Personio Builds a Moat in Europe
Love recruiting news out of Germany? Then you're going to love this week's show. Deutschland is blowing up! The boys are talkin' Personio becoming Europe's most valuable privately-owned HR tech company, WorkMotion raising money to take on Remote, Deel, Oyster, Velocity Global and others in the global employer-of-record provider market, and unicorn-in-training NowJobs has opened its doors in Germany. We even interview NowJobs GM and cofounder Eline Davis on the state of the business.
Plus, we all learn the meaning of the word bumpkin. Viel Spaß!
TRANSCRIPTION SPONSORED BY: Disability Solutions partners with our clients to build best-in-class inclusion programs and reach qualified, talented individuals with disabilities of every skill, education, and experience level.
Eline (0s):
I love the Chad and Cheese podcast.
INTRO (16s):
Hide your kids! Lock the doors! You're listening to HR’s most dangerous podcast. Chad Sowash and Joel Cheeseman 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 (38s):
Oh yeah. American's heading to Europe next year will have to pay a seven Euro tax thanks to a new fee. But the good news, this podcast will always be free. You are listening to the Chad and Cheese podcast does Europe. I'm your cohost Joel "applying for EU membership" Cheeseman.
Chad (57s):
I'm Chad "not today Satan" Sowash.
Lieven (60s):
And I'm Lieven "the only non bumpkin on this show" Van Nieuwenhuyze
Joel (1m 4s):
And on this episode Personia goes, Octacorn, WorkMotion says it's not the size of the wave and it's spring time for NOWJOBS in Germany. Let's do this.
sfx (1m 17s):
Europe has a bunch of countries in it.
Joel (1m 20s):
Bumpkins?
Chad (1m 20s):
Yeah. What do you mean? You're the only non bumpkin on this show? Where did this come from? Where did you even learn that word Lieven?
Lieven (1m 28s):
Just quoting a big fan of the show. Steve Juul from Waterton. I don't know what Waterton is, but I'm sure he will explain. But Steve Juul from Waterton sends me a LinkedIn and he said, blah, blah, blah. What do you say? Okay, I'm going to quote, Lieven, just giving you a shout out for your dry humor and EU perspective that clearly the America bumpkins Chad and Cheese bumpkins do not have.
sfx (1m 50s):
Why did you say?
Lieven (1m 53s):
Bumpkins. You are the James Bond of the trio shaken, but not stirred. And I mean, Steve apparently has a very good view on the matter. So thank you, Steve. It's appreciated. I have a friend.
Joel (2m 3s):
Lieven has a fan.
Lieven (2m 4s):
I have a fan.
Chad (2m 5s):
Did he also tell you that he had applied for a job within the organization or something?
Lieven (2m 11s):
I mean, he has to know his place. He's the fan. He shouldn't be applying that's way too far.
Joel (2m 18s):
And, and bumpkin for those that don't know, it's usually tied to country bumpkin. So it's someone that's very awkward, sort of out of their element, country mouse in the city kind of thing. So.
Chad (2m 28s):
Which is where America is right now.
Joel (2m 31s):
Yeah, totally. So for our fans that don't know, bumpkin is just sort of an awkward idiot.
Lieven (2m 35s):
So it's not, it's not pumpkin, it's bumpkin with a b.
Joel (2m 40s):
Bumpkin.
Lieven (2m 40s):
Okay. Okay. So you are bumpkins. I'm not a bumpkin.
Joel (2m 43s):
Well, that's a hell of a shout out to start the show. I don't know how I can follow that one up?
Chad (2m 48s):
But thanks Steve.
Lieven (2m 49s):
Thank you, Steve. Appreciate it.
Joel (2m 50s):
I'm going to try my shout out goes to Smart Recruiters. The popular ATS announced it has expanded its global operations into the Northern European market. By opening up a regional office in our favorite country, Chad Sweden. They're also going to add staff across the region in Finland, Denmark and Norway. Smart Recruiters counts Ikea and H and M. So the move is also a little bit organic. With more and more European vendors becoming real competitors to the U S companies, I expect to see more US providers plant their flags into Europe, just like Smart Recruiter. Shout out to Smart Recruiters, heading to Sweden.
Joel (3m 32s):
No word yet if the bikini team will be involved or not. And a side note on that, because I went to Wikipedia on this, all the actresses from the nineties beer commercials, for those that remember they were all American actresses with blonde wigs. So I'm feeling a little bit cheated from my youth on that one, Chad.
Lieven (3m 55s):
A long time ago.
Chad (3m 56s):
Really off the wall. Now that was really off the wall.
Joel (3m 59s):
That'll get you canceled today, I think.
Chad (4m 2s):
Okay. So shout out to Denmark's job index who was ratcheting up Step Stone's, original antitrust complaint against Google for Jobs in the EU. Job index turns to the EU antitrust Chief Margaret Vestager who has fined Google more than 8 billion euros in recent years for various anti-competitive practices. So look at Denmark, baby carrying the "not today Satan" banner against Google for Jobs.
sfx (4m 38s):
Ma the meatloaf! FUCK!
Joel (4m 39s):
That's hidden camera from Google in Europe.
Lieven (4m 40s):
Yeah. And I got a second shout out to Dennis from Alameda. He's a COO at DBG media. Now you don't know what DPG media is, but they're pretty big in Belgium, the Netherlands and Denmark. They're into, as the name says media. They have about 6,000 people, 2000 journalists, television stations, newspapers, the whole shit. And he let me know in advance they were about to send me a press release and it always makes me feel very important if people let me know they're going to send me a press release. And he was right. He actually did.
Lieven (5m 21s):
He sent me a press release and they are launching a new company called Aimwell. So like aiming and well, doing something innovative with cross media, lead generation for recruiters in a cookieless world. And I think it's intriguing. I mean, it sounds like they actually found a way to work around the GDPR. A way to generate leads in a cookie-less world. So I'm thinking about we should having them on the show to elaborate on this.
Joel (5m 42s):
Cookie-less actually in the subhead of that press release.
Lieven (5m 44s):
It was somewhere in the text. I actually read the whole text. I know you only read the headlines, but I do. I do.
Joel (5m 53s):
Us bumpkins only read the headlines, we don't go any further.
sfx (5m 58s):
Why did you say?
Chad (5m 59s):
TLDR baby? Yeah. So, so not only do we get called bumpkins, but Lieven goes ahead and slides in another shout out, okay, this is, this has gone off the rails. He's off the show for one week comes back, takes over. This is crazy.
Joel (6m 13s):
Next thing you know, he's going to be joining us in London next week, and taking over our show.
Chad (6m 21s):
Knebworth Park baby. Yeah, we should get Lieven on the stage. July 7th kids. If you have tickets, you know where you're going to be. All day Knebworth Park, come to the Disrupt Stage. Joel and I are going to have nothing but tech on stage all day, not to mention beer. Beers going to be on stage, come out, have a great time. Try not to get wasted Joel Cheeseman. At the end of the day, it's going to be a great time. Lieven would love to see you there, man.
Lieven (6m 50s):
I'm going to try, I'm going to try, as I've told you, we've got an executive committee, so that's an extra reason to be there.
Joel (6m 55s):
Let's be honest. I'm going to still be milking my 4th of July hangover on the plane to London. So I may need a little time out on, on the booze. You bet you may be in luck with my sobriety on, on the seventh. Who knows? Who knows? I may still be drunk. I don't know. I don't know. We'll find out. I guess we'll find out All right.
Chad (7m 22s):
TOPICS!
Joel (7m 23s):
Personio is now Europe's most valuable private HR tech company. Suck on that Job and Talent and the second most valuable startup in all of Germany, Europe's biggest economy. Let that sink in for a second. The Munich Germany based startup has secured $200 million in a Series A funding. The latest injection follows a funding round in October 2021. When the company raised $270 million and has pushed the company value to
sfx (7m 58s):
Pink fluffy unicorns music
Joel (7m 59s):
$2.5 billion up from $2.2 billion just last year. Founded in 2015 Personio is Europe's leading provider of HR software for small and medium sized enterprises or SMEs. It has expanded throughout Europe with offices in London, Dublin Madrid, and Amsterdam, and employs a team of around a thousand people. All right, boys, this is kind of a big deal. Your thoughts bitte?
Lieven (8m 23s):
Once again. What do I miss? I mean, I read the article, they have 6,000 clients and they all pay 190 Euros a month? And if I, if I calculate correctly, that's like $13.13 million revenue a year and they got a startup at, they got a rates from 200 million, valuing them at a whooping $8.5 billion. I must have missed a detail, but this just can't be.
Chad (8m 51s):
Yeah. I think the 6,000 customers is more than just the like 200 MRR that they're talking about. I think there has to be seats or something to that effect. There has to be cause the 13 million to be able to get an 18, you know, 8.5 billion?
Joel (9m 8s):
Or usage.
Chad (9m 9s):
Yeah. Yeah. But look at that. Look at the frickin meteoric rise though in January of 2020 valuation was $500 million. 2021 they were at valuation of $1.7, 18 months ago, 18 months ago, 1.7 million. Now they're at 8.5 billion.
sfx (9m 28s):
What did you say?
Chad (9m 29s):
Yeah, not to mention they don't need the money and they keep saying it over and over. Even in their last raise, they said we don't need the money. Right. So what are these guys trying to do with all this cash? First and foremost, inverse investors I think are helping Personio build a war chest by being able to perspectively by interesting yet failing companies that are going to happen. We've been predicting this, all these huge organizations that may be getting a lot of cash. They're going to fall. There's going to be ones who did not get the traction, they're going to go on the clearance rack. It's going to drive consolidation, which means acquiring more business and also squirreling away cash in case the world economy does see a long winter.
Chad (10m 14s):
So my biggest question is when is Personio coming to the US? Because when you're looking at a Tam, that in itself is going to increase the Tam dramatically.
Joel (10m 24s):
Yeah. And therein lies to me, sort of the impressiveness of what these guys are doing. In two words, discipline and focus. Yeah. So on one end, in terms of discipline, they're staying laser focused on, on small businesses and, and one of their releases, they talked about how, how so many enterprise companies come to them to help them and they turn them away because they're so focused on the small, small companies that's obviously paying off. And the second thing that really stood out to me in the five or six sort of news bits that I read about this, before the show, was 0, 0, 0 talk about the US there was no quote, there was no headline, nothing that the company put out like there's apparently no play or messaging around we're coming to America.
Joel (11m 13s):
So I agree with you, Chad, like it when they when and if they decide to do that, there's a huge opportunity to come to the states, but they are really laser focused on Europe. I mean, we're talking about a lot of big economy in Europe, a lot of opportunity, and they're staying laser focused, not taking enterprise companies, and they're not talking about coming to the U S and that focus as we've learned historically, really pays off for businesses. And it's apparently paying off for Personio. So I, you know, I applaud it, man. It's a rare story and these guys being the most valuable HR tech company in Europe means they need our attention. And we'll be talking about them a lot, I assume, in the coming years.
Chad (11m 51s):
Yeah. Lieven so what do you think about getting this much cash first and foremost, and then not going to the U S and almost doubling your Tam?
Lieven (12m 0s):
It's an admirable. I mean, they've got so much comes from cash from the U S and then they say, we're not going to give it back. We're going to keep it in Europe. It's something more companies should do. It's really kind of weird that they say we don't need a cash, but if you're absolutely definitely want to offer it to us okay, we'll accept it. So Green Oaks probably know something we don't, but they are growing and I believe in their approach on the small and medium companies, there are so many of them definitely in Europe, but I'm sure also in the US, but they're only active now when I'm already had offices in four countries. So they have a lot of gain in Europe before moving over to the pond as you would say.
Joel (12m 40s):
I'd love to know these guys sales strategy, because selling into small businesses, sucks, and for whatever, whatever recipe they have, that's working, they need to package it and sell it to other vendors, because it really sucks to sell to small companies.
Chad (12m 54s):
So have we seen these guys acquire anybody yet? I don't remember. And I, checked crunchbase.
Joel (13m 1s):
Yeah, they acquired some automation company fairly recently.
Chad (13m 4s):
But it was, but it was, no, it was no portfolio acquisition.
Joel (13m 8s):
I feel like a tech or maybe some aquihire.
Chad (13m 10s):
Right. All right. So I mean, they're focusing heavily, which I understand totally too, because automation, maybe, I mean, even small companies need automation, they probably need it more than the bigger companies to be quite Frank to scale quicker. But when we're, taking a look at how Personio grows. I see as you you're talking about Joel, how in the hell do they get into these SMEs? I see acquisition.
Joel (13m 36s):
Yeah. So like agencies, board, I mean, like what would your strategy be here?
Chad (13m 40s):
Anybody who is common, whether it's competitors or it is common to SMEs, like, let's say for instance, just pure play payrolling systems. Right? That's one of the things that Personio, they have a chunk of that, but if they go out and they gobble up smaller payrolling systems and then pull them in, to the platform, then they also have an opportunity to upsell from a wallet share standpoint. So they're gaining market and they're also perspectively driving more, more wallet share.
Joel (14m 8s):
Yeah. They could go country by country and just start gobbling up market share in the SMB space. IPO down the road, baby, that'll be fun to talk about.
Chad (14m 16s):
Yeah. But they said, they said in the article, they're not looking to go public.
Joel (14m 22s):
Geez. These guys are either spinning some shit or they're the most interesting company in a long time. Like not America, not IPO, very few acquisitions. We're just a special company. We'll be watching Personio.
Lieven (14m 35s):
To be honest. I didn't know them before I read about the $200 million. But then again, I'm not their target group. We are not small and medium but still it's impressive. And I'm going to look at them.
Joel (14m 51s):
They're a big deal.
Lieven (14m 52s):
They are apparently.
Joel (14m 54s):
No joke. $8.5 billion that will buy a lot of beer, Lieven. That will buy a lot of beer. All right. We'll be back.
sfx (14m 59s):
Europe has a bunch of countries in it.
Joel (15m 1s):
It's not the size of the wave. Chad, it's the motion in the ocean. I know. You've heard that one before. Let's talk about WorkMotion.
Chad (15m 11s):
It's not this isn't the wave. Oh no. Yeah, no metaphors there at all. No
Joel (15m 17s):
Metaphors there. All right. WorkMotion a global employer of record provider announced a $50 million series B funding round. This brings total funding to $76.6 million. The Berlin based company plans to use funds to expand the automation capabilities of its global talent platform. Quote, "this investment is a bet that this is only the beginning in a humongous market" said Joydeep Bhattacharya general partner at Canaan WorkMotion was found in 2020 and reports it has more than 500 customers. They employ around 250 people. Okay. Guys, what are your thoughts on WorkMotion?
Chad (15m 60s):
Okay. So WorkMotion's, $76.6 million in total there in Germany. But then you have Remote that has close to $500 million out of the US. DEEL close to $700 million in funding at the US. Oyster HR $224 million out of the U S and multiplied, there are all these different companies who are trying to become the remote hiring and managing platform, which I we've talked about before. We think this is awesome. The big question is in this case, you have all of those US companies, right? Who have, you know, they're automatically organically in a huge pool.
Chad (16m 43s):
Now Germany is, don't get me wrong, they are the biggest economy in Europe, although they now have to spread throughout Europe to be able to grow. Where do they go next? Do they go to France next? I mean, what actually makes sense? Because just doing this in Germany is not the end game. Where do they go from here?
Joel (16m 59s):
I think he'd make a good point, Chad, in that, you know, we talk a lot about, you mentioned DEEL, Remote, Oyster, Velocity Global is in that conversation now, the multimedia unicorn club.
Chad (17m 11s):
Yeah.
Joel (17m 11s):
They all have one thing in common, they're based in America. I think two of them are in Silicon Valley, one in Colorado and one in Carolina and for me is WorkMotion situated in a way that they can focus just a little bit like Personio in saying we are going to be the European choice for the employer of record solution for remote work? You know, Europe is twice the size population of the US. It's very complicated. It has a lot of countries in it. So I mean, if WorkMotion takes the approach of, we're going to really target Europe, we're going to let the big boys that have got a lot of money, worry about the US.
Joel (17m 51s):
And, and we dare them to come over and try to, you know, take market share from us in Europe and we'll let them deal with Asia and other places. I think if they focus in Europe, they have a pretty good chance of being successful. But yeah, I think you're right. If they start talking about coming to America, let's go to other places. I think they're diluting their opportunity and, you know, by taking on these companies that have a lot of money and also, from a buyer perspective, you know, there are a lot of European companies that like buying from Silicon Valley businesses. They think, you know, America is progressive and they're better tech, whatever it is. I think the level is getting, or the division is getting closer and closer in terms of what people think about, you know, European tech companies and American tech companies.
Joel (18m 40s):
So I think a lot of businesses in Europe will choose the European headquartered business versus something in the US just because it feels more comfortable to them to use a quote unquote "local business" versus one that's from America.
Chad (18m 55s):
So Lieven you obviously part of an organization that spans many different countries throughout Europe, how hard is it for an organization like this startup to be able to expand within Europe?
Lieven (19m 7s):
Actually, it's pretty hard. Concept is easy and you were talking about France in my opinion, and I don't think I'm alone with this opinion, France probably is the hardest economy to enter, even within Europe, because they are pretty chauvinistic. No, it's really, it's not a joke. They're chauvinistic and we always think the best way to enter France is by buying a French company and doing something they should have been doing for a long time with them. But the start, is always buy something in France and then leverage from there.
Chad (19m 42s):
Especially if you're German, right? You don't want to bring a German brand or German speaking organization to some extent, into some of those other, not just because it's Germany, but because they're such big rivals.
Lieven (19m 55s):
Because the France and Germany, they aren't even that big rivals, I mean, France and England is much worse that does history, but a Germany has its history as well, of course, but I think it's something about the language, you know, it's the only language in Europe that's never accepted words from other languages. I mean, the whole world speaks about a computer. I mean, imagine you say computer in the Netherlands, and then everywhere in France, it's called l'ordinateur. They have the French academy, which is actually inventing worlds words to just make sure no English is entering the language. And that's true.
Chad (20m 32s):
So, dude,
Joel (20m 33s):
So if you were, if you were, if you were consulting with WorkMotion, would you advise them to buy a company in France to get a foothold there?
Lieven (20m 41s):
If you want to enter France, you have, but which company were we talking about? They just left France. StepStone a few episodes ago.
Chad (20m 49s):
Yeah.
Lieven (20m 49s):
And why do you think they do it? Because it just freaking hard.
Chad (20m 53s):
Yeah. But they tried taking their StepStone brand into France. One of the things that I love about House of HR is that you guys don't strip the brand away from the organization. And it stays organic to the country that it was in, in the first place. Right. So, you know, if they had an opportunity to actually acquire, keep that brand and obviously the talent that are there, I think they'd have a better way to go, right?
Lieven (21m 21s):
Yeah. So of have to buy a company, which is at least very similar to what they are doing, and then they can develop their own products and launch it through that existing company. That's how we should do it probably. We have a company in France. It's Bilson, it's an engineering company. They it's <inaudible> secondment of engineers, I think 1200, maybe more engineers on the payroll and it is a pretty close company. It's the company I have the least contact with from all 49 companies. France, a different world sometimes, but it's a very good company. It's a very good market. And we definitely like it. And we need to invest in it and the whole country, but it's hard, it's probably languished and cultural based.
Lieven (22m 8s):
Not sure.
Chad (22m 8s):
Well, let's now let's talk about going into Germany, Joel.
Joel (22m 12s):
Yes. A nice change in history going into Germany. Yeah. Let's talk about NOWJOBS, the Belgium app that matches flex workers and employers is moving to Germany and is already active in neighboring countries like the Netherlands and France. It has already grown from 600,000 euros in revenue to more than 90 million euros in revenue. Eline David co-founder and general manager of the House of HR subsidiary says her personal ambition is turning NOWJOBS into a
sfx (22m 45s):
pink fluffly unicorn soundtrack
Joel (22m 47s):
And the next step in achieving said status is moving into Deutschland. Again, the largest economy in Europe, which the company announced recently, the idea for NOWJOBS came in 2016 when they were looking to disrupt another House of HR company. Well, where can we get a House of HR expert to come comment on this, Chad?
Chad (23m 7s):
I don't know. Are there any accessible at this point? I think Lieven probably on his third beer.
Joel (23m 11s):
Lieven, yes.
Lieven (23m 11s):
Yeah. I've been called many names at House of HR, but expert is a new one, but I'll give it a try. I'll give it a try. In my opinion, and I'm probably a bit biased, but NOWJOBS is one of the main reasons why Bain should have bought us. It was a few episodes ago. Bain has acquired 55% in House of HR and they made a pretty good deal if you ask me, but the NOWJOBS is one of the big reasons because Eline probably is right. This has a potential of becoming a major unicorn. If only in Belgium, we can reach a hundred million probably by the end of this year, how much can we reach in Germany? There are how many Germans, 70 million, something like that, maybe 80?
Lieven (23m 54s):
Need to check, but to under only 10 million Belgians. So on the economy is a lot bigger. I think Germany is a good choice and we already have time partner in Germany, so it's not like she has to start from scratch. We have a big network so we can use the network to give it a speed bump, nothing like a bumpkin speed. Is it the word speed bump?
sfx (24m 17s):
What did you say?
Lieven (24m 17s):
I just like reminding you of the bumpkin. But other than that.
Joel (24m 20s):
Appreciate that.
Lieven (24m 21s):
I know, but no, I think Germany is a good choice and she also has plans in France, where we already are in France, but it's going to grow, maybe the way I was just talking about.
Chad (24m 36s):
Luckily, believe it or not kids, you probably remember we were in Belgium. We have a quick interview from our friends at NOWJOBS, actually Eline sat down with us and talked about the German expansion even before they announced it. So let's sit back. You guys ready to listen?
Joel (25m 0s):
I'm ready.
Lieven (25m 1s):
Yup.
Chad (25m 2s):
Here we go.
Eline (25m 3s):
I love the Chad and Cheese podcast.
Chad (25m 5s):
And we're done. Thanks. Thanks for coming.
Joel (25m 9s):
All right, everybody. We are back again live from Ostend, Belgium at the Recruiting E-Congress.
Chad (25m 15s):
How many beers have we drank thus far?
Joel (25m 16s):
We're at least five or six in.
Chad (25m 22s):
Good God.
Joel (25m 22s):
And it's only 9:00 AM. No, it's a little later than that. I'd like to welcome Eline David.
Chad (25m 40s):
The easiest name we've dealt with today. Yeah.
Joel (25m 41s):
The founder of NOWJOBS.com? .be?
Eline (25m 43s):
.com, .be and .fr and soon, maybe a teaser.
Joel (25m 44s):
Oh, scoop!
Eline (25m 45s):
Soon in Germany.
Joel (25m 46s):
Oh. Deutsland! Yah Zer gut!
Chad (25m 46s):
.de Baby.
Eline (25m 46s):
We are going to Germany.
Joel (25m 48s):
Eline, welcome to the podcast.
Eline (25m 49s):
Thanks for having me.
Joel (25m 50s):
Super fans by the way.
Eline (25m 51s):
Super fans.
Chad (25m 51s):
Really?
Joel (25m 51s):
Yeah. NOWJOBS.
Eline (25m 52s):
Yes.
Joel (25m 52s):
Yes.They love us and now
Chad (25m 55s):
I love it. Okay. So you have a story to tell, and I want to hear this because there are many startups that listen to us that want to understand how to get traction. Right? How do you get into a market? How do you gain traction? You guys have a good story. You've got a great story.
Joel (26m 9s):
Cut to the play.
Chad (26m 10s):
You have a fucking amazing story to be quite Ffrank. So let's start off with the story of NOWJOBS.
Eline (26m 16s):
So go ahead and do you want to know how we accelerate their business or how we got born?
Chad (26m 21s):
How you got born first?
Eline (26m 23s):
How he got born is actually a cool story. So we're part of House of HR. So six years ago, we did a brainstorm session. How to kill Accent? Accent in Belgium, known as the third biggest entering temp office with 2,200 people on the payroll, 500 million revenue. And we saw many digital initiatives.
Chad (26m 43s):
How to kill. I love this. Right out of the gate! You're usually we don't hear this out of you, Europeans. Right?
Joel (26m 50s):
Like a fly on the wall of a strategy meeting at House of HR. How do we fuck shit up? That's the strategy meeting House of HR.
Chad (26m 55s):
I love this. I want to be in more of these conversations by the way. Go on.
Eline (26m 60s):
It was a very cool exercise with all the CEOs of House of HR. We gathered in HGhent and we did a whole day session with all the CEOs. How can we kill Accent? So everybody came up with disruptive ideas, but with four people were quite convinced that everything was happening in a traditional temp office we can digitalize it. And one year later we started programming NOWJOBS.
Chad (27m 25s):
Holy shit. So how do you take something like that though and then operationalize and execute on it? Because that's, I mean, being able to come from whiteboard to execution and business, that's not easy shit.
Eline (27m 39s):
No, two years before we launched another app Swap, it was like the Tinder for jobs and in the beginning, everybody.
Chad (27m 44s):
Oh no she said Tinder for Jobs.
Eline (27m 46s):
But it was like eight years ago. Eight years ago. And they were looking like, oh, Iline, what are you doing? Building an app? A little bit PR. But suddenly that app was getting very nice results, we gave 150 people a job via now via Swap every month. So due to that, we found out, okay, the market in Belgium is ready to go digitally. We got in touch with building funnels, candidate acquisition and all those stuff. And NOWJOBS is actually the extended version of what we had with Swap.
Joel (28m 20s):
So a lot of our listeners and me included don't have a real appreciation for Accent. Give some perspective on how big they were, how much market share you've taken from them. What's the current state of their business. Like give us some sense for those in America that don't know what the hell like Accent is. Yeah.
Chad (28m 41s):
You mean a House of HR company?
Joel (28m 44s):
No, no.
Chad (28m 44s):
Yeah.
Joel (28m 44s):
Oh, you're killing the internal company. Well, that's even more interesting.
Chad (28m 51s):
No, it's Netflix. It's, Netflixing the shit. Right? Because Netflix had the whole
Joel (28m 55s):
Mail in CDs.
Chad (28m 56s):
And then they killed their own business with online.
Eline (28m 59s):
Wala! That's what you see a lot of big players they buy
Chad (29m 1s):
This is why this is fucking cool.
Eline (29m 3s):
Yes. And what we did. So big players buy small initiatives, startups, to integrate them in their company. No, we integrated, we created a company in our company, together with people who have a lot of experience in the industry and people who come from external with good IT.
Joel (29m 23s):
This is great. Cause I didn't know this. So, you know, instead of getting killed by someone else, you intern you euthanized. So is that business gone now?
Chad (29m 30s):
No.
Eline (29m 31s):
No, no.
Chad (29m 31s):
It's strong.
Joel (29m 33s):
So talk about that. Are you, you're just doing it differently? So you're basically having your cake and eating it too. You kept the, the one business alive and you create another business that gobbles up pellets like Pac-Man.
Eline (29m 49s):
NOWJOBS is 100% digital platform to recruit students. People who wants to get some extra money. So we position it on that angle because what we've seen in development in research that if you want to go for a fixed job, that you want to have a physical interview with your employer via an app, it was a little bit difficult in the beginning. Accent is really focused on fixed jobs. And with NOWJOBS, we pick the segments students and flexible workers. So that's why we can attack the same customers and the same customers can use NOWJOBS and Accents.
Joel (30m 21s):
So House of HR incubated you essentially, what kind of budget did they give you? How much rope did you get? Like talk about sort of the playbook that they allowed you to make and run with.
Eline (30m 33s):
It's quite amazing because we see there are many platforms like us in, in Europe and also in the US but what we see is most of them are burning cash massively. $50 million funding, $200 million funding. What we did, we build it up very lean and mean. At this moment, we have a positive EBITDA
Joel (30m 53s):
That was lean and mean for those that didn't catch it.
Eline (30m 55s):
To give you the investments. We only invested two and a half million in NOWJOBS and in five years time.
Chad (31m 3s):
What? 2.5 million in 5 years?
Eline (31m 5s):
And this year we're going for the 100 million revenue. So,
Chad (31m 13s):
Oh, that's what I'm talking about. That's what Lieven's talking about. Lieven's talking about Handshake. So Handshake is, has like, I think at least $400 million in funding, they're approaching a hundred million, right?
Joel (31m 28s):
Reportedly.
Chad (31m 28s):
How much? 5,000,000, Two and a half? Two and a half million in five years.
Joel (31m 34s):
Jesus.
Chad (31m 34s):
Oh, Jesus! I mean, this is what right looks like.
Joel (31m 37s):
All right. So what do you need to do to get to 200? Is it Germany? Is it France?
Eline (31m 46s):
We have a plan. We learned many things in the Belgium markets. And we have a strong international cooperation between the countries. We are learning from each other, do cross selling. We already have more than 10 international customers that we give service outright with all the countries. So we're really one team and the human force and human power is very important to launch a digital platform.
Joel (32m 9s):
Which is why he shaked, she has some team members here with her. And when I said America, he was like, shaking me off like a catcher to a pitcher, speaking of baseball.
Chad (32m 22s):
Which I think is amazing. Because every time we talk to European organizations, they're like, we're going to invade the US. Now that's a big pot of gold, but you're forsaking all of the money that is in Europe!
Joel (32m 35s):
The largest economy in the world. What are you crazy? Why do that?
Chad (32m 40s):
Because there's a big economy here.
Eline (32m 41s):
It's a very big economy and what we also chooses to start up near our own country. So it's easy to build one team. Don't go immediately for far away. Don't go for the UK because you always have to take a train or a plane. Don't go for the US. So we keep it close. And what we do, we do very good.
Joel (33m 4s):
Let me ask about nuance for a second. So Europe has a lot of countries in it. They're very culturally unique. Legally they're all different. Governmentally they're all different. When you grow into other countries in Europe, it's not like going into another state in the US. So talk about the nuance, the challenges of going to a country like Germany.
Eline (33m 26s):
Well, then I paused the mic to Frédéric.
Joel (33m 29s):
Let's introduce Frédéric, Frédéric Pattyn. Oh, with a Y I liked that like General Patton with a Y I can dig. And your position at NOWJOBS is?
Frédéric (33m 39s):
Project Manager since day one.
Joel (33m 40s):
Okay. So talk about going into Germany and what that's all about and what it entails.
Frédéric (33m 47s):
Well, as you say, Europe has a lot of a bunch of countries in it. And we started out with the Netherlands, which was a completely insane, different, legal mindset, where we try to digitalize and automate a lot of stuff. Where we sometimes took nine months to just figure it out through the knowledge of the legal stuff, that'd be automated in Belgium. And what we additionally learned in the Netherlands, it made it rather or easier to go to France, although they are even more bureaucratic, even more un-digitalized, even more.
Chad (34m 17s):
You don't say. No kidding.
Joel (34m 18s):
I've heard.
Frédéric (34m 19s):
And based on the first two countries, it was a big challenge to go to France, but it only took an additional eight to nine months to do that.
Joel (34m 28s):
Only eight to nine months. He says that like it's nine months.
Frédéric (34m 31s):
Just to figure out the legal stuff, because that's the big difference between staffing and freelance. Freelance is so easy to go live with it. Give me two weeks and you have an app for freelance. When it comes to actual interim staffing, flexible staffing, the laws around it's the security that candidates or people that actually have that kind of contract have is so massive. Definitely in France and now we are going to Germany and there it's even worse there they don't even know what an app is. What digital is. I am trying now to figure out what the team, how to site pass some paper documents that apparently must be signed physically.
Joel (35m 15s):
Germans don't know what an app is. I think that's what Frederick's final point was in that. The Germans might have an issue with that. Frédéric, Eline. Thank you for joining. Thanks for listening to the podcast. For those that want to know more about you guys, where do you send them?
Eline (35m 36s):
You can find us on LinkedIn, Eline David or NOWJOBS.com
Frédéric (35m 41s):
Frédéric Pattyn, also LinkedIn and NOWJOBS.be, NOWJOBS.fr, NOWJOBS.nl
Joel (35m 45s):
.de
Chad (35m 46s):
.everything.
Eline (35m 47s):
We're everywhere.
Joel (35m 48s):
Thanks for joining us. Enjoy the rest of the show.
Eline (35m 51s):
Thanks for having us.
Chad (35m 52s):
Okay, dude. I love that story about how NOWJOBS was created first and foremost, as an evolution or alternative to Accent, which is your biggest brand, right Lieven? I mean, you guys, you guys were actually starting to war plan against yourselves so that you could perspectively beat competitors to it.
Lieven (36m 10s):
Absolutely and it's better that we come up with something like that, then that a competitor does.
Chad (36m 16s):
Yes. Well, I, I keep thinking of like back in the Monster days, Monster was on top of the mountain. If they would have had this thought process, they could have perspectively come up with Indeed before Indeed did right. If they could have reinvented themselves, Indeed, wouldn't be on the top of the mountain now. And there are so many companies that are out there today who are guarding and defending. If they just focused on this type of process and really reinventing and reevaluating, it would be a better way to go through R and D.
Lieven (36m 47s):
Definitely. And it's always the same thing when I was, I think it's almost 20 years ago when I was just starting in this industry. I used to work for a job board and I told my boss, I said, pay-per-click is coming. We need to really find our business model because now we charge per credit as a StepStone and Monster still do I guess, but pay per click is coming, we should do something. And in Belgium, you used to have a duopoly. I mean, there are two companies, you have you two competitors. And they had 50% of the markets, each, something like that. So I said to the boss, we need to do something. He said, yeah, don't rock the boat you're in, we were making so much money with the current business model, let the other company do it.
Lieven (37m 31s):
And that was a big mistake. And then three years later, you had a Career Jet, you had Simply Hired, you had Indeed, and now those two companies have merged and they used to be water and fire, they hated each other, but they had to merge because alone, they just couldn't survive. Maybe that's not totally true. There's probably a bit of politics involved as well for the merging, but still they couldn't do it alone. Just keeping your business model because you're afraid to cannibalize. It's always a bad idea there are tons of examples in history.
Joel (38m 2s):
Yeah. There's a great book. About 20 years ago, I think it was written called the Innovator's Dilemma. And it talks a lot about these established companies and how hard it is to pivot and switch the business because you're trading a cash cow in for maybe another business? Maybe? You know, an uncertain future. And I love, I do love how, how this story happened in that there was a relatively small amount of investment in the NOWJOBS company. And it turned into this behemoth
Lieven (38m 34s):
$5 million in five years, something like that.
Chad (38m 38s):
Yeah, yeah. 2 million seed and then 5 billion in that's ridiculous. Yeah.
Joel (38m 42s):
So you, you can, you can still have the main business and take bets on disrupting yourself without losing your shirt. And I think that if there's anything aside from, Hey, if you're going to just be disrupted, disrupt yourself, it's take small bets on the future and hopefully you'll get one of those bets right. And House of HR obviously made a great bet in NOWJOBS and it's paying off handsomely.
Lieven (39m 5s):
And if you look at Accent, I mean, under the whole idea of us develop something, that's going to kill Accent. But if you look at Accent today, it's doing better than ever. They have the best months ever. So this has been what did Eline say? I'm better six years ago or eight years ago, when did we launch NOWJOBS? I don't know.
Joel (39m 25s):
2016.
Lieven (39m 25s):
Okay, so that's
Joel (39m 26s):
The idea for NOWJOBS came in '16.
Lieven (39m 28s):
Well, I'm done. It took us some time, but not that much to develop it. So many years ago, we launched NOWJOBS, it's highly successful, but Accent is still highly successful. So there hasn't been any cannibalization, is that the word?
Chad (39m 42s):
Yeah.
Lieven (39m 42s):
Yeah. Cannibalization. Okay. There hasn't been any cannibalization at all.
Chad (39m 46s):
Yeah. Well, think of it though. Think of it from the standpoint, when Netflix came up with the internet accessible streaming, their disk service didn't dry up overnight. Right. But they had those two running together. At the same time. You have the evolutionary step already in place will Accent, Accent could grow and the next thing you know, you just have two amazing businesses that are just creating cash. That's my biggest point! Is that if you're not looking to defend, what are you really looking to do? I mean, you can't just lay in the corner in the fetal position and hope that nobody comes after your market share because that shit's never going to happen. You might as well go after it yourself.
Lieven (40m 26s):
And it happens constantly that they do go lying in the corner and wait, it's so weird.
Chad (40m 31s):
Well, we're not going to be in the corner Lieven we're going to be on a plane, soon. Hopefully coming to see you. We're going to be at Knebworth Park. Now I'm going to take a little jaunt to Portugal, but I'll be back soon. Another, another great week guys.
Joel (40m 49s):
That's right. It's not, it's not Belgian beer, but English beer is still pretty good. It's still pretty good.
Lieven (40m 58s):
It is.
Joel (40m 58s):
See in London, boys.
Lieven (41m 0s):
See you.
Chad and Cheese and Lieven (41m 0s):
We out.
OUTRO (41m 1s):
Thank you for listening to, what's it called? The podcast with Chad, the Cheese. Brilliant. They talk about recruiting. They talk about technology, but most of all, they talk about nothing. Just a lot of Shout Outs of people, you don't even know and yet you're listening. It's incredible. And not one word about cheese, not one cheddar, blue, nacho, pepper jack, Swiss. So many cheeses and not one word. So weird. Any hoo be sure to subscribe today on iTunes, Spotify, Google play, or wherever you listen to your podcasts, that way you won't miss an episode.
OUTRO (41m 42s):
And while you're at it, visit www.chadcheese.com just don't expect to find any recipes for grilled cheese. Is so weird. We out.