Four years after launching and with $1.5 million of fresh venture capital in the bank, the feedback platform that reduces avoidable employee turnover is harnessing Chattanooga’s innovation ecosystem for more growth.
It all starts with one simple question: “How are you doing right now?”
Really, it’s that straightforward. That’s the text WorkHound clients send out to their distributed workforces wherever they might be. Then they follow up with a second question: “And why do you feel that way?”
At that moment workers have the chance to respond, letting management know exactly what’s on their minds, good or bad, in the here-and-now. And they get to voice those feelings anonymously unless they decide to reveal themselves. The feedback management receives can then be acted upon as part of employee retention efforts.
The philosophical backbone driving WorkHound is an acknowledgment of the reality that one of the most typical reasons workers leave their employer is because they don’t feel their voices are heard and valued. WorkHound gives their clients the ability to proactively solicit worker feedback, then understand it through a data-driven platform and ultimately take appropriate steps to alleviate any troubling situation.
Does this work?
In short, yes. According to data supplied by their clients, WorkHound customers retain 90% of at-risk workers when addressing a problem through the platform. While that’s great, it is, of course, no feel-good metric — especially when you consider how expensive it is to backfill a worker once they leave a business.
Trucking into Chattanooga
WorkHound launched in 2015 in Des Moines, Iowa, by co-founders Max Farrell (CEO) and Andrew Kirpalani (CTO). The industry they first set out to tackle was trucking, since a pain point felt across that space is driver turnover.
How bad is driver turnover, exactly? 95-120% on average. And when it costs between $3,000 and $5,000 to replace a driver, backfilling those positions can get really expensive really quick.
It was clear, then, that if there was one industry where their service could help create real and positive change, it was trucking.
There was one big problem, though: Neither of the co-founders had deep ties in that space. That’s when they learned about Dynamo VC’s accelerator program (note: Dynamo no longer conducts their accelerator program) and thought it would be a great opportunity to connect with notable and helpful people from the trucking industry.
It turned out to be such a good experience, Farrell and Kirpalani decided to open up shop in Chattanooga. Today, they have nine employees — focusing on sales, marketing and customer success — working out of their Cherry Street office and another three in Des Moines.
Farrell is quick to sing Chattanooga’s praises:
“After our first three months in Chattanooga, we landed our first enterprise customer and doubled our revenue thanks to those early connections,” Farrell says. “Access to the community continues to be a strength. We have connected with state legislators, the mayor has visited our office and business leaders are always happy to take our call. My grandfather always said, ‘You can do more with friends than you can with money.’ It’s been rewarding to put this to practice in Chattanooga.”
To date, being in Chattanooga has helped WorkHound lure in a great team. Farrell says, “There is a blossoming energy in Chattanooga that continues to attract talent. For example, 63% of our Chattanooga team is from outside Tennessee, and they’ve come from all over, including California and New York.”
Scrappy innovation, fundraising and new industries
WorkHound is one of those rare birds in the startup world that has achieved most of its growth through its own revenues. Every dollar they’ve raised has been used only after its potential value has been thoroughly scrutinized. During a recent podcast recording, Santosh Sankar, a partner at Dynamo VC, called WorkHound “the scrappiest” Dynamo portfolio business.
But to scale to the degree they need to, the WorkHound team needs a bit more diesel fuel powering their truck forward. To that end, Farrell and Kirpalani recently wrapped a successful Seed Round fundraise of $1.5 million. The fundraise was led by San Francisco-based Right Side Capital and included roughly a dozen more investors from across the United States.
The capital they raised will enable them to dive deeper into the logistics and supply chain realm, while also giving them the ability to expand into new industries, that, like trucking, have distributed workforces, such as non-hospital health care and hospitality.
Farrell is excited about the road ahead for WorkHound.
“1 in 5 American workers do not sit at a desk and are decentralized from their office,” he says. “We have only scratched the surface in helping this workforce have a voice within their companies. WorkHound has grown 20 times since we last raised capital. We aim to double, if not triple the size of our team this year to support this growth.”
And naturally, Chattanooga is happy to be a part of WorkHound’s rise and continued success from the Innovation District and beyond.
David Martin is a co-founder of Heed Public Relations.