Rachel Maclean

"Smart HR software designed for small & medium businesses."

Rachel Maclean is co-founder and COO of Air.

So what’s your background?

I’ve been in startup businesses for quite a long time, I started my own business with my husband which is now the UK’s largest technical content publishing company, called Packt Publishing. I helped him start that and was employee number three. When I left it was turning over about £8 million.

In order for it to go the next level and for it to succeed, we wanted to move away from being a family business and professionalise it. We felt it wasn’t possible to bring in senior talent and still have the husband and wife dynamic. We’d both been around family businesses for a long time and saw some of the problems within them.

So I then took a sideways step into politics and ran for parliament. Had a very interesting couple of years doing that. You have to have such thick skin to do that. People would just attack you, just for standing up for what you believe in. I don’t have a problem with people disagreeing with me but when people start attacking you personally, your family, your children. It’s really nasty and pretty frightening.

I then got into traditional HR for a while before I was approached by Nick who is my business partner and CEO of Air. He wanted to start an HR technology business and had lots of tech people but needed someone with experience of HR.

Nick was and still is working with an experienced team of developers and product designers from his other business, Whisk.  It was during the growth and scaling of Whisk that Nick started to experience his own frustrations of managing HR in a fast growing SME, which led to the motivation to start an HR platform.

“I was able to give people a job, a livelihood and develop them to fulfil their dreams and talents. That’s a rare privilege.”

How quickly did you get your prototype created?

It was a very short period of time, the first conversations were January/February 2016. I joined full time in August by which time we had a prototype. We were already doing lots of customer development. We launched in November 2016.

How does pricing work?

We’ve had a few iterations of pricing. When we started we were charging £3 per person per month. A pretty classic SAAS pricing model. When we started we had a lot of customers that we gave free trials to because we just wanted the feedback. We didn’t really have a beta programme but that really was our beta product.

That went on for 2-3 months and then we got rid of all the free trial coupons. People were expected to pay after 14 days. What we have now is a freemium model. We have a free tier with features like people records documents and company documents which allows companies to onboard staff more easily. There are then premium features such as the time off feature and also expenses.

The vision is that as we grow we will add more apps to the platform. So things like HR reports, engagement surveys, recruitment, training. If people want to add these extra apps they can easily enable them. We want to overcome that headache of having to stitch together different systems which is what often happens in this space.

What feedback comes to mind from those first 2-3 months?

Probably the biggest thing was, we didn’t have a part time employee option. We lost a few potential customers over that. That was probably one of the earliest and most significant pieces of feedback. We record all the feedback and we look at it every single week with our roadmap.

How do you see the change in the nature of work, specifically the rise of freelancing affecting your business?

What we do see is a lot of customers, although they have a lot of traditional employment relations, working a lot with contractors. They are therefore demanding functionality from us for contractors and people working in that way.

Freelancers themselves are used to using apps to manage themselves so when and if those people come to start businesses I think they will naturally look for a HR tool to do that for them. We may well then move into that freelancer space and bring onboard some of the tools from that space to allow us to be the tool they are familiar with.

“You start off with a set of expectations and they are always unrealistic but some are more unrealistic than others.”

What has been the hardest thing?

All of its hard but some assumptions we had at the beginning that we thought we would be able to achieve. Some of those have not been achievable even though we have put a lot of work into them. I suppose you start off with a set of expectations and they are always unrealistic but some are more unrealistic than others. The most unrealistic one was we thought we would be able to develop some partnerships early on with other organisations who were already touching our customers.

It’s something a lot of people had told us and advised us to do. For example, we talked to a small business accounting platform. There is obviously a natural fit between accounting and HR in a small business so we thought we’d be able to do a deal with them and we’d be able to sell to their customers and they’d be able to sell to ours. We found that extremely difficult to do in reality.

What is your current growth strategy?

At the moment, what we are trying to do is run a series of tests on the marketing we are doing so that we can determine which channel converts the best. We’re doing a lot of different things to market the product such as email outreach, building up the blog, PPC etc. So we’re spending a bit of money to figure out the cost of conversion of each channel so we can focus our money on the best performing one. We’re still working on the partnerships but we’re not pinning all our hopes on it

Have you taken on any investment?

It’s been mostly bootstrapped but we have taken on some small seed funding. We are now looking to raise a bigger investment round and we’re in the process of that. We recognise that we do need to take it to the next level. It’s quite a competitive space and we will need marketing budget, that is what we will spend the funding on as well as using it to improve and expand the product. Hopefully we’ll close that in the next couple of months which will allow us to scale further.

What is your proudest moment so far?

I think it’s the little things. It’s having the software working and people paying for it. We reached out to some customers to ask for testimonials for the new website design and they said some really lovely things. Things like that, although it doesn’t sound like much. We’ve created something and people are willing to use it and pay for it.

What was your biggest mistake?

I think I wouldn’t have spent so much time chasing down these elusive partnerships. If we had focused on finding our customers ourselves in those early days I think that would have been much better. So many people told us that we should get a partnership with such and such. I actually came to the conclusion that none of those people knew what they were talking about.

What keeps attracting you to startups rather than traditional 9-5 jobs?

I did have a traditional job so I do know what that’s like but once you’ve worked for yourself and grown a business nothing compares to it. What I love is the constant learning, it’s really hard work and there are lots of really hard things I need to figure out how to do and I really like that. I really like that and I don’t think I’d get that anywhere else.

Also to be able to develop people. The thing I was most proud of at Packt Publishing was I was able to give people a job, a livelihood and develop them to fulfil their dreams and talents. That’s a rare privilege.

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