Annual employee appraisals are a cornerstone of every employee-manager relationship, but annual appraisals are scrutinized as an outdated and inefficient model. Clear Review has built the performance software that facilitates ongoing, meaningful conversations that provides valuable feedback and dialogue for continuous development rather than a once a year review. The platform includes “Talent Snapshots” that allow managers to instantly provide performance insight through its simple survey technology, which is enhanced by the information gathered from Clear Review’s ongoing-employee check-in. The agile platform has attracted numerous customers (200+ and counting) including football clubs, CYBG/Virgin Money, Ricoh, and Kennedys. Since Clear Review’s 2016 launch, the company has expanded to serve the US.
London TechWatch chatted with CEO Stuart Hearn to learn more about Clear Review’s origin, future plans, and latest round of funding, which brings its total funding to £3.1M across two rounds.
Who were your investors and how much did you raise?
Our second round Series A investment raised £2.6M and was led by AlbionVC, with Mercia Technologies also participating. Clear Review previously raised £500,000 in March 2018 from Mercia Technologies (our first Series A round).
Clear Review enables organisations to move away from broken annual appraisals to more meaningful, continuous employee feedback. Our cloud-based SaaS performance development platform promotes and enables more frequent employee feedback and continuous employee-manager conversations.
What inspired the start of Clear Review?
As a former HR Director in my past life, I experienced ongoing frustration with outdated and ineffective annual appraisals. Existing performance management processes and systems were tedious and time-consuming, which led to traditional annual appraisals being viewed as a tick-box exercise by both employees and managers. Apart from creating copious amounts of admin, the worst part was that the employee was receiving little to no value in performance improvement and coaching.
As a result, I was compelled to create and deliver an altogether better and different solution that would improve people’s working lives and deliver the performance and productivity gains that come with this. Specifically, I wanted to deliver an ‘in the flow of work’ solution that would facilitate more frequent feedback and more meaningful performance conversations – something that I believe is essential to people engaging with, and getting value from, a performance management system.
The Clear Review platform that we have today is therefore very much focused on people and relationships rather than systems or even the technology. That’s really informed the way that we’ve built the Clear Review product. It doesn’t matter how smart an idea is: if it doesn’t mesh with how people behave, it will struggle to work.”
How is Clear Review different?
Clear Review is built around facilitating and enabling high-quality conversations. Our belief is that meaningful human connection is what moves the dial, so our tech is geared towards instigating, facilitating and supporting high-quality developmental conversations that are enriched by real-time feedback and tailored coaching questions. It does this by acting as a framework for managers and employees, helping them to set up those conversations and prompting them with questions and topics to ensure that the conversations are useful and developmental. It also provides a process for giving and receiving feedback, helping teams to put positive and constructive feedback at the heart of their relationship.
As a company, we also consistently aim to differentiate ourselves from the competition by prioritising engagement and adoption over complexity. Unlike our competitors, Clear Review’s technology ideology and product methodology are laser-focused on providing the most simple and easily adopted user experience in the world. Other technology tends towards large amounts of data capture, which drives a ‘bells and whistles’ product with a lot of dashboards and numbers that are not well understood. Conversely, Clear Review strips away unnecessary box-ticking, drop-downs, and fields in favour of a ‘jobs to be done’ approach which is predicated solely on what the user is looking to achieve. Clear Review delivers an ‘in the flow of work’ user experience, rather than constantly pushing to extract data for reporting purposes.
What market you are targeting and how big is it?
Clear Review’s core target market is the UK, accounting for 80% of total revenue generation, and encompassing mid-size and enterprise customers spanning all industry sectors. We have experienced rapid growth since launching in 2016 and recently surpassed both the £1.5M revenue and 200 customer milestones.
We see our solution as having an application across the business world and our current customers include central government departments, local councils, financial institutions, football clubs, and law firms, and so we foresee immense growth possibilities. Key customers include CYBG/Virgin Money, Ricoh, Kennedys and The Valuation Office Agency (VOA).
In addition to the UK, Clear Review is also currently developing its reach into and across the US, with 20% of total revenues currently hailing from this market. The recent funding will be used to drive further expansion into the US over the coming year, with the company expanding its operations and establishing an office in Boston, MA.
What’s your business model?
We’re a SaaS business. Attracting and retaining customers – obviously – is our lifeblood. But we believe in simplicity: we make a point of publishing our prices clearly on our site; we don’t have a big suite of additional features to upsell people. Clear Review is about human-centric thinking backed up by good design. Without that simplicity, it wouldn’t be the success that it is.
I speak at many HR industry events, as do other members of the Clear Review leadership team. This has provided a valuable inbound marketing platform from which to build a community of engaged prospective customers who want a better alternative to the ineffective annual appraisal.
The Clear Review sales team has also grown rapidly over the past year in line with the company’s upward growth trajectory. The organisation now has a dedicated sales team of three people, with plans to add three more new business/product demo managers over the coming year. Likewise, we are investing heavily in our marketing team. We expect to add our 4th hire of 2019 to this department in the coming weeks.
Who do you consider to be your main competitors?
Our closest competitors are Betterworks, Reflektive and Lattice.
What was the funding process like?
The process was actually quite enjoyable and a great learning experience. I really enjoyed meeting with a wide range of investors and the various discussions I had helped me to hone some of my thinking about our growth strategy. What helped minimise the stress was having a great management team beneath me that could keep the business growing while I was out meeting investors and preparing the required materials. I also engaged a consultant to help with the process and she helped me prepare the investor deck, business plan and introduced me to relevant Series A investors.
What are the biggest challenges that you faced while raising capital?
Finding the right investor that understood our principle of ‘responsible growth’ – raising the right amount of money to grow ambitiously but responsibly in a way that is positive for our employees and our customers. For us, this meant raising the money necessary to continue growing 100% year on year. However, once you have proven product-market fit as we do, many investors want to put in a serious amount of capital to propel you into ‘hyper-growth’ mode, and whilst that is right for some companies, for us, I felt it would be detrimental to the wellbeing of our employees (and me!) and might negatively impact our customers.
You might only get one shot at running a successful scaleup, so you want the growth to be an amazing experience, and not something that burns out you and the team in the process. Fortunately, we found a number of investors that did understand our ambitions and what was important to us, including Albion Capital who we choose to go with, in the end.
What factors about your business led your investors to write the check?
Emil Gigov, Partner, AlbionVC, explained what attracted AlbionVC to invest: “Businesses are increasingly disappointed with their performance management tools and processes and the impact that ineffective annual appraisals are having on organisational performance. Clear Review’s flexible software solution and thought leadership in continuous performance management are delivering on employees’ rising expectations of continuous feedback and agile goals. We were particularly impressed by the overwhelmingly positive customer comments and the high user adoption rates of Clear Review’s system. Stuart and the talented team at Clear Review have an exciting opportunity to continue supporting businesses in transforming their performance management approach. We’re excited to support Clear Review in their next stage of growth.”
What are the milestones you plan to achieve in the next six months?
We have a sizeable revenue target to hit for Q2 and Q3. We’re also keen to ensure that our customer retention rate continues at its excellent level. We are planning to ramp up our activity in the US – we already have a number of US-based clients and believe there is great potential to grow there – and we aim to onboard our 40th staff member by the end of the year.
What advice can you offer companies in London that do not have a fresh injection of capital in the bank?
We bootstrapped Clear Review for the first 2 years of our life with my own savings, money borrowed from friends and family and a £50k bank loan which I had to give a personal guarantee on. I think that teaches you a lot about how to hustle and be creative, as well as being responsible with money. And because you don’t have much money, it forces you to develop software in a truly agile way. You simply don’t have the money to go to town on developing lots of features, so you have to identify the simplest and fastest way to deliver value to customers. One of the keys to Clear Review’s success has been its simplicity, and I think we might not have had that if we’d been venture funded early on. So my advice to companies is to focus on simplicity and only build what you really need to build at first, to keep your early costs as low as possible.
One of the keys to Clear Review’s success has been its simplicity, and I think we might not have had that if we’d been venture funded early on. So my advice to companies is to focus on simplicity and only build what you really need to build at first, to keep your early costs as low as possible.
Then once you have some paying customers and are getting some evidence of product-market fit, look for funding to accelerate your growth and invest in your team and tech stack.
Another important piece of advice is that raising money always takes longer than you think, so leave yourself enough time – at least 6 months. You’ll end up having to meet with interested investors a number of times each, and getting diaries aligned can take time, plus the due diligence and legal took us a lot longer than we anticipated. Fortunately, with some careful cost control, we had enough money to keep going through this, but I’ve had conversations with other entrepreneurs who were close to running out of money and that impacted their negotiating position and ultimately their valuation.
Where do you see the company going now over the near term?
Our immediate priorities in the near term will focus on talent acquisition, continued product development, US market development, and consolidating Clear Review’s position as the UK category leader in a new breed of performance management technology.
Specifically on the product side, and following the recent build-out of language functionality, the new funding will see the product develop in areas such as an Outlook extension, Natural Language Processing (to enable employees to set better goals) and API/integrations, as well as further development of the way the product supports collaborative team performance.
What is your favorite London pub to grab a pint with the team?
We often end up in The Fence on Cowcross Street. But we’re spoiled in Farringdon: there are two pubs on every corner.