This Startup Shares Google's Famed Employee Review System With Everyone, Says Google Board Member John Doerr

Legendary VC and Google board member John Doerr is super excited about a new startup he's backed, which came out of stealth today: BetterWorks.

Betterworks is releasing a product that turns Google's famous employee review system into an app that any company can use to set employee goals, measure feedback, and run a tight-yet-sprawling ship.

It's backed with $15.5 million in a Series A funding round from Doerr's firm, Kleiner Perkins Caufield & Byers, with participation from Joe Lonsdale's investment firm, Formation 8. Lonsdale co-founded Palantir.

"This is a great company. It really is," Doerr told Business Insider. "I said to myself, 'Come on John, why didn't you think of this?' But the truth is the entrepreneur here is way better than I am."

That entrepreneur is Kris Duggan, cofounder of Badgeville, the company that turned employee review systems into a "game" where employees can earn badges as they complete goals. Badgeville has raised $40 million in five rounds from 8 investors (but not Doerr's firm, KPCB).

Betterworks is based on the employee review system that Doerr himself brought to Google cofounders Larry Page and Sergey Brin when the company had a handful of employees, Doerr told Business Insider.

It's even featured in Google chairman Eric Schmidt's new book that published Tuesday, "How Google Works," (starting on page 220, the chapter about "Setting unreasonable goals" Doerr tells us).

The system is called "objective key results" (OKR) and it was pioneered by Intel's famed early CEO Andy Grove. It allows a company to take a "big hairy goal"and break it into parts for every employee, and track how well everyone does, Doerr describes.

OKR includes several parts: setting goals in clear terms; making sure goals are hard but obtainable; measuring progress, and setting a company-wide standard - a "temperature," as Doerr describes it, for what constitutes reasonable success.

For instance, Doerr says a 70% achievement rate of goals is about right for most companies. If every goal is 100% achieved, the company isn't pushing hard enough. If the failure rate is higher than 70%, then it is demoralizing employees, not motivating them.

Doerr is well known as the VC who backed Google when other VCs would not (and been a board member ever since). He also backed Amazon (and was a board member until 2010), and companies like Twitter, Netscape, Sun Microsystems, Compaq.

But back in the 1970's Doerr was an electrical engineer joining a startup called Intel. That's where he studied at Grove's knee and learned about this system. He credits it for much of Google's (and Amazon's and others') success.

"I grew up with the system that Kris has implemented, "objectives key results," having learned it from Andy Grove. When I left Intel, I took this system to other companies we invested in, all of them, and notably to Google, where I introduced to Larry and Sergey at a time when there were 30 people at the company," he recounts.

"We were gathered around the ping pong table, that was our board room table, in Palo Alto. Larry and Sergey had such a rabid love of learning and a fervent belief in the power of data. They embraced OKRs and to this day, Google uses it. It's an open internal system so anyone at Google can see anyone else's OKR's"

Betterworks has turned the concept of OKRs into an app where goals and feedback can be tracked using a smartphone.

BetterWorks has been testing it in stealth mode for 9 months, Doerr says, at Valley startups, Fortune 1000 companies and even some government agencies.

He sums up his excitement by altering a famous line from Thomas Edison.

"Innovation without execution is a hallucination," Doerr says. "I'm a techie, we all worship at the innovation alter. But I think execution is everything."