Let’s see, Ted Lasso is back, St. Patrick’s Day is here and March Madness is in full effect. So how exactly are we supposed to muster the strength for a podcast? Well, OK, anything for you, you loyal listening selfish bastard!
Here’s what's on tap this week:
More Silicon Valley Bank drama,
Acquisitions by Textkernel and Andela,
A tale of two cities … one in Florida and one in New York (I know, the suspense is killing you).
Now, back to the Jameson.
Sláinte!
TRANSCRIPTION SPONSORED BY:
SFX: Excuse me, I'd like to request $17 for a push broom re-bristling. Why, it's that delightful TV leprechaun. I am going to get your lucky charms. Oh no. My brains.
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.
Joel: Oh, yeah. Ted Lasso is back, Saint Patrick's Day is here and March Madness is in full effect. Can we just stop the show right there and just not do it? Alright kids, what's going on? You are listening to the Chad and Cheese podcast. This is your co-host, Joel, everyone's after me, Lucky Charms Cheesman.
Chad: And this is Chad, I love me a crab boil Sowash.
Joel: And on this week's show, you're down with SVB, fountain squirts and Florida's gonna Florida. Let's do this.
Chad: Back on East Coast time, baby. Yes.
Joel: Yeah. Indiana, the East Coast, baby. Let's do this.
Chad: I'll take it, Jesus, I'll take it. Being eight or nine hours behind Europe because nearly half of the calls we take are usually European. I don't know how they do any business with Europe whatsoever. It's hard enough to do business with the East Coast.
Joel: Yeah, legal weed and really good micro-brews. I think that's how they do it.
Chad: We have great micro-brews here and we can get weed from Michigan or Illinois.
Joel: I don't know anything about that, man. I don't know anything about that. I'm a little bitter today, check this shit out. So my 13-year-old daughter's volleyball team has practice on St. Patrick's day, from 7:00 to 9:00 PM. What kind of sadistic, heathen shit is that?
Chad: It's called carpooling. That's when you just don't pick your fucking kid up.
Joel: Do I take my kid in an Uber and drop her off and then pick her up in an Uber?
Chad: Don't you have friends? Doesn't she have friends that she can actually go with?
Joel: They're dropped too. They're not gonna go to volleyball practice.
Chad: Somebody's responsible.
Joel: I don't know. She's got a bike. It's only about 10 miles away, at 9 o'clock at night.
Chad: I do have to say thanks to all the friends on the West Coast. We were in Spokane and Portland, splitting our time. We had an amazing crab boil. One of our friends is... Was a chef, he's now a fish monger, they still exist, which means he can get the best fish ever. So we had a whole crab boil. It was amazing. We did a five-hour drive, five and a half hour drive from Spokane to Portland, which was probably one of the most beautiful drives, right on the river. It was gorgeous. So we had a good time, but I am happy to be back.
SFX: Alright, alright, alright.
Joel: How about some shout-outs, Mr. West Coast vibe, coming back to Indiana?
Chad: Let's do it.
Joel: MOD Pizza.
Chad: Oh, we've heard of these guys.
Joel: MOD Pizza. Yeah. Each year, Chad, 650,000 individuals in the US exit the criminal justice system. While too many employers whine about not being able to find people, they refuse to give people who, yes, have made mistakes, but wanna work and get a second chance. MOD Pizza has been an incredible example of an employer who embraces second chances. We've talked about their ads showing a worker in an ankle monitor, and I encourage employers to go visit modpizza.com and see that they have an entire page now, about employees that they've given a second chance to, including a recruiter from the site, quote, "We found many justice-involved individuals are ready to get to work and have the grit and resilience we value in our people," end quote. Amen and shout out to our friends at MOD Pizza, which is where I'm going to lunch today, to support...
Chad: That's awesome. Amen. Yeah. We should actually have them on the podcast. Let's make that a thing, this year. My first shout out goes to the US Army and US Navy recruitment ad. So this morning, Julie and I were watching the news, having her morning coffee, when the US Navy, they had a commercial pop on and it was promoting its newest website, buildsubmarines.com. The US Navy is going niche and trying to get people interested in joining by enticing them to build next gen subs, which I thought was fucking awesome. Then, I pulled out my phone and I played the Army's new Overcoming Obstacles commercial for Julie. And right out of the gate, she saw a battlefield with Jonathan Majors, an actor in the Marvel Cinematic Universe. He was in the Loki series, and he's also in the Antman's newest movie. But anyways, it's an ad that shows the long history of the US Army's ability to overcome obstacles, as Jonathan Majors walks through Revolutionary War, World War I, World War II battlefields and ends up on a bus full of recruits, headed to basic training. It's one of those inspiring commercials, and Julie loved it mainly because at first, she thought it was a marvel movie trailer. [laughter] Shout out to the US military.
[music]
Old US Army Jingle: We do more before 9:00 AM than most people do all day.
[music]
Old US Army Jingle: Hey, First Sergeant. Good morning.
Joel: Alright. Shout out to Uber, Lyft and DoorDash, some of your favorite companies. Chad, remember back in 2019, when California passed a state law requiring it... Requiring them to treat drivers as employees? Yeah. About that. It went to the courts after Prop 22 passed in opposition, and a California appeals court ruled this week, that companies such as Uber and Lyft can continue to treat their drivers as independent contractors, exempting them from state laws requiring worker protections and benefits. Uber stock was up 6% on the news. Shout out Uber, Lyft and DoorDash.
Chad: The opportunity to treat their people like shit. That's awesome. Shout out to Eightfold, who was in The New York Times, in an article entitled, quote, "An AI startup boomed, but now it faces a slowing economy and new rules," end quote. Not the kind of article I want my two founders, uneasy faces as the social share image and they look awkward, they look like they're constipated or something's happening, I don't know. But, it was an interesting article. It was kind of half take down piece and then half inspirational AI's here to save the day. It was... I don't think it was incredibly well done. What do you think? Did you read it?
Joel: I don't know. Let's check in on Eightfold right now. Oh, shit.
Chad: The rumor mill, though... The rumor mill says, and we don't have this confirmed yet, so it's just a rumor, kids. Kamal, Eightfold's President is out. And as I was receiving, and I have been getting these messages just this morning, we also received messages that TotalJobs' CEO, John Wilson and CRO, Gemma Hennen are both out, as StepStone restructures. And if you remember, back in December, StepStone announced that they will be looking toward IPO. So cutting high-priced heads while thrusting those responsibilities back to the mothership could be the start of tightening up the belt. Just speculation thus far, but we're gonna stay close...
SFX: That escalated quickly.
Joel: Yeah, so word at EightFold that I've heard is, things are going well from a monetary standpoint, morale isn't too bad, however, they were initially shocked by the amount of layoffs, and a lot of people that they thought wouldn't get laid off, did. And, a lot of the tasks have been obviously passed over to people for extra work, so the foundation may be cracking at Indeed and you and I will be watching closely.
Chad: At EightFold, you mean?
Joel: At EightFold. What did I say?
Chad: Indeed.
Joel: Well, them too. [laughter] Fucking all of them. Well, where it's not cracking, Chad, where the foundation is not cracking, is our listeners that get free shit. So I got new winners from this month. You ready? Textkernel, our whiskey winner this month was Katie Gentry. Our beer winner, sponsored by Aspen Tech Labs is our own Jonathan Duarte. He may come up later in the show. And our Rum with Plum, remember if it's your birthday, you might win some rum from our friends at Plum, and that goes to Greg Fiorentino. If you haven't signed up for free stuff, kids, what the hell are you doing? Head out to chadcheese.com, click the free link, fill out the form, and sign up for free stuff, which normally will include a free T-shirt from our friends at JobGet. But, no matter what, if you're listening, you're a winner no matter what.
Chad: Jonathan Duarte did a commercial for Aspen Tech Labs after... He was like, "I wanna show you my beer," then he did a commercial for Aspen Tech labs.
Joel: He was really thankful for the beer.
Chad: Oh yes, he was.
Joel: He was really thankful.
Chad: He was ready.
Joel: He needs to get out more. I don't know, Jonathan.
Chad: Events, baby. Okay, so Unleash is happening in Vegas at Caesars Forum, late in April. I'm really excited about this one. We're going to be all over the place. I know that they have a podcast booth. We're gonna spend a little time there, but we're gonna be bouncing around, having an amazing time, probably having bourbon, cigars at VIP events, all of that fun stuff.
Joel: You think?
Chad: Yeah, I think so. I think so. Any plans for you thus far, other than also the toke thing that we're doing. It's this little...
Joel: Oh, can we talk about that now? I thought it was under wraps.
Chad: A little event. Well, we can talk about it. We just can't invite people yet.
Joel: We're teasing it.
Chad: Yes.
Joel: God. Talent Toke. Is that what it's called?
Chad: Talent took. We're gonna be meeting around the Bellagio, and we're gonna do weed while we're watching the fountains dance.
SFX: Alright, alright, alright.
Chad: We'll talk more about that later.
Joel: Stay tuned, kids.
Chad: Yes, yes, yes, yes. So then we're going to iCIMS INSPIRE in May. We're both gonna go in early, to meet Terry Baker and Ryan Steelberg for a day in Newport Beach, and then we're headed back to Coronado, where we're gonna be on stage, I believe, and a day, doing an interview with the CEO and whomever else they wanna put up there with us.
Joel: Whoever they dare to put up there with us, is the correct...
Chad: Don't scare them. Don't scare them.
Joel: Geez. That's a lot of days in California. I don't know if I can cope with such a thing.
Chad: That is, that is. And then RecFest in Knebworth Park, early July, just north of London, kids. It's an easy train ride from London, about half an hour, just pop on the train. Chad and Cheese are... We're gonna own the disrupt stage, that's our baby. Nothing but technology, all day, we'll be MC'ing and we'll be trying to cause as much havoc as we possibly can. Those are the next three events that we're going to. Go to chadcheese.com, click on 'events' in the upper right hand corner, register for all of them, partake in the discounts, come partake in all of the wonderful debauchery and learning that's gonna be happening at these events.
Joel: And leave us a review on your favorite podcast platform, while you're at it.
Chad: That's good.
SFX: Really? Did you feel the tension in the air right now? I know I can. I can feel it all the way down in my plums.
Joel: That's right, Chad. That sound bite means we're gonna celebrate some birthdays this week. Celebrating another turn around the sun, Iron Mike Shafer, Ashley Collins, Barb Francello, Jeffrey Wagner, Viot Michael Mueller, he's European. I'm assuming that's how you pronounce 'beat' in Switzerland. Bill Fanning, Jasper Sponjart, James Beaver Cleaver, Deb Andrew Chuck, and Craig That's not a knife, that's a knife Watson.
SFX: Happy birthday.
Joel: Happy birthday, everybody. And thanks for listening to the Chad and Cheese podcast. Topic. Oh, we got some more Indeed insight.
Chad: We sure do. We have plenty of people who are not incredibly happy about what's happening in Indeed, and then also other people that just wanna give us updates. So we have Matt Woodcock, who actually... I tell you what, just roll that beautiful bean footage.
Joel: Did you say Woodcock?
S?: What are you doing, step-bro?
Joel: Here's Matt.
Matthew Woodcock: Greetings, gents. I hope you're well. It's Matt here, from the UK, across the pond. So let's talk about Indeed. From the first of February, a bunch of our clients we put on the CPAS, CPSA model, now, from the first of March, we've been putting all of our clients on that model. So, how has that affected them? Well, we are seeing some pretty good results, but whilst there is still the re-engineered model from the customer click, I'm waiting to see amazing results. But, Indeed is still doing a great job for us and they do a lot of the heavy lifting in terms of high volume recruitment, but it's to be confirmed. So let's see how that goes. That will be coming to America on the first of April. I had that confirmed the other day, so one of our clients is gonna be on that model from the first of April as well. We found out today as well, that the CPA model in the UK, it is coming into effect very soon. They're still in testing.
Matthew Woodcock: They're still testing it, although a lot of the publication is on the website. Now with that, it's only gonna be available in the SME market, just like the States, so I can only imagine it's gonna have the same backlash. But, you're gonna be able to reject unqualified candidates within 72 hours, and if you don't, you have to pay for them. Now, also, that isn't gonna be available to the enterprise level clients spending tens of thousands of pounds a month for the foreseeable future. So whilst the SME market is able to reject candidates, the enterprise level clients have to pay for everything. But I will leave that for you gents to review and I look forward to hearing from you. So from me, for now, cheers.
Chad: So you can tell Matt is British, not just from his accent, but because you can hear the fury hiding deep down inside, that he really wants to let out, but centuries of sensibilities just won't allow it to happen.
Joel: I counted twice that he says, "Indeed is performing magnificently, but."
Chad: And he says re-engineered. It's like, "No, no, they just repackaged the same shit." Anyway, we've already covered the problems with Indeed's bait-and-switch, but let's run through it really quick. Mandatory registration. And we're talking about CPA first. So the CPA can flood with applicants due to one click apply. So you have a job out there, applicants already registered, very easy to apply, click, click, click, floods of applicants are hard to manage, which means the black hole grows and that's horrible for user experience and your brand. Unqualified applicants denied in 72 hours. Who has time for that shit? I mean, 72 hours for a small company to be able to go in, you're literally going to have to have somebody manage that shit for you. Now, on to cost per started apply. Registration still mandatory. Even though the info is not used to apply.
Chad: Why? Because the user is pushed to the corporate career site to apply through your process. So the new CPSA is literally just old CPC with a new label and a higher price tag. That was the re-engineered that Matt was talking about. It's total bullshit. Enterprise companies cannot deny applicants for a refund. Those are just the highlights of some of the new products. So this is the big question that I just can't get an answer to here is, why did Indeed rush to market with these products, when they are so full of holes?
Joel: Remember last week, when we talked about Aaron Rogers going on like a four-day retreat and total blackness.
[laughter]
Chad: Yes.
Joel: I'm pretty sure the executives at Indeed were at this escape as well, because I don't know what the fuck they're doing anymore. They sound scared, they sound totally intimidated by what Google's doing, ChatGPT, they're probably scared to death about what's going on there and the fraud that they're gonna have to deal with, and all kinds of stuff. However, their new gig economy, I'm sure will totally save the business. Really, I got nothing. I don't know who's behind the wheel there, if anybody. It feels like total disarray. Recruit Holdings is buying some makeup company or make... Did you see this shit? It's on the makeup site, for beauty site. I just... I'm at a loss, man. I got nothing. But either way, that is our Indeed update for the week.
Joel: Now, let's get into some real news, shall we, Chad? In case you missed it, a couple of banks went under since we last chatted, and things have gotten a little crazy with implications for some companies in our space, particularly Silicon Valley Bank, which was closed by regulators and put under the control of the FDIC, after a botched capital call and a rush for depositors withdrawing their funds. The bank's position as the go-to bank in tech, made it a huge beneficiary of the Silicon Valley boom through the past few years, as billions in deposits flowed to the bank. SVB decided to park that cash in securities rather than turn those deposits into loans to customers, and invested the bulk of these deposits and securities. As rates went up, the value of these assets plunged, and eventually SVB had to sell some of the securities it had invested, hoping to have enough cash to return money to depositors. It failed, of course, and an old-fashioned run on the bank torched them, and here we are today. A lot to un-back here, Chad. Your thoughts.
Chad: What a fucking mess, man. I mean, so what did we learn that we didn't already know from 2008? And once again, capitalism is amazing, but it doesn't work without government bailouts. So this is just kind of the... The shit that happens when you allow the animals to run the zoo. Europe saw impact. SVB-UK sold for one sterling pound to HSBC. Talked about this earlier this week on the Europe show. Go check that out. But not because it had the same problems as their U.S counterparts, but the UK needed to pivot the optics away from the US's instability into something that was more stable, like HSBC. CrunchBase, then we talk about the market cooling off. CrunchBase had an article where it had a quote, "venture funding has contracted sharply in Q4 of 2022. North America startups investment was down 63% year over year" end quote. So I fear, this is going to cool off funding even more. But the big question is, is that a bad thing? Because we are talking about companies on a weekly basis that literally, conceptually, experientially, leadership wise are shit. They shouldn't be getting money anyway. So is this really a bad thing for us?
Joel: It's not a bad thing for podcasters because we enjoy talking about companies getting money and failing and getting acquired by other companies. So for us, it's probably not a good thing if the money... The money dries up. It's important for me to note that this is not my lane. I don't think it's your lane. Like discussing, banking and what goes on there is not what people tune into this show for.
Chad: I can tell you where to make investments. That's for fucking sure.
Joel: Yeah. However, there is... This does reach into our industry. A couple of things... A couple of thoughts for me here. ThisWay Global sponsored the show and great friends over there. They actually sent out a note to their investors saying that they had previously put funds into SVB, but that they had since moved their money into Chase. So it was like nothing to see here. Everything is good. So I can't imagine a lot of other companies that were sending out notes to customers, investors, people of influence in the company like, hey, we're okay, we're fine. I hate to be on the other end that people were like, oh, shit, things are going to get a little chaotic here in the near future.
Joel: Notable firms listed as SVB clients include ZipRecruiter in our space, in addition to other well-known companies like Pinterest and Shopify. A friend of the show in Silicon Valley resident Jonathan Duarte told us in an email quote, the SVB closure is going to have a big impact on HR tech, but no one knows the impact for sure exactly. He added, quote, "SVB was the primary bank for probably 80% of the US VCs. When a VC raised a fund, that money went into SVB accounts," end quote. Interestingly, Jonathan says SVB got into private banking services such as mortgages, which is a real shit show. And he ended his note with, quote, "My assumption is the shit's going to hit the fan in our HR tech market really fast and it's going to be really big news," end quote. Well, if Jonathan's right, we'll have a lot to talk about. And this is nowhere near the end of the story.
Chad: Yeah, I mean, the dollar is down what, like 600 points since yesterday? I mean, there's obviously more than just this that's happening. But, the big question is, how do we add stability back into... And trust back into the system? And the easy answer is to reinstate something like Dodd-Frank, which was rolled back. Dodd-Frank was instituted in 2010 after the 2008 financial crash. So we actually put guardrails in in 2010 and then we took them out and then we expect to keep the fucking train on the tracks. And we can't even do that anymore. So, I mean, it's one of those things where we we have to get better at understanding that pure systems don't exist, right? We have to have a good meshing of, yes, capitalism grows and thrives, but it has to have adults in the room and we can't allow the fucking animals to run the goddamn zoo, which is exactly what happened here with SBB. There could have been tens of thousands, if hundreds of thousands, possibly, depending on how the dominoes fell, of people who could have lost their jobs. This could have been... This could have been something that was much larger if the US government, the UK and these governments didn't step in and take care of it.
Joel: Speaking of optics, Barney Frank of the Dodd-Frank bill was on signature's board, I believe. So government in bed with banking, no matter what political party you're talking about, is never good. It looks bad. Credit Suisse, you probably saw this morning, bailed out by the government out there. So its stock is back up. I don't know, this whole dance of government, banking systems, bailouts is going to come to a head at some point. I don't know when that is or how that works out, but it's not good. Now, the good news is SVB, I think, is the 16th largest bank in the US. So it's not like a 2008 situation where you had some really huge banks take a shit. So unless this is... SVB sneezes and everyone else catches a cold, it may be more of an isolated incident than we think. Time will tell. But yeah, it's not good. It's not good. And overall, it creates uncertainty in everything. And when people are uncertain, they don't know about the future, like they just stop, right?
Chad: Yes.
Joel: Stop funding, stop doing shit. And that's obviously bad for a machine that needs a well-oiled engine to keep things going. Let's get to Fountain. The ATS for High Volume Hiring has launched Fountain AI, a conversational AI feature they say streamlines the hiring process for recruiters and candidates. The feature automates tasks such as applicant screening and data collection and offers 24/7 support for job candidates with real-time responses. Kind of like a chatbot. So Fountain is well-funded and by all accounts, crushing it. So should Paradox be shaking in their comfy, cozy desert boots or is this much ado about nothing? Chad, your thoughts.
Chad: High volume is a huge market. And I think the paradoxes of the world need the fountains of the world and the fountains of the world need the paradoxes of the world, right? I think it's interesting that they say this is streamlining because Fountain was already an automation and efficiency process engine for high volume hiring companies in the first place. So they're adding a new layer of UX. I mean, that's really what's happening here. So they're just doing more of what they already did. The big question to me is with chat GPT and all of these new big data models popping out, is this just going to be a jump on the bandwagon kind of scenario? And every organization, especially the ones that are well-funded right out of the gate, are they just going to start glomming on to chatGPT in these chatbots? I say yes. But the thing that we need to do, especially on this podcast, is we have to separate and educate the two models.
Chad: We have the domain specific models, much like Paradox has, right? And they've been training on domain specific data. So that being said, domain being just client data, that information that happens inside the system that is not available to the outside world, that nobody else can train on, Paradox has been training on that for years now, right? Then you have the general model, which is broad based and it's trained on whatever you want it to train on, but it's more large data models, right? So we have to understand the difference between those two and that they can also be linked.
Chad: If you listen to our podcast with Ryan Steelberg talking about these different AI models, he goes into more detail about it. So check that podcast out. But this is going to be incredibly interesting because we're going to have to, or at least practitioners are going to have to better understand what the hell is a chatbot? What will this one do for me that that won't do for me, etcetera, etcetera?
Joel: It's quickly becoming a feature of the cool kids. And we've seen this before with like, are my jobs SEO friendly? Can I do text messaging? Can I like these things happen and customers are like, why don't you guys have this? This is like a hot new thing. It's trending. Like, why don't you have it? And then salespeople go bitch it at the executives and the executives ask the web people like, hey, can we design this? Can we develop it? Like, what's it going to take and how long? And then the developers go, oh, yeah, we can do that, knowing that it's going to be nowhere near probably what Paradox has. Right? Or our company that really specifically does this thing. The news was pretty... Pretty foggy. Like, I don't... I mean, did they build it themselves? Did they partner with somebody? Is this white labeled? We don't... We don't really know. So we have to sort of assume that they made it in house.
Joel: It has WhatsApp and SMS in there. So a couple more things that the cool kids are all talking about. They had to throw in there. My question is, if you're... If you're as big as Fountain and you're an ATS, your platform for frontline workers, high turnover jobs, why not build a marketplace? Why not have... Why not give Paradox the ability to build their... Put their conversational AI, Wade Windy? I mean, who... Predictive hire, whatever the hell their name is now, but, put their chatbot. And then as a customer, it's like, oh, I really love Paradox's conversational AI, but I love Fountain's interface and products. Like, why can't I just marry those together? By forcing someone to say like, hey, use our substandard conversational AI because you can check it off the list of functions and features that we have. I think ultimately customers lose in that and Fountain probably loses because their product isn't going to be as good as a company whose core competency is around that. Yeah. Why not build a marketplace? The time that your developers built a conversational AI, they could have built a platform for a marketplace. That to me is a much better use of your time and investment than building one feature. Build an entire platform where people can come build all kinds of features and your customers can get value from that.
Chad: Yeah. You wonder how the founders of Alio and Maya feel right about now. I mean, if they could have actually spent and focused and been more disciplined, right? And they could have kind of like lived a little bit longer than they could have made it to the chatbot is cool kind of scenario. But again, the explorers, they get the arrows.
Joel: Yeah. And it goes once again that most people don't go out of business for too little money. They go out of business because they took too much money. And the two companies you just mentioned are in that category. All right. Let's take a quick break. Guys, listen to the ads. There's no show without the sponsors. And then we'll talk about an acquisition conversational AI thing that might actually make sense. All right, Chad, we got two acquisitions from two pretty big players. This is no small ball that we're talking about here. Textkernel, our friends in Holland and Andela, one of the big new kids on the block with a lot of funding, have made acquisitions. Let's talk about Textkernel first. They've acquired fellow Dutch company Joboti, a candidate engagement tech firm. Joboti's automated recruitment processes, which include job alerts, GDPR checks and interview scheduling, are designed to streamline the recruitment process and reduce recruiter workloads. Textkernel says the addition of Joboti's capabilities will allow them to offer clients an automated recruitment solution, freeing recruiters to focus on high value tasks such as engaging with human beings, imagine that, while reducing costs and increasing efficiency. We actually have a soundbite from our friend, Gerard Mulder or Gerard, if you're in the United States, about the acquisition. Take a listen.
Gerard Mulder: So you can look at this as a natural extension of what we do already. We retrieve good matches, but do not engage with candidates ourselves. Now, most of our customers are looking for more channels and more advanced ways of reaching out to those candidates and automate more in that process. At the same time, they're not looking to replace their CRM or ATS. So this is another best of breed solution, which we can self integrate it or stand alone. And next to that, we see an increasing interest to use our matching technology on the career sides. And combined with Joboti's chatbot, it creates a more candidate friendly and better converting process for all types of positions.
Joel: Chad, your thoughts on Textkernel's acquisition of Joboti.
Chad: So picture this, you post a job in your applicant tracking system, Textkernel receives the job, searches against your candidate database in your applicant tracking system and then starts engaging with candidates automatically. Recruiter didn't have to do a goddamn thing. I've always said that the matching engines are the heaviest lift in our space because of the parsing, contextualizing and then matching against job descriptions and then against CVs. Now add WhatsApp messaging into the fray and it's strong as hell, man. It's not just strong, it is sexy too. So this makes a lot of fucking sense. You take a company who has been doing this, acquire and then attach it to a very strong engine. The biggest organization in the world from a matching parsing standpoint being Textkernel after buying Sovereign and then being able to put this messaging capacity on top of it. This is exactly what a big release should look like. This means something. This is impactful.
Joel: Sexy is the word that you use and that's probably the word that I would use too. I have visions of these two Dutch companies hitting up a coffee shop in Amsterdam to get deals signed.
Chad: Those air quotes by the way, coffee shop.
Joel: Would have loved a bit of fly on the wall. Yes, two Dutch companies making a deal happen. So full disclosure, we love Textkernel.
Chad: Oh yeah.
Joel: They're a sponsor. We love Sovereign, one of our first sponsors and an awesome product. Pretty much everyone that was everyone in the US used Sovereign. Textkernel acquiring Sovereign was one of the understated gangster moves of probably the last five years. Textkernel left the throws of CareerBuilder, which was a gangster move. They partnered with Main Capital who has more money than us to bankroll some of these things. They're making really intelligent sort of organic complimentary acquisitions like the one that they did here. For now, they don't seem like they want to be all things to all people, which so many companies are trying to do. Textkernel is making intelligent acquisitions. They're one to watch. They're doing it really intelligently. Gerard, as we know, is one of the smartest cats in this industry. We've met a lot of the members of their team and they're obviously top notch. We're a little biased, or at least I am, in that we love these guys, but we definitely do applaud this move of Joboti. My only criticism is that I hope that they eventually change the name of the company to Jobooty.
Chad: What is the capital of Djibouti? It's Djibouti, yes.
Joel: But I'm not going to hold my breath for that one. Joboti. Jobooty. Joboti. All right, let's get to one that's easier to pronounce. Andela. Andela, the global job placement network for software developers has acquired Qualified.io, a coding assessment service for an undisclosed amount of money. Andela will add the 3.6 million software engineers who use Qualified's training service, Code Wars, to its global talent community. The acquisition will allow Andela to expand and accelerate its ability to source and expertly assess talent. That's according to CEO Jeremy Johnson. The expanded platform will also allow companies to create hiring processes that are predictive of on-the-job performance. That's according to Qualified CEO Jake Hoffner. Chad, Andela making moves. Your thoughts?
Chad: So imagine this, you are looking for software developers and you go to Andela and not only can you find software developers, but you can actually see how they've been assessed in different languages, right? So now Andela not only has the pool, but they have the opportunity to have credentialing on top of that talent pool. This is fucking powerful, powerful, not to mention how many profiles?
Joel: 3.6 million, the Code Wars.
Chad: 3.6 million added into... I mean, so overall, this just starts to build the types of ecosystems that aren't for everybody. If I'm looking for a marketing person, this is not where I'm going. That's fine. This is really focused. It's really disciplined. And this acquisition is stupidly smart.
Joel: I like it too. So you have acquisitions like text kernels where complimentary services are brought on. And then you have these sort of like big fish eating little fish acquisitions, which Andela can do when you have $200 million in funding. Let me repeat that, $200 million in funding. And when you have that kind of money, you'd better start buying up some other companies by the behest of their investors. I'm sure that's what is happening now. Qualified has been around, if you're listening to Crunchbase 2015, if you look at LinkedIn 2018, either way, they're probably at their runway ending at this point, which means liquidation, I'm guessing a lot of their investors were like, Let's find someone to take this thing over. The Code Wars feature apparently is incredibly popular, but they weren't crushing it in terms of revenue. One report I saw had $2.5 million in revenue per year. Obviously, nothing to sneeze at, but obviously, if you're in business that long, investors are looking for more money. It also made it a really appealing acquisition for Andela. They just had to look through the couch cushions to find enough to go buy this company. So, to me, this is as simple as you had... You have a motivated seller, you have a sugar daddy looking to hook up, and that's what happened. Hard stop, love happened, baby. Love happened with Andela.
Chad: And I predict they acquire Wilco next.
Joel: Ooh, you heard it here first, kids. You heard it here first.
Chad: Listen up, Andela, look at Wilco.
Joel: All right. Time for a little, who'd you rather, Chad? That's right. I read two companies that have gotten money recently, and we decide who'd we rather. First up, we have UpDuo. Up yours, no UpDuo. All right. Peer-to-peer learning platform UpDuo has raised $4 million in seed funding. The company uses data-driven teams to offer short one-on-one video conversations which use gratification features to help workers feel recognized for their achievements. Since 2020, over 500,000 learning sessions have happened on UpDuo with teams located across more than 1000 customer locations. That is UpDuo. Next up, we have Headrace, a recruiting platform founded by three former members of Uber's marketplace team. They've raised $6 million in seed funding. Headrace aims to bring network effects to the recruitment sector, offering employers access to tenured recruiters via curated recommendations or postings. The platform shows recruiters placement records and allows them to collaborate with each other, potentially speeding up hiring times. Headrace also helps independent recruiters to expand their business and save on overhead costs. So Chad, UpDuo, Headrace, who'd you rather?
Chad: So UpDuo, who benefits from peer-to-peer training? In the military, you've got to take the time to ensure that everyone on your team is sharpened up to speed because you're on the battlefield, right? So that just makes sense. But the corporate world doesn't work that way. Corporate America doesn't build team players. We build me players. So will me, helping the team member to the left or right of me, get me a bigger commission bonus or wage increase? Not traditionally. The dollars just go to the top. So the question here, why? Or Headrace. I love the idea of Uber rising hiring, but this ain't it. If you're a company looking to use this platform and you see your recruiters in it for the side hustle, this platform goes sideways quickly. It's not like driving a truck during the day and then driving an Uber at night. Recruiters are doing side hustles, but they don't want it out in the light of day. So who'd I'd rather at 2:00 AM. In the morning on my way home, I'm looking around the bar and I'm going home alone. I'm not choosing either one of these companies because I don't think either one either one are long for the world.
Joel: Oh man, you just flipped the script on who'd you rather. All right. So Chad, in 2020, your boy Josh Burson wrote an article about how recruiter marketplaces were about to blow up. Headspace is only three years too late to the party. Fuel 50, Scout, Telenya promoted itself as the Uber for recruitment almost five years ago.
Chad: All different models.
Joel: And non-industry types, Uber execs have a pretty bad track record in our industry. So UpDuo, you've got upskilling, you've got remote, you've got employee engagement, you got some gamification in there. All the cool kids are talking about all those things. So for me, yeah, it's probably a 2:00 AM, 12 beer night. But if I had to choose, I'm doing UpDuo.
Chad: Beer goggles.
Joel: All right. Let's take a quick break, clean ourselves off and talk about two cities that are near and dear to our heart. All right, Chad, we're going to end this show on tale of two cities. First up, St. Petersburg, Florida. The US Department of Labor has recovered more than $190,000 in back wages from St. Petersburg restaurants, Red Mesa Restaurant and Red Mesa Cantina for violating several provisions of the Fair Labor Standards Act. The restaurants withheld workers wages to cover operating costs, charged employees for their uniforms, what? Paid an incorrect overtime rate and did not combine hours for employees who worked at both locations during the same week. Ouch. The back wages were recovered for the 89 employees affected for the violations. Now, Chad, let's go north to New York City. Pay transparency in action. A New York City tech worker, Kimberly Nguyen, who works as a contractor for Citigroup as a user experience writer, found out that a job opening with the same title as her current role was posted on LinkedIn, offering up to $90,000 more per year due to a new salary transparency law in the city and one that we've talked about.
Joel: She learned that the intended pay for the new hire would be $32,000 to $90,000 more than her current salary, prompting her to apply for the job. Nguyen says she earns $85,000 per year working as a contractor with Citi and has been asking for a raise for months. The company caught heat in November, you'll remember, Chad, when the New York City law went into effect for listing some jobs with a salary range of zero to two million. That was a fun podcast. A Citi spokesperson told CNBC that the company pays Photon, a contractor service, and that Photon negotiates the individual's pay rate. They have nothing to do with it.
Chad: Of course.
Joel: Kimberly says she's actively looking for a new opportunity... No shocking there, after she made a visit to HR after this thing blew up on social media. Chad, we've got Florida and New York in the same show. Your thoughts?
Chad: So the similarity behind all of this is government. So first and foremost, the government has to, again, enforce and actually look after these piece of shit companies who want to screw people, subminimum wage in some cases, workers out of their tips. And that's how these people get paid. And that's how they make the house payment. And then you go to New York and the government did what? They said, pay transparency. We're going to start... We're moving toward equity. So this is all around the government being able to do exactly what they needed to be able to do with SVB is have that oversight. We don't want too much of it. We're not talking Patriot Act shit here, okay? We're not talking about enemy of the state stuff here, but we're talking about things that we need to do to ensure that the little guy, the American worker isn't getting fucked.
SFX: I can make you rich.
Joel: Government plays a part. Social media played a part in this. Citi, corporate governance plays a part in this. For Citi to say that they don't have anything to do with Photon and what salary ranges are going on... I mean, they were already on the shit list for having a job with a pay range of zero to $2 million. Like you'd think at that point somebody in the ivory tire would say, okay, let's get our shit straight around like what we're paying people and like what's being advertised out there. So in some respects, the community and the policing that social media has become... Took Citi to task and let's hope they don't fuck up again and Photon gets their shit together. So you're right. Like government plays a part, the marketplace plays a part, social media plays a part. These are just two fucked up stories by generally two fucked up areas that we'll continue to talk about on this show. But until then, Chad, it's St. Patrick's Day. I say we end the show with a little slantcha, a little Jameson, maybe a little Guinness. Sound good to you?
Chad: That sounds amazing. I'm going to go get me a creamy head of Guinness right now.
Joel: Happy St. Patrick's Day, everybody.
Chad & Joel: We out.
SFX: Wow. Look at you. You made it through an entire episode of the Chad and Chase podcast, or maybe you cheated and fast forwarded to the end. Either way, there's no doubt you wish you had that time back. Viable time you could have used to buy a nutritious meal at Taco Bell, enjoy a pour of your favorite whiskey, or just watch big booty Latinas and bug fights on TikTok. No, you hung out with these two chuckleheads instead. Now go take a shower and wash off all the guilt. But save some soap, because you'll be back. Like an awful train wreck, you can't look away. And like Chad's favorite Western, you can't quit them either. We out.