Andrew: Hey there, freedom fighters. My name is Andrew Warner. I’m the founder of Mixergy.com. It’s the place where you come to hear real entrepreneurs tell you how they really built their businesses with as many details as possible so that you, another real entrepreneur, can learn from them, build your business and hopefully you’ll come back here and do an interview and talk about how you did it.
Joining me today is a man who’s been on the site three times before. You actually, Matt, were here when I used to do the interviews back from my house. I had a separate room, an office I would record from with all the books behind me. I was just getting started and you did an interview back then.
Matt: It’s great to be back.
Andrew: It’s great to have you back here. It’s great that you still remember Mixergy and you’re still enough of a fan that you’re willing to let me come and probe you with all kinds of questions again.
Matt: Absolutely.
Andrew: We did interviews about all the other companies that Matt has run before. We talked about 99designs, the design marketplace. We talked about SitePoint, which has helped so many people build their website. We talked about Flippa, which helped companies buy and sell websites and businesses.
Today we’re going to talk about his latest company. It’s called Hired.com. It’s a career marketplace for the world’s knowledge workers. The Matt who I mentioned earlier is the cofounder. His name is Matt Mickiewicz. I’m so proud to have you back on here, Matt.
This interview is sponsored by two companies, HostGator, which will help people host their websites–Matt, you know them before we started–and a company you didn’t know before we started, which is called BrandBucket. It’s where you can buy a whole brand–domain name, logo, etc. I’ll tell you and everyone else more about them later. But first, I’ve got to welcome you and let’s get into your story. Good to have you here, Matt.
Matt: Thanks for having me.
Andrew: You know what I didn’t realize about you is you started your first company–it was called WebmasterResources.com–I knew you were 14 at the time but I didn’t realize that you used to start making sales calls while you were still in school?
Matt: Yeah, that’s right. I was one of the very first people in high school to get a cell phone, a Nokia 3310 and I used to spend my lunch hours doing ad sales calls, basically order taking from venture funded companies in 1998, 1999 to come back to third period class oftentimes $5,000 or $10,000 richer.
Andrew: Do you remember one sale that you made that you were especially proud of?
Matt: It’s been such a long time, but there were lots of fantastic companies back in the day that had a lot of money and were basically judged on how fast they were spending that money. Some of them definitely aren’t around anymore after the dotcom bust of 2001.
Andrew: I’m looking at an old version of the site right now. It had a couple of typos on there. It was full of links to different tools that people could have. You guys apparently used to have a URL redirection app. Here’s one. It was just a bunch of affiliate programs and it was you doing it. How much revenue did you make while you were still in school?
Matt: I was into the six figures.
Andrew: Six figures? Did you actually go to your bank account one time when you were still in high school and see that you had over $100,000 in it?
Matt: If I did, I don’t remember it.
Andrew: Really?
Matt: No. It just kind of happened.
Andrew: Do you remember when you became a millionaire?
Matt: I don’t.
Andrew: You don’t?
Matt: I don’t remember the specific day.
Andrew: Do you remember when the revenues hit $1 million on one of your businesses?
Matt: It was probably around 2002 to 2003 would have been the first year that SitePoint made over $1 million.
Andrew: Okay. Why don’t you remember any of this stuff? I have a hard time getting a read on you, Matt. You seem really ambitious. You’re working like mad. You’ll step away from dinner and go take a business phone call and then return to the dinner table and your wife will be sitting there still with a cold meal in front of her or in front of you. So you clearly work hard. This isn’t the first time you’ve built a business. You’ve worked equally hard on the others. You’re so calm and relaxed and European with your attitude. What’s the deal here?
Matt: I build businesses to solve problems. After 99designs, I wasn’t really interested in solving our new business. I had no idea what I was going to do next after we kind of left the company. My last day officially at 99designs was April 30th, 2012, and then April 27th, I met with my two cofounders and we came up with this idea for a marketplace for hiring the best engineering talent, the best developers, the best designers, the best product managers.
Andrew: Because you had the problem yourself when you were working at 99designs. What was the problem that you had?
Matt: Hiring engineers was nearly impossible. We were using job boards and getting a whole bunch of irrelevant resumes from people that were basically unhirable, that didn’t possess the skill sets that we needed. We would reach out to our personal network, but that only scaled so far, so fast.
Often the timing was off, the people that we knew weren’t interested in new job opportunities who had recently begun something. The third option, the one that we very heavily leaned on was using agency recruiters. At one point, we were working with 30 different agencies at 99designs and it was a horrible, miserable experience.
Once in a while, one of them would get lucky, send us an invoice for $30,000, $40,000 and I remember this, a six-pack of donuts as a way of saying thank you. I thought that it was pretty ridiculous. My realtor, if I buy a house, they give me a bottle of champagne and a nice gift basket, actually put some time and effort on this. Here I got half a dozen donuts. This guy is making more money than me. Oftentimes, the people we were dealing with weren’t the brightest bulbs in the room.
That, to me, screamed of opportunity. I’m friends with a lot of entrepreneurs and founders and CEOs of other businesses, and when we sit around and talk about our problems or when I ask, “How can I help you?” is, “I need help hiring talent. I am stuck. I have 30 open jobs to fill and I’m butting my head against the wall.”
Andrew: I get that. Okay. So you had this idea in your head. You went and spoke at a conference. What was the conference?
Matt: We spoke on marketplace panels sponsored by Crosslink Capital, who actually became our Series A investor.
Andrew: Okay. That’s another thing that’s different. You actually took money early on in this business where the other ones were so scrappy and bootstrapped and I want to hear about that a little bit. You were sitting on this panel and what led you to find your cofounders? What was the conversation that made you guys hook up?
Matt: Yeah. One of the people that was in the audience was someone I had known previously that I invited to attend so he could hang out after the panel. His name is Allan Grant and he’s the CTO and cofounder of the company. One of the other panelists I met that night was Doug Feirstein who had previously founded a company called LiveOps, which was a distributed call center-type business model, where you had 20,000 agents around the U.S. answering calls when people called in to buy insurance or TV ads, etc., things like that.
Afterwards, we went out for dinner and we basically started about the problem of hiring and recruiting. Allan had just come back from a conference in Atlanta called RailsConf. He had spent five days, $5,000-$7,000 of his own money for tickets, flights, hotels trying to hire a single engineer for his Y Combinator company. He had to come back empty-handed and was super-frustrated.
So, as we tossed around this idea of a two-sided marketplace for matching the best companies with the best talent, Allan basically put up his hand and said, “I’ll build this. It will take me a couple of weekends to build it, but I’m happy to do it because if it helps me find a single engineer for my own company. It’s worth my time.”
The next day, Doug sent me and Allan a copy of a receipt for the domain name, DeveloperAuction.com that he put on his AmEx for $1,600 and that kind of pushed us over the edge. If that hadn’t happened, that might have been one of these ideas that we talk about that doesn’t get action. Doug putting his money on the line and buying the domain name made the entire idea seem much more real. I began working on all the wireframes, the landing pages, the ad copy, the emails, etc. and I just hand delivered all of that to Allan and he started building it.
Andrew: Let me pause the story there. I want to come back to how you designed it. I have to ask you a little bit about the marketplace. Most people are afraid of marketplaces because it means you have to work hard to get two different groups of people and they all have to be there equally represented or as close to as possible. I’m wondering if you first went to marketplace because that’s where you felt most comfortable.
Matt: Yeah, absolutely. This is the third marketplace I’ve founded. Marketplaces are notoriously difficult and have a very high chance of failure. If you can get liquidity on both sides, you’re always thrashing around your attention from trying to please one side of the market versus the other. So, it’s a very complicated business to run as well.
When you get it right, you essentially create a monopoly, which is why Craigslist is still the number one place to find an apartment in San Francisco, even though tens of millions of dollars and dozens of companies have been founded to try to create a better experience and better UI and better search functionality and millions of dollars in marketing budget, but Craigslist has all the liquidity, so they still dominate.
Andrew: What do you know about marketplace creation that other people who are afraid of getting into it don’t know?
Matt: I think it comes down to a couple of key factors, number one is being really narrow in the focus on day one. I think if you go too broad, too fast, you end up delivering a poor experience to both sides of the market, so extreme focus is the key.
When we launched Hired, we essentially focused on engineers who only worked at five companies. We said you can only participate in our marketplace if you work at Zynga, Facebook, Google, Twitter and maybe one or two companies. So, that was like the focus. We said we were only going to go after venture-funded companies, a majority of them seed and series A. Those types of people were looking for each other and the marketplace started spinning up and it started working.
Andrew: I see. That you will go that narrow in is one of the advantages you have for starting it up.
Matt: Exactly. Multiple other companies have tried to do something along what we’re doing at hired, but they’ve gone super-broad trying to serve multiple skill sets across the entire U.S. and nobody gets a great experience out of it, so they don’t deliver great results.
Andrew: The other two marketplaces that you created, Flippa for buying and selling websites and web businesses, 99designs, the marketplace for design. They had an advantage in that they started on SitePoint.
I remember you even in a past interview–which is so good, people who are listening to this need to go back about hear it, about the founding of 99designs–you said it started out as design tennis in the message boards of SitePoint where people said, “Can you create this?” and someone else would create it. You basically had this audience already built in when you started 99designs, ditto with Flippa. You didn’t have that here, did you?
Matt: We had none of that to begin with and the problem was made ten times harder because we’re trying to build liquidity within a 25 or 50-mile radius, whatever is considered a reasonable commute. Flippa and 99designs have a massive advantage in that because the transactions happen digitally online, it was completely geographic agnostic. It doesn’t matter whether the designer is in Europe and the customer is in the UK or Canada or Canada or the US.
For Flippa, it doesn’t matter where the buyers and sellers are as long as they can communicate online with people taking full time jobs, obviously they’re either relocating for that job or commuting to it. So, we needed a critical mass and a very, very small geographic area, which made the prompt ten times more difficult than the other marketplace businesses.
Andrew: Why didn’t you allow it to be people who work at–I guess it makes sense. I take it back. Maybe eventually you want to grow to a place where anyone from anywhere in the world could apply to a venture-funded job and then move over to get it. You were talking about paying people well enough that it makes sense to do it, but if you’re going to start out small, it makes sense to focus on a geographic region.
What I’m wondering is of all those companies, why Zynga? I understand why someone would want to hire from Facebook. What was it about Zynga?
Matt: This was back in 2012. I’m just tossing out names. I don’t really remember whether or not they were specifically on the list. I think they were one of the top companies at the time and had a pretty good reputation for hiring top technical talent.
Andrew: Okay. So, you decided that you’re going focus on that. You’re going to focus on venture-funded companies. Before you continued, you decided that you were going to do the wireframes. I’ll tell you what–I have a cold, by the way, today. I had to come in the office because I refuse to let myself stop because of a cold. Do you continue when you have a cold? What do you do when you get sick?
Matt: Keep working.
Andrew: Keep working.
Matt: Keep working unless I have a major fever and I’m shivering in bed.
Andrew: Right. I find that basically any symptom of most illnesses could be hidden by some medication. So I can use nasal spray to clear up my sinuses. I can use a spray if my throat hurts, which it happens not to. I can use a pill for my headache, whatever it is. I’m going ask you this question and I’m going to go over to the other side of the office and I’m going to grab a Dayquil I brought with me and I’m going to swig it while we do this interview.
Matt: All right.
Andrew: I’ll ask you about wireframes. What did you want to have in that first design? How did you think it through? I’ll go grab it.
Matt: Yeah. The first design was focused primarily appealing towards the engineers, towards the developers we were trying to attract to the marketplace. We really staged out the sequencing of the launching of the market. We said if we can’t get developers and engineers, then we can’t take the next step, which is create a signup flow for employers. And then the third step for testing the concept was really around whether or not employers and engineers wanted to talk to each other through our marketplace.
So, at any one of those three stages if they hadn’t work, we would have pulled the plug on the idea and not kept working on it. So, initially we just signed up 88 engineers from the five or six companies that we chose at the time in 2012 and the response was fantastic.
So, once we had this supply of talent, we went to the companies and we said, “We have 88 engineers who are interested in new job opportunities. Would you be interested in using our platform to interview the people that you’re interested in? There’s no cost up front. We’re not asking you for a credit card, no contract to sign. You don’t have to talk to us if you don’t want to. We’ll only charge you a success fee when somebody gets hired.”
I thought that would be the easiest sales pitch in the world. Quite frankly, there were 4,000 or 5,000 open software engineer jobs in San Francisco. I thought I would reach out to 100 or 200 companies and given the zero-risk value proposition we were offering that they would sign up in droves, but that didn’t happen.
Andrew: Why not? I would think that would be pretty easy too.
Matt: We didn’t have any credibility and we came off looking like a lot of the recruiting services that were pitching at them at the time.
Andrew: Why didn’t you go back to the friends you were sitting and having drinks with talking about how hard it is to hire people and ask them if they would use you.
Matt: So, they did. More interestingly, what we actually ended up doing is we used our personal networks to reach out to investors in Silicon Valley and have those investors email their portfolio companies on behalf of our marketplace in order to get the first 50-60 companies to sign up. So, we kind of back-channeled it and build credibility that way rather than me reaching out to somebody that has an open job ad on their careers page.
We went back to their investors and said, “The number one complaint, the number one challenge portfolio companies have is hiring. We’re building this new tool. We’d love to include your portfolio in our beta program. Would you be willing to introduce or email some companies on our behalf?” And a couple of them did.
Andrew: They did it. They did it because they knew you. They knew your cofounders. They wanted to keep an eye on what you were doing and help out.
Matt: Exactly.
Andrew: I see. The 88 engineers–I’m wondering why that was so easy. I feel like engineers are being hit up so much for different job offers. They don’t want another person messaging them. While you answer that, I’ll take my swig of–I hate swigging out of this. You know what I’m going to do is I’m going to pour it into this cup and then I’ll drink out of the cup.
Matt: Oh look, just like coffee
Andrew: Right. It will taste kind of nasty, which will be a little like Red Bull, kind of like sipping coffee. I probably should just drink it right out of the bottle. I can’t bring myself to do it. Do you do that? Do you drink milk out of the carton at home?
Matt: No.
Andrew: You just pour it in a cup like a human being, not like an animal. So, why do you think the engineers were willing to say yes to you?
Matt: Yeah. We decided what would make us different is this idea around transparency, which is one of the pillars around our product strategy. Every single offer an engineer would get through the platform would include an actual salary number that that employer would commit to if that person passed their entire interview process.
So, all of a sudden, rather than come and interview with us for a job, the email of the outbound message from the employer would say, “I’ll offer $175,000 as our senior DevOps manager if you pass our interviews and I’ll give you 0.5% of the company and we’ll see a company that’s worth x-amount of dollars. All of a sudden, that made the entire offer much more tangible and much more real and made the company seem much more serious to the engineers. Engineers were also very curious around what their market worth was.
So, creating a profile and having multiple companies competing to hire you with transparency around salary upfront was a very appealing value proposition. It was actually quite shocking around how quickly that side of the market took off. We thought that would be by far and away the hardest problem to solve, which is why we started there first.
Andrew: Matt, I feel like this one line that you told our producer that you used in your email copy was just the most powerful thing that you wrote, which is, “Find out how much you’re worth.” Who doesn’t want to know how much they’re worth? Am I right or am I putting too much emphasis on the one thing because it stands out to me?
Matt: I think that was definitely a big part of the equation.
Andrew: Okay.
Matt: It’s not “Get a job.” It was, “Find out how much you’re worth,” and have companies competing to hire you with transparency upfront.
Andrew: All right. There’s a really important question to ask as a follow up to this. But first, I’ve got to tell you and everyone else about that company you didn’t know before, which is a company called BrandBucket. Why don’t we talk about how you got your brand? You didn’t start out as a company called Hired.com. You had a company called DevelopersAuction.com. How did you get your domain, your brand, which I think gives so much credibility to the work you guys are doing.
Matt: Yeah. We actually hired a branding, naming consultancy and we spent a couple of days trying to brainstorm different ideas for a name for our company.
Andrew: What does that cost?
Matt: $10,000-$20,000.
Andrew: $10,000 or $20,000? Okay.
Matt: It was a very worthwhile process. The entire company at that point was probably less than 12 people, so we involved everybody in the naming process and we came up with a short list of ideas and one of those ended being Hired.com.
The Developer Auction name that we initially chose super-controversial. Auction implies highest bidder pays, which was definitely not the case on our platform. The candidates were not obliged to take any offer or the highest offer. In fact, 80% of the time, they chose the company that didn’t offer them the best salary package, but they were doing interesting work in an interesting industry with interesting, fun people they could learn from.
But I’d be limiting the scope of what we were doing way too much. We wanted designers in Developer Auction. We wanted to do product managers and data scientists and machine learning engineers. Now we’re in sales and marketing as well. We needed a name that was more all-encompassing of our vision for what this business would ultimately become.
Andrew: I think for a lot of people, spending $10,000 is a bit out of their reach, especially when they’re getting started. But just picking any old name is a horrible decision. I met this guy at a conference in Vegas who called his company some freaking French name that no American could even pronounce, let alone understand.
When someone asked him where he came up with the name, he said it means a lot to me and my wife because it’s the place where we went on our honeymoon. I realized this guy is so clueless. I can’t even tell you his company name right now to give him a little bit of attention but I can’t freaking remember it because he’s thinking too much about himself, his own world.
But if you spend a little bit of time, people are going to remember it. People are actually going to start talking about it. That’s the idea behind BrandBucket. It’s really hard to just spin your wheels to go looking at the different domain sites to see if you can find a name, to try asking friends what they think, to go hire a consultancy that will help you do it.
So, BrandBucket has an alternative. They say, “We’re going to be the brand marketplace.” At this point now that I’m reading this, they have 26,421 names that are available for anyone to buy. By names, I don’t just mean a company name, I mean everything.
We’re talking about the domain name, like the .com or the dot-something else if you prefer. We’re talking about the logo. We’re talking about the look and feel. It really helps you start off right because they package it all for you. You pay once. You get the whole thing. It’s yours to keep. Your company is branded. It’s ready to roll and you’re good to go.
Mattermark used it. I forget what company name they had before, but Danielle was looking for a good company name. She went to BrandBucket and she ended up with Mattermark. I know you now Envato. Envato used it They came up with the name that worked universally anywhere in the world that didn’t have some weird definition somewhere else. And they are a worldwide company.
I urge anyone who’s listening to me who’s got a new product or a new business who wants a good name for it and a good feel and a good look to their logo, just go buy the whole thing from BrandBucket. If you go to BrandBucket.com/Mixergy, they’re going to give you $75 in Envato credit, which means you’re going to get $75 worth of design credit for your site, which will allow you to really get up and running quickly and make your whole site look good. Zomato, I’m now looking at their site was also bought from there.
But look, if you don’t like it, if you don’t want to pay them for a brand, I still recommend that you check them out. The reason is if you just browse through BrandBucket’s list of domains and logos and images, you’re really going to get a sense of what’s out there and it will shake up your thinking and make you think more creatively about your own personal brand.
So, you might end up going somewhere else and buying a domain yourself or maybe come up with something brand new you haven’t thought of just because you’re being inspired by what’s going on here, kind of like an artist might go to a museum to be inspired and then go to paint something at home. I don’t know if that–is that how art works, Matt? I don’t know anything about how they do it.
I do know there’s something to being inspired by other people’s work that will shape the way you think and get you to think a little more creatively. That’s what I like about BrandBucket. Go check them out at BrandBucket.com/Mixergy.
Matt, when you and 99designs used to sponsor Mixergy, you kept saying to me, “Andrew, give people a coupon code or URL.” I was so against it. I remember how when you turned me down for a continuation of the spot, you said something like, “Yeah, it may not be…” I forget how you said it. It was such a good way of saying it’s not a good match. But it was basically saying you might be right but the economics of this business are that I need to know how well my ads are doing or you need to use a custom URL or code name so I can see how effective the ads are for us.
Matt: Yeah. Very important to know where your money is going and how much you’re getting back in return.
Andrew: Yeah. I get it. I got it always from the beginning. My hesitation with it is now I have to tell people to remember not just the company name, but they need to remember the URL they need for me or to use the coupon code. I never thought that would work.
Matt: If the incentive is good, then people will do it.
Andrew: I know. But I love a lot of things. I never would remember the full URL. I would just go to like BrandBucket. I wouldn’t go to BrandBucket.com/Mixergy. I would forget. But what I’m finding is that I was wrong. My worldview is absolutely wrong. When I say it, people absolutely remember. It’s not just me saying it. It’s not just that they love Mixergy and so they use the full URL. Podcasting in general, I’m noticing, they all use it.
Matt: Yeah.
Andrew: All right. I heard you paid about $125,000 for Hired.com the domain name.
Matt: That’s about right.
Andrew: That’s about right. You had someone who had the domain. You asked a friend to go and email so no one could Google you and that’s how you bought it. That’s a freaking steal.
Matt: It was a very good deal. I was amazed that no one had used the name. Even the two words closer, Hire.com and Hires.com are unused worldwide. So, we weren’t one letter off from an existing well-known brand or popular website. The job space worldwide is over $400 billion a year. So, to have a definitive word felt like a really powerful statement.
But at the time, it was a pretty scary purchase. We had only raised our series seed round of money, which was $2.7 million. So, a six-figure wire transfer represented a not insignificant chunk of our capital. I remember when I send the email to one of the people on our accounts team to do the wire transfer, I got the whole call back asking, “Are you serious? Is there supposed to be a decimal here? Is this a typo?” We decided to buy the domain name rather than paying ourselves a salary.
Andrew: Definitely worth it. You told me about the problems that companies had hiring. You were really aware of that. What’s the problem that developers had that you were aware of and you were going to solve?
Matt: Developers in major markets in the US and internationally are inundated with opportunity. There is a lot of noise. It’s hard to know who’s serious and who’s not. It’s hard to get insights around the company, what we should be doing on a day to day basis, what should you be getting paid, who you’d be working with, etc.
It’s a painful process. One of the big stats that we use regularly is a Gallup poll that said that 70% of Americans are satisfied at their job. Only 20% aren’t searching for a new job in the next year because that process is so painful. That 50% gap represents a massive, massive opportunity.
People are happy at their job if they’re engaged, if their skills are being utilized. If they’re learning, productivity skyrockets. Employers get more value out of their employees. Revenue, earnings go up, etc. It’s a big opportunity to see very little innovation. The last exciting thing to happen to the jobs/recruiting/hiring industry in my mind, at least, is LinkedIn, which is now over a decade old.
Andrew: I’m looking at when you launched on Hacker News. I see one person say, “I’d recommend steering clear of these guys. They spammed me several times at work trying to get me to join their site. Although the founder professes they are not the typical recruiter sending unsolicited email and on the surface it sounds like a good idea, they’re still doing that.”
You’re smiling. You’ve seen this. This is not just one person who said that, right? Weren’t you just instead of having the company email the developers, it’s now you guys emailing the developers.
Matt: Yeah, with a value prop that was very appealing and 88 engineers participated in the first batch. We were testing different marketing tactics. We don’t do that anymore.
Andrew: Here’s another complaint that I read online. You buy ads on LinkedIn, get people to come to your site and you reject them without telling them why. So, developers are coming in, they’re filling out a profile and they can’t get on.
Matt: So, it’s true that we curate both sides of the marketplace to make sure there’s balance. If people are not accepted, we waitlist for the future when we have demand for their skill set or in their geo. So, right now, we operate in 14 cities and 5 countries on 3 continents, but we’re not everywhere yet. Over the past two years, for example, we had a lot of fantastic sales people, business development people, SDRs signing up and we were rejecting them day in and day out.
Andrew: I’ve seen some senior developers get rejected.
Matt: Developers as well, if they’re in the wrong geo, if their salary expectations or skill sets don’t match what our 3,500 employers are looking for, then we put them on the backburner until we can serve them properly rather than putting them live in a marketplace where they don’t get any value.
Andrew: What about the fact that you asked people to post a photo and developers are now being judged based on looks and so there could be discrimination based on gender, based on race, based on looks?
Matt: Great question. On the employer side, we have a remove bias feature. So, employers, they have a setting that they can toggle on or off to remove photos and names as they’re viewing them to reduce that. We also collect diversity data during the signup flow to make sure that we’re serving candidates well regardless of their ethnic background or orientation or gender.
Andrew: So, why let them toggle it on at all? Why not just hide names and photos, especially since you vetted them, so it’s not like it’s going to be some random person who they’re looking at who might be lying.
Matt: It’s up to the employees to choose whether or not they think that’s important.
Andrew: What else were you wrong about when you started? You were wrong about how easy it would be to get companies to sign up at first? What else did you assume would happen that you learned was different once you started?
Matt: The most shocking thing was how bad most companies are at hiring, quite frankly. I would say 80% of employers have a horrible process. They’re inept and inefficient in their recruiting funnel.
Andrew: I read that too. I was doing so much research on you. I came in a little early today so I could get a couple of things done before this interview. All I did was end up researching you to see what people said about you guys online. What do you mean by employers are horrible at hiring? What are you seeing?
Matt: So, for example, a not insignificant number of employers in the past used to get introductions to developers who were interested in them and vice versa. So there was an interest and potential match made. Then they would schedule that interview a week out into the future. By that time, the developer was already doing onsite interviews with two other companies and they would lose out on this candidate or they would skip interviews or miss interviews or not be flexible scheduling or just not present their company in the best light.
It’s the entire concept of employer brand, even the people that are interviewing with your company are not getting offers should walk way wish a positive perception of your company. There are all sorts of websites now where people can talk about their experience dealing with your hiring managers, with your recruiters, with your scheduling coordinators and something that’s quite visible and can hurt your business in the long-term.
Andrew: You know what? That’s one of the big complaints that I saw, that a company would even reach out to a developer and not schedule the meeting two weeks in the future. To me, that seemed kind of petty. I imagine that people were just listing themselves on Hired.com to get a sense of what they were worth and then they were moving on. I didn’t realize that they expected to get a response within a day and they were expected to setup a meeting within a day or even a week. Why does it have to be so fast?
Matt: Well, the developers are inundated with opportunities. They pick a company they’re interested in talking to. They’re legitimately interested in learning more about the job and moving forward with the process. 80% to -90% of our employers now schedule interviews within 72 hours.
So, if you’re not doing that, you’re an outlier and you’re providing a really bad candidate experience. There’s this entire concept of time to hire from the time you’re first introduced to a candidate to the time you’re presented with a paper offer. There are big, big drop-offs along every step of the funnel and many recruiting processes that are sub-optimal and sub-optimized.
Any time a candidate drops out of an interview loop with you before you’ve had the chance to say yes or no to them is that huge waste of internal resources in your company will be spent six, seven, eight hours interviewing somebody and then they get a job offer from a different company that’s moving faster and they accept that before you’ve had a chance to make up your mind internally. That’s massively expensive.
Andrew: So, what do you do about that? These are the people that are basically paying you guys. Not basically, they are paying you guys. What do you do to get people to move fast or to adjust whenever they’re not doing things right?
Matt: We give them the data as to how well they’re performing compared to their peers. We monitor the interaction between candidates and companies to find out where things are going wrong or if those employers are being particularly unresponsive. In extreme cases, we kick employers off of the platform if they’re delivering a bad candidate experience.
The big thing about us is we do the right thing by the candidate even if it hurts our revenue or business in the short-term. We think if the talent comes back to us every two, three, four years for the next job, we win.
Andrew: Okay. Did you call all the 88 developers or any of them when you were starting to get going?
Matt: No.
Andrew: You had them in the marketplace. You got some companies to start hiring and they hired and you were good to go?
Matt: Nobody hired in the first batch.
Andrew: Oh, really? Why not?
Matt: There was a massive timeline between the time we signed up the developers and the time we signed up the companies and the time the two were able to see each other and interact, several months had passed by. So, the developers had moved on to other opportunities or lost interest or forgot about us. Plus the mechanism for introduction and scheduling of those first round interviews was sub-optimal in dozens of different ways that we’ve figured out since then. It was a really hard problem to solve.
That being said, we had over $30 million in job offers being made on that platform with companies like Quora and Dropbox and others participating in that very first batch. It landed us a TechCrunch story.
Andrew: Just to be clear, they still made offers. It’s just that it didn’t connect and it didn’t end up with them getting hired. Before we move on, how did you notice what was wrong with that process so you could create a punch list to solve?
Matt: We started making phone calls and sending emails to both sides of the market.
Andrew: You did call both the 88 developers and you called up the companies and you said, “Why didn’t this work out? What happened?”
Matt: Exactly.
Andrew: Did you personally do it?
Matt: I did it. My cofounder did it. We had a consultant that’s worked with us and helped us out as well because we were crushed on resources.
Andrew: What kind of phone calls did you have? How did you structure the conversation so you can extract useful information?
Matt: First of all, you have to get their general feedback around their experience–did they remember signing up? Did they remember participating? What did they think of the offers? What went wrong? Why were the offers wrong? It was a whole bunch of general feedback around the product UI and interface and timing, quality of candidates and quality if the companies that we have in the platform and whether or not those were aligned. Basically the product needed a lot more before things would happen and we would have to increase the timing. Your signing up to being shown to employers has to be short. It can’t be months.
Andrew: That was the big thing you took away from that.
Matt: That was the big thing.
Andrew: What’s another thing you took from it that you had to change right away?
Matt: Just the scheduling tools and how introductions happened between the employer and the candidates.
Andrew: What was up with the scheduling tools?
Matt: It was very wonky in the early days because it was hacked together in a day or two. So, we did much smoother email introductions and created an ability for us to monitor those introductions and then intervene when things went wrong.
Andrew: Okay. And then you were saying that you wanted some press. You were introduced to Billy Gallagher in 2012. I see the article that Billy wrote on TechCrunch. Did it actually lead to any action for you? The article is “Quora, Dropbox and Others Made $30 Million in Job Offers to Engineers in the First Two Weeks of Developer Auction.” Great headline.
Matt: It was a fantastic headline that really launched the company. I’ve had a lot of press over the last 15 years, but the response to this TechCrunch article was absolutely unbelievable for the following 24-36 hours, me and my cofounders were basically answering emails 22 hours a day. As soon as we would answer one email, three more would come in.
We had thousands of developers and hundreds of companies sign up over the following week. It was absolutely unprecedented in terms of response and inbound from a single press article on TechCrunch. At that point, we clearly felt that we had hit the nail on the head with a concept that needed to exist for both sides of the market because it resonated so strongly. That was the craziest 24-48 hours, I think, in recent memory.
Andrew: I think that you told our producer that you got 5,000 developers to sign up.
Matt: And hundreds of companies.
Andrew: And hundreds of companies signing up. Did that result in any matches?
Matt: In the following batches it did because we started putting candidates live on a bi-weekly basis and people start getting hired.
Andrew: Why a bi-weekly basis, why not as they come on?
Matt: We wanted to build liquidity. So, the idea of having candidates stay on for a limited time would force employers to take action as opposed to the candidates stay live on the platform indefinitely. Employers would feel there was no sense of urgency. On the candidate’s side, to have a good experience, you kind of want to batch all your interviewing processes together.
So, at the end, if you have two or three offers that come in during the same week so you can make an informed decision versus you’re scheduling your first phone call next week but you have a paper offer in hand, having that discovery experience kind of understanding all the options available to you.
Andrew: Wow. That’s interesting. I hadn’t thought of that. You want to limit it also so you don’t have 5,000 people today and then next week when there’s no TechCrunch article have only 200 people on the site. You want to limit it so there’s a sense of urgency. You want to limit it so they batch it. that makes sense. I can see a lot of marketplaces learning from that.
It seems like you were actually pursuing both sides of the marketplace at the same time. From what I’ve heard in these interviews, marketplaces work better when you go after one market at a time, one side of the market.
Matt: Yeah. So, for the following three years, we spent all of our time focusing on candidates, all of our marketing dollars, we built up a marketing team, infrastructure, systems, etc. all focused on candidate acquisition and paid marketing and organic marketing and referral systems and lifecycle and events and sponsorships, etc. It’s only now in 2016 that we’re looking at how we put more gas into the tank on the employer side as well.
Andrew: I see. So, how did you pick the candidates as the side of the market to concentrate on?
Matt: They’re the ones that are most in demand. That’s basically the supply that we’re offering and the main value that we’re offering to employers. Our thesis was always if we have the best candidates and we give them the best experience, they’ll come back to us regularly. They’ll tell their friends about us.
If we take care of their interests and create the quickest, painless, most transparent job search experience possible that that’s a game-change and people will be able to find a job they love and they’ll be less likely to be stuck in jobs where they’re unchallenged or unhappy because of the friction and process involved in going out and looking for something else.
Andrew: All right. So, everything seems to be going well and then something dramatically bad happened. I’ll get to it in a moment. First I’ve got to tell people about HostGator. That is my sponsor. They will host your website and do it right.
Let me ask you this, Matt. You’ve built a bunch of businesses. If you were starting over again as that 14-year old kid with nothing but hustle, no money, no reputation that you have now but you do have the ability to launch any website, what simple website would you launch, no developers to code it, you just have any idea that’s going to start off this whole empire. What would you do?
Matt: I would look for a problem that I was personally passionate about. That’s the key. If you’re doing it for the money, you’re going to give up as soon as you hit hard times.
Andrew: So, how would you find a problem to create a site on HostGator if you had nothing but a HostGator account. How would you find that problem?
Matt: Listen and ask a lot of questions. Go out of your house and talk to people, read a lot, explore different industries, check out the competitive landscape. Before we launched Hired, I spent literally several weeks going through every single startup in the HR and recruiting industry to understand the landscape and understand what would make us different.
Andrew: What do you think of finding a market, looking to see what pain there is in that market and maybe what competitors are already in there and just blogging that whole process. Is there any value in that in saying, for example, “I decided I wanted to get into the recruiting business. Here’s a problem that I see. I just talked to this guy. Here’s a problem that I see when I talk to a company. Here’s a problem I see when I talk to a candidate. Here is one of the companies that’s trying to address this.” What do you think about doing the whole thing publicly?
Matt: That would be really interesting. That goes back to the entire idea of customer development and Lean Startup, Eric Ries and Steve Blank and their system. I think it’s a very valid way of figuring out what to work on and trying to find that product market fit that can be so elusive.
Andrew: So, why do you think it’s helpful to blog about it publicly?
Matt: I think it will be interesting because people would follow along with the journey and you’d get more comments, more input and you’d be holding yourself accountable as well for being honest. It’s easy to deceive yourself as an entrepreneur.
Andrew: What do you mean? What’s a deception that entrepreneurs have?
Matt: Well, you have to be relentlessly optimistic.
Andrew: I see. So, you might see there’s an opportunity where there isn’t one, but if you’re forced to analyze it and you know the world is watching, then you have to be as honest about your analysis as possible. I interviewed a founder who essentially did this kind of thing. His name is Morgan Newman. He decided he was going to start a new company.
He was going to just blog about it. You can actually see his whole blog as he figures out this new product which ended up being honey that was spicy and also had a big pepper in it and he turned it into an interesting, successful product that I interviewed him about. It’s fun to go back in time and see how he bottled the first jars of honey by himself.
All right. If you have an idea for a website, whether it’s the one we just talked about now or something else, you should go over to HostGator.com/Mixergy so you can get 30% off hosting from HostGator’s already incredibly low prices. When you do that, you will get tech support that’s phenomenal. You will get uptime that’s unbeatable. Can I say that literally? Do I have to actually do research to make sure someone hasn’t beaten them? Probably. I don’t know of anyone else who’s got more uptime than they do.
The price is right. And as you scale your business, they will scale with you. Go to HostGator.com/Mixergy. Launch your site now. Get off your butt. If Matt did it when he was 14, you should be doing it right now too.
Frankly, if you already have a site and you’re not happy with your hosting company, go to HostGator. They have tons of hosting options. One is going to be just right for you. Like I said, there are people there who will take your phone calls in good times when you want to sign up and bad times when your site goes down because you made some stupid mistake. They will be there and ready to take your call–HostGator.com/Mixergy.
The problem, Matt, is that you start raising money and there was an issue with one of your investors.
Matt: Yes.
Andrew: Who was it?
Matt: I can’t say.
Andrew: Can’t say?
Matt: No.
Andrew: Was it Marc Andreessen?
Matt: No.
Andrew: It definitely was not Andreessen Horowitz?
Matt: No.
Andrew: I won’t push any further than that obviously. I love listening to Kara Swisher, the interviewer, but she sometimes asks questions that she knows she can’t get the answer to. It’s almost like she’s insulting the intelligence of the guest when she says something like, “What’s your profit going to be next quarter?” And it’s a publicly traded company. What are they going to do, start telling her?
Or she says–I don’t know that this is exactly an example–but to Twitter’s cofounder, “Are you guys going to sell the company?” What is he going to do? Say yes right there on stage, “Yes, we’re selling the company. That’s the idea. Thanks for asking the question.” She sometimes asks questions that she’s knows she’s never going to get the answer to, almost to look ballsy enough to ask it, but it’s not ballsy. There’s no risk there. The person can’t possibly answer these questions. It’s legally just not allowed.
So, you won’t tell me who the investor is, but you can tell us what happened and we’ll keep it as a warning to people.
Matt: Yeah. Absolutely. So, this investor basically promised the world to us, wined and dined us, promised they would put together the round and lead it and give us a term sheet and it never came together.
They sent us an email on Christmas day trying to lower the valuation of the company and decrease the amount of funding we would receive rather than capitulating and agreeing to the new terms, we basically said, “It’s not going to work. This has to be a mutually respectful partnership. If we want to be working together for the next ten years making you all rich, then we want to feel good about.”
So, went and found a new lead investor for the business after spending considerable time and effort chasing down what ended up being a dead end path. This firm prides themselves in being founder-friendly, but it’s definitely not the case.
Andrew: So, what do we learn from this? What do we take away from it that can protect other entrepreneurs who are talking to investors?
Matt: The main thing is to walk away when things are going south or you don’t feel good about the people you’re dealing with and when they’re lying to.
Andrew: Okay. The reason you were able to walk away is because you already raised $2 million in angel funding, right?
Matt: No, this was for the angel.
Andrew: This was for the angel. So, was there any risk for you in not being able to follow through on this?
Matt: We’d have to spend additional weeks trying to line up a new lead investor to put the round together and get to the original capital that we wanted to put into the bank account. So, it was going to delay our ability to move the business forward. It was uncertain whether or not a lead investor could be found, how long that would take, who that would be.
Getting a term sheet across the lines is never as easy as it looks in the media. We could have just agreed to the lower valuation and the lower dollar values, but at that point they had lied and deceived us on three or four occasions and dragged it out. The hardest decision is usually the right one.
Andrew: Will you tell me who this is offline with nobody listening?
Matt: Maybe.
Andrew: I feel like these people get away with so much sometimes and they end up with nothing but compliments, some of them.
Matt: It’s painful to read sometimes in the press.
Andrew: Right? Really painful. There’s one person who I know was really screwed by his investor. He said, “Andrew, I’m going to come to Mixergy afterwards. Let’s give it a couple of years and I’ll give an interview about this because people need to be warned about the situation in general, not necessarily about the person.”
I have to say, this would be great for me, but we’re not going to change anyone’s life with this and let’s not cause damage for you. It’s not worth it for you to talk about it publicly. So, we didn’t do the interview. But buried inside one of my other interviews with him was this story. So, people know what to look out for even if they don’t know the specific person. In private I find that we talk about the stuff. But man, that burns me somehow.
All right. So, now you’ve got your business idea. It’s validated. It’s time to start to grow. What did you do to get more people on board, more people in the marketplace, not more team members?
Matt: Thankfully the press had given us a massive jumpstart. People were signing up organically in pretty significant numbers. We started doing a little bit of paid marketing and building out this talent service function which we call talent advocates who basically act as agents for the talent, guiding them through each step of the process. Their goal is purely around Net Promoter Score initially as opposed to commission-driven or revenue-driven. We just hire people with really high EQ who have a lot of empathy and want to help people.
Andrew: I saw that. I saw on the site that you guys have those people. It kind of feels like then you’re starting to really create a recruiting firm, a headhunter when you have people who go between like that.
Matt: Headhunters are paid a commission and they’re incentivized on that. They’re not offering unbiased advice.
Andrew: I see. You’re saying the people who you hire don’t get a commission. You as a company get a commission, but they don’t get a commission.
Matt: Exactly.
Andrew: So, they don’t have an incentive to push you to take someone.
Matt: It’s a completely different kind of work. A recruiter spends all the time either selling to companies or trying to get candidates off of a sourcing platform such as LinkedIn and trying to match the two together to generate revenue.
The talent advocates only talk to people around what they want out of their career, making sure their profile on the platform explains what they’ve accomplished in the past and what they want to do next. They help them with salary negation. They intervene when interview scheduling goes wrong. It’s a completely different day to day workflow. It’s no sales, no sourcing, nothing like that.
Andrew: Still you told our producer that you guys had some trouble with hiring, that you hired the wrong people at some point in Hire.com’s development, right? Teach me. What’s one big mistake you made?
Matt: We weren’t great at interviewing early on in the company’s life. We weren’t very rigorous in doing reference checks. We sometimes took the first person that walked in the door that we got really excited about without considering other candidates.
Andrew: Do you remember one person you got especially excited about and what it was about them that led you to not vet them more?
Matt: People’s background, past accomplishments, companies or keywords on the resume and just over-indexing for those. Usually it just comes down to not doing a proper vetting of the individual first, but also not considering alternative options and seeing what else is out there.
So, being an uniformed buyer would be like buying the first house you walk to and your realtor would be looking at 10 or 15 houses to understand what’s on the market and what x-dollars gets in your what neighborhood, etc. So, it’s gotten infinitely much better and I would say interviewing methodology and process is super rigorous.
Andrew: What is it like now?
Matt: So, we actually work off of a book called “The Who.”
Andrew: What is it called?
Matt: “The Who.” It talks about top grading as a methodology, just a consistent set of questions and interviews and a way of doing reference checks that helps identify a-players more consistently than a regular interview process.
Andrew: “The Who” by Geoff Smart and Randy Street?
Matt: Yeah.
Andrew: That’s the book.
Matt: Yeah. So, you can definitely try and invent an interview process from scratch. It may or may not be optimal or you can buy a book for $20 that’s used by thousands of companies very successfully to consistently hire top talent. $20 seemed like a good investment in the company. Hiring managers are expected to read it at this point. I give regular talks to our entire company around how to conduct top grading interviews and reference checks.
Andrew: You said top grading interviews?
Matt: Yeah.
Andrew: What’s a top grading interview?
Matt: It’s a structured walkthrough of somebody’s career history.
Andrew: Okay.
Matt: Specific questions you ask about each of their jobs in chronological order and you watch out for certain things that indicate them being an a-player or an underperformer.
Andrew: I see. Wow. This book has got a lot of positive feedback from people. John Malone, chairman of Liberty Media–that guy never talks about anything, “Great read. It really is all about finding, keeping and motivating the team.” I never heard of this book before. That alone is a win for me. What other books do you guys run the company with?
Matt: That one is really important. “The Challenger Sale” is a real interesting one for sales and accounts management.
Andrew: “The Challenger Sale?”
Matt: Yeah.
Andrew: What do you like about that one?
Matt: Our sales and account management org are huge fans of it. I haven’t personally gone through it in great detail. I flipped through it a couple of years ago. But it’s one that’s adopted by [inaudible 00:51:57] organizations. I also like “Work Rules!” by Laszlo Bock, who’s the SVP of people at Google. That was an interesting book I read over the Christmas break.
Andrew: What do you like about that one?
Matt: It just talks about everything that Google has learned about hiring, retaining, training and motivating the best people, either one of them was data-driven HR organizations on the planet and they’ve had a lot of opportunities to run experiments and do tests to optimize their process. I think scaling, hiring, retention and performance management organization to their level is super impressive.
Usually as a company grows, you kind of deteriorate and mediocrity sets in and Amazon and Google are examples of companies who the part gets consistently higher and they’ve been able to scale and maintain that level of people in the company, which has been hugely important to their success.
Andrew: One thing I noticed about you is that you’re very even tempered. I pushed you at times here to see what would happen and no one can tell that I pushed you because you’re very evenly responsive. You’re smiling right now, but you’ve also never been excited that I gave you a softball question that was supposed to make it easy to explain what Hired is. Still, you told our producer there are times you hit absolute ecstasy with this business and incredible despair. When do you hit despair?
Matt: Like the fundraising process around the series seed was absolutely devastating to us. There have been a couple of other events that have happened.
Andrew: Like somebody not paying a big invoice because of going out of business.
Matt: People not being their invoice, being dishonest, things like that that happen inevitably. The good thing is 15 years into it, very few things surprise me anymore. I’ve seen a fair amount and I know the world doesn’t come to an end. Therefore I don’t have the massive reaction as I would have in the past to try to maintain my stress levels. I know the sun will come up the next day.
Andrew: I remember I introduced you to Jason Calacanis. I told him he’s got to have you on his show. And do you remember that day, I think it was that day, the site went down. He was still running Mahalo and Mahalo went down. Was it the day that you were there?
Matt: I think so.
Andrew: It was like hell breaking loose and everyone afraid that Jason was going to just rip them apart. You don’t do that. You don’t get to a place where you’re going to rip someone apart.
Matt: I’ve never yelled at any employee.
Andrew: Okay. Do you and your wife ever get into a fight?
Matt: Not a yelling and screaming fight.
Andrew: When you go away from dinner to take a phone call and you come back and the food is cold, how do you continue to make this relationship work when you do that?
Matt: That was an example of an engineer that I was interviewing. That goes back to my point about being the best at hiring and putting hiring as a number one priority at a company. So many of the employers say that hiring and people are the most fundamental key asset, but their behavior doesn’t match that.
If you’re not willing to walk away from the dinner table to recruit a fantastic engineer that could add millions of dollars to the business in value then it isn’t a top priority. Your actions have to match your words. I do interviews on weekends and I do interviews at 6:00 a.m. for East Coast candidates.
Andrew: How do you make a relationship work when you take that kind of time away?
Matt: Understanding spouse.
Andrew: That’s it.
Matt: Balancing it as well. Going on vacation and spending time together as well, but also sometimes hiring employees for the company comes first and that means on vacation, I’ll step away for half a day to do meetings or interviews.
Andrew: You told your wife this ahead of time? She knew this going in?
Matt: Yeah.
Andrew: I remember I think it was the time I was there with you, I asked Jason how he does it. He’s pretty intense all the time. I said, “What do you do to keep your relationship going with your wife?” He said, “I’ll tell you. I do over the top dates, like it’s so good that she can’t stop talking about it with other people.” I’ve thought about that a lot. He’ll go and do a picnic at the side of the Santa Monica Mountains or something, I think he sad. I get it. That’s so big that you would absolutely remember it. Someone needs to come out with a relationship hacks site or book. I do feel like those things are really important.
Matt: Yeah. I don’t envy the spouses of entrepreneurs. It must be very hard on them.
Andrew: Has this happened to you where you’ll go to an event where someone will talk to you but they’ll completely ignore your wife, like not even say hi to her?
Matt: No. She’s very talkative. She’s usually buzzing around the room, leaves me alone and she comes back and tells me about all the people she met. She’s much more outgoing. I’m much more introverted.
Andrew: I do see that about you. Am I making a lot of personal judgments about you in this conversation?
Matt: I don’t know. You tell me.
Andrew: I’m trying to figure you out. I’m trying to figure out what your motivation is. I asked you that as the first question in this interview and you really did a good job transitioning over to Hired. Then I shifted to what gets–why don’t I ask you this–how do you stay even tempered? How do you, when stuff is just going so bad that you use the word despair to describe it, how do you keep yourself from thinking this is the end or, “I fucked up?”
Matt: You learn from your mistakes. The sun comes up the next day. I do really well under pressure. Some people crumble under pressure and I try and find solutions to problems. It energizes me.
Andrew: What’s one time you did that? Help me visualize this?
Matt: Going back probably 10+ years ago at SitePoint, the company that used to warehouse all of our inventory shut its doors, basically making it impossible for us to fulfill our orders. We scrambled to get a new warehouse up and running. We hired four more employees from that warehouse company to come back to the warehouses and ship over our inventory. We’ve made apologizes to customers in email campaigns explaining what happened and offering value adds for the delays and things like that.
Andrew: This is you saying, “I’m not going to get frustrated. I’m also not going to give up on this. I’m going to find a solution and you found that solution?”
Matt: Just that persistence.
Andrew: So Matt, now, when something happens to you like an investor walking away or a company not paying its invoice. Do you ever flash back to that previous experience and say, “If I got through that experience, I can get through this also.”
Matt: Absolutely. The investor didn’t walk away from us. It was us walking away from the investor.
Andrew: The company that closes and still owes you money on the invoice, you think, “When I was starting out, I had this one location close down on me. They had all of our inventory. If I can solve that problem, I can solve this.”
Matt: Invoice collection doesn’t stress me at all. It’s the cost of doing business. If you’re in an ecommerce store, you have 1% or 2% chargeback creating fraud, same thing. Walmart gets sued hundreds of times annually. It’s still a fantastic, profitable business, ethics aside.
Andrew: Let’s talk a little bit dollars and cents and then we’ll close it out there. We kept asking you in the pre-interview. I kept looking online to see how big is this company revenue-wise. Whenever we checked in with you–we spent a lot of time on these interviews doing research and prepping. Whenever we did, you kept saying, “Here’s how money we raised.” You raised how much?
Matt: Well over $70 million.
Andrew: It’s increased since the pre-interview. That’s impressive. What about revenue? Where are you guys? Have you actually started making sales?
Matt: Oh yeah.
Andrew: Are you doing $10 million in annual sales already?
Matt: We’re doing tens of millions.
Andrew: Tens of millions already?
Matt: Last year.
Andrew: And last year was your third year in business.
Matt: Yeah.
Andrew: Your second full year.
Matt: This company is on track to IPO in the next couple of years. The market potential is huge.
Andrew: Faster than any of your other companies it’s grown?
Matt: Much, much faster. We did in two years what took six years at 99designs.
Andrew: Why?
Matt: Part of this was having the capital to proactively hire and invest in marketing and build out. Number two is we had fantastic timing in term of the market. Number three is the experience that we were delivering to candidates was 10x better than the alternative and the employers that were coming on to hire were able to set up five to ten interviews while the hiring manager was sitting on their couch in the living room watching “Game of Thrones.”
That’s an experience you can’t replicate anywhere else. How do you setup five or ten engineering interviews in San Francisco or New York or Seattle or Denver or Boston or Paris or London in 60 minutes? You can’t do that using any other tool, any other service no matter how much money you pay.
Andrew: So, what do you do to make the experience better and better? You’re very process-oriented. What’s your process for understanding what needs to be improved before you get into improving it?
Matt: We’re incredibly data-driven and we have a data team business intelligence infrastructure. We’ve made that data accessible to the entire company through the entire early days of the business. Currently we use a tool called Looker, which kind of democratizes access to dashboards and information across the business so that people can ask questions of the data and get answers in return so it’s not controlled by a single individual or small group of people within the company.
We go out and talk to a lot of customers, all the product managers are encouraged to do user research feedback sessions. We have fantastic cross-team collaborations. So, all the people who are on the ground across the world representing hires and talking to our users feedback data and insights into engineering and product that we prioritize and action as appropriate. I will continue to test things as well. Sometimes they work. Sometimes they don’t. But having this idea of taking intelligent risk to drive the business forward and keeping on innovating.
Andrew: Looker.com is the tool? I don’t want to just focus on one thing that you said.
Matt: I think it’s Looker.com.
Andrew: You still own 99designs or any piece of it?
Matt: Yes.
Andrew: You do? How much?
Matt: I can’t say. I’m a shareholder.
Andrew: But you’re not running it or you’re not in it day to day, right?
Matt: No. We have a CEO running it, Patrick Llewellyn. He’s been doing a great job. Recently in the press there has been talk of an IPO in the future. The company is building year over year growth. My cofounder and business partner in starting that business, Mark Harbottle, retains a seat on the board of directors. I’m really excited for what that business has become and how it serves so many people.
Andrew: Yeah. On AngelList, you’re still listed as an employee there. But you’re not there as an employee anymore, right?
Matt: No.
Andrew: That’s a little out of date there. Can you say what revenues you guys are doing there now?
Matt: You can look it up on the Australian Financial Review. There was a recent article saying over $80 million.
Andrew: Really? Unreal that you’ve built these two companies and possibly two of them are going to go public in the next couple of years. All right. Congratulations on all the success.
Matt: Thank you.
Andrew: All right. The website, of course, is Hired.com. What a great domain name. The two sponsors that I’ve had for this interview, if you want to go check them out, the company that’s going to get you the right brand is called BrandBucket. You can find them at BrandBucket.com/Mixergy. The company that’s going to host your website is HostGator. Go to HostGator.com/Mixergy.
Matt, I see you’re smiling. Why are you smiling? What do you use here?
Matt: I don’t know. Your interviews are interesting because you get into personal things which not everybody wants to touch on.
Andrew: The personal stuff? What was especially personal?
Matt: Just around failures and spouses and relationships and all that.
Andrew: Is there something that you think I should have hit on that you’re going to walk away thinking, “He missed that one thing. It’s really important.”
Matt: We never really talked about what happens when you’re successful in terms of copycats and clones as a perpetual frustrations, both at 99designs in the early days and maybe more recently at hired. Maybe we’ll save that for the fifth interview in the future.
Andrew: I did see that. I tried to check out InstaHire.com’s site. I can’t see it.
Matt: Yeah, they went bankrupt and shut down the business.
Andrew: And frankly I remember asking you about people who didn’t like you in the past interview, like Andrew Hyde for 99designs said a lot of negative stuff about you. I think in the pre-interview back when I was doing pre-interviews, I asked you about him and I thought, “Maybe there are some fireworks there.”
You said, “At least the guy is not just criticizing. He’s actually coming out with his own business to show there’s alternative. So, I can respect that.” If there’s no fireworks here… Everyone has competition. I don’t know what we’re going to get from this except that we’re not competing as well as you are.
Matt: Check on his business and see whether it’s on track to do IPO as well.
Andrew: It’s not. I kind of feel like with Andrew Hyde, he’s an idea guy. He crated Startup Weekend. He’s really good at these ideas. I don’t know because I haven’t stayed in touch with him the last few years, I don’t know if he’s an executor the way you are. You seem like you’re constantly grinding it out and not of these people are going to faze you, which is why I think bringing up competitors isn’t going to faze you. You’re just going to say something like, “We out work them.” You can’t just come in and by a copycat without caring about it.
Matt: The great thing with marketplace is the network effect. We’re sitting on a treasure trove of data since day one of the business around companies and employees and how they interact with each other. We have a fantastic team of data scientists and crazy machine learning algorithms that do things that nobody else will be able to replicate for years to come.
Andrew: Like what?
Matt: Just optimizing and personalizing the experience for candidates and employees to make sure the right people are seeing–
Andrew: It does seem much more like a Match.com than a Monster.com, for example.
Matt: That’s a much better analogy, I would say. Monster.com is very one-sided. You’re submitting your resume to a black hole. The power is held by the employer, whether they look at your resume or schedule a first interview with you. With Hired, it’s the exact opposite. You come to us, you tell us what you want and we get you relevant offers in a weeks’ time. Then you choose who you want to engage with based on the offers and salary and location and the team in the industry that you’re interested and passionate about working in.
Andrew: That’s a great market to be in. I see there’s a lot of revenue to be made in it. You guys are definitely growing fast there. Thanks so much for doing this interview. I’m looking forward to our next one.
Anyone who’s listened to this interview should go back and listen to the previous ones. I’m going to recommend of all of them–there’s one that I did with you about Flippa, which is basically about like how to flip a business because it was a New York Times article about how people were buying and selling business on I think it was SitePoint at the time.
The really good one is about 99designs, where the idea came from, how you discovered it, how you built this marketplace. If I can recommend one follow up to this one. Go listen to that one. Congratulations on this interview, on your success and I’m looking forward to the very next one.
Matt: Thank you.
Andrew: Cool. Bye, everyone.
