There's an old saying that cobbler's children go unshod. The idea--and the dilemma--is that cobblers are too busy mending others' soles to worry about the heels under their own roof. 

So if your startup sells software helping companies create happy employees, well--you know the rest: You better make sure your own employees are happy too. 

For David Niu, serial entrepreneur and founder of TINYhr, avoiding the cobbler's dilemma should not be a problem. For one thing, the two-year-old Seattle-based startup has just 10 employees. Yes, they use their own software, but at this point Niu can keep tabs the old-fashioned way: By walking around, asking questions, and listening. Still, the software helps. From it, he once learned that his employees didn't like the brand of pretzels he kept in the kitchen. So he changed it. 

Crunchy and innocuous as it may seem, pretzel-gate epitomizes much of what Niu has learned at the helm of TINYhr. You can automate the surveying and processing of employee dislikes, but the human touch--listening, empathizing, reacting--is usually required to effect real change, once employees tell you the truth about what's bugging them.  

The Power of Bite-Sized Anonymity

Empathy means "the ability to understand and share the feelings of another," but leaders struggle with it for one obvious reason: They've lost touch with the quotidien pain points of non-leaders. Topics seemingly unconnected to bottom-line goals--say, delays in reimbursement for pricey flights or a dearth of gluten-free snacks in the kitchen--can create resentments. Those resentments blossom into dissatisfaction when leaders proclaim empathy yet behave with indifference. 

This problem is easy to identify but hard to solve. As authors Reid Hoffman, Ben Casnocha and Chris Yeh point out in The Alliance: Managing Talent in the Networked Age, employees are typically abashed about sharing gripes. Vulnerability is a two-way street. The last thing any employee wants to do is complain to a boss who might call him a complainer. "Historically employees feel they have to be very guarded around their manager and the company in general," Yeh told me.

For Niu, 40, the solution was an uncompromising promise of anonymity. If employees could vent without fear of being judged, employers could get closer to assessing and improving employee happiness. So Niu designed TINYpulse, the company's inaugural product, to anonymously ask employees one question at a time, once a week, through an email with a unique link. The piecemeal approach means employers aren't overwhelmed with feedback. Each week brings a subject-specific morsel to act on. 

Niu embraces this piecemeal approach for several reasons. The first is from his own history. Before becoming an entrepreneur, he worked as a consultant in Andersen Consulting's Strategy Group. There, he advised Fortune 500 clients on strategy and implementation. So he got a firsthand sense of how difficult it can be to implement changes of varying scopes and sizes. And at the end of each year, in what he calls an "antiquated approach," he had to answer 50 online survey questions about his happiness as an Andersen employee. "You hit submit," he says, "and you never know what happens to it." 

The Careercation of a Lifetime

That was his first inkling that a piecemeal approach--one question, weekly, rather than a boatload of questions, annually--might be more fruitful for both employees and employers. Another inkling came about three years ago. Burned out from the entrepreneurial life, he sold most of his belongings, crammed his remaining possessions into a storage facility, and bought one-way tickets to New Zealand for his wife and then-10-month-old daughter. 

You can take the entrepreneur out of his environment, but you can't stop him from thinking about business ideas. Though he was feeling things for the first time, as a father and untethered global traveler, Niu's thoughts were rarely far from best practices. He found himself interviewing entrepreneurs of all stripes, hoping to discover their pain points. 

There was the winemaker in New Zealand. At another stop, there was the fruit trader in Shanghai. Later, there was the financial services entrepreneur in Seoul. Niu listened to their problems like someone who had all the time in the world. He made tons of what he calls "mental sticky notes." He felt as if they opened up to him more because he was listening as an interested person, not (necessarily) as an idea monger.

The longer the "careercation" lasted, the better he got at listening. "I could see regardless of where a company was located or its size, the most common complaint was when an employee would say, 'Here's my two week's notice,' out of the blue," he says. The entrepreneurs wondered: Why didn't I see it coming? Then there was the secondary shock: The problem of filling the role, by finding someone new or training someone in-house. 

Turning Down "Tier One" VCs

Niu's careercation lessons inspired the launch of TINYhr. They also became the basis for one of his company's most persuasive pieces of content, a free e-book called Careercation. TINYhr is constantly finding smart ways to package and market its insights on employee engagement. Next week, it's releasing The Advanced Guide to Employee Surveys, based on the 250,000 surveys the company has conducted so far.

Currently TINYhr has more than 500 customers--mostly small and midsized businesses--in a variety of verticals. A second product called CLIENTpulse grew out of what Niu learned from his initial batch of customers. They loved TINYpulse, and wanted something just like it that could efficiently gather customer feedback, in the same way TINYpulse gathered employee feedback. From such client-pleasing pivots, growth companies are born. 

Venture capitalists have noticed the traction of TINYhr's two products. Niu says that "tier one" VCs have asked to meet with him. So far, he's turned them down. His mentees in Seattle's TechStars program often ask him why. His main reason is that fundraising is a time drain. He is also far from desperate for the cash. With more than 500 customers, he can support the company through recurring monthly revenues. Sure, he might eventually welcome investors, but it will be on his terms and timetable. 

What he tells VCs, when they ask him to meet, is something like this: "I’m humbled by your interest, but [every minute I spend talking to you or thinking about terms is] one minute I'm not delighting my customers."

Niu says about half of the VCs who approach him appreciate that response. The other half are indignant. He keeps track of it all in his own black book. "If I do raise money," he says, then the indignant type is "not somoene I’m going to talk to."

Fatherhood, VCs, and Animals

Turning down VC money is one advantage Niu has as a serial entrepreneur. He has founded companies before. He doesn't need the validation. He is a husband and a father. His self-identity hardly requires the prestige of prospective investors. And beyond all that, he's just being honest when he says he lacks the time to focus on fundraising. "It's a major time commitment, with all the hidden costs," he says, recalling previous sleepness nights obsessing over pitch decks. 

That sense of security about who he is and what he's doing sometimes manifests itself in some suprising ways. Once, a client called him in disbelief that about one of TinyPulse's weekly questions: "If your organization was an animal, what would it be and why?" Such a soft, touchie-feelie question could've seemed embarrassing. It was the type of question that could make a client wonder: "Wait, we're paying for this?" But Niu knew the question would work and told the client to trust the process. 

Sure enough, one week later, the client was thrilled. Employees were debating the question with vigor at the water cooler, making their cases for this animal or that one. Was the organization a lion, or a lion cub? Or was it an octopus, which is smart and crafty yet hides and doesn't have to be in the spotlight?

Here's the key takeaway: You can learn a lot about employee happiness from seemingly frivolous (but incredibly potent) questions.

The key is asking regularly, and acting on what you learn. Even if it just means changing the pretzels.