Editor’s note: Traction Watch is a new column focused obsessively on growth, and is a companion to the DEMO Traction conference series, which brings together high-growth startups with high-potential customers. The next DEMO Traction will take place in Boston on September 16, 2015. Growth companies can apply to present, or those similarly obsessed can register here to attend.
This is the third in a series of posts profiling the Spring 2015 Demo Traction Champions. BetterWorks was named the Traction Watch: Smart Data Champion. Read more about the winners in “Traction Watch: Meet The Spring 2015 DEMO Traction Champions.”
There’s been a fundamental shift in how people work. But how employee performance is evaluated and measured hasn’t evolved to keep pace, said Kris Duggan, co-founder and CEO of BetterWorks, during his winning presentation at the April 2015 DEMO Traction conference in San Francisco.
At most organizations, annual performance reviews still rule, Duggan pointed out. Supervisors don’t check in frequently to see how their direct reports are progressing in their goals. The net effect: Only 34 percent of workers said they had received useful feedback about their performance in the past six months, according to a 2013 survey.
There’s also a problem with how employee goals are developed, Duggan added. Most of the time, employee goals are viewed as private, hierarchical, and based on a top-down system of priorities.
"But we need to work cross-functionally," Duggan said, "We need a bottoms-up creation of goals, to align and coordinate more frequently than ever before, to be agile in our business."
At the same time, most organizations use Microsoft Office software to "run their company," Duggan explained. "I met with a company recently that has 82,000 knowledge workers," he said, and PowerPoint, Excel, and Word were still the primary tools driving the organization.
As an alternative, Duggan and his co-founders envisioned a software platform, similar to Fitbit’s leaderboard, that enables enterprise knowledge workers to track their progress in completing goals and to cheer colleagues as they move toward their finish lines. Duggan cited statics that illustrate how Fitbit users benefit from sharing their goals and achievements with friends, such as a 42 percent increase in steps.
With the ‘Fitbit for enterprise goal tracking’ idea in mind, BetterWorks was founded in 2013. The Palo Alto, Calif.-based startup developed a software-as-a-service platform that helps employees set and manage goals using software that can "deliver at enterprise scale, whether you’re a 100-person company or a company with tens of thousands of knowledge workers," Duggan explained.
The BetterWorks platform was developed for workers, managers, and executives. Knowledge workers can see their progress; view their colleague’s achievements; cheer them on; and "feel that winning sensation" as they complete their goals, Duggan said.
Using the platform, managers can "become coaches and drive higher results with their teams," Duggan added, "Imagine if you could get a Sunday night digest of all the progress that’s happening on your team and all the key things that are being worked on right now."
BetterWorks also gives senior executives visibility into what’s happening across the entire organization, according to Duggan.
Since its September 2014 launch, 75 enterprise clients have deployed BetterWorks, including some Fortune 500 companies, Duggan said. The 50-employee company has achieved $3 million in annual contract value (ACV) bookings. Over the past few quarters, the BetterWorks platform has handled 50,000 total goals and 110,000 check-ins, with 90 percent monthly active users.
Duggan said the company received the largest series A investment from noted venture capitalist John Doerr since Doerr’s $15.5 million early investment in Google.
BetterWorks’ platform is based on an employee review system Doerr brought to Google’s co-founders, Larry Page and Sergey Brin, early in the company’s history, according toBusiness Insider. The system, called Objective Key Results, had been pioneered years earlier by Intel’s former CEO Andy Grove.
Prior to BetterWorks, Duggan founded Badgeville in 2010, a "gamification" platform designed to enhance an organization’s customer loyalty, employee productivity, and product enhancement programs. Like BetterWorks, Badgeville achieved traction quickly. Founded in 2010, Badgeville made Forbes’ 2011 list of America’s 100 most promising companies. Watch his DEMO Traction presentation above.