Tuesday, September 18, 2018

Vision and Grit: How Peopledoc defined a multi-billion HR Software category

On July 17, Ultimate Software, a $10B HR software gorilla, announced the acquisition of Peopledoc for $300m - the largest software exit in France since the acquisition of Neolane by Adobe in 2013. Hats off to Jon Benhamou and Clement Buyse, the two founders, and to the wider Peopledoc team for this achievement!

Sometimes companies get to the point of acquisition in a straight line; most of the time, however, they don’t. It’s only the perseverance, grit and vision of the founders that makes it possible. Peopledoc is a great example, and the success of the company is deeply entrenched in the driving force of the founding team, who reinvented the business a couple of times to get to where they are today. This took foresight, courage, creativity and a lot of hard work. Let’s jump back to 2007 to see where it all began…
Celebrating Year 2
In a dark dorm room on the HEC (the French HBS) campus, Jon and Clement were scratching their heads in search of the business idea to present for their entrepreneurship major. They were lucky to have Pierre Kosciusko-Morizet, founder of PriceMinister, and Jean-David Chamboredon, founder of ISAI, as their mentors. The four of them hatched their first idea: creating an online document management system for utility e-bills, which were starting to take off in France. When John and Clement graduated a few months later, and with the angel funding of Pierre and other friends, they started their first company, Novapost. Unfortunately, the level of adoption was not quite what it needed to be and in 2010, the team realised that a new strategy was needed. Given how hard it was to digitize paper for consumers, they decided to focus on the enterprise market.
Jon and Pierre working on the first business plan in 2007
A few brainstorming sessions later, and a new strategy was born. Jon and Clement decided to leverage their online document management platform to digitize payslips, reinventing the company for the first time. In France, the law mandates that companies provide employees with access to their payslips (as proof for retirement benefits) for 50 years, and this requires a layer of security and compliance that legacy document management companies didn’t provide.

Team first attempt at marketing Novapost: "Save like pigs"
In June 2010, Jon and Clement relaunched the company as a new HR SaaS business with a €1.3m Series A investment from Alven and Kernel (Pierre’s investment fund). In October 2012, as the business started to take off, I received an email from Pierre: “The company is killing it, not raising for now but it’s worth you meeting with the CEO.”

Lunch was set, and it was a great lunch. I loved Jon’s energy and drive and his exceptional ability to inspire people to share his dreams. As we discussed the potential of the market, I suggested him to expand the product platform to address markets beyond France. French payslips were an interesting market, but somewhat limited in size.

Fast forward to spring 2013, and I caught up with Jon, who told me that they were launching a new product: Peopledoc – a full document management platform for HR. A much bigger market. We discussed the opportunity to go global and start by setting up a beachhead in the US. A month later, Jon let me know that the day after our call, he had gone to the US embassy to apply for a visa and was moving to New York in September.
Jon and Clement with French President Francois Hollande
in the new Peopledoc New York office
I was impressed by how decisive Jon and Clement had been on such an important decision. So, a few months later, when Jon called, I jumped at the chance to invest, and we closed the $17.5m Series B in May 2014. At the same time, the company rebranded as Peopledoc, understanding that their new product was their biggest asset, for its second reinvention.

When we invested, Peopledoc was at a $3m run rate, with an exciting and challenging journey ahead! The gross margin of the company was sub-40% and needed to reach over 70% to become a “real SaaS” business. During the fundraising process, Jon, Clement and I had several strategy discussions on what it would take to build a massive SaaS HR business:
  • First, we needed to conquer the US market: get our first references fast and build a strong sales team locally.
  • Second, we needed to shift the company’s product mix from payslips to document management. Payslips were a managed service business, and while 50% of payslips were digital, 50% were still paper.
  • Third, we needed to add new modules to the platform, beyond document management, to create a new HR software category.
Shortly after the closing of the round, we brought onboard Mike Dinsdale, the CFO of DocuSign, as an independent board member. From there, the stars continued to align, as we addressed each challenge. Jon and Clement hired several key US execs in sales, marketing and finance, which helped land the first $500k ARR deal with a flagship US financial services firm in 2015. The product mix shifted over time as the company expanded in the US, UK and Germany and finally, the team launched HR case management and digital onboarding. New competitors started to address the market, such as SuccessFactors and ServiceNow, and Gartner recognised the category as “HR Service Delivery”.

In the midst of this, Eurazeo led the $28m Series C.

By mid-2018, the team had grown to 240 people in the US, UK, Germany and France, gross margin had skyrocketed to 75%+ and the business was growing 100%+, with a $30m+ run rate.

 And then Ultimate knocked at the door, which gave us a very hard decision to make. More than 10 years had passed since the first late nights in the university dorm. The business model had evolved three times, and the company went from a Paris based start-up to a global HR category leader headquartered in New York. For Jon and Clement, it was a good time to give new wings to the company and write its next chapter.
Jon and Clement announcing the deal with Scott Scherr, CEO of Ultimate
I feel privileged to have been part of this story and will miss our board meetings. Congrats again Jon and Clement for showing true vision and grit! What an exciting journey.

Monday, June 18, 2018

Building Workflows should be easy - and they will be...with Zenaton!

This blog post was co-authored with Adrian Colyer, Venture Partner and former CTO of Pivotal
Nearly all businesses have process-related workflows that govern how their users interact with their service or automate internal tasks...and they are painful to code and even more painful to test. Hopefully things will change soon with Zenaton, the newest addition to the Accel family. We are joined in this seed round by our friends at Point9.
For instance, let’s suppose, in the light of the GDPR legislation a company wants to send a series of emails over a period of a few weeks, reminding people to explicitly opt-in to receive communications, so it can record their consent. Obviously, the emails should stop if consent is given at any point in time. In many cases the implementation will involve database changes, scheduled tasks, and cumbersome logic to tie it all together. What should be a simple workflow ends up creating a mess!
There are software applications, or workflow engines, that have been created to manage business processes. So, why does this happen? Because many existing workflow engines are hard to use, and it's easier for a developer to hack something together themselves. After experiencing this issue many times over, the Zenaton team - Louis Cibot and Gilles Barbier - had had enough. They built a workflow service designed to delight developers with a simple and easy to use API. It's just way easier to code a workflow using Zenaton than it is to roll your own, and when it comes to developers, ease of use is incredibly important.
As we got to know Zenaton, we spoke with many companies whose teams who were extremely pleased with the simplification in their codebases and the speed with which they could make progress: focusing on their business processes, and not on the intricacies of long-running asynchronous workflow management. You'd have to prize Zenaton out of their cold dead hands before they'd give up on this kind of improvement.
With Zenaton, the code looks like the design. The implementation of the workflow is all in one place, with a straightforward mapping to the business process. The Zenaton service orchestrates the workflow for you, invoking the individual flow steps as tasks that run within your own environment.

None of that counts for anything of course if the backend workflow engine isn't up to scratch. The Zenaton team have spent a lot of effort on this and have built a robust platform on top of the Erlang Virtual Machine, well known for running distributed and fault-tolerant systems (Erlang is a programming language used to build massively scalable soft real-time systems with high availability requirements). It's all made available as a scalable service so there are no setup costs, and no operational overheads.
Zenaton is currently in closed beta and will launch in the coming weeks. It has clients for Node and PHP, with Python, Ruby, and Java in the works.
We believe that any developer who wants to spend more time working on business features and less time solving purely technical issues will love Zenaton. We are excited to back Gilles and Louis, as they roll out their platform and put it into the hands of developers around the world. We are big believers in massive growth of dev tools and the API economy and see Zenaton in the continuity of previous Accel investments like Atlassian, Algolia and Segment.

Friday, April 27, 2018

Signed, sealed, delivered: DocuSign hits the Nasdaq

Congratulations to the past and present DocuSign team for their incredible achievements, as the company makes its public market debut. What a journey it has been since the genesis of the company in 2003, when it’s visionary team set out to automate the agreement process and solve many pain points from speed to cost and accuracy.

In 15 years, DocuSign’s cloud-based platform has made it possible for more than 370,000 companies and hundreds of millions of users to make nearly every agreement, approval process, or transaction digital—from practically any device, virtually anywhere in the world. It’s rare to see any type of technology reach such a range of customers -  from very large companies to individual users across all industries. Today, seven of the top 10 global technology companies, 18 of the top 20 global pharmaceutical companies, and 10 of the top 15 global financial services companies are DocuSign customers. More than 700 million transactions have been performed on the platform. And this is just the beginning!

DocuSign’s second office, the ‘Garage’ 

From printer & fax to computer
When Tom Gonser, Court Lorenzini and Eric Ranft started the company in 2003 out of Seattle in the overhang of the dot.com explosion, the business world was used to the print-sign-fax routine. I’m sure everyone still remembers those moments of anxiety in a random hotel lobby, trying to email a document to the reception desk so they could print it for signature… a frustrating process which could easily take an hour. There had to be a better way to do this and indeed there was: DocuSign was born and suddenly the print-sign-fax routine became as simple as connecting to a Wi-Fi network. One click and the document was securely signed and authenticated. But, you still needed a computer and a Wi-Fi connection to do this.

From computer to iPad
In the company’s early years, the notion of an e-signature first gained traction in the midmarket and in particular in the real estate industry. Real estate brokers quickly realised the value that could be gained from an expedited signature process. With the launch of 3G and the rapid growth of iPhones and iPads in 2007-09, the world realised that paper could be entirely digital, beginning a new era for DocuSign, which had invested early on in “mobilising” its product. Executing a transaction became as simple as a tap on your tablet or smartphone, further fuelling the company’s growth.

From e-signature to digital transactions
With large enterprises beginning to adopt the technology, the platform quickly evolved in several dimensions. With the first global enterprise-wide deployments, the team strengthened the scalability, security and certifications of the platform. A lot of people still see e-signature as a simple problem to solve (as easy as a tap on a mobile screen), but this is only the tip of the iceberg. There is a lot more to it to ensure the authentication of the user, the security of the information, and the management of the transaction workflow.

Partners network
Keith Krach, who joined the board of the company in January 2010, was appointed CEO the following year. During his tenure from 2011 to 2017, Keith developed a set of partnerships with most of the relevant leaders involved in software productivity and transactions, including Microsoft, SAP, Salesforce and Comcast. These deals strengthened the footprint of DocuSign, reinforcing the company’s position in the industry.

A DocuSign sales meeting in early 2016 

It is all about people
Having the chance to work with the leaders who made this success story happen has been a privilege for us. This stellar team includes Tom Gonser, the co-founder of the company and driving force behind the product and vision; Keith Krach, who I had the chance to know before his involvement with DocuSign; Mike Dinsdale, who I knew from his days at Lithium in 2009, and who became CFO of DocuSign in 2010 (and is now the CFO of Gusto). Mike and I regularly exchanged thoughts on SaaS metrics and strategic transactions in EMEA. And last but not least, Dan Springer, a long-time friend of Accel through our investment in Responsys, who became CEO last year.

What a journey – hearing the bell ring this morning brought all of these wonderful memories back. It reminded me that at the end of the day, the journey is the reward. Thank you again to all the members of the DocuSign family!