide. We’re not trying to be the HRIF. We’re just trying to own the entire experience around operationalizing the business. We believe that is not being delivered from these existing HR tools.

Sramana Mitra: The other line of questioning is what is the financing strategy of Betterworks?

Kris Duggan: I would say that we were just lucky. At the beginning, the company was funded by the co-founder of Palantir. He invested in our $2.5 million seed round. He didn’t invest in anything other than wanting to back me. We had a good relationship. About 30 days later, I met John Doerr and I told him about what we were working on. He was very excited about the idea. At first, he was angry because he thought he should have come up with the idea and not us. Then he said, “What’s the most that we can invest?” We ended up taking a $15 million Series A that was Kleiner’s largest A investment since Google. That was in October 2013.

This segment is part 4 in the series : Building a SaaS Company with Operational Discipline: Betterworks CEO Kris Duggan
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