This week Koan, a startup that provides objectives-and-key-results (OKR) and status-tracking software, announced that it has raised an additional $1 million, added a free tier to its service, and acquired a design firm that it has worked with.
Koan, which raised $3 million in Seed funding last October, was co-founded by Matt Tucker, who previously co-founded Jive. Jive focused on enterprise social networking, went public in 2011 and later sold itself in 2017 for an all-cash deal worth $462 million.
The OKR-focused startup competes in a somewhat crowded space. The goals-tracking software market saw a wave of venture funding over the last year, including Ally’s $15 million Series B, Gtmhub’s Series A, WorkBoard’s Series C, among others.
For more on what OKRs are and how they work, I’ve written a bit of an explainer here.
Koan’s software is built around a single core philosophy, Tucker told TechCrunch in an interview, namely that small, positive actions done repeatedly will amount to a big impact in time.
In that vein, while Koan offers the OKR tools you’d imagine, it also has a check-in feature that helps individuals to report their performance and progress in a manner that is aggregated across teams to provide a clear picture of how individuals across teams are feeling about any particular KR. If individual workers keep updating their progress, the company’s picture of how it is progressing towards goals will sharpen.
Koan is pursuing a growth strategy called product-led growth, also known as product-led selling. OpenView Partners defines the go-to-market method as follows: “[A]n end user-focused growth model that relies on the product itself as the primary driver of customer acquisition, conversion and expansion.”
It’s cheap, and if it works, very effective.
Software products that entice individuals to sign up, who then invite colleagues aboard can benefit from product-led growth strategies. The method has proven popular with collaboration-focused software, so it could make sense for Koan; if one team at a company uses the startup’s software, its use could spread to other teams. That would mean more revenue for Koan.
So to juice the number of folks using its product in hopes of it spreading widely, Koan is adding a free tier to its service. In marketing-speak, the startup wants to widen the top of its funnel.
If the move works, Koan could progress from Seed maturity to Series A preparedness. Its new capital will help in the same effort, with the new funds earmarked to help it staff up on the engineering side of its business and to help “accelerate [its] product led growth,” in the words of its CEO.
BMNT put the new monies into the company.
And to top its news dump off, Koan has purchased Horrible Design Co, which it has worked with. Horrible has traditionally helped small startups with product and design related projects.
The OKR space is red-hot, and competitive. Some startups charge, others don’t, some have a freemium model. Koan has now cast its lot in with the third category. Let’s see if the 2021 planning cycle can help the company snag new users as its CEO hopes, and drive the revenue growth that its new investor expects.