I caught up with COO Rasmus Holst and VP of Marketing Tim Deluca-Smith on a visit to London last week to find out what's been happening at Huddle and how it views its role in the fast-growing digital enterprise collaboration marketplace.
Focused on document collaboration
Collaboration in a modern enterprise embraces a broad range of activities, from messaging and content management to workflow and teamwork. Huddle has refined its positioning to double down on its strengths in document-centric collaboration, explains Deluca-Smith.
We were very insistent from an early stage that we weren't an enterprise file sync and share company, we weren't a Dropbox or a Box, we were about document collaboration.
We are not all things to all men. We understand where we win, we understand where we lose.
Rather than selling collaboration as a thing in itself, Huddle now wants to focus on the business outcomes customers want to achieve, he says. Its own strengths are in managing how distributed teams of people collaborate around complex or confidential sets of documents in a government or enterprise setting. The company is therefore investing in playing well with the various other collaboration tools such organizations are likely to use — witness the introduction of more seamless integration with Microsoft Office Online last month. Deluca-Smith says:
The term collaboration is so nebulous now. I'm very careful to use the words 'document collaboration.' What we've become very familiar with in talking to customers is, you will not get one tool that fits all of your needs. You will have to start building out a stack of collaboration tools that hopefully talk to each other.
You need to be buying on a use case driven approach, rather than saying, 'I need a business to collaborate better.' What does that mean? We go very fine-tuned on some of our use cases now.
Huddle got an early start selling into government and that gave it a big focus on security. Over time, that has meant its core customer base has radiated out into regulated industries and professional advisory services — in particular audit and accountancy firms such as Baker Tilly, quasi-government businesses such as Royal Mint, and utilities. But it also cites large enterprises in other fields, such as staffing giant Adecco and global logistics provider DHL.
In all of these cases, many of the challenges Huddle sets out to solve are to do with simplifying and tracking the processes involved in working with documents across distributed teams, often across the enterprise boundary. Deluca-Smith explains:
The challenge with all of this is trying to make the buyer aware that there is an easier way to work with this. It's explaining to people, well, actually, what if you could consolidate all of that activity into one place?
Less growth but cashflow positive
The decision to focus has also been a recognition of financial reality. Many of the players in the collaboration space are established tech giants such as Microsoft, Cisco and Google, while the newer contenders are richly funded startups or recent IPO candidates, such as Slack, Box and Dropbox. Huddle has had significant funding too, but it's not operating at the same scale, admits Holst:
We don't want to be everything to everyone because a hundred-people company cannot be that.
Thus part of the work of incoming CEO Morten Brøgger has been to transition the business from a high-growth strategy to a more affordable pace, says Holst:
We have done a number of exercises to bring the company to a place where it will be cashflow positive this year, so that we can decide our own fate.
We could have continued the growth, just thrown money at it and say we will grow our way out of this. This was not the approach we've taken. We've taken the approach of saying, we want to balance expenses and revenues.
It's still a low double-digit growth that's come out of it.
Brøgger's predecessor, company co-founder Alastair Mitchell, remains on the board and "in support of that strategy," says Holst. The company has a stable revenue stream coming in from those long-term relationships with its public sector and professional advisory customers. That provides a solid base from which Huddle will be able to grow into new business opportunities, says Holst.
You basically build a business in advisory, government — a bit slow moving business, but stable and secure because they're buying into the security premise of Huddle, buying into the workspace model. That pays for your base, and then you start an accelerated leg.
Developing use cases
Growth opportunities will come from identifying common business needs that customers are solving using Huddle, and then productizing the solution. A new feature that Huddle recently introduced provides an example, says Deluca-Smith. It's specific to the complex document management needs of its core customer base, he explains.
If there is a project that involves a document, there are four very distinct phases:
Phase one, I need to get that document, or documents, into a system to work.
Phase two, I need to build a team around it.
Phase three, I need to work around it, co-author, edit.
Phase four, I need to publish it, put it out to approvals, client, board, whatever.
If you look at everyone in the market, largely, they do the middle two sections very well — build a team around a document, manage the workflow. As we started to build out use cases, for example, in advisory, we found one of the biggest hurdles they face is, 'Well, how, actually, do I get all these documents into a system in the first place?' If I'm at KPMG doing an audit, I've probably got a requirement for 200 documents from my client that I need to get into a Huddle, or similar, in the first instance.
What Huddle found is that the initial phase of gathering those documents is painfully laborious. It's usually tracked in an email spreadsheet and involves individually requesting each document and then manually saving it into the collaboration system (if one exists) as it arrives.
It's a hugely time-intensive process for these guys to do. If you think from that advisory sector, we're talking about billable hours. You're talking about tens, if not hundreds, of man hours, just on data gathering exercises.
So Huddle spent eight months building a tool called File Request to automate and track the entire process, which the company can now sell as a solution to a specific use case, he says.
Our use case driven approach isn't just marketing-wise. We're actually building features and functions to enable a lot of this stuff to happen.
The sales pitch goes beyond productivity, he adds. Having a system that stores documents centrally avoids the embarrassment of having to go back to a client to ask for another copy of a document because it had been kept in someone's email inbox, and then they left the firm. That's a more compelling value than some nebulous productivity claim, he says.
This is something that I don't think the market puts enough of a story behind. We've spoken about productivity gains — OK, 30% saving, what does that mean? I don't measure, I don't have a stopwatch, so it doesn't really mean anything to me.
It's more important, he concludes, to provide capabilities that enable enterprises to maximize revenues by delivering better value to customers.
In part two, we explore what's on Huddle's product roadmap as the company builds out more use cases that bring the capabilities of the networked enterprise to old-school organizations.