Denver Startup Helps Employees Become “Convercent” in Values, Culture
Bosses don’t have many ways to measure the health of their companies’ corporate culture.
Sure, they can take surveys or try to extrapolate from indirect measures—or they can suddenly call the entire staff together, offer everyone the chance to quit with two months pay, and see who leaves.
Patrick Quinlan, CEO of Convercent, tried the last approach this spring. It was the type of dramatic step Convercent’s software might help users avoid.
Convercent is a Denver-based company that’s developing software that companies can use to teach employees about corporate values and policies and get feedback about how well they are complying.
This summer Convercent will release the second version of its software package, which Quinlan says gives companies a quick but detailed snapshot of their corporate culture. The software generates a numerical score like a FICO credit score for individuals, departments, and the company as a whole. The rating can help businesses fix current problems and take steps to avoid future issues.
It’s a subtler way of finding out what Quinlan wanted to know in the spring. Convercent had just closed a $10.2 million Series A round and launched its first product. Everyone was proud of what they’d done, but the collective energy was down a bit. Quinlan wanted to find out who was ready and committed to keep pushing forward.
“I wanted to find out who believed. There was the excitement of the fund raise, there was the huge launch where we launched the product where everyone had worked their asses off for six months, and there had been a lull after that. There had kind of been a sense that we got to the finish line, rather than we’re at the starting line,” Quinlan said.
To his surprise, no one left.
“One of the things we know here is we have a very motivated, engaged staff, and I can tell you with absolute certainty none of my employees is looking for a job,” Quinlan said when I visited Convercent’s office in May.
Since the visit, Convercent has raised another million dollars and come out with version two of its cloud-based suite. The company is hiring at a rapid pace, and by August it should have nearly 80 employees. It began the year with 15.
Convercent recently finished building out a new office, where it is hosting a meetup Tuesday evening that’s open to the public. Reps from other startups and Denver Mayor Michael Hancock are scheduled to attend.
Employee education is a part of Convercent’s vision. Its name plays on the word conversant, which means knowledgeable and well-versed.
The tools Convercent offers let medium to enterprise-size companies educate employees about best practices, ethics, and corporate policy. They also help HR departments bring on board new employees, share training info, and organize company- or department-wide campaigns.
Convercent does that by centralizing documents, instructional videos, and other materials in a secure cloud. Policies can cover everything from sexual harassment to rules about using mobile devices on the company network to complying with Sarbanes-Oxley. Managers can quickly add or update documents and see who reads or watches the material and completes course reviews.
Quinlan acknowledges it seems a bit dull at first, but these things create huge and costly problems when they go wrong. Helping mitigate problems is part of the initial appeal, but Quinlan believes Convercent also can be used to promote values like sustainability and public service. He believes that aspect will become important as companies like Whole Foods Market create brand strategies around values they share with like-minded consumers.
Convercent is built around the idea that the current way companies monitor compliance is costly, outdated, and inefficient. Typically, companies only learn of problems after the fact, when fixing them becomes expensive. That makes compliance a major, albeit necessary, cost center, and the software currently out there is not very powerful.
“We created this technology because everything else in the market sucks,” Quinlan said.
A key feature of Convercent’s suite is a dashboard featuring a numerical score that tells management whether the materials and policies are being read and followed. The software gives companies a way to identify problems in real time and take action, or helps predict which employees or departments might need more attention.
Convercent’s goal is to make a product that’s more efficient and can show a positive return on investment as the savings it generates begin to exceed what companies spend on compliance. Software licenses are $50 per employee per year, with custom pricing available for very large clients.
Compliance and governance is a $3.6 billion market, and Convercent already has 450 customers, according to Quinlan. The company had revenue of $3 million last year, and Quinlan said it will at least double that this year.
Quinlan said Convercent’s focus now is developing its customer base and adding employees. The most recent investment money will go toward scaling up operations as the company emphasizes rapid growth over immediate profitability. The goal is to set Convercent on the growth path that software-as-a-service companies like Rally Software and Tableau Software have followed recently to IPOs.
It’s an ambitious goal for a startup, but Convercent isn’t quite a typical startup—and its management team has a track record of success.
Convercent’s corporate roots go back to the 1990s and a company named Business Controls Inc. BCI provided hotlines and case management software for companies trying to minimize and track employee misconduct.
BCI had a healthy business that had about 400 customers and 30 employees at its peak, former owner and president Steven Foster said. The company was successful at the old way of doing compliance by collecting tips and leading follow-up efforts, but it seemed to have maxed its revenue out at a few million each year.
“We knew we had great technology, but we needed to renew and refresh it,” Foster said. To move BCI forward, it might have needed new management and investors as it made a big pivot.
As BCI was trying to set a new course, Quinlan’s previous company, Rivet Software, was also going through a major transition. Rivet develops financial reporting and analytics software public companies use to file information with the SEC.
During Quinlan’s tenure as CEO, Rivet grew into a market leader with $60 million in revenue. Rivet worked with more than 1,500 public companies and amassed an impressive number of awards from publications like Inc. and Red Herring.
But in 2011, Quinlan left Rivet following a disagreement with its founders and chairman about the company’s long-term strategy. Rivet’s chief operating and information officers followed Quinlan, and together they formed Nebbiolo Ventures, an investment firm.
They still wanted to run a tech company, Quinlan said, but they didn’t want to start a company from scratch—and they wanted ultimate control.
As Quinlan and Foster tell it, they found each other through contacts in Denver’s tech industry. BCI was an attractive takeover candidate for Nebbiolo Ventures because it was generating revenue and was in a business-to-business market that was overlooked but offered potential for rapid growth, Quinlan said. So important building blocks were in place.
Foster also was willing to sell the company and step aside as Quinlan and his Nebbiolo partners moved into the top management positions.
“It was a little scary, a little new, but it was the right thing for us,” Foster said. He remains an investor and board member.
BCI was renamed, reorganized, refocused on cloud-based software, and relaunched January 29 as Convercent. Azure Capital Partners and Mantucket Capital are investors.