Profitable Happy5 Aims at Global Market Through Culture Transformation Platform

The SaaS (software-as-a-service) industry that started as technological innovation has become a necessity for businesses. Companies are trying to implement this technology in various sectors, from digital marketing, business process optimization, product development, and HR management.

For the last 5 years, Happy5, an Indonesian-based Software-as-a-Service (SaaS) company, has been trying to solve the problem in the HR sector by empowering agile ways of working. They believe the HR software company as the most fitting way to scale high performing culture in any organization.

Founded in 2014, Happy5 has pivoted its business twice. At first, they're focused on Happiness, then switched a little bit to Culture and now to measure Performance. After the third year, they've finally found that employee happiness as the value proposition was not fit to Indonesia market and decided to change it into the Culture Transformation Platform.

Doni Priliandi, Founder & CEO of Happy5, said, "Companies are now doing a lot of culture transformation. But they have painful problems with communicating new values and transformation agenda, getting fast insights from employee and measure behavior demonstration."

Fixing the value proposition

The early days of Happy5 are all about customer validation on a product that can measure employee's happiness, direct communication, and recognition. Until they realize it's not making money and here comes the first pivot.

The product doesn't change, only the value proposition shifted from Measuring Employee Happiness into Enterprise Social Media. They started to charge Rp10,000 / user / month annually with advance payment. Some of the buyers come from internal communication, but that was not enough.

It's not until they changed the value proposition into a culture transformation platform, that they can multiply the price by 4 times with a larger user base from the culture team under HR Department or directly to CEO.

The app offers an all-in-one communication and culture platform. It consists of 3 main groups of features, Enterprise Social Media; Employee Recognition, and Employee Survey. Currently, BCA, Kompas Gramedia, Telkomsel, Pegadaian, and XL are trusting Happy5 Culture as their platform of choice to do culture transformation.

In the 4th year, the company finally made some profit. With the Annual Recurring Revenue at $708,000, which is increased by $456,000 or nearly 3 times from the previous year. This year, they multiply the revenue to $1.3 million and still growing. They've hit 91% in gross margin and 5% of net margin in 2019.

Also, they have designed a holistic solution that seamlessly combines adaptive goal management (Objective Key Results) with high-configurable performance review and project management. The pilot costs Rp140,000 / user / month.

And as of now, BCA, Kompas Gramedia, Telkom (pilot at Amoeba Team), Pegadaian (pilot at a couple of regional offices) have chosen Happy5 Performance as their platform of choice to run agile performance management.

"We are super privileged to have a chance of helping reputable organizations in Indonesia like BCA and Telkomsel. And it's a good start to learn both on implementation and product improvement. It gives ideas on how to scale too," Priliandi said.

The US scenarios

According to the research by Market Expertz, the global human resource (HR) software market currently has a market value of $15.8 billion and North America holds the largest HR software market in the world. With the not-yet-sufficient market for the SaaS industry in Indonesia, Happy5 aims big for the US market.

Priliandi is planning to expand to the US market by Q3 2020, with possible fundraising from the US VCs.

"In 2020, Happy5 should have a presence in the US, regardless of how much money we have."

The other priority is to build a better engineering team and improve the management team. Priliandi also shared his target to multiply sales by twice, projected to US$2.8 million.

"With extra funding, we can multiply at least three times our sales," he added.