Guest Column | April 1, 2019

Transforming A SaaS Business In A Single Week

By Abby Sorensen, Chief Editor

Feat_Wodify.jpg
Ameet Shah

This founder/CEO shut his SaaS company down for a week and invested half a million dollars to reboot its culture and put it back on a path of rapid growth.

Wodify’s founding story, in less than the length of a Tweet, sounds something like this: Someone identifies a problem in day-to-day life, thinks software could provide a solution, builds a product to address that problem, and scales the product to become a company with 75+ employees and a spot on the Inc. 5000 list. That someone is Ameet Shah. That problem was CrossFit gyms’ use of whiteboards to track member data. That company, Wodify, hasn’t raised a dime of outside capital since it was founded in 2012. It’s a feel-good story so often told in the SaaS world where the barrier to entry to build a software company has been immensely lowered over the last two decades.

To be clear, Wodify is doing well today. Its growth rate in the first three years was above 200 percent. The product has expanded beyond CrossFit performance tracking to become an all-in-one gym management software platform. It has thousands of customers across the globe. Its platform processes more than half a billion dollars in payments annually. Employees participate in giving one percent of the company’s time, services, and profits back to charity and volunteer initiatives each quarter. But it hasn’t always been smooth sailing for Shah’s company. That’s why he invested $500,000 in a “culture week” aimed at transforming the company’s culture and values.

It’s rare to get a founder or CEO to open up about a company’s scars, but Shah did just that. His candor is something other software executives should appreciate and learn from. It takes both confidence and humility to share some of the growing pains — something made easier by the fact that culture week has had very tangible, positive ROI.

A SIDE PROJECT TURNED PRODUCT COMPANY

After Shah built what he calls a point solution for his CrossFit gym — a way for gyms and members to digitize performance instead of writing it on a whiteboard or in a journal — he didn’t exactly get a warm reception. The gist of the early reactions was, “You obviously don’t get CrossFit, because CrossFit is about sweat and chalk and barbells, it’s not about computers and bits and bytes.” He pitched the convenience of the app automatically pushing to a gym’s WordPress site, and the first customers started to trickle in.

The app was a side project never meant to be anything more than that. At the time, Shah was the CEO and founder of Conigent, a software consulting/development company specializing in CRM and ERP implementations. His hope was this app project would bring in a little bit of recurring revenue to supplement the up and down income stream of a services-based business. What he really wanted was enough cash to fund new office space for Conigent. There wasn’t a road map for growth beyond that. “I remember telling our team, ‘Let’s just do the performance tracking thing,’” Shah recalls. “What we didn’t want to get involved in is membership management and credit card processing because that gets complicated really, really quickly. Sure enough, our customers encouraged us to build a full-featured application, so the things we said we wouldn’t do is exactly what we did.” Wodify’s initial idea — CrossFit performance tracking — is now only about two to three percent of its feature base.

Once Wodify became a full-blown product in 2012, its growth line shot up and to the right. In its first three years, Wodify grew more than 200 percent YoY. “I’ll tell you that the last three years we didn’t grow at the same rate,” Shah admits. “That was partly because we didn’t build products at the same rate. And we weren’t building products at the same rate because we had a cultural problem.” The unspoken but universally understood values and goals that existed when the company could all fit in one room hadn’t scaled along with Wodify. Back then, there wasn’t a need to codify a culture — it was taught through osmosis. Eventually though, employee turnover increased. What used to be a fun office atmosphere wasn’t so fun anymore. Production slowed. There wasn’t a single “a-ha” moment to make Shah realize something was off. It was more of a feeling. “I never ran a product company, and most of the people I worked with had never launched a product before,” he says. “We were learning so much, and learning is what really drives things, not ARR and revenue and cash flow.”

Shah could have raised money to develop software faster — his phone rang more than once with a VC or private equity firm on the other end of the line. Instead, he set out to build a better, stronger culture for Wodify in a week.

"The last three years we didn’t grow at the same rate. That was partly because we didn’t build products at the same rate. And we weren’t building products at the same rate because we had a cultural problem."

CULTURE WEEK

Wodify’s “culture week” in spring 2018 was a detailed, highly engineered endeavor put together with the help of Zappos Insights, a consulting division of the online shoe retailer that helps companies build cultures like the one it is famous for. Shah had spent some time at the Zappos headquarters in Las Vegas seeing firsthand how the company ticked, and he wanted that cultural expertise to help shape the investment Wodify would make in this week. Together, Zappos Insights and the Wodify leadership team mapped out an agenda, workshops, and a definition of the overall purpose of the week. In Shah’s words, it was a tall but necessary order. “The purpose of the week was, as a group and in five days, to come up with a very good rough draft around our purpose as a company and as human beings, to define our culture through our core values, and then to build relationships.”

"The purpose of the week was, as a group and in five days, to come up with a very good rough draft around our purpose as a company and as human beings, to define our culture through our core values, and then to build relationships.”

The company shut down for a week. The entire team from Lisbon, Portugal, flew to the U.S. — about 50 people. Workshops included everything from improv classes to an employee demonstrating skills like painting. Team members from Lisbon saw their first major league baseball game. Zappos helped develop sessions for change management, customer service, and team-building. The company brainstormed core values. Each day, a small group of employees from different teams was sent offsite for lunch and dinner. Several key customers and partners joined Wodify employees for the week. Five days later, Wodify had tangible next steps, including to solidify the company’s 10 core values:

  1. Serve with a caring heart.
  2. Be open, honest, and respectful.
  3. Lead like a business owner.
  4. Inspire “why” thinking.
  5. Be humble and grow from failure.
  6. Do the right thing.
  7. Invest in yourself and others.
  8. Keep calm and collaborate.
  9. Be authentic.
  10. Stay positive and have fun.

These core values became part of the hiring and employee onboarding process. Wodify now has a separate presentation and exercise to teach new hires each core value. Existing employees went through a certification program based on the values, too. Shah started to see progress being made, like the senior engineer who considered the meaning of core value number seven, “Invest in yourself and others.” That engineer started spending more time mentoring and training junior engineers, and that became a standard practice across the entire engineering team.

Culture week was just the start. “There is no finish line,” Shah says. “This is not something you can check off a task list. We’ll continue to evolve culture, process, and strategy.”

THE OFFER

Culture week wasn’t just fun and food and a baseball game. Shah admits tears were shed throughout the week during difficult, candid conversations. Even the toughest parts of the week helped strengthen the company, including when some of Wodify’s employees opted to leave when given the chance. After culture week, Shah presented every employee with “the offer” — if this isn’t the place you’re meant to be, you can leave now with two months’ severance. “We knew it was quite possible that, after we defined our core purpose and our values, there would be employees who thought, ‘That’s not me. If I had known that when you had hired me, I might have not taken the job, because your purpose and core values don’t align with mine,’” Shah explains.

The entire company was given a few weeks to contemplate “the offer,” and when the deadline was up about 10 percent accepted it. After all of the positivity that came out of culture week, Shah admits this felt like a punch in the gut. As time passed though, he realized those employees who left were heading somewhere else that was a better fit. And the employees who stayed were where they truly wanted to be — they became brand ambassadors and they were genuinely optimistic about Wodify’s future. While there was short-term pain caused by being short-staffed, the result of “the offer” did help the company refocus. “We had an all-hands meeting, explained what just happened, and explained what we were going to do to solve it,” Shah says. “We had to shift our teams and our priorities. This forced us to focus on the most important things.”

The company then turned its attention to filling those open positions with its revamped, culture-focused hiring process. Zappos evaluates candidates based on how they treat the driver who picks them up from the airport (who is an unannounced Zappos employee). Wodify now places the same emphasis on cultural fit. When a candidate is being interviewed, the hiring manager will evaluate for skill and a separate team evaluates for cultural fit. The rule is that the culture interviews trump the skills interviews. Candidates are now required to submit a video as part of the application process. “You’re going to succeed here if you can let your guard down, be yourself, and put yourself out there,” Shah says. “That video is just a small sample to say, ‘Hey, I know it’s a little unusual. Can you put yourself out there? Can you let go of taking yourself seriously?’”

"It’s almost like offering a bonus to quit, because we have to own some of that responsibility if we didn’t do a great job of explaining our core values in the first place.”

Even if a candidate passes all of the skills and cultural tests to start working at Wodify, “the offer” is made — this time for a one-month severance to walk away, no questions asked. “We encourage all of our prospective employees to really, truly understand our core values, but we don’t really immerse them in our culture until they get through the onboarding,” Shah explains. “After they understand our mission and core values, we ask them to take some time to think and ask themselves, ‘Did I make a mistake?’ It’s almost like offering a bonus to quit, because we have to own some of that responsibility if we didn’t do a great job of explaining our core values in the first place.”

Since culture week, no new hires have accepted “the offer.” And Shah firmly believes “the offer” to existing employees was a one-time deal. The company is growing at a healthy rate again and plans to triple the size of its customer success team in 2019. Wodify is debt-free, cash flow positive, and proudly bootstrapped. Officevibe, the internal NPS tool Wodify uses, shows an 89.6 percent increase in employee satisfaction since culture week. Monthly all-hands meetings have been established to continue the momentum from culture week.

By July 2019, Shah wants to have Wodify’s five-year plan mapped out. The company might not have had a product road map in place when it first developed an app as a side project, but there is a clear path forward for how Wodify will continue to improve both its culture and its software.


BUILDING AN OVERSEAS CULTURE

When Ameet Shah and his then-IT integration and consulting company started a side project to build an app for CrossFit gyms, no one imagined it would scale to thousands of customers across the globe. The original app was built on OutSystems, a leading low-code development platform. When the app started to gain momentum and Wodify became a separate product company, Shah quickly realized the company would need to scale its engineering team to keep up with growth. Finding engineers in the U.S. who had deep experience with OutSystems proved to be difficult.

The OutSystems platform was created in Lisbon, Portugal, so Shah looked there to find seasoned engineers. Wodify found much more than senior engineers — the Lisbon area was ripe with talent excited to work for a U.S. software startup. The company could open an office there much more cost-effectively than it could in the greater NJ/Philadelphia area — so it did just that, making the first Lisbon hire in 2016. Today, the team in Lisbon has grown to 45+ people including QA, front-end, DevOps, and database engineers, plus UI designers and management-level employees.

The Lisbon office has its own core value ambassadors just like the U.S. office does. Wodify’s leadership team regularly flies to Portugal to spend time with team members there. Of course, for Wodify’s culture week, the entire Lisbon office came to the U.S. “One of our core values is, ‘Invest in yourself and others,’” Shah says. “It’s hard to invest in others if you don’t see them. Our leadership team in the U.S. goes to Lisbon on a monthly basis, sometimes more often, and vice versa to help drive those relationships.”


Founder & CEO: Ameet Shah, Wodify
Cherry Hill, NJ

Year Founded: 2012
3-year Growth Rate: 203%
Employees: 75
Offices: Lisbon, Portugal
Honors/Awards: 2017 & 2018 Inc. 5000 list

Products

Wodify Core: Gym management software
Wodify Arena: Competition management software
Wodify Rise: Mobile app for organizing lifestyle challenges for fitness communities
Wodify Live: Event management, registration, and ticketing software
Wodify Pulse: Heart rate tracking software
Wodify Perform: Performance tracking software