Every once and awhile, we get a startup on Firing Squad who claims to do it all, or at least almost do it all (none of them can deliver a case of Pabst with your new hire, but whatever).
Talent Alpha out of Poland is once such company. Calling it the human cloud, they'll find, screen and schedule your next IT pro, promising to give you access to a previously untapped talent pool of 700,000 experienced and project-ready IT specialists working in 25,000 small & medium-sized IT Services Companies across Europe.
One of your fearless podcasters loves the idea; the other one, not-as-much. Checkout founder and CEO Przemek Berendt bring his A-game to The Squad.
Brought to you by our friends at Pandologic, bringing programmatic since 2007 now that's a yottabyte of job data! What the hell is a yottabyte?
PODCAST TRANSCRIPTION sponsored by:
Intro: Like Shark Tank, then you'll love Firing Squad. Chad Sowash and Joel Cheesman are here to put their recruiting industry's bravest, ballsiest, and baddest startups through the gauntlet to see if they've got what it takes to make it out alive. Dig a foxhole and duck for cover kids, The Chad and Cheese Podcast is taken into a whole other level.
Joel: Oh yeah. It's the post St. Patrick's edition of the Firing Squad. I'm a little hung over, Chad. How about you?
Chad: Oh yeah. Definitely. I'm not hung over, and I feel amazing just because I drank Guinness all last night. And that's how you feel when you drink Guinness. It's the best beer in the world.
Joel: Very nice. I, for one, don't want to hear the guns today because I just don't want my brain to have to go through that. All right. Let's welcome our startup for this episode of Firing Squad. Today, we are happy to welcome Talent Alpha, not Alphaville. Talent Alpha and CEO and founder, Prez Berendt.
Chad: Przemek. Przemek.
Joel: Did I say that right? Przemek or Prez?
Chad: Przemek.
Przemek: Hello everyone.
Joel: He's like P. Diddy, he's either Puff Daddy or Diddy. He has a lot of different names.
Przemek: It's a pleasure to be here. Yes, my name is Przemek, but I also go by Prez, that makes it slightly easier.
Joel: Welcome to the show. And you are in Poland right now, correct?
Przemek: That is correct.
Joel: Very nice. Dealing with your own coronavirus issues I'm sure.
Przemek: No St. Patrick's day over here, because we got locked down when it comes to our bars.
Chad: Yeah. Us too. We had to have it in our homes. So I had to make sure we stockpiled enough Guinness and whiskey to ensure that we had a good time.
Joel: Plenty of whiskey in my place.
Przemek: Good for you.
Joel: All right, dude. Chad, you want to give him the rules? And we'll get to it.
Chad: All right, Przemek. You will have two minutes to pitch Talent Alpha. At the end of two minutes, you'll hear the bell. Then Joel and I will hit you with rapid fire Q and A, if your answers start rambling, Joel will hit you with the crickets.
Joel: Ouch.
Chad: And that means that you need to move along, tighten up your game. But then at the end of Q and A, you're going to be graded with one of these three: Big applause, that just means get your back account ready.
Joel: Well done.
Chad: Time to be sugar daddy. Golf clap, you're getting there, but you can do much better. Or, what you do not want to hear is the Firing Squad, that means hit the bricks, close up shop, take your ass home and put that drawing board away because this is not going to go anywhere very fast.
Joel: Oh, my head.
Chad: Any questions, Przemek?
Przemek: I'm ready. Bring it on.
Chad: All right.
Joel: All right, Prez. Two minutes to pitch starting.
Przemek: Talent Alpha Human Cloud Platform enables organizations to manage, measure, access, and share IT talent. We are building technology that allows organizations to get detailed understanding of their technology workforce and augment its capabilities. Our platform indexes unprecedented amount of data about specialists working in these organizations, going deep into their technical expertise, soft skills, and also psychometrics. Having best in class understanding of IT Talent sitting in organizations using our platform, we unlock numerous applications of it. Starting with Virtual Bench, there is a B to B to B marketplace that allows companies to share and access IT talent in what we call the tech teams on demand model. As of today, there are over 160 companies from 15 countries in central and Eastern Europe using our technology, offering their capabilities of over 10,000 specialists to clients around the globe, through our website, talentalpha.com.
Thanks to tapping into organizations, and understanding their experience future capacity, we can dispatch entire teams of IT professionals within hours of receiving a request. This maximizes time to productivity, not the time to hire, as clients get a working unit that already has gone through all of the stages of building up the team. Number of enterprise level clients are already testing Virtual Bench with us with a lot of success. Thanks to our proprietary skills to data model, we kept up to 500 data points about every individual on our platform. On top of mapping skills, we measure competencies where possible. Our Talent Lab app enhances this model with capturing additional metrics such as working memory, perceptual speed or tasks switching. We are already working on unlocking other use cases using core functionalities of our platform, including freelance through management, ATF lead capture, just to name a few on our roadmap. So to summarize, if your organization needs to quickly ramp up IT talent, or needs to gain better visibility on the skills already in the house, Talent Alpha Human Cloud is your solution.
Chad: Boom.
Joel: And you can find you where?
Przemek: You can find us at talent-alpha.com.
Chad: Talent-alpha.com.
Joel: I always forget that part, Chad.
Chad: Not always, but for the most part, yes. Prez, we're talking about open virtual benches. Let's dig into this a little bit further. So what it sounds like, and please help dig a little deeper into this, is that there's great tech talent that's there and you have open benches for multiple companies to actually tap into the exact same talent. Is that correct?
Przemek: That is correct. So what we discovered as we were building up Talent Alpha is that, in central and Eastern Europe itself, there are over 25,000 small and medium sized IT services companies, anywhere from like five to 500 people. Now, as we started digging into that, we realized that they are not running on full utilization, so at any given point in time, 20 to 30% of their headcount is unutilized. So when you look at this kind of talent pool sitting out there, there are over 700,000 professionals kind of sitting in this talent pool, where 20 to 30% is available at any given point in time for grabs. So what do we decided to do is to connect the dots and basically index talent sitting in these organization and birth kind of a virtual layer that allows other organizations who need to leverage IT talent to access them in this on demand fashion.
Chad: Okay. So these individuals, are they working under talent alpha or are they actually working under these other companies and they're kind of lending their talent out, but they're doing this through your platform? How does that actually work?
Przemek: It's the latter, right? So if you are one of those small and medium sized IT companies, you registered on our platform, you would then map out talent in your organization using our technology, and you'd tell us when these individuals become available for grabs, basically for sale, right? And then if we can find the matching request, we will basically bring the deal over to you. So, we are not hiring them directly, on the contrary, for the clients who want to leverage our capabilities, we enter it kind of as an alternative IT services vendor, giving clients access to this broad pool of talent coming from various organizations.
Chad: Well, it sounds like you're more, almost like an Uber per se, that you know when the driver's available to work, so you can actually just tap into that into one of these other companies. Is that correct? They let you know the availability and then what you do is you make the match. Is that it?
Przemek: Well, there are different ways to think about it. This is one way, that you described. Another way is more of an Airbnb model, right? You have certain assets kind of at your disposal, and you know when they are booked or not, and you can then lend them out to others. Yet another way we like to think about it is that, what we are doing is the same thing that AWS does to the IT infrastructure, right? Prior AWS, your service would be sitting on your premise, right? And now they get moved to the cloud. We basically believe that the same can happen with tech talent. They are sitting in somebody else's house, right? They are being managed and operated over there, and we are granting you kind of live access to their brainpower.
Joel: Prez, maybe it's the hangover, but I'm still a little bit fuzzy on what your objective is and who your competitors are. So when you go to the site, it looks very much like a people search engine. So the initial thought is hiring solve to seek out a hiring tool is your competition. But what I'm hearing you say is more an Upwork or Fiverr is your competition. Am I getting that wrong? Or how would you describe what side of the fence you're on? Are you a weird hybrid of both of those?
Przemek: I would say we are a hybrid of traditional IT services firms. So think, Accenture, Cognizant, EPAM, and the likes, right? Like large IT outsourcing companies and the talent platform, like Upwork or Toptal, right? What is different is the underlying business model, whereas Toptal or Upwork would connect freelancers on the market, we tap into existing companies and map out and basically share the talents to that as they're working over there.
Joel: Okay. How are you filling the database with talent? Are you tapping into a database? Are you scraping profiles? Are you buying them from a third party? How are you getting that data?
Przemek: So that's the beauty of the solution, right? We speak directly to the CEO or the owner of this company, and we basically tell him A, "Use our technology to better understand the people you have already on board." B, "Use our technology to sell to your own clients and see, we can actually bring you additional deals through our search engine that you just mentioned, that it's available on our website." So we don't have to find this individuals on the market, we make one handshake, one contract, can we get access to 100 or 200 profiles at once.
Joel: Why would a company give you access to their talent pool?
Przemek: Because they want to build sales. As I mentioned, many of these organizations are not running on full utilizations, they want to bring more attractive projects, they would like to work for bigger, more established clients on more fancy technologies, and that's what we enable them to do. Because on the other side of the spectrum, who we are bringing to this equation, are the large enterprises who are struggling with the tech talent gap, right? So, we are actually closing or building a link that was before not available. The smaller players, they could never sell to a very large enterprise. For a number of reasons, they couldn't jump through the procurement hoops, they didn't have the skills or the budgets to actually make that sale. And we're closing and bridging that gap.
Chad: So, from my standpoint, this sounds almost like RPO, but taking RPO to the next level, where you have recruitment process outsourcing and being able to use the bench that you have for other jobs. And that's really what RPO is. RPO has hundreds of companies that they work with, but yet they have the talent that they can dole out to those different projects. This is just done in an entirely different way where you're using talent that that company already has, and you're leveraging that for different projects that they could perspectively work on, so that the company that they actually work for, that they are the full time employee of, gets paid off of that. Does that sound more in line?
Przemek: That is correct. I guess the only difference is that in the RPO model, the specific IT specialist would be then ripped out of the organization where he or she is working right now and kind of hired on the client account. In our model, they keep working when they are working. And that's the beauty of the model, because what we are essentially doing, we are unlocking a new talent pool for many of these organizations. Reason being is that many companies who are already on our platform, they operate in very small cities. Like cities you've never heard of before, like Torun in Poland, in Romania, right? Where the large guys are not fishing. Right? And they know back home, these companies are actually quite well recognized companies to work for, so they have, sort of enjoying quieter retention rates, et cetera. Right? And the cost base is much smaller. So there are various benefits of that model.
Chad: So how many companies currently are utilizing your platform as the providers of talent? Number one. And number two, how many companies are using your platform to be able to dig into use talent? So how many of them have projects versus how many of them have people?
Przemek: Right. So, there are 160 of them who are using our technology to map their talent and basically make their talent available through our network.
Chad: How many people in those 160?
Przemek: Over 10,000 right now.
Chad: Wow. Okay. Okay.
Przemek: And then the demand side of the equation, we only started unlocking last November, so it's relatively fresh, but we already work with a number of enterprise-level clients who actually see benefits of that model. Because what we allow them to do is to give them access to something that's very niche skills in a presidented kind of a short time, right? Like to the extent that we've had cases where entire teams were dispatched within 24 hours from getting a client request.
Joel: Prez, who's your target market? Whether it's size the company or part of the world. And what is your typical sort of opening pitch to a prospect?
Przemek: So geography wise, we are focusing on the markets that are used to working in the offshoring model, so that's mainly North America, US, Canada and also Europe and Israel. So that's kind of our core focus when it comes to generating demand. Company size wise, we've been actually experimenting across the spectrum, and I'll tell you what our initial assumption was and what we see kind of, as we progress on our journey. Our initial assumption was, let's sell it directly to the enterprise, which we did, but it's a lengthy process as you know, right? You can get a sponsor and the IT organization, or the procurement organization, or innovation division that will love the model, but then going through all of the formalities can take quite a few months to do that.
Then we actually figured out a few other things. First of all, is that there is a number of what we call like, Tier 1 IT services suppliers, so, kind of midsize to large size IT organizations who struggle with the tech talent gap on their own, and we also become kind of a Tier 2 supplier to them. And this model is working for us quite effectively. We are also talking to some of the MSPs out there for our solution to be part of the total workforce management that they're offering to their huge clients. Right? So there are various ways in which we are going to the market. And there is also SMEs, right? That we are kind of trying to tackle in more traditional approach, through digital advertising, et cetera.
Joel: And what's sort of the opening pitch to them? What problem are you solving? Is it just get talent that you can't get to? Or is there something more?
Przemek: Well, we start with helping them to close the tech talent gap, right? That was basically kind of the initial idea for building Talent Alpha and the key problem that we were solving, and then explaining the mechanics of it. Right? And the once people get it, they actually see huge value in the model that we are offering. Now, as we traveled the world and we spent last year, pretty much attending different conferences really to see where this concept would be sticky, seven out of 10 conversations we would have with people there was in like, "We get the model, the model is great, but the technology that you guys are building, it's even more interesting," right? So that kind of put us on the trajectory that, maybe we are not only kind of in this talent platform business, but perhaps in the software, as a service, business. So we are actually, as we speak, in a process of validating that hypothesis, where they're not only the small guys who are using our technology today to map their talent would be interested in it, but maybe there is some bigger opportunity in larger accounts that we believe are pretty much blind when it comes to the workforce they already have on board.
Joel: Got you. So you mentioned SAS models, how's the pricing breakdown? Is it a subscription model? Is it based on size or seats? How does the pricing breakdown?
Przemek: When it comes to leveraging the Virtual Bench, which is our core offering right now, we basically add a margin to whatever GSV comes through our platform. So basically the partners who are exposing their talents through our platform, they are giving us rates and we're writing a margin on top of that. When it comes to the SAS, we make it free up to 150 seats, and then there is a pricing model, and there's a basically pair of seats model depending on how many profiles you'd like to map it out. To be honest, we are kind of in the process of figuring that out and then trying to test the market to see what would work best for the SAS piece.
Chad: Yeah. So this sounds like almost an evolution, especially from a technology standpoint of RPO. It's definitely a different take on it. Have you had any interest or are you working with any RPOs out there today, just from a partnership standpoint?
Przemek: We do, and we do participate in bits with them. As I mentioned, there are a number of RFPs where we were brought as part of the, kind of the holistic solution the RPO would offer to their own clients. Moreover, we are also building partnerships with some of the VMS providers out there, some of the largest ones, we are already working on integration where Talent Alpha would become basically an app in their ecosystem. So when the company has a requisition to be filled, they could query our database and we were to offer them required time based on what we see in our portfolio.
Chad: Excellent. So what's the end state for Talent Alpha? You're growing right now, you're targeting North America, what's the end state? What do you see the end state for what your doing? You become a hub? What does that look like?
Przemek: Well, the grand vision is to index the talent around the world, and make sure that we can have this talent to connect with the right opportunities, which you could say, LinkedIn has a very similar vision, but I think we are putting our vision on steroids, right? Because we don't want it to be a recruitment platform, we want to be this platform that basically facilitates this kind of API economy where jobs can freely flow. Now we are in a VC game, we raised a pretty substantial seed round in May of last year, we raised $5 million, that makes us one of the largest seed rounds in the region. So we need to kind of follow up that game, right? So the end state would be some type of an exit, whether it's through the MNA and one of the industry players, either in their recruitment space or more in the technology space remains to be seen or IPO, but God knows where the markets are going to take us these days.
Chad: No shit. Right?
Joel: Is that five million US dollars, Prez?
Przemek: Yes. That was five million US dollars.
SFX: Hell yeah.
Chad: Who's your biggest threat? You just mentioned LinkedIn, could they perspectively pivot, since they do have so many profiles, could they pivot to this model do you believe, or is there another organization that's out there that's more, I would say, well, suited to be able to pivot into something like this?
Przemek: We see LinkedIn trying to get deeper when it comes to understanding and mapping taxonomies of skills of individuals, but I'm not sure how successful they are, especially that they're taxonomies are rather shallow for those IT skills. I haven't mentioned that on every single profile in our database, we can capture today already up to 500 data points, right? And our tech skill taxonomies are very complex. Like, we've mapped out core IT roles I believe to an unprecedented level of detail when you get full visibility of the skills and individual has. So I think LinkedIn would have to try a bit more. I think people update their LinkedIn profiles, kind of in only various number of scenarios, typically, when they are ready to shift jobs, right? We changed the model where we are giving our technology for these companies to basically manage talent on our platform, and therefore we are getting access to a very accurate and up to date inventory. And moreover, we put on top of that a mobile app that kind of in the poll survey way allows us to keep enhancing that data model with additional insights. So LinkedIn potentially, yes. I see also our friends from Upwork and Toptal trying to move with this kind of enterprise level offering as well. But again, their underlying business model, which is the business to freelance model, I think causes them a bit more trouble. I think in one of your last shows you were talking about some of the issues Upwork is facing with the changes to their policy. So
Chad: Stupid moves. Yeah.
Joel: Prez, I hate to be the bearer of bad news, but this Corona virus is spreading around the world, the recession word is being thrown around pretty regularly these days. How is your business sort of prepared for a downturn in the economy or is it?
Przemek: well, we are in the process of figuring out what this all means to us. And we believe that it creates a potential number of opportunities in what we do. First of all, I believe this will drive the adoption, let's call it, on the supply side or on the small and medium sized enterprise side when it comes to using our technology to map talent. Because some of these organizations with whom we are working today will be stressed when it comes to their future. Right? I expect projects getting cut and they often case work with small companies, kind of an unusual model. I think they will struggle with having their pipeline suit that I believe would drive our adoption. Now on the demand side of that model, I think the large enterprises will also follow the suit, meaning that they will start looking into cost savings and trying to get creative on how to live in this new reality. And I believe that this human cloud that we are preaching and not having the necessity of hiring that talent in-house, or even having it as a permanent staff, allowing you to work remotely, would be one of the potential solutions that they will seek. So I think the after, we are going to definitely wake up in a totally different world once this is done and over, but many successful startups were actually born in the crisis era. And Airbnb, I think was born during the last one.
Joel: All right, Prez. That's the bell. It's time to be rated by us and face the Firing Squad. Are you ready?
Przemek: I am ready. Bring it on.
Joel: All right. So I'll go ahead, and I'll go first. There are a lot of people doing this or some variation of this, which is obviously validation for the business. It's also an incredible challenge to compete with bigger players, publicly traded players, players with a lot of money, really nicely funded ownership, et cetera. So, for me, the market is there, my challenges is the uniqueness there and the ability to cut through the clutter of the competition there. Obviously, as the economy is doing very well, and it's very tough to find people, particularly IT folks and engineers, et cetera, you're going to get a lot of people taking phone calls to figure out how we can get more engineers and it professionals to the door. In a recessionary environment, that could be a challenge for you, because recruiters are going to get laid off, companies aren't going to hire, they aren't going to have a need for your service, et cetera. And that's gonna affect everybody, not just you. I think, marketing wise, the site, I think you're sort of in the infant stages there, but you have a lot of room to grow, in terms of finding your niche, finding your groove. I think the five million in funding that you got is going to give you a nice bit of a runway to figure that out, to withstand the Corona virus scare, however long that lasts, any recessionary terms. So, definitely not the guns for me, but also I think with the competitive landscape, the economic landscape that we're looking at, I think that you've got a lot of work to do. So for me, it's a golf clap.
Przemek: Thank you, sir.
Joel: Chad.
Chad: All right, man. So everyone's trying to close the tech talent gap. And we also saw kind of like forms of these things about 10, 15 years ago, AllianceQ, Jobfox. The problem with them was, they weren't attacking it the way that you are. They weren't using the monetary and almost the heroin drip that you are to be able to lure talent directly to projects. The Corona virus will kick some companies in the ass, there's no question. I don't believe it'll be yours. I think many are doing this, like the Upworks so on and so forth, as Joel had mentioned, but they aren't set up the way that you're set up and they're not making money in some cases, the way that you can actually go after the money with all of these resources that are left on the bench. We're not really working into a virtual bench, especially around technology, which again, everybody's trying to close that gap. So I think crisis will definitely thin the herd, but you'll be the strong bullet comes out on top. You'll be one of those that I believe the RPOs who have tons of fucking cash will be looking at you to evolve how they're doing the technology side of their play. And overall, I think this is nothing but a big applause.
Przemek: Hell yeah. Thank you.
SFX: Hell yeah.
Przemek: Awesome.
Joel: Good job, Prez. How do you feel?
Przemek: Pretty good. Pretty good. Thank you.
Chad: Excellent.
Przemek: Always good to speak with some industry experts.
Chad: Excellent, man.
Joel: Chad, thus endeth another Firing Squad. And we out.
Chad: We out.
Outro: This has been the Firing Squad. Be sure to subscribe to The Chad and Cheese Podcast, so you don't miss an episode. And if you're a startup who wants to face the Firing Squad, contact the boys at chadcheese.com today. That's, www.C-H-A-D-C-H-E-E-S-E.com.