It’s been several days since my return from the WorkHuman conference. It was sponsored by Globoforce, a company that provides technology to enable peer driven rewards and recognition. Their intention was to bring together product users, business leaders, analysts, as well as others to discuss how to create happier and healthier workplaces.

Overall, I thought it succeeded in its intentions, which is a testament to the Globoforce team. This was the company’s first event, so it could have been one filled with missteps, mistakes, and frustration. None of those things were apparent for the 2.5 days I was an attendee.

The most amazing thing about @Globoforce was how tightly their relatively new team hustled and flowed at #WorkHuman. Proof is in the pudding

Franny Oxford (@Frannyo) June 10, 2015

In the interest of not over-analyzing, here are a few bullet points of note about the event, from my perspective:

Professionalism and grace. I can’t emphasize enough how smoothly the event ran. Adding to that was how well the Globoforce team handled sudden changes to the itinerary. For example, Arianna Huffington, one of the Tuesday keynote speakers, couldn’t attend in person. So they set-up a satellite feed to allow her to give the keynote from Germany, and it was well received by the audience. On a smaller scale, thunderstorms altered some outdoor plans, and the team rolled with it.

Singular focus.One of the most refreshing aspects of this conference was its focus. Devoting the event to the topic of happiness and health in the world of work meant that others didn’t pollute the discussion. There was no talk of “a seat at the table.” There were no lawyers or “compliance cops” discussing how companies are thisclose to getting sued, or worse. Not having these type of previously mentioned sessions (along with not focusing on offering credits toward certification) meant that attendees were at WorkHuman because they wanted to be. How refreshing!

One and (not) done.The trouble I have with conferences is that, while energizing and informative (when they’re successful) they do little to sustain you beyond the event. Aside from the connections you may have made, and the swag you collected, maintaining that connection to an event is hard. In talking to organizers, it appears that Globoforce wants to change that. During the conference, it was announced that China Gorman will be working with Globoforce on taking the WorkHuman brand to the next level. China is the former CEO of the Great Place to Work Institute, as well as a longtime Human Resources leader. I talked to her at the event, and the thought is to have the conference serve as the cornerstone for a year-round engagement strategy.

So honored to be leading @Globoforce ‘s #WorkHuman efforts! Thanks for the warm welcome!

China Gorman (@ChinaGorman) June 10, 2015

IPO-bound Globoforce's $50MM customer & what startups should know about early big-ticket enterprise contracts.

As posted this morning on the Bowery Capital Blog.

Globoforce, a Human Capital Management (HCM) vendor focused on talent management, filed for a $75MM IPO last week. Their products enable the recognition and motivation of outperforming employees across an organization (hence the cheeky ticker choice: “THNX”). Per its S-1, the company is currently at a run-rate of about $170MM in revenue and ($7MM) in bottom-line net income. Another big win for the HR tech space, which has seen a spate of huge deals over the past several years, including but not limited to: Cornerstone OnDemand, Taleo, Kenexa, SuccessFactors, Workday, and another quite recent IPO, Benefitfocus. Globoforce’s success in particular speaks to the importance of employee satisfaction and growth as a counter to massive turnover risk that often represents a multi-billion-dollar hidden cost to big enterprises.

From the company’s home base in Dublin, Globoforce has built an impressive roster of blue chip clients across verticals and geographies. As of June 2013, the company’s “client base consisted of more than 80 companies, with more than 1.7 million users located in more than 140 countries using our solution in 25 languages and dialects” per management. JetBlue, for example, uses Globoforce’s “social recognition” software (SaaS + mobile) across 15k crew members and achieved an 88% boost in employee satisfaction in just three months. Other clients include Abbott Labs, CitiCorp, Intuit, Symantec, and InterContinental Hotels. Here's some more product color (hope Globoforce doesn't mind me pulling this from their website, which has a number of interesting white papers, by the way):

There’s one client in particular I want to emphasize: General Electric. Per the company’s S-1, Globoforce management believes that they “have deployed one of the largest and most geographically-dispersed single SaaS implementations for…General Electric, that spans more than 300,000 employees.” What’s astounding is that GE accounts for approximately a third of Globoforce’s total top-line revenue. As of June 30, 2013, the figure was 32%, implying that GE and its affiliates pay the company well over $50MM a year for the use of its platform. GE isn’t their only “mega client.” Another 39% of annual revenue (extrapolating from 1H 2013 numbers) comes from customers #2 – 10. “For…the six months ending June 30, 2013, our ten largest clients by revenue represented approximately…71%…of our total revenue.”

From one perspective, it’s encouraging to see that Globoforce can win and maintain such staggering contracts. It speaks to their sales and support organizations. Aside from the fact that they can absorb larger contracts, clients willing to pay tens of millions for a product (once onboard) will be willing to stick with you for a cycle. You don’t get the green light to set up across an organization as massive as GE without the proper testing / vetting processes; the huge potential switching costs alone can represent a barrier to entry (at least temporarily).

On the other hand, when losing one client could set your company back two years in terms of revenue scale, there’s a clear inherent risk. Not only would such a loss cripple a public company, but, there’s also a less obvious danger (one even more important to startups); being pressured by mega clients to the extent that product roadmaps cater to their needs. In this situation, it’s easy to lose sight of the larger marketplace. Before you know it, you may find yourself pitching a tool that looks more like something built in-house at your mega client. And that may be exactly what they want, if they haven’t already asked for contractual exclusivity. Another major mega-client consideration is the costs of supporting such large, needy customers. These costs can be especially dangerous if there are critical service elements of your business that scale linearly, like account management teams.