The Wall Street Journal almost killed my HR Tech startup. Here’s why I’m grateful.

Our big break gone wrong

I still remember the feeling when I saw that email in my inbox “Hi from WSJ!”

It was summer 2019 when I sat down for an interview with Sarah Krouse, a reporter (now with the Information) who had gotten in touch about a story she was writing on how “employers are using AI to judge workers, boost productivity and spot stars.”

I was shocked and excited that she even wanted to talk to me about my tiny startup. Our team at Bunch had just launched the beta version of our new Analytics platform that analyzed the language used on Slack to report on a team’s overall morale, collaboration, customer-focus and other similar factors that contribute to team performance. We were in the early stages of selling it as a service to companies, typically working closely with the VP of People & Culture at tech companies that had remote or distributed teams.

When I spoke to Sarah about our project, I excitedly told her about the technology we had developed, my big picture goal of making work better for millions of people, by enabling more effective, healthy, and fulfilling collaboration at work.

A week or two later, I was literally walking out of our first ever board meeting when the piece landed with the title The New Ways Your Boss Is Spying on You. The story continued with gems like this:

“It’s not just emails that are being tallied and analyzed. Companies are increasingly sifting through texts, Slack chats and, in some cases, recorded and transcribed phone calls on mobile devices”.

Bunch was mentioned only as the primary example of how employers are monitoring you on Slack. The story spawned spin-offs in other major publications, including Inc. Magazine’s piece called 19 Sneaky Ways Your Boss Is Probably Spying on You in 2019.

I was scared and angry. A story like this can easily kill a startup in the making, and it was devastating for the team because in our view, we were underdogs out there fighting for a better world — to improve conditions for millions of people at work. Selling the product to top management is just how things are done — it’s the only way to implement any great solution at work, right?

Investors, friends, and advisors told me to brush it off and not be discouraged. But the idea that we’re part of the problem kept me up at night. It took a few weeks before I finally understood why: Sarah was right.

A painful realization

The more I thought about Sarah’s piece, the more I started to recognize and agree with the deeper problem behind the clickbait headline.

The status quo for how companies build, market and sell innovations for “work” is absolutely broken. Everything is oriented around the buyer — the person who has the power to implement something inside a company. In the HR Tech space, all of the major players who are trying to solve problems for workers/employees are coming at the problem top down. But something happens when you optimize for the buyer: you start to build for them too and lose sight of the end user, the person who your product affects the most: the employee. . Serving them becomes simply a contractual obligation, and as long as the buyer is happy, the company succeeds.

In our own space, we’ve watched VC money flow to B2B-focused companies. Some have raised hundreds of millions of dollars by essentially providing executives with a nice slide to include in their board deck. Don’t get me wrong: there’s nothing wrong with selling products to companies. But I realized that we — and pretty much every other company around us — had lost sight of what the point of it all was.

I realized that in order to be a part of the solution, we needed to fundamentally change the way we thought about our mission, and focus 100% on the individuals we want to help — not the companies who might pay for it, or the people in the organization who have the biggest budgets. We made a conscious decision to ignore them for now while we build the right thing for the world.

It was a big bet that had huge implications for our business. But I had nothing to lose — I was already publicly known as the CEO of the creepy Slack spyware company, right? Chances were, we’d be dead in the water no matter what, so I was willing to be bold.

The bottom-up pivot

When our team discussed what to do next, one thing was clear: most people at work don’t need a dashboard of analytics on their team’s culture. They needed real help on how to navigate the challenges of today’s fast-paced, distributed work environment. We didn’t know it at the time, but this would be made even more true once the pandemic hit just a few months later.

We decided to build an entirely new product focused on supporting individuals to navigate the situations that make them anxious on a day-to-day basis like how to avoid or correct communication, how to give feedback that lands, how to prioritize, and how to shut off after work. We wrapped all of this up under the theme of leadership skills.

We made a conscious decision to judge our success based on the impact we have on end users, not based on how much money we could extract from their employers, with the logic that if we can be the ones who finally focus on making a real, tangible difference for the end user, we’d also be able to build a more successful and sustainable business in the long run.

We asked ourselves: what if Duolingo taught human skills? What if Calm gave you perspective on how to resolve problems at work and gave you the tools on how to resolve the most difficult conflicts? What would that look like?

In retrospect, this was the beginning of something special. Our laser focus on the user allowed us to build the new BUNCH, a leadership coaching app for the iPhone (Android coming soon). It enables any aspiring leader to get 1% better every day during their coffee break, and replace anxiety with more confidence and clarity that directly impacts the people around them too.

An example of what’s possible

We launched our app in November 2020, and have operated it for nearly an entire year, 100% free. In just 11 months, we’ve served 35,000 aspiring leaders. For perspective: BetterUp, the leading player in the B2B ‘‘coaching’ space, that just reached Series E with a $4.7 billion valuation, apparently served their 100,000th person earlier in 2021 after 8 years in the market, hundreds of million in funding.

We expect to reach that 100k milestone within the next 12 months. I think that’s something to be proud of, but it has been a difficult and at times impossible-feeling journey to get here. We still face adversity.

We need to start charging soon and find a way to monetize at the company level while still keeping the power in the hands of the employee in a way that they control what they want to learn. We’re hopeful though, as we’ve had over 500 companies enquire about future team or enterprise versions. The plan is and will always be to focus on bottom up: building a premium model that the end user can pay for themselves (or ask their employer to reimburse).

In this way, we’re committed to our users owning their own data, keeping hold of their accounts even when they change jobs, and being in the driver’s seat of what they want to learn and when.

On this journey, we’ve learned a LOT about the power of community, and the incredible opportunity that exists for tech companies to approach traditionally “enterprise” markets in a bottom-up fashion.

We’ve seen a similar effect in action across most functional areas of business: from Github, to Miro, to Figma, to Slack itself in the early days. All of these companies went on to be enormously successful both in terms of value to users and financial performance.

Strangely, it seems that companies operating in an area traditionally (and perhaps unfairly) considered HR’s domain are particularly far behind. Engagement, culture, training, and professional development products are still all sold “top-down”. But BUNCH is a bit too stubborn to buckle to the norm just because it’s “what’s done.” We’re at a turning point in the world where the power is starting to shift, and we want to be a part of the bottom-up mission that inspires real change.

A call to action

When we showed Bunch to a VC last week, he said “I have been investing in the future of workspace in the past 6 years, and I’ve been waiting to see a bottom-up solution in the training market coming out of someone’s head”.

In my opinion, it’s now or never. In the industry today, there’s a shift because companies are losing talent and hiring is harder than ever (Jason Corsello of Acadian Ventures calls it the “Worsening job crisis”). Organizations are pushed to provide and maintain what employees need. We have one opportunity to turn it around.

To my peers in the industry, I’d like to issue a challenge: prove that you’re building for your users and not just the person signing the check. Now more than ever, incentives are aligned for this to be both a powerful strategy to make a difference and a profit.

As long as we keep building top down businesses that are solving bottom up problems, we’re lying to ourselves and cashing out in the process but not creating any change.

We are in the pocket of time where this is about to happen and if we don’t fuck it up, we’ll have better products that help create better humans that aren’t just geared toward enterprise mechanics. Let’s do this!

Original Email from WSJ:

🐦 Follow me on Twitter or subscribe to The Weekly Briefing, my Sunday leadership newsletter.

--

--

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
Darja Gutnick

Darja Gutnick

Co-founder, CEO at Bunch — Helping future leaders grow; bookworm, psychologist and relentless optimist. Grow | Inspire | Stay humble