Startups Who Sell to Other Startups: iDoneThis Jumps Into the Tech Daisy Chain

By Erin Griffith , written on June 28, 2012

From The News Desk

There's a danger among startups who build tools for each other of creating an ouroboros -- a snake eating its own tail. Rodrigo Guzman is the co-founder of work productivity site iDoneThis, whose tools have become popular among New York startups. He went so far as to wonder if the companies like his are just creating a big -- in his words -- "circle jerk."

A company can't survive on revenue from other startups alone. But there's not necessarily a problem with building tools first adopted by other startups. The idea is that the startups are a hotbed for interesting ideas. "The good ones bubble up and get adopted by bigger companies and eventually, you can build something that can have a bigger impact, but by first using startups to really figure out the product," iDoneThis co-founder and CEO Walter Chen says.

iDoneThis's simple productivity management tool is quickly gaining adoption among startups, including Foursquare, Harvest, Fitocracy, Shopify, Olark, Viggle, Vungle, FreeAgent, Code Academy, Sourceninja, Pipedrive, and Weedmaps, the Yelp for marijuana. Thanks to endorsements from Daniel Pink, author of the workplace book "Drive," iDoneThis is also gaining traction with larger companies like, Thomson Reuters, and Zappos. In April, the company launched the latest version of its tools, which charge companies $3 per user per month.

The way it works is stupidly simple but plays into the trends of "quantified self" and self-evaluation. Every day iDoneThis sends you an email asking what you've accomplished for the day. You respond, and the next morning your entire team gets a digest of what everyone is up to. There are feedback tools, visualizations of commonly used words, and an impact graph that shows peoples' contributions over time.

Chen says the site has become popular with startups, for one, because it works best with smaller teams, and as startups grow, their ability to manage their teams becomes difficult. Most founders just want to concentrate on the product. Further, in addition to wanting to change the world in some way with their technology, startups want to change the way people manage employees. "Part of the beauty of a startup is you get to build a company the way you like, and when they hear about our product they get excited because its a lightweight way to keep everyone in the loop," Chen says. "It gives everyone the autonomy to say, 'Hey, do your thing, just let me know what you're getting done.'"

He's also finding that iDoneThis is helping founders with the emotional side of their businesses. "As a founder, you're anxiety ridden, especially as you grow, and you have less and less control on what is happening in your company," Chen says. "This gives you that without having to be really annoying."

The main criticisms iDoneThis receives are that people hate email (further evidence of this sentiment in Asana's well-recieved goal to kill email), and that people aren't sure how it fits into their existing work management systems.

Chen says the company is grappling with the second item, since many larger companies still have IT departments and aren't always excited to adopt SaaS programs. As for the email problem, he says that even if Asana succeeds in killing email, its going to take awhile. Right now, iDoneThis doesn't change anyone's work flow.

The four-person company has raised $380,000 in angel funding from Sierra Ventures, Interwest, Angelpad, founder and CEO of Yashi Jay Gould, product director of ads at Facebook Gokul Rajaram, founder of AngelPad Thomas Korte, and co-founder of Achex Keval Desai.