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Founders and investors sometimes ask me for my views on HR software. Five years into Lattice, here are my general thoughts:
"Is the market big enough?"
This was the top reason investors named for passing on Lattice, and that I hear all the time about other HR startups.
One on hand, it's just ridiculous. ADP, SAP, Workday, Ultimate, Cornerstone, Oracle.
HR is a big market. Lots of people go to work.
This was the top reason investors named for passing on Lattice, and that I hear all the time about other HR startups.
One on hand, it's just ridiculous. ADP, SAP, Workday, Ultimate, Cornerstone, Oracle.
HR is a big market. Lots of people go to work.
On the other, there is a nuance that really matters: bundling.
It's extremely valuable to HR teams to get multiple offerings from a single company. Fewer employee roll outs, cheaper prices, better data integration, less time spent making purchase decisions and managing vendors.
It's extremely valuable to HR teams to get multiple offerings from a single company. Fewer employee roll outs, cheaper prices, better data integration, less time spent making purchase decisions and managing vendors.
So, generally, you have to believe that the company you're building or investing in has the capacity to continually expand its product offering.
Bundle or get bundled.
There are a very small number of exceptions, but I believe this is mostly true.
Bundle or get bundled.
There are a very small number of exceptions, but I believe this is mostly true.
"Selling to HR is terrible!"
Yes and no.
Yes and no.
It's true that HR admins and end users (employees at the company) often have very different needs and priorities.
And as a result you end up with software where employee say "this software is terrible! How in the world is this a public company??"
And as a result you end up with software where employee say "this software is terrible! How in the world is this a public company??"
I'd argue this is still true, but becoming less and less true over time.
HR teams are becoming savvier about employee needs and there's been an explosion of saas tools that increase buyer choice.
As a result, HR teams are baking employee preferences into theirs more these days.
HR teams are becoming savvier about employee needs and there's been an explosion of saas tools that increase buyer choice.
As a result, HR teams are baking employee preferences into theirs more these days.
The other reason people say HR is a bad buyer is because they think they're disempowered and don't have budget.
People have said this for a long time and they still say this, but in my opinion they're just misreading the situation.
People have said this for a long time and they still say this, but in my opinion they're just misreading the situation.
It used to be true. But it's been changing fast and it's really not anymore.
The number of tools that are now "line items in the budget" and there's really no debate about whether or not HR is allowed to buy them has gotten long, and it's getting longer every year.
The number of tools that are now "line items in the budget" and there's really no debate about whether or not HR is allowed to buy them has gotten long, and it's getting longer every year.
Today's best companies empower their HR teams and let them buy the software they need, just like they do for sales and engineering.
HR software does (at least) one of three things: it helps you bring people into your company, it helps you manage the people who work at your company, or it helps you carry out the nuts and bolts of employment.
Each area is huge and has many large companies to be built.
Each area is huge and has many large companies to be built.
Tl;dr: HR software markets are huge and work is changing in fundamental ways. I’m nearly positive there are several future public HR software companies that are being built as we speak.
