Why The Move to Remote Has Accelerated The Need for New Tools
The first generation of SaaS was about single player workflows and data. The second generation added collaboration (aka multiplayer). And the third generation added ML/AI to reorganize/optimize those workflows based upon the intelligence of the computer, not the habits of the user. Not every industry and not every profession has moved through these generations in sync. Early adopter verticals — such as software development and tech sales — is mostly in Gen 3. Some of the largest markets including construction, health care, finance and agriculture are moving into Gen 1 and 2, with specific toes dipped carefully into 3. And my framework here also applies mostly to the US, with other part of the world ahead and behind the pacing I’ve suggested above.
Homebrew has invested into all three generations of SaaS mentioned here, and continues to do so with the previous 12 months including undisclosed seed rounds into promising teams working on agriculture fintech, health care backoffice automation and salesperson performance. But I also wanted to suggest there’s a coming Gen 4 of SaaS leaning heavily into EQ instead of IQ because I truly believe the Future of Work involves understanding emotions not just data.
When friends ask me to reflect on the impact of 2020–21 on startups one of the observations I shared is how dramatically the urgency increased around conversations that were more about culture, behavior and values than just strategy, financing and product. Especially during the second half of last year the convergence of the COVID pandemic, US political race and societal outrage over George Floyd’s murder, resulted in CEOs confronting a host of situations that weren’t on their roadmap.
In some cases these leaders wanted to be proactive in the moment. Other times it was their teams, customers or reporters probing for their POV. And regardless they wanted to be thoughtful, deliberate and consistent in how they, and their companies, engaged. So my conversations with these CEOs wasn’t about pushing my particular opinion on these matters or rushing them into a conclusion, but rather helping them focus what they were hoping to accomplish with their internal and external positions. I’m proud at the range of outcomes since they were honest and authentic, not performative.
Throughout these months one thing became very clear with all the leaders and managers I spoke with — they didn’t have the software tools to engage and understand their teams, their customers and other constituents at a deep emotional level. They had plenty of communication utilities which made conversations virtual but they didn’t have modern tools built with EQ in mind. So you had “Zoom Fatigue” and burnout and HRIS platforms designed for compliance not engagement. Thankfully I knew there were better options in development. How? Because we’d invested in them 🙂
Over the past 12–18 months another theme had started to coalesce in the Homebrew portfolio — Future of Work tools that were built with a combination of IQ *and* EQ. Gatheround in the teambuilding, education and collaboration space; Humu, smartly bridging the gap between strategy and action for your teams; Ethena for modern compliance training and behavior change; and Assembly in the lowcode HRIS market. Ahead of the extraordinary circumstances of the past year and a half, these founders had intuitively sensed and previously experienced the limitations of Generation 1, 2 and 3 tools. And while I don’t think they all agree with this market positioning, to me they represent the next wave we’re going to see in Future of Work tools, designed with tangible and intangible sense of how people are left feeling by the software they use, not just how productive they were. It’s still very early in this cycle but hybrid and remote work is pulling us forward with new types of communication, virtual HQs, and socialization needs. And software that remembers humans are the endpoints.