DEATH MATCH: Job.com's Arran Stewart
Welcome to Death Match North America 2019 - part three of four. This Chad and Cheese Death Match episode features Arran Stewart, Founder and Chief Visionary Officer of Job.com - what an amazing url.
Death Match took place at TAtech on September 26th, 2019 in Austin Texas with a room full of TAtech practitioners. The bar was open, drinks were going down smooth, and the judge's questions were on point. Enjoy - right after a word from our sponsor...
Death Match made possible by Alexander Mann Solutions.
PODCAST TRANSCRIPTION sponsored by:
Chad: Welcome to Deathmatch North America 2019 part three of four. This Chad and Cheese Deathmatch episode features Arran Stewart, founder and Chief Visionary Officer at job.com. What an amazing URL. Deathmatch took place at TAtech on September 26, 2019 in Austin, Texas with a room full of TAtech practitioners. The bar was open, drinks were going down smooth, and the judges' questions were on point. Enjoy, right after a word from our sponsor.
AMS: Death Match is brought to you by Alexander Mann Solutions. Hiring great people is no easy feat. There are new obstacles around every single corner, and your competition for that talent is intense. Together we need to be bold in our approach to tackling these challenges. Alexander Mann Solutions can be your bold next step. With a team of nearly 5,000 people around the globe delivering market leading recruitment, outsourcing, and a talent consulting services. And in early 2020, Alexander Mann Solutions will unveil an exciting new digital solution that will disrupt how you connect with job seekers and hire the best fit candidates. To learn more about how Alexander Mann Solutions is working with talent acquisition professionals around the globe, visit alexandermannsolutions.com. That's alexandermannsolutions.com.
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 or the Chad and Cheese Podcast.
Peter Weddle: All right. You've not been to a TAtech event before, you are in for a memorable treat. You're not here to see me, so without further ado, let me introduce podcasters extraordinaire, Chad and Cheese.
Chad: Raise that drink everybody. So, thanks first and foremost, thanks Peter and TAtech for making sure that we had alcohol in the morning because a lot of us got in late. We need that. Yeah, keep the party going. So, Deathmatch, who's seen a deathmatch before? This is our third deathmatch. There we go. That's why you're here, right? Deathmatch, really a variation of firing squad. This is more the onstage live version. So, obviously, if you're listeners of the podcast, I took out firing squads with every single one of these pitches today.
Chad: Without further ado, today we have four startups. They will have two minutes to pitch. After those two minutes, we have a stunning panel of judges who includes Cindy Songne from Talroo, Quincy Valencia from Alexander Mann Solutions. Woohoo! Give it up. And Robert Ruff, Sovern, Sovern Technologies, everybody. All amazing sponsors, and we love them. All right, that's three out of four. We've got one more. He's sweating it. I can see him out there. Arran Stewart from Job.com.
Arran: Good morning.
Joel: Can you two arm wrestle before? Are you ready?
Arran: I'm ready.
Joel: In three, two, go.
Arran: Job.com is an automated staffing solution utilizing artificial intelligence and Blockchain technology. We deliver a perm placed candidate 70% than a contingency service solution, White Glove. Our candidates are given a 5% salary signing bonus when they get that job with job.com, and we take 2%, making it a total fee of 7% charge to our clients. We are a technology focused system utilizing artificial intelligence in a way for predictive in order to allow clients to retain their staff. We focus on unconscious bias within gender, and we also have Blockchain technology that allows us to verify candidates when they come through the hiring process. We are focused towards digital recruitment and we are the future of digital recruitment for the benefit of candidates and clients. Done.
Joel: And I'll help you out. You can learn more at job.com.
Arran: You can indeed, yes. It's actually quite hard to do in two minutes, even though I did it good on your show,
Joel: So, I'll ask this first question real quick, how did you come by the job.com domain? Because it's kind of good.
Arran: Acquired the business. So, job.com had been a job board in the United States since 2001. The company came up for sale on the market in 2017, and my team and I acquired the business September 2017.
Robert Ruff: Blockchain.
Arran: Yeah. Yes. Genuine Blockchain. Well, actually, no. So, being brutally honest, we use the very crude version of Blockchain in the beginning, so we use the private Hyperledger fabric system on AWS. And it was just a way of us creating a contractual agreement between us, the client, and the candidate so that we had ownership of them if they apply for a job for the next 12 months, akin to terms as a staffing agency, which isn't particularly exciting for technology.
Arran: The secondary level that we introduced was called public G20 smart contracts. And they actually work in what's called proof of authority supernodes, which means we can do 1300 transactions per second publicly, and it only costs us 1.3 cents on gas in order to store the record. So, it is actually scalable because if you tried to do on ERC-20 contracts, it wouldn't be. But our actual prize jewel prize, which I did bore you on the call with, is that we're introducing trustocracy and meritocracy scoring. We're calling it Equifax for Resumes, and what it means, it's just utilizing the same behavior that we've always done online, which is I invite people to LinkedIn, I recommend them on LinkedIn, but there's no third feedback loop from employers to say that that person actually is good for what that recommendation was or they actually have worked at this particular company.
Arran: So, we've introduced the same process on job.com. We actually reward job seekers by inviting their contacts. We give them five bucks for every person they bring on board, and we give them 100 bucks for every person that gets placed. We give them extra 50 bucks if they verify someone to say, "Hey, yeah, Chad and Cheese know everything about recruitment," and they get hired for that. That feedback loop then crystallizes a score on Blockchain, on a public Blockchain, says, "This person actually can do what they say they can do in meritocracy, and this person gave an accurate recommendation." This is trustocracy, and we provide that to our customers.
Cindy: What's the process where a candidate to upload their resume?
Arran: So, it's exactly the same as what they're used to doing on something like Indeed or any of the other platforms, they just go to the site, they upload their resume. We don't actually allow search. It's all based on match, so it's a passive solution, typically, because we're acting as a staffing agency. We're not a job board. And what it is is for those passive candidates, or active ones, there'll be given jobs sent to them based on matching their resume, and they can choose to apply and go through the application process. There's some stages on our platform that would be similar to what you've experienced through an app contracting system. However, we do work with many app contracting systems as well through two-way XML, but the candidate, really, their hiring process is exactly the same. But the reason we give a signing bonus back to them is because, "I'm the person with the skills, experience, education. I apply for the job. I'm the one that aced the interview, and that guy made 20%?" it doesn't work for a millennial workforce, and I'm sorry to say that I am a millennial, as we discussed before. So, we believe that the lion's share should actually go back to the commodity, which isn't a commodity, it's a human being, and that's the process that they go through.
Quincy: I like that concept. I think it's really good.
Arran: Thank you.
Quincy: You talked about a meritocracy and a trustocracy, and you're getting referrals and recommendations and they did actually work there. How is is any different than someone doing a recommendation on LinkedIn?
Arran: Great question. It's the third part, which is, when an employer hires someone, so let's say I've invited you to job.com, you're one of my friends and you sign up, and then it pauses your resume and says, "Hey, you know about recruiting." And they ask me, "Does this person know about recruiting?" I say, "Yes." Okay. There's a preliminary recommendation and referral between us. When you then get hired by another employer on job.com, go through that process, and that employer retains you after your 90 days for that skill set that they hired you for, it then crystallizes that you can actually do that skill, because they've kept you, and that the recommendation I gave was actually accurate, and that's that trio recommendation that happens. It's then stored on a Blockchain record.
Arran: Because I could pretend and create a fake profile for a Fortune 500 and say I work at Bank of America, which actually happens very often on LinkedIn, give a recommendation to my real profile, and say that I was actually there or I actually have these skills. And without the input of someone like Bank of America to say, "Yay" or, "Nay," it's difficult sometimes, and that's one of the problems that happens with traditional solutions. So, we've introduced a system that's basically three ways. It's verification from the person that invited you, it's verification of the person that got invited, and then it's a final verification that crystallizes the score by the actual employer that takes on that person afterwards.
Quincy: And is there some sort of active participation the employer has to have to verify the person's still there?
Arran: They do indeed. Yes. Absolutely. And how we do that is very crude, is if you help us, then we give you extra discounts on your further hires. And nine times out of 10, most employees want to help with that because they're also bought into the fact that they want... Statistically, you can look how 85% of candidates lie during the hiring process, and 46% of them fail in 18 months. It's a huge problem for employers. So, they're actually glad to have an opportunity to not only verify that this person's real for themselves, but for the rest of the employment ecosystem.
Quincy: So, how often is that chain broken? Meaning, somebody doesn't come back and your not doing the third step?
Arran: Oh, yeah.
Quincy: And is there any way anybody knows that? Is there some sort of something on the site saying this person is not completed?
Arran: There's no score reveals for someone unless they've had the third link done, so, you can't say that... It will not tell a client that this is a verified profile unless that third link's done. Absolutely. Because, again, that would just have abuse. And there is a drop-off. I mean, I'm not going to lie. I mean, look, I'm not going to pretend that we're like the oracle of answers for this stuff. We are absolutely not. We're just on a digital journey to improve the industry, and so we're working at the moment, but there's huge drop-off on it still. People that aren't following it up, and we're very much active to make them do it. But I think we're in Industrial Revolution four right now, and everybody's looking for new ways to hire top talent, who they're going to hire, the future of work. So, we're trying to introduce things and methods and technologies to actually just gear towards the future of recruitment.
Quincy: You said there's huge drop-off in answer to my question.
Arran: Okay. 80%.
Quincy: What is it?
Arran: 80%, roughly.
Quincy: Thank you.
Arran: So, I say 20% of candidates do it. So, yeah.
Joel: I want to talk about trust for a second. So, in a traditional job search environment, a job seeker would go to a job board, which you are not. They would see job postings from some companies they know, some that they don't. They would then apply, typically. They would go to the company's website. So, the trust would be would be built on, "You're just a middleman to get me to the company." Whereas, your site is, "Give us your resume." So, to me, that's a very different behavior for a job seeker, so how do you plan on overcoming that? And I think there's a little bit of a trust issue. Maybe a monster.com or Indeed could get away with that because more and more people know them, but job.com, although it's a great URL, they don't know you. So, how do you overcome that trust, or are you getting your resumes from somewhere else and it doesn't really matter if people upload or not?
Arran: So, great question. So, it's kind of the chicken and egg scenario, which is, we have clients, and I can name, them people like Coca Cola, Emphasis, Zoom for example, that use us. And they place their jobs on the platform, and we go and work with all of the leading people out there through the friendly guys at Appcast and stuff like that and other channels like Monster, to attract talent to these jobs. Those people apply for the job as they would if we were a staffing agency, and we take them through that process. And then, once we have a verified candidate go through our process, because in order to gift them their signing bonus we have to take their details for tax, W-9s, all of that stuff. We then ask them the question to then refer and add people to the sites. That overcomes the trust part. Because imagine if Joel invited Chad to a platform and said, "Hey, I just earned $4,000 by getting my last job there. You should sign up too." That's how you overcome the trust part and gain the passive signups.
Robert Ruff: Question. It's kind of a softball, but what's the worst thing about your platform? What are the things that you're trying to fix?
Arran: I think there's an education piece. There's a big education piece. So, the worst thing about our platform is, I'm giving you the highlights, but I'll be brutally honest, like with technology, anything, we are still very much developing and improving and growing this system and we're learning on the way. And one of the things we learned fantastically is, since 4th of June this year, we've had 3,700 individual companies sign up on their own back onto job.com to use it, and not a single one of them has done a successful placement from the back of it because they don't understand how the system works. It requires us to have these actual intervene relationships with Coca Cola, with Emphasis, with Talent Fusion from Monster. We partner with them and power their jobs.
Arran: Those relationships work, but the organic signups and
people like that, they still don't quite get it. They think we're a job board because it's called job.com, which is totally understandable, so they come to use it. They think it's just free to post. Their find out that it's actually technically not free to post, it's going to cost you 7% of the person's base salary. We bridge the gap between job boards and staffing agencies. When, on the odd occasion, a job board doesn't work, what's your alternative? A 20 or 30% fee to a staffing agency? Where is there a middle ground? And that's what we offer. But people don't quite understand that yet, being brutally honest, on the organic side.
Robert Ruff: So, you mentioned that 85% of candidates lie in an interview.
Robert Ruff: Would you agree that 99% of employers do too?
Arran: I would, yeah. This is one of the things, as well, and this, being honest with you, there's a lot of blasphemy that goes around on both sides. And one of the things we want to overcome with the scoring side of things is not just making sure a candidates true, but making sure a small business is true. But also allowing things like, when I give a review, let's say on a review site like Glassdoor, "I actually did work there or I actually did do an interview there," rather than just, "Oh, I'm going to be brutal, and don't like someone or maybe write something a bit slanderous," because it's unfair. So, yeah, I'd say that there's just as much blood both sides. Definitely agree with you.
Robert Ruff: Okay. So, you are self-admitted millennial. You're giving money away. $5 here, $100 here. 5% of the 7% goes back to the candidate. Is 2% enough?
Arran: Great question. So, our average fee for our 2% is just shy of $1,600, and it's based on volume and it's based on ratios. So, arguably, there'll be people in here, some very experienced people that I know who own job boards, and they will tell you that, maybe, they get 50 bucks for a post. They might get 100 bucks, they might even get 20 bucks if they're doing high volume.
Robert Ruff: Well, that's a post, not a hire.
Arran: I know, but that's a post. But how many of those posts do they do until their clients get hired? So, their clients hire. So, what we are is we're an alternative, which is, statistically, if we get paid 1,600 bucks when someone gets placed, can we do that across? Would it take 20 adverts in order to place one person? And if that does happen, then you're on the same numbers as what a job board operates at because that job board's still got to attract talent, it's still got to engage it, it's still got to get them to apply, and that's pretty much all we've got to do. But you've got one huge carry in your favor, which is, "Hey, if you do this, you're going to earn a 5% salary signing reward," which, statistically, we see a much higher conversion rate. So, yeah, there is margin in it, yeah.
Robert Ruff: So, it's got to be volume?
Arran: It's all volume.
Robert Ruff: It's got to be volume.
Arran: And when you say volume, it's volume in staffing terms. It's volume in staffing terms, so statistically, based on some numbers that we projected, we're enrolling up companies at the moment. So, I'm buying out staffing agencies as we speak. We bought three staffing agencies this month. And if we do a million placements in a year based on this volume play, then you'll do 3 billion in revenue, and you're doing about 500 million in margin. And that's how it works. So, can we get to the first milestone, which is 100,000 placements, which is 8,000 people a month?
Joel: If the award for the show was the grandest vision, you would win.
Arran: Yeah, I know. That's fine.
Joel: Unfortunately it is not, so-
Arran: You've got to have a big dream guys.
Joel: ... I do applaud you.
Arran: Go hard of go home.
Joel: If you're going to dream, you might as well dream big. Of course, big dreams require big dollars.
Arran: They do.
Joel: So, talk to me about your series plan of investment, marketing strategy, global growth. Talk about just a macro 30,000 foot view of that.
Arran: I have 388 shareholders. I am backed by Falcon Capital and I'm backed by Garden State Securities, and I'm about to close another very significant round with a major $10 billion fund. We are halfway through our S-1, and we are planning to go public by the end of Q-1 on NASDAQ next year. And I am buying staffing agencies, and I have an open checkbook to roll up staffing agencies to the tune of 150 million in board revenue over the next six months. And I've already bought 30 million of it in the last two weeks. That's how we're funding it.
Cindy: What's the plan for the staffing services?
Arran: Pardon? Sorry. I'm so sorry.
Cindy: What's the plan for the staffing services? Why are you buying them up?
Arran: Why? Because you absorb their revenue, you introduce your technology into their processes, you make them use the artificial intelligence, you make them use the Blockchain service. There's two ways of doing things. It's buy or build, and build is also a fantastic way, but build is slow. Whereas, if you've got a model that people buy into like major Fortune 500s have with us, monster.com's Talent Fusion, RPO, SAP, we are a [foundry 00:19:02] finalist. They're reselling us now to their existing customer base. So, buy, because it's faster, and that's exactly why.
Chad: Okay. Blockchain, for anybody else.
Chad: Okay. So, iCIMS has also a grandiose vision of creating
profiles on the Blockchain passport, right?
Chad: So, if you're doing it, they're doing it, all these, but they're all supposed to be one record, right?
Chad: Are they all feeding into one? Tell us how that actually works if some of these big companies are also having the same vision.
Arran: Who's willing to give away the data for free? I am not interested in holding the data of a verified profile for just my own purposes. I am more than happy to provide a fee to anyone in this room for free so you can query at any time to make sure someone's real. But in return for the query, I would like to have the data in order to take a person through that process to verify them, and I'll give it back to you for free. I am your Equifax. Now, iCIMS is a different scenario. We have a fantastic and very deep close relationship with iSIMS. Sadly, I cannot tell you about that one, but you will read about it in the press. So-
Arran: I'm not a tease. You can't give everything away. But what they are doing is very, very sophisticated, and so are we. And it takes the collaboration and working of-
Arran: Give it a few days. Gentlemen, it's been a real pleasure.
Chad: Arran Stewart.
Arran: My pleasure.
Arran: Thank you. Thanks so much.
Chad: Thanks so much.
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