Ever wondered how to turn a spreadsheet nightmare into a seamless workforce management dream? Tushar Makhija, the founder and CEO of Team Ohana, reveals how he transformed the chaotic world of people spend management into an innovative and collaborative platform. Discover the unique journey behind Team Ohana's creation, as Tushar uncovers the potential pitfalls of relying solely on traditional HR systems and the groundbreaking solutions his company offers to address these challenges.
The conversation takes a deep dive into the intricacies of integrating disparate HR and financial systems, like Workday and Greenhouse, and how misalignment can hinder proactive decision-making. Tushar explains the importance of real-time insights and strategic alignment between operational systems and financial models in today’s fast-paced business environment. Team Ohana emerges as a critical decision-making hub, offering not just a platform but a total transformation into an agile workforce and financial planning system that prioritizes efficient, profitable growth.
As we navigate the complexities of scaling a software company in a cautious market, Tushar shares valuable lessons on the art of engaging CFOs and the strategic use of AI to enhance decision-making processes. From stealth mode beginnings to a rapidly growing enterprise, learn how Team Ohana leveraged augmented intelligence to create a dynamic organizational planning tool that not only predicts hiring timelines but also shapes the future of workforce management. This episode is a treasure trove of insights for anyone looking to harness AI and innovation to drive business success.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
During the 2019 to 2021 time period, I got to
interact with a lot of CFOs andit's a very natural question hey
, what more can we do for you?
What should we be building?
What are you interested in?
Time and again, every CFO cameback and said Dushar, you're
only managing 10-15% of my spendtoday.
That's what accounts payable isright.
(00:23):
It's vendors, it's software,it's reimbursements, it's
salespeople travel expensesgreat, but a large percentage of
my spend is actually people.
Who is doing people spendmanagement?
Speaker 2 (00:38):
Hey everyone, welcome to another episode of Seed to
Exit.
In this episode, I interviewedTushar Makhija, the founder and
CEO of Team Ohana.
Team Ohana is a high-growth HRtech startup that's solving a
pressing HR issue in enterprisecompanies.
Prior to founding Team Ohana,he was a founding go-to-market
hire at HelpShift as their VP ofRevenue and also as the VP of
Sales and Customer Success atAirbase.
(00:58):
So in this episode, I'm talkingto Tushar, both about his
expertise in go-to-market aswell as the people function.
I really enjoyed theconversation and I hope you will
too.
Speaker 3 (01:09):
You're listening to the Seed to Exit podcast with
your host, rhys Keck.
Here you'll learn from startupexecutives, founders, investors
and industry experts.
You'll learn from the bestabout building amazing products,
scaling companies, raisingcapital, hiring the right people
and more.
Subscribe and listen in for newepisodes and enjoy the show.
Speaker 2 (01:32):
Tushar, welcome on, excited to have you, Excited to
be here.
Thank you for having meAbsolutely Well.
I'm really excited to talk toyou because the problem that
you're solving over at TeamOhana is near and dear to my
heart, considering some of thestuff I've been dealing in
talent acquisition but it is avery at least your original plan
was a fairly niche problem thatyou were solving.
(01:53):
So, for those who are notcoming from a finance or talent
acquisition background, couldyou describe the problem that
you're solving over at TeamOhana and, ultimately, what the
problem is?
Speaker 1 (02:05):
the problem that you're solving over at Team
Ohana and, ultimately, what theproblem is.
Thanks for having me and thanksfor asking that question.
So, at the core of everysuccessful organization, you are
saying whether you are in theearly stages or the late stages,
you're saying we need to spendmoney to grow, and growth means
it translates into ARR, ittranslates into revenue.
But at the core of it, in orderto sell more software, you need
(02:28):
to hire more engineers.
So you've got to build, thenyou have to productize, and then
you've got to market, and thenyou've got to sell at every
space and then you have tomanage and maintain.
All of these are people-drivenfunctions.
So you cannot really achieveyour company's revenue goals
till you achieve your company'shiring goals.
And when I talk about hiring, Italk about both the elements.
(02:50):
You want to bring in new talent, you want to retain your
existing talent and also talent,and your company's workforce is
your company's largest expense.
Nearly 70% of your operatingexpense is tied to people and
it's not a one-time expense,it's a flow of expenses.
When you hire someone, youexpect them to be with the
company for 12, 24 months, right?
(03:12):
So when we started looking atevery company, every company is
trying to grow, every company istrying to manage their
workforce.
But when we ask thisfundamental question that what
is the source of truth of yourcompany's headcount or your
company's headcount plan, whichis about future, and the answer
was a spreadsheet.
(03:33):
And I was like, okay, this isyour largest expense.
There is so much riding on thisand we saw it play out in the
market.
Right, if you overhired, youran out of money.
You shut down as a company.
If you underhired, you did notgrow at the right time, oh,
you're shutting down as acompany.
That means your survival andyour success is all tied to your
(03:53):
people.
And when we lead with thatquestion and say, why are you
managing your people or yourheadcount in a spreadsheet?
The answer is well, I don'tknow how else would you do it.
So there has been decades ofcompanies trying to do this in a
manual way, using spreadsheets,cobbling together different
data sources, and when they lookat our application, when they
(04:17):
look at what we are building,they think of us as that all
right, now I have this one placewhich has all my data, it has
all the right permissioning, itis collaborative and I can come
in and I can do all thedecisions that I need to take
around my company's workforce.
So we started with headcountplanning, which was, yes, true
niche, but we have expanded intowhat we call plan hire, promote
(04:40):
, retain, retire the entire lifecycle.
Who I want to hire, when I wantto hire?
How I should compensate, whowill they report into?
Which location should we hire?
Who gets a merit increase, whogets a promotion?
Who gets a bonus?
Who gets to stay, who gets tobe let go, who needs to be
backfilled, who does not?
(05:00):
These are all people decisionsand from an outside in you may
say why can't Workday do this?
Workday is the record keeper ofall these decisions.
If you ask any company todaywhere these decisions are
actually being made, they arebeing made in hallways, in Slack
channels, in Google Sheets, andthen, once the decision has
been made, it gets recorded inwhat I call the system of record
(05:24):
.
So that was the opportunitythat we saw.
Three years back.
We started with headcountplanning, we now have launched a
compensation planning productand next year we are launching
our organizational planningproduct and that's what I call
becomes your workforce operatingsystem.
So we are your company's WASright.
Speaker 2 (05:45):
I haven't heard that acronym, but I like it.
Speaker 1 (05:48):
I'm using it for the first time.
So it is for you users andlisteners, for whoever's
listening.
Speaker 2 (05:56):
All right, let's make this a thing.
I'm curious when you say yourealized this three years ago.
How did that realization comeabout?
Speaker 1 (06:06):
Yeah.
So I'm not a finance person,I'm not a talent person, I'm not
an HR person, I'm a productperson.
I'm an engineer by training andI have had this unique
opportunity to morph my careerinto going from code engineering
sitting down on a computerwriting code, to being on the
product side of things, buildingnew products and then getting
on the sales side of thingsbuilding new products and then
getting on the sales side,actually taking those products
(06:28):
to market and generating revenueright.
So that has been my journey andin 2019, I joined a company
called Airbiz.
They recently announced thatthey got acquired by Paylocity.
Congratulations to all myfriends there.
I was there for two years andwhen I spoke with the CEO, it
was so beautiful how heexplained that said, hey,
(06:50):
people's companies spend a lotof money and they spend money on
vendors, corporate cards,reimbursements, and all of this
is happening in differentsystems.
Airbase is going to bring allof this together and we are
going to do spend management.
I'm like great, why has nobodythought about this?
Right?
Great run at the company Ijoined, like.
In the seed stage I left atCDsB.
The company went from a $30million valuation to a $600
(07:13):
million valuation and when I, wewere selling directly to CFO.
So during the 2019 to 2021 timeperiod, I got to interact with a
lot of CFOs.
And when I it time period, Igot to interact with a lot of
CFOs and it's a very naturalquestion hey, what more can we
do for you?
What should we be building?
What are you interested in?
Time and again, every CFO cameback and said Dushar, you're
(07:39):
only managing 10, 15% of myspend today.
That's what accounts payable isright, it's vendors, it's
software software, it'sreimbursements, it's sales,
people, travel expenses great,but a large percentage of my
spend is actually people.
Who is doing people spendmanagement?
And you know what?
At the beginning of it, I sawthat, hey, we are not going to
do people spend management, weare.
We are different.
(08:00):
So, great, awesome, let's writethis down, let's nod, let's
smile so that the CFO thinks I'mlistening to them.
But when you keep hearing itagain and again and if you have
some semblance of what it's, themarket is literally telling you
that there is a need forsomething, and all I did was,
you know, slow down and startedasking the next 10 questions
(08:23):
around, and started asking thenext 10 questions around how are
you doing it today.
Why don't you have a system?
Well, you just spend a milliondollars to install Workday.
What the hell are you doingthere?
Don't you have a planningsystem?
You're a CFO, you have adaptiveplanning or Anaplan.
That's another million dollarsand they're like yeah, I'm $2
million in, but it's still notworking.
And I was like, okay, why is itnot working?
(08:44):
And it really helped us come tothis point, which was like, hey
, even though this is a spendmanagement problem, at the crux
of it it is a data problem.
Imagine this Workday is thesource of truth of all the
existing employees, existingemployees, people.
If someone is changing adepartment, if someone is
leaving, if someone is gettingpromoted, all these actions
(09:04):
around that people are recordedin Workday.
So if you want to know how manypeople are button seat, who
they are, that all informationis in Workday, then there is an
applicant tracking system, rightLike a greenhouse, which has
all the information of the jobsthat you are hiring for right
now.
It gives you a clear idea thatin the next three to six months,
who are the people that youexpect to bring on, what are
(09:26):
their titles, which departmentsare they going to report into
and how much expected salary doyou want to give the range right
Now, we all have to publishthat.
Speaker 2 (09:34):
And even then not to interrupt.
But even then, that's only theroles you're actively working on
.
It's not the stuff that's in.
Speaker 1 (09:40):
Exactly.
There is this whole idea behind, which is only sitting in a
financial model somewhere whatam I allowed to hire?
What have you already budgetedfor?
So there was a complete becauseof these data this being
disconnected that the financialmodel has information about
total approved headcount,starting and ending, based on
(10:01):
every department.
They run the numbers and theywant to stick to those numbers.
They have also run the numbersof how much money you should be
spending, but that's theoperational plan.
The operational execution ishappening in Workday and
Greenhouse and, at any givenpoint in time, because those two
systems don't talk to back tothe model at a regular interval,
(10:22):
finance is now only looking atbackward-looking data.
So instead of looking atleading indicators, they're
looking at lagging indicators ofwhat has already happened.
Now, fast forward, going backfour years.
It was not a big problembecause I know where my next
check is going to come from.
I just have to go hopping fromone VC office to the other and
someone's going to get me acheck.
(10:43):
So this problem really becameexaggerated post-COVID,
post-2021, early 2022, after SVBcame down like okay, look,
we've raised all this money, weneed to grow, but we need to now
grow efficiently.
What does that even mean Allpublications Wall Street Journal
(11:06):
, techcrunch wrote aboutefficient growth, profitable
growth.
I'm asking this question what,how?
Tell me how you're going to getthere.
What do you need to change inyour operations?
You don't need to throw awayWorkday.
You don't need to throw awayGreenhouse.
What you now need is a newsystem of execution, system of
decision-making that becomes thehub where you come together,
(11:28):
you collaborate.
It has all the rightinformation, sucking in
information in real time, andit's giving you these insights
on how you should hire, how youshould promote, what you should
do with these people, so thatyou can answer or you can
deliver on three things.
First, you're delivering onyour company's goals.
I want to hire the right people, I want to promote the right
(11:48):
people.
I want to retain the rightpeople.
Second, you're looking at itfrom a budgetary angle.
This was never.
Before Timoana, this was nothappening at all.
Someone gets hired, someoneshows up at the door, then
payroll gets updated, thenfinance is notified Like, look,
I just hired someone for 200Kand finance is like sorry, how
(12:11):
the hell did you hire thisperson in Q2?
I now I'm holding the bag ofthree extra month of spend.
Where is this money going tocome from.
On the other hand, if sales issupposed to hit some revenue
targets and hiring is going slowand you only get to know about
this at the end of the quarterfinances, like okay, now I have
extra dollars left, I could havegiven it to marketing.
So it becomes a capitalallocation problem, right?
(12:32):
So when you think about all ofthese things together, spend
management for people is reallytied to your revenue.
And because I came from Airbase, I was just uniquely
opportunistic, right place,right time, because I never
attacked this problem from an HRangle.
That is very, that was verylike well, they can do that.
(12:54):
I can look at a nice org chart.
I can look at span of control.
I can look at gender, ethnicity.
All of that is important, butthat is not tied to revenue.
If your diversity metrics areoff, you have to go fix them to
become a better company, but itdoesn't really translate into
revenue.
And when we got into the newworld of efficient growth,
(13:16):
profitable growth, not grow atall costs T-Mohana just became a
very important piece of thefinancial and people
infrastructure that companieswanted to adopt.
So Docker is a customer,postman is a customer, right,
seedgeek is a customer.
There are a few companies whohave raised a lot of money, but
I'm not going to say their names.
Are customers, so it's now athing.
Speaker 2 (13:37):
I love that and so it seems so obvious when you say
it.
But were there any solutionsbefore this, or are you
essentially first to market onthis?
Speaker 1 (13:45):
From a first principles basis, trying to
think about headcount spendmanagement and having the vision
of building this workforce OSwe are the first to market.
People have tried to do this inisolation and there are so many
compensation planning tools outthere.
But imagine compensation isonce or twice a year.
You are giving people meritraises.
(14:07):
You're giving people bonuses.
It doesn't tie to the agilenature of the business.
Right, with Team Ohana, you canstart with a budget which says
this is what I need to spendGreat.
Hey, vp of engineering, youwant to hire new people Same
bucket.
You want to promote existingpeople Same bucket and one
system of workflow.
(14:27):
So Team Ohana allows you to dothis.
I'm the VP of engineering.
I look at my total budget and Isay you know what?
I have this $10 million, but Ineed to retain my existing staff
.
They are more important to me.
Instead of giving the 5% raises, I'll give people 10% raises
and the money that is left overfrom that.
I'm going to augment and hirenew people.
Some people may say well, Idon't care about attrition,
(14:54):
right, I just want to hire newpeople so I can let go of the
others.
Finance is happy.
All the people who need to makepeople decisions are happy.
Hr is happy because they aregetting the full visibility.
They are not being told afterthe fact, and that's how the
company's vision should operate.
You have to look at workforceholistically.
You can't say that this is howI'm hiring, this is how I'm
promoting, this is how muchmoney I'll save through
(15:15):
attrition.
No, it all comes together.
Why are you making isolateddecisions?
And that's what got us intotrouble, because every system
was siloed and we were justoperating in our own world.
Right and NetSuite, workday areall systems of record where
decisions after they have beenmade are just gone to record for
compliance purposes.
So it was already too late bythe time the information hit
(15:38):
Workday or NetSuite.
It was not real time.
Speaker 2 (15:41):
You mentioned earlier that you got the inkling of
this when you were talking tovarious CFOs over at Airbase.
So you had the light bulb idea.
You founded the company youstarted building.
When did you feel like you'dfound product market fit?
Like what were thoseconversations with early
customers?
Speaker 1 (16:00):
So you know, we were fortunate that even before we
had written a line of code, wehad five CFOs who had given us a
letter of intent saying ifyou're able to raise money and
if you're able to ever buildthis software, we will be your
(16:20):
design partners.
Right, so it's the differencebetween starting a company at 42
than 22,.
Right, so few extra people knowyou.
Right, so that's the benefit.
It's just being around too longin this world, right?
So we already knew from ourvision what we were going and
for the first year we justoperated in stealth mode and
worked with just those fivecompanies.
Luckily, those five companiesin that one year went from 200
(16:42):
to 400, like someone went from300 to 1,000.
There was hyper growth that washappening in those companies.
A couple of companies shut downas well, so we got to
understand the full range ofwhat growth looks like, what
flatline looks like, whatattrition looks like.
So that gave us the opportunityto fully understand what is the
(17:02):
real market looking like andwhat are the features that they
care about.
And we boiled down to threethings.
First, I need a unified rosterof current and future employees.
How do I do headcountforecasting?
How do I make it accurate?
How do I make it real time andnot something that is only
happening once a quarter, right?
The second thing was hiringplan management.
If you're a hyper growthcompany, you really care about
(17:24):
the fact that who is coming in,how long it is going to take to
hire, how much it is going tocost, and you need constant
updating.
And good companies werethrowing bodies at the problem
that there's a talent ops person, there's a rec ops person,
there is a fin ops person tryingto do this manually, creating a
dashboard for a Monday morningexec meeting.
But not all companies had that,I would say, resources to do
(17:47):
this.
So the second thing was okay,let's enable a hiring tracker
which is basically a real-time,updated company's headcount plan
.
And then the third thing thatwe quickly understood was there
is a lot of downstream manualwork what we call headcount
reconciliation that is done bythe talent team, which is
(18:08):
finance.
Said you could hire a softwareengineer at level three in this
quarter for this price point.
There has to be a job that isopen in greenhouse and opening
candidates apply to that opening.
One of those candidates gets anoffer.
The offer needs to be approvedA lot of places where things can
start breaking down.
Hiring can be delayed, hiringcan be moved faster.
(18:29):
You can up-level a role,down-level a role.
At the end of it, what reallyhappens is that once an offer is
accepted, someone shows up onthe start date and their payroll
system gets updated.
So now the talent leader or thetalent ops and the fin-off
person together will come.
We had said we wanted to dosomething.
Did we do that or did we dosomething totally different?
(18:51):
What was the budget ID?
What was the job ID?
What was the employee ID?
Three different IDs, allalphanumeric shit that nobody
understands.
We said we will go andcompletely automate this, that
whatever you're saying you wantto hire, we will connect to the
right job in Greenhouse.
When an offer goes out, we willcapture those offer and
candidate details when thecandidate actually joins and
(19:13):
becomes an employee and payrollgets updated.
We're going to reconcileeverything right.
So the market was very clearthat solve these three problems
forecasting, hiring, trackingand reconciliation.
That was the first product andwe launched the product in
October of 2022.
And then that was basically.
We went from five customers to35 customers in one year Wow.
Speaker 2 (19:38):
So I'm curious between finance and HR, who does
the buck ultimately stop within terms of responsibility for
what you just described?
Speaker 1 (19:47):
You know, this is a challenge that we are still
evaluating because every companyis slightly different.
Now the lazy Tushar wants to gosell to the CFO Hard to impress
, but has money in the pocket.
It's the person who's going tomake the decision, is going to
sign the contract.
You keep the CFO happy.
The company is okay.
Right, they will not fire youif you're doing their job, if
(20:13):
you're doing your job right.
The HR team, actually, webelieve there is a lot of
opportunity for them becauseHRBPs are hard to find their
expenses and all HRBPs areoverworked, right.
I mean, these are absolutetruths.
Nobody can sit here and debateboth of us on this.
Three words, three sentencesthat I just said.
But I think there are some HRleaders like the CHRO of New
Zealand.
She was one of my firstcustomers, right.
She fought with her CFO andsaid you got to allocate budget
(20:34):
to this because you're notgiving me new headcount.
Right, if you're not giving menew headcount, headcount is
150,000, t-mall is 50.
Like, I just still saved youmoney, but you got to give me
something so I can operate and Ican scale.
Like Invoka, another fairlylarge SaaS company.
Their head of finance said Ijust lost the person who was
(20:57):
managing headcount in thespreadsheet and I said you know
what?
Let's take a guess how muchyou're paying that person.
What if I charge you one thirdof that person?
Would you buy software?
Prove it to me in two months,can you do it?
We proved it.
They've been customer for threeyears.
Right, so we had we were what welike from the fact that we are
looking for more future mindedleaders.
(21:18):
They can come from the CFO,they can come from the CHRO.
We prefer the CFO becausedirect line of sight into budget
and expenses right and sellingheadcount spend management
resonates better.
Because everybody now has beentold that do more with less and
don't hire new people forsupport functions like GMA and
(21:39):
make sure you don't overrun thebudget right.
Missing the set budget now orkeeping the budget is a no-miss
KPI.
People can be fired if youbreak through their budget right
.
So everyone is very diligent onthat and, if you can, when we
prove it to them that we helpyou do this, they're very happy
(21:59):
that they found the solution,which costs, as I said, one
third of a fully loaded cost ofan employee.
Speaker 2 (22:06):
You mentioned.
You started or you launched inOctober of 2022, went from five
to 35 really fast.
And October of 2022, that is apainful memory for me because
that's right when all thelayoffs started.
That's when Google, applestarted jettisoning tens of
thousands of employees, and it'sright when the purse strings
(22:26):
tightened.
So the fact that you were ableto go from 5 to 35 and in that
environment, in such short orderis is impressive.
Why were you able to do that?
Speaker 1 (22:37):
I?
I don't think it's I.
I think let me try and answerit from a different angle of how
were we able to do that right?
I think this has less to dowith the idea.
It is more to do with companybuilding.
And how did we approach thewhole strategy behind how we go
to market the new world ofbuying software?
There has been like afundamental difference.
(22:57):
People are not buying softwarebecause they have fear of
missing out.
There's no FOMO buying anymore.
I mean, definitely nothappening in the GNA space
between HR and finance.
They are doubly cautious ortriply cautious because they
have full moon fear of messingup.
Speaker 3 (23:12):
They don't want to mess up right.
Speaker 1 (23:14):
So what we did in that first year of actually
building the product, being veryopen and direct to the network
of people that we had andtelling them so I was not
posting on LinkedIn what I'mdoing we were operating in stock
, but more with direct email,phone, zoom conversations.
We were keeping a set of 100CFOs informed about what we are
(23:36):
doing and each of the time thatwe gave them an update, they
came back to us and they gave usfeedback and some set some
targets for us and say, oh, thisis good, but I also want to see
that this is good.
Set some targets for us and say, oh, this is good, but I also
want to see that this is good.
I want to see this right and itwas.
You know, I'm very thankful tothe community of CFOs because
they were so forthcoming andgenerous with their feedback,
because I was not tellingwhether you should buy or not.
(23:57):
I was just saying, if you have,if 1% of your body feels, if
your mind feels this is aproblem worthwhile solving, and
if you have another 1%, trustthat I am someone who you
believe is capable of solvingthis problem, give us your
feedback right and when thefeedback flywheel starts.
They see how feedback isgetting implemented, they get
(24:17):
more excited.
Then comes look what we've donefor Docker, look what we've
done for Postman, look what wedid for Invoka some of our
earliest customers Messagestarts going up, right.
Then I came from a salesbackground, so we also had a
what I call is blog engine with,like good data interviews right
, we had already feeded a lot ofcontent and then we started
(24:40):
doing outbound where we saidlook, customer, real ROI, here
is our mindset.
Are you interested?
So it just.
It was not something thathappened overnight.
We had started putting thesebuilding blocks from the very
beginning say from October of2021 to October of 2022, we had
(25:00):
already made a plan that everymonth, what do we want to
execute?
We were a team of 10 smart,dedicated people working
close-knit together saying allright, here's what we want to do
.
Right, and that really helpedwhen we actually went to market
and people said show me what yougot.
And they're like what?
This doesn't seem like an MVPand you're already supporting
(25:22):
these companies that are doinglike at least 100 million ARR
plus.
They're all you know.
I don't know if we should sayunicorn is still a good word or
a bad word, but you know theseare smart people, right?
So that really helped us get toyou know revenue and
accelerated close faster, right?
It was all the work that we didin the beginning of the year,
(25:45):
right.
Speaker 2 (25:46):
Yep.
So set yourself up for success.
Set the goal, goal and thenjust relentless execution until
you get relentless executionright.
Speaker 1 (25:53):
I tell people that you know, uh, there is.
In order to control yourdestiny, you must have
relentless is also a kinder word, I would say maniacal.
Focus is like, basically likemy cto.
I've known him, for he's myco-founder and cto.
He's a.
He's a very good friend of mine.
He had hired me in his startupright back in 2012, so we've
(26:17):
known each other for at least,you know, 12 plus years.
And he told me, like tushar, ifyou have great ideas, you also
also have a very good notebook.
I'll buy you a nice fountainpen.
Write it down.
You don't have to always comeand blurt it out in a meeting.
No, that's distraction.
(26:37):
Shut up, write it down, unlessyou have believed that this new
information either augments ourexisting plan or it is so
disruptive that you should stopwhat you're doing and pivot,
then open your mouth.
And if that is not the case,then let's just have this
conversation of hey, here's whatI'm hearing.
(26:58):
Write it down.
Right, be a good CEO and stopdistracting us and write shit
down.
So he forced me to write shitdown and he did not deviate from
the plan.
Speaker 2 (27:11):
I love that.
Speaker 1 (27:12):
So you know you, really, it's not just the stars
have to align, Like some peoplesay.
Like I have a great idea, Iwant to start a company.
You know, I think even raisingfunding is easier right now.
What is hard is finding a verygood co-founder and a technical
co-founder.
What is hard is recruitingsmart engineers.
(27:34):
What is hard is actuallybuilding scalable software
Because, as I said, fomo the baris so high that you cannot mess
up, because you messing up willlead to the buyer getting in
trouble with their boss, whosaid you fought for this money.
(27:56):
I'm not getting ROI, it's yourdamn fault, right?
So the world of software haschanged.
I remember when HubSpot hadjust launched and inbound
marketing was a thing.
That's how old I am.
Now there are so many companiesand everybody's raising around
(28:19):
the funding.
When we raised $4 million backin 2021, there were like 100
other companies who had raisedmore than us.
Sure so why would there be?
No, you can't be.
Suddenly you can't callTechCrunch and say oh, I raised
$4 million, get in line.
Somebody just raised 40.
Speaker 2 (28:32):
Well, right.
Speaker 3 (28:33):
It was so funny.
Speaker 2 (28:34):
You know, those were during the days when everyone
was raising money, and I wouldhave calls with firms back then
and I would tell them you know,one of the key questions that I
always ask when I'm doing arecruitment search is you know,
what sets you apart, what'sexciting about your company, why
someone would want to come workhere.
And I said, well, we justraised our series B.
Okay, you and everyone else.
Speaker 1 (28:53):
Right.
So it is like the some of ourangel investors were like we,
you know, october of 2021, weclosed around in February of
2022.
We launched our MVP and tookour first customer live.
And they were like are youstupid?
Like what is this going on?
Are you serious?
And like it takes companiesfive months, four months, to
(29:13):
just hire three engineers.
Like we built a team from oneto 10 product engineering design
and we took the MVP out to thecompany right.
Again you know, it's like we'veonly hired from our network.
We knew the people even beforewe started the company.
We I left Airbase in March of2021.
(29:34):
In June of 2021, I convinced myco-founder that hey, you should
, we should do this and let'scommit for the next 10 years.
And at that time we had nomoney in the bank.
We seeded our own personalfunds so that we can get some
initial couple of engineers tostart tinkering on.
Like what should we be eventhinking about?
And that helped, right?
I already told him like let'soperate from the mindset that
(29:57):
come October, either we havemoney in the bank and we are
executing or we are taking along queue for off and going to
Lexington and relaxing.
It's like it's a very binaryoption.
If you can't raise money, thenlet's not go build a company.
It's like great, you know,because it's this is not like.
This is not like a developerproduct or something.
Selling into the CFO or eventhe CHRO is hard.
(30:19):
They don't buy half-bakedsoftware.
So even when I was talking toVCs, they're like why do you
want to raise?
Why don't you raise a millionbucks?
I'm like that's going to donothing for me.
My CFOs, these five companies,have letters of intent.
They want to see a platform.
They want to solve hiringtracking, headcount forecasting,
(30:40):
headcount reconciliation.
They are not just looking for apretty chart or graph or like,
hey, this is your diversitymetrics and this is gender
distribution.
That's like it's.
This is your diversity metricsand this is gender distribution.
It's not an analytics productthat someone logs into once a
day or once a week.
This is a workflow product.
This is where people come inand do work.
So user management,permissioning, access control,
data integrity these are alltable stakes.
(31:00):
I cannot go and say I willintegrate with your software
tomorrow.
No, I have to do it all today.
I have to get it right and thenyou will be able to use it.
And that also gives you theedge right.
Once you've done all this work,you've basically, you truly
have first mover advantage.
Speaker 2 (31:18):
And that velocity that you had was so important to
doing.
That I mean to be able to startgetting customers hire your
first 10 in such a short periodof time is so critical.
And those first 10, not onlyare they the most important
hires because they formed thefoundation of so much of the
rest of your company, but it'salso the hardest, because you're
convincing people to come tosomething that, frankly, barely
(31:38):
exists.
So I'm just curious how did youhire that first 10?
What did that look like?
Speaker 1 (31:43):
So in the first 10, that includes us so we hired it.
Sure, right, six of them camethrough of engineers.
That came through direct thenetwork of my co-founder.
My co-founder has been in theprevious startups.
(32:06):
He had built teams from scratch.
He's known as a mentor in theindustry.
People want to work with him.
So I would not say it was easy,but I would say it wasn't
something that kept me up atnight.
It was more like BG.
His name is BG.
Bg is going to go and pick thebest people within the right
(32:28):
budget.
We were doing our own headcountplanning, right?
Bg was like tell me how muchmoney you want to spend and also
set me the goals that you wantto hit and based on that, I'll
give you plan A cost this much,we hire these people.
Plan B maybe cost less or more,we hire the other people.
Right, we found a good mojo andthen he went and was very
(32:48):
convincing.
And then we found a recruiterthat we had worked with in the
past for the product managerrole and the designer role.
So those were the two rolesthat came through recruiters,
but the rest the engineeringtalent came through my
co-founder's network.
Speaker 2 (33:06):
That network is so critical.
And yeah, I was going to sayyou know spoilers Usually.
I think that's the best way tohire your first 10, if you can.
Speaker 1 (33:14):
Next 10 also came through.
You know at least 60% camethrough network and only 40%
came through a recruiter.
Speaker 2 (33:24):
Nice.
I don't want to over AIeverything, but obviously AI is
a huge conversation right now,both in terms of how is it going
to affect the workforce atlarge, which of course to an
extent affects headcountplanning, and then also the role
of AI in the actual head countplanning itself.
How are you thinking about bothof those things?
Speaker 1 (33:46):
The first part you mentioned right.
How does it impact theworkforce?
I think that there is a lot ofpromise talking about the
productivity gains andelimination of certain jobs, but
at the core of it, we are notthere yet.
Right of certain jobs, but atthe core of it, we are not there
yet, right.
It is more about augmentedintelligence, augmented
(34:10):
productivity, being able to domore things at the same time,
being able to do them better,faster, right, more accurately,
with the help of an assistant,right, and I have a lot.
I believe that that is the truepotential of what AI has to
offer today, and on those lines,we are now building AI directly
into our workflows.
(34:31):
So imagine, today Team Ohana isbuilt for someone.
If you know what you want to do, we will help you execute right
.
You know what you want to do.
We will help you execute right.
Inform yourself, execute, run aworkflow, get people to
collaborate with you.
We help you fast, pace yourexecution and get to the desired
(34:51):
end state and the outcome thatyou are looking for.
But it starts with I know whatI want to do as we grow as a
company and as AI now becomesmore accessible, what our
customers are telling us andwhere our vision is going, is
that allow AI to help me maketwo things Help me make an even
(35:12):
better decision that I alone,with the workflow, was not able
to make.
It's augmenting my intelligence.
Then the other part, which isone step more than part, which
is like one step more thanintelligence.
Speaker 3 (35:23):
It is like literally I say it's you call it super
intelligence, or it's lookinginto the future.
Speaker 1 (35:30):
Well, what do I mean by that?
Let's say you are.
You are a company that wants tohire five AI engineers.
You have you're a very wellbuttoned company.
You've got salary bands.
You have your applicanttracking system.
You know what your time to fillis time to hire all of those
cool things, right.
You come in, you start making aplan, right?
Team Ohana can immediately giveyou two suggestions.
(35:52):
The first suggestion is that,hey, the last two engineers you
hired, you actually paid 20%more than what was allocated in
your budget.
I'm just telling you that youmay go over budget.
The next thing is that, hey, youwant to hire this person in 45
days.
You think it's in 45 days.
You have five other jobs thatyou have queued up before this.
Because we have the fullpicture, you need to adjust the
(36:14):
priority, what something gives,because you only have limited or
set amount of recruitercapacity.
This is impossible to do today.
It's all.
It is so different that thetalent ops person will come in
and look and say, well, I can dothis, and you're a very
persuasive VP of engineeringLike you got to do this for me.
How the hell will we bloody,survive if you do this?
It's going to be Armageddon.
(36:37):
And they're like, oh shit, I'mgoing to try and do it.
You're just signing up forfailure, right?
But a human telling you this.
You will try to overcome thehuman and try to apply pressure.
A machine telling you this.
You will say, oh, intelligence,I need to make sure I take a
look at this.
Right, I'm a VP of engineering.
Of course, this AI is right.
Right, it's just thatperception.
All I'm doing is we are takingthe intelligence of the human
(37:00):
what a human was crunchingnumbers and coming to you after
the fact or maybe they nevercome to you to complain?
The AI will complain to you andgive you feedback in real time,
right?
So that is what is theimmediate output.
You come into Team Ohana nextquarter.
You have this feature turned onfor you, right?
The future where we are goingis a people.
When they especially thinkabout planning, they have a lot
(37:22):
going on in their head.
What if I promote to Shah thethree people that report into
this person?
I move it to them.
Then I hire four new people,but instead of hiring in San
Francisco, I'm going to hire inMexico or in India.
I'm going through all of theseideas.
Imagine you just rattling thisoff into a voice assistant in
(37:46):
Timo Hanna, right, I'm justcapturing this.
And then you say, what would itlook like?
And I just design an org chartfor you.
Then you say, how much would itcost?
I show you the cost, because Ihave all of this information.
How long would it take you totake me to hire these people?
I have that information and Ican show you two levels of
(38:08):
information.
One is based on yourhomogeneous data of you as a
company, based on yours, and theother is data from the market,
or data from all theheterogeneous data that is
coming from all the othercustomers of T Mohana anonymized
, cleaned up.
You never know anything, butthis becomes the collective
intelligence of the community,helping all of us make better
decisions.
Right, that, what I call issuper intelligence.
(38:28):
That's a little far away, butaugmented intelligence is very
near.
You can.
We'll talk in three months and Ican give you a demo.
Speaker 2 (38:38):
Well, I might have to take you up on that.
That is probably a good placeto stop.
This has been such a coolconversation, really excited for
what you're doing and lookingforward to your continued
success.
Thank you for coming on.
Speaker 1 (38:51):
Thanks for having me.
Speaker 3 (38:53):
Thanks for listening to See to Exit.
If you enjoyed the episode,don't forget to subscribe and
we'll see you next time.
During the 2019 to 2021 time period, I got to
interact with a lot of CFOs andit's a very natural question hey
, what more can we do for you?
What should we be building?
What are you interested in?
Time and again, every CFO cameback and said Dushar, you're
only managing 10-15% of my spendtoday.
That's what accounts payable isright.
(00:23):
It's vendors, it's software,it's reimbursements, it's
salespeople travel expensesgreat, but a large percentage of
my spend is actually people.
Who is doing people spendmanagement?
Speaker 2 (00:38):
Hey everyone, welcome to another episode of Seed to
Exit.
In this episode, I interviewedTushar Makhija, the founder and
CEO of Team Ohana.
Team Ohana is a high-growth HRtech startup that's solving a
pressing HR issue in enterprisecompanies.
Prior to founding Team Ohana,he was a founding go-to-market
hire at HelpShift as their VP ofRevenue and also as the VP of
Sales and Customer Success atAirbase.
(00:58):
So in this episode, I'm talkingto Tushar, both about his
expertise in go-to-market aswell as the people function.
I really enjoyed theconversation and I hope you will
too.
Speaker 3 (01:09):
You're listening to the Seed to Exit podcast with
your host, rhys Keck.
Here you'll learn from startupexecutives, founders, investors
and industry experts.
You'll learn from the bestabout building amazing products,
scaling companies, raisingcapital, hiring the right people
and more.
Subscribe and listen in for newepisodes and enjoy the show.
Speaker 2 (01:32):
Tushar, welcome on, excited to have you, Excited to
be here.
Thank you for having meAbsolutely Well.
I'm really excited to talk toyou because the problem that
you're solving over at TeamOhana is near and dear to my
heart, considering some of thestuff I've been dealing in
talent acquisition but it is avery at least your original plan
was a fairly niche problem thatyou were solving.
(01:53):
So, for those who are notcoming from a finance or talent
acquisition background, couldyou describe the problem that
you're solving over at TeamOhana and, ultimately, what the
problem is?
Speaker 1 (02:05):
the problem that you're solving over at Team
Ohana and, ultimately, what theproblem is.
Thanks for having me and thanksfor asking that question.
So, at the core of everysuccessful organization, you are
saying whether you are in theearly stages or the late stages,
you're saying we need to spendmoney to grow, and growth means
it translates into ARR, ittranslates into revenue.
But at the core of it, in orderto sell more software, you need
(02:28):
to hire more engineers.
So you've got to build, thenyou have to productize, and then
you've got to market, and thenyou've got to sell at every
space and then you have tomanage and maintain.
All of these are people-drivenfunctions.
So you cannot really achieveyour company's revenue goals
till you achieve your company'shiring goals.
And when I talk about hiring, Italk about both the elements.
(02:50):
You want to bring in new talent, you want to retain your
existing talent and also talent,and your company's workforce is
your company's largest expense.
Nearly 70% of your operatingexpense is tied to people and
it's not a one-time expense,it's a flow of expenses.
When you hire someone, youexpect them to be with the
company for 12, 24 months, right?
(03:12):
So when we started looking atevery company, every company is
trying to grow, every company istrying to manage their
workforce.
But when we ask thisfundamental question that what
is the source of truth of yourcompany's headcount or your
company's headcount plan, whichis about future, and the answer
was a spreadsheet.
(03:33):
And I was like, okay, this isyour largest expense.
There is so much riding on thisand we saw it play out in the
market.
Right, if you overhired, youran out of money.
You shut down as a company.
If you underhired, you did notgrow at the right time, oh,
you're shutting down as acompany.
That means your survival andyour success is all tied to your
(03:53):
people.
And when we lead with thatquestion and say, why are you
managing your people or yourheadcount in a spreadsheet?
The answer is well, I don'tknow how else would you do it.
So there has been decades ofcompanies trying to do this in a
manual way, using spreadsheets,cobbling together different
data sources, and when they lookat our application, when they
(04:17):
look at what we are building,they think of us as that all
right, now I have this one placewhich has all my data, it has
all the right permissioning, itis collaborative and I can come
in and I can do all thedecisions that I need to take
around my company's workforce.
So we started with headcountplanning, which was, yes, true
niche, but we have expanded intowhat we call plan hire, promote
(04:40):
, retain, retire the entire lifecycle.
Who I want to hire, when I wantto hire?
How I should compensate, whowill they report into?
Which location should we hire?
Who gets a merit increase, whogets a promotion?
Who gets a bonus?
Who gets to stay, who gets tobe let go, who needs to be
backfilled, who does not?
(05:00):
These are all people decisionsand from an outside in you may
say why can't Workday do this?
Workday is the record keeper ofall these decisions.
If you ask any company todaywhere these decisions are
actually being made, they arebeing made in hallways, in Slack
channels, in Google Sheets, andthen, once the decision has
been made, it gets recorded inwhat I call the system of record
(05:24):
.
So that was the opportunitythat we saw.
Three years back.
We started with headcountplanning, we now have launched a
compensation planning productand next year we are launching
our organizational planningproduct and that's what I call
becomes your workforce operatingsystem.
So we are your company's WASright.
Speaker 2 (05:45):
I haven't heard that acronym, but I like it.
Speaker 1 (05:48):
I'm using it for the first time.
So it is for you users andlisteners, for whoever's
listening.
Speaker 2 (05:56):
All right, let's make this a thing.
I'm curious when you say yourealized this three years ago.
How did that realization comeabout?
Speaker 1 (06:06):
Yeah.
So I'm not a finance person,I'm not a talent person, I'm not
an HR person, I'm a productperson.
I'm an engineer by training andI have had this unique
opportunity to morph my careerinto going from code engineering
sitting down on a computerwriting code, to being on the
product side of things, buildingnew products and then getting
on the sales side of thingsbuilding new products and then
getting on the sales side,actually taking those products
(06:28):
to market and generating revenueright.
So that has been my journey andin 2019, I joined a company
called Airbiz.
They recently announced thatthey got acquired by Paylocity.
Congratulations to all myfriends there.
I was there for two years andwhen I spoke with the CEO, it
was so beautiful how heexplained that said, hey,
(06:50):
people's companies spend a lotof money and they spend money on
vendors, corporate cards,reimbursements, and all of this
is happening in differentsystems.
Airbase is going to bring allof this together and we are
going to do spend management.
I'm like great, why has nobodythought about this?
Right?
Great run at the company Ijoined, like.
In the seed stage I left atCDsB.
The company went from a $30million valuation to a $600
(07:13):
million valuation and when I, wewere selling directly to CFO.
So during the 2019 to 2021 timeperiod, I got to interact with a
lot of CFOs.
And when I it time period, Igot to interact with a lot of
CFOs and it's a very naturalquestion hey, what more can we
do for you?
What should we be building?
What are you interested in?
Time and again, every CFO cameback and said Dushar, you're
(07:39):
only managing 10, 15% of myspend today.
That's what accounts payable isright, it's vendors, it's
software software, it'sreimbursements, it's sales,
people, travel expenses great,but a large percentage of my
spend is actually people.
Who is doing people spendmanagement?
And you know what?
At the beginning of it, I sawthat, hey, we are not going to
do people spend management, weare.
We are different.
(08:00):
So, great, awesome, let's writethis down, let's nod, let's
smile so that the CFO thinks I'mlistening to them.
But when you keep hearing itagain and again and if you have
some semblance of what it's, themarket is literally telling you
that there is a need forsomething, and all I did was,
you know, slow down and startedasking the next 10 questions
(08:23):
around, and started asking thenext 10 questions around how are
you doing it today.
Why don't you have a system?
Well, you just spend a milliondollars to install Workday.
What the hell are you doingthere?
Don't you have a planningsystem?
You're a CFO, you have adaptiveplanning or Anaplan.
That's another million dollarsand they're like yeah, I'm $2
million in, but it's still notworking.
And I was like, okay, why is itnot working?
(08:44):
And it really helped us come tothis point, which was like, hey
, even though this is a spendmanagement problem, at the crux
of it it is a data problem.
Imagine this Workday is thesource of truth of all the
existing employees, existingemployees, people.
If someone is changing adepartment, if someone is
leaving, if someone is gettingpromoted, all these actions
(09:04):
around that people are recordedin Workday.
So if you want to know how manypeople are button seat, who
they are, that all informationis in Workday, then there is an
applicant tracking system, rightLike a greenhouse, which has
all the information of the jobsthat you are hiring for right
now.
It gives you a clear idea thatin the next three to six months,
who are the people that youexpect to bring on, what are
(09:26):
their titles, which departmentsare they going to report into
and how much expected salary doyou want to give the range right
Now, we all have to publishthat.
Speaker 2 (09:34):
And even then not to interrupt.
But even then, that's only theroles you're actively working on
.
It's not the stuff that's in.
Speaker 1 (09:40):
Exactly.
There is this whole idea behind, which is only sitting in a
financial model somewhere whatam I allowed to hire?
What have you already budgetedfor?
So there was a complete becauseof these data this being
disconnected that the financialmodel has information about
total approved headcount,starting and ending, based on
(10:01):
every department.
They run the numbers and theywant to stick to those numbers.
They have also run the numbersof how much money you should be
spending, but that's theoperational plan.
The operational execution ishappening in Workday and
Greenhouse and, at any givenpoint in time, because those two
systems don't talk to back tothe model at a regular interval,
(10:22):
finance is now only looking atbackward-looking data.
So instead of looking atleading indicators, they're
looking at lagging indicators ofwhat has already happened.
Now, fast forward, going backfour years.
It was not a big problembecause I know where my next
check is going to come from.
I just have to go hopping fromone VC office to the other and
someone's going to get me acheck.
(10:43):
So this problem really becameexaggerated post-COVID,
post-2021, early 2022, after SVBcame down like okay, look,
we've raised all this money, weneed to grow, but we need to now
grow efficiently.
What does that even mean Allpublications Wall Street Journal
(11:06):
, techcrunch wrote aboutefficient growth, profitable
growth.
I'm asking this question what,how?
Tell me how you're going to getthere.
What do you need to change inyour operations?
You don't need to throw awayWorkday.
You don't need to throw awayGreenhouse.
What you now need is a newsystem of execution, system of
decision-making that becomes thehub where you come together,
(11:28):
you collaborate.
It has all the rightinformation, sucking in
information in real time, andit's giving you these insights
on how you should hire, how youshould promote, what you should
do with these people, so thatyou can answer or you can
deliver on three things.
First, you're delivering onyour company's goals.
I want to hire the right people, I want to promote the right
(11:48):
people.
I want to retain the rightpeople.
Second, you're looking at itfrom a budgetary angle.
This was never.
Before Timoana, this was nothappening at all.
Someone gets hired, someoneshows up at the door, then
payroll gets updated, thenfinance is notified Like, look,
I just hired someone for 200Kand finance is like sorry, how
(12:11):
the hell did you hire thisperson in Q2?
I now I'm holding the bag ofthree extra month of spend.
Where is this money going tocome from.
On the other hand, if sales issupposed to hit some revenue
targets and hiring is going slowand you only get to know about
this at the end of the quarterfinances, like okay, now I have
extra dollars left, I could havegiven it to marketing.
So it becomes a capitalallocation problem, right?
(12:32):
So when you think about all ofthese things together, spend
management for people is reallytied to your revenue.
And because I came from Airbase, I was just uniquely
opportunistic, right place,right time, because I never
attacked this problem from an HRangle.
That is very, that was verylike well, they can do that.
(12:54):
I can look at a nice org chart.
I can look at span of control.
I can look at gender, ethnicity.
All of that is important, butthat is not tied to revenue.
If your diversity metrics areoff, you have to go fix them to
become a better company, but itdoesn't really translate into
revenue.
And when we got into the newworld of efficient growth,
(13:16):
profitable growth, not grow atall costs T-Mohana just became a
very important piece of thefinancial and people
infrastructure that companieswanted to adopt.
So Docker is a customer,postman is a customer, right,
seedgeek is a customer.
There are a few companies whohave raised a lot of money, but
I'm not going to say their names.
Are customers, so it's now athing.
Speaker 2 (13:37):
I love that and so it seems so obvious when you say
it.
But were there any solutionsbefore this, or are you
essentially first to market onthis?
Speaker 1 (13:45):
From a first principles basis, trying to
think about headcount spendmanagement and having the vision
of building this workforce OSwe are the first to market.
People have tried to do this inisolation and there are so many
compensation planning tools outthere.
But imagine compensation isonce or twice a year.
You are giving people meritraises.
(14:07):
You're giving people bonuses.
It doesn't tie to the agilenature of the business.
Right, with Team Ohana, you canstart with a budget which says
this is what I need to spendGreat.
Hey, vp of engineering, youwant to hire new people Same
bucket.
You want to promote existingpeople Same bucket and one
system of workflow.
(14:27):
So Team Ohana allows you to dothis.
I'm the VP of engineering.
I look at my total budget and Isay you know what?
I have this $10 million, but Ineed to retain my existing staff
.
They are more important to me.
Instead of giving the 5% raises, I'll give people 10% raises
and the money that is left overfrom that.
I'm going to augment and hirenew people.
Some people may say well, Idon't care about attrition,
(14:54):
right, I just want to hire newpeople so I can let go of the
others.
Finance is happy.
All the people who need to makepeople decisions are happy.
Hr is happy because they aregetting the full visibility.
They are not being told afterthe fact, and that's how the
company's vision should operate.
You have to look at workforceholistically.
You can't say that this is howI'm hiring, this is how I'm
promoting, this is how muchmoney I'll save through
(15:15):
attrition.
No, it all comes together.
Why are you making isolateddecisions?
And that's what got us intotrouble, because every system
was siloed and we were justoperating in our own world.
Right and NetSuite, workday areall systems of record where
decisions after they have beenmade are just gone to record for
compliance purposes.
So it was already too late bythe time the information hit
(15:38):
Workday or NetSuite.
It was not real time.
Speaker 2 (15:41):
You mentioned earlier that you got the inkling of
this when you were talking tovarious CFOs over at Airbase.
So you had the light bulb idea.
You founded the company youstarted building.
When did you feel like you'dfound product market fit?
Like what were thoseconversations with early
customers?
Speaker 1 (16:00):
So you know, we were fortunate that even before we
had written a line of code, wehad five CFOs who had given us a
letter of intent saying ifyou're able to raise money and
if you're able to ever buildthis software, we will be your
(16:20):
design partners.
Right, so it's the differencebetween starting a company at 42
than 22,.
Right, so few extra people knowyou.
Right, so that's the benefit.
It's just being around too longin this world, right?
So we already knew from ourvision what we were going and
for the first year we justoperated in stealth mode and
worked with just those fivecompanies.
Luckily, those five companiesin that one year went from 200
(16:42):
to 400, like someone went from300 to 1,000.
There was hyper growth that washappening in those companies.
A couple of companies shut downas well, so we got to
understand the full range ofwhat growth looks like, what
flatline looks like, whatattrition looks like.
So that gave us the opportunityto fully understand what is the
(17:02):
real market looking like andwhat are the features that they
care about.
And we boiled down to threethings.
First, I need a unified rosterof current and future employees.
How do I do headcountforecasting?
How do I make it accurate?
How do I make it real time andnot something that is only
happening once a quarter, right?
The second thing was hiringplan management.
If you're a hyper growthcompany, you really care about
(17:24):
the fact that who is coming in,how long it is going to take to
hire, how much it is going tocost, and you need constant
updating.
And good companies werethrowing bodies at the problem
that there's a talent ops person, there's a rec ops person,
there is a fin ops person tryingto do this manually, creating a
dashboard for a Monday morningexec meeting.
But not all companies had that,I would say, resources to do
(17:47):
this.
So the second thing was okay,let's enable a hiring tracker
which is basically a real-time,updated company's headcount plan
.
And then the third thing thatwe quickly understood was there
is a lot of downstream manualwork what we call headcount
reconciliation that is done bythe talent team, which is
(18:08):
finance.
Said you could hire a softwareengineer at level three in this
quarter for this price point.
There has to be a job that isopen in greenhouse and opening
candidates apply to that opening.
One of those candidates gets anoffer.
The offer needs to be approvedA lot of places where things can
start breaking down.
Hiring can be delayed, hiringcan be moved faster.
(18:29):
You can up-level a role,down-level a role.
At the end of it, what reallyhappens is that once an offer is
accepted, someone shows up onthe start date and their payroll
system gets updated.
So now the talent leader or thetalent ops and the fin-off
person together will come.
We had said we wanted to dosomething.
Did we do that or did we dosomething totally different?
(18:51):
What was the budget ID?
What was the job ID?
What was the employee ID?
Three different IDs, allalphanumeric shit that nobody
understands.
We said we will go andcompletely automate this, that
whatever you're saying you wantto hire, we will connect to the
right job in Greenhouse.
When an offer goes out, we willcapture those offer and
candidate details when thecandidate actually joins and
(19:13):
becomes an employee and payrollgets updated.
We're going to reconcileeverything right.
So the market was very clearthat solve these three problems
forecasting, hiring, trackingand reconciliation.
That was the first product andwe launched the product in
October of 2022.
And then that was basically.
We went from five customers to35 customers in one year Wow.
Speaker 2 (19:38):
So I'm curious between finance and HR, who does
the buck ultimately stop within terms of responsibility for
what you just described?
Speaker 1 (19:47):
You know, this is a challenge that we are still
evaluating because every companyis slightly different.
Now the lazy Tushar wants to gosell to the CFO Hard to impress
, but has money in the pocket.
It's the person who's going tomake the decision, is going to
sign the contract.
You keep the CFO happy.
The company is okay.
Right, they will not fire youif you're doing their job, if
(20:13):
you're doing your job right.
The HR team, actually, webelieve there is a lot of
opportunity for them becauseHRBPs are hard to find their
expenses and all HRBPs areoverworked, right.
I mean, these are absolutetruths.
Nobody can sit here and debateboth of us on this.
Three words, three sentencesthat I just said.
But I think there are some HRleaders like the CHRO of New
Zealand.
She was one of my firstcustomers, right.
She fought with her CFO andsaid you got to allocate budget
(20:34):
to this because you're notgiving me new headcount.
Right, if you're not giving menew headcount, headcount is
150,000, t-mall is 50.
Like, I just still saved youmoney, but you got to give me
something so I can operate and Ican scale.
Like Invoka, another fairlylarge SaaS company.
Their head of finance said Ijust lost the person who was
(20:57):
managing headcount in thespreadsheet and I said you know
what?
Let's take a guess how muchyou're paying that person.
What if I charge you one thirdof that person?
Would you buy software?
Prove it to me in two months,can you do it?
We proved it.
They've been customer for threeyears.
Right, so we had we were what welike from the fact that we are
looking for more future mindedleaders.
(21:18):
They can come from the CFO,they can come from the CHRO.
We prefer the CFO becausedirect line of sight into budget
and expenses right and sellingheadcount spend management
resonates better.
Because everybody now has beentold that do more with less and
don't hire new people forsupport functions like GMA and
(21:39):
make sure you don't overrun thebudget right.
Missing the set budget now orkeeping the budget is a no-miss
KPI.
People can be fired if youbreak through their budget right
.
So everyone is very diligent onthat and, if you can, when we
prove it to them that we helpyou do this, they're very happy
(21:59):
that they found the solution,which costs, as I said, one
third of a fully loaded cost ofan employee.
Speaker 2 (22:06):
You mentioned.
You started or you launched inOctober of 2022, went from five
to 35 really fast.
And October of 2022, that is apainful memory for me because
that's right when all thelayoffs started.
That's when Google, applestarted jettisoning tens of
thousands of employees, and it'sright when the purse strings
(22:26):
tightened.
So the fact that you were ableto go from 5 to 35 and in that
environment, in such short orderis is impressive.
Why were you able to do that?
Speaker 1 (22:37):
I?
I don't think it's I.
I think let me try and answerit from a different angle of how
were we able to do that right?
I think this has less to dowith the idea.
It is more to do with companybuilding.
And how did we approach thewhole strategy behind how we go
to market the new world ofbuying software?
There has been like afundamental difference.
(22:57):
People are not buying softwarebecause they have fear of
missing out.
There's no FOMO buying anymore.
I mean, definitely nothappening in the GNA space
between HR and finance.
They are doubly cautious ortriply cautious because they
have full moon fear of messingup.
Speaker 3 (23:12):
They don't want to mess up right.
Speaker 1 (23:14):
So what we did in that first year of actually
building the product, being veryopen and direct to the network
of people that we had andtelling them so I was not
posting on LinkedIn what I'mdoing we were operating in stock
, but more with direct email,phone, zoom conversations.
We were keeping a set of 100CFOs informed about what we are
(23:36):
doing and each of the time thatwe gave them an update, they
came back to us and they gave usfeedback and some set some
targets for us and say, oh, thisis good, but I also want to see
that this is good.
Set some targets for us and say, oh, this is good, but I also
want to see that this is good.
I want to see this right and itwas.
You know, I'm very thankful tothe community of CFOs because
they were so forthcoming andgenerous with their feedback,
because I was not tellingwhether you should buy or not.
(23:57):
I was just saying, if you have,if 1% of your body feels, if
your mind feels this is aproblem worthwhile solving, and
if you have another 1%, trustthat I am someone who you
believe is capable of solvingthis problem, give us your
feedback right and when thefeedback flywheel starts.
They see how feedback isgetting implemented, they get
(24:17):
more excited.
Then comes look what we've donefor Docker, look what we've
done for Postman, look what wedid for Invoka some of our
earliest customers Messagestarts going up, right.
Then I came from a salesbackground, so we also had a
what I call is blog engine with,like good data interviews right
, we had already feeded a lot ofcontent and then we started
(24:40):
doing outbound where we saidlook, customer, real ROI, here
is our mindset.
Are you interested?
So it just.
It was not something thathappened overnight.
We had started putting thesebuilding blocks from the very
beginning say from October of2021 to October of 2022, we had
(25:00):
already made a plan that everymonth, what do we want to
execute?
We were a team of 10 smart,dedicated people working
close-knit together saying allright, here's what we want to do
.
Right, and that really helpedwhen we actually went to market
and people said show me what yougot.
And they're like what?
This doesn't seem like an MVPand you're already supporting
(25:22):
these companies that are doinglike at least 100 million ARR
plus.
They're all you know.
I don't know if we should sayunicorn is still a good word or
a bad word, but you know theseare smart people, right?
So that really helped us get toyou know revenue and
accelerated close faster, right?
It was all the work that we didin the beginning of the year,
(25:45):
right.
Speaker 2 (25:46):
Yep.
So set yourself up for success.
Set the goal, goal and thenjust relentless execution until
you get relentless executionright.
Speaker 1 (25:53):
I tell people that you know, uh, there is.
In order to control yourdestiny, you must have
relentless is also a kinder word, I would say maniacal.
Focus is like, basically likemy cto.
I've known him, for he's myco-founder and cto.
He's a.
He's a very good friend of mine.
He had hired me in his startupright back in 2012, so we've
(26:17):
known each other for at least,you know, 12 plus years.
And he told me, like tushar, ifyou have great ideas, you also
also have a very good notebook.
I'll buy you a nice fountainpen.
Write it down.
You don't have to always comeand blurt it out in a meeting.
No, that's distraction.
(26:37):
Shut up, write it down, unlessyou have believed that this new
information either augments ourexisting plan or it is so
disruptive that you should stopwhat you're doing and pivot,
then open your mouth.
And if that is not the case,then let's just have this
conversation of hey, here's whatI'm hearing.
(26:58):
Write it down.
Right, be a good CEO and stopdistracting us and write shit
down.
So he forced me to write shitdown and he did not deviate from
the plan.
Speaker 2 (27:11):
I love that.
Speaker 1 (27:12):
So you know you, really, it's not just the stars
have to align, Like some peoplesay.
Like I have a great idea, Iwant to start a company.
You know, I think even raisingfunding is easier right now.
What is hard is finding a verygood co-founder and a technical
co-founder.
What is hard is recruitingsmart engineers.
(27:34):
What is hard is actuallybuilding scalable software
Because, as I said, fomo the baris so high that you cannot mess
up, because you messing up willlead to the buyer getting in
trouble with their boss, whosaid you fought for this money.
(27:56):
I'm not getting ROI, it's yourdamn fault, right?
So the world of software haschanged.
I remember when HubSpot hadjust launched and inbound
marketing was a thing.
That's how old I am.
Now there are so many companiesand everybody's raising around
(28:19):
the funding.
When we raised $4 million backin 2021, there were like 100
other companies who had raisedmore than us.
Sure so why would there be?
No, you can't be.
Suddenly you can't callTechCrunch and say oh, I raised
$4 million, get in line.
Somebody just raised 40.
Speaker 2 (28:32):
Well, right.
Speaker 3 (28:33):
It was so funny.
Speaker 2 (28:34):
You know, those were during the days when everyone
was raising money, and I wouldhave calls with firms back then
and I would tell them you know,one of the key questions that I
always ask when I'm doing arecruitment search is you know,
what sets you apart, what'sexciting about your company, why
someone would want to come workhere.
And I said, well, we justraised our series B.
Okay, you and everyone else.
Speaker 1 (28:53):
Right.
So it is like the some of ourangel investors were like we,
you know, october of 2021, weclosed around in February of
2022.
We launched our MVP and tookour first customer live.
And they were like are youstupid?
Like what is this going on?
Are you serious?
And like it takes companiesfive months, four months, to
(29:13):
just hire three engineers.
Like we built a team from oneto 10 product engineering design
and we took the MVP out to thecompany right.
Again you know, it's like we'veonly hired from our network.
We knew the people even beforewe started the company.
We I left Airbase in March of2021.
(29:34):
In June of 2021, I convinced myco-founder that hey, you should
, we should do this and let'scommit for the next 10 years.
And at that time we had nomoney in the bank.
We seeded our own personalfunds so that we can get some
initial couple of engineers tostart tinkering on.
Like what should we be eventhinking about?
And that helped, right?
I already told him like let'soperate from the mindset that
(29:57):
come October, either we havemoney in the bank and we are
executing or we are taking along queue for off and going to
Lexington and relaxing.
It's like it's a very binaryoption.
If you can't raise money, thenlet's not go build a company.
It's like great, you know,because it's this is not like.
This is not like a developerproduct or something.
Selling into the CFO or eventhe CHRO is hard.
(30:19):
They don't buy half-bakedsoftware.
So even when I was talking toVCs, they're like why do you
want to raise?
Why don't you raise a millionbucks?
I'm like that's going to donothing for me.
My CFOs, these five companies,have letters of intent.
They want to see a platform.
They want to solve hiringtracking, headcount forecasting,
(30:40):
headcount reconciliation.
They are not just looking for apretty chart or graph or like,
hey, this is your diversitymetrics and this is gender
distribution.
That's like it's.
This is your diversity metricsand this is gender distribution.
It's not an analytics productthat someone logs into once a
day or once a week.
This is a workflow product.
This is where people come inand do work.
So user management,permissioning, access control,
data integrity these are alltable stakes.
(31:00):
I cannot go and say I willintegrate with your software
tomorrow.
No, I have to do it all today.
I have to get it right and thenyou will be able to use it.
And that also gives you theedge right.
Once you've done all this work,you've basically, you truly
have first mover advantage.
Speaker 2 (31:18):
And that velocity that you had was so important to
doing.
That I mean to be able to startgetting customers hire your
first 10 in such a short periodof time is so critical.
And those first 10, not onlyare they the most important
hires because they formed thefoundation of so much of the
rest of your company, but it'salso the hardest, because you're
convincing people to come tosomething that, frankly, barely
(31:38):
exists.
So I'm just curious how did youhire that first 10?
What did that look like?
Speaker 1 (31:43):
So in the first 10, that includes us so we hired it.
Sure, right, six of them camethrough of engineers.
That came through direct thenetwork of my co-founder.
My co-founder has been in theprevious startups.
(32:06):
He had built teams from scratch.
He's known as a mentor in theindustry.
People want to work with him.
So I would not say it was easy,but I would say it wasn't
something that kept me up atnight.
It was more like BG.
His name is BG.
Bg is going to go and pick thebest people within the right
(32:28):
budget.
We were doing our own headcountplanning, right?
Bg was like tell me how muchmoney you want to spend and also
set me the goals that you wantto hit and based on that, I'll
give you plan A cost this much,we hire these people.
Plan B maybe cost less or more,we hire the other people.
Right, we found a good mojo andthen he went and was very
(32:48):
convincing.
And then we found a recruiterthat we had worked with in the
past for the product managerrole and the designer role.
So those were the two rolesthat came through recruiters,
but the rest the engineeringtalent came through my
co-founder's network.
Speaker 2 (33:06):
That network is so critical.
And yeah, I was going to sayyou know spoilers Usually.
I think that's the best way tohire your first 10, if you can.
Speaker 1 (33:14):
Next 10 also came through.
You know at least 60% camethrough network and only 40%
came through a recruiter.
Speaker 2 (33:24):
Nice.
I don't want to over AIeverything, but obviously AI is
a huge conversation right now,both in terms of how is it going
to affect the workforce atlarge, which of course to an
extent affects headcountplanning, and then also the role
of AI in the actual head countplanning itself.
How are you thinking about bothof those things?
Speaker 1 (33:46):
The first part you mentioned right.
How does it impact theworkforce?
I think that there is a lot ofpromise talking about the
productivity gains andelimination of certain jobs, but
at the core of it, we are notthere yet.
Right of certain jobs, but atthe core of it, we are not there
yet, right.
It is more about augmentedintelligence, augmented
(34:10):
productivity, being able to domore things at the same time,
being able to do them better,faster, right, more accurately,
with the help of an assistant,right, and I have a lot.
I believe that that is the truepotential of what AI has to
offer today, and on those lines,we are now building AI directly
into our workflows.
(34:31):
So imagine, today Team Ohana isbuilt for someone.
If you know what you want to do, we will help you execute right
.
You know what you want to do.
We will help you execute right.
Inform yourself, execute, run aworkflow, get people to
collaborate with you.
We help you fast, pace yourexecution and get to the desired
(34:51):
end state and the outcome thatyou are looking for.
But it starts with I know whatI want to do as we grow as a
company and as AI now becomesmore accessible, what our
customers are telling us andwhere our vision is going, is
that allow AI to help me maketwo things Help me make an even
(35:12):
better decision that I alone,with the workflow, was not able
to make.
It's augmenting my intelligence.
Then the other part, which isone step more than part, which
is like one step more thanintelligence.
Speaker 3 (35:23):
It is like literally I say it's you call it super
intelligence, or it's lookinginto the future.
Speaker 1 (35:30):
Well, what do I mean by that?
Let's say you are.
You are a company that wants tohire five AI engineers.
You have you're a very wellbuttoned company.
You've got salary bands.
You have your applicanttracking system.
You know what your time to fillis time to hire all of those
cool things, right.
You come in, you start making aplan, right?
Team Ohana can immediately giveyou two suggestions.
(35:52):
The first suggestion is that,hey, the last two engineers you
hired, you actually paid 20%more than what was allocated in
your budget.
I'm just telling you that youmay go over budget.
The next thing is that, hey, youwant to hire this person in 45
days.
You think it's in 45 days.
You have five other jobs thatyou have queued up before this.
Because we have the fullpicture, you need to adjust the
(36:14):
priority, what something gives,because you only have limited or
set amount of recruitercapacity.
This is impossible to do today.
It's all.
It is so different that thetalent ops person will come in
and look and say, well, I can dothis, and you're a very
persuasive VP of engineeringLike you got to do this for me.
How the hell will we bloody,survive if you do this?
It's going to be Armageddon.
(36:37):
And they're like, oh shit, I'mgoing to try and do it.
You're just signing up forfailure, right?
But a human telling you this.
You will try to overcome thehuman and try to apply pressure.
A machine telling you this.
You will say, oh, intelligence,I need to make sure I take a
look at this.
Right, I'm a VP of engineering.
Of course, this AI is right.
Right, it's just thatperception.
All I'm doing is we are takingthe intelligence of the human
(37:00):
what a human was crunchingnumbers and coming to you after
the fact or maybe they nevercome to you to complain?
The AI will complain to you andgive you feedback in real time,
right?
So that is what is theimmediate output.
You come into Team Ohana nextquarter.
You have this feature turned onfor you, right?
The future where we are goingis a people.
When they especially thinkabout planning, they have a lot
(37:22):
going on in their head.
What if I promote to Shah thethree people that report into
this person?
I move it to them.
Then I hire four new people,but instead of hiring in San
Francisco, I'm going to hire inMexico or in India.
I'm going through all of theseideas.
Imagine you just rattling thisoff into a voice assistant in
(37:46):
Timo Hanna, right, I'm justcapturing this.
And then you say, what would itlook like?
And I just design an org chartfor you.
Then you say, how much would itcost?
I show you the cost, because Ihave all of this information.
How long would it take you totake me to hire these people?
I have that information and Ican show you two levels of
(38:08):
information.
One is based on yourhomogeneous data of you as a
company, based on yours, and theother is data from the market,
or data from all theheterogeneous data that is
coming from all the othercustomers of T Mohana anonymized
, cleaned up.
You never know anything, butthis becomes the collective
intelligence of the community,helping all of us make better
decisions.
Right, that, what I call issuper intelligence.
(38:28):
That's a little far away, butaugmented intelligence is very
near.
You can.
We'll talk in three months and Ican give you a demo.
Speaker 2 (38:38):
Well, I might have to take you up on that.
That is probably a good placeto stop.
This has been such a coolconversation, really excited for
what you're doing and lookingforward to your continued
success.
Thank you for coming on.
Speaker 1 (38:51):
Thanks for having me.
Speaker 3 (38:53):
Thanks for listening to See to Exit.
If you enjoyed the episode,don't forget to subscribe and
we'll see you next time.
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