The First Full Year!
Out first full year has come and gone! WHOOSH! There was a lot of learning, excitement, growth, and as will happen, a few let downs. But all in all, we are psyched at how the year ended. From a business standpoint, we couldn't be prouder!
We were hoping to both increase our platform price as well as the size organization we could capture. We did both! Much of ourt growth was from existing client referral and network referrals. We attended one conference and landed two clients as a result with a number of others showing interest in possible adoption in the future. We experienced a lull in the mid year as the leadership team focused on investor networking more than sales (more on that later.) The end of the year picked up nicely and we ended the year in a strong position.
Total Revenue = $22,390 (up 526%!)
Total Users = 565 (up 594%!)
Client Retention = 80%
In our final sprint for 2017, we launched version 0.28. That's 28 sprints worth of updates, enhancements, bug fixes, and features since our launch in Oct of 2016. Average of 1.9 sprints per month! We built a lot of what we planned and a lot of features our clients were asking for. They have contributed to our success by helping us build a better platform and remind us to make fewer assumptions about how we design some elements. The great thing is, from a core perspective, the methodology TOTALLY works and managers are reporting easier performance conversations about the things that matter. We've also had some clients find leaders in places they weren't looking which provided them an opportunity to recognize and promote a few people they had previously overlooked.
In June of 2017, Co-founders Dave Needham and Alicia Yanik, were invited to attend the Rockies Venture Club HyperAccelerator. We learned a lot about capital structure, investor value levers, and some business levers. It was an intense week of pitch-feedback-refine-repeat. And we learned a lot about valuations, financial modeling, and a few other important areas. We also met some great mentors and potential advisors for us moving forward.
The Lows & Learnings
Sales Focus & Lost Clients
While overall things went well, we realized we need to focus on sales more. The latter half of the year was good and we could have done better. We also realized that when you don't focus on sales...the pipeline dries up. Also, we lost 4 clients total; some were doing pilots (Comcast/Noodles&Co) that we structured poorly, which resulted in unsuccessful pilots at those companies. We also lost our very first client (CloudElements). While they remain an advocate for us, they did not know how to have conversations around the data in a meaningful way, which was an implementation and client support error for us. Lastly, CacheMatrix was purchased right after we implemented and we did not get introduced to the buying entity so we lost them. We learned from it, but it still sucked.
From those experiences we learned a few things. We learned how to better structure pilots (small group of people receiving feedback with a larger group of "outside" employees able to provide it.) And we learned that without leader support (like at Comcast) usage is DOA. We also learned how to provide better support for managers and leaders to use the data for conversations. We created an implementation guide and coaching follow up process to ensure clients are getting immediate value from the platform.
We had a minor security breach in January of 2017 (along with most every other MongoDB client - https://www.darknet.org.uk/2017/01/mongodb-ransack-33000-databases-hacked/.) The good thing was, we had sufficient backups to restore everything with a very minimal impact on clients. The system was shut down for 3-days while we added security measures, test, and restored the system. Huge kudos to our Team Member, Steven Easter, on his hard work. On the upside - we added sufficient security upgrades to prevent us falling victim to a similar hack that occurred in September of 2017. We had a few bugs in the system that ended up being client facing. It wasn't anything overly troublesome but it is still something we want to have an increased focus on. None of them compromised anonymity or data integrity, both of which could compromise trust in the system, something that is paramount for us.
We were hoping to secure a higher level of interest after the RVC HyperAccelerator. We spent a lot of time and energy working to present what we thought was a great pitch with very complete and favorable financials and walked away with lukewarm interest at best. Which, to be honest, took the wind out of our sales for a god month. It wasn't that they said "no thanks" it was that they said it after we worked with advisors to provide the information they most cared about. It felt like a gut punch. It re-energized our focus on sales however which fueled a good deal of out impetus in the latter half of the year.
As the year finished, we started to realize that VCs are not a panacea. We also learned Denver and Boulder area VCs and Angels typically do not lead deals. In retrospect, we were naive to think that the typical VC path is the right one for a disrupting technology like Ohos. Most shy away from HR software unless they know the founder or the companies are much further along.
The investor response in late June it's toll on Alicia the most. In September she decided to leave Ohos at the close the year to return to a more stable career path. I am personally grateful to the efforts she made as co-founder to get the technology team together and guide us towards a successful launch. Founding a company can take it's toll on your energy levels and it takes longer than the stories might have you believe. When you are splitting your focus on Ohos and trying to earn enough money to pay your mortgage through other channels, eventually a founder may find themselves having to pick one or the other. We wish her the best.
The Year Ahead
With the departure of Alicia, Steven Easter, our lead developer from the start has stepped up in to the co-founder role! We couldn't be more thrilled to see his dedication and passion for Ohos. He is in this for the long haul and is learning at an incredible rate. Steven brings a wealth of knowledge of building software at startups and we are excited he wanted to take the leap. We are also courting possible Sales and Marketing focused individuals as an addition to the Leadership Team knowing that is an area we need more focus and energy around.
Marketing and Sales
We are working hard to formalize our sales process. We've been very conversational with out clients up to this point which is great for network sales, not so great for a repeatable and scalable process. We reached out to a number of people in that area and have gotten some good guidance on building a more formal process. While we were doing things according to most of the guidance we received, we've been able to tighten it up.
We're also focusing hard on client specificity, particularly as it relates to the basic questions. Who is our ideal client? Who is the ideal buyer in that client? And where can we find them? While we have proven Ohos can benefit a wide variety of clients in pretty much any industry, we learned a lot about who our perfect client is. Most share the following characteristics:
- Tech savvy (tech-based company)
- flatter organization or dispersed teams
- progressive mindset
- 50-250 employees
- data geeks
- small HR teams (spread thin)
We're doing some additional research and plan to form a Client Advisory Board that will hopefully provide some additional insight (as well as some testimonial videos :-)
The VCs get all the flash. So much so that it often makes you think that is the best way to find the capital you need to grow your business, advisors who can help you grow, and build a sustainable company. Well, we've come to the early conclusion that at this point in Ohos's (Oho's? Ohos'? whatever) evolution that the majority of people who call themselves VCs don't really align with the type of advisors we might want (and therefore the type of company we want to build,) they may not be interested in a sustainable company (they'd are professional investors who want you to get the most money back for them possible and fast - that is their #1 goal, which is fine for them) and therefore probably aren't the source of capital we are looking for since we want to be sustainable NOT just a flash in the pan. We are dedicated to changing how companies think about performance management.
There are a few VCs that prove to be exceptions and we welcome talking with them of course. AND we realized that the entire ethos of Ohos is to decentralize a historically top-down model (where the people in power get to make decisions that increase their power that often doesn't serve the company in the long run) The majority of large VC firms are in business to make the richest people even richer, so again, a top-down model that mostly serves the people at the top. We want everyone to have a chance to profit from our success. SO...
We will be launching another crowdfunding campaign top help us hit our next 18 month milestone which is - $80k/mo in revenue and 100 clients. Stay tuned.
Our first year was a success in so many ways and we are excited to keep moving forward with all the things we learned! We are stoked to have Steven in the co-founder seat and still directing our development efforts. We are also excited at the new clients we have in the pipeline for Q1 of 2018.
Please stay aboard the train and keep an eye out for that new opportunity to invest in a growing company who is dedicated to make a difference (AND be good stewards of our investors money.)
As always, you can reach out to me with any questions you might have!
Dave Needham, CEO (firstname.lastname@example.org)