Reunited, and it feels so good. Last time we talked to Teddy Chestnut cofounder at Brighthire - the self-proclaimed “first interview intelligence platform” - they were cleaning on big applauses on Firing Squad. That was way back before the pandemic, and needless to say, the world is different. So how are things going. Chad & Cheese bring Teddy back check-in on the startup that was founded back in 2019 and has raised almost $40 million. Even Peaches and Herb would be envious.
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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. What's up kids? It's your favorite guilty pleasure AKA The Chad and Cheese Podcast. I'm your co-host Joel Cheeseman. Joined as always, the Kobayashi to my Joey Chestnut, Chad is in the house and we are reunited today and it feels so damn good. Everyone welcome Teddy Chestnut co-founder at BrightHire back to the show. Teddy, greetings and salutations.
Teddy Chestnut: What's up guys? Glad to be back.
Joel: Good to have you back.
Chad: How are you doing big guy? It's been a couple of years since you've been on the show.
Teddy Chestnut: I was just looking, almost two years to the day.
Joel: Anything weird happen in the world in the last time you were here? Anything?
Teddy Chestnut: I definitely had COVID during our last recording a 100%.
Chad: Really? During the actual recording.
Teddy Chestnut: I'm pretty sure.
Chad: You're gonna claim that?
Joel: Are you sure you just didn't feel sick talking to us?
Teddy Chestnut: A little foggy, came out a little foggy. [laughter] No. Yeah it's been... Yeah a lot's happened in the world in the last two years.
Chad: You shaved.
Teddy Chestnut: BrightHire and otherwise I shaved after four years...
Joel: You did shave.
Teddy Chestnut: Not that everybody could see or know that but now I look like my LinkedIn profile so people are confused when I get on Zoom.
Joel: Very executive. You shaved the beard.
Chad: He does kind of have the country and Western shirt on though. If he had a hat and maybe a belt buckle I think he could pull it off.
Joel: I think it's kind of Eddie Haskell. I don't know if it's quite [laughter] Merle Haggard.
Teddy Chestnut: I could tell you I have a belt buckle on right now and nobody would know 'cause it's just audio. It's big, three inches diagonal, Texas Longhorn.
Chad: Yeah. It looks like a dinner platter.
Joel: We're not gonna talk about anything below the belt today, Teddy. Nothing below the belt.
Teddy Chestnut: Just at the belt. Okay. Mental note: Next piece of swag, BrightHire belt buckle.
Chad: There it is. There it is.
Joel: Ooh...
Teddy Chestnut: I'll wear it to SIA in Miami. I'll send you a pic. [laughter]
Joel: That is unique.
Chad: That's sexy. Well why are we here, kids? We're here because Teddy a couple of years ago actually came on Firing Squad and he did pretty well whether he was in a COVID haze or not. And this is the reunion show where this is what's gonna happen, Teddy. You don't have to actually go through the Firing Squad, you already did that. But what you do have to do and the torture that you do have to face is listening to your two minute pitch from two years ago. Then after that we're just gonna... We're gonna talk about the journey. What went well, what sucked, how to kick PE in the nuts. Who knows? There are gonna be plenty of things that we can talk about today.
Joel: And most importantly how many more servers did you have to buy after being on our show? Because the traffic was obviously off the chart.
[laughter]
Chad: Does anybody buy servers anymore?
Joel: I know right? I know it's like Super Bowl ad and Chad and Cheese interview basically.
Teddy Chestnut: For a platform that records and transcribes interviews, hopefully listening to myself is not that painful. I should have a handle on that at this point.
Joel: No...
Chad: Okay.
Joel: You have a sweet voice, goes down smoothly. So without any further ado everybody, here's Teddy's pitch from two years ago.
Teddy Chestnut: At its heart, hiring is human. Every hiring decision is driven by what we are doing right now, talking to each other and it's a series of conversations. And because hiring is human it's also inconsistent. It's inefficient and there's a tremendous amount of space for subjectivity room for bias. I co-founded BrightHire because I saw an opportunity to transform the heart of the hiring process and specifically to build a new kind of interview platform that could drive better, faster and more inclusive hiring decisions. Now BrightHire does that first by raising the quality of interviews in a real time. So when a recruiter or an interviewer uses BrightHire, they have an interview assistant riding along with them as a heads up display to guide that conversation. And as that conversation unfolds, it's recorded, transcribed and annotated. They're producing real evidence to support more rigorous and fair hiring decisions. So instead of relying on shorthand or scribbled notes or nothing but our best recollection to fill out a scorecard and make a decision, you can quickly pull up candidate highlights to recall key details and make a decision based on that candidate's merits, not your memory. And then you can share those highlights across the hiring team to make a seamless handoff or calibrate based on real substance or check each other's biases.
Teddy Chestnut: And for the first time teams can actually effectively all be in the same room together for every interview. We can actually work together to make better less biased hiring decisions. Every other team, design, product, engineering, sales has had a collaboration platform built specifically for them. Now finally hiring teams have one, too. And then finally we give people leaders transformational insight to improve their hiring outcomes or to enable their teams to predictably replicate success. So whether that's through search or analytics or alerts, we're also enabling teams to hold up a mirror to their own hiring practice, let's see how it's done and make data-driven improvements to ensure they're running a consistent, quality and fair hiring practice. And one last thought. Our first value as a company is candidates first and a big part of our mission is to give candidates a hiring experience that they deserve by reducing bias and instilling good practices where it matters most in every interview and hiring decision.
Joel: That sure was tight.
Teddy Chestnut: That was pretty good.
Chad: That was good.
Joel: It was the $6 million man of pitches.
Chad: That was good in a COVID haze which I still don't believe. I don't believe he was in a COVID haze. That was way too clear. So after having the weight of the world on your back coming to The Chad and Cheese Podcast to be on Firing Squad, how did it feel after we hit stop and the recording was over?
Teddy Chestnut: Like a relief. Relief, man. Well 'cause I thought you were gonna fail me 'cause you guys were throwing a lot of shade and there was the Joey Chestnut stuff and I wasn't sure if there was like I've done video interviews before but man like passing grade. I'll take it. Big relief. No it was fun. And then we had to go do a bunch of work to make all that real.
Joel: Reconnection to Joey Chestnut is aces in my book, Teddy.
Teddy Chestnut: I really like, I'm still holding to third cousin twice removed something.
Joel: I'd go with that too. I'd go with that.
Chad: Anything that has to do with eating, Joel's a big fan of. [chuckle] When you left you had a product, that product of yesteryear, literally two years ago. I mean, tech moves fast. How fast and how many changes did you... Let's talk about the journey a little bit. When you stepped off what was the next thing you had to do? Obviously there was funding that happened, there were new features. What happened to the platform? What happened to you guys?
Teddy Chestnut: We had secured funding already but we had just gone to market like commercially at the end of 2020. And so you called us right after we signed our first cohort of clients, really. I think we've since we probably like 10X-ed our client base. And so a lot of the work to do immediately afterward was get those teams up and running. We had the baseline product, that was ready to go. We were just shipping a set of integration still to make it seamless in the workflow. But a lot of the work was change management. It was introducing the idea of recording and transcribing interviews beyond the champions who saw the potential and signed up for it and rolling that out to the rest of their teams, recruiters, hiring managers, interviewers. Hiring's a team sport. Not everybody was involved in the sales process and so a lot of the work was changed. Against people...
Chad: Well, onboarding sucks, right? Onboarding sucks. And you hadn't had to do it really before, so now you were starting to do it with a cohort of companies. Talk about that a little bit. What changed? What did you get right? And then what did you get wrong?
Teddy Chestnut: We had rolled out BrightHire back in late 2020 first just to recruiting teams. A couple really big ones, but primarily was like recruiters and early '21 was the first steps toward rolling out toward eng and sales and product and the rest of the org. And obviously that's a partnership between TA and those orgs. Like they don't roll up into TA, they don't report into TA. And so working with our buyers and that heads of talent acquisition and the recruiters to put the comms and the rollout plan together and to socialize BrightHire with the rest of their teams and to help them understand the why, that was the work to do coming right out of that conversation. And it's a different message, right, to a hiring manager than is to a recruiter about why you should be on BrightHire and the value to you. And so developing that language in partnership with our early clients to nail and kind of stick the landing, that was a lot of work.
Joel: So one of the things I mentioned to you in our first interview was that I thought you needed to raise more cash which you then quickly raised $20M, so [laughter] I don't know...
Chad: A little bit of cash, yeah.
Joel: I don't know if my advice was pression in that or like... [laughter]
Teddy Chestnut: I hadn't actually even considered it before you...
[overlapping conversation]
Joel: I know, right? Yeah, yeah, yeah.
Teddy Chestnut: Always to go get some more.
Joel: Yeah. So good to raise money. That sounds great.
Teddy Chestnut: Let's go do it.
[laughter]
Joel: So what have you done with the money? Are you gonna go raise some more? What's the state of the funding of the business?
Teddy Chestnut: Yeah, well capitalized. Yes. We raised that the like $20M series B only like six months after the series A. And so that was really a momentum and conviction play on the size of the opportunity and the fact that we could become a leader in the market. That we've invested primarily in R&D and eng. The pitch that I gave around the workflow interview assistant and in the moment and the analytics and the insights, we had built the rudimentary components of a lot of that when we talked but a lot of that capital's just been invested in actually realizing that full vision over the last couple years and then scaling up our CS and support team to be able to onboard and support new clients pretty beautifully.
Joel: So you've raised about $36M total. Any plan to raise more? And if so, what's the environment right now for raising money?
Teddy Chestnut: We're fortunate. Building a startup, there's big doses of luck and timing involved and we had the fortunate opportunity to raise a bunch of capital back in '21 when the market was really hot and do it at a really nice valuation. And so we're in a fortunate position where we don't have to be out raising capital right now. I don't envy the teams that have to be 'cause it's a very different environment. So no, we're we'll capitalized, not thinking about raising any time soon. Mostly thinking about continuing to invest in the product and the team and kind of grow our current install base.
Joel: Invest in the team. So have you had layoffs? If not, what's been your secret sauce to avoid those and are you hiring? It sounds like you are.
Teddy Chestnut: We did scale up and then we scaled down primarily on the go-to-market side, like a lot of teams did because we saw what the market looked like in the first half of last year which was just ripping and then obviously things hit a wall for a lot of our clients, high growth tech in the back half of last year. And so we rightsized the team a little bit. Now we're continued to invest in product R&D, kind of resetting the sales team and our territories and kind of our targets to make sure that we go after the teams that are still hiring really aggressively and the segments that are still really healthy.
Joel: Got it. And one more real quick before I toss it back to Chad, you were brighthire.ai when we interviewed you, you're now brighthire.com. Did some of that money go to somebody to get that.com? What was the story there?
Teddy Chestnut: Just vanity, pure vanity play.
[laughter]
Teddy Chestnut: Yeah. Brighthire.com was not an expensive investment, thankfully. We bought it for two reasons. Three, one pure vanity two the.ai was confusing people. They would presume that we were using AI to evaluate candidates and it would start this conversation about that which we don't. And so we didn't wanna confuse people and if you're the category leader in your market you gotta own the.com. And it's just something you gotta do it.
Chad: It is what it is. So let's talk a little bit about that around the competition side 'cause everybody wants to do interviews now. It's a video interview, it's a that interview. So talk a little bit about the competition and then being able to really focus on messaging because at the end of the day as you've just said, people were looking at AI and they thought, "Holy shit, we don't want the face recognition shit going on or the voice recognition or any of that stuff." So talk a little bit about that. Talk about the perception, market perception and then messaging and then the competitor landscape.
Teddy Chestnut: So that's another thing that changed pretty dramatically. Like the next thing I had to do after we got off of our call two years ago was talk to somebody about why recording interviews was a good idea. Because interview intelligence, this idea that we were gonna record and transcribe live interviews was still not even out in the world in any kind of material way. Whereas fast forward two years and Josh Bersin is up on stage at HR Tech talking about how interview intelligence is one of the most exciting categories of new technology in recruiting tech. So that's great. Market development is incredibly important and with market development comes competition and other kind of startups in the space. We've seen that, which is again, I think great. The more people are thinking about recording and transcribing interviews as a foundation for a quality, fair, efficient process, that's great for us. In terms of the actual competitive landscape, still very few deals. Conversations are multiple players kind of going at the same opportunity. It's still just a tremendous amount of white space.
Teddy Chestnut: And our approach on it has always been just obsessed about the customer, not the competition. Just listen to them and figure out what's important to them and try to serve their needs, which have changed a ton. That's another thing, like in the last six months, it went from, again, 2021, even two years, hire as fast as fucking possible.
[laughter]
Teddy Chestnut: Like, gimme a button. I need like 35 butts in seats and and half of those are recruiters. Just scale up as fast as possible to now we gotta do more with less, we gotta be more agile, we're only making the key quality hire so it matters a ton. So the whole marketplace has shifted around what they care about. And so our positioning and messaging and the use cases for BrightHire have changed along with that.
Chad: Now, is it hard to be able to skate to the puck when you have no clue and when there are 20 pucks in the rank?
[laughter]
Chad: Because as we talk about talent acquisition, we talk a lot about strategy, but there's more tactics that happen even at the "strategic level". They're just talking about what's happening in the next six months, if you're lucky, let alone 18 months or six years. So is it hard to skate to all the pucks?
Teddy Chestnut: Yeah, I think especially that can be exacerbated or made more challenging depending on the segment that you're working with. If you're working with Fortune 500, they're doing annual planning on their headcount, but those TA teams are still thinking two, three years strategic transformation. And they're like their timelines are a little bit longer. When you're serving Angie or Figma or Roblox or Mr. Beast, which is a client of ours, that time horizon is much shorter. And so you have to be more reactive and you have to be reactive with your clients to the pressures that they're facing or the reality that they're operating in. What we've tried to do is keep a true north on the core value propositions that we know will differentiate us over time. Gather a ton of data about what's happening in conversation so we can actually add value, give people guidance in real time so they know what to ask and what to cover and serve recruiters beautifully. Recognizing that they might have a different job. I might have the same title in the same company and have a job that feels very different today than it felt nine months ago or 12 months ago.
Chad: Do you find yourself as companies talking to you about where they're skating, trying to divert them, knowing that they're probably going at the wrong puck at the wrong time? Because again, you're seeing a lot more from more companies, you're more in-tuned with the market, especially with your product. Is there a lot of consulting that's happening these days?
Teddy Chestnut: The best relationships are consultative. You have to develop really deep trust in order for somebody to take your consultation from the outside and have it truly influence their strategy. That's what we aspire to. But it would be a little heuristic to try to have us come in from the outside and say, "I know you're focused on this, but you should be focused on that," and expect somebody to actually make that change in a short amount of time. So you do a lot of planting of seeds and starting the conversation then coming back to it later on. I think that's probably the story of many of the startups that you've worked with that are developing markets is like, "We're gonna have a conversation about this thing that's really important and I know you've got five other priorities that you're working on." So cool, now you know we exist and let's come back and talk, six, nine months from now. Now that you've cleared those things out and you realize that that thing that we talked about that was really important actually is really important.
Joel: The fact that you work with Mr. Beast just might have made me cool with my teenagers, at least for tonight. I want to thank you for that, first and foremost.
Chad: It's never gonna happen by the way. I just want you to know.
Joel: Just for a night, I said.
Chad: It's never gonna be cool. [laughter]
Joel: Just for one night. Just for one night. And then I'm back to dorky dad.
[laughter]
Joel: What would be an unexpected, maybe a curve ball that you weren't expecting that really changed the business? Just something that startups have to deal with, a story that, oh man, this thing that happened to us was just sort of nuts and I had to deal with it, aside from COVID or something macro?
Teddy Chestnut: Or the global slowdown and pull back in tech hiring. I mean, that's been it.
Joel: Which is another one, right? You are a human-centric business. People use the product. It's not automation as much as some of the others. So there are less recruiters in the world. How has that impacted the product?
Teddy Chestnut: Two ways. One obviously is there are fewer users [laughter] out there.
Joel: Is that a bottom line situation? Do people pay by the seat?
Teddy Chestnut: The bottom line from us more so is how much hiring are you doing? And so that certainly has an impact. And we've aspired to be thoughtful and creative to meet clients who've loved our product, where they are when they come up for renewal and they're like, "I was hiring 100 people a month and now I'm hiring 10." Just try to think long term with those partners because we know that there's a tremendous amount of value, but that absolutely has an impact on building the business. The other side is it creates a lot of opportunity. I talked about the messaging changes and the use case changes. And one thing that we're seeing in the market right now is this concept of recruiter agility. I might have had a team of specialist recruiters, design, product, eng, CS and I could afford to have people focused on one specialist. I can't afford that anymore, 'cause I went from a team of 20 to 10 or 100 to 50. And now I need that product person to also design and eng and maybe on a one-off CS role. And it turns out that it's really helpful to use BrightHire in that context to get smart on roles quickly and to shift and kind of do like mini onboardings every time you take on a new rec. So we've actually seen a lot of positive feedback around that kind of a use case for BrightHire when teams are more constrained and have to do more with less.
Joel: Aside from being a guest on this podcast, what have been some of your best marketing decisions, best platforms to use? We have a lot of companies that are looking for that silver bullet from a marketing perspective, what's worked best for you?
Teddy Chestnut: Co-marketing has been great for us, honestly.
Joel: Say more about that.
Teddy Chestnut: Yeah, we decided to make pretty deep investments with other players in the HR tech space. We got a bunch of them up and running on our platform. We've hosted webinars and events with them that extends to ATS platforms, Greenhouse, SmartRecruiters, Lever, but also other partners like Checker and GoodTime, SeekOut, Gem. We've done a lot of work 'cause we talk the same profiles and we wanna reach the same audiences. And having conversations with the market alongside those kinds of brands about topics that are just important to to our buyers has been super productive.
Joel: So content marketing, but leveraging partnerships and relationships to amplify, I guess the message.
Teddy Chestnut: Yeah, and that's strategically they are investing in partners that share a similar view of the world as we do, or that are actually really important platform partners for us, again, like the ATS platforms.
Chad: Was that always your go-to-market? Was it always try to force multiply through partnerships?
Teddy Chestnut: Our head of marketing, Linda made that a big part of her strategy when she joined, and I think she'd had some previous experience doing that kind of work at her last company and saw the success there. So really pretty soon after she joined, we started to do a lot of co-marketing work. And then also we took an approach where our product and customer experience could be our marketing. Trying to market a product that people haven't had their hands on before in a new category, people's experience with it saying, "Wow, this was amazing," can be really valuable. And so getting the product in the hands of a ChartHop really early or a GoodTime is really valuable. 'Cause then those teams are talking to our same buyers and can reflect on the fact that they've used the product and we've been great partners to them and that goes a long way.
Chad: Well, and also from a market strategy standpoint, they're not developing that product or at least looking to prospectively develop that product because they've got such tight partnerships. Now that being said, on the marketing standpoint, did you also take the same type of path for your sales go-to-market and being able to leverage those big names or those partnerships to also leverage their portfolios?
Teddy Chestnut: Because we've been playing primarily historically in the mid-market segment, there's been less of that. Lever, Greenhouse, they play more of like Switzerland when it comes to those partner ecosystems, unlike say a Workday where you can get plugged in and then they're gonna put you into every single deal. It hasn't been a huge part of our strategy yet, but as we think about upmarket, that partnership strategy I think will become more important.
Chad: Talk a little bit about product expansion. Being able to go from where you were to where you are now.
Teddy Chestnut: Yeah.
Chad: And then the vision of moving past that. Where does Teddy Chestnut see BrightHire in the next six months to 18?
Teddy Chestnut: So if you think about an ATS as the system of record, that's a foundational layer, right? That's who are we talking to at what stage of the process for what role? Now, that's the foundation. On top of that are all of the things that humans are doing to actually assess and select and sell candidates, plan the interview, write the job description, plan the interview, figure out what questions we wanna ask, run the interview, make a decision, figure out what happened after that decision, and tie it back into how we plan and run and decide so that we get better over time. And the vision for BrightHire has always to been to be that layer on top of the system of record, helping people do the full range of jobs that they need to do really well in order to make great hiring decisions exceptionally well. And where we started was, let's capture the interview, that was like the big black box. Let's record and transcribe and give people the right context to make decisions. And you can think about then horizontal expansion into, well, how do we plan interviews really effectively? How do we run those, how do we gather all these data to then continuously improve? And we had lightweight parts of a lot of those pieces and a lot of the product roadmap is around extension and depth in those areas.
Teddy Chestnut: I'll give you a great example on the insights side. We started with like, how many interviews are people running on BrightHire and what are their talk ratios? Like really easy stuff to get. But now we can tell you, are you running interviews consistently between men and women? How many questions are you asking? What kinds of questions are you asking? What's the candidate's sentiment. And going deeper on what are the dynamics of these interviews really look like and start to answer questions that head of TA really cares about. So that's an example of like, we started in insights, we had like a V1, then we go V2, V3 and go deeper and deeper and deeper.
Chad: This is actually helping companies kind of like QA, QC their process because in some cases...
Teddy Chestnut: Totally.
Chad: It's just the Wild West. They ask whatever the hell they want, they take whatever time they want and it's not fair and unbiased. What you're saying is our company's actually taking that data and then starting to go out and train their managers.
Teddy Chestnut: Yeah, absolutely. And one of the things that we built was a training module, actually. [laughter] We literally built there's like BrightHire training and you can take examples of highlights from your interviews or examples from candidates and build that into a playlist and then give that back to managers to actually consume. And that can be informed by what you're learning. Another great example, we'd worked with one client where we found that men and women who were getting the same scorecard scores were being hired at different rates. And then we went into the interviews and we found, well certain topics were coming up when men were interviewing women like sports or remote work, and that was having a material impact on those candidates passer rates. So to be able to shine a light on that, call it out, put it back into training, close the loop on it and then track those passer rates over time helps influence the way that a team hires in a way that they never would've had visibility to before. And that's the work that I'm really excited about.
Joel: You mentioned remote work in light of COVID were a more disparate workforce than ever before. The bright side of that, or the BrightHire side of that is that there's global growth opportunities for companies and we talk to companies all the time that talk about global growth. How has that been for you? If you haven't, what's the go-to-market strategy around that? What percentage of your business now is global? Talk about that.
Teddy Chestnut: We have client teams operating in probably four continents from North America, South America, yeah, APAC and Europe. Most of the teams that we serve are still headquartered in the US, but we have teams that are headquartered out of the EU like Revolut's a great example. And we've had to adapt to that from call recording in GDPR and data privacy and all. We've laid all those foundations. One thing that we've seen, and this is actually in a different segment, on the staffing side, a lot of staffing teams are globally distributed and the coordination that they can achieve using BrightHire when I've got a team in the US and a team in the Philippines, getting those teams on the same page and sharing candidates and being on 24/7 has been a real value prop for BrightHire.
Chad: Reunited and it feels so good.
Joel: And it feels so good. Teddy Chestnut.
Chad: That's Teddy Chestnut from BrightHire, everybody. Teddy, if somebody wants to find out a little bit more about you and/or, I don't know, maybe BrightHire, where would you send them?
Teddy Chestnut: Brighthire.com.
Chad: Oh.
Joel: Does the AI still redirect?
Teddy Chestnut: 100%. Yeah. You can also...
[laughter]
Joel: All right. If you know him as ai, then that still works.
Teddy Chestnut: For anybody who hasn't cached the browser, just go back to brighthire.ai and you'll end up in the right spot.
Joel: Teddy, it's been fun. Hopefully we get to see you on a face-to-face basis this year as the world continues to open up. Chad, another one in the books. We out.
Chad: We out.
Outro: This has been The Firing Squad. Be sure to subscribe to the Chad and Cheese Podcast so you don't miss an episode. And if you're a startup who wants to face the Firing Squad, contact the boys at chadcheese.com today. That's www.C-H-A-D-C-H-E-E-S-E.com.