Most employees value constructive criticism — and they want more of it. In a recent PricewaterhouseCoopers survey, 60% of respondents said they’d prefer feedback on a daily or weekly basis, and 75% said they believed it’s valuable. Unfortunately for them, regular performance reviews are somewhat of a rarity — less than 30% of workers say they receive them from peers, clients, or customers.
Performance management platform provider 15Five hopes to reverse the trend, and its founders are raising substantial capital to see their vision through. The San Francisco-based startup today announced that it has raised $30.7 million in a series B round led by Siemens’ Next47, with participation from Matrix Partners, PointNine Capital, Jason Calacanis’ Launch Fund, Newground Ventures, Bling Capital, Chaifetz Group, and Origin Ventures. The infusion brings 15Five’s total raised to $42.6 million, and CEO David Hassell says the money will help to accelerate growth, scale sales and marketing, and more than double the workforce to a total of 190 employees by 2020.
“This latest round of funding signifies a paradigm shift in organizations’ people management practices, driven by a new generation of employees,” said Hassell, who ran adventure travel company Kite Adventures prior to founding 15Five. “Millennials perform at their peak when given regular feedback, flexibility in how they work, and growth opportunities. Now as managers, directors and even founders, they see the value of investing in technologies that enable thriving workplaces. We believe that the market has arrived and demand for talent management software like 15Five will continue.”
15Five gets its name from the habit its tools encourage: setting aside 15 minutes each week to write reports and five minutes to read them. Patagonia founder Yvon Chouinard and former Sundia CEO Brad Oberwager were among the first to establish the practice, which was pioneered by Esprit founding employee Doug Tompkins.
Employees use 15Five’s cloud-hosted tools to share check-in critiques with managers, mainly in the form of answers to questions written by management or selected from a research-informed question bank. Middle managers can optionally review or comment on answers before collating the results for higher-ups, or sort and analyze them for trends.
From desktop or 15Five’s mobile app, evaluators can flag or escalate issues within reports, after which employees receive email notifications. HR departments can assign review due dates and milestone meetings from this same dashboard, and set automated reminders. And post-review, bosses can add action items to an online agenda or private notes section for the following week’s session.
Additionally, 15Five offers tools to help structure performance management processes, with the ultimate aim of aligning departmental and team objectives. For instance, employees can set the status of goals — On Track, At Risk, or Behind — while filling out their weekly reports, and can view colleagues’ progress on collaborative objectives as they approach completion.
15Five’s platform plays nicely with apps like Zapier, Slack, Okta, OneLogin, and Namely, and it boasts a robust API that enables custom integrations. More recent additions to the ecosystem include High Five, which enables peers and managers to highlight a colleague’s work companywide.
15Five competes directly with startups like San Francisco-based Lattice, which has raised $24.5 million to date for its software-as-a-service business development tool set, and Reflektive, a self-described “people management” platform provider that’s raked in over $100 million since emerging from stealth in 2014. That’s not to mention LinkedIn acquisition target Glint, which develops a suite of employee engagement tools, and Melbourne, Australia-based employee analytics and staff surveying company Culture Amp.
But investors like Next47 partner Matthew Cowan aren’t concerned. He expects 15Five’s focus on deeper analytics and career-tracking features will (and already have) set it apart from the pack. To this end, 15Five has been cash-flow positive for “most” of the past few years and has 2,000 paying customers (up from 1,700 in December 2018), including Spotify, Indeed, HubSpot, Credit Karma, TechStyle, Citrix, NationBuilder, Vend, Ubiquity, and Warby Parker.
15Five’s basic subscription starts at $7 per person per month. The costlier Plus plan, which starts at $14 per person per month, adds in reports and objectives.
“15Five has established a leadership position in the high-growth market for continuous performance management solutions,” said Cowan. “They have a simple yet elegant technology solution that reflects the needs of the modern day employee. As millennials take on an increased percentage of the workforce and workforces become more distributed, corporations such as Siemens and the customers they serve, are rethinking how they manage their employees. We look forward to leveraging our relationships to help 15Five achieve accelerated future growth.”
Current and former 15Five investors include Richmond Global, 500 Startups, ex-Mashable editor Ben Parr’s Dominate Fund, Yammer founder David Sacks, Ustream founder John Ham, Sincerely CEO Matt Brezina, Simon Sinek, Adam Goldenberg, and Khosla Ventures partner Ben Ling.