Key Stats: People First RH on Republic
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The People First RH team has been selected as a “Deal to Watch” by KingsCrowd. This distinction is reserved for deals selected into the top 10%-20% of our due diligence funnel. If you have questions regarding our deal diligence and selection methodology, please reach out to email@example.com.
The People First RH founders are part of traditionally underrepresented groups in startup investing.
The #MeToo movement and other progressive awareness-raising campaigns have shined a renewed spotlight on discrimination and harassment at work. However, the problem is not a new one, and it occurs on a surprising scale. From 1997 to 2018, the Equal Employment Opportunity Commission (EEOC) received 1,889,631 discrimination complaints.
Discrimination and harassment take many forms. They are often tied to race, gender, sexual orientation, and other identities that mark employees as “other” than the majority. In 2016, the EEOC’s comprehensive study of workplace harassment found that anywhere from 25% to 85% of women reported having experienced sexual harassment in the workplace. Furthermore, 42% of American workers reported to Glassdoor that they have experienced or seen racism at work.
Discrimination and harassment are not only traumatizing for victims, but they are also costly for employers. A 2019 Deloitte report found that workplace sexual harassment caused $2.6 billion in lost productivity in Australia (a suitable proxy for the United States, though figures in America are likely even higher). The EEOC reports that employers have paid out almost $700 million to sexual harassment victims via the Commissions’ prelitigation process.
Both employees and employers deserve a modern-day solution to mitigate discrimination and harassment in the workplace. As employers compete in a tight talent market, a diverse and welcoming culture with clear steps taken to address workplace inequality can be a critical advantage in hiring.
People First is a “resolution-based software platform for all types of workplace conflict.” The People First team is focused on providing a streamlined solution for employees to report discrimination, harassment, and other negative incidents to management. The platform also enables employers to resolve conflicts quickly and with empathy toward the victim.
Employees of People First clients can access the People First app to report workplace conflict immediately after it happens, documenting the who, what, when, and where with the ability to add supporting evidence (photos, documents, etc.) and indicate peers who witnessed the event. HR representatives or managers then receive notification that an incident has been filed and learn how the employee hopes that the incident can be resolved (by apology, training, etc.). Employees can even file formal EEOC complaints directly through People First if incidents are not resolved to their satisfaction.
At scale, People First consolidates an organization’s conflict reporting system into one platform. This simplicity provides transparency to all parties involved. People First’s centralized administrative dashboard and tools can help employers identify systemic causes of conflict and work toward safer, more productive workplaces for all employees.
Companies will ultimately be able to subscribe to three tiers of service: Free, Premium, and Enterprise (future). Premium clients pay $40 per employee per year for several reporting pathways (different managers and expected time of resolution). The Enterprise tier, which will launch in 2021, gives companies more escalation paths and advanced reporting tools, including a publishable workplace inclusion score.
People First launched in May 2019 with 12 customers and reports to have grown four times over in the last year. The company was initially bootstrapped by founders and later raised $355,000 from angel investors. People First is on track to generate $450,000 in revenue for 2020, after recording just $1,000 in revenue in 2019.
People First was founded by leaders in marketing, software, and social impact. Co-Founder and CEO Shantanu Rana has over 20 years of experience building and deploying digital marketing campaigns across social, search, and media. He founded a digital marketing consulting firm that grew to 40 employees after gaining experience at KBS, Rosetta, R/GA, and PwC.
Kamael Ann Sugrim is People First’s Co-Founder and COO. She has over 20 years of experience in software and social impact. Previously she developed new products at Salesforce, SAP, and the Impact Hub Network. She serves as a board chair and advisor to several global social impact startups. She is also a writer and thought leader in diversity and inclusion.
People First’s third co-founder is Keath Chan, who serves as the company’s CTO. He previously held technical leadership roles at frog design (a leading product design firm), R/GA, Droga5, and Verizon.
People First plans to use the capital raised on Republic to complete enterprise software product development and begin the enterprise sales process. The team aims to sign 150 Enterprise clients and 100,000 users by mid-2021, with the help of a new crop of regional sales managers.
In the longer term, People First plans to expand to global employee coverage, beginning with the EU and Canada. These expansions would allow employees in countries outside the United States to report workplace incidents in accordance with local laws. The company also plans to introduce a resolution recommendation engine powered by artificial intelligence and to refine its ability to provide employers with organizational inclusion and equality scores.
Why We Like It
- Addressing a worthy cause in diversity and inclusion: Recent protests in the United States have further emphasized the need for progressive solutions in diversity and inclusion. People First is leading the way towards enabling safer workplaces for employees of all races, genders, sexual orientations, etc. People First is unique in that it solves resolution in addition to reporting and also monitors for retaliation. This focus is a more comprehensive solution to workplace conflict than tools that simply focus on reporting and leave employers to figure out the rest.
- Positioned in the booming HR tech space: HR tech is garnering more and more popularity as modern workplaces strive to provide more and more comprehensive tools for their employees. The human resource management market is estimated to reach $38.17 billion by 2027 at a CAGR of 11.7%. Venture capitalists continue to pour more resources into the space. Solutions that address diversity and inclusion are perhaps the most urgent areas of investment over other innovations in performance tracking and hiring.
- Strong traction from first year of operations: People First launched its product only a year ago and is anticipating almost half a million dollars in 2020 revenue, a strong indicator of early product-market fit. The introduction of an enterprise product will only further advance People First’s position in the market and allow the company to win huge corporate clients. Revenue from these large contracts can be devoted toward further product development, creating a virtuous cycle of greater social impact and increased revenue.
People First is providing a needed solution to a persistent and concerning problem in the modern workplace. The team has differentiated its product by addressing not only employee reporting of workplace conflict, but also the critical steps of resolution and retaliation monitoring. Early performance seems to indicate that clients are pleased with the People First solution, paving the way for even larger contracts to be signed with enterprise clients in 2021.
People First does face a significant risk from the COVID-19 pandemic, which potential investors should take into account. As businesses worldwide face unprecedented revenue gaps, operational complexity, and the potential long-term impacts of a global recession, are they likely to sign new contracts with non-essential software vendors? This risk may be tempered by the effect of increased racial justice awareness in the United States. However, the long-term impacts of that movement remain to be seen, while the pandemic is certain to wreak havoc on many business categories.
If People First can prevail through pandemic business conditions and continue demonstrating product-market fit with enterprise clients, long-term exit potential is positive. CB Insights notes that the HR tech industry saw over 50 exits per year from 2014-2016. Most of these exits came via acquisition. People First could be acquired by a large legacy player in HR and benefits technology, but it could also integrate into a buzzier new player like Gusto.
The People First team has built a product making substantial social impact in the working world and is being rewarded with impressive first-year revenue. HR technology is a growing space that is no stranger to lucrative exits via acquisition. Therefore, People First RH is a Deal to Watch.
About: Katy dolan
Katy is a marketing and research consultant to startups (including VC-backed companies, small businesses, and advocacy movements). With experience in tech, venture capital, politics, and non-profits, Katy partners with clients to strategize and execute compelling campaigns focused on user experience and empathetic narrative. Katy graduated cum laude from Harvard College with an AB in Sociology.