Nowadays, growth minded leaders know that a strong corporate culture and engaged employees are a central part of any company’s growth playbook. Yet when Zillow first launched, placing people on the same level as product innovation was an audacious move. Still, Zillow took the time to invest in improving its employee engagement, knowing that engaged employees were the bedrock for a company’s long-term success.
On this episode of Growth Hacks, Kunal and Katja talk to TCV Venture Partner and former CMO, COO, and current Zillow board member, Amy Bohutinsky. We discuss Amy’s perspective on C-suite leadership and bucking the traditional marketing and operational playbooks in order to drive growth and create better company cohesion. As board member of various technology companies, Amy also walks us through what boards are discussing now more than ever.
Why Zillow focused on product over marketing to drive early growth. When Zillow launched in 2004, they’d seen many of their startup peers spend lots of money on brand marketing without a proven revenue model. Rather than tread the same path, Amy says the Zillow team “saw an opportunity to build a company in a really different way, which was to focus deeply on product. Product was absolutely the best marketing we could have.” By adopting a no budget marketing budget, the team was further incentivized to create products, like Zillow’s Zestimate, that customers would truly love using.
Strategies for successfully merging companies post-acquisition. As Zillow has grown, it’s acquired companies of all sizes, including its $2.5 billion acquisition of fellow real estate juggernaut Trulia. To navigate a smoother post-acquisition merger after she became COO, Amy took a page from her former CMO playbook when considering how to best scale Zillow’s employee base while retaining what was special about its culture. During the Trulia acquisition, the companies combined their individual sets of values to create a new shared set of driving core values. “That gave a nod to what was great about both, but also showed that we were bridging two companies together and two different cultures together and creating something new,” says Amy.
How shared values in a shared language build connective tissue between disparate teams. One of Amy’s goals during her time as Zillow’s COO was to drive better cohesion between sales, marketing, and product. Though each team had its own values in addition to Zillow’s shared corporate values, everyone across the company bought into what Zillow called its “product personas” — mental sketches of the people they built for. “They had names, they had photos, they had a whole life…And these are individual personas that everyone across every department at the company understands deeply,” says Amy.
The most important metrics all C-suite leaders should be paying attention to. When Amy shifted her role from CMO to COO, she viewed Zillow employees the same way she did end consumers; what did they have to say, what were their concerns, and what could Zillow do to make sure they retained the workforce that made them successful. Even now, Amy says all C-suite leaders should be paying attention to a key metric: employee engagement. “If you get that right, it’s a whole lot easier to meet all of the business-related metrics you need.”
What corporate boards are most concerned with currently. In addition to the board of Zillow, Amy sits on the boards of Modsy and Duolingo, and has sat on the boards of companies including Gap and HotelTonight. She says that in the last seven to ten years, the conversation on boards has shifted away from growth at all costs to an emphasis on people and how to keep and retain a healthy workforce.
Shanna Tellerman is a two-time Founder and CEO. Her current company, Modsy, is a virtual home interior design service that provides 3D photorealistic renderings of the home space, where all items within the design are 100% shoppable and users can purchase all in one place. In this Growth Journeys podcast, Shanna traces her evolution from math-loving fine arts major to entrepreneur by way of 3D technology and venture investing at Google. Tina Hoang-To, Executive Vice President at TCV, also has both CEO and venture experience, so this lively conversation is filled with lessons of:
Founding and leading businesses and raising capital
Building and scaling high-performing teams
Integrating technology and design
Succeeding as a working parent
Forging a successful partnership with investors
For all this and more, settle back and click play.
Tina Hoang-To: Welcome everyone to Growth Journeys, a
podcast series from TCV focused on lessons from entrepreneurs and founders in
the TCV ecosystem. I’m Tina Hoang-To, Executive Vice President at TCV, and I’m
here with Shanna Tellerman, Founder and CEO of Modsy, a leading virtual home
interior design service. Shanna and I met five years ago, when I was CEO of
Wedding Spot and she was a partner at Google Ventures. Then we traded sides. I
re-joined TCV as an investor last year and reconnected with Shanna. Fast
forward a few weeks later…TCV led the Series C in Modsy and I joined the board.
Shanna, looking forward to having you today to share your story. Welcome to
Shanna Tellerman: Thank
you. Excited to be here.
Tina Hoang-To: Shanna, let’s start from the
beginning. You have a pretty unique journey from having a fine arts major at
Carnegie Mellon to venture capitalist to CEO of Modsy. What changed for you in
those early years to put you on an entrepreneurial path?
Shanna Tellerman: I
definitely did not have any original intention of going into venture capital or
even technology. I was a big fan of both art and math and science, and I was
always looking for the place where these two things intersected. And I tried a
bunch of ways that felt kind of
superficial to me until during my time at Carnegie Mellon, I took this
class called Building Virtual Worlds, which was very early days virtual
reality. Crazy headsets. Low resolution. And that class was, for me, the
changing point in my life. I figured out that you can combine all of these
things into 3D and graphics and consumer experiences and pave the way to new
ideas working on this interdisciplinary team. And for me, it was like,
“Check, check, check.” It hit every box. I had so much fun. And it
veered me from going through this path of selling art in New York to “I am on a
path to starting companies, founding businesses, and working in technology.”
Tina Hoang-To: So
your first company was Sim Ops. Tell me the story behind that.
Shanna Tellerman: I
was in Carnegie Mellon in graduate school and I was working on a technology
that I just couldn’t imagine leaving behind and taking a job. And that technology was game technology
that was being used to train emergency responders. And we were working with emergency
responders all over the country
and actually all over the globe. I had a professor who recommended,
“Why don’t you start a business around this?” And I thought,
“Sure. Why not? How hard is that?” And there I was, three months
later, and he gave us a $10,000 loan and I had set up my very first business.
And we were taking the technology out of the university and essentially using
it to train emergency responders.
Tina Hoang-To: And what were some of the toughest
challenges you faced as a young, first-time CEO with Sim Ops?
Shanna Tellerman: I
think I faced almost every challenge that you can face as a first-time founder.
I joke but it’s kind of serious that I made every mistake you can make from the
way you structure the company to the way you divide up your equity. And the
good news was that you can make a lot of mistakes as long as you recover very
quickly and learn from them. And so I made all kinds of mistakes. The biggest
challenge that I faced as a young entrepreneur I think was having no credibility.
I had never worked. I had no experience. I had gone to graduate school. And I
both had no credibility plus no experience to say, “This is how things
should be done.” And so for me, I think – rightly so – investors who were looking at my business said,
“It’s interesting technology, but are you the right person to lead this
company?” And I came into work every day being like, “Am I right
person to lead this company? I don’t know.” And over the years building
out that confidence for myself but also for investors was probably the hardest
part of the journey.
Tina Hoang-To: So selling your company is a big
decision. How did you know M&A was the right path for Sim Ops and yourself
at that moment in time when you did sell the company?
Shanna Tellerman: Yeah.
I mean, the moment of an exit is the moment of many, many, moments prior,
right? And for me, the path of Sim Ops was a path of lots of learnings. I
started out of graduate school. I didn’t plan to become an entrepreneur. And
then we hit fundraising issues, technology and product fit challenges, me
moving to the West Coast, and then the downturn. A massive recession hit, and
we had to raise our Series A during that. And I probably pitched 60 to 70
investors and somehow did raise a Series A during this downturn when nobody
else was getting funded. So there we were a year later and Autodesk had been a
partner that we had been talking to for a long time, and they wanted to buy the
company, and I was thinking about, “Do I go out and raise a Series B or do
I take this path?” And for me, at that moment I was like, “I’m ready
for the next chapter. And that was a very, very tough road. And this is a
really great company to keep doing what we’re doing and to have it impact an
even broader set of people.” So for me, that was the right moment but it
was a tough choice.
Tina Hoang-To: You built Sim Ops and then you’re CEO
of Modsy. In between, I’m sure you’ve built a lot of confidence in operations.
Tell us a little bit about what you’ve learned along the way.
Shanna Tellerman: That’s
a great question. I actually believe first that you learn the most by mistakes.
So when you make a mistake and then you recover and you’re able to course-correct
from that mistake, to me it’s the center of confidence, because now you’re not
fearful when you’re making choices because you know that you’re going to make
bad choices. But as long as you can quickly react and maneuver from those
choices, you’re going to be okay. For me, that’s been one big piece at the
center. The second most important part for me of building confidence has been
learning to be really myself. I think that when you start a company especially
if you’re really young and you don’t know what you’re doing you like to put on
this pretense that, “I’m a manager. I’m a founder. I am somebody who can
run a business.” And most people don’t feel that level of confidence. And
ironically being completely transparent and vulnerable and sharing the things
you do know and don’t know build a tremendous amount of trust with your
employees and with your investors and with your partners. And you’re able to
build on that confidence of “These
are the things I actually do know. I know how to do them.” And then these ones
I don’t and I’m okay with that. And people are going to give me feedback and
I’m going to learn and I’m going to evolve. And then I get to be just myself.
Tina Hoang-To: What was your experience like once Sim
Ops was acquired by Autodesk? How was that
integration process? And I’m sure that’s a big transition to go from a really
small team to such a large organization.
Shanna Tellerman: The
experience for me going from acquisition to working at Autodesk was definitely a
night-and-day difference. We were, at that point, a 12-person company and I
went into Autodesk which was thousands of people, multiple offices, global
company. I had never worked for a company and I had never had a manager before
in my life. And so it was a transition at every single level of your work
experience. There was nothing that was the same anymore. The experience for me
though was amazing because, one, my first manager ever was actually an amazing
manager, somebody I still turn to today for advice. And the company was just
really full of incredibly intelligent, really humble people who were super-passionate
about the same kinds of things I was passionate about — like 3D and graphics
and this world of transformation into the cloud. And so the baseline of those
things that were aligned between me and them made it this incredible adventure —
many acquisitions don’t go that way. But
for me, I felt like I just got to absorb and I got to learn and I got to work
with great people. It was incredible.
So, Tina, I know you also went through the experience of an
exit. I’m so curious. It was probably a totally different experience for you.
What was it like? What were your lessons learned?
Tina Hoang-To: I think very similar to you. I think
at every point in time as a founder when you’re thinking about fundraising,
you’re also thinking about the strategic options, right? It’s a tough decision.
When you build your company it’s sort of your baby. So letting that go I think
was really hard for me. And very similar to you I thought “Hey, I’ve built
this, this far. There’s a new chapter that might be better partnered with
someone else.” And I think that was the right choice, and I still believe
it’s the right choice.
Shanna Tellerman: So,
Tina, I know that we also have the same common path that was a little unusual,
a little untraditional. You went from selling cars in college to becoming a CEO
and then back to being an investor. Tell me a little bit about how that path
Tina Hoang-To: Well, it’s a lot of lessons along the
way. But since you mentioned my car selling days, one of the biggest things
that I’ve learned throughout my career is that being good at sales is something
that got me very far. And I think that’s important to everybody in their
career. When I was CEO, I felt like every day I was playing a sales role. When
recruiting talent, you’re selling your culture and your mission. And then when
fundraising you’re selling the market opportunity and your growth trajectory.
And now as an investor, I’m still not done pitching. I’m pitching myself as a
board member. I’m pitching TCV’s brand, our domain expertise, and our track
record. To bring it back to something that I think all the listeners can relate
to, think about every annual review that you’ve had. You’re essentially
pitching your impact to the team and your work product. So my biggest advice
here is if you don’t feel like you’re good at selling, read some books. Go out
there and do some online classes, because I think that’s definitely going to
come in handy as you progress throughout your career.
So let’s talk
about Modsy. What is Modsy for those listeners who are not familiar with the
Shanna Tellerman: So Modsy is an online interior design
service where you get paired with a designer virtually, and then we use
specialized visualization technology to basically reconstruct your room into a
3D model and design it so you can see how everything will look in your space
and shop from real products, from real retailers. Everything integrated: You
can check out and buy from Modsy.
Hoang-To: How did you
come up with the idea?
Shanna Tellerman: The
story starts with myself. I am the Modsy customer. My husband and I moved into
a home in San Francisco and we went through that process of, “It’s time to
buy some furniture. It’s time to upgrade from our IKEA and hand-me-downs.”
And we got stuck almost immediately. We were looking at an awkward space. And
we had a sofa, but we couldn’t decide on the rug without deciding on the art.
And we couldn’t decide on the layout of the space. And without being able to
see what it would really look like and have design help to visualize and to
come up with a plan we did nothing for a year-plus and our space was sad. And
we came home to this kind of empty sad space. And for me, that led to this
moment where I was looking at a catalog and I looked at it and I was like,
“I wish I was having this experience looking at this beautiful image where
everything is designed and looks great, and they’re all products I can really
buy. I just wish it was in my own house.” And for me, that light bulb went
off because I had this background in 3D and graphics and spent time at
Autodesk. I knew what was coming and I knew that we could combine the ability
to visualize your unique space, fully designed, with real furniture you could
really buy, in a way that felt beautiful — like a catalog — but it was in
your house. And we could combine that with the ability to have a designer at a
very affordable rate, working with you to make the decisions. And that if I
provided that to the average consumer who today has no access to design
services without thousands and thousands of dollars, that we could open up a
huge market opportunity.
So the moment I had that idea I couldn’t drop it. I went
into work every day, and I was thinking about it, and prototyping it. And then
fast forward a few months later, and I had left Google Ventures, where I was
investing, and I was like, “I am starting Modsy.” And here we are,
five years later.
Tina Hoang-To: I can attest to the value proposition
since I was a customer of Modsy. You know this story, but you saved Nick and
I’s life when we moved into our new place in San Francisco, and we went through
the same thing. We tried out two interior designers. They came in, took a look
at the space, gave us an estimate of three to four months before we can
actually start buying furniture. And given I’m a very quick person to do
everything, that just didn’t work for me. Like, what are going to do for four
months without furniture in this wide-open space? So because of Modsy, we were
actually able to buy all our furniture in three weeks and be able to settle
into our new home.
Shanna Tellerman: It
Tina Hoang-To: Thanks, Shanna. What is the technology
behind Modsy and how’s it changed since you launched the company in 2015?
Shanna Tellerman: Technology
is definitely at the center of Modsy. It’s at the center of the vision because
the vision is about visualization and visualization technology powers that. So,
there’s two parts to this. One is the photo-realistic 3D renderings. From day
one, we knew we could enable that. But to enable that in a scalable and
affordable way that would allow us to provide the service at a very low cost,
we had to build our own proprietary tools and technology and we had to plug
into a couple of systems that were all cloud-based so the whole thing could
scale. And so that just took a lot of time. That one we had a pretty clear
The second part of our technology is taking photos of
somebody’s room and then reconstructing an accurate to-scale 3D model — ideally
with as little measurements, or no measurements, as possible — and then coming
out with that 3D model to be usable in the design process to be able to put the
furniture in. And so it had to be accurate. It had to have floors and walls and
windows. And then it had to be something that could render out
photo-realistically. And nothing in the world existed to do that.
There was reconstruction technology as a concept and there
are big cameras that do depth sensing that can measure and that can use laser
scanners — but that doesn’t exist in the normal consumer’s pocket. So we were
like, we need to take the normal phone in normal consumer’s pockets and we need
to apply the things that are only possible in these really sophisticated
cameras. And we had some guesses about how to do it, but nobody had ever done
it. So fast forward to today. Several years of R&D and various approaches
and a sort iterative approach to solving this problem one piece of the pipeline
along the way, we now have patented technology. We have taken an approach that
is unique to everybody in the world that is trying to solve this. We’re
probably the furthest ahead. We’re about to release something even cooler in
this space in the next couple of months. But it has been one of those things
where you know what you’re trying to do at the end, but your R&D path
uncovers new ways and new approaches continuously and along the way you have to
adapt that plan.
Tina Hoang-To: I remember as I was using Modsy for
the first time, the biggest value proposition for me is actually seeing things
fit in my space. And that was very hard for us. I mean, I can walk around with
a ruler and measure everything but being able to look at three different types
of layouts for a sofa and how it’s arranged in the space and click a button to
live-swap in each and every one of the sofas was just a tremendous value add
for us. So thanks for building that.
Shanna Tellerman: Awesome.
Tina Hoang-To: So Modsy has been growing, raising the
Series C, and nearly doubling its headcount in 2019. How have you navigated
through the challenges of scaling a team so quickly?
Shanna Tellerman: It’s
interesting. Not only are we scaling the team, we’ve also been transitioning
the locations and roles of our team. So a lot has changed all in one year. I am
not going to say this is easy. Any time you grow and you add a lot more people,
your culture does change. But what I’m constantly telling our team is that the
culture is what the people make it and that as we add new people, they both
adopt pieces of our culture, and they bring new culture in. I’ve seen our
culture, the core elements of our culture, where we lead with our heart and we
believe in making magic for our customers and we believe in hard work — those have stayed.
Those have always stayed true. But we’ve added all these new elements of our
culture, like you can work anywhere, you can work remotely, you can work from
home. We have a lot of customer-facing people who have a different view of the
world and there’s a different set of things that they’re interested in when we
give Monday morning updates, for example. So you need to adapt pieces of your
business and pieces of your culture. You also need to hear the feedback from
all the people who’ve joined. And simultaneously you constantly rethink the
tools and the structures especially when things like the location of the people
changes along the way.
Tina Hoang-To: Fundraising is often a big part of
being CEO. I know that. If anybody tells you that fundraising is fun, they’re
probably lying. What were you looking for when you were raising the Series C?
And what was most important to you?
Shanna Tellerman: This
one is easy. I was looking for Tina. In all seriousness, I really, really look
for investors that are partners – true partners – and to be a true partner
you have to be able to put yourselves in the shoes of each other once in a
while. And I feel like my experience being on the investing side was helpful in
that I can understand what an investor’s trying to get out of the relationship.
I understand the dynamics of a partnership, I understand the growth rate, I understand
the things that are exciting to an investor. Simultaneously as an entrepreneur
it’s really, really helpful when your investor understands how hard it is to
run a business, to build a business and that every day you’re in there and
you’re slaving away and you’re making these hard decisions and hard choices and
that there’s real work in that. And again, when you get those snapshots of a
company once every couple of months it’s easy to not remember that there’s a
lot of hard work that goes into it. And for me when I’ve ultimately talked to
investors and had the opportunity to bring great people onto the board, it’s
the people who just get it. They get that there’s a lot behind the scenes and
that that’s always part of the conversation. And as we chatted, it was so clear
that that was how you thought about the world and that’s always made it easy.
It’s made the relationship easy.
Tina Hoang-To: I think on the flip side, one of the
greatest things that you’ve given me is the opportunity to work with the team. Every
time we’re launching new products, Sam, CTO, is sending me the test pilot
launches, it gives me the opportunity to bring myself back to the days when I
was an operator and launching new products. And that’s been really exciting to
be a part of that journey with you.
Shanna Tellerman: Yeah.
Actually, we feel that you have had a unique ability to put yourself in the
shoes of our team and ask the questions or give the feedback in a way that feels
like you are part of the team, not sort of passing by giving us side comments
or sort of surface-level comments. It’s real feedback that we can really apply.
Tina Hoang-To: Shanna, you’re a CEO and founder but you’re
also a mother. How has motherhood changed how you work and how you are as a
Shanna Tellerman: So motherhood, for anybody who’s listening –
as a mother or father, is hard work. There’s no question. It definitely started
to divide my time. But I will say, it has been life-changing, game-changing.
Not just for me personally, but for our business. The thing everybody says is
true — which is, you get way more efficient with your time and you start
canceling all those silly meetings and those lunches or dinners that
didn’t really matter But for me, the best part of it was really I always have
carried around the stress of my company. It doesn’t matter whether I’m going to
dinner or a movie or on vacation, it’s a weight in life and I’m always thinking
about it and nothing I could do would break me out of it. My first company, my
second company, I could be in the most beautiful place in the world and I was
still thinking about my new business. We were hiking in New Zealand and I’m
thinking about my business. And I’m like, “This isn’t healthy,” but I
can’t break out. But then I had a baby. And when I go home and see Skye it’s
pure joy and the thoughts of our business melt away. And even if it’s only for
a few minutes, there’s these few moments where I’m like, “This is actually
more important than that.” And I never had that before, and it’s been
Tina Hoang-To: So I’ve been really fortunate to have great
mentors in my career and I think this is a very important part of development
as you progress. Who are some of the people in your life that have provided
mentorship to you?
Shanna Tellerman: It’s such an important question. Definitely,
I have had a series of mentors along the way from managers to advisors and
people in my life, my husband. But for me actually even more fundamental
to that was something I realized when I was an entrepreneur, but then realized
more profoundly when I was an investor, was that there really wasn’t this same kind
of network for women. And so I became really passionate about connecting women
together who were founders, investors, and operators because that’s the
ecosystem and just allowing us to build bridges and connections and
relationships with no business purpose to start out — knowing that it would
lead to great business results in the end. And so it started then when I was an
investor and we started doing this annual trip to Park City and skiing, and
it’s been just amazing to see this network grow and support each other. And all
these women are people I know I can just get on the phone and I can ask a quick
question. When I started my company they were my first calls — being like, “Will
you invest in my seed round?” That is the network that ends up becoming
such a powerful resource for me.
Tina Hoang-To: So we’re down to the last question
which I think will be helpful for most listeners who are in your shoes. As a
CEO and a former VC, what is one piece of advice for someone pitching to a VC
firm that you wouldn’t have known if you hadn’t had that experience as a
Shanna Tellerman: I
get asked this question a lot. What did I take from being a VC and how do I
apply it to being an entrepreneur? And especially in fundraising and pitching,
what’s the secret sauce? For me, it’s actually my understanding that it is a
partnership and that the partnership collectively makes a decision. So you
might have a big champion who has brought you in and they’re super excited, and there might be a bunch of people at
the table really excited. But there might also be some people who are
not that excited about your business and that that is actually a pretty normal
part of a partnership discussion after a pitch. And for me, that’s allowed me
to take it way less personally — the pitch. It sounds funny but as an
entrepreneur you feel like this is my baby, this is my company, people are
giving me feedback they didn’t like me, they don’t like my business. But in
reality, there’s this collection of people looking at your business with their
collective history and experiences, and it is more common than not that some of
the people sitting around that table have some concerns and have some
reservations and bring it up. And then that discussion ensues, and it may be
swayed one way or the other. And you are a minor part of that equation. At the end
of the day, they’re making a collective partnership decision. And for me, that
just took a lot of the emotion out of the fundraise.
Tina Hoang-To: That’s a great point. When I was going
through a fundraising as well you get a lot of “no’s.” I think some people have
biases towards certain industries or certain products, etc. But one of the
greatest pieces of advice I was given was, it doesn’t matter how many “no’s”
you get. You really only need one “yes.”
Shanna Tellerman: So
Tina Hoang-To: And I think that turned everything
around for me, that it is okay to get turned down. Because if you look at the
data and the stats, the chances are you’re probably not going to get a “yes” in
your first try, so that’s really helpful advice.
Shanna Tellerman: Very
Tina Hoang-To: Shanna, these are really valuable
lessons you’ve shared. Thank you so much for joining us on Growth Journeys, and
thanks to all out there for listening.
views and opinions expressed are those of the authors and do not necessarily
reflect those of TCMI, Inc. or its affiliates (“TCV”). TCV has not
verified the accuracy of any statements by the authors and disclaims any
responsibility therefor. This interview and blog post is not an offer to
sell or the solicitation of an offer to purchase an interest in any private
fund managed or sponsored by TCV or any of the securities of any company
discussed. The TCV portfolio companies identified above are not
necessarily representative of all TCV investments, and no assumption should be
made that the investments identified were or will be profitable. For a complete
list of TCV investments, please visit www.tcv.com/all-companies/. For additional
important disclaimers regarding this interview and blog post, please see
Compliance seems to divide enterprises into three categories: those that primarily publicize it as proof of “good governance,” those that actually push the boundaries far enough to bring consequences, and everyone else with their heads down, trying to address whatever regulatory standards govern their industry and the seemingly ever-changing nature of those standards.
fourth group is emerging, charting their own course. These enterprises are
turning compliance to their advantage by mining compliance data for digital
gold: insights that increase efficiency and competitive advantage. Like the
governance crowd, they have automated many compliance functions with emerging software
solutions. They are looking at the resulting data with fresh eyes and using it
to improve their businesses.
people think of compliance in terms of rules and regulations imposed by lawmakers
and other governing bodies, for good reason: there is a proliferation not just
of new regulations but of whole new regulatory frameworks such as Dodd-Frank
and GDPR. Even long-time frameworks such as SOX, HIPAA, and FCPA continue to
evolve. Yet at the same time, many enterprises are setting rules of their own
to address an increasingly complex environment that includes global supply
chains, cybercrime, trade wars, Brexit, and other evolving risks.
end, it doesn’t matter where the rules come from: compliance, and the
documentation that comes along with it, is essential for managing risks and
maintaining brand reputation. The roster of damaged brands from just the past
few years illustrates what can happen when risk and compliance management break
recently, enterprises managed compliance risks with home-grown, often siloed and
disparate initiatives that focused on people and processes. The components
included manual record-keeping, time-consuming audits, constant training,
ever-lengthier supplier questionnaires, C-level compliance positions, and
board-level reporting. The reams of information gathered and presented were
considered useful mainly for answering a simple question: Are we compliant or
Then a new
question arose: Can we at least automate and digitize risk and compliance data,
like we have done with so many other processes? The answer to that question is
clear: We can, thanks to a growing community of companies providing governance,
risk, and compliance (GRC) technology solutions that automate the process of
collecting, aggregating, analyzing, and presenting relevant data while reducing
their costs to the organization.
that just as homegrown compliance structures created the opportunity for
digitization, a critical mass of companies are now positioned for a new
opportunity that may eclipse the earlier one. Data that was once viewed merely as fuel for the compliance machine
can now be considered a strategic output in its own right, with value to the
business beyond compliance.
it’s a bank mining Know Your Customer data to pitch targeted travel insurance
to its customers or a CPG manufacturer analyzing complaint data from the Consumer
Financial Protection Bureau to improve its manufacturing methods, we see an
opportunity for companies to extract incremental, “offensive” business insight
from large risk, compliance, and regulatory data sets.
opportunity represents a convergence of what may seem unrelated factors. But
let’s remember that in a globalized, highly competitive economy there are few
trends that arise in isolation.
trend we note is a dramatic change in the people sitting in the chief
compliance officer (CCO) chair. Russell Reynolds
the career backgrounds of 72 CCOs in banking, insurance and asset
management and reported that “gone are the days of principally legal and
compliance executives nabbing the top job in the compliance function.” So who’s
getting the job instead? According to the report, it’s “broader-focused appointees
from consulting, risk and audit. This new breed of appointees would be
well-positioned to contextualize compliance (and the associated cultural
change) in the wider picture of the organization.” In other words, compliance executive leadership is not just for
lawyers and specialists – it’s for multidisciplinary executives who are as
fluent with brand value and enterprise risk as they are with the P&L and
The second trend we note is increased use of AI/ML.
The transportation sector is a leading example, in part because it is heavily
regulated. Shipping companies, notably UPS, now place dozens of monitors on
their vehicles for compliance with internal and regulatory rules – and then
apply AI to the monitor data to optimize delivery routes and driver behaviors
in ways that squeeze out fuel costs and improve customer satisfaction. Fleet
operators are further served by solutions from the likes of Keep Truckin,
Samsara, and Geotab, which help improve driver safety and increase the
precision of preventive maintenance.
The third trend is the evolving
consumer privacy landscape. Ironically, more robust data protection and
security regulations such as GDPR can actually serve to enhance business value
by increasing the trust between companies and their customers. In its January
2018 report, “How
GDPR is an Opportunity to Create Business Value”,
Gartner notes that “handled effectively, there is great potential to obtain
consent to increase data access, use, and sharing rights — aligned with goals
of a wider organizational data and analytics strategy. This can help drive
competitive advantage, while also helping to achieve compliance in other
countries and regions.”
Examples of Leveraging Risk &
Compliance Data to Drive Business Value
examples of companies that are helping advance the use of risk and compliance
data for improving everything from customer experiences to supply chain
performance to more effective emergency response:
customers use Avetta to certify compliance quality of its suppliers (green
flag, yellow flag, red flag) and then mine the data to identify which suppliers
are best trained and best equipped for certain on-site jobs.
Higher education institutions have long collected
data to achieve and maintain external accreditation. Watermark Insights helps universities and colleges not only
collect, digitize, and report on that data to demonstrate effectiveness, but
also to use it to inform curricular changes and improve student outcomes.
AxiomSL’s financial services clients utilize its data integrity and control platform and
its risk calculation and reporting solutions to satisfy regulatory requirements
across the globe systematically. With
trusted data, banks are now also able
to identify opportunities to fine-tune capital/credit risk and deliver
compelling business insights across the enterprise.
Trade Management solutions from the likes of Descartes and Amber Road (now a part of E2OPEN) have long been used to satisfy mandatory export
compliance obligations (e.g. restricted party screenings) and to remain abreast
of regional duty programs and tariffs. But by marrying these regulatory
datasets with companies’ more “traditional” supply chain data (such as bill of
materials and transportation fees), clients are now able to more accurately forecast
true landed costs (the total price of
the shipment including customs, duties, taxes, tariffs, etc.), all the while
minimizing risks and delays.
Rave Mobile Safety enables schools to automate collection of and access to critical facility
information (e.g., floor plans, alarm information), which they need to remain
compliant with fire department ordinances – and it also provide 911 dispatchers
and first responders better real-time capabilities when emergencies arise.
governance and eDiscovery vendor Nuix is well known for its deep
technical capabilities in high speed processing and analytics around vast data
sets, typically in the context of litigation and investigations. But enterprise clients are also able to
leverage the platform to create “data lakes”, making data more accessible for
re-use in future investigations, litigations and data management programs,
helping reduce costs.
Biopharma companies rely on software
from ETQ for much more than compliance with FDA requirements; they also
leverage the data to mitigate and prevent high-risk events, scale operations
more effectively, and streamline their go-to-market activities.
There are many other examples of organizations across
industries utilizing technology from GRC vendors to not only achieve their risk
and compliance objectives, but also advance their strategic objectives. The trend is still very much in its early
days, but it provides an exciting avenue for continued growth in the
sector. As an experienced technology
focused growth equity firm, TCV is committed to investing in the category
innovators in the GRC space and has invested in such companies as Avalara,
AxiomSL, Avetta, LegalZoom, Rave Mobile Safety, RiskMetrics Group, and
The statements, views, and
opinions expressed are those of the speakers and do not necessarily reflect
those of TCMI, Inc. or its affiliates (“TCV”). TCV has not verified the accuracy
of any statements by the speakers and disclaims any responsibility therefor.
This interview is not an offer to sell or the solicitation of an offer to
purchase an interest in any private fund managed or sponsored by TCV or any of
the securities of any company discussed. The TCV portfolio companies
identified, if any, are not necessarily representative of all TCV investments
and no assumption should be made that the investments identified were or will
be profitable. For a complete list of TCV investments, please visit www.tcv.com/all-companies. For additional important disclaimers, please see “Informational
SALT LAKE CITY, Sept. 3, 2019 /PRNewswire/ — HireVue, provider of the most comprehensive suite of AI-driven talent assessment and video interviewing solutions, today announced that global investment firm The Carlyle Group (NASDAQ: CG) has signed an agreement to invest in HireVue as its majority investor. Existing shareholders, including TCV, Granite Ventures and Sequoia, together with HireVue management, will remain minority investors.
Over its 15-year history, HireVue has transformed the way companies discover, hire and develop the most diverse set of top talent. HireVue customers, who include over one-third of the Fortune 100, generate strong returns on their investment by reducing the time it takes to hire a candidate by 90 percent on average, and by regularly achieving world-class candidate net promoter scores of more than 70, all while increasing the number of prospective candidates, hiring objectivity and the diversity of hires. HireVue pioneered the video interviewing industry and remains the leader today, delivering a million interviews and over 150,000 pre-hire assessments every 90 days.
“We are delighted to partner with Carlyle to accelerate HireVue’s technology innovation and propel our growth globally,” said Kevin Parker, Chairman and CEO at HireVue. “Carlyle’s culture of ‘performance through collaboration’ makes it our ideal partner as we expand to new markets and enhance our support of enterprise partners around the world.”
“HireVue is the recognized video interviewing and talent assessments leader,” said Patrick McCarter, Managing Director and Co-Head of TMT at The Carlyle Group. “Innovative global enterprises are driving more efficient and effective hiring through HireVue, accessing a broader, more diverse talent pool and significantly reducing bias.”
“We look forward to partnering with Kevin and the entire HireVue team to further accelerate the business and create even greater value for HireVue’s global employees, customers and partners,” said Tyler Parker, Vice President at The Carlyle Group.
“HireVue’s market-leading SaaS platform and suite of recruitment solutions assist global enterprises in finding, engaging and hiring the best talent,” said Nari Ansari, General Partner at TCV. “We are excited about the new partnership with Carlyle and HireVue’s next phase of growth.”
The current executive team at HireVue will continue to lead the company under the direction of Chairman and Chief Executive Officer Kevin Parker.
Equity capital for the investment will come from Carlyle Partners VII, an $18.5 billion fund. The Carlyle team leading the transaction focuses on investments in global technology, media and telecommunications (TMT) companies. TMT is a core area of focus for Carlyle, representing more than $30 billion of invested equity since inception. Goldman Sachs acted as exclusive financial advisor to HireVue.
The HireVue Assessment and Video Interviewing Platform combine the power of video, AI, game and technical challenges for comprehensive hiring intelligence. Validated behavioral science is the foundation of HireVue’s highly effective pre-hire assessments, which are rigorously bias-tested according to the EEOC’s Uniform Guidelines and used to support greater diversity and efficiency in hiring. HireVue customers report lower attrition and high return on investment.
In addition, the HireVue Assessment and Video Interviewing Platform is the only platform in its industry that can scale to support the growth of enterprise customers. HireVue has achieved numerous industry and federal certifications, including:
ISO/IEC 27001:2013 certification
SOC 2 Type 2 assurance
For more information about HireVue or to schedule a demo, visit www.hirevue.com.
HireVue is transforming the way companies discover, hire and develop the best talent by combining the power of video, games and AI for better hiring decisions. The HireVue Assessments and Video Interviewing Platform uses a ground-breaking combination of industrial/organizational science and rigorously tested, predictive artificial intelligence to help customers find and engage higher quality talent, faster. HireVue is available worldwide in over 30 languages and has hosted more than ten million on-demand interviews and one million assessments. Its more than 700 customers worldwide include over one-third of the Fortune 100 and leading brands such as Unilever, Hilton, JP Morgan Chase, Delta Air Lines, Vodafone, Carnival Cruise Line, and Goldman Sachs. For more information, visit www.hirevue.com.
The Carlyle Group (NASDAQ: CG) is a global investment firm with deep industry expertise that deploys private capital across four business segments: Corporate Private Equity, Real Assets, Global Credit and Investment Solutions. With $223 billion of assets under management as of June 30, 2019, Carlyle’s purpose is to invest wisely and create value on behalf of its investors, portfolio companies and the communities in which we live and invest. The Carlyle Group employs more than 1,775 people in 33 offices across six continents.
TEMECULA, Calif., Aug. 12, 2019 (GLOBE NEWSWIRE) — Perceptyx, the employee survey and people analytics platform that helps companies transform the way they leverage their people data to drive business success, today announced it has received a significant investment from TCV, one of the largest growth equity firms backing public and private technology companies. The investment and expertise from TCV will help fuel Perceptyx’s rapid growth through product innovations for current and future customers, positioning the company to build upon its market-leading people analytics platform. As part of this investment, Nari Ansari (General Partner, TCV) and Dave Eichler (Vice President, TCV) will join the Perceptyx Board of Directors.
Founded in 2003, Perceptyx provides deep insights into an organization’s people, giving leaders the data and insight they need to improve the employee experience, predict challenges in the business, and drive strategic action to deliver improved business performance.
“This is an exciting moment in Perceptyx’s history. For over 16 years we have been on a mission to help people and organizations thrive, and the partnership with TCV is evidence of the value that our customers continue to derive from our platform,” said John Borland, CEO of Perceptyx. “TCV has a history of investing in category-redefining companies, and their partnership reaffirms our culture of innovation, off-the-charts customer retention, and the increasing demand for a more integrated approach to talent analytics in driving business strategy and operations.”
Advancements in machine learning and the growing volume and availability of business and people data continue to fuel increased demand for deeper talent insights that enable Human Resources (HR) to be more strategic partners to the business. While the global Human Capital Management (HCM) market size is expected to reach US$22.6 billion by the end of 2025 (a 7.6% CAGR), the 2018-2019 Sierra-Cedar HR Systems Survey found that 41% of CHROs plan to increase spending on Talent Analytics in particular, further indicating that the Talent Analytics market is heating up.
“Perceptyx’s history of building a best-in-class product as well as their strong customer focus has the team well positioned to capitalize on the enormous and growing opportunity within the HCM space. We are very excited to partner with the Perceptyx team to help them reach their full potential,” said Dave Eichler, Vice President at TCV.
Since TCV’s inception in 1995, the firm has raised over $15 billion across ten funds and invested over $12 billion in leading technology companies. TCV investments include notable franchises such as Netflix, Facebook, Expedia, Spotify, Airbnb, Peloton, Splunk, and Zillow – and they have partnered with leading cloud / SaaS software companies, such as Avalara, ExactTarget, Alarm.com, HireVue, GoDaddy, Twilio, Toast, Webroot, and Xero.
“TCV partners with companies we believe are leaders within their market vertical,” said Nari Ansari, General Partner at TCV. “We have been watching Perceptyx closely for quite some time and have been impressed with their consistent growth and amazing track record within the Fortune 1000. We look forward to supporting the team as they embark on their next phase of growth.”
The investment from TCV is particularly significant for Perceptyx in that it represents the first external investment since its founding in 2003. Entirely self-funded and profitable from its inception, Perceptyx has fueled its own growth through a relentless focus on product innovation and client satisfaction, achieving greater than 95% client retention. As the people analytics provider to over 30% of the Fortune 100, experiencing accelerated growth, Perceptyx is poised to further its growth and expansion through the partnership.
About Perceptyx Since its founding in 2003, Perceptyx has been revolutionizing the employee survey and people analytics industry, delivering enterprise-level employee surveys and people analytics to more than 30% of the Fortune 100. With an unrivaled technology platform and a tailor-made, flexible approach, the Perceptyx technology makes it easy for managers and HR or business leaders to discover insights deep within large and complex organizations, driving meaningful action to improve business outcomes. Driven by a deep intellectual curiosity and culture of innovation, Perceptyx is challenging the status quo – to help people and organizations thrive.
About TCV Founded in 1995, TCV provides capital to growth-stage private and public companies in the technology industry. TCV has invested over $12 billion in leading technology companies and has helped guide CEOs through more than 120 IPOs and strategic acquisitions. TCV’s software investments include Alarm.com, Altiris, Ariba, Avalara, Avetta, AxiomSL, CCC Information Services, ExactTarget, ETQ, FinancialForce, Genesys, IQMS, OSIsoft, Rapid7, Rave Mobile Safety, Sitecore, SMT, Splunk, Toast, Vectra AI, and more. TCV is headquartered in Menlo Park, California, with offices in New York and London. For more information about TCV, including a complete list of TCV investments, please visit http://www.tcv.com.
SOURCE: Perceptyx, Inc.
Perceptyx Daniel Norwood Phone: 951.526.2422 firstname.lastname@example.org
Michelle Peluso has spent the past two decades helping to forge a new relationship between people and technology. She started her first company, Site59, with a group of friends in 1999 and later sold it to Travelocity, where she served as CEO during the “roaming gnome” era. Peluso became an Executive Advisor to TCV before joining Citibank as Global Consumer Chief Marketing and Internet Officer responsible for the digital experience of the bank’s 100 million global customers. Peluso then took the helm at fashion pioneer Gilt, which she later sold to Hudson’s Bay Company. She became IBM’s first Chief Marketing Officer in 2016 — a move that highlights the transformation of marketing into a core corporate capability.
Still an Executive Advisor to TCV, Peluso remains committed to discovering how marketing can redefine relationships with customers, a transformation that requires curiosity, agility, innovation, persistence, and resilience. In this exclusive interview, Peluso discusses:
How the CMO’s role has changed in the last decade
Four trends that continue to revolutionize marketing
How the rise of ‘augmented marketing’ will challenge CMOs as never before
TCV: It’s widely acknowledged that there has never been a more challenging time to be a CMO. How have you seen the role change since you founded Site59 in 1999?
Peluso: It’s no wonder the average CMO tenure is only 2–3 years and has seen a drop over the past two decades. It’s a hard and incredibly dynamic role, as marketing has shifted from a thoughtful, functional discipline around creatively amplifying the company message to a much more dynamic, real-time, analytical — and creative — driver of client experience, revenue, and company performance. Expectations have never been higher for marketers, and the new seat they have at the table is an amazing opportunity for the best of them to grow and lead.
TCV: It’s easy to say all these changes have been driven by the rise of the internet. But there are several distinct trends that are reshaping marketing…
Peluso: Clearly four major shifts have shaped, and are shaping, how we can connect with customers, how we can analyze our effectiveness and drive results, and how we need to lead our respective organizations. First was the era of digital. For me, this was the beginning of the internet, making transactions and content interactive, convenient, and more personal. Then, we entered the era of social, which has been all about engagement and authenticity. Social toppled the notion of hierarchy and forced brands to think differently. Third, we have seen the era of mobile, which began with mastering the art of a smaller screen but evolved into much more as the focus has been about location and real-time and always-on engagement. These three eras have dramatically reshaped every industry while elevating the role of the individual, with far-reaching consequences.
TCV: That’s three…
Peluso: Right. We are now on the cusp of the era of cognitive learning, or as we call it at IBM: Augmented Intelligence (AI). We’re building fast and smart systems that understand vast amounts of unstructured information, such as natural language and imagery, recognize data patterns to create recommendations, continuously learn from these recommendations and many other sources of data, such as books, medical records, and conversations with humans and finally, interact with humans in a natural way. AI lets us better understand and engage with our customers; it enables us to make more precise bids on advertising and improve ROI across every dollar spent, and it will fundamentally shift the paradigm of how consumers interact with websites. Arguably, we are already starting to see this with new AI home devices and natural language interaction.
TCV: This new vision will require an entirely new way of doing things, which is a significant change for any company, much less for a massive organization like IBM. How does a CMO drive these kinds of changes within such an established framework?
Peluso: The cognitive change is no different than any other large-scale change management program. To be a cognitive company, you need to be clear about your mission — what challenges do you want to solve? What decisions do you most want to improve? You need to have the assets, which are all about your data sets but, even more, your team, marketers, developers, and data scientists. And, of course, you need the right tools. Companies new to AI should identify a handful of specific problems they want to address and apply AI tools to solving those problems. Then, repeat the process to address new challenges. This way, a corporation will see meaningful and measurable results as they evolve into a cognitive company. Patience is required. Companies must learn how to use AI, and these systems also require learning, so “training” the system is critical. It’s a classic crawl, walk, run.
TCV: How does this new approach to marketing change the way you look for and hire the right talent for ‘augmented marketing’?
The traditional marketing waterfall process — develop a creative idea, send it to advertising, media, and a CRM team, and then analyze results — can no longer keep up with the pace of the market today. I take a lot of inspiration from the Agile movement, which fundamentally reinvented the technology development process. At IBM, we’re applying Agile to our marketing function, and that means creating small empowered teams with the right skills, clear accountability, sprints, and a constant focus on prioritization. When you adopt Agile, you can see how different marketing becomes, and the emphasis it puts on hiring Agile teams that have a strong mix of creative, process, digital, and data science skills.
TCV: What role will marketers have in identifying and developing new technologies for the augmented marketing era? Or will that function remain within the realm of the IT department?
Peluso: AI is about man (or woman) AND machine. Users of all sorts, not just developers or CIOs, can use AI in small and big ways to help them solve the most difficult problems. That’s the promise, and we’re starting to see this at organizations all over the world. Marketers will play a critical role in how AI is developed and applied. One of the many things I learned while working with the TCV team and their companies is that it’s fundamentally important to be insatiably curious about technology because the most successful marketers are as analytically rigorous as they are creative.