 On the Ground. Presented by theCUBE, here's your host, John Furrier. Hello everyone, welcome to Silicon Angles theCUBE. We are On the Ground, this is our On the Ground series. We go out to the action and talk to the tech athletes, talk to the news makers, entrepreneurs, venture capitalists, and get all the action and bring it to you. Not at the event, but out on the ground. I'm John Furrier with the founder of Silicon Angles and I'm here with SK, who's the CEO and co-founder of Zugata here at the General Catalyst Office. Welcome to On the Ground. Perfect, thank you, John. Thanks for having me on the show. So obviously you're funded by these guys, right? So give us the low down. Yeah, so we actually raised a 3.2 million seed round in December of 2014. General Catalyst led the round and we have investment from Formation 8 and Red Point Ventures as well, and a few angels. A seed or a Series A? Seed. So you're still on the seed, which it was probably paper as preferred stock, so it's technically whatever you want to call it. Whatever you want to call it. It's basically the old-like Series A, but classify as a seed given today's market. And mostly Series A's used to be like that now, but now they're mostly higher. So no Series A yet? Nope. Still working off that cash? Yeah, absolutely. And we're being pretty conservative with our spend, so we want to do an A-Round when we're quite ready for it. So are you making money right now? Not yet. We just launched the company in October. And since we launched the company in October, we've had about 250 organizations sign up to use the product and we have a freemium business model. So we're just getting ready to ship our enterprise version of the product that we want to charge for. So forecasting revenue in Q1. Great. So you pretty much product development now, you go to Mark, now you're in your go to Mark. So talk about the company, the vision specifically, what business you're in. Yeah, so here's the way we started the company. So I spent a lot of years at VMware. I was an early employee there. In fact, Steve Herrod and I were office mates. He was my first office mate at VMware and that's my claim to fame. But one of the things that I realized during my career at VMware is that I would only log into the HR software once a year to actually do the annual performance reviews. And you were really happy to do that too, right? Yeah, once a year, I don't want to do any more than that, right? But the realization that I came to, the aha moment for me to think about this idea was, look, all the HR software broadly speaking that's out in the market is really optimized for HR people to have them be compliant with all the rules and regulations and have them have a good system of record. But it's not really built for helping employees. So our vision is to actually focus on the employee and figure out how can we actually help the employees develop and reach their fullest potential. So it's not about necessarily helping HR be compliant, but really focus on helping employees be as productive as they can be and develop as much as they possibly could. So is this to integrate into pre-existing HR systems because you brought up systems of record? This isn't, we talked about this on theCUBE many times, obviously the big data spaces, systems of record, systems of engagement and systems of insight, right? Obviously, so you're saying, okay, everyone should have the compliance stuff, check the box, get that done there foundational. You're changing the game on the experience of the interaction with the employee, not necessarily the HR. Exactly, right? So if you think about the system of record, there's a whole bunch of companies that do that really well and we have no intention of disrupting that at all. But where we see a lot of these vendors falling short is actually helping employees, right? Helping them with engagement, helping them develop. And we feel that that's a huge untapped market that we want to focus on and that's where we're going to focus on. You know, it's interesting, we were talking before we started filming on Silicon Valley, the Ellen Powell case highlights and many things, gender diversity, which is an HR issue, but reality, it brings up a question that's been talked about among certainly in my circles and other executive circles is, you know, how do you actually determine if someone's being effective? It's usually post more and more after the fact of some contingent event happened. And that's actually not happening effectively for growing employees. Take us through that mindset because that is a sentiment that's pretty consistent out there and how do you get out in front of that? How do you change the digital experience and the digital assets that are coming through? Yeah, it's actually fascinating what has happened in the space over the last couple of years. You know, the traditional systems were, hey, you would do an annual performance review, obviously once a year, right? Looking back at what had happened and be able to provide feedback. But now the business is moving so fast that the notion of waiting a year to get feedback is just so old school. It just doesn't work with the way businesses run. And so what we fundamentally believe is that continuous feedback, ongoing feedback is the way to go forward, right? And the analogy that we use when we talk to some of our early customers is on the development side, right? With DevOps or when you're building applications, it's all about agile, right? You're continuously developing, continuously testing, continuously integrating and continuously shipping. So feedback should be continuous to align with the way you guys work versus us dropping everything once a year and fitting into the way HIs are used to working, right? So there's a big shift going on right now. Yeah, big shift. And I would say, I mean, you pull nine out of 10 people, no one loves doing those things. It's like, oh, okay, I got my review tomorrow and they bang out some BS. And the managers do it too. It's both sides, so it's okay. But there's some statutory- In fact, HR people actually don't like it either because they have to chase after managers and employees to fill out the paperwork. It's a productivity drain. It's incompatible with the work behavior. So I got to ask you, the digital transformation topic and certainly the disruption that we're covering on SiliconANGLE theCUBE and Wikibon is looking pretty significant that it's people want to work for a company where there's digital assets that could help them be successful. Absolutely. And you would agree with that. Absolutely. So take me through an example, a proof point where, okay, this is about growing the employees' skill set or not to check the box, to actually help the person who works way to be more successful and more successful on the job. Yeah, absolutely. An example? Yeah, I mean, if you think about the broader trend, right? We're very much in a people economy, right? There's nothing more important than the people that work at a company. And there's already a talent shortage, right? And so the notion of you just being able to go out and just hire whoever you want whenever you want is just not gonna work, right? So companies that invest in developing their people are the ones that are gonna be successful in the long run. And so we're the platform that is gonna help companies actually develop their employees by getting them continuous feedback, by closing the loop on feedback, by saying, hey, here are what your strengths and weaknesses are. Here's ways in which you can actually improve and be able to track your progress. So in a sense, it's almost like a quantified employee way of thinking about it rather than this once-year performance review thing that happens that everybody pitches and nobody pays attention to it. You mentioned Agile and things I'll throw in there. We're gonna be moving to the data aspect with some of the examples around the data and the work streams and whatnot is that you're seeing a nice combination between Agile and DevOps, infecting the application in this case. For you, it's the end user, person getting better in the organization. But it's a top-down mix of the organic bottoms-up kind of dynamic. It's not just this is what you need to do. This is the rules. You're creating kind of loose data in engagement interactions amongst the employees and other assets, combining that with the top-down hierarchy. This is like, this is what the cloud is all about, yeah, absolutely. So take me through an example where you can give some data examples. What is the digital asset data look like in this new work stream? Is it surveillance data from the cameras? Is it their smartphone data? Is it their interaction with the systems? Yeah, all the above. So what is the assets look like? So let me give you a specific example in terms of getting feedback, right? So the old way of doing it is obviously you do it once a year and then you as an employee would be asked to give names of three or four people that you work with. Peers who can give you peer feedback, right? Your manager goes out to them, collects their feedback and then gives it back to you. We think that's very old school, right? So what we're now able to do with the software that we have is automatically figure out who you work with. So you don't actually have to tell us who you work with. Based on who you're emailing, based on who you're meeting with, based on who you're slacking with, based on who you're interacting with in HipJab, we can actually build a social graph. We know exactly who you're working with and how closely you're working with them. And that is the input that we use to figure out who to ask for feedback about you, right? So it's not a manual process anymore. Once you log into our system, we automatically figure out who you work with and we automatically go collect feedback on your behalf on a weekly basis. So every week you're getting feedback from the people that you're working with, completely automated. So the assets would be, one, your touch points, social and interest graph like data. Exactly. And then interaction, either captured first party or aggregated. Both, right? Yeah, and so now we're able to actually figure out, you know, if you were to expand that further and extrapolate that to the entire organization, now we can actually start to do interesting network analysis in terms of how information flows within our organization, right? Which groups are communicating with which groups? Which groups are not communicating with which groups? Who are the connectors across groups? So we can do a lot of interesting analysis based on all the digital assets that already exist. Because if you think about it as an employee, I'm touching so many different systems at work. And if you wanna figure out what's going on in your organization, you have a whole bunch of information already that if you can actually make sense out of it, you can actually... So if I get this right, if I understand this correctly, you're essentially tapping into not the HR platforms or target audience, you're tapping into the technology workflow of the organization, and then overlaying on the HR impact to that employee. Exactly, that's the perfect way to put it. Okay, so where does this go? I mean, so give us your trajectory, your vision, okay, you just got funding, well, 22 and 14, but full year development, you got the product out, you go into market, you start charging. How do people buy it? What's the rollout look like? Is it SaaS, is it software? Is it commercially packaged? Just to take? Yeah, so completely SaaS. I mean, I think on-prem stuff is dead. Anybody who's building on-prem software shouldn't get funded if you ask me, but everything is SaaS, mobile. That's a cube gem right there. Yeah. And it's all mobile enabled, right? And so the way we're thinking about it is, look, trying to sell top-down is gonna be hard, right? So what we're enabling customers to do is actually just sign up on our website. And we have about 250 organizations I've already signed up. And what's been fascinating is because of cloud, we have customers all over the world, right? We have customers in the UK, we have customers in South Africa using the product, Poland, Brazil, and just this morning, somebody from Ireland actually signed up to use the product. We have zero salespeople, right? We haven't like done any marketing or any sales yet, right? So the cloud nature of our software actually enables us to actually get customers the world over. And so all these people are signing up using the product and the enterprise version is gonna be out. And we wanna make it as easy as possible for teams of people to buy a product. And using a very consumerization of IT, maybe this is a consumerization of HR play, right? We wanna be able to go back to HR downstream and be able to say, look, there's like five or six of your big product teams are actually using the software already. Maybe you should sanitize across the board on the software. So your growth strategy to land and expand, get some stickiness, since it's a SaaS, you don't have to go a company-wide license. So people will buy on a perceived basis, what you're thinking or? Per user per month. Per user per month, okay, standard stuff. Okay, how do you guys compete with like Workday? ServiceNow has kind of an HR developer program where you're starting to see developers starting to interact. You mentioned DevOps, so what if there's some guys that have the best expense app on the planet? Yeah, yeah, so obviously we'll do integration. So it's a very co-operative way of thinking about Workday, right? I mean, if you're in the HR space, you're gonna end up like competing with HR. I mean, you don't have a choice, right? But we pitch ourselves more as something that's complementary to Workday, rather than saying, look, we're gonna replace Workday, which is not our intention at all, because we have no intention of doing any of the system of record, any of that stuff. And so we're focused on the talent management space. And so we'll integrate with a lot of these vendors and potentially we offer a different way of doing certain things that if that aligns well with the company, maybe they'll use us for the talent management performance management module and be able to use Workday underneath us for the system of record. Are you talking about the company? How many employees, head count trend, engineering, go to market, marketing, what's the, give us a taste of it, actually you're lean, lean and mean, no big financing, which is good, you know, not a lot of capital. Yeah, so we're a team of eight. So I'm responsible for all the products that have marketing, we have one designer and the rest of the team is engineering, right? It's a very small team and we've tried to keep it as small and lean as possible until we feel like we've had product market fit and that's when we're gonna start growing. We actually had a data scientist just start yesterday, so the ninth person on the team, we wanna keep it small and then in terms of growth then once we do our A-Round, we wanna invest more in engineering obviously and also like ramp up our sales and marketing. So you guys are taking your time, there's no rush for you guys, you're really focused on the big prize which is create a great app that's different than the big guys who do an HR stuff. It's not just a difference, it's the value, right? Our focus really is how can we actually bring value, how can we help employee, that's what our metric is, that's what we're tracking. What do you guys want users to say and employees to be, if you had to kind of have your preferred testimonials, how would they read or if you have testimonies you can share, what outcome do you want to have happen for the employees? Yeah, I mean, it's kind of like one example that we look at E harmony, right? It's like, oh, 50% of the people who use the product got married or whatever, right? So we wanna be able to say, look, what of X% of the people who've used a product actually ended up getting a promotion or whatever else, that's what we wanna track. But in the short term, what we're hearing from our customers is a couple of interesting things, right? One, people have said the fact that we're so focused on helping employees develop, right? They're actually using that as a recruiting tactic. So we have a customer who's telling their candidates that say, hey, look, if you come join our company, you're gonna be using the software where you're gonna be getting continuous feedback from the people that you work with and we're gonna help you develop, right? We're gonna invest in you and they're actually using that as almost a perk. And that's pretty fascinating to hear for such an early stage company. Yeah, one of the things I love about Big Data is you have a lot of these kind of collective intelligence like algorithms and machine learning, Steve Garrett was talking about that earlier. And when it's working, it's a surprise benefit. It's like, whoa, hey, how'd you know I wanted to do that? When you think about the employee opportunity, one problem that we see in the market is that the HR process really just does the filing, as you say, and the compliance. But generally, people wanna be in the right job. Job satisfaction is really about being in the right job. Is that similar outcome that you see? It's not only just to give you feedback on your job, but might say, hey, you're a developer today, but you'd be a rock star sales engineer. Absolutely, that's the vision, right? It's like, once we start collecting the data, we wanna get to a stage that says, hey, if you wanna get ready for the next level, hear the skills that you need to get better at because it seems like everybody at the next level up have these types of skills that you actually don't have. So can we actually help you with career development, right? Or to be able to say, kind of to pick and riff off the example that you gave me, we could say, hey, you're a developer, you're obviously very strong technically, but the feedback that you've been getting is that you're really good with customers, you understand the business aspects of it, and we could say, hey, people that look like you kind of moved into product management, have you thought about moving into product management? And here's some mentors possibly, bringing some of social network. Yeah, here are like two or three people who look like you and moved into product management who seem to be doing well, would you like an introduction, right? And even at a very basic level with the feedback that we're collecting, one of the things that we're doing that's working really well for us is we're helping understand your strengths and weaknesses, and for the weaknesses that you have, we're able to recommend mentors for you within the company who have that particular skill as their top strength. So that would meet the thesis that employees would enjoy that because the digital assets that you're enabling to be collected and presented and interacted with is in a new format that hasn't been there before. Yeah, exactly. And it's very focused on helping them, right? It's all about helping them and nothing else. And people like that. Great, great vision. I love the product idea and we've lived the new media world, we're doing things different, it's looking at angles well, often misunderstood, but people that understand and get it. So I got to ask you just in general questions, coding, coding base, what do you guys write in? What are some of the cutting edge tools you guys are using? Is it Node, I'll see. We use a lot of Node. What kind of software are you writing in? Everything is on AWS, by the way. It's fascinating when we moved into our space, all we bought was desk chairs and laptops, that's it, right? Everything is out in the cloud. And then from our infrastructure perspective, all the backend is written in Java. All the mid-layer, the mid-layer APIs is done in Ruby on Rails. And on the front end, for the webinar phase, we actually use React framework, JavaScript React framework, and then we have an iOS native app. So we do Swift. Android app at all, coming? Not yet. Just get the prototype. Yeah, we're iterating. I mean, we do weekly sprints, right? So things are moving so fast that, you know, this small number of platforms that we have, the faster we can iterate. But you want to nail the mobile first, experience, UX, workflow, do that thing, you know? The webinar phase that we've built is actually responsive. So if you actually do have an Android device, it actually looks very nice and actually works, but it's actually a web interface. I will do a native one, you know, once things are solved. So web responsive covers the wrestling mobile. Exactly. But you see a native app as mandatory, right? Absolutely. I mean, we already are getting feedback from customers who have said, look, you know, I'm standing in line at Starbucks and I'm able to actually give somebody feedback while I'm waiting for my coffee. You know, the way we've set up the app, you know, you get a list of skills and it's like Tinder, right? You swipe right on the scale. If it's a strength, swipe left. If it's not yet a strength, you know? It's a very consumer. Is that medium hot or not? You know? That way, right? I mean, that's what consumers want. I mean, that's what employees want because that's what they're getting in the consumer life, right? And you go to work and you get these clunky apps that are so difficult to use and you've got to go to training. That's just so old school. So we're reinventing how simple these apps need to be. And so we're getting feedback that, look, I can give feedback to somebody in 60 seconds while I'm waiting for my coffee and that's the experience that we want to bring. Yeah, and then helping people make it frictionless to do that. Exactly. Using a lot of gesture data and other interaction data you store. Exactly. And manage that for them. And then we automate it as well, right? Thinking differently. SK, thanks so much for spending time on the ground. This is theCUBE on the ground at General Catalyst in Palo Alto. I'm John Furrier. Thanks for watching.