When Sandi Lin and Jason Stewart left Amazon to start their own company, they noticed one common thread between software companies in construction, retail and business: they all needed help getting employees at their customers to actually use their tools.
“It surprised us how universal the experiences are,” says Lin. “We can all relate to the experience of getting frustrated with a piece of software.”
The answer to making software easy, according to Lin and Stewart, is more software. Their startup, Skilljar, tackles the onboarding process when employees start using a new tool. With hundreds of customers, the Seattle-based startup is now raising a lot more money to grow faster. The latest is a somewhat unusual co-led $16.4 million Series A raised from both Mayfield and Shasta Ventures.
Skilljar got going in 2013 after Lin and Stewart struck out on their own, and had previously raised a $1 million angel round the following year and a $2.6 million seed round in 2015. That investor, Trilogy Equity Partners, is returning in the new raise. What makes Skilljar’s funding somewhat unusual is that Lin put together her own preferred duo of investosr across firms. In tapping Mayfield and Shasta, she’s working with Rajeev Batra and Doug Pepper, two investors who worked together in the past as co-investors in Marketo. To a first-time founder like Lin, getting go-to market advice from the Marketo VC team was an opportunity she couldn’t pass up. So she asked them to share. And in a lesson for entrepreneurs with a hot product: the VCs couldn't resist.
The startup plans to grow its headcount from 40 people to more than 100 in upcoming months, while starting to build out its sales and marketing. Lin says Skilljar has about 150 customers today, including MapR, Procore and Zendesk, which typically pay five-figure and occasionally six-figure contracts based on their size. At Mercado Libre, an online marketplace in Latin America, employees use Skilljar to train third party sellers on how to use their platform, with about half completing a two-hour-plus training program. More typical completion rates would be one-tenth of that, says Lin.
Skilljar’s new venture capital investors hadn’t intended to work together when they started pursuing Lin and Stewart. Mayfield and Batra had met the entrepreneurs early in their process through another founder and been impressed at how the company could improve customer experiences. Pepper and Shasta met Lin through a mutual contact who’d worked with the VC at Amazon. Both pursued a deal, only to hear that Lin wanted them to share. Co-investing with Marketo had worked out well. So the VC firms made a “fairly unique” decision to split the deal, according to Pepper.
What Skilljar hopes to replace, according to Lin, is a current Frankenstein approach to onboarding that combines in-person classroom training with software that she argues wasn’t intended for employee onboarding at all. Cornerstone OnDemand went public offering training software, but more typically for new employees, not customers. And while a host of companies now offer “customer success” software that can monitor whether a company is using your software less, and thus more likely to cancel in the future, Skilljar and its investors argue that much of the healthiness of that relationship is set early when the customer company first gets its staff onto the new tools. “When everyone has the same widget, how do you differentiate?” asks Batra. “We have companies that alert you to customers who might churn,” explains Pepper. “The next goal is to retain customers in the subscription economy, and you do that through training and development.”
Eventually Skilljar, which also took the unusual step to crowdsource its name, hopes to follow in other business software companies footsteps and become a “platform,” meaning it would provide a dashboard on training levels and levels of use that would help businesses assess how their product was being picked up. Skilljar already offers certificates to customers so they can reward and mark users who complete training.
For companies that sell software – an increasing proportion of businesses – Lin says she hopes the new funds will give Skilljar more credibility to work with the largest of companies. Four of the country’s largest 100 companies by revenue use Skilljar today. Skilljar hopes that number will look small in a few months time.
Update: Before Skilljar's name change and shift to its current business model, Skilljar graduated from TechStars Seattle as Everpath. A third cofounder, Doug Gradt, returned to work at Amazon in 2014.
