Why High Alpha Invested in Woven
Marc Andreessen famously stated in 2011 that “software is eating the world.”
Marc was right — and it’s hard to overstate just how prescient his idea was at the time. Since then, our world has been molded, both at home and in the office, by digital transformation. The rise of public cloud infrastructure and the Software as a Service model helped software become a horizontal solution, penetrating every industry. Software has become a core part of every company, leading Satya Nadella to proclaim that “every company is a software company.”
All of this has led to a sharp increase in demand for all technical talent, especially software developers.
The Bureau of Labor Statistics estimates there are 1.4 million developers in the US and that’s expected to grow at a 21% CAGR through 2028. A quick search shows almost 200,000 software developer roles that are currently open, many of which advertise $100,000+ salaries. Estimates show that almost one million developer jobs will go unfilled by the end of 2020. Unfortunately, despite the interest and high pay, there’s still a shortage of software developers.
Hiring developers has always been difficult, but it’s turned into an all-out talent war. We hear it every day from our portfolio companies, and we see firsthand the struggles of scaling engineering teams. Companies are forced to move faster than ever, as top engineering candidates can land roles at competitors within a matter of days. To make matters worse, most scaling companies don’t have technical recruiters in-house, forcing senior engineers to devote significant time to recruiting or to outsource the recruiting process to expensive headhunters. A bad developer hire can cost an organization hundreds of thousands of dollars between salary and lost time.
Despite this, many companies still hire strictly based on resume bullet points (did they attend a top school?), job history (have they worked at Google or another top tier company?) or gut reaction (do I like them?). These archaic methods often result in the wrong hire, as well as bias. We felt the pain and knew there had to be a better way.
Woven’s founding team, Wes Winham, Kyle Shipley, and Anthony Panozzo, used to meet for lunch on a weekly basis to discuss the challenges in scaling their respective engineering teams and brainstorm better ways to hire. Woven was born out of these discussions, built to solve the pain they felt as engineering leaders.
Since launching in 2018, Woven has earned a reputation as a leading provider of software engineering candidate assessments. Most existing assessment solutions focus on algorithmic problem solving and mainly assess the technical prowess of pre-vetted candidates. Woven’s approach is significantly different, putting all candidates — regardless of their resume — through an hour-long assessment that looks and feels like actual work. This provides a more robust view of candidates’ technical, communication, and problem-solving skills than a traditional code quiz. The end result is that Woven is able to discover “hidden gem” software engineers — high-quality developers that are often missed by the traditional recruiting and screening process.
We first backed Woven during their pre-seed round in 2018 just as Wes, Kyle, and Anthony were beginning their mission to change the hiring process for technical talent. It’s been a privilege to join them on the journey and we’re proud to announce that High Alpha is leading Woven’s seed funding round. The investment builds upon High Alpha’s Future of Work thesis and follows a year where Woven increased revenue by 340%. Woven’s growth stemmed from frustration with the status quo of developer hiring, and has continued thanks to Woven’s proven success at finding “hidden gem” software engineers — high-quality developers who are often missed by traditional recruiting and screening processes.
In the past year, Woven’s customers have been able to hire great-fit engineers faster. This means that Woven customers’ engineers have spent less time recruiting (in turn, saving those companies money), and reduced bias in their hiring process. In fact, a third of all hires made through Woven would have been rejected based on their resume alone.
Internally, the Woven team calls these candidates “Hidden Gems,” and they have transformed the way Woven’s customers think about hiring. In fact, during our reference calls, one customer said their top devops engineer “wouldn’t have received an interview without being discovered as a hidden gem through Woven’s platform.” Another customer told us that in 60 days of using Woven, they saved $100,000 on headhunter fees and saw an 80% reduction in engineering time spent on hiring. We also heard a customer comment they saved 54 engineering hours during the first 90 days of use while hiring better talent significantly faster with less involvement from the engineering team.
Woven is fundamentally changing the way forward-thinking companies hire engineering talent. If you’re ready to move beyond traditional methods and hire the best talent regardless of resume or background, reach out to Woven.
This post was originally published on HighAlpha.com.
High Alpha is a venture studio pioneering a new model for entrepreneurship that unites company building and venture capital. To learn more, visit highalpha.com or subscribe to our newsletter.
