Twist and SHRM, Industry Acquisitions Come Together
Cheese is back from a whole week in Vegas, where he attended the SHRM National show, so we start with an update from the expo hall, including vendor takeaways, podcast superfans and a budding romance between Cardboard Chad and Cardboard Dolly Parton 🔥 Back to business, Adzuna, Beamery and Synthesia embrace AI, which is something we’ll certainly see more of from the solutions space. The show also covers recent industry acquisitions from Spark Hire and WebMD (yes, that WebMD). Then it’s Buy or Sell with Ferretly, 2045 and Swing Education. And what better way to end a show that starts with the adult playground that is Vegas than a story about an OnlyFans creator shutting down conservative commentator Piers Morgan?
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Intro: Hide your kids. Lock the doors. You're listening to HR's most dangerous podcast. Chad Sowash and Joel Cheesman are here to punch the recruiting industry right where it hurts. Complete with breaking news, brash opinion, and loads of snark. Buckle up boys and girls. It's time for the Chad and Cheese podcast.
Joel: Oh Yeah. It's National Fudge Day and take back the lunch break day. Any guesses what I'm having for lunch today after the show, Chad?
Chad: Yeah. Good guy.
Joel: You are listening to the Chad and Cheese podcast. This is your co-host, Joel Packer Cheesman.
Chad: And this is Chad Nobody wants an AI Ringo Sowash.
Joel: And on this week's show, SHRM stuff, an only fan smackdown and buy or sell. Let's do this.
Chad: Mother fucking cardboard Chad.
Joel: Motherfucking cardboard Chad [laughter]
Chad: You had a week.
Joel: Dude. I walk into the expo hall. So if you're not a regular listener, I was at the SHRM National Show this week. I walk into the expo hall, no shit. Cardboard Chad is facing everyone that's coming into that particular door of the expo hall, because Aaron's booth was right on the corner. And they moved cardboard Chad to basically greet everyone that was coming through the door.
Chad: I love it.
Joel: It was quite a sight. [laughter]
Chad: And a roll up with Chad and Cheese. HR's most dangerous podcast. I had, me in my robe and slippers. Yeah. No, it was pretty legit.
Joel: And Chad heads were all around as well, which is not good for anybody. Chad... Cardboard Chad made friends with Cardboard Dolly Parton, which was probably one of the highlights for me of the show. That's a romance that is budding and worth keeping an eye on Chad. Islands in the Stream takes on a whole different meaning. [laughter]
Chad: Oh, yes.
Joel: When it's cardboard Chad involved.
Chad: Yes, it does. Jesus.
Joel: So yeah, I've been in Vegas for a week. I need a nap more than usual. I was there with my wife and some of the in-laws having a good time, and then transitioned over to the SHRM show. Drank every day for sure, of that trip. And it's not good. Congratulations to hockey's Las Vegas Golden Knights who won the title while I was there. Had some drinks with the Plum team which...
Joel: Includes a Canadian founder. So it was always fun to rub in the fact that another year goes by without a Canadian team winning the NHL, which by the way we researched the last Canadian team to win it, 1993s, Montreal Canadians were the last Canadian team to win the cup.
Chad: Holy Shit. Wow.
Joel: Of course, they're very quick to let you know that everyone that plays on every team is Canadian, so it doesn't matter. The Canadians win every year.
Chad: Every year. [laughter]
SFX: Shout out.
Chad: It's time. While you were in Vegas, I was on a me... A mission to spread diplomacy. That's right. You don't need shots for that. I was spreading diplomacy. We actually met two French couples at an Italian restaurant, and we were just having a good time. They didn't speak English, we didn't speak French. They bought us two bottles of wine. We sat there for three hours, I swear, just bullshitting and Google translating. They invited us to their Airbnb last weekend and while you were in Vegas we arrived to five hours of food and drink. Only communicating through Google Translate. We had a fucking blast. It is literally one of those days we're gonna remember for the rest of our lives. So anyway, shout out to French people and technology and when Julie and I go back to Normandy we've got a place to stay.
Joel: You know a lot of porn stars with French people in Italian restaurants by the way. That's where my mind went on this.
Chad: Oh, God.
Joel: It also reminds me of European vacation when the Griswold's go to a French restaurant and he is like "I'll give you dish water. You won't know the difference." And he hits talks about Clark's daughter. Anyway, at least there's Google Translate.
Chad: They weren't Parisian. Yes. [laughter]
Joel: Shout out a little bit more SHRM stuff. Okay. Let's...
Joel: A little business stuff.
Chad: Bring it back.
Joel: The expo hall was interesting. It was full. It was busy.
Chad: Of course, yeah.
Joel: I think they had a larger number of people that went this year than last year. It was a little more telling about who wasn't there in the vendor space. Eightfold who we love making fun of for their 80 by 80 booths had no booth whatsoever. Deal, Oyster, Velocity, Global. A lot of the unicorns we talk about weren't there. Indeed, HiBob, Fountain, Paradox, Remote were there but very subtle booths. Mostly did not have the A team in the booth. Obviously not the A team in the booth. [laughter] Indeed had one of the banners that hung from the ceiling, the rafters. It looked like somebody printed it out from the HP printer in the office. Like they didn't...
Chad: Dot matrix.
Joel: Yeah. The dot matrix with the holes on the side that you gotta rip off. That's what that looked like. But that was my takeaway from the vendor side was in the Aaron Booth from another Chad and Cheese perspective. Another 150 t-shirts with our faces on it were given out during this conference. And I'm just amazed.
Chad: Wow. You didn't even save one for Steven McGrath. Oh, my God.
Joel: I did not. That's another shout out that's coming up. So don't ruin it. But yes I got one for my dad who it's pretty much all he wears is his Chad and Cheese t-shirts [laughter], which I can't hate on. [laughter] I got him a new one so he can rotate it in the laundry. But it was a good show. I would say equal parts optimism, equal parts nuclear winter is coming. I'm not sure what to make of that but we'll be talking about that obviously as the weeks and months go by throughout the rest of the year.
Chad: Well, what's gonna save us, Joel, or my next shout out, large language models. That's right. All vendors are looking at different ways to leverage generative AI and Adzuna is choosing to use this most powerful tool... Tech for job seekers, and an interview prep tool. So this is from the press release based over 10 years of labor market data, Prepper is built on a large language model using in-built prompts to generate and review interview questions and model answers. The tool also assesses and scores candidates' answers, reviewing each response with the skills and requirements being sought by the employer and provided bespoke feedback, not customized, but bespoke feedback to help candidates improve. So you just add the job title into this and the job description. Then you can choose easy, hard, or pirate. I love that. Very talru, very pirate. [laughter]
Chad: As an interviewer preference and away you go. So using large language models AI to help job seekers. Shout out to LLM and for Adzuna, focusing on the job seeker. And Little Rumor News. I heard a little listener told me... [laughter]
Joel: Why are you looking around?
Chad: You only see that on the YouTube.
Joel: Yeah. Listeners won't see what you're doing. That's...
Chad: I heard from a little listener that Indeed is backing away from their mandatory salaries on their job. So this is just a work and...
Chad: That escalated quickly.
Joel: We're going to take a look at it. That's exactly right. We're gonna continue to watch this space, but Indeed might possibly be backing away from their salary mandates. Keep a watch.
Joel: Wow. So the name Prepper...
Joel: Sometimes these like countries, words mean different things. When I saw prepper, I was like, is this some doomsday product that they're creating that. Prepper is like doomsday prepares. And I hope, I pray that, I pray that some country creates a competitor called Fluffer. Please God, please let someone not know and make Fluffer the first... [laughter]
Chad: It's the only fans version.
Joel: The competing product. Yeah. And speaking of Fluffer, my next shout out, I got a few super fans, that I need to, I need to shine a light on...
Joel: Steven McGrath. I don't know how many shows in a row that he's been in, but our favorite Scott, finally got his T-shirt. My God. Yes. There is, there is a God. Finally the mail service, the post got it to him. Well, both you and I woke up this morning to a picture of Steven in his t-shirt and nothing but the t-shirt with a big censored bar over his twig and berries.
Chad: If you're watching us on YouTube, you can actually see the picture.
Joel: Yeah. Yeah. Something Adam Gourd wouldn't even think about doing. Steven like, it's just Tuesday at the McGrath house. So shout out to him and a couple other super fans, that came by during my time at SHRM. Rachel Scatter, she's with Jobcase. She's a Hoosier. Went to, Indiana State, the school, you know well, because your daughter was there.
Chad: Oh, Terre Haute.
Joel: Yeah. Terre Haute, Indiana. She came by and was excited to see that we were there. At least I was there. And also, Ilia Brodsky a super fan. He is the CEO at VanHack.
Chad: I love that name.
Joel: And if you don't know what VanHack is, it makes sense.
Chad: I love that name. Yes.
Joel: When you realize he's from Vancouver and he helps people in Vancouver hire tech people. I think they've moved on from just Vancouver, so he is trying to figure out the branding. I told him like, dude just get a VW van as a Mascot and then put a techie on the side of whatever and he's like...
Chad: Van Wilder, VanHack. I love it.
Joel: Yeah, no, I don't know if it, but anyway, so those two guys, yeah. Big fans of the show. Steven McGrath, keep doing you, man. I can't wait to see you in London which I guess will bring us into travel here in a second, but can't wait to see you, man. Don't corrupt my son too much, please?
Chad: Good luck on that one. I've got an update on the, messy shout out from last week with, Inter Miami. So $29 tickets now cost $450 plus. Come the fuck on people. It, it's almost like we don't know how capitalism works. A family of four is over a $100 at $29 per ticket. Do you think a family of four can afford close to $2,000, including all those fucking fees and shit? Not enough families to fill the damn stadiums. Buy beer, hotdogs and nachos. Your favorite. What the actual fuck were these idiots thinking, raising Skybox rates might have been good, but fill the fucking stadium. Sell merch, sell concessions, then ratchet it up from there. This reminds me of JobAdder's dumbass CEO takeover [laughter] of JobAdder in, in the Boost, right? I don't know, maybe he's on the team at Inter Miami. I don't know.
SFX: Doesn't anyone notice this? I feel like I'm taking crazy pills.
Joel: To charge more for MLS. I don't care who's on the pitch than football tickets in America is just.
Joel: Just stupid.
Joel: You just can't do it. You can't do it.
Chad: You stop it.
Joel: You can't do it.
Chad: You stop it.
Joel: Oh, man.
Chad: Can you feel the tension in the air right now? I know. I can.
Joel: You can do it.
Chad: I can feel it all the way down in my Plums.
Joel: You can do it. Down in my plums. That's right Chad. It's birthdays and it's Rum with Plum, which also we should mention if you haven't given us your contact information for free. Shit. We got beer from our friends at Aspen Tech Labs, Bourbon from our friends at Text Colonel and Rum with Plum. If it's your birthday month and celebrating another trip around the sun this week is Eli Carstens, Kimberly Ol strap, TJ Lou, Robin Walsh, Zach Martin, Catherine Henry, Eric Baker, Linda White Moore, Jennifer McClure and Dan Yell North.
SFX: Happy birthday.
Joel: Happy Birthday fans.
Chad: We also have to let our listeners know that we have a new free giveaway. It's for Getaways and it's from our friends over at Abode HR. You go and register at free and once a month we're gonna give away with Abode. We're gonna give away $250 worth. It's a little card, little credit card of Airbnb. This gives you TA and HR professionals an opportunity to get the fuck away, to breathe and to focus on strategy and get out of the goddamn tactical weeds. That's from Chad and Cheese and your friends over at Abode HR.
Joel: Ooh, I like that. [laughter] I like that a lot.
Joel: And where are we going, Chad?
Chad: We're going to the UK. We're going to RecFest July 6th at Knebworth Park.
Chad: But, by the time you hear this episode kids I'm pretty confident that RecFest is going to have already hit their threshold of 5,500 people that are allowed to come in. So, if you haven't gotten your ticket, you're shit outta luck kids. That's just sad. But what should make you happy is RecFest Nashville. Be there to say that you and your team because this is an all hands thing. This is a bonding moment that you were the very fucking first RecFest USA fans, what have you? Seriously, it's a thing in five years RecFest, you're gonna be the OG, they'll have OG badges, that kinda shit. You're gonna get you see people with the OG badges, you give them that subtle nod while you get a little bit more champagne and your Mimosa, Cheesman you know exactly what I'm talking about. You bougie bastard. That is exactly what RecFest is about. Fun, getting together, all hands learning. And since you couldn't make it to the UK, because they're sold out, you gotta come to the US.
Joel: Electric Bull Chad. I want the Electric world in Tennessee baby.
Joel: All right. AI. Yeah. Startup Synthesia has raised 90 million in a series C round, bringing its total to $156 million. Synthesia's platform allows companies to create instructional videos using AI avatars without the need for actors or studios. The company will generate over 12 million videos and works with over 50,000 companies worldwide this year alone. Nvidia, the company powering its revolution, powering this revolution, excuse me, is now a trillion dollar juggernaut. McKenzie says, the AI boom will usher in an age of accelerated productivity to the tune of around $4 trillion annually. But it will come with profound disruption for many primarily knowledge workers. At least they can use the time off to listen to some new Beatles songs. As Paul McCartney confirmed this week that they're making a new single utilizing John Lennon's AI generated voice. Chad, lots to unpack here. The AI front is hot as usual. What's your take?
Chad: My take is you're very tired 'cause you didn't use the unicorn sound effect.
Chad: Nvidia is the most important company in the world when it comes to AI development and ML right now. Why, you might ask, Nvidia's GPUs are the processors used for AI and deep learning. They don't have the market cornered, but they've pretty much have the market cornered. So if you're an AI company and Nvidia comes knocking whether you need the money or not, you open the goddamn door, you have the conversation. So apparently there are over 12 million videos with Synthesia. This is that, that's a horrible name. Synthesia has over 12 million videos that have been generated on the platform since 2017 in 50,000 companies worldwide. That's not too shabby if we better understand what their MRR, ARR, their pricing model is. Here's a big thing. Competitors. Hour One, who's been on the show, Veritone, sponsor and on the show many times. This space is heating up. It is fucking hot. And this is nothing but market validation for the companies that we've already been talking to. Hour One, Veritone, who are looking at voice, not just audio, but also video.
Chad: Video and avatar all the way through, man, it is fucking crazy. Tell me what you think about that.
Joel: For sure and again, I've got SHRM on the brain. Yes, I need a nap. You're right about that. [laughter] Slightly braindead, for this week's show. Sorry about that, everybody, but...
Chad: I'll put the unicorn in, don't worry.
Joel: Don't worry. It's clear companies are trying to figure out how we get on this AI train. There's a lot of pasting messaging because when people buy the booths for SHRM, it's usually like a year before and they try to figure everything out. You could see there was a little bit of plastering of, yeah, ChatGPT and coming soon, this and that and the other. So everyone's trying to figure out what to do on this front. But you have companies that were there and I talked to, that are on this train right now. VirgilHR, who I spoke with, and I think we'll get that interview up at some point. They're using AI to basically replace lawyers for a firm.
Joel: So, or for a company so an employee can like type in. I wanna lay off people in California. What are the laws? What's the process? And it can like spit it out for you that you don't need the lawyers that you used to have before. Beamery, you mentioned Adzuna, Beamery this week announced I guess what they're calling an AI driven workforce planning solution. So everyone's trying to release news, trying to get this stuff product together. What we've talked about before is that you have these, I don't know, baby gorillas soon to become 800-pound gorillas, the Veritones of the world. They're gonna have just a Howitzer that'll tie in HR products and services because they have the video technology, the scripting, the language processing, the translations into multiple languages.
Joel: They're going to be at the forefront. And a lot of these other companies are just not gonna be able to play ball or compete with it. So it's gonna be crazy to talk about. The McKinsey report, that came out this week. If you get a chance, type in Google McKinsey digital report. It's a long thing, but it's really interesting. Yeah. It's, this is the next year or two that we're gonna be talking about. AI solutions, startups.
Joel: Money's gonna be going into this stuff. It'll be real exciting and disruptive.
Chad: Nvidia CEO actually said Moore's Law instead of being one and a half times it's two times right now. It is moving that much faster. Going to the Beatles discussion and a new album. Right?
Chad: So, I had a discussion with Julie this morning 'cause I don't know how I feel about this. I love music, I love the classics. I love it from living people. I don't know if I love the new generated, not real stuff. So I asked Julie, I was like what do you think? She said, I think it cheapens the experience. I then asked her if you thought it was okay to speak with your grandma, because that's another thing, right? You can actually condense that information.
Joel: So it's that coming out now.
Chad: She had a visceral reaction to that. She said, yeah, no, I would definitely love to speak with grandma.
Chad: Then I said, but for some people, music and bands are like a personal and real relationship. And then she thought that one through a little bit harder and said, okay, well, maybe no. Right? Maybe no, because it cheapens the experience. It all led to this question, what is life worth? If you live 27 years, like Janis Joplin, Jimi Hendrix, Jim Morrison, Amy Winehouse, Kurt Cobain, and a list of others. Does it cheapen the experience after you saw Jimi Hendrix and Janis Joplin at Woodstock and you're one and you're a boomer, would it cheapen the experience if a new AI version of the album came out and who would buy it? I guess we're gonna find out. And this is also going to open up a can of worms around should Harry Caray AI be used for Cubs games? Should AI be used to recreate obviously all these musical works? And or discussions with Grandma, because these are all discussions and products that are already out there.
Joel: What is life worth?
Chad: That escalated quickly?
Joel: You went there, didn't you? So I initially liked this trend, mostly because there's a new Oasis album and Oasis wasn't gonna make a new album ever. [laughter] And it was pretty good, like voice.
Joel: Single was written and the real people played instruments.
Joel: And then, yes, this came out and I was, do I really wanna hear a Beatles record? With John Lennon's AI voice, now it's endorsed by Paul, which helps it, because if you go to YouTube, search AI cover, and there's everything under the sun, right, there's Freddie Mercury singing Hotel California, and there's this. People are just being crazy. I think that totally is stupid. That's novel. People will get over that, like they did MySpace and some other things, but.
Chad: And most people buy it.
Joel: The problem is yes. These songs don't exist in a vacuum. These artists don't exist in a vacuum. You can't, you couldn't release Revolution today and have it, have the same meaning as it did in the '60s. You can't have Blitzkrieg Bop released today and have it, have the same gravitas that it did in the '70s. Smells like Teen Spirit today does not have the same hit that it does in the early '90s. So for me, maybe it's old school. I don't like the idea of artists that have these bookmarks in history, these bookmarks in our lives, these bookmarks in time, whether it's Vietnam or whatever in history. I don't like the idea of that. Maybe it's an old guy crusty thing, but yeah, I'm gonna sell the whole dead rockers creating new stuff trend.
Chad: Yeah. Again, what is life worth?
Joel: Damn. You went there. That was...
Chad: That escalated quickly.
Joel: That was really fucking deep. We gotta move on from some of that shit.
Chad: Clearance rack. Come on.
Joel: Let's talk about sales. All right. Can I interest you in some sleep inducing acquisitions, Chad? [laughter] Israeli startup, Comeet, a provider of applicant tracking and candidate management platform is merging with video interview platforms, Spark Hire. The merger is estimated to be a $50 million deal. The merge company will have a combined customer base of over 7,000 companies. But wait, Chad, there's more. There's more from the TJMaxx. WebMD is set to acquire Limeade. The transaction values limeade at $75 million and is expected to close in the third quarter. Limeade provides software to help companies enhance employee wellbeing and satisfaction. Alright, Chad, throwback a five hour energy and give us your take.
Chad: Dude. An applicant tracking system just bought, or was just sold to a video interviewing platform. That's about as backwards as it fucking gets, right? Comeet was founded in 2013, received about $7.2 million in funding. Spark Hire founded back in 2010. It seems they've taken little funding, under 70 employees. So it almost seems kind of a lifestyle company to some extent. Spark Hire isn't a big name in the space, right? And again, that might be on purpose, buying this many people and New Tech, they're gonna have to go after funding. Is this a great time to go after funding? It's not. It's not. So, I see this as Spark Hire's very safe and reliable Volvo. They just hitched it up to a freight train and now the Volvo has to pull the Comeet Freight train. It's gonna be incredibly incredibly hard for them. I wish 'em luck. But what they were doing, I think it's gonna be really hard for them to expand beyond and into applicant tracking.
Joel: So we had a show, I think maybe a year or so ago, and we talked about, what do SMBs do when they need an ATS? Well, a lot of them just use the Indeed built in ATS or they'll use the ZipRecruiter or whatever. And what does that do to that tier two or tier three ATS, kinda puts 'em out of business, frankly. There's a lot of Tier 2, Tier 3 ATSs. Comeet is one of them that simply can't compete with the iCIMS, the smart recruiters, the big guys that are out there doing it. On the other side of that, there's a whole lot of SaaS companies that think they are a platform, or at least they wanna be a platform. And to be a platform in our business, you better have an ATS. So you're gonna see a lot of these SaaS companies go shopping for these lower Tier ATSs because frankly, it's just a bad business.
Joel: ATS, the ATS is a commodity. And these ATSs that are down this, down at that level, they don't have marketplaces. And if they do have marketplaces, companies aren't building for it because they don't have enough penetration to make it worth their while. So you have an ATS and all there is, is an ATS, there's no marketplace. Companies are leaving them to go to ATSs that do have marketplaces that they can use. It's just inevitable that these are gonna get bought up, go out of business, and you're gonna see more of these SaaS companies with a little bit of money, a little bit of cheddar in the bank from investment, go buy ATSs and say, now we're a platform. Will the market buy it? I don't think so, but it is a move that I at least understand.
Joel: Now going to the WebMD deal.
Chad: Oh, geez. Yeah. So Limeade, I think the biggest issue, and we see this throughout our entire industry.
Chad: Is we don't know... We don't understand how to create a narrative that's going to sell more. There are some amazing CEOs that have gone through our industry who can raise money and can sell shit, and they do one thing incredibly well. Narrative, being able to hone in on what is truly important and create a narrative. Limeade couldn't do that. Went into their press release, went into some of their blogs, went into their website. They couldn't get narrative right. I mean, they could have been a two... They, they could have easily been a five to 6X as opposed to a little over a 2X, right? They had a couple of points that they should have definitely hit. I saw that, that were easy to hit, but they didn't even touch. Number one, low worker productivity, which equals lost revenue.
Chad: And that's all been in the news lately. High attrition rates, lost revenue. That's the key. We don't focus on the hard lost revenue types of numbers, which the board gives a shit about. We always focus on the fuzzy charts and graphs and that kind of shit. That's the thing. We really need to focus on stories like Amazon lost 9 billion in revenue because of attrition, lost revenue. Two words we have to have in our lexicon, and we have to go further than just talking about three times better productivity. That doesn't mean a fucking thing to the board unless you can put numbers to it, right? And in that productivity, what does that actually do from an attrition standpoint? Attrition stretches teams too thin. So you lose productivity while you're trying to fill a record number of positions and the employees that stay are getting burnt the fuck out.
Chad: Then you hire onboard. How long does that take? Because your current team is still running on fumes. And then finally, when you get people in the seats to do the goddamn job, the people that are burnt out fucking leave, you're in this vicious cycle, right? That's where productivity has gone to the shitter. And then we need to tie in attrition rate. So again, lost revenue. Our industry needs to focus on those two words. Limeade wasn't even close to it. So again, I really think that this organization could have sold for a lot more, a lot more. They just didn't know how to build a narrative.
Joel: The math did not add up, Chad.
Chad: 60% of the time. It works every time.
Joel: So my take is a little bit different on this. And it's pretty simple. I've said it before on the show. This company raised about 33 million. They were founded in 2006. You said it. Raising money now, really hard. There's no free money left, right? Time ran out on Limeade. Clear and simple. The money ran out. The patience for the investors ran out. They sold this thing probably for a song. I think that's, to me clear cut at what happened in terms of that deal on that side.
Chad: It was a little over two times, two times at least in their funding.
Joel: Well, I hope they've used that 33 to make some money in the 20 years basically, that they've been around. Hopefully that they did have some monetary value there. The WebMD thing, I don't know WebMD very well. I know it comes on search results when I want to know about my prostate and what's going on with my weight gain in the holidays or whatever. But two words on that side. Elevated Careers. Do you remember Elevated Careers Chad? They were the eHarmony of jobs.
Chad: Oh, they were fucking horrible.
Joel: Eharmony bought the eharmony of jobs. So WebMD coming in thinking that they can buy some employee, you know, satisfaction company or employee wellness company. And now they're gonna watch WebMD employment or WebMD work and try to make this thing, something, that people want. And I think it's going to end up just like eharmony and be a total piece of dog shit. [laughter] Hot garbage. What the hell are these companies thinking? We'll be right back.
Joel: Alright, Chad, can I interest you in some buy or sell baby? That's right.
Chad: Always, always.
Joel: We talk about three companies that have recently gotten funding. We read a summary and Chad and I will review them and either buy or sell. Let's play. Number one. Ferretly. The social media screening company has raised $1.5 million in a seed funding round, bringing its total to $2 million. Ferretly's platform helps organizations assess candidates online personas to align them with corporate values, reduce risk, and create a safer workplace. The funding will be used to expand into the pre-employment screening market and other segments. Chad, are you buy or sell on Ferretly?
Chad: So we've talked about Fama who just acquired social intelligence in this space for a few years, and I believe we both feel that this type of social background checking is inevitable. It's just, it's going to happen. The biggest difference between Ferretly and Fama, I think, is messaging. Ferretly is going heavily toward pure fear marketing, using words like hate speech, political speech, insults and bullying, self-harm, sexual impropriety, terrorism, extremism, toxic claim.
Chad: The list goes on, and on and on. Those are triggers that will sell a very risk-averse HR practitioner. If you scare the shit out of 'em, they're like, "Oh, fuck, my people are doing that. We need to put parameters around this," but I've said it before and I'll say it again. Old crusty background check companies will have to build new processes and infrastructure to sale... To scale. The days of someone running to the local courthouse in Walla Walla, Washington will be a thing of the past as data becomes more public and AI scales background checking. I believe Fama is well ahead of Ferretly, but that doesn't mean Ferretly isn't a good acquisition target for an old slow and lumbering background check company. This for me, my friend is a buy.
Joel: Have you even been to Walla Walla, Washington?
Chad: I have.
Joel: Have you. Okay. I haven't.
Joel: I'm sure it's... I'm sure it's a fine place. Another difference between Ferretly and Fama is money raised.
Joel: Fama's raised around $17 million. And then of course, the 2 million, here by Ferretly. This is to me, the Coke and Pepsi of this sector, of the industry. If you're looking for social media, like background checking, these are the two companies I don't think we'll see anymore. It's becoming a hard business. Is TikTok InVideo and like how this stuff is created, that's a tough thing to monitor. It's not just tweets. It's not just text. So it's a tough business. I don't see anybody getting into it from here. Both are basically features for a bigger background check company. I agree with you. That's a no-brainer. Ferretly at much less raised is gonna be a probably the first one to go out. And that'll set the market for Fama. Money isn't free anymore. Like we've said. This feels a lot like a bridge loan...
Joel: To when we finally get to a place where people are buying companies again, because that's, it's just not a lot of money. It feels like the investors are like, oh, let's get us to 2025, 2024, and then we'll start talking about acquisition. I don't see them raising more money. Yeah. I think it'll be bought by '24, '25. The litmus test to me is, in terms of being bought is does it make a profit for the investors? And I think the modest investment that they've gotten for is gonna be returned maybe 10 x for a company like this, because a background check company needs to have this service. So for me, yeah, this is an obvious buy from me as well.
Joel: Well, let's talk about 2045. The New York City based network, an exclusive network for influential professionals of color secured $4.2 million in pre-seed funding. Funds will be used to enhance digital tools, programming and their NYC clubhouse. The company also unveiled a comprehensive in-person and online membership platform with committed corporate sponsors, including Pfizer, Ford, and Fidelity. Chad, are you buy or sell on 2045?
Chad: I love the apply for community membership element. It's a velvet rope type of community. Not everybody can get in. I don't like that it's NYC New York City focused. We live in a remote environment. Why do we have boundaries? This... I understand there is a physical element to it, but that doesn't mean the entire thing has to be a physical, their messaging is pretty tight. Diverse leaders are leaving corporate jobs at a staggering rate. That's a great hook because those who have left and or are thinking about leaving, they're not giving up. They're just taking a breath. And what a better place than among other like-minded leaders. 4.2 in pre-seed funding is for a professional network? That's pretty stout. 2045 is looking at two membership options. Number one, individual pay, and number two, company pay. Number one is a non-starter. This should be a free platform subsidized by companies in a variety of ways. Now if they want to charge for live events and or use of their clubhouse, that's understandable. But membership fees are a non-starter. I love the core concept, but they have some business model issues that need to be shored up. They have self-imposed, geographic limitations and I think some soul searching to do so, even though I love the core concept, 2045 right now is a sell for me.
Joel: So first of all, I tried really hard to find out how the name 2045 was given to this. I have no... I can't find it. I assume you didn't find it. So if somebody knows how they got the name 2045, let me know.
Chad: I believe that is when, in the United States, white people aren't gonna be the majority anymore. We're gonna be more of a mixed society. Yeah.
Joel: Okay. That's why I have you on the show, Chad, to let me know about this.
Joel: So, so number one, the is NBA All-star, CJ McCollum, who is an avid Brown's fan from Canton, is an investor. And I just had to get the Browns on the show somehow.
Joel: So that's how I'm gonna do that. Look by almost all metrics in America, blacks are behind. I'm all for anything that lifts people and sets an example of success. This company portrays blacks as successful, just in a positive light. And that's good for everybody. We've seen organizations like this pop up, whether it's blacks, women, Hispanics, et cetera. And they've all had little to no success that I can see. Fairygodboss was acquired. I guess that may be a win. 2045 being a winner is a winner for all of us. They do have digital membership, so you don't have to be in New York. My guess is if it works, they'll launch it in Philly and Chicago and LA and it'll, it'll come to other markets. And I think we should all be rooting for this organization to be a big success. So for me, I love what they're doing. It's a good first seed round. A lot of good corporate sponsors, so...
SFX: All right. All right. All right.
Joel: I'm gonna buy 2045.
Chad: No, 2045 leadership. Feel free to reach out if you'd like some, at least some advising, from me, I'd be more than happy to have a conversation, no invoice necessary because I'd love to see what you're doing, work. I just see a lot of gaps and would be more than happy to help.
Joel: And if CJ McCollum ever wants to come on the show...
Joel: We will make room for you, my friend. We will make room. All right. Let's go to Swing Education. San Francisco based startup Swing Education has raised 38 million in a series C funding round, bringing its total to $60.8 million. The company operates an online platform that connects schools with substitute teachers addressing the issue of teacher shortage. Let's go back to school, Chad, I'm gonna review this one first, just for the hell of it because yeah, I need a nap and we need to click this thing up. Alright, historically, tapping into solving government pain is a big winner. Getting government money is a winner because it's a consistent form of cash that you can rely on right now, over three-fourths of states in America are facing teacher shortages until we start paying teachers like the rock stars that they are, we are going to continue having teacher shortages, a company out there that can help plug in teachers, even on a substitute basis, I think is a [laughter] slam dunk because there's such a need for it.
Joel: I think their educational programs where they can take substitute teachers and make them into full-time teachers with up-skilling, I think is a big win as well. When you have a need like this, when you have government money that's gonna go towards it and a consistent customer that's not gonna go anywhere, this is to me.
Joel: Another buy which is my hat trick and my hat tip to the Las Vegas Golden Knights. My hat trick on buy or sell. [laughter]
Chad: Somebody's in the good mood. [laughter] So yes, we have a teacher shortage, there's no question, and there's another a number of reasons for it and Swing Education is a Band-Aid on a sucking chest wound, but but because the problem is so God damn big, we need even if they're Band-Aids, we need something to help, and I don't disagree, I don't disagree at all that a platform that can help really connect a lot of these substitute teachers in the spot and give them an opportunity to see what's open and where they can go, very quickly, just makes sense. So I mean this is really a marketplace, I love marketplaces, again, this is not gonna fix the problem, but I tell you what it's gonna do, it's going to make money, it's a buy for me.
SFX: Alright. Alright. Alright.
Joel: Can I interest you in a OnlyFans story, Chad? [laughter]
SFX: What are you doing, step bro?
Joel: All right. OnlyFans, creator Elle Brooke was quizzed by Conservative, Piers Morgan about how her future children will react to her career. It is being celebrated as the perfect response, but I'm gonna let our listeners decide for themselves.
Piers: I'm just curious about you being someone who embarked on a law career, was obviously very bright, went to university, packed it in just for money to be effectively an online stripper. I mean, that's what you do, right?
Elle: Yeah. Way worse than an online stripper, but.
Piers: What do you mean way worse?
Elle: Way worse. Online stripper's just naked, I do things that are way more grotesque than that.
Piers: Just pornography.
Elle: Pornography, anything. But it's all within what I want to do, and I absolutely love it, and I'm really good at it. I could be a good lawyer. Yes. But also, am I good at doing other things on video and camera? Yes.
Piers: How would you feel when you want to have kids yourself?
Elle: Well, I mean, that's... I don't really want kids right now, but at least...
Piers: But you will. How old are you?
Piers: Right. So you will do at some stage, probably, right?
Piers: When you do, are you gonna be proud that you have your little ones and they look at you and go, "Didn't you wanna be a lawyer? Mummy, what happened?" And you go here, but look at all my stuff.
Elle: Yeah. They can cry in a Ferrari.
Joel: All right, Chad, drop the mic moment for the OnlyFans movement, or not so much?
Chad: Yeah. I mean, there's no shame in Elle Brooke's game, for God's sake. Sex is about control. And Piers Morgan is... I don't know if this is really how he thinks, but he's definitely demonstrating the old power structure and sex is about control. Throughout history, sex has become taboo because there's one area that men don't own control, and that's a woman's body. Unless they use things like shame to harness that control, which we've done amazingly well through religion and many other structures of things that we can't even prove exists. But Elle is doing what she wants, how she wants, where she wants, and most importantly with whom she wants, good for her. Good for her. That's she's gonna make more money doing this than being an attorney.
Joel: Yep. So, Piers Morgan is an old white dude. [laughter], for our listeners that don't know, I'm an old white dude. Chad has called us old white dudes before. Attitudes about naked women from yesterday are much different than they are today. Sex has become normalized online and women are profiting from it handsomely. And it's not just dildos and BJ's, by the way. Some twin female basketball players from the University of Miami have earned millions of dollars in those, the NIL deal from a couple years ago. And they're not strippers and they're not porn stars. They're just really cute. Playboy used to be the primary outlet for most men to see naked women. Playboy came out once a month, so the number of women that could be in the limelight for their nudity was very exclusive.
Joel: The internet has democratized sex appeal and sex. It is what it is. I'm not sure if it's ultimately a net win for society. I have a 13 year old daughter. I don't want her to think that being sexualized is the way to make millions of dollars necessarily. I know you have a daughter, so I don't know how you feel about that. I mean ultimately I think AI phases out a lot of this trend. The sex robots, the AI videos where you can get the AI girl to do whatever you want, however you want to whatever is probably ultimately gonna put OnlyFans out of business. And this will be something that we talk about from back in the day. Just like the internet or just like... The internet put out, put Playboy outta business. I think AI is ultimately gonna put OnlyFans out of business, but only time will tell. Until then, it's fun to talk about.
SFX: What are you doing, step bro.
Chad: We Out.
Joel: We out.
Outro: Wow, look at you. You made it through an entire episode of the Chad and Cheese podcast. Or maybe you cheated and fast forwarded to the end. Either way, there's no doubt you wish you had that time back. Valuable 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.