VCs are pouring millions into two org chart companies. Here's why.
ChartHop and The Org launched on the same day. Here's how the two startups raised millions on the idea of a better org chart.
Christian Wylonis was excited for his company's big launch last week. His company, called The Org, had raised a total of $11 million from blue-chip investors like Sequoia and Founders Fund to build a database of company hierarchies.
Then the news broke that his org chart company wasn't the only one to raise money last Thursday from a top-tier firm. ChartHop had raised a $5 million seed round from its own pool of top-tier investors, including Andreessen Horowitz.
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"What are the odds? Seriously, what are the odds?" Wylonis asked days after the news settled. "I really think it was serendipitous."
The simultaneous splash of the two companies focused on org charts immediately spurned talk of whether "OrgTech" is going to become the next big trend in startups. That may be premature, but there's no question that recruiters, sales professionals and others will pay money to peel back the curtain on companies. And as interesting as it is for external people to understand an internal pecking order, employees often ask for better visibility into their own firms, too.
"I do think people are realizing that it really matters with what organizational structures look like," said Ian White, the founder, CEO and CTO of ChartHop. Even so, the fact that his company and another org chart startup announced their funding rounds within hours of each other was "definitely a surprise to us, too," he said.
ChartHop and The Org can afford to be amused rather than stressed because they're not actually direct competitors. They both have an org chart in common, but that's where the similarities end.
White's ChartHop is building a better internal tool for companies to use to easily visualize their company's org structure and plan their future growth. It connects to existing HR software like Workday or can pull in stock information from Carta to assemble what a company's reporting structure looks like, and it makes it easy to sort employees by geography or level. Beyond making a fancier org chart, it helps companies analyze things like gender and pay equity and also model future open positions. While HR leaders are the obvious target market, White said he's seen everyone from newly hired interns to CEOs log in to ChartHop's system to check out the org chart.
"It's a map of relationships in this company," he said. "If you look at an org chart, you can have some kind of understanding of what does this company value, what are the different roles and responsibilities."
Wylonis sees the same value, but his approach is dramatically different: He wants to build a public-facing external database of who's who at a company.
The idea is for companies to show off the talent on their teams in a way that just searching on LinkedIn or reading their "About" page can't. "LinkedIn is a compilation of online CVs," Wylonis said. "The Org is completely different. We're more like a CV for your company, where everything happens on a company level."
It largely crowdsources the information, pulling from news articles and people's LinkedIn pages to build out the org chart — an effort that can bring mixed success. After I interviewed Wylonis, an org chart for Protocol showed up on The Org — with our publisher, our executive editor and me all on the same level (a flattering idea, but not an accurate look at how a newsroom works).
The Org's goal, though, is for companies or their employees to complete and then maintain their company's roster. People with registered company email addresses can add or edit their company's chart, and anyone can sign up for notifications for when changes are made to a business they care about and are tracking. Eventually, Wylonis said, the company may make a premium product so power searchers, like recruiters or business development leaders, can find people more easily.
"The problem right now is data on LinkedIn is both unverified and unstructured. If you're a PM at Airbnb, and if you search Airbnb employees, you'll get a list of 20,000 names," he said. "The way we see our product is basically a compilation of company team pages."
Still, it might be an uphill battle to convince companies that they should reveal their inner power structures. More often, that information is locked in a tool (like ChartHop, for instance, which doesn't publicize anyone's org charts) and is treated as sensitive information, even to its own employees. Laying out a corporate roadmap may make it easier to poach employees when it's easier to tell their seniority in an org chart. Wylonis gets the concerns, but he argues that a lot of this information is public anyway if people do the digging and that it can actually be an advantage in recruiting when people can see the power of the teams they would work with.
"We believe that a company long term will be more successful when they're more transparent about their team," he said.
The fact that an org chart often is fire-walled information has made it a more interesting challenge to solve. In fact, mapping out a company's hidden org chart was something LinkedIn data scientists were excited about six years ago. Former LinkedIn data scientist Pete Skomoroch said features like endorsements actually helped the company understand job hierarchies because it required people to fill out their relationship to the person they were endorsing, like a boss recommending an intern or two co-workers recommending each other. Upon seeing the launch of The Org, he was excited to see someone finally taking a "big swing" at it.
"I think it's one of those things that could be a bit of a data moat," he said.
Venture capitalists have clearly seen the value, too. People are already a company's most important resource, and firms also already spend millions on resource planning or trying to figure out if they have pay equity issues or gender gap issues, said Aileen Lee, the founder of Cowboy Ventures and backer of ChartHop. "Now there will be no excuse because the data is sitting there and you can push a button and do it," she said.
Still, she doesn't expect an explosion of so-called "OrgTech" companies as a result, since The Org and ChartHop have already kind of covered both sides of the same coin. But the idea of using a visualization like an org chart as a new way to gain insight into a business could be something followed by other startups.
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"Maybe that's an insight that other software folks in the future will draw upon, where it's not just charts and graphs and bars, but the visualization of how your resources are laid out does tell a story of what you care about or what you're investing in or what your competencies are," she said.
It's one thing to understand the internal structure, but Kulveer Taggar of Zeus Living says understanding other companies' org charts, via something like The Org, would be something he'd be willing to pay for, too.
One of the biggest challenges of a CEO is how to build out a team, he said. There are the simple questions, like at what size do most companies start adding general counsels or a chief financial officer. And then there are the harder organizational structures, like whether a company's chief product officer reports to the chief technology officer, or if they both report directly to the CEO.
"There aren't a ton of guides on how to do the nitty gritty of it," he said.
ChartHop, unlike The Org, does not plan to make any information public about its customers organizations. But over time, it could release some insights that it's seen from companies growing and at least to try to address questions like Taggar's as to what stage is the right one for bringing in, say, a general counsel. The public ones, like The Org, could be more immediately helpful, though, in allowing outsiders to see how competitors are structuring their companies. Taggar says he might also study the startups that are a few steps ahead to see how their orgs developed.
"Really you're kind of in the dark as you're figuring it out," Taggar said. "Seeing an org chart just gives you so much information."