Driving Business Growth Through People-Centric Strategies and Successful Partnerships

With Aaron Au, the Co-founder of SuccessFactors: a global leader in cloud-based HR software.

Aaron also served as the president of SAP Gem Collaboration Division, boasting over 50 million subscribers. He is a true pioneer in the software as a service (SaaS) revolution, and his journey offers invaluable insights for anyone interested in the world of tech startups and SaaS.

Key Takeaways

(01:54-05:38) The founding story of SuccessFactors

(05:38-08:40) Running a cloud-based software company

(08:40-11:03) Elevating HR with the power of software

(11:03-14:43) How collaboration efforts made the magic of SuccessFactors work

(14:43-15:42) The importance of learning agility

(30:20-32:32) The evolution from creation to collaboration with SAP Jam

(41:25-44:16) How to focus on people in an economically uncertain environment

(47:24-51:14) Generational change in the culture of accountability

(51:14-52:09) How to motivate different generations

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From Startup
to SaaS Success

In this interview, Aaron Au, a key figure in the cloud software industry, shares his journey from founding SuccessFactors to shaping the future of enterprise software. With insights into the challenges of building a cloud-based company, fostering collaboration, and driving a culture of accountability, Aaron provides valuable perspectives on leadership, motivation across generations, and how software can evolve to meet the needs of both individuals and businesses. From HR transformation to the evolution of learning and performance management, this conversation explores the transformative impact of technology on the workplace.

1. The founding story of SuccessFactors

Aaron Au recounts the early 2000s as a pivotal and difficult period for cloud adoption. Coming from a computer science background, he entered the enterprise software world just after the dot-com crash, when cloud computing was not yet accepted. Most major players were still on-premise, and the concept of SaaS was met with skepticism. In his first startup experience, Aaron saw firsthand how misaligned release cycles and sales messaging created confusion. While his R&D team shipped updates every two weeks, the sales team pitched outdated screenshots from nine months prior, highlighting the industry's lack of readiness for agile, cloud-based delivery.

This disconnect taught Aaron that building a cloud company wasn’t just about delivering software over the internet; it required a complete shift in organizational DNA. Cloud wasn’t just a deployment model—it was a fundamentally different way of thinking about product, sales, and customer engagement. When he later joined SuccessFactors, the company was on the brink of being shut down. His co-founder had been brought in to wind it down, not scale it up. But by applying the hard lessons learned from failure and focusing on what made cloud-native companies different, they were able to rebuild SuccessFactors into a global SaaS leader.

So, think about how big the disconnect is. And in the back of my mind, we have no way to be successful. I think my biggest lesson learned there is that we have no clue how to build a car like a cloud company. So as a cloud company, it is not just another software company, frankly. The fundamental DNA and everything need to be different.
— Aaron Au

2. Running a cloud-based software company

Aaron Au reflects on the early challenges of cloud software, especially in HR, emphasizing that a key factor for failure in the past was the lack of consideration for the user experience. In the early days of SuccessFactors, many of their users had no familiarity with computers, and the idea of accessing HR functions via software seemed alien to them. Back then, field workers, typically in warehouse or manufacturing environments, didn’t use computers regularly, making the transition to cloud-based HR tools much harder. The experience factor was crucial, and a failure to address it contributed to the struggles of early cloud software adoption.

Additionally, Aaron highlights that traditional HR software didn’t prioritize the people within the business, missing a fundamental element of driving value through human resources. At the time, most investors weren’t convinced that the cloud was the future of business software, especially after the dot-com bust. Despite these challenges, Aaron and his team believed strongly in the cloud model, seeing it as critical not just for their company but for the future of the industry. This conviction fueled their decision to press forward, despite the tough market conditions, knowing that strategic alignment with the needs of the workforce would be key to long-term success.

We see people as a factor that impacts the strategic growth of the business. That you really need to have a strategic alignment there. That's one of the reasons we put full steam forward and started a company in a very tough time.
— Aaron Au

3. Elevating HR with the power of software

Aaron Au explains that SuccessFactors, like Salesforce with CRM, focuses on elevating HR by emphasizing people and organizational performance, recognizing that a company's success hinges on the talent it attracts, cultivates, and retains. Unlike traditional HR systems, SuccessFactors aimed to connect various HR functions, such as learning, development, and performance management, into a unified experience that supported the entire employee lifecycle. The company's unique approach was to bring HR into strategic business discussions, ensuring HR leaders were included in board meetings and emphasizing the connection between employee experience and business success. This holistic vision was groundbreaking at the time, as existing market solutions lacked integration across HR processes.

Success as a company depends on the talent that we bring in, cultivate, retain and how that talent delivers on the key strategic initiatives of the business.
— Aaron Au

4. How collaboration efforts made the magic of SuccessFactors work

Aaron Au reflects on the unique dynamics that helped make SuccessFactors successful, attributing much of it to the diverse backgrounds and perspectives he and his co-founder, Lars, brought to the table. Born in Hong Kong and educated at Berkeley, while Lars came from Denmark with a background in business from Stanford, their differences in culture, education, and approach were essential to the company's growth. Despite these differences, they shared core values, such as mutual respect and a commitment to learning. They constantly adapted, learning on the fly across all areas of the business, from sales and marketing to product engineering. This learning agility and respect for each other's expertise played a critical role in fostering collaboration and driving SuccessFactors forward.

The respect they had for each other’s domain allowed them to approach challenges with an open mindset, constantly seeking the best solutions. Their teamwork was not about one person dictating the path but about understanding and leveraging each other's strengths. This culture of continuous learning and adaptability became a key component of SuccessFactors' success. As the company grew, they focused on creating an environment where everyone, not just the leadership, could contribute to solving problems and driving the company’s strategic initiatives forward. This collaborative, agile approach was crucial in scaling the company and building a successful, sustainable business model.

We all need to figure out what the answer is and learn on the fly. It's not so much about the “Oh, I know the answer, just follow me” kind of thing. It's from sales, marketing, product engineering, and everything in between that we need to learn on the fly. By doing that, we always have the respect of each other.
— Aaron Au

5. The evolution from creation to collaboration with SAP Jam

Aaron Au discusses the evolution of SAP Jam, emphasizing that certain tasks in the enterprise space inherently require collaboration, such as learning. He highlights that learning is best achieved through peer-to-peer interaction, rather than through isolated e-learning platforms. Au criticizes the approach taken by companies that tried to implement Facebook-like platforms for enterprises, where everything was mixed together, expecting employees to simply "have fun." He argues that collaboration, particularly in learning, requires a more structured and focused approach to be truly effective.

Learning is actually a collaboration by nature. You actually learn from each other, you typically don't learn on your own. Even though there are many e-learning platforms and a lot of e-learning content, the majority of learning is actually peer-to-peer learning. I learned a lot from you. You may learn something from me. That's probably the most effective way that I show you how to do certain things or collaborate.
— Aaron Au

6. Generational change in the culture of accountability

Aaron Au reflects on the importance of accountability in the workplace and how SuccessFactors' software helps foster a sense of responsibility among individuals and teams. He discusses the evolution of goal-setting and self-assessment over time, noting how different generations are motivated by varying factors. For instance, his 17-year-old son is motivated in ways that differ from his own experience at that age. This generational shift is crucial when trying to drive a culture of accountability. Au emphasizes that, as work environments change, understanding these differences and tailoring approaches to motivation is essential for fostering a productive and accountable culture.

In a more personal note, Au shares a story about his niece, Ashley, who contributed significantly to the RELAYTO team during her gap year at Yale. Her work during COVID, even as an unpaid intern, left a lasting impression on the team due to her exceptional productivity and leadership. This anecdote leads to a broader discussion about motivating young people, with Au noting how his son, much like Ashley, has shown initiative by completing an internship abroad, highlighting the importance of fostering independence and motivation in the younger generation.

When you're trying to drive the accountability culture, at the same time, you also need to take into consideration the generation gap because the different generations are motivated by very different things.
— Aaron Au