Damir Davidovic and the four-year wait for ten customers

Four years is a long time to collect ten customers. Long enough for a founder to become intimately acquainted with the phrase “we’ll get back to you.” For Damir Davidovic, that was roughly the opening pace at NEOGOV. The company would eventually reach thousands of public institutions. Its early sales record offers a less glamorous, and rather more useful, place to begin.

Davidovic co-founded NEOGOV in 2000. He had moved from Croatia to Los Angeles to study computer science at the University of Southern California, then worked as a consultant at Accenture. The sequence sounds familiar until the customer appears. His software was intended for government employers, a market where a hiring decision has to survive more scrutiny than a manager’s good feeling about a résumé.

There is a pleasing complication in his career. After building software to help other people hire, he found himself back in Croatia looking for people to hire. The entrepreneur who had left to study in California was helping build a software team in Split. Across both countries, the work kept returning to the same stubborn question: how do you get the right people into an organization?

A computer science degree, then the paperwork

Davidovic’s route into American technology ran through a university classroom and consulting rather than a public-sector career. USC supplied the computer science education; Accenture supplied his next professional stop. By 2000, he was starting NEOGOV with colleagues, including co-founder Ward Komers. The company’s subject was employment administration. An unromantic subject, perhaps, until you need a job.

Software businesses can be understood by the moments they handle. A recruiting system sits between someone seeking work and an institution deciding whom to employ. Onboarding begins after the offer, when the congratulations give way to forms, instructions and the practical business of becoming useful. Performance evaluation comes later still. Davidovic would build businesses around several of these moments, following the employee beyond the initial application.

That continuity gives the career its shape. NEOGOV addressed public employers. HR Cloud, his later venture, took human-resources software into the commercial market. Different buyers, related problems. The career reads less like a succession of unrelated bets than a prolonged examination of what happens when organizations try to manage the people inside them.

The customer who needs a record

Government hiring gave NEOGOV a particular problem to solve. Candidates needed consistent treatment and an evaluation process that could be accounted for. Davidovic described a market reached through referrals and accumulated trust. He also held to delivering software online even when prospective customers preferred a system installed on their own premises. The first contracts took time; recognizable public clients made subsequent conversations easier.

“It took us maybe four years”

Damir Davidovic, on winning NEOGOV’s first ten clients, 2012

Patience is an attractive word after a company succeeds. During the waiting, it is mostly a calendar. The interesting business decision here was to keep a consistent delivery model while selling to customers who needed reassurance. Each implementation had to make the next promise more credible. There is little room for a theatrical product launch in that equation. The performance happens after the contract.

What changed in Cincinnati

For an applicant, the value of all this could be quite ordinary. In November 2012, Cincinnati announced that it would introduce NEOGOV’s application system the following January. Job seekers would be able to create a profile and use it for multiple electronic applications. They could also register for notices about vacancies. A repetitive chore was becoming something reusable.

Inside city government, managers would be able to review online records and sort candidate qualifications. The city described the change as a way to reduce administrative work and improve accountability. Davidovic’s promise included “making job searches easier for everyone.” The phrase is modest enough to test: can a person apply without entering everything again, and can the employer handle the application properly?

This is where a founder’s career touches a stranger’s afternoon. The applicant does not need to know who wrote the business plan. The useful result is a completed application, a record that can be found, a process that moves. Administrative software earns its place through these small transactions. Its audience is often too busy trying to finish one to applaud.

A bid does not guarantee a buyer

The procurement table could be less satisfying. In 2010, Philadelphia’s school system awarded an applicant-tracking contract to Kenexa for $1.14 million over five years. NEOGOV had bid $361,000 and was among the unsuccessful vendors. Davidovic questioned the difference. “The price gap is too large to make sense,” he said.

The district defended its selection on product quality and evaluation scores. Its officials said the chosen system performed better across the overall assessment, including district goals and customer support. Davidovic wanted an explanation of why NEOGOV had lost. The episode captures a commercial reality that a growth chart tends to omit: having a lower price does not settle a public buyer’s judgment.

It also gives the founder a less polished voice. Here he was a disappointed bidder asking how a decision had been reached. No motivational slogan is required. Selling software meant answering someone else’s criteria, then sometimes disputing the result. Any account of his progress that contains only wins would leave out part of the job.

Back in Split, with vacancies

By October 2013, HR Cloud had opened a development office in Split and wanted to recruit up to 50 people. Davidovic was looking for experienced programmers, designers and project managers, with technical skills ranging from C# and SQL Server to JavaScript. He wanted team players who would keep developing alongside the product. The Split operation would work as part of the Los Angeles team.

His connection to the place preceded the office. Originally from Šibenik, he had grown up in Split. By September 2015, the Croatian operation employed about 40 mostly young technology workers, and a Zagreb development center was opening. Employees had opportunities to train in the United States. A route Davidovic had taken as a student was becoming part of the company’s working geography.

Regional director Vedran Vukotić described responsibility in the Croatian offices across the production cycle. That detail matters more than the postcard appeal of an Adriatic address. A development office can mean many things. Responsibility for a product’s development gives the people there a closer connection to the thing customers actually use.

Growth, with the denominator attached

External recognition arrived during Davidovic’s time as NEOGOV’s CEO. Deloitte’s 2011 Technology Fast 500 ranked the company at number 235, listing growth of 386 percent. In the 2012 ranking, NEOGOV appeared at number 412 with 177 percent growth. These are dated measurements from separate rankings, rather than interchangeable numbers describing the business today.

The distinction is useful. A ranking records a company at a particular point under a particular method. It does not tell you what happened in every customer implementation, or how it felt to work there. For Davidovic, the rankings establish that the slow opening years eventually led to a business growing quickly enough to appear in national technology lists.

In August 2016, NEOGOV also announced another Inc. 5000 appearance and Great Place to Work certification. The workplace review drew on 88 employee surveys. Eighty-eight percent called it a great workplace, while 91 percent said management trusted people to do a good job without close supervision. These were employees’ reported experiences at that time. For a company selling tools about working life, its own working life was a relevant subject.

Sixteen years to a different conversation

On October 18, 2016, Warburg Pincus announced an investment in NEOGOV. The company then served more than 1,500 organizations, including over 40 percent of the largest American cities and more than 20 state customers. Financial terms were undisclosed. Sixteen years after founding, Davidovic was discussing an investor’s role in expanding a business with an established public-sector customer base.

The stated plan was to broaden the products, reach more customers and accelerate growth. It followed the direction already visible in the software: recruiting, onboarding and performance evaluation formed a suite around the employee’s time in an organization. The transaction gave that expansion a new partner. It also supplies a clear milestone in Davidovic’s tenure without requiring a speculative estimate of his personal fortune.

The work after the application

HR Cloud carried a related interest into employee engagement. Its engagement-platform announcement described tools for collaboration and recognition alongside employee information, with applications for onboarding and other stages of employment. Davidovic’s attention had moved beyond how an organization selects someone to how people interact once they arrive. The employee record was acquiring a social dimension.

Today, HR Cloud’s leadership page lists Davidovic as chairman and Krishna Surendra as CEO/CTO. NEOGOV, where Davidovic is a co-founder and former CEO, now describes a customer base of more than 13,000 public-sector organizations. Those are different chapters, and the present scale belongs to the work of successive teams as well as the founding one.

Davidovic’s story makes room for the application form, the unsuccessful bid and the development office with desks to fill. Each is a reminder that an organization runs through people making decisions about other people. The software can make those decisions easier to administer. Someone still has to build it, sell it and hire the next person who will improve it.