Coming down from the high of the recent iCIMS acquisition of CandidateID, former CEO Adam Gordon of CandidateID and Mike Wilczak, chief product & development officer at iCIMS, join Chad & Cheese for the "morning-after" recap of the deal. Included are tips for startups who want to be acquired, whether it's better to buy or build your next feature set, and what the future looks like for iCIMS and CandidateID customers alike.
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INTRO (1s):
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 (21s):
Oh yeah, what's up everybody. It's your favorite guilty pleasure the Chad and Cheese podcast. I'm your co-host Joel Cheeseman joined is always the Robin to my Batman, Chad Sowash. And today it's a double dose of HR tech perfection. We've got Adam Gordon, former CEO of CandidateID, and now VP of Recruitment Marketing Automation at iCIMS as well as Mike Wilczak Chief Product and Development Officer at iCIMS. Boys. Welcome to the show from Fiji or Bora Bora or wherever you guys are at the moment.
Mike (1m 4s):
A lot better than where I'm at, but no, that's great.
Chad (1m 6s):
Dude, whatever you're in Paris, Adam is in Lanzarote. I mean, you're fine. Okay. Joel is in Indiana.
Joel (1m 15s):
Edison, New Jersey Edison, New Jersey is like the Paris of Jersey, right?
Mike (1m 22s):
Being a global company has its perks, I guess. Huh?
Joel (1m 24s):
Very nice. Do you guys have an office in Paris then?
Mike (1m 26s):
We do have an office in Paris, a pretty sizable office in Paris with a hundred plus people there now.
Joel (1m 31s):
Hundred plus.
Chad (1m 33s):
Hundred plus, nice.
Joel (1m 34s):
And offices where else?
Mike (1m 36s):
Yeah, so we've done a lot in Europe, in particular over the last couple of years. So Paris, Dublin, London, and now of course, Glasgow, Scotland.
Chad (1m 45s):
Very nice. Very nice. Okay. Who are these guys? Everybody should know Adam for God's sakes. The guy has been on the podcast enough, but Mike you've been around for a little while and you're responsible or at least you've led six different acquisitions in five years at iCIMS. Text Recruit, Jibe, opening.io, Easy Recru, Altru and now CandidateID beyond that, give us a little background about you.
Mike (2m 16s):
Yeah, definitely. So look, I mean, I've kind of spent my life doing acquisitions and strategy and product kind of work. Came to iCIMS eight years ago. At that point, we really hadn't done any M&A, had a pretty simple kind of business model and portfolio of products. Partnered up with the CEO at that time, Colin and thought through how we take this company and grow it in new and different ways, including acquisitions. So spent a couple of years just kind of really learning the company and getting a little bit more confidence, I guess, in where we should invest our resources. Did our first deal in 2018 and like you said, now with CandidateID, we've done six since then. So a lot of work over the last few years.
Chad (2m 52s):
So did those conversations also focus on equity partners? Because I mean to be able to have this type of acquisition power, you need cash and guys have a pretty substantial equity partner in your, I don't want to say back pocket, on your frontline. Let's say do were the discussions with Colin around that as well, because iCIMS had been known pretty much as a mom and pop shop until, you know, around the, around 2018 when they started buying stuff.
Mike (3m 21s):
Yeah, of course. I mean, I joined the company, right. Because I had been at prior founder led companies that had either been owned by or sold to private equity firms. So part of me joining was all around, like how do we take this business to the next level? How do we think about different PE firms coming in? Yeah, when I joined iCIMS actually, we already had sold a portion of the company, the Susquehanna Growth Equity. So there was already a private equity firm involved, but yeah, in 2018, when we did that transaction with Vista, I led that for the company to, and they've been a fantastic partner. I've loved every minute of it.
Chad (3m 51s):
Yeah. That's pretty big. Six acquisitions you've got, you led the Vista. Okay. Enough about Mike for a second. I'm getting too excited.
Joel (3m 60s):
Calm down, calm down.
Chad (4m 1s):
Come to, come to me, man. I know you're on an island, one of the Canary islands and all. You talk to us or at least you gave us a soundbite around why iCIMS was such a great partner for you guys. And this is important I think for most founders that are out there because, you know, being able to just throw your line in the water and take anything that bites, I don't believe is the right way to go. And I don't think you do either. What made iCIMS the right fish for you?
Adam (4m 29s):
I can't work out how to extend that analogy, but you don't just sell your business to the first person that comes asking to buy your business, unless they're the right ones. But, you know, we had a lot of approaches from different organizations from about 2019 onwards. We started winning awards and things in 2018, 2019 and we got approached by lots of different businesses, but we knew that what we were taking into the TA tech market had the opportunity to be really significant. And we intended to go on our own journey until the point where we thought we had to do something very strategic to take it to a thousand customers.
Adam (5m 11s):
And if that meant selling it, it would need to be selling it to a business with people that we liked. People with a vision that was in line with ours and people that already had a considerable customer base and team to help us to achieve our mission, to take marketing automation to mainstream within, within TA technology. And so iCIMS had all of that.
Joel (5m 35s):
So you guys know that that Chad and Cheese have ears and eyes everywhere. And I just want to let you know, we have some secret footage from actually the first time iCIMS went in to talk to CandidateID. Let's let's hear that sound clip real quick.
sfx (5m 48s):
Welcome to all things Scottish. Our slogan is if it's no Scottish it's crap.
Joel (5m 53s):
That was Adam. So I'm curious, how long did the deal take to sort of unfold and happen? And I'm interested from the crowdfunding perspective for founders and companies and startups that are looking to crowdfund versus a traditional road. Do you feel like the deal happened quicker because you went a crowdfunding route or do you think it would have happened or happened the same, no matter what kind of funding you would have gotten for the company?
Adam (6m 20s):
I think that the crowdfunding was part of us hacking attention. We never intended to go and raise vast amounts of money to build this business. We've heard you say many times on this podcast that taking too much money is the killer for a startup business and we absolutely agree with that. So we never intended to go, you know, take this mainstream by raising a hundred million dollars.
Joel (6m 52s):
Right.
Adam (6m 52s):
And so how, how would we get a new type of technology really well known within an industry? And that's guerrilla marketing, it's getting a megaphone out, it's wearing kilts abroad, it's posting stuff on social media 25 times a day.
Joel (7m 13s):
It's giving away very expensive scotch that's part of it.
Adam (7m 16s):
Giving away expensive scotch, being controversial, doing crowdfundings and things like that. And, you know, we did a lot of different things in order to get our message better known. And one of those was that crowdfunding that we did in 2019, we raised about $700,000 and we brought on board 550 shareholders to our company at that time. Now about half of those were in HR and talent acquisition and became immediate advocates for our business and our message and what we were trying to achieve to make recruitment better for employers.
Adam (7m 56s):
And so as part of that, we brought on board a chair, Doug Sores had been the CEO of Ceridian and joined us as chair. We brought on board advisors and advisory board people who were a TA leaders in either customers or businesses that had the same persona as a typical kind of customer for us. And we got to know lots of people in TA tech, who we didn't know. So it really did help us to hack our way into relationship we otherwise maybe couldn't have generated.
Chad (8m 29s):
Yeah. And your original goal was what on that crowdfunding?
Adam (8m 33s):
So we put down, we said we wanted to raise 50,000 pounds, which is about $70,000, something like that. And yeah, we 10Xd that the reason we did it, we weren't intending to do that as a major investment exercise. We raised like 600,000, about five months earlier from a guy called Andy, whose fund is called, Jacopo Invest in, in Germany. He's a serial kind of investor in TA tech businesses. I think we were his 19th investment in a TA tech business and we didn't really need the money, but we, we, we wanted to really bring on board a whole load of advocates and use it as a marketing exercise.
Adam (9m 17s):
We put that in the absolute minimum amount, which that you could do on Crowdcube, which was 50,000 pounds. And then we got to that after about 15, 20 minutes. And then by day two, we woke up and saw, we were at like, I don't know, 80,000 or something. We were way over. We decided to start actually marketing this more aggressively. And what happens is when you are, over-funding so much the algorithm on Crowdcube lifts you up to the very top of the page. So that the first thing somebody sees when they go and look at, what could I invest in is the ones that are over-funding the most.
Adam (9m 59s):
And we were up there at the top and yeah, eventually we had to just go like no more. We can't take any more when it got to a moment where we just thought, nah, this is we're giving it. We're selling too much of our business here. So let's stop during this now.
Joel (10m 10s):
So I assume you would, you would recommend that route for any startup. That's looking to raise money.
Adam (10m 17s):
There's pros and cons. If you are good at marketing, one of the things we did was we looked to everybody investing and, you know, if they were in our industry, we contacted them and said, you know, thanks for getting involved. If it was as little as 10 pounds or if it was as much as 2000 pounds or 10,000 pounds. Yeah. We still reached out to them and said, really want to find out why you got involved and also find out if you'd be willing to talk about it publicly, just on a sort of 60 second video with me. And a lot of people said, yes, a lot of well-respected people said yes. So that became part of our, you know, hacking our way into getting a lot of attention by that.
Joel (10m 58s):
So let's bring Mike into some of this. Probably my, I have an integration question. So historically iCIMS makes acquisitions a Text Recruit and opening.io or two that I am familiar with or come up top of my head, both of those URLs go directly to iCIMS.com. So they've ultimately sort of taken in the company and the brand and it's become an iCIMS product. Is that what's going to happen with CandidateID? How long will it be a standalone brand until it becomes iCIMS? Like, what is the plan for the integration of the product? What's the message to the customers in terms of what's going to change or not change. Talk about that.
Mike (11m 35s):
I mean, you'll notice already that the, if you go to the website for CandidateID, it says CandidateID an iCIMS company. Right? And so the first step for us is to just acknowledge that it's now part of iCIMS and our portfolio. But yeah, our intention is always to integrate, the time it takes us to, to replace the brand varies. You know, what we decided is that we're going to keep this CandidateID brand out there, but acknowledge it as an iCIMS company for the next several months. And then probably going into 2023, we'll look at, you know, how we go to market as a completely integrated iCIMS' branded company.
Chad (12m 9s):
Question back to you, Mike, I already asked Adam what he was looking for when you are doing these acquisitions. What are you looking for in a founder? Cause I would assume that, you know, there's, there's kind of like a prototype that, you know, will go well with the culture. It's not just about the tech. So what do you look for in a founder?
Mike (12m 28s):
Yeah. I mean, I think first and foremost, you have to be solving a big problem. Right? And a problem that the company has figured out how to solve in a unique way or in a better way than other companies that we've seen. And so, you know, when we started talking with Adam, when we started talking with Scott around what they were building with CandidateID, it was like, wow, this is really interesting. We keep talking about how recruiting is following sales and marketing and how candidates are becoming consumers. And companies need to think about targeting them in a different way and prioritizing right their sales efforts so to speak. Where they're targeting efforts on folks that are qualified, but also engaged, right?
Mike (13m 9s):
And so they have a qualified pipeline of candidates, not just a potential list of folks that could be interesting for them. And so when we started talking with Adam about what he's built and how he's thought about building marketing automation and measuring level of engagement, not just targeting blanket, you know, marketing kind of activities, it was really interesting. So for us, like it always starts with, you know, are you building something that is interesting to us? Are you building into thinking about it in a different way?
Chad (13m 38s):
Gotcha.
Mike (13m 38s):
I think the other thing we've only seen in just about like every company is there's this dynamic of a co-founder where you have someone that kind of plays the role of understanding and driving the product roadmap. And you have somebody that plays the role of understanding and driving the sales activities. We saw that with iCIMS, right with Eric and Jen, we saw with Altru with Ali Khan and Vinny. We've seen it in just about every company we've done, right? Folks are naturally good at one thing or the other. And just about every company for whatever reason we've invested in has had those kinds of personas as co-founders so similar kind of thing here with Adam and Scott in terms of the way they think about the world.
Chad (14m 23s):
Okay. I love that because there are so many founders that are out there that suck at certain areas of the business. If they have the actual ability to look themselves in the mirror and say, okay, this is what I'm good at. This is what I'm going to focus at on. And I'm going to have other co-founders or individuals on my team take over what I'm, what I'm not good at. That's a great way to be able to identify who might be good on the team. So that being said, switching it back around the Steve Lucas little platform called Marquetto for goodness sakes, marketing automation. It seems like nobody else in this space really gets, I mean, they get like a light touch to recruitment automation, to some extent, but CandidateID went deeper than pretty much everybody else out there.
Chad (15m 13s):
Was Steve being so close to marketing automation key to really understanding how this acquisition would be used and integrated into the iCIMS ecosystem?
Mike (15m 28s):
Yeah, no doubt. Right. So, when Vista invested in iCIMS back in 2018, we knew there was going to be a CEO transition. This was really smart about it, right? They had already known this guy, Steve Lucas, they were invested in Marquetto. They saw that the direction of the industry was to do more in terms of marketing driven kinds of products and strategies for recruiting. And I invited Steve to be a member of our board of directors. And so Steve was involved with, iCIMS, as you know, for a year plus, as a board member, just understanding the business and helping us think through our portfolio and the way we were thinking about our own products. And then obviously he had that opportunity to step in as the CEO of the company, he comes from that space of sales and marketing software, right before Marquetto, he was at SAP before SAP he was at Salesforce, just very deep on sales and marketing software.
Mike (16m 19s):
And so a lot of what he's trying to bring to the company is this forward vision around how do we enable not just recruiters, but hiring teams, companies to build a workforce and to do it in a different way than companies have thought about it before. So very much his fingerprints are on this acquisition.
Joel (16m 37s):
Adam, when you, when you talk to us about the acquisition, and I think you said something about being able to spread your wings, I'm curious from your perspective, does iCIMS coming in simply sort of supercharge what you had planned to build on your roadmap or does the roadmap change because maybe iCIMS has a different vision for what you want to build out. Talk about, I guess the future of the product, how it's changing with the acquisition, or maybe it's not changing at all. What are you building?
Adam (17m 6s):
Well, I remember when we were going through the sort of courtship process earlier in the year on this, I remember doing a meeting with the product leadership team at iCIMS and I asked if I could share my screen and I shared my screen and showed them a slide. And this slide that I put together was here's what we're doing today. And here's all the other different things that marketing automation technology can enable, right the way through recruitment through the recruitment process, offer management, onboarding, into internal mobility and then alumni and Peter iCIMS said, this is almost exactly what we've put together.
Adam (17m 49s):
And, you know, I knew at that point that our vision was completely aligned. So I believe it enables us to do things at scale, which we haven't been able to do until now. And it's going to enable us to accelerate the adoption of marketing automation technology throughout different parts of recruitment, that we've always known that, you know, are applicable, but now we can really create those use cases in a big way.
Joel (18m 17s):
Yeah. Mike, there's always a question at companies of whether to build a product or just go acquire somebody. Was there ever any conversation in iCIMS about, Hey, we could build this or was Adam so far down that road that acquisition made just that much more sense?
Mike (18m 33s):
You know, there's always that question of do we build, buy or partner, right? Is it easier for us to go build these things ourselves than it is to go acquire a company and then try to integrate their portfolio in with ours? Yeah, I think, I think the question is spot on. I think your answer is spot on. I think Adam was so far down this path already and building something that was differentiated in the market that it made way more sense for us to go invest in that company and acquire the company and now work on integrating our stuff in. The other thing, maybe just getting back to the last question you asked, like it makes absolutely no sense to us to go acquire a company because we love their product and then start bit of innovation.
Mike (19m 14s):
And so we very much are investing even more in R and D in resources to take CandidateID and the product portfolio even further than where it's at today. So great product accelerates our roadmap better than building it ourselves and investing even more going forward behind it.
Joel (19m 29s):
And I remember when we talked to you in an Eric at Text Recruit that the fact that they were in the marketplace and you could kind of see the engagement with their customers. Obviously, the Marchetto connection was a, sounds like a marriage made in heaven, but was there also some data to back up while the engagement with this product is really great from our marketplace data?
Mike (19m 50s):
Yeah. So, so here we didn't have a ton of marketplace customers. We had mutual alum partners using the product. I think one of the things that Adam was really upfront about was saying, Hey, look, here's our list of companies that use the product today, give them a call, see what they think about it. And so we did, right. We started calling down, you know, their list of customers, just asking about how they're using it and why they use it. And whether they think that this is different and every single company we talked to just raved about what the product does. They raved about how it's reduced their time to hire. They rave about how it's reduced their cost to hire, they raved about how it enables their teams to be more effective in targeting the right fit and the most engaged candidates and how that's just changed their landscape.
Mike (20m 37s):
So that may be, I don't know if that's a lesson learned for any founder, right? But the openness to have us talk to companies that were using the platform was a game changer for us.
Chad (20m 48s):
That's pretty damn big. So Adam and Mike, in your opinions, you've been able to watch the recruitment tech landscape from different vantage points. What have you seen as some of the founders' best steps that are out there? So you see this with this wide birth of, of these, these tech founders that are out there today. What have you seen that have been incredibly good steps? And then what have you seen that have been incredibly horrible, horrible steps because you know, founders are going to be listening to this podcast. So great steps, bad steps, Adam, you go first.
Adam (21m 20s):
Do, as I say, not, not as I do. I think it just depends what you want to achieve. If you're building a business, if you're building a business to make a load of money, you going go and copy other things that are out there and just make a slightly better version of other things that are out there. If you're actually trying to change the world in some way, find a problem that nobody's solved yet and work to solve it.
Mike (21m 41s):
Pretty similar, and maybe I'll add onto it. Right? So every company that I've seen that is, you know, become a bigger company, has started off by solving a very defined problem that everybody understands. We don't try to tackle too much, right. Find that thing, that is a gap in the market or that isn't being solved in a good way and solve for that. Try to keep the use case simple. And then you can expand as you get more customers and you know, over time. Make sure that that thing that you are creating, you don't wait until it's the finished product before it's out in market, because the reality is your product will never be finished. And the product that you think you're going to be building is way different than what the market values. So put something out, that's the whole definition of SAAS, right?
Mike (22m 23s):
Put something out, get feedback, iterate on it. Your customers in the market will drive you to the things that they value and are willing to pay for it. So don't sit there and try to, you know, spend millions of dollars at R and D to go put some fantastic thing out in the market that nobody buys. Start simple, put something out, get feedback, keep iterating on it. The other thing I would say, I've seen a ton of founders not sell at the right time. It's always a hard thing, right? It's the founder's dilemma when you exit the business.
Chad (22m 51s):
Yeah.
Mike (22m 51s):
But I've seen so many companies raise money at valuations that they're never going to catch up to and really their own, their own value in the business by taking on too much money at unrealistic expectations. So that's it. I mean, I always tell that to every founder that I talk to, you solve a real-world problem, get something in market and get feedback and know when you want to get out.
Joel (23m 10s):
So in light of that, I'm curious what features products are missing currently from the iCIMS platform and maybe not specific features, but are there themes that you guys are looking at to adding to the product set? And by the way, this is your chance to talk about the new metaverse product that iCIMS is launching. What is this like, what's missing. What's going to be added in the next few years.
Mike (23m 35s):
Yeah. That's for the last week talking about NFTs. Right. And how do we,
Joel (23m 44s):
Yes.
Chad (23m 44s):
Oh my God.
Joel (23m 44s):
Here we go. Here we go. Here we go.
Chad (23m 49s):
Can we go back to blockchain please?
Mike (23m 51s):
Yeah. It's not about what's missing, right? It's more feature by feature. It's more about, you know, how are companies thinking about getting better at recruiting, right? And not just recruiting, but building their workforce. And I think for us, it's about how do we enable greater automation? Right. So how do we enable greater knowledge in the hands of the user at the right time, within the workflow so that they're taking sort of guided decisions or at least decisions based on information that we can give them based on the number of customers and use cases and industries and hiring types and everything else that we have access to because of our big customer base. I think it's about how do we enable companies to continue to engage with people and create those personalized experiences at scale?
Mike (24m 33s):
I think it's about how do we enable companies to understand not just the skills that somebody has, but how those skills are relevant to the roles that they're trying to fill and not just what ability somebody has today, but their potential to grow into a role. Because I think that's the biggest thing that's hindering just about everybody right now there just aren't enough workers in the world for the jobs that are open. And when you look at the workforce and the skills that are needed in those jobs, it just 10Xs the problem. There aren't enough skilled workers in the roles that people are trying to hire for today. And so everybody has to figure out how do I take an individual that may not have, you know, all of the different requirements, but they have that ability to do the role and learn the role and grow into the role.
Mike (25m 15s):
So how do I find that person? Right. And invest behind them and make a bet on them.
Chad (25m 22s):
Yes and that is the problem that we've had for decades and we need a solution for it there's no question. Well, that's Mike Wilczak Chief Product Officer and Development Officer at iCIMS, Adam Gordon, co-founder VP Recruitment Marketing Automation at CandidateID/iCIMS. Guys We really appreciate you coming on the show, not just talking about the acquisition, but also talking about the market overall. If anybody wants to find out a little bit more about iCIMS and CandidateID, where would you send them guys?
Mike (25m 55s):
Yeah. I mean, anybody can go find me on LinkedIn and send me a note directly, or you can send me an email to my email address. It's pretty straight forward. It's Michael.Wilczak@icims.com. Okay.
Joel (26m 7s):
Excellent. Chad another one in the can. We out.
Chad (26m 12s):
We out
OUTRO (27m 2s):
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. 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.