The one product feature that tripled our sales last month

Here’s how the tiniest Know Your Company feature that took 20 minutes to code led to the biggest impact on our business…

Even the smallest lever can have a big impact.

A few months ago, we moved Know Your Company to self-signup. This means that when people come to our site, they can sign up for the product themselves, give it a spin for free for two weeks, and decide whether or not they want to purchase it. (Prior to this move to self-signup, we sold our product manually, via in-person demos that I would do myself.)

After we launched self-signup, the first month was a little slow. We typically see 4–6 sales a month. But in May, we only saw three sales come through self-signup.

Hmm. Three sales wasn’t abysmal, but it wasn’t promising either. If Matt (our other employee at Know Your Company) and I wanted self-signup to work and help more people benefit from Know Your Company, we needed to find a way to get more than three sales from self-signup in a month. Like a lot of folks who run software products that offer a free trial period, we needed to figure out: How do we improve our trial to convert more signups into sales?

To answer this question, we set out to talk to the people who we knew would know: our potential customers.

Going to the source

We emailed a handful of people who’d signed-up for Know Your Company but had not bought the product. We asked if they’d like to jump on the phone for 10 minutes to help us figure out what we could improve. If you were curious, here’s an example of an email we actually sent:

Hey Josh,

Happy Wednesday!

My name’s Matt, and I’m a programmer with Know Your Company. Just wanted to say hello and say thanks for checking us out!

I’ve got a small favor to ask…

I’m doing some research to better understand why people try Know Your Company. Would you be willing to chat by phone for 10 minutes?

If so, just let me know when (and a good number to reach you)! Thanks Josh — this would be a big help as we improve our service 🙂


We sent this email to about twenty “good fits” — CEOs who’d signed up for the product and had 25–75 employees (this is who the product works the best for). We ended up getting on the phone with about six of them.

From these conversations, we found that the #1 reason why these CEOs didn’t buy Know Your Company after trying it out was because of the participation rate. The number of their employees’ who responded to questions was lower than what they expected.

These CEOs were typically seeing ~25% response rates with Know Your Company. On the flip side, companies who had purchased Know Your Company had seen at least 50% response rates during their trial. Interesting.

We walked away with a huge insight from those customer conversations: For CEOs, participation from their employees was the indicator of success for the trial. Seeing their employees actively participate with Know Your Company is when they have the “ah ha moment” that this is something that adds value to their company. It’s the barometer they use to see if Know Your Company is working for them.

And I get it. Know Your Company is about helping you to get to know your employees better. And if only three out of your twelve employees you’ve added to Know Your Company are answering, the quality of the insights you receive are going to feel underwhelming.

So Matt and I started wracking our brains… How do we help our CEOs achieve what they see as a successful outcome with the trial? How do we help them see the participation rate that they’re expecting?

Direct, small, and easy

We decided to approach it from the most direct way possible: What if employees simply got a friendly, nonintrusive email reminder asking them to respond to a Know Your Company question, if they hadn’t yet?

I could imagine how easy it was for an employee to forget to respond to the Know Your Company question or even outright ignore it — especially if they weren’t 100% convinced yet that it was a genuine effort on the part of their CEO.

We chose to design the email reminder around the Company Question — it’s a rotating question we ask every Wednesday about something specific in the company (for example: “Do you think the company is the right size?”). The Wednesday Company Question is the one our CEOs often tell us that they receive the most insights from and feel the greatest impact. That being the case, our thinking was… if a CEO could see a significant response rate to the Company Question during their trial, perhaps she or he would want to buy the product.

Here’s what we came up with. For anyone who hasn’t yet answered the Company Question she or he receives an email that looks like this:

In this example, the email is coming from Victor, the CEO in the company (all Know Your Company questions come from the CEO), addressing the employee, Jared.

You’ll notice a few things about this email. It’s friendly, and natural-sounding. It was important to us that this email didn’t bug someone or didn’t feel nagging.

In fact, we were so worried about bugging people, that if someone also forgot to answer the Company Question during the second week of the trial, we created an alternate email with different wording to send to them so it wouldn’t feel too stale or automated.

The email reminder also points out the importance of answering the Know Your Company question (note where it reads: “it’d really help us see how Know Your Company could be a useful tool for the company”). We wanted to make sure this was clear to employees — that answering this Know Your Company question would help their CEO understand if the tool was a good fit for the company or not.

What were the results?

Since launching this feature on June 7th, the average company question response rate amongst trial signups has gone up to 41% (it was previously 25%).

We saw our sales for last month triple — we did nine sales in June. If you recall, we’d only done three in May. This is the highest number of sales in a month we’ve done this year so far, and it matches the highest number of sales we’ve done in a month ever.

Six of those nine sales came after the launch of this feature, with two of those companies seeing their response rates improved by 3X and 4X than what they had previously been before.

One caveat is that we had a high increase in the number of inbound leads: We saw more than 3,000 visitors come to the Know Your Company website week that this Fast Company article was published, and that traffic bump continued throughout June. So we did have a significantly larger pool of leads coming in June.

Yet in spite of this, there’s a distinct difference in our conversion rate before and after we launched this feature. Our conversation rate from signup to sale was 15% for June. In May, it was 5%.

As a whole, I think it’s fair to attribute the dramatic boost in sales last month to this one, tiny little email that barely took any time to code.

A few lessons learned

It blows my mind that something so small, and required such little time and technical complexity, was able to have such a profound impact on our business.

It was an important reminder for me to “play detective” in our business. To look in the nooks and crannies of our business for insights and learnings that can help our customers get more of the outcomes that they want to see.

Specifically, it reminded me to…

1) Ask yourself: What barometer do potential customers use to judge whether or not this product is going to work for them? What’s the equivalent of a “high participation rate” in your business?

2) If you don’t know the answer to the question in #1, go talk to your potential customers to answer this question. It’s easy to forget that your customers and potential customers truly do have all the answers. They will tell you what they were doing before they used your product, when they decided to switch and purchase your product, and the forces that influenced them along the way. All you have to do is ask.

3) Don’t be afraid to try something direct, small, and easy. Matt and I looked for the most direct way we could impact the outcome that our CEOs are looking to have. And we didn’t dismiss an idea it because it wasn’t technically advanced enough or “a big enough idea.” It’s amazing how something as small as one email can make a difference in your business.

For you, I hope sharing this reminds you as much as it did me to be on the look out for truffles like this. Even the smallest lever can have a big impact.

Big news! We’re now Know Your Team. Check out our new product that helps managers become better leaders, and get the full story behind our change.

P.S.: If you did indeed enjoy this piece, please feel free to share + give it ❤️ so others can find it too. Thanks 😊 (And you can always say hi at @clairejlew.)

How we generated $712,076.64 in revenue with two people in a little over two years

Detailing Know Your Company’s most unusual business model… that works! We’ll go behind the scenes and share the numbers to show you exactly how we’ve done it.

“Can I ask you a weird question, Claire?”

“Sure,” I reply.

“How do you make any money?”

I get asked this question fairly often. People hear about the pricing model for our software, Know Your Company, and they’re a bit perplexed.

We charge $100 per employee, one-time, for life. That’s it. So if you’ve got 20 employees, it’s $2,000. You pay that once and that’s it. No recurring costs, maintenance fees, etc. The only time you ever pay again is if you hire someone new. Then it’s $100 for that new person.

It’s weird, I’ll admit. With software, you typically see a subscription-based pricing model. Say, $5 per user per month. Or maybe just $100 per month for unlimited usage.

To most, a one-time, per-person fee sounds like we may be leaving money on the table.

Why would we ever price something this way? Does it work?

We’re now two-and-a-half years into running Know Your Company as our own separate company (we spun off from Basecamp in December 2013) and I want to share the answers to those questions. Here’s the nitty gritty on the reasoning behind our business model and how it’s been going. Read on and I’ll share our revenue numbers, customer retention numbers, etc.

First off, why did we price the software this way?

The biggest reason we went with one-time pricing, versus a subscription model, is because it best aligns with the value we’re trying to create.

I believe that a business owner should get feedback from an employee for the entire time that she or he is at the company. Not just for a few weeks or months — but for how ever many years an employee is with you.

A subscription model doesn’t encourage this. It’s easy to go for a few months using a product, paying, say, $50 a month, and then turn it off. In the case of Know Your Company, it’d be even easier. It’d be convenient to get a piece of feedback you don’t particularly like, and say, “Ahh I don’t need to hear this right now,” and turn off Know Your Company.

But for me, that’s not good enough. If you’re truly invested in creating the best environment for your employees, you’re getting feedback from your employees for life. Our pricing model encourages CEOs to start to see getting feedback in this way.

Our one-time pricing model also brings an advantage a subscription model doesn’t have: It encourages a high commitment from CEOs when they use the product. When you’re putting in $3,000 one-time upfront, versus $30/month or $300/month, you’ve got some skin in the game. So now you’re more determined to see that value returned to you on the other end.

As a result, CEOs put more energy behind Know Your Company when they roll it out. They talk it up to their employees, and they act on the feedback that comes from the software. Know Your Company becomes an initiative, a program — not just another web app they’re playing around with. And these CEOs see meaningful outcomes in their company because of it. For us, it’s been extraordinarily helpful that our pricing model helps influence the outcomes we want our customers to have.

So do we make money doing this? Let’s pull back the curtain on our numbers…

Since becoming our own standalone company in January 2014, we’ve generated $712,076.64 in revenue. We’re profitable — our average monthly profit margins are at a healthy 30%.

More than 200 companies have purchased our product, and 12,000+ employees use Know Your Company every day in more than 15 different countries across the world.

We do this all as a two-person company. It’s just me as the CEO, and our programmer, Matt De Leon.

We’ve never taken a cent of funding from outside investors. When we spun off from Basecamp a few years back, they didn’t give us any cash or team members — just the product and the existing customer base the product had acquired at that point.

Our customers are companies who typically have between 25 and 75 employees. The average size is 31 employees. Our smallest customer has six employees, and our biggest has 380 employees. (They were at around 70 employees when they first started using Know Your Company.) The industries of companies range across the board — from software to retail to hotels to ad agencies to nonprofits. We even work with a few churches.

The biggest surprise though: where our revenue has come from. Last year, 70% of our revenue came from existing customers adding new employees to the system, as their companies have grown. About 50 new employees were added every week by existing customers. The remaining 30% of our revenue resulted from new companies signing up for Know Your Company.

In other words, 70% of our revenue in 2015 was “recurring.” That’s more than two-thirds of our revenue generated off a business model where we’ve got one-time pricing per user.

So while the pricing model doesn’t inherently feel like there is a recurring component — there is. And it’s directly tied to the value that we’re creating for our customers. We’re supporting them as they grow and become more successful.

How this one-time pricing model has been helpful for us

Over the past two and half years, we’ve built a solid, profitable, bootstrapped company with just a two-person team. And our pricing model has absolutely enabled that.

I didn’t realize it when we started, but our pricing model has played a large role in helping us become profitable as a bootstrapped company early on and continue to stay profitable.

Our one-time pricing has allowed us to see cash a lot sooner than if we were operating on a monthly subscription pricing model. As a bootstrapped company, cash flow is the lifeline we depend on. On average, an initial $3,100 invoice is paid out to us the first week a new customer comes onboard. That’s significant. With a subscription model, how many months would we have to wait until we see that same $3,100?

Some might argue, though, while we’re able to capture a large portion of cash upfront, we’re missing out on the entire lifetime value that a monthly subscription model would capture. I initially had concerns about this, myself. However, the math proves something different.

For us with our current one-time pricing model, the average lifetime value of a customer is about $4,600 per customer. Companies add an average of 15 employees to our software during the time they use Know Your Company. The average amount of time a customer stays with us is 19 months.

To attain that same average lifetime value of $4,600 with a subscription model (let’s say we were to charge $5 per employee per month), we‘d need a customer to stay with us for about 30 months.

Thirty months is a much longer time than 19 months. And while I’d love for a customer to stick with us for two-and-a-half years, right now the average customer uses us for one year and seven months. Plus, with a one-time model, we see 67% of that lifetime value upfront. No waiting on our end required.

In fact, this one-time pricing model is what has gotten us to profitability so quickly as a bootstrapped company. We became profitable during our first month of running Know Your Company as a separate company because of this pricing model.

Allowing us to capture a larger chunk of the lifetime value upfront has also afforded us to take our time. We’re not in a rush to scoop up as many customers as we possibly can, regardless of whether we’re a good fit for them or not. Rather, we can focus on taking on customers we believe we can actually help, ensuring we’re truly solving their problem and serving them well.

Our one-time pricing model gives us room to treat each customer with thoughtfulness and personal care. Whether that’s sharing data on the best questions to ask employees, providing questions that other CEOs have asked through Know Your Company, or adding them to a Basecamp Project where there are hundreds of other customer CEOs — we’re able to pour ourselves into making sure our customers get the most out of Know Your Company. And these investments for our customers have paid off. Last year, we had a 98% retention rate. (Unfortunately, we had one company decide to stop using the product.)

This isn’t to say that a subscription model and solving your customers’ problems are mutually exclusive. Instead, I just want to share how for us, a business that’s getting off the ground, trying to get its legs under it, this is something that’s worked well.

It’s still not easy

Let’s be clear: A one-time pricing model doesn’t make everything easier. Running a business is still tremendously hard for us, even with this pricing model.

While we can capture a large chunk of lifetime value upfront, we still run a very, very lean business in order to be profitable. One of the ways I try to reduce overhead is that I don’t pay office rent. Basecamp is kind enough to let me work out of their office a few days a week over in the West Loop in Chicago, free of charge. I use a table in a conference room they don’t use very often, and I try to minimize getting in anyone’s way. It’s generous of them and an arrangement for which I’m grateful. You might be able to propose something similar and borrow an unused table at a friend’s office. (It never hurts to ask.) Or, you can always work from home to save on office rent — which is what I do about 50% of the time.

Another way I’ve reduced overhead is that I’ve only hired one other person (Matt, our programmer, who I mentioned earlier). Perhaps we could afford to bring on another person, be it part-time or full-time. But I’m highly cognizant of the costs — in salary dollars, and also in time and training. I’ve watched fellow friends who are business owners hire too quickly, and I’ve seen the strain that puts on the business. Get too big too fast, and it’s hard to rewind.

It’s also taken us an arduous, painstaking two-and-half years to hit $700K in cumulative revenue. Up until two months ago when we moved to self-signup, if a business owner was interested in purchasing Know Your Company, she or he had to do a 30-minute in-person demo with me via GoToMeeting, Skype, or WebEx. Not a demo with a salesperson — but with me, every time. In fact, I’ve done almost 500 of these in-person demos over the course of two-and-a-half years!

Every single Know Your Company product feature we shipped was conceptualized, designed and engineered by Matt and me. Every single article written, marketing site redesign, social media push, conference talk (I’ve spoken at more than 30 conferences, CEO groups, company events, etc.), and conference partnership was something the two of us executed. All the support requests, account setup, account management, invoicing, billing for 200+ companies with 12,000+ employees in 15 countries — were handled by just two people.

Matt and I have pushed ourselves to do everything we can as a two-person team, ever mindful of staying profitable each month. And we’re still wary about bringing someone else on board. When we do, we want it to be measured and truly, truly needed. (We only recently brought on a part-time data intern for the summer.) Yet it works for us.

I prefer our slow, intentional, in-control growth. It gives me the time, focus, and energy to feel we are doing right by our customers, creating the best product possible, and building company that lasts for the long haul. (My goal is to run Know Your Company for the next 10, 20 years, if I can!) And our pricing model supports that.

As a two-person company, with more than 200 customers, $700K in cumulative revenue, less than three-years-old, profitable, and bootstrapped… I’m proud of how far we’ve come.

Plus, with our recent move to self-signup, things are looking up, more than ever. Last month, we had our biggest month of sales to date… and we’re on pace to hit $1 million in cumulative revenue by the end of the year (fingers crossed!).

Will it work for you?

Who’s to say that this exact pricing structure will work for your business.

But here’s what I will say: if you focus on helping your customers get the outcomes they want and keeping your overhead low, there’s a clear path to profitability.

What matters less is if the pricing model you’ve decided on is “popular” or not for your industry. Who cares if the way you price something or the way you sell something or the way you run your business is unconventional. Who cares if people are saying to you, “Can I ask you a weird question?”

What’s most important is that you’re running a business on your own terms and providing real value to people by making some aspect of their lives better.

I hope by sharing our numbers — and making ourselves a bit naked — it’ll help you reach your own conclusions as to whether this one-time pricing — or another model — is something that will work for you.

So, to anyone out there who’s starting a business and trying to figure out how to make money and have an impact on others: Charge people what you think it’s worth, do what you can with what you have, and focus on doing a really damn good job.

Big news! We’re now Know Your Team. Check out our new product that helps managers become better leaders, and get the full story behind our change.

P.S.: If you did indeed enjoy this piece, please feel free to share + give it ❤️ so others can find it too. Thanks 😊 (And you can always say hi at @clairejlew.)

How to give feedback to your boss

When I was an employee four years ago, I felt stuck.

I had some ideas about how I thought the company could be better… but I had no clue how to bring it up to my boss at the time.

How could I mention these ideas without it feeling like an attack on him? I didn’t want him to think I was arrogant, assuming I could run the company better than him. And I didn’t want him to become defensive, and brush off my ideas outright.

I was torn about what to do. Comments can easily be misconstrued — and in this scenario, it could cost me any good will with my boss, my reputation in company… and even my job.

I decided not to do anything. I didn’t share my ideas with my boss. I ended up leaving the company later that year.

I’m not proud of my silence. Looking back, I often think: What should I have done instead?

Now four years later, after consuming every article, study, and book I could get my hands on, working one-on-one with companies through a consulting practice I started, and speaking with hundreds of business owners as the CEO of Know Your Team… I know exactly what I should have done to give feedback to my boss.

If you’re an employee and you want to give your boss feedback, here’s are the lessons I’ve learned on what you can do.

Set up a time to talk

The worst thing you can do to your boss is surprise them with information or create a situation where they feel caught off-guard. Instead, you can send over a note to your CEO or manager to set up a specific time to talk with them.

Here’s something you could start with:

Hey [your boss’s name],

I know how much you care about maintaining a strong culture at the company… I have some thoughts / ideas on that I’ve been thinking on lately! Would you be up for chatting sometime? Perhaps we can grab 30 minutes over coffee next week, when things slow down for you? Please let me know! Looking forward to it.

Ask for feedback about yourself

Another way to kickstart the conversation with your manager is to ask for feedback about yourself. This will help your CEO or manager let their guard down, and realize that you’re not looking to blast them. You’re showing you’re open to a two-way dialogue.

For example, you could write something like this to them:

Hey [your boss’s name],

Lately, I’ve been thinking hard about how I can improve in my role. Would love to get some feedback from you and riff on this together. I’ve also been chewing some ideas about the company that I’d love to share with you too, if you’re open to it! Got time for coffee sometime next week?

Just make sure you’re open and ready to hear this feedback about yourself. In other words, don’t be willing to dish it unless you can take it.

Make your intention clear upfront.

When you do sit down to give feedback to your CEO or manager, begin the conversation by making it very clear why you’re wanting to give them this feedback.

For example, let them know: “I’m saying this because ____ matters to me, and it’s something I could see benefitting the company as a whole. And just to be clear, these thoughts aren’t coming from a place of disrespect or mistrust in you or your ability — I completely understand and accept that this is your thing to have the final call on.”

Another way to do this is by reinforcing what you have in common. You’ll want to remind your CEO and manager that you’re on the same team. “I’m only sharing this because I care about the company culture and am worried about ____, and I know that’s something we both care about.”

Acknowledge that it’s only your opinion

You don’t want your words taken as a critique on your boss’s character. Your words are not a definitive stance on their value as a person — and they shouldn’t be interpreted as so. So you’ll want to reinforce that your feedback is coming only from your personal point-of-view. This will show humility on your part, and encourage them to not take your comments personally.

For example you could say: “Keep in mind this is only my opinion and I could be way off here… I thought you might want to know though, regardless, and I wanted to share these thoughts with you for the sake of transparency.”

One last tip: In preparation for this conversation, I’d highly recommend writing down what you want to say beforehand. (I even do this today as CEO when I give feedback to an employee.) Consider… How do you want your boss to feel after you’ve had the conversation? How can you frame what you’re saying to help them feel that way? Articulating the points clearly to yourself first will help make sure you articulate them clearly to your CEO.

Granted, this all is much easier to do in theory than in practice. I remember all too well how nerve-wracking it was to even consider reaching out to my boss like this. But take that first initial step to schedule the time to sit down with them, and you’ll be surprised at how open most CEOs and managers are to hearing what’s on your mind.

Don’t get too hung up on anticipating how your CEO might react. You can never control another’s person’s reaction. You can only control yourself — what you put out into the world, and your own intention behind it. So focus on that. Fear should never get in the way of you sharing something you think could truly benefit the company.

If the content of what you’re trying to express is worth it, there’s only one way to find out how they’ll react: Speak up.

You’ll never know, otherwise. It’s what I wish I would’ve done four years ago.

P.S.: This was originally published on the Know Your Team Blog. If you enjoyed this piece, please feel free to share + give it 👏 so others can find it too. Thanks 😊(And you can always say hi at @clairejlew.)

Anonymous feedback breeds a culture of distrust

As the CEO of Know Your Team, I often get asked about my opinion on asking employees for anonymous feedback. Is it a useful approach? Would I recommend it?

My answer is the same each time: I hate anonymous feedback. I hate giving it, and I hate receiving it. Here’s why.

Anonymous feedback breeds a culture of distrust — especially in small teams and organizations.

When you ask for anonymous feedback, the first thing that oftentimes runs through employees’ minds is, “Hmmm will this really be anonymous?” They speculate: “I wonder who’s viewing the data? Or if they’ll be able to tell what I wrote?”

You’ve immediately injected a tone of suspicion and skepticism into your company.

On top of this, when you receive this anonymous feedback, you frequently end up feeling suspicious and skeptical yourself. You think: “Hmmm I wonder who wrote this?” It’s a completely natural human tendency. And in some cases, you may even be able tell who the person is from someone’s tone or word choice, thus nullifying the purpose for anonymity in the first place.

This suspicion and skepticism is poison for a healthy company culture. Particularly when one in three employees already don’t trust their bosses, you’re only furthering their distrust. Asking for anonymous feedback fuels an existing an assumption that CEOs do not have their employees’ best interest in mind.

After all, if you’re trying to foster truthfulness and transparency in your company, why resort to a covert, opaque way to get feedback?

But even greater than these cultural repercussions, the biggest reason anonymous feedback sucks is because it’s difficult to act on. I hear this from dozens and dozens of CEOs who’ve started using Know Your Team after running anonymous surveys.

These CEOs told me that after collecting feedback anonymously from their employees, they’d get stuck — they didn’t know how to follow up on the feedback, or implement any of it. They couldn’t go talk to the department that the problem was brought up in, or have a one-on-one with a specific employee and resolve the issue.

Anonymous feedback didn’t help them act on the feedback, itself. This is counter to the very purpose of getting feedback in the first place: to be able to take action.

So what can you do instead of asking for anonymous feedback? How can you encourage employees to honestly speak their minds, without resorting to hiding behind anonymity?

Here are a few things you can do…

State your intention clearly

When a leadership teams wants to start getting more regular, honest feedback, they’ll often kick off a survey or software tool or initiative without any context or explanation as to why. This can be a huge mistake, as your employees might not understand what your intention behind wanting to get this feedback.

Rather, you want to want to be upfront and clear about why getting feedback is important to you — and not just assume employees already know this. This helps clear the air and create an environment where people feel safe giving candid feedback, without having to be anonymous.

Show vulnerability

If you want your employees to be transparent with you, you have to start by being transparent with them as the leader. Showing vulnerability — that you don’t have all the answers, that you want to improve as the boss — helps your employees feel comfortable giving you feedback non-anonymously.

For example, when you announce to your employees that you’d like to start getting feedback transparently, you could say something like: “I feel a little disconnected from everyone and that’s been bugging me. It’s my fault, and I’d like to make an effort to get better.”

As a leader, simply saying or writing the words, “it’s my fault,” signals to your employees that you’re open to hearing the truth of what they really think.

Ask specific questions

A huge part of getting meaningful, honest feedback from employees has to do with the questions you ask your employees. If you want answers, you’ve got to ask questions. You can’t expect the answers to come to you.

These questions have to be good — they need to be specific, relevant, and well-thought out. If you ask a general, half-hearted question, you’ll get a general, half-hearted response. For example, ask someone “How’s it going?” and the most-likely response will be, “It’s fine.”

Instead ask, “What’s one thing about the last board meeting we held that could’ve been better?” This specific question zooms in on “one thing”, one event, and asks for an actionable takeaway. As a result, the responses to the question are far more likely to be more focused and actionable too. And because you’re asking it non-anonymously, you’ll be able to follow up with the specific person to clarify the thought or implement the idea.

Do something

Taking action on the feedback you receive is the most powerful way to encourage your employees to be honest with you. This is because, more than anything, seeing some action or response to the feedback given is what employees want.

Now this doesn’t mean you need to go and implement every single piece of feedback that you receive. Nor does it obligate you to make any changes that your employees might suggest.

Rather, you can take action on feedback to show your employees that you’re listening. For instance, when you decide that an idea isn’t feasible or that you aren’t going to implement a piece of feedback you received, be sure to explain that to your employees. Pull back the curtain on why the company isn’t going to take a certain direction, so employees don’t assume a reason for why something isn’t happening, or that you ignored their feedback.

And then when you do receive a piece of feedback that is worth acting on, you’ll want to jump on it immediately. Knocking out a quick win — especially when it’s low hanging fruit — can shift your company’s culture. This could be as small as getting an employee a new office chair, or changing your company’s phone service. But that responsiveness matters, and it’ll prompt employees to be honest with you the next time you ask for their opinion or feedback on something.

When you do these things, you create less of a need to have people hide behind anonymity. You demonstrate trust, and empower your employees to be accountable for what they believe and what they say.

I understand that this can feel scary. It’s much easier to have a box of anonymous suggestions that you can keep at arm’s length, versus having to face the opinions of people who you work alongside everyday.

But it’s worth it. I talk with hundreds of companies every day who choose to ask their employees for feedback in an open, honest way. And they see the positive results firsthand. CEOs have shared me that their employees will say things to them like, “Wow, I’m so impressed with how open the leadership team is,” or “This means a lot that you’re asking such tough questions so openly — my last company would have never done this.”

Will your employees say the same?

Enjoy this piece? Read more of Claire‘s writing on leadership on the Know Your Team blog. And, check out Know Your Team – software that helps you become a better manager.

Our biggest blindspots as CEOs

After collecting data from the past 2.5 years through Know Your Team, I’m sharing the most surprising things CEOs overlook…

“What’s the hardest part about being a leader?A few years ago, the Washington Post interviewed Peter Thiel, cofounder and former CEO of PayPal, and asked him this question.

This was his response:

“As CEO, you’re somehow both the total insider and the total outsider at the same time. In some ways you’re at the center of the organization. In other contexts, you’re like the last person to know anything.”

You’re like the last person to know anything.

Of all the things that make it tough to be a CEO — the burden of decisions you have to make, the psychological toll of risk you bear, the interpersonal politics you juggle — Peter felt that “being the last to know” was the hardest thing about being a leader.

He’s not alone in feeling this way.

I hear this sentiment all the time. As the CEO of Know Your Team, I talk with hundreds of founders, CEOs, and business owners who tell me: “I had no clue that a project was falling behind,” or “I was completely blindsided when our senior employee decided to put in her two weeks notice.”

As a CEO, it can feel utterly maddening. You want to know about issues in your company before they bubble up into something bigger, and you try everything in your power to be “in the know”: employee surveys, suggestion boxes, one-on-ones, town hall meetings… You tell your employees that your door is always open, that you want to hear their honest feedback, that you can handle the truth…and yet it doesn’t seem enough. You’re still always the last person to know anything in your company.

At Know Your Team, this is what we do best: we help CEOs clear the air in their companies, and not be the last to know. With our software tool, we ask the right questions, in the right way, at the right time, to help CEOs get the insights they want. Our belief is you only get answers if you ask questions.

We’ve done this for the past two-and-a-half years, asking carefully crafted questions to over 200 different companies with 10,000+ employees in more than 15 countries… and it’s been fascinating to see the data come together.

I decided to pull the most surprising insights from that data, and share them for the first time in written form here.

Based on the questions we ask thousands of employees through Know Your Team, here are the three biggest blindspots CEOs overlook…

Blindspot #1: Your employees feel like they could be contributing more.

When asked through Know Your Team, 75% of employees said, “Yes, there’s an area outside my current role where I feel I could be contributing” (688 employees answered this across 107 companies). This is contrary to a common perception CEOs have: that their employees are slammed and completely at capacity.

Now, that perception may still very well be the truth. Your employees often do have a whole lot on their plates.

But they still hunger to grow, learn, and further their own abilities in ways that we as CEOs might not always be aware of. This might be a management role they’ve always wanted to take on, or perhaps a new skill that they’ve been wanting to develop.

Employees have untapped potential that you could be helping to encourage… if only you knew about it.

What can you do about this? Find a way to help your employees develop the skills they want.

You want to nurture your employees’ interests and abilities that help them grow professionally and personally. This can be as straightforward as asking your employees, “What professional skill(s) have you always been wanting to develop?” or “Is there something you’ve always wanted to learn professionally but haven’t had a chance to yet?”

Another way to uncover this information is to consider that employees oftentimes love to learn from their peers. Ask your employees, “Is there anyone at the company you wish you could apprentice under for a few weeks?” This is one of the most popular questions we ask through Know Your Team. When asked across 145 companies to 1,756 employees, 92% of employees said “Yes, there’s someone in the company I’d like to apprentice under.”

You don’t need to go hire expensive consultants or create elaborate training programs to help your employees develop the skills they want. It can be as simple as utilizing the talents of the employees you already have.

Blindspot #2: Your employees think your company is behind the curve.

From the responses gathered through Know Your Team, we found that most employees believe their company is behind the curve in a certain area. In fact, when asked directly, “Do you think our company is behind the curve in something in particular?” 66% of employees said “yes” (1,072 employees responded to this across 147 companies).

On top of that, employees frequently notice competitors pushing out ahead and doing things they wish their own company was doing. Seventy-six-percent of employees have said, “Yes, I’ve seen something recently and thought to myself, I wish we’d done that” (1,119 employees answered this across 165 companies). Even further, 65% of employees said “Yes, I’ve seen something a competitor has done recently that’s really impressed me” (564 employees answered this across 104 companies).

Yet, how often do you have employees actively coming up to you, telling you about the latest neat thing a competitor’s done that you should be aware of?

My guess is… not that often. You’re sitting on a wealth of helpful observations and good ideas with the potential to improve your business. And you’re oblivious to them simply because, as leaders, we forget to ask.

What can you do about it? Don’t kill an idea too quickly.

We all have a bias against creativity in time of uncertainty. So when an employee brings up an idea or suggestion (especially if we’re feeling overwhelmed or flustered at that moment), our knee-jerk reaction is to cast it aside. “Not now,” we tell ourselves.

To combat this natural bias, ask yourself: “What are the ideas I’ve been hearing right under my nose that I should be listening to?” Force yourself to recognize that you might have a mental model or preconceived notion about what ideas are good and bad, which may be closing you off to ideas that are actually worthwhile.

You can also try spending 15 minutes each week writing down questions that challenge the status quo. This technique, often used to promote innovation in a company, will help you shake loose your predisposition to move things along in your company the way they’ve always moved along.

Lastly, you can simply ask your employees: “Is there anything in particular you think we’re behind the curve on?” From this question through Know Your Team, we’ve had companies make tangible improvements to business development, customer support, software security, and employee recruitment.

Blindspot #3: Your employees want more feedback… but they don’t want more performance reviews.

Perhaps this isn’t a surprise to some. It’s well documented that employees today, more than ever, crave to understand what they could do better at their jobs. In our data collected through Know Your Team, we found the same: 80% of employees want more feedback about their performance (1,468 employees were asked about this across 138 companies).

However, employees don’t see performance reviews as the best way to get this feedback. Sixty-three percent of employees feel that, “Yes, we do performance reviews frequently enough” (650 employees responded to a question about this across 73 different companies).

It’s no secret people don’t like performance reviews. Have you ever sat in one? They’re awful. We hate giving them. We hate being on the receiving end. Why? They’re a long, stressful, giant dump of information from the past year, often arbitrary with ratings and scores.

What employees want instead is regular, helpful feedback. The more regular this feedback and interaction is with managers, the more engaged employees are. A recent 2015 Gallup study show that managers who hold regular meetings with them are almost three times as likely to be engaged as employees whose managers do not hold regular meetings with them.

It’s more than evaluating employees at the end of the year just to “check a box.” It’s open, frequent conversations that are centered around mentoring and coaching employees.

What can you do about this? Communicate consistently.

Consistent communication from a manager — be it via in person, over the phone, electronically — is proven by Gallup to be connected to higher engagement. This could be one-on-ones, all company meetings, social opportunities, all-company get togethers.

In particular, Gallup found that managers who are most successful at engaging their employees use a combination of face-to-face, phone and electronic communication. And, the most engaged employees report that their managers returned calls or messages within 24 hours.

The key here is consistency. If you want your company culture to be open and transparent, you’ve got to practice open and transparent communication regularly. The more often you do it, the more natural it will feel. Practice makes habit. And those habits will evolve into your culture. This is how you create a culture of openness.

I understand how difficult this is to do. But your employees want to know you’re listening and are responsive — and your consistent communication shows this.

It’s not a one-off, “do it once and I’m done” sort of thing you do. It’s not transactional. It’s genuinely caring about the relationships you’re building with your employees, and showing that you care.

This means getting to know your employees outside of work as well. Gallup reported that employees who feel as though their manager is invested in them as people are more likely to be engaged. So creating opportunities for people to engage socially, share a bit of their lives outside of work, is a way to increase your employees’ engagement.

In sum, as a CEO, founder, or manager, you’ll want to keep these blindspots in mind…

  1. Employees feel like they could be contributing more.
  2. Employees think your company is behind the curve.
  3. Employees want more feedback… but they don’t want more performance reviews.

Now granted, these are insights we found across the 200+ companies who use Know Your Team. For your company, your blindspots could be different. Depending on how big your company is, what interpersonal dynamics you have, how well you communicate across the company, etc.… what you don’t know varies from company to company. And it changes over time, as you grow and hire new folks and other folks leave, as the market changes, and as your business offering evolves.

But by understanding what’s most commonly overlooked, and seeing what’s been surprising to our CEOs who use Know Your Team, you can avoid the blindspots that others have failed to see.

Enjoy this piece? Read more of Claire‘s writing on leadership on the Know Your Team blog. And, check out Know Your Team – software that helps you become a better manager.

Launch: Know Your Company moves to self-signup!

About three years ago, Basecamp built Know Your Company to solve their own growing pains as a company. The tool helped their partners, Jason and David, get weekly insights into their company they’d never known about before.

Know Your Company worked so well for them that they decided to launch it as a product. Word soon caught on, and Know Your Company started working well for other companies too… It worked so well in fact, that Basecamp decided to spin out Know Your Company into its own separate company, and I became the CEO.

That was back in December 2013. Since then, we’ve worked with hundreds of companies, helping over 10,000 employees in more than 15 different countries feel more connected and their voices more heard.

During that time, we’ve learned a lot. And those learnings are what pushed us to make a big change to our business…

Starting today, you can sign up for a free trial of Know Your Company yourself. You can come to our website, see the product for yourself, take it for a spin, and then decide whether or not you want to buy it.

This is the first time we’ve ever done this.

Prior to today, if you were interested in using Know Your Company, you had to signup for a 30 minute personal demo with me via WebEx, GoToMeeting, Skype, Google Hangouts, etc. We didn’t show the product on our website at all. No screenshots. No video. Nothing. If you wanted to see the product, you had to talk to me. It was all very manual and very high-touch.

Why did we do this? And why are we now changing it?

Focusing on the outcomes

When I first started running Know Your Company, the most important thing to me was to make sure people had really good outcomes when using the product. I wanted to make sure the CEOs we worked with were learning things about their companies they never knew before .

In order to get those successful outcomes with Know Your Company, I realized you need an upfront commitment from the CEO to spearhead the initiative. Getting to know your company requires a shift in culture at your company. That kind of shift only happens when it starts at the top.

We figured that if a business owner was willing to commit 30 minutes of her time for a demo, she’d be committed to using Know Your Company in the right way. She’d take the program seriously, write her own thoughtful questions, and act on the feedback she received. And in turn, she’d see successful outcomes in her company because of it.

So we purposely created an initial high barrier to entry in order to filter for that commitment.

We also knew that because I’d be talking one-on-one with each CEO, I’d be able to ensure that Know Your Company was a good fit for them. I’d share best practices around the tool — how to encourage employees to give honest feedback, how to follow up with employees — so they could get those outcomes they were looking for. You can’t be there for your potential customer and have their back like that, unless you go the route of a manual, high-touch sales process, like we did.

It worked well. For the past two and a half years, we’ve helped our customers achieve some incredible results. I regularly hear how a company has changed their benefits policy and saved bunch of money, because of Know Your Company. Or how they’ve restructured their meetings as a company, and become entirely more productive. Or how they revamped their business development because of an insight learned through Know Your Company, and have become more profitable as a company.

Most incredibly, some companies have even detected through Know Your Company that an employee was disgruntled, and were able to keep that person from potentially leaving. All because of Know Your Company.

In fact, 98% of the customers who signed up for Know Your Company last year are still with us today.

Wanting to help more people

While we’ve helped our customers achieve great outcomes with the product, there was one big, obvious downside to this manual process: We weren’t getting to help as many people as we’d like. Naturally, when you’re doing in-person demos, there are only so many you can do in a day. You start to feel the constraints around scale.

Sure, we could potentially build out a sales team and scale that way… But to what end?

With our manual process, I also saw how we could be unintentionally turning away some business owners who might otherwise be a great fit for Know Your Company. I could see how asking some business owners to commit 30 minutes of their time for a personal demo could be discouraging. Perhaps they were highly committed to getting feedback from the team, but the barrier to entry we created was too high.

So at the end of last year, I asked myself this question:

“Are we doing our best to help as many people as we can, in the best way that we can?”

My answer was, “No.” There’s more we can do to help even more people.

So we set to work. We decided to move Know Your Company to be self-signup so we can help even more people benefit from the outcomes we know we’re able to help create.

Better than ever

My desire to help more people feels urgent because I believe the current version of Know Your Company is the best version we’ve ever put out.

We’ve spent the past almost three years studying the hundreds of companies who’ve used our software — coming up with the best questions to ask, refining our methodology to ask those questions, and observing the best ways to use those questions to uncover blindspots in a company.

The 208 questions that we give you with Know Your Company have been carefully researched, tested, tweaked, and then tweaked again. And the method behind how we ask those questions something we’ve evolved over time.

We’ve come up with a system that works.

Now, more than ever before, is the best time time for a business owner to be using Know Your Company. And now, we’re excited to have more people be able to use it.

Put it to work for you

If you have at least 10 employees, but no greater than 100, and you’ve been feeling growing pains as a company, come take a look at Know Your Company.

You’ll be able to try us on for size, yourself. Sign up here for a free trial of Know Your Company.

Or if you’d prefer a personal walkthrough of the product, I’m still very much happy to do that. You can schedule a 30 minute demo with me here.

Either way, I’m excited to fully open the doors to Know Your Company, and help more people create an open, honest work environment at their companies.

Come on in!

Big news! We’re now Know Your Team. Check out our new product that helps managers become better leaders, and get the full story behind our change.