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Disability Solutions

Seven Circles of Compliance Hell


In the past, we’ve been critical of SHRM investing money into startups. Seems like a big conflict of interest, but whatever. Since SHRM isn’t running to talk to Chad & Chelsea about it, how about the next best thing: The company SHRM gave money? That’s why we brought Jocelyn King, CEO of VirgilHR to the show. VirgilHR is an interactive technology that lets employees ask HR compliance questions in real-time. Seems like a company ripe for disruption from the likes to ChatGPT, but you’d be wrong (or at least that’s what Jocelyn says). The way that they chose their name is pretty cool too. Heck, it’s an all-around banger of an interview.


Enjoy.



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 Cheesman: Oh. Yeah. What's up everybody? We're live from the Aaron Booth at SHRM National Las Vegas, Nevada. I'm your host Joel Cheesman, flying solo as Chad works on his savage tan in Portugal. And I am here with Jocelyn King, CEO at VirgilHR. Jocelyn, welcome to the show.


Jocelyn King: Thank you for having me.


Joel Cheesman: So I'm gonna embarrass myself here real quick and tell the audience that I forgot to push record when we first started talking to Jocelyn. So a lot of this is gonna be her humoring me with the same questions. We'll see if you give the same answers. That might be an interesting game to play. So for our listeners that don't know you, tell us a little bit about you and the company.


Jocelyn King: Sure. So I've been an HR practitioner my entire career. I've worked predominantly for high-growth technology companies based in the US and international as well. And, because we were high-growth, we were hiring in a lot of states very quickly, either opening new locations or hiring remote workers. And it became increasingly difficult to track and comply with employment and labor laws, especially at the state and local level. There are thousands of them. They run concurrently, they supersede each other. It's a very complicated landscape. And now post COVID with a very dispersed workforce, it makes for an even greater challenge for HR professionals. So, coming from a tech background, I thought there's gotta be a technology solution out there that can address this because we're going on Google...


Joel Cheesman: Sure.


Jocelyn King: And we're googling these requirements online.


Joel Cheesman: Yeah.


Jocelyn King: Or we're talking to lawyers if we have the budget, it's either really time consuming and there's a high risk for error or it's expensive when you don't get the answers you need right away. So about a year and a half ago I decided to quit my job. At the time I was a VP of HR for a Series C Tech startup.


Joel Cheesman: Yep.


Jocelyn King: Out of the DC area. Learned a lot there. They went through a funding round at the time, so I learned quite a bit. Both founders actually are two of our biggest investors. They were really supportive through the whole process and made me quit my job to do this, so really fortunate for them. And now we've built out this solution and just launched it in March.


Joel Cheesman: Yeah. So Virgil we have HiBob. We have MeetFrank. We have names all over the place. How did you come up with Virgil.


Jocelyn King: [laughter] Yes. It is a very nerdy answer that I have for you. I was a philosophy major in college. I did my senior thesis on Dante's Divine Comedies. If you're familiar with Dante's Inferno, for example. That's the first.


Joel Cheesman: Seven layers. Yeah.


Jocelyn King: Yep, exactly. And Virgil, who is a real life poet, was a character in this poem and he was this beacon of wisdom and reason, and he was Virgil's guide and he took him through hell and...


Joel Cheesman: Okay.


Jocelyn King: Showed him all the things that, this is what happens when you do the wrong thing and tick him up, take him up to purgatory and then heaven. And I thought, well, you know, what compliance is pretty hellacious for HR and so we're a guide and we can show you, "Hey, this is what happens when you do the wrong thing and we're gonna take you to the right direction."


Joel Cheesman: Got it.


Jocelyn King: And it's a little pertinent, so.


Joel Cheesman: Got it. Got it.


Jocelyn King: Yeah.


Joel Cheesman: Podcasting with Chad is my seven layers of hell but that's a different, that's a different interview. So you guys are brand new, not even outta diapers yet. You raised 1.5 million in pre-seed funding. Talk about that. What are you doing with the money? What do you plan on doing with the money?


Jocelyn King: Mm-hmm. Yeah. So we closed that round in December. We were really fortunate, we have four institutions. We were part of that round, including Techstars and SHRMLabs. Having SHRM on board was really exciting because they've only ever done an outside investment like that with one other company. And it was the same time as when they invested in us. Anything else has kind of been through their accelerator, or through funds. So that was really cool that they had as much confidence in what we were doing and that they really felt like the product that we were bringing to market was something that was really needed...


Joel Cheesman: Yeah.


Jocelyn King: By the HR community. So we closed that in December and it was a great process. I felt really supported along the way. I don't think a lot of women in tech necessarily feel that way. And I certainly had my fair share of experiences where I was definitely treated differently because I was a woman. But for the most part just had an incredible journey and experience and met a ton of people who were really supportive. So that was good. And we've been spending the money, on the product side for sure.


Joel Cheesman: Yep.


Jocelyn King: But now that the product has launched, we're very focused on the marketing side in particular, so that's where our funds have really kind of been re-appropriated to more recently.


Joel Cheesman: Okay. I'm glad you brought that up so you have a deep understanding of HR. Just go check out her LinkedIn profile if you wanna learn more about that. You have a tech background, doesn't really scream sales and marketing. So what's been effective for you in terms of the getting to market and letting people know and build the brand and ultimately get sales?


Jocelyn King: Yeah, so we launched product in March and that's when we started marketing. We first went for the conference route. So we started the, conference train, I guess, and went through that and it was really good to us. We were really successful in these conferences. We started generating a pretty, pretty good pipeline, acquired customers...


Joel Cheesman: Yep.


Jocelyn King: Started generating revenue, et cetera. So that was really exciting. We've also been working a lot on content marketing and that's something that takes some time to build up, but we've been working on that quite a bit.


Joel Cheesman: Can we see you karaokeing on TikTok as part of your marketing strategy or not so much?


Jocelyn King: You know what? I have never been able to get into TikTok.


[laughter]


Jocelyn King: I. Haven't been able to do it, and nobody wants me to do karaoke.


Joel Cheesman: Fair enough. Fair enough. They don't want me to do it either. They do not want me to do that either.


Jocelyn King: Yeah.


Joel Cheesman: So we've been critical of SHRM investing in companies on the show, and you're a real life example of a company that has gotten money. Is the criticism of saying SHRM shouldn't get in the business of financing companies that are exhibitors at their show or not giving money to people who are exhibitors. Do you get an unfair advantage by being a SHRM member? Do they give you access to the mailing list and things like that? Is it a fair criticism or not?


Jocelyn King: Well, I'm not familiar with the criticisms you all have given on SHRM, but I can tell you just from my own experience. SHRM typically invests in funds. If they're investing in individual companies, it's either through their accelerator or in my case independently, VirgilHR and another company. And I think that at least the companies that I know who've gone through the accelerator and then the other company who they'd invested in the same time they've invested in me, these were companies that were... That are trying to bring a product that is very focused on the user, that really addresses a need and a pain point and is committed to ensuring the customer experience during the product journey. And that's been pretty consistent with the companies that they've invested in directly.


Joel Cheesman: Yep.


Jocelyn King: I don't get preferential treatment actually at all.


Joel Cheesman: Okay.


Jocelyn King: Being a company that's invested in by SHRM, I wish I did, but, yeah, no introductions to customers.


Joel Cheesman: Okay.


Jocelyn King: No discount on the booth, no mailing list access, nothing like that.


Joel Cheesman: That's very refreshing to hear actually, our listeners will like to, to know that, what does a typical customer look like? Big companies, I figure they wouldn't be 'cause they can afford their own lawyers. Is it the small business somewhere in the middle? What does a customer look like?


Jocelyn King: Yeah, so, we really work with companies that generally have 2,500 employees or under. There's some that are over, but for the most part it's 2,500 and under. And that's because they generally don't have internal employment and labor law counsel.


Joel Cheesman: Yep.


Jocelyn King: So they're having to, HR is having to go out and do all this work themselves, or they're using outside legal counsel and it's expensive. So we're helping displace some of the legal fees that they would otherwise be paying 'cause they're able to get this information at a fraction of the cost through our product. And we have, customers that have as little as 11 employees. So there's a wide range of customers that, we work with today, but across the board, they're all multi-state or they're in California, which is really a complicated state to deal with. And I think that you kind of, that's where you really start getting that level of complexity with employment and labor laws when you have to deal with so many jurisdictions.


Joel Cheesman: Yep.


Jocelyn King: So across the board that's pretty similar profile wise.


Joel Cheesman: So a lot of state talk. Are you a global footprint? Are you restricted to the US English only Talk about that.


Jocelyn King: Sure. So yeah, we just launched in March, as I mentioned.


Joel Cheesman: Yeah.


Jocelyn King: So we cover US all 50 states in the district. We do plan on moving into Canada next year, and then move on from there just based on kind of market demand and what maybe our current customers are asking for too.


Joel Cheesman: So you're, you're a pre-seed. I would think that a little more money might make that global growth, opportunity more amenable. Are you looking to raise more money? How much? Talk about that.


Jocelyn King: So we actually started our seed round last week. We're raising a $3 million seed round and, have just started having active conversations with VCs that invest in the future of work. So we're, very new to that process.


Joel Cheesman: Yeah.


Jocelyn King: And hopefully that gets closed by September because we do have some pretty aggressive growth goals and some goals in mind product-wise, like expanding internationally and bringing AI into our product.


Joel Cheesman: Sure. So you have mentioned AI. When I toured the product, one of the things I initially said was ChatGPT is gonna destroy this company. [laughter] I know I'm wrong by the look on your face, but I want you to tell me why I'm wrong that ChatGPT can't replace what Virgil does for your customers.


Jocelyn King: Oh, sure. So today, if you went on to ChatGPT and you asked it, what are the requirements for an employer when an employee's taking maternity leave in California? It will give you information about the CFRA, but it doesn't even tell you about the FMLA or PDL or if they're in San Francisco, PPLO, all these other, even the ADA, all these other laws that are relevant to that employee taking maternity leave that you have to comply with, which is really dangerous. So ChatGPT today can't handle the field of law. It's too complicated for it. Our chatbot is actually hand programmed by labor and employment attorneys. So they're looking at every single scenario pretty holistically. In the future, AI could get to that point.


Joel Cheesman: Yeah.


Jocelyn King: Where it could do that, and that's where we would be looking at incorporating some of that AI into our product. But along the way we're also working on a roadmap that builds out additional functionality, to risk and compliance, for example, once we close our seed round, we'll be building a predictive risk feature in our product where it will actually be able to determine percentage wise, level of risk you have in getting successfully sued for certain decisions you make, like terminating an employee or some form of disciplinary action or an accommodation, for example. And so we'll continue to build and grow and what we'd really like to be is taking hold of that compliance footprint and, go well beyond even just our chatbot today.


Joel Cheesman: So did I hear you say that you created an assessment to tell a company, "Hey, you have a 50% chance of getting sued if you do this"...


Jocelyn King: Mm-hmm.


Joel Cheesman: I would assume that's pretty valuable. Now when I look at your pricing, which you publish on your site, so I'll applaud that for sure, but it seems kinda low. You're nodding that it is.


Jocelyn King: Yeah.


Joel Cheesman: I assume prices will go up at some point, but where did you come? 'cause I would think that you have to be lower than the cost of a lawyer, but you have to be higher than the cost of Googling. Was there some algorithm? 'cause I know you're a science person.


Jocelyn King: [laughter] I'm not a science...


Joel Cheesman: Somewhere. Well, somewhere in the 7 layers of hell did you figure out how to do pricing and how will that change in the future?


Jocelyn King: Well, my spatial reasoning is limited. So there is no science involved. So we actually did an exercise when I was going through Techstars and interviewed about 75 HR leaders and asked them, how much are you spending today on this type of challenge, and how much would you be willing to spend for a solution that did X? And we took that information and then figured out, okay, this is how we wanna price it out by company size. In our case, our pricing is, kind of a mix between the license and the usage based approach. And that's to cater to, the size of a company essentially, and how often we would expect they'd be using the chatbot. So it is intentionally low right now. I'd call it early adopter pricing.


Joel Cheesman: Yeah.


Jocelyn King: Because what we are most concerned about today is business is product market fit, and showing that we can bring in customers. We're not as focused on the revenue side quite yet.


Joel Cheesman: Okay.


Jocelyn King: Once we get to that point, we'll increase our prices and, be a bit more competitive.


Joel Cheesman: Do you think you'll be grandfathering in the current price to customers that hold on?


Jocelyn King: I have not decided yet.


Joel Cheesman: Okay.


Jocelyn King: So I'm not going to answer that question.


Joel Cheesman: So you're saying there's a chance, you're saying there's a chance, talk about the competition. Are there others that do this? This is a pretty new space for me, but, do you have others breathing down your neck? Are there established players or are you just the brand new kid on the block with nobody else around?


Jocelyn King: No. There are absolutely other companies that have been trying to solve this challenge as well.


Joel Cheesman: Okay.


Jocelyn King: You've got companies like Mammoth or Expert HR, for example, I'd call them digital libraries websites.


Joel Cheesman: Yeah.


Jocelyn King: Where you can dig into the content they have and do some research and, and figure out, okay, this is the law that's relevant for X, Y, and Z. The problem is that it's very time consuming and, it doesn't always have the information you need holistically. And by that I mean, if you were looking at that maternity leave example in California, it might not say these are all the laws that you need to consider.


Joel Cheesman: Yeah.


Jocelyn King: And oh, by the way, if the person's in San Francisco, there's an additional law that you need to consider as well. So it's not comprehensive, but you have to look through a lot of stuff.


Jocelyn King: And it's quite time consuming. Nobody else is really leveraging technology in the way that we are to make things more efficient and automate this process. And nobody is providing prescriptive legal guidance as well. So after our chatbot identifies what laws are applicable to a certain task and employee, we then give step-by-step guidance on everything that HR practitioner needs to do to be compliant with all applicable laws. Nobody's doing anything like that today. So then after you figure out what laws are relevant, you then have to go and figure out, okay, now what do I have to do to actually be compliant with each individual law?


Joel Cheesman: Okay.


Jocelyn King: And that's really time consuming.


Joel Cheesman: Okay. Are you a feature or a product?


Jocelyn King: I think that every HR Tech company gets asked this question and it's a little bit unfair.


Joel Cheesman: Oh, okay.


Jocelyn King: You know, I think that we are a company that is working toward being a product.


Joel Cheesman: Okay.


Jocelyn King: Maybe even a platform that's where we'd like to get to, but I do think that there is an opportunity to partner with HRIS, for example, and be an added commodity to their marketplace.


Joel Cheesman: Yeah.


Jocelyn King: As well. So, it's a good question. And I think at the moment we're just still too young to...


Joel Cheesman: Okay.


Jocelyn King: Truly have a definitive answer.


Joel Cheesman: Why do you think it's an unfair question?


Jocelyn King: Because I do think that in particular, it happens to HR Tech companies. HR Tech companies get asked that question. And so it's a little frustrating when you're in the HR Tech community, and I say this is just my experience of working with investors, because I know that that's not getting asked the same way in other industries. And it's kind of like, you could say almost any company's a feature. It just, I don't know. I don't like it.


Joel Cheesman: Okay. Well, I appreciate you answering it, [laughter] and not telling me to fuck off. [laughter] As an unfair question, what do you want to be when you grow up? Do you want to be a platform? It sounds like you're not in it for the quick flip. It sounds like you're building something for the future, like obviously round A must be in the future and further rounds. Is that what we're looking at with Virgil?


Jocelyn King: Yeah, absolutely. I, this is something that I wanna do for a bit. You know, I wanna spend some time on it. I think that there's a lot of potential in the compliance and risk management space that has yet to be explored by us and by others. And it would be very neat if we could be that one-stop shop, for these types of situations that HR practitioners go through. And if we can do it internationally, that would be incredible as well.


Joel Cheesman: Yeah.


Jocelyn King: So yeah, so I definitely plan on being around for a while.


Joel Cheesman: All right. Well, I appreciate you sitting down with us. Best of luck to you. For our listeners that want to connect with you or the company, where would you send them?


Jocelyn King: Yeah, I think, LinkedIn's a great place. Please find me on LinkedIn. But you can also always shoot us an email as well, jKing@virgilhr.com.


Joel Cheesman: Awesome. That is another one in the can, everybody. We are live from the Aaron booth at SHRM National. Jocelyn, thanks for sitting down and chatting with us. We out.


S?: Wow. Look at you. You made it through an entire episode of the Chad and Cheese podcast. Or maybe you cheated and fast forwarded it to the end. Either way, there's no doubt you'll wish you had that time back. Valuable time you could've used to buying a Nutritious meal at Taco Bell. Enjoy a pour of your favorite whiskey. Or just watch big booty Latinas and bug fights on TikTok. No, you hung out with these two chuggleheads instead, now go take a shower and wash off all the guilt, but save some soap because you'll be back. Like an awful train wreck you can't look away. And like Chad's favorite Western, you can't quit them either. We're out.

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