Enterprise goal management tool BetterWorks raises Kleiner's largest Series A since Google
“You can't manage what you don't measure.” ~Unknown
A favorite tool among managers is the OKR (objectives and key results) model for goal setting and planning. MBA textbooks are filled with variations on the approach and Silicon Valley titans like Intel and Google have long been devotees. Incidentally, the common thread among among both these businesses is John Doerr, who implemented OKR at Intel and brought the technique to Google as one of its earliest investors.
The challenge with OKR and nearly all other management systems, is that once a company gets above a few hundred employees – which Google, Intel, and most other businesses mature enough to implement this system certainly are – it’s a nearly impossible task for senior management to get visibility and accountability into what goals are being set and how individual employees and teams are performing against them across the organization.
BetterWorks, which is looking like the newest “best thing since sliced bread” in Silicon Valley, today launched out of stealth to solve this problem, while announcing a massive funding round. The company raised a $15.5 million Series A led by John Doerr and Bing Gordon of Kleiner Perkins Caulfield & Byers, with participation from Joe Lonsdale of Formation 8. The round is Kleiner’s largest Series A check since Google and represents a major vote of confidence in the business opportunity and the team behind it.
“These guys are solving one of the biggest problems in the enterprise and something that no other software platform addresses,” Lemkin says. “They’ve built a platform around operational excellence and teams throughout an organization, rather than just in sales, which is what we’ve seen in the past. In many ways they’re the RelateIQ for work. But BetterWorks is competing with Excel and paper, not Siebel and Salesforce.”
At the helm of BetterWorks is former Badgeville CEO and founder Kris Duggan, who is credited with pioneering enterprise sales for SaaS software while at WebEx. Duggan has recruited former Palantir engineer Di Wu to lead engineering and former Badgeville exec Paul Reeves to head customer success. The company now totals 36 people, according to LinkedIn, and includes talent from Box, Adobe, Cisco, Salesforce and other notable engineering shops. BetterWorks’ board of directors now includes Kleiner’s Gordon and Formation 8’s Lonsdale, along with Google Emeritus Shona Brown and Storm Ventures’ Jason Lemkin, the former CEO of EchoSign.
After less than a year in private beta, BetterWorks is already on track to close 2014 with seven figures in revenue, according to Lemkin, on the back of several six figure contracts with early clients including Bluenose Analytics, Edmunds, Lookout, Lumeris, UpWind, and the US Department of Health and Human Services. As that statement makes clear, this is not a cheap, freemium piece of software but something that will cost serious buyers real money. But with the pedigree of the team involved – including now the investors – and the magnitude of the problem being addressed – which is as central to running a successful enterprise business as any – it seems companies will be willing to shell out for BetterWorks.
“For enterprises to buy from a startup is a huge risk,” Lemkin says. “They want the innovation without venture risk. But Kris and his team are second generation enterprise guys. They’ve proven already that they can build and deploy enterprise-grade systems. There are really two ways to get into the enterprise: you can go upmarket like Box and Dropbox have done, or, if you have the pedigree, which few do, you start there like Workday and now BetterWorks.”
Goal setting and performance management is critical in any environment, but it may be more important than ever with today’s millennial and mobile workforces. With increased transparency and accountability, OKRs allow managers to provide much-needed feedback and appraisal. BetterWorks is adding a social and software-powered element to this process, allowing goal-setting to become a cross-organization (horizontally and vertically) process
“I’ve spoken with hundreds of Fortune 1000 leaders that share similar frustrations with aligning goals across their enterprises that ladder up to overarching objectives,” Duggan said in a statement. This sentiment was echoed by Margie Mader-Clark, VP of HR for Lookout, a BetterWorks beta customer, who said in a statement, “So many tools out there become business inhibitors rather than business accelerators. We believe that BetterWorks can actually accelerate our business by providing transparency, accountability and driving crisp execution against our business goals.”
It seems from all accounts that BetterWorks has zeroed in on a very real and very significant problem in enterprise management and has built a compelling solution. But this is only the first step in building a SaaS giant. The next phase will be equally if not more critical to determining the company’s long-term success, wherein Duggan must build out a capable sales and customer success team to get this product in the hands of those confronting this problem and help them implement the solution effectively. It’s a process that is more science than art, but which should be doable given the experience around the table at this company.
For those who watch the startup scene closely, the name BetterWorks should ring a bell. Just two years ago, there was a much-hyped startup by the same name based in Los Angeles providing an employee perks platform to small businesses. But when that model failed to scale, the company was shut down and the assets put up for sale, including the domain “Betterworks.com.”
“You and I know that name because we pay attention to this stuff, but the companies these guys are selling to don’t,” Lemkin says. “It’s really the perfect name for this product and it was an opportunistic situation that it became available when it did.”
Lemkin is not worried about competition at this stage, referring back to the challenge of building and deploying at enterprise scale. Rather, the big challenge in his mind is nailing the execution around this potentially massive opportunity. We’re still in the early innings of BetterWorks and software-defined operational management.
Like Salesforce quickly expanded beyond a simple contact and relationship management platform, the BetterWorks team anticipates this product growing into a platform that addresses all areas of people management. You can bet that Duggan will be using his own software to manage that process and make sure the BetterWorks team is executing according to plan. And with the brain trust behind Intel, Google, Palantir, WebEx, and EchoSign in the room, expect that plan to be thoughtfully laid out.
“This is a SaaS 3.0 company, which means they aren’t just taking things that have been done before in legacy software and webifying them,” Lemkin says. “They are webifying business processes that have never been addressed by software. The risky and challenging thing about doing something new is you don't know where this tool will end up once it gets into the hands of clients in the real world. It seems to do just one thing today, but when you operationalize so much of the enterprise and then customers are bound to expect a lot out of it. We’re definitely building this as a platform and we have a big vision for where it goes. But at this stage, focus is important.”
[Image via anjan58, Flickr]