By Tom Ballard, Chief Alliance Officer, PYA
Max Farrell, Co-Founder and Chief Executive Officer (CEO) of WorkHound, saw the value of a Chattanooga beachhead in 2016 when he was a participant in the inaugural logistics accelerator run by Dynamo Ventures. Now, his four-year old start-up has its sales and customer success team in the Scenic City, while the software development group is in Des Moines, IA where the company was founded.
“Chattanooga is a city built on a thesis focused on transportation, logistics, and supply chain,” Farrell told us during a recent interview. That’s important since WorkHound has focused initially on trucking companies and perhaps their biggest pain point: employee retention.
We were following-up with the Co-Founder and CEO after WorkHound’s June announcement that it had raised a $1.5 million seed round to add to scale-up the company’s presence in transportation, expedite feature developments for its software platform, and explore new markets.
Farrell’s story starts in Arkansas where he grew-up before heading to Grinnell College in Iowa to study sociology. After college, he began cutting his teeth with start-ups in the Des Moines area including Dwolla, a fast and efficient platform to transfer funds. During his tenure there, Farrell helped the company grow its user base by 500 percent, increase headcount from 10 to more than 60 employees, and raise more than $20 million from Union Square Ventures and Andreessen Horowitz.
“I learned a ton working there,” he says. One suspects that addressing a pain point in funds transfer provided very useful insights in developing a platform to help an industry known for its very high employee turnover rates.
So, you might ask, “How did you get into the logistics sector?” Farrell says it was a strong interest in corporate innovation that uncovered the pervasive problem of employee turnover in what he describes today as all frontline industries even though the initial focus was trucking companies.
“Our mission at WorkHound is to help people love the work they do,” he says.
To better understand the dimensions of the challenge trucking companies faced, Farrell actually rode with cross-country truckers to see what life on the road was like. Those interactions helped spearhead the direction that the fledgling idea took.
“Workers don’t feel respected,” he concluded, quickly noting the exit interviews that employers use really don’t uncover the source of the frustration. “Those interviews are basically autopsies” occurring after a person has made a decision to leave an employer.
How do you surface the core issues much earlier so that an employer could take actions that could result in a different decision? The solution that WorkHound developed takes no more than 90 seconds of a driver’s time each week and relies on texting rather than email or the internet.
“We prompt the workers via a text message each week,” Farrell says. “We ask open-ended questions. We see the good, the bad and the ugly.”
The feedback, which is not identified with an individual without that person’s permission, is consolidated and presented to the company in an easy-to-use dashboard with the expectation that the employer will take action on the most common problems. For employees who do not desire to remain anonymous, WorkHound has an added feature that allows the employer to respond directly to the feedback.
Regardless of anonymous or non-anonymous approach, the goal is to provide a tool that will reverse the high turnover rates by helping companies be proactive rather than reactive, and it seems to be working. Not quite four years since accepting its first customers, WorkHound now serves more than 20,000 workers across a mix of employers from as small as 100 employees to several thousand.
“We built our product to be industry neutral for any workforce that doesn’t sit at a desk,” Farrell says. “We’ve been getting interest from prospective customers in the retail, healthcare, and manufacturing sectors.”