Does the future of enterprise applications look like Hooky?

Profile picture for user pwainewright By Phil Wainewright August 26, 2019
Summary:
Employee engagement and development startup Hooky is one of a growing ecosystem of apps with a Slack front-end. Is this the future of enterprise applications?

Hooky screen shot

In the quest to improve the effectiveness of employee learning and development, one LA-based startup has built its application in Slack. Not only does this save a ton of development effort, it's also the future, believes Hooky co-founder Andrew Kirchner:

I think all internal-facing applications, any employee-facing tool, will eventually have a pretty robust Slack or Teams or other sort of workplace OS integration.

There are some complex enough workflows that web apps will still be necessary for. That'll usually be internal-expert-facing — HR-facing or IT-facing or finance-facing — but the interactions that those people have with the employee base at large, I think we'll all move into this workplace OS tool.

Established vendors already recognize this trend — indeed, diginomica has been following the emergence of what we call headless applications, where users interact through a conversational layer, typically in a messaging application. Kirchner says:

This is already happening. Of the HR technology companies that we follow closely, the majority now have deep integrations with Slack or Teams. They just know this is coming. And they know that they're going to lose eyeballs if they don't do it.

The messaging layer is especially useful for applications like Hooky, which focuses on employee engagement, learning and development. This type of application has always struggled with adoption in the past. It becomes much more accessible if it's just there in the messaging stream that employees are already using, he explains.

We think Slack is giving birth to a new generation of applications that would not have existed as standalone web applications. They were important, but not urgent.

I think employee development is a classic example of this. If you deliver a standalone employee development platform, no one's going to go visit it because it's never urgent. They've got work to do.

But there are people whose whole jobs are employee development. Most of our clients have a team of [several] people that do this for a living, and their only recourse is to just send these blast emails — it's not personalized — in a platform that people are never going to go visit and doesn't work anyway.

Slack is giving birth to an opportunity to say, we can access these people in a personalized seamless way [and] get them to engage with something they wouldn't have engaged with before.

Slack is building an AppExchange-like ecosystem

As a platform, Slack can enable an ecosystem of these internal facing applications in the same way that Salesforce enabled an ecosystem of ISV partners to build customer-facing applications on the AppExchange, says Kirchner. Like Salesforce, Slack has established an investment fund to support new ventures in its ecosystem. But the Slack platform isn't a traditional platform-as-a-service in the way that Force.com was.

Six months ago, Slack launched its Block Kit UI framework and prototyping tool. This provides developers with building blocks to create the presentation layer of an application within Slack's UI parameters. But rather than running on Slack infrastructure, the toolkit automatically generates JSON code that developers can then build into their application, which runs elsewhere, usually on AWS, Azure or Google Cloud. So Hooky's two founders, for example, could create the UI for the application in the drag-and-drop builder and then pass the results over to their developers to finish off. This enabled a very fast result at low cost, says Kirchner.

It's been very easy for us to build an application, we stood the whole application up live to beta customers — demanding enterprise customers — for a very small sum. That was not even remotely possible five years ago.

Much of the heavy lifting in Hooky happens behind the scenes in its integrations to other applications. It pulls in information about people's goals, their learning needs and development plans from performance management applications. Sometimes these are a traditional HRIS such as SAP or Workday, or it may be a newer standalone application such as Reflektive, 15Five or Lattice. Then it integrates to learning management systems, where the content lives. All of these are direct integrations so that Hooky acts as the mediator bringing data and workflow from these applications into Slack. That's a crucial advantage that Hooky brings to the table, Kirchner believes.

I think that's the future of HCM technology. You can't be an an island. Everyone wants to know, who do you integrate with? ...

The practitioners that we speak to have all this data, but no way of cobbling it together. It's in this system over here, and that spreadsheet over there, and this person knows, and I wrote it down in a notebook, and there's no way to bring this all together. That's a huge part of our offering. It's just bringing a lot of disparate data that HR doesn't have the manpower or the analytical power to put together on their own.

While Hooky has started developing a standalone web application for one of its customers, Kirchner believes the startup still has a lot to gain from targeting the Slack customer base. This strongly echoes the experiences of Salesforce ISV partners a decade ago in targeting the CRM vendor's fast-growing customer base. The fact that companies are using Slack is already a sign that they're open to an app like Hooky, says Kirchner:

A third to a half of the companies that we interact with — forward thinking companies that care about developing their employees — they typically already have Slack.

It's just a signal to us that the company takes employee development seriously, they want to give their people good technology.

Companies that are still using other forms, it's just a signal that they're probably not as forward thinking.

While Microsoft Teams has now caught up and overtaken Slack in market share, he believes Slack still has the edge as the collaboration layer where horizontal apps will live:

All internal tools, whether it's requesting vacation, whether it's expense reporting, whether it's performance reviews, all of this is going to move to a horizontal layer.

I'm not sure Slack is going to win, they're definitely best positioned to win right now. Although Teams is certainly winning by market share, I think Slack has the right idea. So we've used Slack in that world as the best delivery mechanism for all internal workflows.

Looking to a new generation

In the specific case of employee engagement, learning and development, Hooky is also taking a very modern, employee-centric view of its role, underlined by its web address of playhooky.io. Traditional learning and development applications have been built around the compliance and skills needs of the employer. A new generation of workers look for a more engaging culture and the opportunity to grow on their own terms. This is what Hooky aims to provide, says Kirchner.

Training is what you need to do to be able to perform your job. Development is really about bringing people up to speed, about cultivating them as a whole person, about giving them the opportunity to grow into the next role. One of the big focuses of our product is what's called professional development plans ...

It's really about your learning as an individual, your development as an individual, rather than the company's needs. And I think it reflects this fundamental power shift towards employees that's been happening, away from viewing human capital as capital, just like a machinery is capital.

It's a world away from the older generation of enterprise applications — which to a young entrepreneur like Kirchner, includes long-established cloud-native brands like Salesforce and Workday. Their more traditional enterprise application structures aren't what people want today, he believes.

We use Salesforce as a CRM. It looks and feels like it was built in the 90s — because it was built in the 90s essentially. I get one Workday rant probably a day. 

These incumbents were tremendously successful companies fifteen years ago, and their approach — their interface, their locked-in processes — reflects that. I think that speaks to the opportunity for a company like us.

My take

This is a very early-stage startup but I was struck by the parallels to the advent of AppExchange a dozen years ago. Back then, building on the Salesforce platform shaved millions off the development cost of an application like Coda2Go, the precursor of FinancialForce. Fast forward to today, and after shaving off a few more millions, an app like Hooky can be built for a five-figure sum. That unleashes enormous creativity because so many more applications can test the market and see if they fly. Though bear in mind that some would argue the future of enterprise collaboration lies elsewhere than Slack and Teams.

It was also an intriguing insight from someone who views Salesforce and Workday as old-school enterprise applications whose heyday is long past. That's a bit tough on Workday, which had barely gotten started just twelve years ago. Sic transit gloria mundi. But the view is symptomatic of rising impatience with today's dominant enterprise applications, a sentiment expressed at the heart of large enterprises such as Deutsche Telekom.

It seems therefore that there's a new wave of applications on its way that may push the previous generation of cloud application leaders out of the limelight. And just as HR was often the first enterprise function to embrace cloud, this new wave of conversational applications is also targeting the HR function — or at least the employee-facing side of it.

This is a trend I'll continue to explore in future articles, and also in my upcoming talk on agile teams and digital teamwork at the UNLEASH conference in Paris this October. 

[Updated to remove two inadvertent disclosures].