Podcast - Interview with Pedro Bados, Co-founder and CEO of Nexthink
Part of our special series of episodes that we're recording in partnership with the European PR Agency, Tyto, and their own Without Borders podcast, this interview is with Pedro Bados, Co-founder and CEO of Nexthink.
Pedro Bados, Co-founder and CEO of Nexthink, joined Russell Goldsmith and Tyto's Founder, Brendon Craigie online from Boston in the US for the csuite podcast’s special series on leaders of unicorn companies, produced in partnership with Tyto.
Nexthink specialises in digital employee experience management software, with headquarters in Boston and in Lausanne in Switzerland. They reached unicorn status in February 2021, after announcing a $180 million series D funding found, reaching a valuation of $1.1 Billion.
Pedro explained that Nexthink is the pioneer and one of the leaders in digital employee experience. He said Nexthink make sure that IT departments, and companies in general, are providing these services that can really be adopted by their employees.
Inspiration Behind the Business
Nexthink was not an overnight success. When they launched the company, it was more related with security and trying to understand the normal behaviour of computers. He explained that the number one customer for an IT department is the internal employee and it’s critical for them to know the data, so people can then do their jobs properly.
Pedro said that Nexthink is made of chapters. In the first chapter back in 2004/2005 in Europe, start-ups were not something the market was aware of, and it was mainly security the first three or four years.
It was a little bit later when they understood the power and potential of digital employee experience market in 2009/2010 but at that time, there was a big crisis and raising money was difficult.
He said that around 2011/2012, they were still below 10 million in revenue in which they got funding, they then expanded the business to other countries and in 2015/16, they had a Series B and company grew exponentially.
Pedro said some entrepreneurs might think that success must come overnight but Nexthink went through highs and lows, yet here they are with one of the highest valuations for an infrastructure software company in Europe. He believes resilience is probably one of the most important attributes of a company.
Perception of the Business Since Becoming a Unicorn
Pedro said he’s very proud of becoming a unicorn but also the expectations are higher, and the investors are more ambitious. He said the valuation is not so important, but it's a landmark.
Nexthink Digital Employee Experience Score (DEX Score)
Pedro said it’s interesting to understand the relevance of digital employee experience and right now these great employees have choices, companies are worried about attracting and retaining the best talent and one third of the reason people leave a job is related to tools, processes, technology.
Pedro explained that there are no good metrics about how people are perceiving the digital experience, so one of the first things that Nexthink did is really try to standardize this market and create the digital employee experience score.
Pedro said the philosophy is based on hard data, but the other 50 percent is based on sentiment and putting them together into a simple score, in Nexthink’s case, it’s based on six different dimensions.
Nexthink were one of the first, if not the first company to put out a comprehensive score. Pedro believes they have the most advanced technology for engagement and that their score is more accurate, representing the real feeling of the organisation.
However, a differentiating factor for Nexthink is they link their score with actions and that's what their customers really appreciate.
Impact of Coronavirus
The impact of the past year has been massive, according to Pedro. He said Nexthink were able to put out there what they call the 'remote worker pack' so people were able to monitor that everything was working well e.g., Wi-Fi. After a couple of months, Nexthink had a lot of demand for almost HR business cases, for example, wellness burnouts.
Pedro wanted to use ‘Nexthink Engage’, which can measure sentiment, to see if people are doing well. It was outside of their core market, but because they have this real time capability to engage with people based on their behaviour, many people were using it.
Pedro explained that more companies moving to a hybrid model will create a couple of challenges in the future.
He said operationally, it's very hard to run meetings in a hybrid environment and for people that work from home and for them, it's very easy to switch to another company because they don't have this personal attachment. So how can companies really make employees feel that they care about them?
The Future of Nexthink
Pedro said the stage in which they are now is assisting investors and the management team and thinking about potentially an IPO in the years to come. In terms of growing the business, they are just scratching the surface, they are in 5% ,10% of the market opportunity and are continuing to deliver digital experience to many companies in the world.
Pedro said in the traditional world of IT, they thought they knew what was best for their employees, however, now they are starting to include the employees in the thinking process, not at the end as a consumer of a solution. Pedro said fostering a partnership between employees and IT departments is super important to build the technology of the future in companies.
Pedro said sometimes people know the problem, but they don't know the solution.
On average, he said there are 2 incidents per employee, per week and each of these incidents are 28 minutes, so every employee in a company wastes 1 hour of time because of a technology problem. Telling others that there’s a solution or a part for that, is something that Nexthink are constantly communicating.
Building Company Culture
Pedro said for Nexthink, building culture has probably been a little bit easier because their mission is to ‘delight people at work’, as this is what they do for their customers. He said they are very clear about the 4 core values - positive attitude, one team, continuous growth and getting things done.
To create these values, they looked backwards and tried to understand what a successful employee in the company is. Nexthink is also very international, with headquarters in Boston and in Lausanne and offices all around the world.
Pedro said internal communication is very important and something that you cannot fake. He said they make sure that people have a great experience in events and try to over communicate with newsletters. Pedro added they have something called ‘Next in Life’ every month where they tell everyone what’s going on in the company.
He explained that he tries to be very accessible, every single employee who has joined Nexthink has had the opportunity to talk to him on a welcome day in a small group. He said it’s mandatory for all executives to attend a welcome day.
Pedro explained that he likes spending a lot of time with customers and partners to make sure they're successful, but he is not someone who thinks success comes from speaking too much externally. He said success comes from great products, customers getting value and employees that are engaged.
Biggest Communications Challenge
Pedro explained that as the company grows, you must be mindful about the things you say and you must mean it, because people really listen to you.