Hi! Welcome to my blog, where I write about my path to building an internet business.

I’m feeling better after last week’s cold, and excited about the holiday season: reading books and spending time with friends and family. Also, excited to share with you what I’ve learned this week.

📑Quick recap

Three weeks ago I declared (😬) that I will be focusing on the employee engagement space. What I’ve found since then is that this space is super-crowded, with hundreds of companies doing almost the same thing. These companies offer solutions regarding engagement, feedback, 1on1s, onboarding (I skipped this one) and recognition. See below more details and example products:

  • Engagement surveys (pulse)- asking employees about their mood and attitude towards the company and team

kona

  • Feedback - structuring the process of asking for, giving and using feedback between peers and managers, both in time (when, how often, etc.) and in method (e.g. feedback frameworks)

feedback

  • 1-on-1s - a hot topic since the pandemic, this is about nudging and structuring frequent conversations between managers and employees with agendas, action items, note-taking, etc. I’ve become more suspicious about tools like these. People mostly stay within their standard tools (email, calendar, docs/sheets), and structured 1:1 would have to be somewhere else, otherwise the UX would be too clunky (e.g. 1:1s embedded in google calendar). So people would need to get used to going to yet another communication/note-taking tool.

1on1

  • Recognition (kudos & rewards) - this involves two things: facilitating employees praising each other and rewarding employees when they get a lot of praise

recognition

➡️Next steps from last week

  • Analyze ~40 more players in the space
  • Start framing questions for user interviews

📖Learnings from competitors

So, what did I learn by looking at ~50 companies in the space? I’ll go through:

  • Types of players
  • Go-to-market
  • Customer voice

🕹️Types of players

There are 3 types of companies in the employee engagement market segment:

  • 💼All-in-one solutions that cover the entire engagement space (e.g. 15Five, Cultureamp).
    • Almost all of these integrate with Slack, Teams, and tons of other systems
    • They aggressively advertise on top of each other, which tells me how competitive the market is
  • 👶All-in-one wannabes that cover 2-3 parts of the space (Matter does recognition and pulse surveys), and also typically integrate with multiple systems
  • 🎠One-trick-ponies that do… one thing (Kona only does pulse) and are typically on one platform only (e.g. Slack)

🚡Go-to-market

Marketing

All companies in the space produce massive amounts of content (e.g. blog articles) to get customers through search engines (for example, Cultureamp ranks really well for “work games”). This means I’d have to do the same to get users organically (i.e. not chase them myself).

Aside from the hundreds of live solutions, there seems to be a graveyard of products (see some reddit and producthunt “launches”) that never took off. They may also have given up before investments in marketing started paying off.

Pricing

Companies in the space tend to charge for each user, and prices vary between $2/user/month and $15/user/month. Assuming a target revenue of $5000/month and a 2$/user/month price point, I’d have to get 2500 users, or less than 100 companies larger than 20 people to live a comfortable life on some beach in Europe. That seems like something I could grind through, despite there being so many competitors

Competitive edges

While not very-data driven, my gut feeling based on what I’ve seen so far is that there are 5 factors that companies are using as competitive edges:

  • All-in-one - just the fact that a product offers all kinds of engagement solutions seems to be a selling point. In fact, some all-in-one-wannabees and one-trick-ponies try to make it look like they are all-in-one (e.g. empuls, suberbeings, kona)
  • Simplicity - simple UI and UX, not trying to do too much, ease of setting up
  • Science - having some scientific studies behind the questions asked in surveys, the way feedback is structured, etc. Sometimes, just having some HBR and McKinsey articles, or “developing in collaboration with psychologists” seems to do the trick
  • Analytics - this can range from some basic dashboards up to more AI-based advanced insights (e.g. detecting risk of burnout from survey responses)
  • Language, design & story- Companies try to use more empathetic language, eye-catching design and colors to make their products attractive. That’s an old trick. What’s surprising is that some engagement products try to build an attractive story behind their product. Kona has a dog mascot, that asks you how you’re doing. Matter tries to make a ritual around feedback with Feedback Friday.

🗣️Customer voice

I’ve gone through hundreds of customer reviews for these products. Some common themes that I’ve seen across customer reviews are below:

  • General likes:
    • Science & psychology - based surveys and feedback approaches
    • Being able to benchmark against other companies
    • Getting more feedback, recognition and generally having more and better conversations. While this may sound obvious, people sometimes just need a more “official” reason or channel to do something.
  • General dislikes:
    • Difficulty in setting-up the solution (e.g. connecting it to all the right systems)
    • With all-in-one solutions, people often complain about too many features
    • Data analysis/aggregation being difficult for more complex orgs, and not meaningful for smaller companies
    • Too frequent notifications and repetitiveness can get on people’s nerves and backfire with disengagement, cynicism
    • Lack of personalization (e.g. ability to add links to content, images or gifs)
  • Conflicting opinions:
    • Structure - some people complain when they don’t have enough guidance, while others feel constrained by inflexibility (e.g. you need to do your 1:1 exactly like THIS). Structure can also give the impression of substance, while inviting superficiality.
    • Anonymity - some people don’t like the lack of accountability that comes with anonymous ratings and feedback, while others feel like they can be more honest because of anonymity. The same applies to public recognition, which comes with a drop in anonymity.
    • Language bias - some solutions (e.g. Officevibe) tend to have more positive/hippy language in their questions, nudges, etc. This helps make some people feel safer, while others feel manipulated

💭Closing thoughts

Generally, this looks like an overcrowded space. To win, or at least not die in it, I probably need to invest a lot into marketing, or to understand a very specific niche ( 🙏hit me up if you have any ideas). Plus, I’d need to do something differently.

My best ideas so far are:

  • Pulse: Company pulse surveys that can also be shared outside the company, to show a culture of transparency, and maybe attract hires. This could also backfire
  • Recognition:
    • Giving kudos to colleagues, where each kudos comes with an AI-generated “greeting card” that’s based on the message included in the kudos. This is based on feedback that existing tools lack personalization.
    • Using days off as the currency for recognition. For example, each employee could get 1 day every year, that they could give away (in tiny chunks) to their colleagues, as a thank-you. This is based on feedback that reward redemption can be difficult, and because… who doesn’t like time off?

➡️Next steps

  • Prepare for customer interviews
    • Build a pipeline of people to talk to (end users, HR leaders, people managers)
    • Write up interview guides for each type
  • Try to decide whether going into a super crowded space is worth it
  • [Maybe] Try to see how far I can get in building out one of the ideas above