A 65-year-old company isn’t exactly a startup. But The Predictive Index has started to look a lot like one to its CEO, Mike Zani.
Zani and his business partner, Daniel Muzquiz, bought the venerable personality testing company five years ago with the idea of reinvigorating it. Having been customers of The Predictive Index for 10 years, they were fans of its product and believers in its value.
But then the company started growing rapidly, with revenue jumping by nearly 40% annually. And Zani and Muzquiz started to think the company had the potential to grow even faster.
“When we bought the Boston-based company in 2014, we knew it was a great company. We knew it was a great product. But I don’t think we fully saw the size of the potential,” Zani told Business Insider in an interview earlier this month. They eventually realized, he continued, that “the idea was bigger than we originally saw.”
Since its founding, The Predictive Index has offered tests that allow companies and organizations to assess the personalities of their executives and employees. The tests, distributed through a network of partners, are designed to be used to help companies hire the people whose personalities best fit their culture or needs and to help them organize teams with people who mesh together.
It took a lot of work to revamp The Predictive Index
When Zani and Muzquiz took over The Predictive Index, they found a company in need of a lot of work. They set to work rebuilding its partner network, boosting it from 47 to 160. They worked on getting new studies done that would verify the scientific validity of the company’s tests. And they rebuilt its technology infrastructure.
“It was a huge lift on many fronts to reenvision and reinvent and re-found the company,” Zani said.
Today, The Predictive Index offers a subscription software service that allows customers to administer its tests and collect and analyze the data from them. Its partners help sell its service, offer workshops to help clients use the tools, and consult with companies about how to interpret and act on the results.
As they revitalized The Predictive Index, Zani and Muzquiz realized that the company was really in what Zani calls the talent optimization business. In that market, they had few competitors and lots of opportunity, he said.
Nearly every CEO has a business strategy for his or her company. Most also have a financial plan to support and further than strategy. But few have worked out a high-level hiring plan that can guide who they hire and promote, Zani said. That’s where The Predictive Index comes in.
Its service allows companies to design a plan for building out their talent base and then use that plan to help them figure out who to hire and promote and how to group those employees together.
“Our platform really enables a talent strategy to happen,” he said.
Zani sees a huge opportunity ahead
The Predictive Index already has 7,100 clients, who represent a wide range of different industries, sizes, and types of organizations, including churches, professional sports teams, startups, and mining companies. But Zani thinks the total potential market for its services is much, much larger.
“There are hundreds of thousands of entities — companies — that would benefit from this,” he said.
When Zani and Muzquiz took over The Predictive Index, they funded its expansion and revitalization with its operating cash flow. But they decided that in order to take advantage of the opportunity they saw, they were going to need a boost. So they went out looking for outside investors.
In January, they raised $50 million from venture capital firm General Catalyst in a Series A funding round. They’re using the funds to further develop the service and the partner network. They also brought in General Catalyst to sit on The Predictive Index’s board to offer advice on how to grow the company, Zani said.
Their focus is on “how do we turn this into a multi-billion dollar revenue company,” Zani said, “because the total addressable market could easily support that.”
Here’s the pitch deck The Predictive Index used to raise its $50 million funding round:
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