How One SaaS Founder Went From Bagging Groceries To Building A Multi‑Million Dollar Business
Chad Halvorson of When I Work on building a business that solves a painful problem for the hourly workforce.
While many entrepreneurs cut their teeth selling lemonade or baseball cards as kids, Chad Halvorson got his start bagging groceries.
And while it didn’t teach him how to qualify a lead, make a pitch or close a deal, it exposed him to a nagging problem that he would later go on to solve in a big way.
Today, Chad is the Founder and CEO of When I Work, a company that builds employee scheduling software for hourly workers.
When I Work, born from Chad’s own high school frustrations with scheduling at his grocery store job, has innovated their way to tackling a problem that many have tried to solve, but few have succeeded.
With more than 30,000 businesses using When I Work’s software today, the company had its first million-dollar year in 2013, and has “doubled that several times since.”
Today, When I Work is signing up more than 800 new customers each month.
We talked to Chad about the story of When I Work, the challenges he faced building the company and how they got to where they are today.
How Chad Halvorson Went From Bagging Groceries To Building A Multi‑Million Dollar Business
Chad’s Early Fascination With Technology
Working as a grocery store bagger in his teens, Chad didn’t focus on many of the same things as other kids of that age.
I was so obsessed with technology, and trying to make things out of technology.
That was where I spent all my disposable income: on things I could play around with.
For me, the $200 or whatever it was that most people would spend on something more applicable to a 17 or 18 year old, I was using to buy software to learn how to do 3D animation and things like that.
It’s that obsession that led Chad, annoyed by the tedious nature of scheduling at his job, to register wheniwork.com in 1998.
Domains were far more expensive to host back then, and this one cost Chad nearly $300 per year; no small price on a teenager’s wage.
But he didn’t just sit on the domain…at first.
I built a prototype.
I built the first version of a product that would allow someone to create a schedule on a web page and post it. Unfortunately, it didn’t have legs, and I parked it.
There were a number of reasons that the idea didn’t take off at the time…
The hourly workforce that I was targeting was very fragmented from an economic perspective.
Not everybody had computers in their home, not everybody had high speed internet.
Only students really had access to connectivity available to them. And then, pile on top of that the whole fact that at the time, the idea of web software for business use to make your business run better wasn’t really a prevalent thing.
People used the internet to look up stuff and go on Amazon.
Chad shelved the idea (though he kept the domain), and went on to work on other things.
The Agency Days, And Learning To Run A Business
For the next ten years, Chad built a consulting agency, where he did web and application development as the market began to realize the value of software for business.
The experience taught him valuable lessons about how to run a company.
There are lessons you learn in the service business that are hugely valuable in the software business.
You learn about cash flow.
You learn how to run a solvent business
You learn how to make payroll.
You learn how to how to define the scope of a project and not let it get out of hand, because you have a budget for it.
You learn about customer service.
Our business was based very much on client relationships, and I took a lot from that.
Returning To The Scheduling Problem
In 2008, Chad began to consider whether his earlier idea finally had some legs.
I took a really hard look at the market and saw something:
Nothing had changed in the space of scheduling or workforce management; it was the same crap that was there 10 years earlier, and there was no innovation. No mobile strategy. Nothing.
I ’ve been building software and learning about product development for 10 years, and I thought: let’s build something that’s extremely easy for people to figure out and use and let’s lead with mobile, because by that time there was obvious proliferation.
Mobile was becoming a platform for delivering information, and if we were to capitalize upfront on mobile, we could be in a unique position to deliver something very transformative to the hourly workforce and to the businesses that employ our workers.
Digging deeper, Chad realized that the problem from the customer's perspective was still just as frustrating:
I’d walk into any retail store, any coffee shop, any restaurant, and I would ask the employees: “How do you get your schedule? How do you know when you work?”
And they would say, “well, it’s on a piece of paper in the break room.”
Just by asking people in the environments where you think your product is going to be valuable what they do now to solve the problem that you’re trying to solve is probably the best way to validate your assumptions.
After doing that for 10 years on and off, I couldn’t really ignore it any longer: there’s a problem here, it’s been a problem since I was experiencing it 10 years earlier, and it hasn’t been changed or improved upon.
To validate the problem from the business’ side, Chad took to the internet.
I did a lot of research to determine that there was a demand for it from the business perspective by doing keyword research on Google.
I needed to make sure that this wasn’t just a problem that employees are having, but that there are business owners and managers that are looking for a solution to this problem.
When Chad realized that there might really be an opportunity to step in and make something meaningful, he jumped in.
Figuring Out Who When I Work’s Customers Were
The market for hourly employees is massive.
Seemingly infinite, even, when you consider all of the businesses that rely on an hourly workforce around the world.
So at first, the challenge was to narrow down exactly who to market to.
We really didn’t know who our customer was in the early days.
When we thought about what the keyword strategy was going to be around how we optimized the website, and optimized the traffic, and optimized the searchability so that people that were looking for “scheduling software” or “staff scheduling software” would find us, the only thing we had to go on were these very broad terms.
I wasn’t optimizing for “retail scheduling software” or “restaurant scheduling software” because it was too narrow, so we went broad.
That allowed us to get that early traction of leads and trials and early customers, but then what it ended up validating for us was that the problem that we were solving was having much more impact outside the area of where we were actually trying to solve the problem.
We thought it was restaurants, retail and hospitality where we would have the most impact, but what we learned as we started to build this big, wide funnel, was that we were finding success in healthcare, law enforcement, personal care, museums, theme parks, water parks, dog walking businesses, all of these different kinds of businesses that you don’t instinctively think of when you think of hourly workers.
It was through that kind of discovery that we learned that we didn’t really know who our customers were.
When we started to look at the data, we eventually got to the point where we saw ourselves making a really big impact in the small business space and having a really strong growth opportunity within a large space that was hungry for something that would help them with this problem.
What the team ended up decided to do was strategize their marketing not around verticals or industries, as many companies do, but around the size of the customer’s business.
Businesses in all sorts of industries were having this problem, but while it’s a horizontal when it comes to industry, the target market is very narrow when you look at the size of business that’s getting value from it.
Most of our customers have between 20 and 200 employees, McDonald’s isn’t using our platform. Best Buy isn’t using our platform.
We learned that we had to optimize it for an operator or a manager of a small business that’s either doing this on Excel or a piece of paper or using some kind of archaic system that’s complicated and clumsy.
Marketing To A Huge Audience
With a massive, deeply fragmented market (small businesses), When I Work had a big challenge on their hands when it came to figuring out how to get quality leads into their funnel.
Chad turned, again, to the internet.
We focused on digital marketing to build the apparatus that was going to drive the leads.
In the early days, we didn’t spend any money on acquiring customers, because there was no money to be spent.
It was pure time and grit and optimization of the website from an SEO perspective.
This was before all of the changes that have happened in SEO over the last several years, so at the time it was about having proper title tags, and ensuring that we had “employee scheduling software” in all of the H1 tags.
It was about getting links back to our website from other websites and directories. I would spend hours and hours tweaking little things, everything from the headlines on pages to the title tags, to the copy, and then wait a month to see if that changes the rankings or the traffic.
We were also sending tons of emails we were sending to small businesses to tell them about the product.
It was about doing whatever we could, because there was no budget, and very little revenue in the early days, so we had to rely on SEO and email marketing.
At that point, the key was delivering the best possible service and product experience we could.
We were listening to everything our users said, and responding 24 hours a day to capture as many customers as we could in those early days.
We would send 100,000 emails out to a list that we had built, and we might get 10 customers from it. So it was a very brick-by-brick approach to build the foundation of a strong community of customers who would tell others about their experience with us.
Building a Two-Sided Customer Base
When I Work has what many call the “platform challenge”: having to market to not one, but two completely different audiences.
One is employees, who check their schedule with When I Work, and the other is businesses, who make the schedule.
Both are important, but it’s the businesses that make the buying decision.
Nine months before we launched the product, we set up a landing page that just asked for an email address, and it had a little blurb about what we were building.
We built a list of people that filled that out, and on that page, we asked: “Do you check the schedule, or do you make the schedule?”
We thought that would be a good way to determine who’s actually searching for this stuff, and we had about 600 people that make the schedule and 150 that check it, so that was validation that we were getting traffic that was potentially valuable for attracting paying customers.
Once we had that list and we went to market, we probably emailed that list 100 times in the first year, and we got our first couple dozen customers from that list.
But, Chad says, they didn’t want to leave out the employees.
We’ve always focused on having really good customer service and a really great product experience.
Turnover in an hourly environment is pretty high.
If you work at a restaurant or a coffee shop, the average time there is less than a year.
So if you’re using our product at that place, and loving the experience, and then you go get another job somewhere else that has the schedule posted on the wall, you’re going to be a lot more likely to suggest to your boss or manager that they should check out When I Work.
So we put a lot of focus and energy in trying to create a great experience for the employee, because we know that they’re going to have a voice when they change jobs.
Expanding the Marketing Mix To Include Advertising, Content Marketing And More
As the company grew, it was able to test paid acquisition, and found some big wins there.
We have PPC strategy now where we’re buying AdWords and Facebook ads and that sort of thing.
That was huge for us; we were able to tune our Facebook ads to where we were able to generate a lot of installations of our app for very cheap. It ended up costing us less than a dollar per install using the targeting tools on Facebook mobile ads.
We figured out Facebook really early and that was hugely successful.
When I Work also found success by bringing content marketing into the mix.
About three years in is when we launched our content marketing strategy.
We started building our blog and building content around small business topics.
That ignited a lot of the growth and a lot of the traffic that we ended up getting.
A third, less obvious strategy that’s worked for the company, is a pretty counter-intuitive one.
Another thing we’ve done that’s been really helpful is offer free Excel templates to managers who aren’t yet customers.
We’re displacing Excel in a lot of instances, so to get people interested, we’ve built Excel templates that are free for people to download.
And these are really good templates for scheduling, for HR, for time management, for all of these different things, because a lot of businesses are looking for free resources to help them run better.
If I’d have known how successful this would be, I would have done this on day one.
Around three years after launch, published a template that was completely free.
We put it on a landing page and then optimized it for search and started getting a lot of people downloading it.
And now, this Excel template is effectively feeding lead generation to our product, because they’ll get the Excel template, they’ll use it a bit, and then we’ll let them know about our software product at some point.
Many of them then come into our product, try our product and become a customer.
That has become one of the things that we do a lot of now; these different resource guides and downloads that provide value that might even compete with what we’re selling.
But it works because you’re giving away something for free and building trust, but at the end of the day, if what you’re selling is better and more valuable than what you’re giving away for free, people will eventually want to move on to that.
Making Customer Service A Priority
Chad keeps coming back to two points that are clearly very important to him: product experience and customer service.
Having those two things in the foundation from the beginning is so important.
And the way you do that, according to Chad, is simple.
I think you just make it a priority.
You make it a priority from the first time you meet a customer or a potential employee that you’re interviewing, that that is a key driver to the success of your company.
I think in a lot of cases, customer service is not hailed as being as critical as other areas of the business, and for us, it is ultimately the folks that are on your customer service team that are responsible for all of the revenue that you’re generating on a monthly basis.
You don’t hire anybody that you don’t think is going to fit your values.
We have a test for everyone we hire. It’s a couple of questions that we ask folks to respond to, and that helps us qualify where their heads are when they think of customer service, and how important it is to them.
And when we hire people, every single person that starts with the company, their first two weeks they spend several days in customer support.
Whether you’re coming in as a engineer, or in marketing, or in finance, or in data, it doesn’t matter, you spend several days of your first few weeks with the customer support team so that everybody gets a sense for how important that is to the company’s success and growth and retention.
And that retention is something that would make a lot of customer success teams jealous:
We had 0% churn for the first two years; we didn’t lose a single customer.
Now, our churn is extremely low, like 1%, but our revenue churn is negative. We have more customers that are staying with us and spending more money with us because of the value they’re getting from the product and the value they’re getting from our customer service.
“It’s Best To Be Anywhere BUT Silicon Valley”
Based in Minneapolis–Saint Paul, Minnesota, When I Work isn’t in a particularly talked-about metropolis when it comes to startups.
Still, Chad says, moving the company was never even a consideration.
At the end of the day, if you’re able to successfully grow the company and have good talent resources in your geography, then you’re better off being anywhere else but Silicon Valley.
Think about how much competition is there. There are so many startups, there’s so much talent, and the turnover is so high because folks are moving around so much.
If you have a talent pool in your area that’s going to help you do what you want to do, you’re in a much better position to stay focused on that then relocating.
Though while the majority of When I Work’s employees are based near their headquarters, the company does have remote workers, too.
We have a few employees that we’ve recruited and relocated, like our VP of Marketing, Sujan. He’s from San Francisco and he moved here a year ago.
We also have a handful of remote employees that work throughout the country, including developers that are in Texas, northern Minnesota and South Dakota.
We have one employee in San Francisco, a couple in Seattle.
We’re very supportive of finding the best talent where we can find it, whether that’s here in the Twin Cities or anywhere else.
How does When I Work manage a workforce that’s split between co-located employees and remote ones?
I think you’ve to to use the right tools. We use tools like HipChat, which is probably the foundational tool that allows this whole thing to work, because it brings everybody together.
The other thing that’s happened – though not necessarily deliberately – as a result of looking for the best talent we can find, is that most of the people that we hire that are remote are typically leaving another company that they’re also working remotely for.
They’ve got a cultural DNA in terms of their work ethic and their way of thinking that lets them work really well in remote environments.
To find great remote employees, When I Work posts their jobs to WeWorkRemotely.
Chad Halvorson’s Required Reading
Groove’s blog subscribers tend to be voracious readers who work tirelessly to better themselves and their businesses. That’s why we’re asking each of our My First $100K interviewees to share their favorite books and blogs that they read daily.
I’ll give three different sources in three different areas.
When it comes to business building, I am huge fan of Jason Fried and David Heinemeier Hansson at Basecamp.
Their thesis on building a web product is the foundation of what I used when we started building When I Work in 2008.
They had a book that wasn’t even really a book – it was just a series of short essays – called Getting Real, and it was before all the bestsellers had started coming out like Rework and Remote, and it was really inspirational to me in building When I Work. Their Signal Vs. Noise blog is also definitely worth reading.
From a marketing perspective, I’ve been a fan of Gary Vaynerchuk. His message about how to really engage with people and provide value has been valuable to me. For example, thanks to Gary, we send a handwritten thank you card to every single new customer that we ever get, and we’re getting 800 customers a month, so we’re sending 800 handwritten thank you cards a month.
And from the VC point of view, probably the blog I gravitate to the most is Mark Suster; his blog is called Both Sides of the Table, and if there’s one that you’re going to go after and start following, he’s got fantastic content that covers all stages of venture from when you’re just dipping your toes into your seed round to when you’re raising a second or third round of funding. He and brings some really good perspective from both sides of the table, as both an entrepreneur and a VC.
Your Turn: Ask Chad Anything
Chad has (very) generously agreed to answer your questions in the comments of this interview. We’re going to be watching closely and trying to learn as much as we can ourselves, so don’t be shy.
Post your questions for Chad in the comments below.