When I Work CEO and Founder Chad Halvorson
St. Paul software startup recently picked up $15m in venture capital to fund their vision of becoming a global time tracking and scheduling solution for companies and their employees.
We connected with Halvorson for a deep dive around this milestone and what he sees for the future:
After the raise, you penned a piece called ‘2 billion reasons why we raised $15m’ – why?
There’s a certain amount of depth that doesn’t often get told when it comes to funding. So I wanted to provide a perspective on where our passions, focus, and reasoning is around our recent capital raise.
The 2 billion reasons is reflective on the size of the global hourly workforce – there is upwards of that many people in the world working in jobs that are not behind a desk. They are working on their feet, they are out and about, they are working part time.
We believe passionately about our ability to impact these people and the companies that employ them. That’s the guiding north star, that’s our vision and mission: to connect every hourly worker on the planet to our platform.
Was that always your vision?
No…it manifested itself over time and has been our clear vision over the last few years. We have a unique DNA in that we were founded on a pain point of the employee, not the pain point of the employer. That has led us to take the approach we have and allowed us to be as successfull as we have so far. Most compliance and control, we started with collaboration and communication.
At what point did you decide that you were going to aim for that?
When I really started to realize the size of the market in 2013, 2-3 years into this, the dots started connecting….I then really started to believe that we were the company to do it.
As a founder, what does it feel like to be shooting for a massive global market now?
I think it’s like any big problem worth solving. Start with the macro perspective and then think about breaking it down into smaller chunks. If we were to bite it all off at once, we’d probably implode. So we started where we could have the largest effective impact, one step at a time. This is reflective when looking at who our core customers are now…when we started our primary customer was a small business with 5-10-20 employees. As we became more successful at solving their problems, we started moving into 50 person companies, 200 person companies and so on — without abandoning our smaller customers.
Where are you currently relative to that 2 billion target?
Since we’ve launched, we’ve had over 2 million employees on our platform since 2010, so from that perspective if you look at the US 77 million hourly employees, we’ve had an impact on 1-2% of the domestic workforce. Our goal is to continue to grow that figure exponentially and also maintain engagement with our users from job to job, which will help us get there.
Who is your largest customer currently?
Select Medical is a healthcare company that has 17,000 nurses across the country in 250 hospitals. Our second largest cutomers are Uber for their customer service and GrubHub for dirvers.
Who is your largest competitor?
When we look at where we are getting our customers and what we’re competing with around that, I’d say that 80-90% of the time its moving people from offline to online…getting them off of paper…getting them off of whatever they have piece mealed together. That’s where we see most of the friction and pressure around acquiring new users. Then there’s 10-15% who are coming off a solution they’ve already been using integrated with POS or comparing us against other such services…there’s a significant number of those, a very fragmented space.
Regarding the fundraise, how did you determine that $15m was the right number?
We looked at how capital efficient we’ve been with the previous $9m raised and what it took to get here, thinking that if we’re to double down, what kind of capital needs do we want to have in order to do so aggessively with a meaningful runway over the next two years or so. That’s how we landed on that number.
And why the partners that you selected?
I spent a lot of time in discussion with many potential partners. I’ve known Drive for over a year now and it was a relationship that was building for some time. There are some high level and specific things that make them a good fit for us. First, they get us. The vision, the market, the path…they believe in what we’re doing and how we’re doing it. From a more detailed perspetive, I love their mission of investing in the midwest. Their belief and their charter that the best opportunities and companies are being built in the midwest. That’s why they exist and that’s also competting to us. The founding partners of Drive come from Sequoia Capital, where they were early on involved with a particular company that I think aligns very well with where we want to go: LinkedIn.
How about High Alpha and Arthur Ventures?
High Alpha is a fund out of Indianapolis started by Scott Dorsey from ExactTarget. I’ve gotten to know Scott over the past few months and really respect his story. There’s a lof of similarities to us, and enthusiasm from him around what we’re doing. It gives us a strong partner/advisor in our court to bring some very relevant meaning along the way.
Arthur Ventures has been a supporter of us from the first dollar that was invested in the company. What else can I say?
Ok…so tell me more about what you mean with the LinkedIn reference?
LinkedIn is a platform for connecting the white collar corporate salaried workforce, basically. They’ve dominated that space, which is about 40% of the market. And LinkedIn adds a lot of value to that demographic, but it doesn’t really for the other half of the market that we serve.
There’s a parallel there between the two and as we look forward, that’s part of the picture of what we can serve, who we can add to the platform to make work less work. We can help them on the job, off the job, and in between jobs just like LinkedIn has proven.
Do you intent to have a similar outcome as LinkedIn – IPO, Acquisition?
It’s just a reference point. The path that we’re on is to connect the hourly workforce and all their employers to our platform to empower them. However we can do that as quickly as we can. If that follows the path of another company then that’s how it ends up. Those are results, not a destination for us.
Who is currently on your board of directors?
Myself, John Tedesco, Tom Gieselman from e.ventures, and now Nick Solaro from Drive Capital. We have one open spot.
What are you looking for in terms of that open spot?
I’m looking for someone who can bring ‘been there done that’ perspective, ideally from the background of scaling SaaS or an industry that is hyper relevant to ours. At the core, operational acumen.
How do you plan to allocate the money?
The investments that we are going to be making is mostly in hiring. The expansion that we’re going to have over the next 12-18 months will be fairly significant in product engineering, sales/marketing.
How many employees do you currently have and how many projected through end of 2016?
We’re just over 100 right now and pretty tapped out on space…we’re in the process of determining how to solve for that problem. By the end of this year, we want to hire another 30-50 depending on how fast we can change space and assimilate people. Overall, we see another 100 people on board over the next 12 months.
What’s this talk of moving out of St. Paul, is there any truth to that?
We’re looking at either St. Paul or Minneapolis and have not decided on that yet.
Back the the second round when you raised a second tranche and acquired ShiftHub – how is that playing out?
That was a pipeline acquisition, not a technology, people, or direct revenue acquisition. They have built a pipeline of traffic, lead gen, and prospects aligned with who our customers were.
Do you foresee further acquisitions?
Absolutely — if the right opportunities come up
On the flipside, have you been fielding any calls from potential acquirers for your own company?
Not to the extent that the conversations are serious. We have a lot of partnership conversations…
Any of those with Ceridian?
What do you see trending in the HR tech space that you exist in?
HR tech is really just scratching the surface right now. We’re seeing an environment right now where the workforce is finally becoming connected at scale. 3 years ago, 5 years ago, it wasn’t like this. There’s a lot of attention and spotlight on this space for the right reasons. It’s kinda like a goldrush right now if you look at software companies in the space.
What keeps you up at night?
We’re in a very good position – the fastest growing and most funded in our space. I feel confident in our ability to set out and accomplish the goals we have to grow bigger. The thing that I spend most of my time thinking about is that next hire, that next wave of talent, ensuring that we’re building the company in a way that is going to attract the best of the best for this mission. I spend a lot of time recruiting – what do I need to do today to ensure we’re in a position to be where we need to be around that in 6-12 months. The people are everything.
What’s your perspective on talent and hiring in the Twin Cities?
I’m in the middle on that, it’s always hard and it’s hard for anyone no matter where you are — Minnesota, San Francisco, New York, etc. High growth tech companies are all in this together. Some areas its a supply challenge, others its a loyalty challenge, depending on where the company is at geographically. The midwest has a very loyal workforce typically which is a huge advantage for everyone building a company in Minnesota.
But if it we’re easy everyone would be doing it…get over it! The whole point is to execute and hustle to do what it takes to make it happen. Great talent is something everyone wants.
What would you say to those out there who feel that Minnesota is somehow inferior or lacking in terms of a place to start and scale a tech company?
I would disagree with that notion. If, as an entrepreneur, you’re able to solve a real problem that attracts paying customers who find value in what you’re doing – that can happen (or fail) anywhere. It’s not unique to a particular geography. The ingredients are already present here, it’s all about what you can mix and make with them.
Anything you would like to add?
Be on the lookout for an entirely new product from us over the next 6-12 months…