Sramana Mitra: So CultureIQ begins in 2009?
Greg Besner: No. CultureIQ was started in 2013.
Sramana Mitra: Let’s jump to the CultureIQ beginning. What was the concept? Why did you start CultureIQ? What problem were you going to solve?
Greg Besner: I would say that the interest in culture was from being involved with Zappos. When I got involved, there were about 70 employees. When we sold it, there were thousands of employees. Many of them were warehouse workers and call center workers, yet this organization had such an incredible culture.
Having a great culture really inspired employees to provide great customer service and built an incredible brand. Being a part of that, even just as an investor, had a huge impact on my leadership style. I ended up adopting a lot of these culture initiatives and strategies in my next business. Many of my peers knew that I was involved with Zappos. They knew that I had started an HR technology company.
When Tony Hsieh’s book came out in the summer of 2010, I had Tony do some public speaking to some of my groups here. People started approaching me for years after that. At conferences, they’d tell me about the challenges they were having about understanding their culture and dealing with it. Eventually when enough people approach you with the challenge they’re having, you start to think, “Maybe instead of having culture as a part of what I do, I should make culture what I do.”
In 2013, I started researching what other people were doing to understand their culture and strengthen their culture. That’s where the CultureIQ journey started. I had the experience of building a SaaS HR technology business with Restricted Stock Systems so I had the ability to build a team, build a product, and even raise capital. I had the culture domain experience through my great journey with Zappos. Then I had one final piece. I had access to potential customers. I teach at night in NYU. I had some academic access as well.
In 2013, I had a few of my students engage part-time to start doing the research part of research and development. By the end of 2013, I had built a prototype and had signed up eight Proof of Concept customers who agreed to be the first customers. Some of them were those companies who approached me expressing a need for a solution. That’s how we developed the requirements. We interviewed professors and the companies on this topic.
What was surprising was because so many people care about this topic, it’s a very collaborative industry. I would end up meeting with the CEOs and partners at some of the large incumbent legacy providers like the partners that run McKinsey’s organizational health index project. Many of the largest companies are very open to talk about the industry. I was able to find a lot of data. I was able to interview a lot of customers and even talked to some of the incumbents.
It synthesized to a few areas that we felt we could really help organizations understand their strength and culture. I had been funding it for 10 months, but I also raised from some of those same initial investors and a few new investors. We put $2.25 million into capitalizing the business. That’s when I formally started building a team. I had a few people waiting in the wings to help build the technology and the product. Our first employee joined the day we were funded. Our CTO started a week later.