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Dunwello, focused on delivering better employee feedback, banks $1.4 million

Posted by Scott Kirsner  February 14, 2014 10:30 AM

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Do you get too much feedback at work? If you're a manager, do you give too much?

A group of investors are betting for many of us, the answers are no. They're putting $1.4 million into a Boston startup, Dunwello, that wants to end the tradition of the dreaded once-a-year performance review by creating a new online tool for delivering more consistent feedback and recognition to employees. The founder is Matt Lauzon, formerly CEO of the jewelry retailer Gemvara, and the first technical team member is Matt Brand, formerly at Bunk1.com and Mzinga.

After leaving the top job at Gemvara, which he co-founded while a student at Babson College, Lauzon says he "spent a lot of time looking at the employee life cycle, from hiring to retiring. In doing that, you learn that something like 70 percent of people feel disengaged at work, and that the average tenure in a job is going down. It's less than two years."

When he was running Gemvara as a first time CEO in his 20s (he's now 29), Lauzon says he often used Twitter or text messages to give employees digital pats on the back. But "it wasn't being preserved anywhere that employees and I could use meaningfully over time," he says.

Lauzon says Dunwello's product is very much still in development, though the startup has been testing it with several companies. "We're thinking bigger than just improving performance reviews," he says. "We want to help people feel appreciated, aligned, and that they're advancing at work. And we want to make sure that the most important moments at work get highlighted or preserved." That includes not just moments of glory, but also moments when someone could've done better, he says. It'll be interesting to see how Dunwello's product handles the more critical aspects of employee feedback...

Lauzon says he set out to raise about $1 million in seed funding for the new venture, but wound up raising a bit more: $1.4 million. Investors include Boston-based NextView Ventures and G20 Ventures, as well as the Vegas Tech Fund, run by a group of Zappos.com executives. Angels involved include Bridge Boys (Jeremy Levine and Jordan Fliegel), Axel Bichara, Gautam Gupta, Jeremy Hitchcock and Mark Guadagnoli.

For G20, a relatively-new Back Bay fund run by former investors at Advanced Technology Ventures, this is the first investment they've announced. "We see this as a pretty big, juicy problem," says Bob Hower, G20's co-founder. "The system is pretty broken around employee reviews as an annual punctuation point, and I think Matt wants to build a more consistent, better communication channel that can improve the consistency and frequency of feedback." Hower will be an observer on Dunwello's board. Rob Go of NextView will join as a board member, since NextView is leading the funding round.

In the near future, Lauzon says Dunwello is "focused on really nailing the user experience. We will be rolling out the product to more companies this year. But we're being really maniacal about saying, 'We're not going to focus at all on ramping it up to more companies until we're sure we're adding value to everyone involved: the individual employees, the managers, the human resources executives." He's also planning to bring on some software developers, and someone to oversee product and user interface.

As for the business model, Dunwello is taking the "freemium approach": any employee at any company can use the service with their team for free. Lauzon says "there will be opportunities for users, including managers and HR professionals, to upgrade their accounts in the future."

After departing Gemvara, Lauzon spent several months as an entrepreneur-in-residence at the venture capital firm Matrix Partners. He remains chairman of Gemvara's board.

Lauzon posted the slides he used as part of raising Dunwello's seed round. Here's Rob Go's post about the funding.

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Scott Kirsner was part of the team that launched Boston.com in 1995, and has been writing a column for the Globe since 2000. His work has also appeared in Wired, Fast Company, The New York Times, BusinessWeek, Newsweek, and Variety. Scott is also the author of the books "Fans, Friends & Followers" and "Inventing the Movies," was the editor of "The Convergence Guide: Life Sciences in New England," and was a contributor to "The Good City: Writers Explore 21st Century Boston." Scott also helps organize several local events on entrepreneurship, including the Nantucket Conference and Future Forward. Here's some background on how Scott decides what to cover, and how to pitch him a story idea.

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