Yoke Har Lee: HR software making big waves abroad

Michael Carden says it's vital to build a product before chasing investors. Picture / Richard Robinson

Sonar6 loves to rock the boat. Last month at Chicago's HR Tech, a showcase for all things HR, Sonar6's co-founders didn't rent a booth. Instead they put on loud T-shirts with a printed message close to many employees' hearts: "myperformancereviewsucked.com".

For Sonar6, the T-shirts got it the attention they sought. Never mind the flak it got from some on the blogosphere.

Michael Carden, co-founder of Auckland-based Sonar6, admits the move was controversial, but says the company received high-profile coverage from the online HR community.

Sonar6 is in the business of helping clients carry out performance reviews, using software delivered over the internet, and Chicago wasn't the first time it had challenged convention. In 2006 the company pitched its performance review management system to the globe, rather than taking the traditional route of establishing a successful local market before venturing abroad.

Carden recalls: "We always viewed ourselves, from the beginning, as a global business. Our mindset has always been: let's build a business that is relevant in different countries."

The company, founded five years ago, was still developing the product when it took it to Britain and soon clinched its first client there, Capital Consulting.

Sonar6 then signed on US customers such as Amylin Pharmaceuticals, L'Oreal USA and Papa Murphy's Pizza, a chain with 1150 stores.

In a recent coup Sonar6 signed a contract with Aggreko, a company that rents out power generators, to use its performance review system across 133 offices in multiple countries. The contract is worth several million dollars.

This year Sonar6 was recognised at PricewaterhouseCoopers' Hi-tech awards, winning the IRL Emerging Company category.

The company is now growing at the rate of one new customer per day, a sign that the HR community has accepted Sonar6's system which is lively and visually appealing - the antithesis of traditional performance review tools. Orders are up by over 100 per cent this year, compared to last year.

Carden believes traditional performance reviews are big yawns because they have become onerous chores that managers do to meet compliance requirements. This, he says, is a real pity because business owners know precious little about their most valuable assets - their people.

"We don't want to trivialise the HR process but our idea was, we don't want to make the process too heavy," he says. "We are a believer in keeping things simple."

Sonar6 was founded by Carden, chief executive John Holt and Mark Hellier. Carden and Hellier have business backgrounds and have in their past managed many people.

The company didn't want to go into the traditional enterprise software area, so it narrowed its focus to performance reviews.

One of the features that has won clients' hearts is the graphical information the system can generate with a mouse click.

Carden believes this simple tool will engage managers. The process for reviewing an employee should take no more than an hour, and should ideally be done quarterly.

Early on, Sonar6 presented its performance review system to Trade Me founder Sam Morgan.

He later bought shares in Sonar6 and is now a director.

Sonar6's marketing model is also something that has attracted the HR community. The company is a firm believer in transparent pricing and is brazen about putting Sonar6's pricing on its website.

It also has a slim salesforce and believes sale engagement happens over time when customers have enough information about your product.

The company actively uses social media to market itself, participating in Twitter, Facebook, LinkedIn, HR forums and blogs.

However, cyberspace can be fickle, Carden points out, and a medium that's useful for driving traffic to the company may disappear quickly. "Social media is such a useful resource you can't ignore it. But it cannot be a panacea to your business."

One of the most important things Sonar6 learned is that being on your competitors' turf can be a valuable learning experience for a budding company.

"Try to get to where your competition is the strongest," says Carden. "You'll learn more about your business from your competitors. You will learn a lot more about how to make your business great." For Sonar6, the best move was setting up office in Santa Clara, California.

Another nugget of wisdom for start-ups is to focus first on building a product before chasing investors. "We have seen people go after investors who haven't left their day job or build a product."

Execution, Carden says, is what wins the race in the end. "When it comes to the invention stuff, most of what makes companies succeed is the execution - how you get your product to market, how you support your customers."