How Rypple’s co-founders are turning feedback into a million-dollar business

Posted by Team Sprouter

Daniel Debow didn’t realize the business plan he helped write would turn into a $100 million company. He was approached by entrepreneur David Ossip to help write the plan for Workbrain, a workforce management software company that went from idea to revenue in seven years, and eventually sold for $227 million. “Workbrain was an incredible experience for learning how to be an entrepreneur – from an idea to $100 million in revenue in 7 years,” he says.

Rypple co-founder David SteinBefore that million dollar business plan though, Debow was exploring entrepreneurship by organizing rock concerts in high school. I realized that I loved getting people together for a common cause to create something awesome,” he says. Debow’s former Workbrain colleague David Stein also had a fascination with business from a young age. “As a youngster, I started out building and selling airplanes to kids in the neighbourhood,” he says. “After high school, I went to work with my father in the diamond and jewelry industry. I learned about hard work, negotiating, and the importance of customer service.”

Debow says he learned a lot during his time at Workbrain, including the fact that startups need to iterate like crazy. “The first idea for Workbrain wasn’t what we ended up becoming, and we had no idea that the main market segment and product – scheduling for very large etailers – would be so huge.  If we hadn’t have moved fast to respond to market opportunities – and taken risks – there is no way it would have been so successful.” He also learned early on that while it might sound cliche, a great team is the key to startup success. “We used to run at complex, hairy problems at Workbrain, taking on projects that others would avoid.  If we didn’t take so much time to find great people – and build a great culture – there is no way we would have had the confidence that we could deliver.  But we did, and we could.” Finally he says he learned to take action in the moment to avoid fatal problems. He says he’ll never forget moving almost 50 people to Atlanta over a weekend after Ossip realized that SARS was going to impact their consulting revenue when customers banned their service people from their premises. “It was incredibly bold, risky – and completely the right move.  Don’t dither; take action – that’s the lesson.” Stein reiterates the importance of team, and also says you have to be bold and unreasonable about what you can achieve. “Set aggressive goals and work to make them happen,” he says. “If you don’t plan, you likely will not achieve it.” Stein also says perseverance is key. “In building any business, you will have ups and downs, but those who persevere achieve great things over time.”

In 2008 Debow and Stein decided to start a new company, Rypple, which provides web-based feedback software. Users can give colleagues public recognition, set goals, and give anonymous feedback.  The two are now co-founders as well as co-CEOs. Debow says the idea for Rypple came from a few places,, and the first was a personal itch. “We didn’t like the formal processes we set up a Workbrain.  They were ’state-of-the-art,’ and they really didn’t do anything for the high-performers that we had brought on.  In fact, they were painful.  We realized that the next generation would want new solutions for real-time feedback, coaching and recognition – something entirely re-thought, and based around how people work today, not a formal process.” He also says that at Workbrain they got to see and meet with many of the existing players in the Human Capital Management market and talk to their customers. They realized that almost everybody hates traditional performance reviews, and yet they persist. But he says that Rypple wasn’t really an ‘idea’ they thought up. “Instead, it was an iterative process of finding a big problem in a very large market and iterating very fast, with real users, to build something that people love.”

The biggest challenges building the business were developing a low cost user acquisition funnel and a highly engaging product that attacks a very entrenched business process with a different model. “There are a lot of moving parts in people management,” he says. “So, designing every little element of the Rypple experience take a ton of experimentation and trial and error.”

Business at Rypple is booming now, with a client list that includes Mozilla and a recent round of funding worth $7 million. Debow says they employ a simple strategy to attract big-name clients. “Build something that people love to use and let them spread the word,” he says. “Until very recently, we did had no PR firm, had no traditional marketing, no sales people – nothing.  Everything was based on word of mouth.” He also says that when it comes to signing big clients, you need to know when to say no. “We knew that a really simple, easy product made for managers and employees would help us grow.  So, initially we turned away many large organizations who wanted to work with us because we felt that that putting our resources in the large enterprise sales cycle would distract us from the core mission.” He says raising money this year was key as it lets them add people and resources that will help get them to the next level. “As the service has matured, we’re ready to help larger organizations.  This takes talent and technology. We’ve already opened an office in San Francisco, and are hard at work on major product innovations.” Stein says the key to attracting big-name clients is having a vision that is unique, exciting, and yields great benefits for the customer. “Deliver a delightful product that their people like to use and that adds value to their organization.”

Debow’s been a part of startups at every stage of the game – from idea to acquisition. He says his biggest advice to new entrepreneurs is to just try things. “There are no secret magic answers to most problems.  The way you learn is by doing things, quickly,” he says. “Spending time pontificating in the office won’t help.  Getting out and talking to real customers, building prototypes, listening carefully and moving quickly will help you until you find out the real problem you are solving.” Stein says startups need to think from the perspective of the client they’re serving. What is their pain? How can you solve it differently, or better than other people? He also says you have be patient, and says that most great businesses take seven years to build.

It’s only been a few years for Rypple, but Debow and Stein are excited about where the company is heading. “2011 is going to be a big year for us.  We’re going to be making some great enhancements, announcing some major partnerships, and generally capitalizing on the momentum that’s been building,” Debow says. As for him personally? Well, aside from being all Rypple all the time his big goal is to get his band to play live sometime soon. Stein has a similar big goal: prepare for a big race in the spring. Meanwhile, the race to build Rypple into a household name continues.

Company:
Rypple
Website:
http://www.rypple.com
Location:
Toronto, Ontario, Canada

Long before Rypple, we started a software company called Workbrain. Workbrain helped huge companies schedule and pay people. Within a few years, we grew to over 650 people. Like every big company, we set up a "Performance Management" program. We thought that formal reviews would help us manage people and the business. They did. Sort of. Our process helped the company but not our people. It calculated bonuses and... more

Company:
Sprouter
Website:
http://www.sprouter.com
Location:
Toronto, Ontario, Canada

Sprouter facilitates networking and collaboration between entrepreneurs globally. Providing a platform for users to connect with other innovators, entrepreneurs can expand their networks as well as discover and join events in their local areas, start discussions and follow topics of relevance to their business. Start connecting at Sprouter.com more


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Team Sprouter

Team Sprouter

Sprouter is where founders get help with their startups. Sprouter allows entrepreneurs to get curated answers to small business questions from people who know what they’re talking about. The site’s carefully chosen panel of experts provide advice on a variety of topics including law, marketing and funding. To ensure quality, answers aren’t crowdsourced, they’re gathered from proven experts.... more



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