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Building and leading an early-stage sales team with Zoom CRO Ryan Azus
This year at Early Stage, TechCrunch spoke with Zoom Chief Revenue Officer (CRO) Ryan Azus about building an early-stage sales team. Azus is perhaps best known for leading the video-calling giant’s income arm during COVID-19, but his experience building RingCentral’s North American sales organization from the ground up made him the perfect guest to chat with about building an early-stage sales team.
We asked him about when founders should step aside from leading their startup’s sales org, how to build a working sales culture, hiring diversely, how to pick customer segments and how to build a playbook.
Below, TechCrunch has compiled a number of key comments from Azus, and afterward we’ve included the full video from the interview as well as a transcript. Let’s go!
When should founders let others run sales?
Nearly every startup leans on its CEO as its first salesperson. After all, who else knows the product and can talk it up like the startup’s leader? But having the CEO as point-person for sales scales poorly. So, when is the right time to have someone else step in?
Fairly early on. First off, CEOs need to solve customer needs. And so it’s important to be very hands-on for a while to really understand while you’re trying to figure out product-market fit. And then bringing in some of those sales people as you start seeing something [good].
Part of it is also knowing what type of salesperson you need. [ … ] Who is your core audience? What persona are you going after? And trying to find people that know and understand selling something that’s primarily very transactional to small businesses, [or] e-commerce lead, or selling something that’s more enterprise — those are different animals, different segments that you’re going after. One mistake [startups make] is hiring the wrong type of salesperson. (Time stamp: 5:29)
How much product-market fit is enough?
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How to recruit data scientists without paying top dollar
When it comes to building a data science team, many companies fail at the first step — creating a job posting. These mistakes have been amplified in the age of COVID-19.
The increasing demand for AI and data science experts, driven in part by the pandemic’s economic impact, is showing no sign of abating. Many employers are failing to identify viable job candidates, much less interviewing or hiring them.
What’s the biggest obstacle holding them back? In our experience, it is often a poorly drafted job posting. And with the pandemic completely stopping all in-person recruiting events, hiring success hinges on an effective job rec. Previously tolerable mistakes are now fatal.
At The Data Incubator, a data science training and placement firm, we’ve helped hundreds of companies successfully hire data science teams. Honestly, it pains me to see amazing companies undersell themselves in this area.
When it comes to building a data science team, many companies fail at the first step — creating a job posting.
Companies inevitably gravitate toward the same generic buzzwords, promoting themselves as “cutting edge,” “creative,” “collaborative,” “data driven,” “passionate” or “insightful” (just peruse Indeed for examples of these lackluster postings). Or they delve into industry jargon, which may be lost on candidates who are not familiar with the industry.
To streamline the writing process, we recommend that clients break down their competitive advantage into three buckets: compensation, mission and tech. Only by understanding where their strength lies can they successfully market their job openings.
Compensation
Compensation is an important component of making a position competitive. Managers certainly need to fight to ensure their remuneration range is appropriate for their data science roles. However, budget constraints are difficult to overcome, especially given the ability of tech and finance to pay top dollar for these sought-after skills. How to combat this when you don’t have the same budget? Consider listing compensation in job ads.
If you’re one of (the majority of) employers who cannot afford to compete on salary, this will help job seekers understand what to expect. Neither you, nor a potential candidate, wants to spend hours interviewing just to discover that it would have never worked out because of compensation. Save yourself the time and frustration by listing remuneration upfront.
What if you are one of the few employers able to pay major-league salaries? Congratulations, but don’t throw away your hard-won budget! Companies develop reputations for compensation. Unless you are one of the select firms with a reputation for paying top dollar, you will need to signal that to top talent. Otherwise, strong candidates may assume the remuneration is low and not apply, defeating the purpose of paying a high salary in the first place.
Obviously, listing salaries is controversial and there are plenty of reasons why employers are weary of listing salary ranges. However, a recent survey by SHRM found that 70% of professionals want to hear about salary upfront and Glassdoor.com reports that salary is the No. 1 consideration for 67% of job seekers. With all these benefits, employers should seriously consider being more upfront and transparent about what they are able to pay, if only to save themselves time and frustration.
Mission
In the COVID-19 workplace, employees are finding themselves increasingly isolated. With work from home poised to stay even after the virus has dissipated, the risk of isolation will continue. Companies need to double down on articulating their mission and galvanizing employees around that. This doesn’t just start with employment but the very first step of the hiring process: the job posting. Emphasizing mission in the job posting will attract employees.
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The Product Manager asterisk
Product manager might be one of the most grey roles within a startup. However, as a company progresses and the team grows, there comes a time when a founder needs to carve out dedicated roles. Of these positions, product management might be one of the most elusive — and key — roles to fill.
Ken Norton, who recently left his job as director of product at Figma to consult rising PMs, thinks it’s easier to start with defining what they aren’t: the CEO of the product.
“Product managers need to realize that there is a lot of janitorial work that gets done in product management,” he said. “It’s not fun or glamorous, and it’s certainly not being the CEO of the product. It’s just stuff that needs to get done.” I wrote up a guide on how and when to hire your first product manager that expands on some of these insights, including how focus might be the biggest trait to interview for:
- How and when to hire your first product manager
- In freemium marketing, product analytics are the difference between conversion and confusion
- Create a handbook and integrate AI to onboard remote employees
Hiring continues to be one of the hardest parts of building a startup, and those early employees can define the trajectory, culture and eventual success of it. Even during TC Sessions: Justice this past week, Precursor’s Sydney Thomas explained how startups need to make “pretty final decisions, pretty early on in what type of company you want to build.”
It’s a slight asterisk to the common narrative of how startups pivot every other day. It’s not that simple, and I’ll probably remind you of that every other week, dear Startups Weekly readers.
The rest of today’s newsletter will include notes on a hot up-and-coming edtech IPO, an exit that includes Jay-Z, and the latest in agricultural tech robots. Also, remember you can always find me on Twitter @nmasc_ or e-mail me at natasha.m@techcrunch.com.
The public markets get educated
It’s been yet another busy week for the public markets. I published a scoop earlier this week that Coursera is filing to go public soon, which would be one of the first debuts that will let us see how an education company’s finances changed, and accelerated, amid the pandemic’s impact on remote learning.
Here’s what to know: Like clockwork, Coursera’s S-1 dropped late Friday, giving us the first glance of the numbers behind the business. The startup tried to pain a picture of a path of profitability, with rising revenues as well as rising net losses. We get into the meat of it here.
- Unraveling ThredUp’s IPO filing: Slow growth but a shifting business model
- First impressions of AppLovin’s IPO filing
- Oscar Health prices IPO at $39 and secures a $9.5 billion valuation
Image Credits: Fotograzia / Getty Images
What’s better than one billionaire? Two
One of the biggest headlines of this past week was Square buying a majority stake of Tidal. A fintech and music collaboration might not seem that obvious, but the music economy remains one of the most under-tapped (and under-innovated) opportunities that remains out there.
Here’s what to know: Square CEO Jack Dorsey used his other company, Twitter, to share more information about the $297 million deal. As part of this transaction, Tidal owner Jay-Z got a board seat with Square, triggering conversations about the future of musical NFTs. The deal also officially confirmed that Jay-Z isn’t just a businessman, he’s a business, man.
- 3Lau spoke on the Good Time Show, hosted by Sriram Krishnan and Aarthi Ramamurthy, about his NFT audio journey.
- Cappuccino lets you share short, intimate audio stories with your friends.
- Plus, stay tuned for an NFT-focused Equity show next week. If there’s anyone you think we need to interview for the episode, DM me names.
Singer Jay-Z performs before US President Barack Obama speaks at a campaign rally in Columbus, Ohio, on November 5, 2012. After a grueling 18-month battle, the final US campaign day arrived Monday for Obama and Republican rival Mitt Romney, two men on a collision course for the world’s top job. The candidates have attended hundreds of rallies, fundraisers and town halls, spent literally billions on attack ads, ground games, and get out the vote efforts, and squared off in three intense debates. AFP PHOTO/Jewel Samad (Photo credit should read JEWEL SAMAD/AFP/Getty Images)
Decentralized insect farming, anyone?
In this week’s Equity Wednesday episode, we brought on TC’s climate tech editor, Jonathan Shieber, to talk about the opportunities within agtech right now. We covered a lot within the 20-minute episode: from $100 million for mealworms, farm-to-grill robots and decentralized insect farming.
Here’s what to know: Farms have always had a compelling reason to turn to robotics to make tedious work much, much easier. We got into two different businesses and their approaches on how to serve farm robots, from SaaS leases to selling the robots one by one.
- Corporate sustainability initiatives may open doors for carbon offset startups
- Autonomous dust cropping might be a new suite of services amid agtech robotics
Image Credits: Fernando Trabanco Fotografía / Getty Images
Around TechCrunch
Thanks to all of you who tuned into TC Sessions: Justice this past week, it was so fun to hang — and make sure to give virtual kudos to my colleague, and showrunner, Megan Rose Dickey.
Next up is TechCrunch Early Stage, our yearly event that is all about tactical advice to help new and first-time founders navigate the Wild West world that is venture capital and startups. We just announced the judges of the pitch-off competition, and have already landed top-tier venture capitalists to share what you won’t find on Twitter: behind the scenes startup advice that is beyond 180 characters.
It’s the bootcamp you always wished you could attend, so get your tickets here.
Across the week
Seen on Extra Crunch
Understanding how investors value growth in 2021
Dear Sophie: Can you demystify the H-1B process and E-3 premium processing
11 words and phrases to cut from your VC pitch deck
Making sense of the $6.5B Okta-Auth0 deal
Seen on TechCrunch
SoftBank makes mountains of cash off of human laziness
Mary Meeker’s Bond has closed its second fund with $2 billion
The technology selloff is getting to be somewhat material
What China’s Big Tech CEOs propose at the annual parliament meeting
And finally…
I wanted to end by using this platform to address the rise of anti-Asian violence across our country. Conversations around how to be a more inclusive and anti-racist society need to be more loud, and more collaborative in order for change to actually happen. Intention around inclusion will impact the world we live in, the startups we create and the success of our collective. Here are some resources to donate, petition and learn.
Thanks,
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How and when to hire your first product manager
In the world of early-stage startups, job titles are often a formality. In reality, each employee may handle a dozen responsibilities outside their job description. The choose-your-own-adventure type of work style is part of the magic of startups and often why generalists thrive here.
However, as a company progresses and the team grows, there comes a time when a founder needs to carve out dedicated roles. Of these positions, product management might be one of the most elusive — and key — roles to fill.
Product management might be one of the most elusive — and key — roles to fill.
We spoke to startup founders and operators to get their thoughts about how and when they hired their first product manager. Some of the things we talked about were:
- Which traits to look for.
- Why it’s important to define the role before you look for your best fit.
- Whether your new hire needs to have a technical background.
- The best questions to ask in an interview.
- How to time your first hire and avoid overhiring.
Don’t hire for the CEO of a product
Let’s start by working backward. Product managers often graduate into a CEO role or leave a company to become a founder. Like founders, talented product managers have innate leadership skills and are able to effectively and clearly communicate. Similarly, both roles require a person who is a visionary when it comes to the product and execution.
David Blake was a product manager before he became a serial edtech founder who created Degreed, Learn In, and most recently, BookClub. He says that experience helped him launch the first prototype of Degreed and attract first clients.
“The must-have skill is the ability to put the team’s best wisdom in check and inform the product decisions with users and potential clients to inform what you are building,” he said. The person “must also be able to take the team’s mission and develop and sell that narrative to users and potential clients. That is how you blaze a new trail, balance risk, while avoiding building a ‘faster horse.”
The overlapping synergies between PMs and founders is part of the reason why the role is so confusing to define and hire for. Ken Norton, former director of product at Figma who recently left to solo advise and coach product managers, says companies can start by defining what PMs are not: The CEO of the product.
“It’s about not handing off the product responsibilities to somebody,” he said. “You want the founder and the CEO to continue to be the evangelist and visionary.” Instead, the role is more about day to day “blocking and tackling.” Norton wrote a piece more than 15 years ago about how to hire a product manager, and it’s still an essential read for anyone interested in the field.
Define the role and set your expectations
Product managers help translate all the jugglers within a startup to each other; connecting the engineer with marketing, design with business development and sales with all the above. The role at its core is hard to define, but at the same time is the necessary plumbing for any startup that wants to be high-growth and ambitious.
While a successful product manager is a strong generalist, they have to have the ability to understand and humanize technical processes. The best candidates, then, have some sort of technical experience as an engineer or otherwise.
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Hourly job-matching startup Landed raises $1.4M
Landed, a startup aiming to improve the hiring process for hourly employers and job applicants, is officially launching its mobile app today. It’s also announcing that it has raised $1.4 million in seed funding.
Founder and CEO Vivian Wang said that the app works by asking applicants to fill out a profile with information like work experience and shift availability, as well as recording videos that answer basic common interview questions. It then uses artificial intelligence to analyze those responses across 50 traits such as communication skills and body language, then matches them up with job listings from employers.
Landed has been in beta testing since March of last year — yes, right as COVID-19 was hitting the United States. Wang acknowledged that this was bad news for some of the startup’s potential customers, but she said businesses like grocery stores and fast food restaurants needed the product more than ever.
“That’s why we continuously grew through 2020,” she said.
After all, Landed allowed those businesses to continue hiring without having to conduct large group interviews in person. Even beyond health concerns, she said managers struggle with rapid turnover in these positions (something Wang saw herself during her time on the corporate team at Gap, Inc.) and with a hiring process that’s usually “only a small part of their job.” So Landed saves time and automates a large part of the product.
Landed CEO Vivian Wang. Image Credits: Landed
Meanwhile, Wang said job applicants benefit because they can find jobs more easily and quickly, often within a week of creating a profile. She also argued that Landed can improve on existing diversity and inclusion efforts by allowing managers to see a broader pool of candidates, and because its AI matching isn’t subject to the same unconscious biases that employers might have.
Of course, bias can also be inadvertently built into AI, but when I raised this issue, Wang pointed to Landed’s partnerships with local nonprofits to bring in underrepresented candidates, and she added, “AI can be scary when there are no human checks in place. We partner directly with our employers to ensure the matches that we’re sending them are the right matches, and there are calibration periods.”
Landed is free for job applicants, while it charges a monthly fee to employers, with customers already including Wendy’s, Chick-fil-A and Grocery Outlet franchisees. In fact, Grocery Outlet Ventura owner Eric Sawyer said that by using the app, he’s gone from hiring one person for every 10 interviews to hiring one person for every three interviews.
“My time spent on scheduling and performing interviews has been cut in half by utilizing the Landed app for most of my communications,” he said in a statement.
The new funding was led by Javelin Venture Partners, with participation from Y Combinator, Palm Drive Capital and various angel investors. Wang said this will allow Landed to continue expanding — the service is currently available in seven metro areas (Northern California; Southern California; Virginia Beach/Chesapeake, Virginia; Phoenix/Scottsdale, Arizona; Atlanta, Georgia; Reno, Nevada and Dallas-Ft. Worth, Texas), with a goal of tripling that number by the end of the year.
Wang added that eventually, she wants to provide other services to job applicants, such as loans (at a lower rate than payday lenders) and job training, turning Landed into a “lifestyle stability platform” that combines job stability, financial stability and educational “upskilling” for blue-collar workers.
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Oyster snaps up $20M for its HR platform aimed at distributed workforces
The growth of remote working and managing workforces that are distributed well beyond the confines of a centralized physical office — or even a single country — have put a spotlight on the human resources technology that organizations use to help manage those people. Today, one of the HR startups that’s been seeing a surge of growth is announcing a round of funding to double down on its business.
Oyster, a startup and platform that helps companies through the process of hiring, onboarding and then providing contractors and full-time employees in the area of “knowledge work” with HR services like payroll, benefits and salary management, has closed a Series A round of $20 million.
The company is already working in 100 countries, and CEO and Tony Jamous (who co-founded the company with Jack Mardack) said in an interview that the plan is to expand that list of markets, and also bring in new services, particularly to address the opportunity in emerging markets to hire more people.
Currently, Oyster does not cover candidate sourcing or any of the interviewing and evaluation process: those could be areas where it might build its own tech or partner to provide them as part of its one-stop shop. It has dabbled in virtual job fairs, as a pointer to one potential product that it might explore.
“There are 1.5 billion knowledge workers coming into the workforce in the next 10 years, mostly from emerging economies, while in developed economies there are some 90 million jobs unfilled,” Jamous said. “There are super powers you can gain from being globally distributed, but it poses a major challenge around HR and payroll.”
Emergence Capital, the B2B VC that has backed the likes of Zoom, Salesforce, Bill.com and our former sister site Crunchbase, is leading the funding. The Slack Fund (Slack’s strategic investment vehicle) and London firm Connect Ventures (which has previously backed the company at seed stage) are also participating. The investment will accelerate Oyster’s rapid growth, and support its mission of enabling people to work from anywhere.
Oyster’s valuation is not being disclosed. The startup has raised about $24 million to date.
One of the great ironies of the global health pandemic is that while our worlds have become much smaller — travel and even local activities have been drastically curtailed, and many of us spend day in, day out at home — the employment opportunity and scope of how organizations are expected to operate has become significantly bigger.
Public health-enforced remote working has led to companies de-coupling workers from offices, and that has opened the door to seeking out and working with the best talent, regardless of location.
This predicament may have become more acute in the last year, but it’s been one that has been gradually coming into focus for years, helped by trends in cloud computing and globalization. Jamous said that the idea for Oyster that came to him was something he’s been thinking about for years, but became more apparent when he was still at his previous startup, Nexmo — the cloud communications provider that was acquired by Vonage for $230 million in in 2016.
At Nexmo we wanted to be a great local employer. We were headquartered in two countries but wanted to have people everywhere,” he said. “We spent millions building employment infrastructure to do that, becoming knowledgeable about local laws in France, Korea and more countries.” He realized quickly that this was a highly inefficient way to work. “We weren’t ready for the complexity and diversity of issues that would come up.”
After he moved on from Nexmo and did some angel investing (he backs other distributed work juggernauts like Hopin, among others), he decided that he would try to tackle the workforce challenge as the focus of his next venture.
That was in mid-2019, pre-pandemic. It turned out that the timing was spot on, with every organization looking in the next year at ways to address their own distributed workforce challenges.
The emerging market focus, meanwhile, also has a direct link to Jamous himself: He left his home country of Lebanon to study in France when he was 17, and has essentially lived abroad since then. But as with many people who move from developed into emerging markets, he knew that the base of technical talent in his home country was something that was worth tapping and nurturing to help residents and the countries themselves improve their lots in life; and he thought he could use tech to help there, too.
Related to that wider social mission, Oyster has a pending application to become a B-Corporation.
Jamous is not the only one that has founded an HR company based on his personal experience: Turing’s founders have cited their own backgrounds growing up in India and working with people remotely from there as part of their own impetus for building Turing; and Remote’s founder hails from Europe but built GitLab (where he had been head of product) based on a similar premise of tapping into the talent he knew existed all around the world.
And indeed, Oyster is not alone in tackling this opportunity. The list of HR startups looking to be the ADPs of the world of distributed work include Deel, Remote, Hibob, Papaya Global, Personio, Factorial, Lattice, Turing and Rippling. And these are just some of the HR startups that have raised money in the last year; there are many, many more.
The attraction of Oyster seems to come in the simplicity of how the services are provided — you have options for contractors and full-timers, and full, larger staff deployments in other countries. You have options to add benefits for employees if you choose. And you have some tools to work out how hires fit into your bigger budgets, and also to guide you on remuneration in each local market. Pricing ranges from $29 per person, per month for contractors, to $399 for working with full employees, to other packages for larger deployments.
Oyster works with local partners to provide some aspects of these services, but it has built the technology to make the process seamless for the customer. As with other services, it essentially handles the employment and payroll as a local provider on behalf of its customers, but can do so under contract terms that reconcile both a company’s own policies and those of the local jurisdictions (which can differ widely between each other in areas like vacation time, redundancy terms, maternity leave and more).
“It has a few well-funded competitors, but that’s usually a good signal,” said Jason Green, the Emergence partner who led its investment. “But you want to bet on the horse that will lead the race, and that comes down to execution. Here, we are betting on a team that’s done it before, an entrepreneur experienced in building a company and selling it. Tony’s made money and knows how to build a business. But more than that, he’s mission driven and that will matter in the space, and to employees.”
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HiPeople picks up $3M seed to automate reference checks
HiPeople, an HR tech startup based in Berlin that wants to automate the reference checking process, has raised $3 million in seed funding.
Leading the round is Mattias Ljungman’s Moonfire, with participation from Capnamic Ventures and Cherry Ventures. It follows a $1.1 million pre-seed in late 2019. Notably, the seed round was closed fully remote, without any in-person meetings. “Just like the hiring processes of HiPeople’s clients,” founders Jakob Gillmann and Sebastian Schüller told me in an email.
HiPeople says the investment will be used to support growth so that more recruiters can hire remotely using automated reference checks. Longer term, the company is developing a candidate analytics platform to provide rich data and insights on each candidate and enable what it frames as “data-driven” hiring.
“Abstractly-speaking HiPeople is in the talent insights business,” say Gillmann and Schüller. “Its mission is to enable better hiring by automatically collecting and analyzing talent data, and providing rich insights. HiPeople currently solves this by automating candidate reference checks from request, to collection, and analysis. This allows companies to extend the information they have on a candidate without additional manual work”.
The idea behind the software-as-a-service is that HiPeople’s approach creates a seamless user experience for the recruiter, and “verified, in-depth reference checks they can trust”. As a result, the startup claims that its users on average collect 2x the amount of references on a candidate, in 50% of the time. “Traditionally, reference checks are underutilized due to the highly manual process, and often only exclusively used for executive hiring. HiPeople dusts off reference checks, and enables rich talent insights by rethinking how they are done,” says HiPeople’s founders.
HiPeople’s customers span fast-growing startups to tech scale-ups and more established upper mid-market companies. For example, process mining company Celonis, which doubled its workforce in the last 12 months to 1,200 employees globally, uses HiPeople to improve hiring quality for roles in San Francisco, Munich and Tokyo. “By programmatically conducting reference checks the company hires talent based on verified insights on topics like areas of improvement, skills, teamwork style, or work values,” explains HiPeople.
Adds Moonfire’s Mattias Ljungman: “Workflow automation of repetitive processes, and insights on the candidate that go beyond the limitations of the CV, are a clear pain for anybody in recruiting. The Covid-influenced reality of remote work, hence remote hiring practices, has increased the complexity of finding the right talent. HiPeople created a way to enable anybody who is hiring to make better decisions, whilst improving processes and increasing hiring velocity”.
Gillmann and Schüller tell me that in Europe, HiPeople mainly competes with the existing infrastructure and processes recruiters use to manually conduct references checks. In the U.S., companies like Xref or Crosschq are more direct competitors in terms of automating reference checks.
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Iziwork raises $43 million for its temporary work platform
French startup Iziwork has raised a $43 million funding round. Cathay Innovation and Bpifrance’s Large Venture fund are participating in this funding round. The company has been building a platform focused on improving temporary employment.
While it’s a relatively large funding round, the startup is quite young. It was founded in September 2018 and it has raised $68 million overall.
Iziwork manages a marketplace of temporary work; 2,000 companies are using the platform in France and Italy, and 800,000 candidates have used the app to access job opportunities. You can consider it as a tech-enabled version of the good old employment agency.
Candidates can onboard directly from the mobile app. You then get personalized recommendations based on your profile (95% of assignments are filled in less than four hours). And of course, all your documents are managed from the app.
Iziwork tries to add some benefits to compensate for the fact that temporary workers often jump from one company to another. For instance, you get a time savings account, you can request a down payment on your pay every week, etc.
The startup has realized that it can’t open offices in every big and intermediate city. That’s why third-party companies can join the Iziwork network. As a partner, you find new clients and new job opportunities. You can then leverage Iziwork’s app, service and pool of candidates.
This is an interesting strategy, as it greatly increases supply on the Iziwork marketplace. Partners get a revenue sharing deal with Iziwork.
With today’s funding round, the company plans to expand to new countries and improve its tech product. There are still some growth opportunities in its existing markets as well.
Jobandtalent, another company in this space, has attracted some headlines as it raised $108 million last week. Founded in 2009 and based in Madrid, it generated €500 million in revenue last year.
But, let’s be honest, the temporary work market is huge. Adecco, Randstad and other legacy players still represent a bigger threat for this recent wave of temp staffing startups. Let’s see how it plays out in the coming years.
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Turing nabs $32M more for an AI-based platform to source and manage engineers remotely
As remote work continues to solidify its place as a critical aspect of how businesses exist these days, a startup that has built a platform to help companies source and bring on one specific category of remote employees — engineers — is taking on some more funding to meet demand.
Turing — which has built an AI-based platform to help evaluate prospective, but far-flung, engineers, bring them together into remote teams, then manage them for the company — has picked up $32 million in a Series B round of funding led by WestBridge Capital. Its plan is as ambitious as the world it is addressing is wide: an AI platform to help define the future of how companies source IT talent to grow.
“They have a ton of experience in investing in global IT services, companies like Cognizant and GlobalLogic,” said co-founder and CEO Jonathan Siddharth of its lead investor in an interview the other day. “We see Turing as the next iteration of that model. Once software ate the IT services industry, what would Accenture look like?”
It currently has a database of some 180,000 engineers covering around 100 or so engineering skills, including React, Node, Python, Agular, Swift, Android, Java, Rails, Golang, PHP, Vue, DevOps, machine learning, data engineering and more.
In addition to WestBridge, other investors in this round included Foundation Capital, Altair Capital, Mindset Ventures, Frontier Ventures and Gaingels. There is also a very long list of high-profile angels participating, underscoring the network that the founders themselves have amassed. It includes unnamed executives from Google, Facebook, Amazon, Twitter, Microsoft, Snap and other companies, as well as Adam D’Angelo (Facebook’s first CTO and CEO at Quora), Gokul Rajaram, Cyan Banister and Scott Banister, and Beerud Sheth (the founder of Upwork), among many others (I’ll run the full list below).
Turing is not disclosing its valuation. But as a measure of its momentum, it was only in August that the company raised a seed round of $14 million, led by Foundation. Siddharth said that the growth has been strong enough in the interim that the valuations it was getting and the level of interest compelled the company to skip a Series A altogether and go straight for its Series B.
The company now has signed up to its platform 180,000 developers from across 10,000 cities (compared to 150,000 developers back in August). Some 50,000 of them have gone through automated vetting on the Turing platform, and the task will now be to bring on more companies to tap into that trove of talent.
Or, “We are demand-constrained,” which is how Siddharth describes it. At the same time, it’s been growing revenues and growing its customer base, jumping from revenues of $9.5 million in October to $12 million in November, increasing 17x since first becoming generally available 14 months ago. Current customers include VillageMD, Plume, Lambda School, Ohi Tech, Proxy and Carta Healthcare.
Remote work = immediate opportunity
A lot of people talk about remote work today in the context of people no longer able to go into their offices as part of the effort to curtail the spread of COVID-19. But in reality, another form of it has been in existence for decades.
Offshoring and outsourcing by way of help from third parties — such as Accenture and other systems integrators — are two ways that companies have been scaling and operating, paying sums to those third parties to run certain functions or build out specific areas instead of shouldering the operating costs of employing, upsizing and sometimes downsizing that labor force itself.
Turing is essentially tapping into both concepts. On one hand, it has built a new way to source and run teams of people, specifically engineers, on behalf of others. On the other, it’s using the opportunity that has presented itself in the last year to open up the minds of engineering managers and others to consider the idea of bringing on people they might have previously insisted work in their offices, to now work for them remotely, and still be effective.
Siddarth and co-founder Vijay Krishnan (who is the CTO) know the other side of the coin all too well. They are both from India, and both relocated to the Valley first for school (post-graduate degrees at Stanford) and then work at a time when moving to the Valley was effectively the only option for ambitious people like them to get employed by large, global tech companies, or build startups — effectively what could become large, global tech companies.
“Talent is universal, but opportunities are not,” Siddarth said to me earlier this year when describing the state of the situation.
A previous startup co-founded by the pair — content discovery app Rover — highlighted to them a gap in the market. They built the startup around a remote and distributed team of engineers, which helped them keep costs down while still recruiting top talent. Meanwhile, rivals were building teams in the Valley. “All our competitors in Palo Alto and the wider area were burning through tons of cash, and it’s only worse now. Salaries have skyrocketed,” he said.
After Rover was acquired by Revcontent, a recommendation platform that competes against the likes of Taboola and Outbrain, they decided to turn their attention to seeing if they could build a startup based on how they had, basically, built their own previous startup.
There are a number of companies that have been tapping into the different aspects of the remote work opportunity, as it pertains to sourcing talent and how to manage it.
They include the likes of Remote (raised $35 million in November), Deel ($30 million raised in September), Papaya Global ($40 million also in September), Lattice ($45 million in July) and Factorial ($16 million in April), among others.
What’s interesting about Turing is how it’s trying to address and provide services for the different stages you go through when finding new talent. It starts with an AI platform to source and vet candidates. That then moves into matching people with opportunities, and onboarding those engineers. Then, Turing helps manage their work and productivity in a secure fashion, and also provides guidance on the best way to manage that worker in the most compliant way, be it as a contractor or potentially as a full-time remote employee.
The company is not freemium, as such, but gives people two weeks to trial people before committing to a project. So unlike an Accenture, Turing itself tries to build in some elasticity into its own product, not unlike the kind of elasticity that it promises its customers.
It all sounds like a great idea now, but interestingly, it was only after remote work really became the norm around March/April of this year that the idea really started to pick up traction.
“It’s amazing what COVID has done. It’s led to a huge boom for Turing,” said Sumir Chadha, managing director for WestBridge Capital, in an interview. For those who are building out tech teams, he added, there is now “No need for to find engineers and match them with customers. All of that is done in the cloud.”
“Turing has a very interesting business model, which today is especially relevant,” said Igor Ryabenkiy, managing partner at Altair Capital, in a statement. “Access to the best talent worldwide and keeping it well-managed and cost-effective make the offering attractive for many corporations. The energy of the founding team provides fast growth for the company, which will be even more accelerated after the B-round.”
PS. I said I’d list the full, longer list of investors in this round. In these COVID times, this is likely the biggest kind of party you’ll see for a while. In addition to those listed above, it included [deep breath] Founders Fund, Chapter One Ventures (Jeff Morris Jr.), Plug and Play Tech Ventures (Saeed Amidi), UpHonest Capital (Wei Guo, Ellen Ma), Ideas & Capital (Xavier Ponce de León), 500 Startups Vietnam (Binh Tran and Eddie Thai), Canvas Ventures (Gary Little), B Capital (Karen Appleton Page, Kabir Narang), Peak State Ventures (Bryan Ciambella, Seva Zakharov), Stanford StartX Fund, Amino Capital, Spike Ventures, Visary Capital (Faizan Khan), Brainstorm Ventures (Ariel Jaduszliwer), Dmitry Chernyak, Lorenzo Thione, Shariq Rizvi, Siqi Chen, Yi Ding, Sunil Rajaraman, Parakram Khandpur, Kintan Brahmbhatt, Cameron Drummond, Kevin Moore, Sundeep Ahuja, Auren Hoffman, Greg Back, Sean Foote, Kelly Graziadei, Bobby Balachandran, Ajith Samuel, Aakash Dhuna, Adam Canady, Steffen Nauman, Sybille Nauman, Eric Cohen, Vlad V, Marat Kichikov, Piyush Prahladka, Manas Joglekar, Vladimir Khristenko, Tim and Melinda Thompson, Alexandr Katalov, Joseph and Lea Anne Ng, Jed Ng, Eric Bunting, Rafael Carmona, Jorge Carmona, Viacheslav Turpanov, James Borow, Ray Carroll, Suzanne Fletcher, Denis Beloglazov, Tigran Nazaretian, Andrew Kamotskiy, Ilya Poz, Natalia Shkirtil, Ludmila Khrapchenko, Ustavshchikov Sergey, Maxim Matcin and Peggy Ferrell.
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Hibob raises $70M for its new take on human resources
Productivity software has been getting a major re-examination this year, and human resources platforms — used for hiring, firing, paying and managing employees — have been no exception. Today, one of the startups that’s built what it believes is the next generation of how HR should and will work is announcing a big fundraise, underscoring its own growth and the focus on the category.
Hibob, the startup behind the HR platform that goes by the name of “bob” (the company name is pronounced, “Hi, Bob!”), has picked up $70 million in funding at a valuation that reliable sources close to the company tell us is around $500 million.
“Our mission is to modernize HR technology,” said Ronni Zehavi, Hibob’s CEO, who co-founded the company with Israel David. “We are a people management platform for how people work today. Whether that’s remotely or physically collaborative, our customers face challenges with work. We believe that the HR platforms of the future will not be clunky systems, annoying, giant platforms. We believe it should be different. We are a system of engagement rather than record.”
The Series B is being led by SEEK and Israel Growth Partners, with participation also from Bessemer Venture Partners, Battery Ventures, Eight Roads Ventures, Arbor Ventures, Presidio Ventures, Entree Capital, Cerca Partners and Perpetual Partners, the same group that also backed Hibob in its last round (a Series A extension) in 2019. It has raised $124 million to date.
The company has its roots in Israel but these days describes its headquarters as London and New York, and the funding comes on the back of strong growth in multiple markets. In an interview, Zehavi said that Hibob specialises in the mid-market customers and says that it has more than 1,000 of them currently on its books across the U.S., Europe and Asia, including Monzo, Revolut, Happy Socks, ironSource, Receipt Bank, Fiverr, Gong and VaynerMedia. In the last year Hibob has had “triple-digit” year-on-year growth (it didn’t specify what those digits are).
Human resources has never been at the more glamorous end of how a company works, and it can sometimes even be looked on with some disdain. However, HR has found itself in a new spotlight in 2020, the year when every company — whether one based around people sitting at desks or in more interactive and active environments — had to change how it worked.
That might have involved sending everyone home to sign in from offices possibly made out of corners of bedrooms or kitchens, or that might have involved a vastly different set of practices in terms of when and where workers showed up and how they interacted with people once they did. But regardless of the implementations, they all involved a team of people who needed to be linked together, still feeling connected and managed; and sometimes hired, furloughed, or let go.
That focus has started to reveal the strains of how some legacy systems worked, with older systems built to consider little more than creating an employee identity number that could then be tracked for payroll and other purposes.
Hibob — Zehavi said they chose the name after the person who owned the bob.com domain wanted too much to sell it, but they liked “bob” for the actual product — takes an approach from the ground up that is in line with how many people work today, balancing different software and apps depending on what they are doing, and linking them up by way of integrations: its own includes Slack, Microsoft Teams and Mercer, and other packages that are popular with HR departments.
While it covers all of the necessary HR bases like payroll and further compensation, onboarding, managing time off and benefits, it further brings in a variety of other features that help build out bigger profiles of users, such as performance and culture, with the ability for peers, managers and workers themselves to provide feedback to enhance their own engagement with the company, and for the company to have a better idea of how they are fitting into the organization, and what might need more attention in the future.
That then links into a bigger organizational chart and conceptual charts that highlight strong performers, those who are possible flight risks, those who are leaders and so on. While there have been a number of others in the HR world that have built standalone apps that cover some of these features (for example, 15five was early to spot the value of a platform that made it much easier to set goals and provide feedback), what’s notable here is how they are all folded into one system together.
The end effect, as you can see here, looks less like word salad and more interactive, graphic interfaces that are presumably a lot more enjoyable and at least easier to use for HR people themselves.
The importance for investors has been that the product and the startup has identified the opportunity, but has delivered not just more engagement, but a strong piece of software that still provides the essentials.
“This is certainly not a Workday,” said Adam Fisher, a partner at Bessemer, in an interview. “Our overall thesis has been that HR is only growing in importance. And while engagement is super important, that opportunity is not enough to create the market.”
The end result is a platform that has a significant shot at building in even more over time. For example, another large area that has been seeing traction in the world of enterprise and B2B software is employee training. Specifically, enterprise learning systems are creating another way to help keep people not only up to speed on important aspects of how they work, but also engaged at a time when connections are under strain.
“Training, a SuccessFactors -style offering, is definitely in our road map,” said Zehavi, who noted they are adding new features all the time. The latest has been compensation, sometimes known as merit increase cycles. “That is a very complex issue and requires deeper integrations finance and the CFO’s office. We streamlined it and made it easy to use. We launched two months ago and it’s on fire. After learning and development there are other modules also down the road.”
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