If you think the battle between LinkedIn and hiQ is over, think again. While hiQ seems to have won over the judges, LinkedIn is currently appealing the latest decision to the Supreme Court of the United States.
The boys bring in Sovren president Robert Ruff to discuss this David and Goliath story. The winners and losers, regardless of what happens in court, may surprise you.
Enjoy this Voices Series from The Chad & Cheese Podcast.
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VOICES Intro: Voices. We hear them every day. Some voices like mine are smooth and comforting, while on the other hand, the Chad & Cheese Podcast is like listening to a Nickelback album. You'd rather stab yourself in the ears with an ice pick. Anyway, you're now listening to Voices, a podcast series from Chad & Cheese that features the most important and influential voices within the recruitment industry. Try not to fuck it up, boys.
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 & Cheese Podcast.
Joel: Oh yeah. What's up everybody? It's the Chad & Cheese Podcast. I'm your cohost, Joel Cheesman.
Chad: And Chad Sowash.
Joel: Very special guest, Robert Ruff of Sovren, I guess CEO and founder, is that right, Robert?
Robert: Yeah, I actually go by president.
Joel: El presidente.
Robert: Yeah, el presidente, and one of the co founders. I actually started the company with a friend of mine 23 years ago.
Joel: God, a legend.
Chad: 23 years ago. What did you actually start out doing? Did you start out with parsing? You couldn't have started there. Where did you start?
Joel: They were parsing newspaper ads.
Robert: Yes, exactly. So like most good people in IT, I went to school and studied finance and was a commercial banker for 10 years. And then I got out of banking and did a leveraged buyout of the family business so my parents could retire and my sisters could work less hard, and sold that business off after a few years to a much bigger company. And was basically on a partial retirement, which the best advice I ever got, I think in life, was a guy that came to me and he said, "Hey, I heard you just did really well on the sale, and you're thinking about retiring."
Robert: And I'm like, "Yeah, it seems a little odd though at age 33." And he's like, "Yeah, so you're really lucky. This is how that works. Retire right now for a year or two. And in another 10 years do that again." He goes, "You should retire multiple times in your life. So you don't put all your eggs in the end of life basket and maybe you don't make it there or you don't make it in good health."
Chad: I like it.
Robert: That makes a lot of sense, doesn't it?
Chad: Yeah. I like it.
Joel: Words of wisdom for the kids out there. Hope everyone's paying attention.
Robert: Yeah. So go on and tell your boss that next year you'll be taking off.
Joel: Sabbaticals are what those are called, I think.
Robert: They're called searching for a new job a year from now, plus one day.
Joel: The thing is, my boss is my wife. I'm not sure how she'd take to retiring multiple times.
Chad: Your job currently is retirement, whatever.
Robert: When you tell your wife at 33 that you're retired, she's like, "No, no, you're not. You have one year to live or get a job."
Joel: By the way, Robert and Sovren, incredible supporters of the podcast, we couldn't do it without you. I got to get that in there. Thank you so much for your support before we get into the meat and potatoes.
Robert: So the check did clear.
Joel: It did clear. Yeah. Yeah. PayPal's cool like that.
Chad: We wanted to be able to start an ask the expert type of podcast where we could get some people in the industry, who've obviously been in the industry for a while, to have conversations around subjects like AI in recruiting, the big data, the hiQ verdicts. There's so many things that-
Joel: Chat bots.
Chad: Chat bots, yeah, we love to talk about all this stuff, but we want to be able to get more angles. So as we start this one out, I want to start this with a red hot one, because I know that you have some interesting angles or thought around the hiQ LinkedIn ruling.
Joel: Contrasting opinions.
Chad: Yeah, and for the kids out there, LinkedIn was actually telling this small company called hiQ Labs that they couldn't come in and scrape their data. Then a federal court said, "No, that's not your data. That is public data." So therefore hiQ now has the opportunity as... This is really setting a precedent for all those other organizations who want to get to that data. Now they can get to the data. So what do you think? Is this a bad thing for LinkedIn moving forward down the road, and all those smaller organizations will be able to thrive off LinkedIn data?
Robert: I think it's actually the opposite. This is probably the salvation of Microsoft's investment in LinkedIn. So no one's ever really criticized the purchase or said this is going to be a fiasco. But recall that LinkedIn basically laid low for forever and pretended to be a professional network, when in fact they were the world's largest job board. A job board for the most valuable candidates, which are the ones who weren't actively job seeking. So whether it's right or wrong, the reality is most people want to hire people that aren't looking for a job, not the people that are. And that's what LinkedIn was. But it couldn't monetize it on its own without exposing the wizard behind the curtain too much. So in selling it to Microsoft, Microsoft clearly had to find a way to monetize it. I personally made a prediction that has not come to pass. In the initial days I said, well, they will turn it into the next edition of Clippy.
Robert: I don't know if you remember way back to that. So that as you're typing your email and as you're typing your Word document, the little Clippy thing will pop up and go, "Oh, I see you typed the word engineer. Did you know that we have 17 engineers in your area? Click here to see the engineers,"
Chad: The little assistant. For all those kids out there. There used to be this thing in Microsoft Word called Clippy, and you would start typing things, and this little paper clip would pop up. And it would start not talking, just chatting with you. Its name was Clippy, and it died a nasty death.
Joel: It looks like you're typing a memo, would you like some help with that? Fuck off, Clippy.
Robert: People hated Clippy.
Joel: Are you still holding to that prediction, or have you buried that and said goodbye?
Robert: I think some version of that is coming. So my prediction is that it's going to be part of Office 365 eventually.
Robert: So in order to get to LinkedIn, you'll have to have an Office 365 subscription, and it will be part of that. And it will be integrated into more parts of that. So that's still prediction. I think the Clippy part itself unfortunately did not come to pass and won't. But here's what I think's going on on this. Microsoft needed an excuse for really cutting people off from this data, if they are going to truly be that repository that you have to come to and play by their rules. And LinkedIn, before they sold, had to try to keep people off the site from doing some kinds of things like what hiQ had done. Now the courts have basically said, "No no, it's not your data. It's supposed to be public. People can come in and get that data." So here's what's going to happen.
Robert: It's already happening. LinkedIn is going to be legally required to let people try to get that data. But they are also, remember, part of Microsoft now, who is helping them make it so that even though you can see the data as a human being, when you try to scrape that data, or you try to get a PDF profile off and use that data from that profile in an automated fashion, it is a mixed up, jumbled night... So what a human sees is not what a machine sees. And what they've done behind the scenes is to make it as unparseable, unextractable by machines as possible. And they are doing it in the smartest way, which is 1% every few days. So if they did what they had done in Europe about six years ago, which is to suddenly make the PDF profile unusable, because you couldn't even extract any text out of it.
Robert: So it looked fine to a human. But as soon as the machine tried to get the text out, it was like, there's no tex here. It caused riots because it was such a sudden, I used to get this data off LinkedIn and now it's not usable. So everybody got mad at LinkedIn, and LinkedIn quickly undid that. Nobody's getting mad at LinkedIn right now, because they don't think LinkedIn is doing this. So you know it's making companies like Sovren's life very difficult right now, because we're trying to figure out a dynamically changing landscape of, take a good resume, and scramble it up as much as you can, and give it to us, and see how good we can do with it. It's very difficult. And those formats and the way that they're putting that out is changing, in some cases daily. And there's some randomness to it too.
Robert: So it's making it very difficult to get data out, and it's getting worse by the week.
Chad: Here's the question, Robert. Can you prove that they're actually doing that? Because if you can, wouldn't that be going against the ruling? Because you are literally not making that information accessible to the public.
Robert: I think it is accessible. So I don't want to imply that I think LinkedIn is doing something that's either illegal or unethical. I think that they have built their business on this data. And to the extent that they can protect it legally, they have a right to. So you can still get the data. You have to look at it with human eyes to do much with it. Okay. I'm not sure that's discriminatory in any sense.
Chad: But that's against the actual hiQ model though. It's not predicated on hiQ's ability to go in manually with human eyes.
Chad: It was their ability to actually go in with technology to be
able to utilize their platform. So it sounds like there are going to be different iterations of this argument around really just impeding what the court-
Joel: Bots versus humans.
Chad: What the courts have actually ruled on already.
Robert: It remains to be seen, because the ruling is not final. This was just a preliminary injunction, is that correct?
Chad: I believe so, yeah.
Joel: There's been a few.
Robert: So we'll see how it comes down in the end, and what rules there are around that. But I doubt the court is truly going to say, "Not only can you not protect this data if people want to scrape it, but you have to make it easily scrapeable. And in fact, if people want it in a certain format, you have to give it to them on that." I don't think that's going to happen.
Robert: I hope it happens, but I doubt it. And if it doesn't happen, I think Microsoft ends up winning. Because what's going to happen is, the recruiters who have built their business around LinkedIn, and 90% of what they do starts with LinkedIn, are going to end up giving 90% of their profits to LinkedIn. Because they're going to have to buy data in a useful way. So I think this turns out to be the way that Microsoft monetizes it, and the rest of us get shut off from useful data. Ironically, this turns out to their benefit, I predict.
Joel: So is the benefit the fact that hiQ and the ruling basically forced LinkedIn to take a technological approach to building a walled garden as opposed to a legal walled garden? Is that sort of your consensus?
Robert: That is 100% my point.
Joel: Okay. And it's going to put, what, 99% of the hiQs out of business. Right?
Robert: I think that it will make the data unusable, because you will find ways to get some of it. But in a huge data aggregation, it's impossible to vet the data as you get it. And so you won't really know what you don't know, which is like some of your data's great, and some of it's terrible.
Joel: Yeah. It's basically like SEO. SEO used to be everyone knew the rules, everyone knew how it worked, and then Google said, "You know what? We're going to change this up. We're going to turn the knobs every so often." So ultimately every SEO is going to get out of the business except maybe 5% or less. That's essentially what they're doing.
Robert: I think so, yeah. And again, I don't know the legality of it. I would suspect that what they're doing is fine. I don't think it's the right thing to do, but at the same time I don't think it's necessarily immoral. They did build a business on that data, and it is still publicly available. If you go out there, I can go to see your LinkedIn right now, and it's the data that I want to see. Good luck using it.
Chad: Again, I think it still goes against the actual idea of the ruling in the first place of being able to allow, empower these smaller organizations to really create business models around that data, whether it's data that's compiled on one database or multiple databases. I think just from my standpoint, the spirit of the ruling at this point is definitely being fractured.
Joel: They also know that very few companies have the resources to take them on. The fact that hiQ's been fighting this for so long is pretty amazing. I've got to think most companies, even though they might agree with Chad in saying, "Hey, we should be able to get this easily. And we can't," are they going to want to take on that fight? And my guess is again, 99% aren't going to want to climb that Mount Everest.
Robert: This is where a consortium of the smaller organizations actually come together, because that's the only way that they can get something like that done.
Joel: Class action.
Chad: Look for more episodes of Voices. This Chad & Cheese Podcast series is devoted to stories and opinions of industry leaders. Subscribe on iTunes, Google Podcasts or wherever you get your podcasts, so you don't miss a single show. For more, visit chadcheese.com.