He burned through his savings to keep his SaaS startup afloat, and now it’s profitable

Human capital management (HCM) software is a promising business: Its current global market value is US$15 billion, and that’s expected to double to US$30 billion by 2026.

With the industry dominated by Silicon Valley giants such as SAP, Facebook, and Workday, it seems harder for startups to enter this market. However, Doni Priliandi, a former business development executive for a HR consulting firm who sell SuccessFactors – SAP’s cloud-based HCM software – in Indonesia, begs to disagree.

“SAP decided to acquire SuccessFactors in 2012 for US$3.4 billion to provide a more relevant solution. Today, we see the rise of new startups that come with a more agile approach. That’s the cycle,” he says.

Reydi Sutandang (CTO, left) and Doni Priliandi (CEO) / Photo credit: Happy5

Since 2014, Priliandi has been building Happy5, a software-as-a-service (SaaS) startup focused on HCM systems. At present, the company’s software is used by around 60,000 employees from 24 companies in Indonesia, including Bank Central Asia, the country’s biggest private bank, and telecommunications giant Telkomsel.

The startup has been profitable for the past two years and plans to take the business beyond Indonesia this year. Happy5 charges customers a monthly subscription fee of around US$10 per user and recorded US$1.3 million in annual recurring revenue (ARR) in 2019, Priliandi says.

David vs. Goliath

Happy5 initially marketed the service as an internal communications tool for employees. While it managed to attract users, growth was hard to sustain in the face of competition from more established players such as Facebook Workplace and Slack. Priliandi then decided to target human resource division instead.

Dubbed Happy5 Culture, the software is an internal timeline-based social media platform that allows employees at client-companies to post job-related content, congratulate co-workers on their achievements, or recognize colleagues for their contributions to the company. The platform also enables businesses to broadcast information or surveys to their entire workforce – a process that Priliandi claims is more efficient than email.

“Employees tend to ignore the invitation to join a survey via email,” he observes. “With our tools, one of our customers can have 7,000 out of 12,000 of their employees fill out a survey in just a couple of hours.”

The software also generates quantitative data such as employees’ achievements that HR executives can use as basis for appraisal.

Another software offered by the startup is Happy5 Performance. Developed in 2017, it manages the staff’s activities to help them meet the organization’s goals.

Unlike conventional platforms that only maintain quarterly and annual performance reviews, Happy5 Performance supports newer systems like objectives and key results (OKRs), agile goal-setting, ongoing feedback, and project-based reviews. The software also allows companies to link data from other tools such as Asana and Jira.

Priliandi believes that Happy5’s specific value proposition, along with its affordable price, can fill a gap in this saturated market despite intense competition from bigger rival.

Google inspiration

Priliandi says the creation of Happy5 was partly inspired by Work Rules, a book written by Laszlo Bock, who was previously senior vice president of people operations at Google. The book explains how Google built its HR processes and culture. The two met in the U.S. two years ago to discuss the possibility of Bock becoming one of Happy5’s advisers.

Crazy experience

Expansion plans