It’s a Nexxt EXCLUSIVE The Chad and Cheese Podcast where we’re diving headlong into the hiQ versus LinkedIn court battle starring and interview with CEO of hiQ Labs, Mark Weidick. It’s also a lactose-free event – Joel Cheesman (Cheese) is out on assignment or maybe he just found a comfortable place to curl up?
In this episode Mark and Chad talk:
Updates on their David v. Goliath court battle
Negative industry (Global Innovation) impact if hiQ loses
Scraping, bots, how can we ID bad from good actors?
FlipDog’s name is used in phishing vain
Are we losing control? Start-ups in court? Net neutrality?
Why are other – affected – companies in the fetal position instead of fighting?
CrowdJustice – crowd funding legal battles
and last but never least Nexxt gives Mark a reason to think his family might be ducking him during the holidays.
None of this would be possible without the gang over at Nexxt and in the spirit of giving – YOU can get 25% off your first Text2Hire campaign by visiting www.nexxt.com/chadandcheese25.
HAPPY HOLIDAYS from The Chad and Cheese Podcast!
Chad: This The Chad and Cheese Podcast brought to you in partnership with TA Tech. TA Tech, the association for talent acquisition solutions. Visit TATech.org.
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Intro: Hide your kids, lock the doors. You're listening to HR's most dangerous podcast. Chad Sowash and Joel Cheesman are here to punch the recruiting industry right where it hurts. Complete with breaking news, brash opinion, and loads of snark. Buckle up, boys and girls. It's time for The Chad and Cheese Podcast.
Chad: Welcome to this Nexxt exclusive episode of HR's most dangerous podcast. This is Chad Sowash and I can't tell you how happy we are to have Mark Weidick, CEO of hiQ Labs with us today again. Second time around. If you're lactose intolerant, today is the show for you. THat's right, we are cheese free. As in, Joel Cheesman is out on assignment. Because that sounds better than taking nap.
Chad: All right, Mark, welcome back to the show, man. This is the second time you've been on. But for those listeners who did not listen to, shame on you, the August 25th show where Mark actually gave us an interview, can you tell the crowd, can you tell the listeners who the illustrious Mark Wedick is? Who's this guy we've all heard about?
Mark: You and me. I'm the CEO of hiQ Labs as of February 2017. And I have a background in early stage technology out here in Silicon Valley. Hold on a second. Do you hear my dogs in the background?
Chad: No, you're fine, keep going.
Mark: And I'm a dog owner, a dog lover, as I said up in Northern California. And we're dealing, of course, for those listeners that weren't in tune with the prior interview with a legal battle with LinkedIn around public data.
Chad: Gotcha, gotcha. So we have a ton to talk about today, but since turkey day is still fresh in everyone's memory, for all those who are not in tryptophan stupors at this point, I'd like to take some time if you don't mind and run through some fun research that we did with the gang over at Nexxt. Are you cool with that?
Mark: That'd be great. I'm anxious to hear it.
Chad: Okay, okay, so listen. So the main survey question, I'm just going to run through one of these questions, is would you use work as an excuse to miss Thanksgiving? Again, the question is, would you use work as an excuse to miss Thanksgiving. Now I'm sure you wouldn't do that, Mark, because you have a lovely family.
Mark: They might use work as an excuse to miss me.
Chad: That's a good point. So, here it is. So here's how it broke down and they broke it down generationally, which is really cool. So Gen Z, which is 1997 to today, 48% of them said they would definitely used work as an excuse. 36% of millennials. 29% of Xers and 24% of Boomers. That breakdown is astonishing. Why do you think that is? Why so many? Almost 50% of our Gen Zs and then 24% of Boomers. Still, almost a quarter of Boomers.
Mark: I looked at the 24% of Boomers as actually a smaller number than I expected. I thought it would be a little bit more consistent. And maybe we're just more set in that way. Don't want to put you in the same category, but I'm sentimental. I look forward to the holidays. It's a time to chill out, relax. I love to cook. I have friends out here, and we're into the wine scene and it's just a good time. So I don't think we're as motivated to look for a reason to avoid due to sentimentality.
Chad: Yeah, well I, on the Gen Z side and the Millennial side, I think most of them, or at least 20% of Gen Z's are still living at home from my understanding. And Millennials are still living at home in most cases, as well. And they already get enough of family time. So, I kind of get that. It's almost like, oh my god, Mom and Dad. You know, they're at the point where they need to get the hell out of the house in the first place.
Chad: But Xers and Boomers. You know, Xers, 20 almost 30% and Boomers at 24. That's when you're really ... I mean, as an Xer, not grandfather yet. But when I am, I definitely want to see the grandkids. So it's definitely going to be different than that 50% who says, I've had enough of family.
Mark: Yeah, I think you nailed it. I think the notion of being there all the time kind of contributes to the idea that I might want to get away when that family time is going to be ultra concentrated.
Chad: Yeah. If you haven't seen the infrograph or taken the new survey that Nexxt has, just go to ChadCheese.com, check it out. You'll see, it'll say survey, inforgraphics. Too easy, man. So we're going to the real show. We're going to stop clowning around. Are you ready?
Mark: Sure, fire away.
Chad: Okay, sure. Okay, so the big question right out of the gate. Everyone's been hearing about hiQ versus LinkedIn battle, right? But can you tell our listeners why this case is so vital for not just the recruiting industry but every industry out there. Why should anyone care?
Mark: Well, this is about control, right? And ultimately, the control of the information that so many of us contribute to the life experience at both a professional and personal level that we all have. That information is owned by us, certainly the case of LinkedIn. LinkedIn doesn't dispute that. They don't own the data.
Mark: And the notion that the control of that information would become so highly concentrated among a handful of extremely large companies creates a horrible dynamic. It creates a horrible dynamic around the prospect for innovation and new services. It creates a horrible dynamic ... well, I guess innovation and anti-competitive behavior go together. But history has shown that when choices are limited, so too does the richness of the experience become diminished. And that's the dynamic that we're talking about here.
Mark: If this data is deemed to be that controllable, this data that you and I purposely designated as publicly accessible or not is controlled by a single entity other other guys that collect data about us as well, it limits the richness of our professional and personal life experiences.
Chad: This seems like an issue, though, lately, because I mean, control along with net neutrality, right? I mean, we're now looking at having an issue perspectively with net neutrality. And we're talking about data, we're talking about control. We talk about net neutrality we talk about control. Do you see this perspectively as an issue that we're really going to have to fight hard for the next four, eight, who knows how many years?
Mark: Well, I hope it doesn't take that long, but absolutely I do. The regulation that exists that in some sense is possibly applicable is proving to fail right now. So at a macro-government level, it certainly seems that new regulation reflective of current circumstances has warranted here. And God help us if it takes eight years to figure that out. That's certainly not internet speed, is it?
Chad: Not at all. And I think that's one of the biggest issues that we have with government getting into this. They don't move fast and they don't understand, it seems. Like, they don't understand how these types of moves, which again is kind of scary with LinkedIn versus hiQ. At that point, you're not really sure where they're going to go. I'm glad that you guys are in the ninth circuit, as we talked about. But again, when we had our last interview, we talked about the initial win against LinkedIn where you guys received an injunction. Can you bring us up to date on where everything is at this point?
Mark: Sure, coming out of the preliminary injunction, the judge in short said the balance of hardships here tips clearly in favor if hiQ. That the things that we were doing with member public profile data, data that LinkedIn clearly does not own, don't constitute really any harm whatsoever to LinkedIn. They certainly didn't do an effective job, if any, of describing what harm they were incurring as a result of this.
Mark: So coming out of that, the judge granted an injunction. The injunction prevents LinkedIn from putting in place and technological or legal impediments to our efforts to collect, aka scrape, member profile data. Subsequent to that, LinkedIn had a choice. They could accept that outcome or they could appeal it. They chose to appeal it.
Chad: Well, of course.
Mark: Expected that they would. When they appealed, they filed their appellate brief on I want to ballpark timeframe, early October.
Mark: It took us approximately six weeks through November 20th to file our response. These are all public documents, by the way. A lot of ways, if you're even marginally interested, these are fascinating tomes. And well worth the read.
Chad: Are you guys publishing these on your website?
Mark: Yes, we are. You know what? I say that quickly. I don't know if we've posted ours yet, but they will imminently be up, both LinkedIn's filing as well as ours.
Mark: And they're beefy, right? They're excess of 10,000 words each. LinkedIn gets the last say. So they'll have an opportunity to respond to our appellate filing. My understanding is they have 30 days to do that, so before the end of the calendar year, they should be in a position to get filing. And then it's off to the judges process to assign the three panel judge, the three judge panel. And set a hearing date. And our expectation is that each of those things ought to happen in Q1, including an outcome, a decision, Q1 of 2018.
Chad: So deep breath, right?
Mark: I think so.
Chad: Good, good. So what I've read, and I saw that there's a hundred page response that you guys put out. I got to dive in to a tad, surface-wise. It looks like LinkedIn's main regulatory stance seems to be the CFAA, so the Computer Fraud and Abuse Act. Two part question. Can you tell me about what aspects they're using of the CFAA And number two, how you feel LinkedIn is manipulating it for this case.
Mark: I'll give it a shot. Although the documents do a great job of breaking down both sides of that argument. They really do. The lawyers earn their Mooney on the description at least. So the CFA application of course is in question by us. Generally speaking, the Computer Fraud and Abuse Act was put in place to prevent illegal access to protected, largely password-protected, computing services.
Mark: So think about a world where you have some sort of authentication, maybe a password or some other security token that, in the absence of having, you are unable to access that computing service. LinkedIn's position, which Judge Chen described as an overreach, is that by simply saying, we don't want you to access our computing services, their right to prevent us is preserved under CFAA. Remember, there's no password protection for you or I do view LinkedIn member public profiles.
Chad: Public data. Hence, public, right?
Mark: That's right. And there are ... I'm going to find out, the things you learn through a process like this, Chad. I have the sense that there are literally dozens and dozens of CFAA cases where the root of the issue is someone giving their credentials to someone else for the purposes of accessing data that's on a private computer network. That does not sound at all like the situation between hiQ and LinkedIn public profile data today at all.
Mark: As a layman, I look at it and say it's beyond curious that this would even be the device you use to protect this data. So that's LinkedIn's position and that's sort of the genesis of CFAA. This goes back to what I said earlier, that the regulation we have in place is dated at best. CFAA is a regulation that was created in 1986. Think about all the things that existed or didn't exist. Thing about the mobile phone you had in 1986.
Mark: And again, we go back to regulation, how it's not keeping up. And that's one of the hardest pieces, right? It's hard to keep up with Moore's Law as it is, let alone with regulation, knowing how slow it moves.
Chad: Back to what you were saying, LinkedIn they're actually saying, yeah, we do have public profiles.
Mark: No dispute on that point.
Chad: If they're public profiles and it's public information and they realize that that data is my data, then why is this even a conversation? Other than them just trying to bully you
Mark: Let's be clear, bully hiQ and many, many other companies that scraped before us or scrape concurrently with us.
Chad: Why aren't we hearing from them, though? Why aren't we hearing from them? That's the thing that bothers me the most. We see hiQ out there, you guys are in the forefront and you're fighting the good fight. Why are all these other companies that could be coming out for not just hiQ, but for this issue, they are sitting back in the fetal position and they are hoping and praying that you guys actually do the shit that needs to be done. Why aren't they fighting the fight?
Mark: That's a hard question to answer. I've talked to dozens of them. So many have reached out. So many have offered to help. THey've offered to help through amicus briefs. They've offered to, in some cases, help fund our legal defense. So I don't know. At the end of the day. I suppose it does have something to do with either access to resources, sufficient resources to combat the bully. If you know you don't have the resources to combat the bully, why waste what you do have?
Chad: Why wouldn't you do that in public, though? Isn't that the cheapest way to actually get out? Social media, press the case, and show your support for what's going on in this case.
Mark: I think it's among the best ways. I don't think it's the easiest way. I'm a big believer, a follower of Seth Godin. I look at his blog, not all 7,000 of them, but ... a few weeks ago, he wrote something that felt very poignant to me. It was, is your issue important, popular, or viral? And it caused me to think about the plight of anybody who's received a cease and desist letter from LinkedIn.
Mark: And by the way, some of those cease and desist letter recipients were clear violators of LinkedIn's terms of service. They've acknowledged, hey, we were doing things that you didn't want us to do so we'll fix that. I don't know how many others have a situation that even similar, let alone identical to hiQ's.
Mark: But in this notion of important, popular, or viral, I could argue quite convincingly that this is a very important issue. We touched on why at the beginning of this conversation. This is an important issue. Every human in the world should have some sense of understanding what's going on here. I don't think it's popular or viral yet, though, Chad. No yet.
Chad: It only gets viral if people start to stand up and actually use their megaphones. That's the problem, right? I mean, from my standpoint.
Mark: Me too. And I wish. I hope, I'd like, but I recognize that in a world where you have thousands and thousands of stimuli coming at you every day, how much time are you going to spend parsing an issue that's as nuanced and complex as this?
Chad: Maybe six seconds. And I'll let you know. We've talked about this issue on this show for many episodes. I obviously had you on interview once, thanks, twice now. But this is something that's important to us in our industry, which means the snarky assholes on this show will continue to talk about this. But what you are talking about, though, in our industry, companies have scraped public data, mainly company jobs, and this is all the way back in the Flip Dog days before Monster bought them.
Mark: Right, wow.
Chad: Yeah, remember that, right?
Mark: Way back reaching.
Chad: And they've used it for phishing schemes, to be able to compile candidate data for years. So for us, I believe the big question is, how can we distinguish between good actors and bad actors. Russian bots versus legit companies trying to innovate for the common good. How do we know? What's the litmus test?
Mark: I wish I were smart enough to assemble it. I'd love to be part of a group that takes a shot at doing that. I think there is a rubric that can be applied that gives us a better methodology for sorting out the good actors and the bad actors. It doesn't exist today, that's for sure. It hearkens back to ... should know the name of the justice who had the is it pornography or not case. And his quote at the end of it was, we may not be abl to define it, but I'll know it when I see it.
Mark: Look, the people that I've talked to in this community of interest have a remarkably consistent point of view around what is a good actor and what is a bad actor. And those that are bad actors will often acknowledge privately, yeah, I'm on the margin. I'm a little bit over the line.
Mark: So many of us understand or we come back with a similar conclusion about whether something is in good faith, good actor. Bad actor, bad faith. It's doable. It just hasn't been done.
Chad: So right now, because the regulations suck and they're back to 1986, that's why we have terms of service, right? Terms of agreement, all these different terms, which you are abiding by with LinkedIn or at least when you started working with them. They might have changed them. They change them it seems like every other day, for goodness sakes.
Mark: They change them so much that even Judge Chen referred to them as speciest in their application. That nobody reads the fine print. And again, there are dozens and dozens of very smart people, several attorneys, in fact who have dissected LinkedIn's terms of service to highlight the self-conflict. Literally from one paragraph to the next, you'll find instances of something like this. You must do A followed by you can never do A.
Mark: And my experience often, that type of situation spawns from the desire to monetize something. Let's change the terms of service so we can actually do what we want to do to monetize this and we'll worry about the conflict that we create later on. And we'll worry about the confusion that we create later on if it ever becomes an issue. And then you're relying upon the large entity to be a good actor, as well. And whose interest do they have at heart, right?
Mark: One thing we didn't touch on as I went off like the busted hose I did around the dynamic here is the money associated with it. Will people care about this when they recognize the billions and billions of dollars that are at stake? Will it be the economic interest that finally catalyzed the masses to make this a popular and viral issue as well as important issue.
Chad: And that's the question. And another big question and something else that I don't think listeners or many people out there understand is that this switch wasn't flipped on hiQ until LinkedIn looked at hiQ and said, we're going to get into that business line.
Mark: That's how it seems to us. Someone else might ultimately be the judge of that, but the sequence of events and encounters that led up to the cease and desist really do constitute the proverbial I smell smoke so there must be a fire. They knew about us for several years. They participated in our twice annual subject matter experts. People analytics expertise from all segments of industry would join us to talk about issues of the day.
Mark: And we were very clear in the evolution and genesis of our product. Keep our retention product and the data that we used to inform it LinkedIn public profiles. LinkedIn was party to that. We met with them on a frequent basis across several years only to find out that they were in fact banking a competitive product. Jeff Weiner alluded to it in an earnings call a while back. He went many steps further in an interview with the now-exiled Charlie Rose in June of 2017. And they launched that product at their Nashville event a couple of months ago. And we have customers who said, yeah, they've specifically said we're selling against hiQ.
Mark: So this notion of understanding what skills you have and what jobs are out there and to provide a match along that dimension, right, that's our skill mapper product which we launched in April of this year. Has been in the works, it seems, at LinkedIn for quite some time. And now that we're competitors, we get the cease and desist letter and we can't do what they want to do.
Chad: And they want to use public data, my data, your data to be able to do what hiQ is doing. But they don't want to allow hiQ to do the exact same thing. I mean, that's really the issue here. So when we start doing this, everybody else on the block better get off my block.
Mark: Yes to all that. And furthermore, as was demonstrated in the preliminary injunction hearing, it seems that LinkedIn is equally flexible with respect to how they use our private information. LinkedIn, my understanding is, a recruiter product will allow a purchasing recruiter to access profile information that goes well beyond public. I don't know if they use public and information designated as private to inform this new product that they launched. But certainly they put up as a shield this notion of protecting member privacy, that they're the steward of member privacy as the reason that they need to throttle us.
Mark: Meanwhile, they're going several steps beyond what we would use to inform their own product. So that's the height of hypocrisy and it's all driven by the dollar.
Chad: And the shield is scaring the living shit out of everybody because there are so many bad actors out there and we can't allow bad actors to get your information, right?
Mark: That's right. And look, it comes back to the important, popular, viral thing. How many of us really understand? When you hear that someone is scraping data to do something you didn't expect, your natural reaction is, bad actor. We've been sensitized to that from the phishing schemes that you alluded to and many others.
Chad: Here's a fun one. So in an Ad Week article, you might have read this, I don't know. Rami Assad said that hiQ's a parasite. You guys are pretty much just taking all the hard work that LinkedIn did and really just being a very parasitic type of organization. How do you respond to guys like that who ... he's actually a security specialist, so go figure. He wants everything locked down. How do you respond to this?
Mark: I'll respond to that in a moment. What does Rami's company do again?
Chad: Thbey're security. On his Twitter, he actually says-
Mark: I think they sell tools.
Chad: We've been locking down bots for like 10 years or something like that. So it's something that is in his best interest, obviously.
Mark: Yeah, that's where I was going with that, of course, that I believe his company sells tools that help with bot management. And certainly this is that degree thing we talked about earlier, Chad, whereby when does an active scraping endeavor to public data begin to look like a denial of service attack? When are you actually impacting server capacity and degradation of the experience that LinkedIn customers ... We're well short of that. We quantified it. We understand that very well.
Mark: So how do I respond to the parasite notion? I've been called worse. I've been called better. My customers pay for the value that we deliver to them. And these are enterprise level Fortune 500s who are actively looking to do a better job with their employees. If we were universally viewed as a parasite, I can't imagine that we would have had the economic success that we have had to date. There's clear value in what we do. Other companies are trying to do it, as well. LinkedIn is trying to do it as well.
Mark: So the notion that I use a public dataset to do it, it's a red herring. Is Google a parasite because they index everybody else's data for us to have a more affective search experience? Are the pricing optimization applications that look at Amazon pricing all day long to help us get better prices on the goods and services we buy, are they parasites, too?
Chad: Right yeah. It's easy to point at these little pieces. And again, when you run a company and you hope that you get an opportunity to stop bots, because that's what your company does, but this is how we innovate. So a big question. If your injunction does not stand, and we hope if does, there's no question. What does that mean for small companies all over the nation who are trying to innovate and trying to provide these services that, to be quite frank, just aren't going to exist because they're not going to have the opportunity to innovate?
Mark: Well, certainly there's an obstacle in front of anybody who's trying to use public data to innovate, no doubt about it, if this injunction does not stand. How do they say this? I'm a pragmatist. I'm not an optimist. I'm not a pessimist, but I do know that the optimists often call the pragmatists pessimists. So I recognize ... and we're about the same. I might sound like a little bit pessimist. I have not spent 1/100th the amount of time contemplating our next move should LinkedIn win the appeal as I have spent time contemplating what we do when the decision is upheld.
Mark: I think about when we, so to speak, win. And the things that happen subsequent to that. And that this cloud of uncertainty that has put friction on certainly hiQ and likely many, many other businesses, that cloud is gone. And now the market can truly opine around the value that we proport to deliver. It won't be a sales discussion around how long will you have access to the data. Well, what is LinkedIn going to do? All that goes away. All litigation conversation goes away. All the strategy around how we handle it goes away and we get to focus on the core issue, which is what can we do to help your business be more productive and cage better with your workforce to present better opportunities to them. All the things that we want to do. Those are conversations we need to get to.
Chad: So you had a crowd justice campaign and many many people, myself included, went out and supported hiQ, but it failed, right? So you're trying to hit a mark. Explain the crowd justice initiative and are you going to try it again?
Mark: Don't know. Look, when you're a small company, you get to experiment with many many things, and you get to refine your thinking and take another bite at the apple on many occasions. So the crowd justice thing, it's actually a nice sort of summary to this story arch we've created here across the last 20 plus minutes. It touches on the community of interest outreach that hiQ experienced. I said earlier that I had literally dozens of companies and individuals, CEOs of other companies reach out to ask how they could help.
Mark: And I don't know when we started to talk about it. It was more than one, but it wasn't the 12th or the 13th that provoked us to say, well, I wonder if there's enough interest that people would want to be a part of this, that they would want to think that they've contributed to addressing this public data dynamic. And ultimately, we took a shot at that through this crowd justice is the platform that we used.
Mark: And then, what became abundantly obvious was cemented with the Seth Godin post that I alluded to. Important, popular, and viral. The notion that this was important was very clear. The media coverage we got driven by our desire to put that crowdfunding out there was immediate. Interestingly, much of the media I think stayed away from highlighting it or even presenting the URL. They don't want to be the source of either success or the catalyst for that tipping point, They don't want to take a position about that, and I respect that. I understand that. It's our job to get the word out there and to catalyze interest to fund it.
Mark: But in the big scheme of things, it changes nothing. We still have the same appeal process to go through. We're still funded by investors who will continue this battle to the end. My ability to fight the appeal was completely independent of the success of ultimate failure of the crowdfunding endeavor.
Mark: We identified the legal budget for the appeal. It's about a $700,000 endeavor. We thought it was fair for potential contributors or ultimate contributors to know, to have a sense of how much they'd be moving the needle if they made contribution if we got to the $100,000 goal. And we're proud of the way we handled it. It was a very transparent campaign. It ultimately didn't get to the goal, but that doesn't change anything about out day-to-day.
Mark: And would I do it again?
Chad: Well, from your standpoint-
Mark: Here's when I think it might make sense. We talked about why the every man or every woman probably parses on this subject for six or 10 seconds, that was my summarization. It's a six second glance at the issue. And if the gravity of this situation ever reaches the point where all of us could have some common understanding of the impact it will have on society, then I think a crowdfunding thing becomes a more relevant topical action-oriented platform upon which to create participation. But we're not there yet.
Chad: Well, I hope we get there. And I'm going to go ahead and round this out by saying, Mark, we really appreciate again, you guys going out there and fighting the good fight and challenging. Everybody else who's out there, if you believe this is an important issue in us to make this viral. You got to speak up. You got to do something. You can't just sit on your hands and hope that people go and fight the fight for you. You've got to stand up and you've got to fight it yourself. And we really appreciate Mark, you guys oing that at hiQ.
Chad: This isn't just a story of a blip in time. This is something that could and would negatively impact more than just the recruiting industry itself and we really appreciate you taking the time to talk to us.
Mark: Glad to do it and I'd be glad to keep you apprised as this whole situation develops in the future.
Chad: Excellent, Mark. Thanks so much. Good luck. Let's knock this thing out.
Mark: Thanks for planting the seed in and around the Christmas holiday to wonder why my friends and family may choose not to participate.
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