To say the ATS business is a challenging one these days would be an understatement. Between mergers and acquisitions, slumbering IPO ambitions and figuring out the whole AI Revolution, staying ahead of the game is complex. That's why we invited SmartRecruiters interim CEO and CPO Rebecca Carr to the show. She's an industry veteran with a good story to tell and as an industry product person to the bone, she can add nuance to the landscape. Covering everything from the hibernating IPO speculation to the botched acquisition with iCIMS to her time with - wait for it - Branchout, a high flying player from over a decade ago, who flamed out and die at the hand of Facebook before it really caught fire. It'a a walk down Memory Land, and a glimpse into the future that's a must-listen.
[00:00:00] Hide your kids, lock the doors! You're listening to HR's most dangerous podcast Chad Soosh and Joel Cheeseman are here to punch the recruiting industry right where it hurts Complete with breaking news, brash opinion and loads of snark
[00:00:15] Buckle up boys and girls, it's time for the Chad and Cheese Podcast Ohhhh yeah, what's up everybody? It is the Chad and Cheese Podcast I'm your co-host Joel Cheeseman, join us always Chad Soosh and we are excited to welcome Rebecca
[00:00:32] Carr, Chief Product Officer and Acting CEO at Smart Recruiters Rebecca welcome to HR's most dangerous podcast Thank you for having me She's very pensive, she's like what am I doing here? This is a fun part of the day Who do I need to fire for this one?
[00:00:48] This is going to be the easiest part of your day I promise So Rebecca, a lot of our listeners don't know who you are Give us a little window into what makes you tick as a person
[00:00:59] Love products, Tech Nerd, Ben and HR way too long but haven't we all? Amen Yeah, yeah My whole career was a recruiter, turned product manager Actually in there by the way I built Facebook games, fun story Okay you want to hear about that
[00:01:15] Hold on, you can hear about that But business stuff, my first question is going to rock it So keep talking about your personal stuff Mama too, love Pilates Give me peace, you know you got it with this industry Joel loves Pilates too
[00:01:30] We're talking teams, we're talking toddlers, we're talking out of the house Like the kids We're talking a five-year-old and a three-year-old Oh my God And you're a CEO and CPO I have a great husband Do you sleep? Do you sleep? Good God
[00:01:42] I do, thankfully because I moved to the East Coast recently Nice And prior to that I was living in California and operating a European company and that took a lot out of me I can imagine I would say, yeah
[00:01:54] But now I'm on the East Coast and I have balance and I do kid drop off and then I don't see them for the rest of the day That sounds like utopia All right, I had a jaw drop moment when I was doing some research on you
[00:02:06] Oh you did research on me, this is going to be fun You talked about being a long time veteran as are we You spent time at Branch Out Oh That's where we're going That's where we're going I love this, this is great Okay, I'm ready
[00:02:20] I mean, I was begging for interviews with Branch Out back in the day You were? I don't even give you one Rick didn't want to give you an interview They would only talk to TechCrunch or like CNBC For those that don't know
[00:02:34] For those that don't know that they were alive Talk about what the company did and the epic flame out After the Facebook changes I guess for lack of a matter Talk about your branch out experience Yeah, us and identified we tried hard on that one you remember them
[00:02:53] Which ironically Charlie Nelson came over from my identified to smart recruiters And then I came over from jobite to smart recruiters So that we competed again but in a different context But anyway Branch Out It was essentially an app within Facebook that was attempting to Bring jobs Spam
[00:03:10] And network Well that was my No, but it was a attempt to compete with LinkedIn Basically they wanted to have like a professional profile that was You know in parallel to your Facebook profile They raised how much money? Oh At the time it was huge
[00:03:27] It was like a near 100 million or something like that at the time Yeah, there was a lot of issues there But it was it was an interesting idea actually Which was if people are spending a lot of time on Facebook Why not bring them jobs? Sure Yeah
[00:03:40] If there was like an app that felt a bit protected where you could build a Profile that was professional and you could share that and apply to jobs Then you could do it all in one experience
[00:03:52] And in the back end there was actually essentially like an early CRM That then we sold to big companies some of them are at the show Where they used to source people on Facebook Yeah And so I ran product Well, okay
[00:04:06] So I mean I think that was one of the very first In the space that we found out that you couldn't lean too hard on a big platform Like with Google's panda and how that screwed so much SEO
[00:04:19] And this obviously with branch out and then also be known monster had been known Yeah, yeah, be known same time Sharecropping is a dangerous business for sure Yeah Well the biggest challenge was One getting people to actually
[00:04:33] Like get out of I'm in Facebook mode. This is like where I'm sharing pictures of my dog and kids Yeah, well that and that's not easy It is hard because you have safe spaces and then you have professional spaces Exactly and regardless of if it's like an app
[00:04:46] People still didn't trust that there wasn't some visibility into their personal life The data was extremely unclean at the time So this was back in the day when you when you entered in your location on Facebook
[00:04:58] It was like I live in SF or San Fran or San Francisco So like the normalization of like every single data element Hard But identified did it right actually in the beginning they said, you know what we're going to focus on like one job profile nurses
[00:05:13] Because they're on Facebook and they're not on LinkedIn And we're just going to focus on normalizing all the healthcare data that we can possibly get and they were more successful
[00:05:22] Branch out just went a little too broad there and we played that whole like who would you rather work with? Branched out a little too far get it. So let's talk about that a little bit because I mean there's just so many learnings for uh current startups
[00:05:35] First and foremost don't lean too hard on a big brand that could fuck you number one number two being able to Spread the tam that quick just doesn't make sense And we see obviously many companies that are here today who spread the tam too quick
[00:05:48] Yeah, so I mean what do we have to do to learn from history because we just keep repeating it Yeah, arguably smart recruiters did something similar too. I mean we brought an ats to market from a free product
[00:06:01] Probably could have focused a little bit more on the industry and the segment we wanted to serve We went overseas extremely quickly which actually has ended up benefiting coming to our benefit But as a product leader, it's probably one of the hardest things you do
[00:06:15] You get you get a couple big customers right in the beginning that pull you in one direction versus another You want to make them happy because you need them to reference you
[00:06:24] But none of them are like each other which take you all over the place takes you all over the place Um, it's hard to pick one because there's a lot of risk in that you're operating on Especially as a startup a limited amount of capital
[00:06:35] But let's talk about discipline at that point right you have limited amount of capital But I mean it's incredibly important to be disciplined. Yeah right out of the gate, right?
[00:06:44] So I mean you guys you you you didn't but then you reigned it back in we reigned it back Yeah, so talk a little bit about that journey. Well, I think what we realized was it's important to have an icb No
[00:06:58] Oh, yeah, listen for the kids if you'd like some money No, I mean it is I think for us It was about One identifying a segment we wanted to play in like the the unit economics of acquiring an smb versus an enterprise
[00:07:12] Or wildly different not just at the industry level, but like the country level very very different And understanding and unpacking that data is step one I think we were moving so quickly because we were seeing so much inbound right we were just reacting and like
[00:07:29] Actually putting some data around everything that you do and studying it and spending time studying it very important There were things that came out of that analysis that actually shocked us We have massive massive software and technology brands that use the smart recruiters platform
[00:07:45] But when you look at things like market growth over the next couple years total ticket volume Where they're struggling where there's the most overlap in product strategy We still see a lot of success in software and tech but not as much as we do in retail and hospitality
[00:07:58] They both are doing theoretically high velocity hiring because tons of people are applying to these big tech brands Tons of people have to apply to retail But actually the like level of depth that you need to go on anyone feature is wildly different
[00:08:11] And figuring out how to balance that successfully is something we've had to do by You know changing how we structure our engineering teams and the types of resources and and dollar allocation We put toward each of them and you can't create one product that covers them all
[00:08:24] No, I can't be something for everyone. That's for sure And uh, frankly, it's a strategy that we've only recently started to embrace With embedded partners and we're not the only ones workday starting to like branch out a little bit more You heard of them? Yeah
[00:08:39] But uh, like I'm not going to be the best people analytics platform on the earth If vizier wants to white label under the scenes great Now I don't have to have engineers there. I can rely on like an actual best of breed platform there
[00:08:53] They're willing to white label The commercials look good for everybody including our customers. Well, that's their expertise too Yeah, exactly and they'll continue to innovate there Instead of me innovating now on that and then in fitting again in four years
[00:09:08] Like it's but that's what I would have to do in order to serve That's the general product cycle for a core platform though, right when you come up with like a new quote-unquote Product which is really just a feature. It goes out everybody's like
[00:09:20] And then four years later. It's like oh we should probably update. We should go back to that Yeah, I mean the mark is moving fast enough. We should talk about how you're looking at I guess sort of the the economy as a whole
[00:09:31] You guys like head count wise From what I can tell the last couple years have stayed pretty constant You haven't had the big layoffs. You haven't had like a major earthquake in terms of head count
[00:09:42] What has been the strategy and how how has the the bigger economy at large or the marketplace at large directed that? Yeah I mean
[00:09:51] We've seen a little bit of a reduction a couple two years ago or so around the same time a lot of other people started doing it But mostly because we divested in certain product areas that we didn't need anymore
[00:10:03] Not like your traditional riff. I think what the the refinement of the icp helped us Was right at that moment that we actually said, you know what we're doing way too much and if we actually focus our dollars We're going to see
[00:10:15] Short-term growth in the segments that we already know we have great product market fit If we put all our product and engineering resource there, we're driving good impact But we were frankly our business strategy has always been to
[00:10:28] Nearsure so to speak a lot of our r&d so our r&d team has actually grown dramatically and continues to grow but in a lower cost market and Very high tenure. I'm like proud to say our engineering team is I think our average tenure is 4.9 years
[00:10:45] Something like that pretty good. Yeah, I mean So there's lots of context subject matter expertise In a market we've got over 200 engineers now that are working on that on a company of 500 That's actually pretty good allocation. Yeah, so you've pulled back a little bit on sales people
[00:11:01] Is that a response to less market demand? Are you more efficient around sales like talk about that different gtm? Yeah I think we've you're of efficiency Yeah, I mean year of efficiency, but like leading the witness
[00:11:16] I'm helpful like that. Well, I mean you could get into the details of net magic number and all the things that are Investors actually want to see branch out Yeah, I mean the reality is if you play in the enterprise space
[00:11:30] You grab a lot of enterprise deals. Those are one deal one core team You don't need the same volume of reps you might need in like a mid-market play
[00:11:39] Right, and if we've got good hunters that know our business and have been with us for a long time our european team Very high tenure reps. They've built good relationships in the market. We did a lot of great account based marketing
[00:11:52] You can do it pretty efficiently. You just need to win them And you need to win them with good products So we've invested a lot more in r&d to have the good product to drive up our win rates, which are are good
[00:12:03] Yeah, you've increased service. So servicing those accounts. You've you've invested on that end. It looks like yeah I mean we've invested in good partners there too We outsource a good piece of our professional services
[00:12:16] Group uh to the ams's of the world the cllos of the world that sort of thing Frankly that that revenue we're a tech company It's not interesting and it might be positive margin
[00:12:25] But like what's it really doing other than just your holding costs that you don't really need Um, and especially if it starts branching out in those those resources start doing more like traditional customer success
[00:12:37] Then you have direct impact on your net magic number. So we've started to outsource a little bit more We're going to continue to do that but yeah, we've invested a lot in retaining our customers and Not having a leaky bucket turns out it helps
[00:12:51] Uh hell yeah, it's easier to keep a lot easier to keep going up customer than to acquire a new one So you've been talking about products. I had an acquisition of job pal. How does that actually how's that bled into?
[00:13:03] If yes or no into the actual product itself Joel talking about you know year of efficiency talk about tech efficiency Yeah, how has that helped where hasn't helped specifically job pal We turned into a product called smart pal
[00:13:17] We've seen some growth there, but frankly a lot of the acquisitions that we've made It's it's expensive and costly to integrate new tech into your stack There's a lot of enhancements that need to be made our big sort of big
[00:13:32] Relaunch of the original job pal stack with a lot more is what we're working on this year actually But yeah, it's acquisition In in most of the areas of our space would not be my first go-to these days
[00:13:47] Um, I mean there's good. There's good products out there good point solutions but integrating the people retaining those people Aligning those customers to your core stack not the most efficient experience in the world Um and or a motion and so for job pal in particular
[00:14:05] It's been I'd say could have been more successful than it was. Um, but we're getting there We we're sort of rewriting it So let's talk about smart recruiters and then obviously talk about where we're at today and moving forward
[00:14:18] So smart recruiters literally and we saw this out of a lot of the core platforms with greenhouses and whatnot that came A little bit later a little bit fashion forward a little cooler than some of the older platforms But yet they were still
[00:14:29] predicated on the process methodologies of the old world recruiting We're seeing new breed new breed new breed that's coming out How in the hell are you guys going to compete with that because it's going to be faster
[00:14:41] Are you putting paradox and fountain in that in that bucket of new competitors? Yeah I would definitely say that so how how we how can you actually keep up with that in today's I mean because morse law is even speeding faster
[00:14:55] GPUs are just killing this game. I mean, how are you gonna do that? Well one thing we need to get out of this whole
[00:15:03] I have to own the user experience of everything mindset. Yeah, I mean we all sort of went and it's like a product person by the way I gotta that's that's revolutionary Well, I mean the reality is we serve in recruiting
[00:15:17] Recruiter might be our core persona, but the reality is most of our users are not recruiters Their employees their hiring managers that are their interviews. They're people that don't care about recruiting until it's time
[00:15:28] Yes, and the last thing they want to do is log into my a ts I mean, I I fought that battle for a long time like well, what if it's more beautiful? No Like it's not there for work
[00:15:39] It was mainly predicated on for many of the newer applicant tracking systems is just that it's more sexy We've got rounded corners as opposed to squared corners We might have some more like it's prettier colors a little bit like easier on the eye bigger buttons
[00:15:53] So how do you keep up with the new breed? You open yourself aggressively I mean if I could make smart recruiters fully apiable tomorrow, I would uh and i'm On that journey. I mean for a long time we led the way and we were maybe 30 40 percent
[00:16:10] Open to a public api. Yeah this year hope is to get to more like 80 85 um to my point on we can't serve everybody we can In a world where there's more movement toward gig and fractional work Which means more kind of custom more personalized experiences
[00:16:28] They don't want to build the back office because that's really expensive But if they can control the ui And I can give them a design system not just apis But like components that they can plug and play to build that experience
[00:16:40] Then I can meet a lot more people where they need to be candidates and hiring managers alike But do you do that because that sounds very complex for the the normal like hr slash
[00:16:52] We rolled out our first version of our design system back in january. Okay great feedback from partners You're testing it with the viziers and the hired scores of the world nice Yeah, nice little tie into a work day there. That was nice. Yeah, I try great product
[00:17:08] But it needs to just be a part of who we are and for a long time We held control over wanting to be Even for integrated partners their experience just like everybody we're going to be agnostic
[00:17:20] Everybody's going to look the same. We're going to control what that ui looks like We just can't anymore And so I think opening up that experience just and making it easy to plug and play
[00:17:29] Point solutions. Yeah, so like app like experiences for integration not these like hundred thousand dollar custom Middleware connector thing of a mobs tech is better than that Like frankly all of the other industries that surround us from, you know, martech to
[00:17:46] FinTech are doing this. They have api first products that are successful in the market a very long time. Yes for yeah Like we can get there. Yeah, and we have to we're going to be forced to do that
[00:17:57] Um as work evolves well the workdays the bigger core platforms Have to be forced into that before anybody else can because other ones that really rule the world So, I mean it it's hard to force that is it not?
[00:18:10] Yes, they will play a big role, but they are too certain I mean this is I mean david summers has come out on and been very vocal about the fact that they need to open their ecosystem
[00:18:21] And frankly they had they have been evolving to a certain extent remember when workday studio was like it Like now they do have apis and they have started to to share more and they have been open to partnerships
[00:18:35] With companies that might directly compete with them in one area versus another if it serves a different purpose and That kind of collaboration is I think going to make us all better because it's going to force us to come to the table and
[00:18:49] Uh, just frankly have better infrastructure In 2021 you guys raised 110 million dollars Evaluation of oh, that's a lot of money 1.5 billion dollars Obviously talk of IPO surrounded you as well as your brethren in greenhouse and isams
[00:19:06] I'm sure you're tired of talking about the IPO question, but give us a current state of affairs with Is there someone IPOing right now? Waiting game is it like what is is it a holding pattern certainly there has to be some sort of a liquidation event
[00:19:22] I mean sure. I think you raise that kind of money. There's expectations from investors. That's natural It's a horrible time to IPO. We're certainly not having that conversation. Do I think that There's going to be a lot of market consolidation
[00:19:37] Yes, do I think that acquisitions like hired scorer by workday or a domino that's going to fall like tip the market? Yes, I do. Okay. Um, that's normal. That's what you expect in in recessions like this Does smart recruiters come up in conversations around the world?
[00:19:53] Of course, like this is actually a moment when we most of the vendors on this floor get the most phone calls It's a question of who they are. Can they pay?
[00:20:04] The price that they need to pay is there a good cultural and product fix that's actually going to be the right strategic decision for the buyer and That I I think there's a couple options there on the table that could exist for
[00:20:18] For many of us. So the elephant in the room, which Joel just totally passed over is the botched acquisition that we talked about As we we know and you don't you don't have to validate or confirm that that was with isams
[00:20:30] So, okay a little head nod. That's okay Don't do that to her I said, okay if that's what you think I think it might have been a shrug. I'm sorry Oh like maybe Anyway, so I mean that would have been a liquidation event
[00:20:48] Somebody told me the other day that I was beat that beemory and us we're gonna merge That was that was another one that's been flying around. That would be the dumbest thing anybody could ever do
[00:20:58] But I tell you the amount of rumor that exists in this space though is exceptional. Yeah. Yeah, it's like giving a cat a bath Yeah, but this one's not a rumor So, uh So when we're talking about we're talking about liquidation events
[00:21:12] I mean you guys and I mean many of the the unicorn slash unicorns are out there looking for at least partners Yeah, yeah to the very least so talk about that IPO. I think is not even a conversation today
[00:21:26] No, not for any of us. Um, I mean, but Great acquisitions start with great partnerships period And we're in a moment as I mentioned where we're starting to look at a lot of embedded partnerships across the industry
[00:21:41] And some of them are going to take off and they're going to be great And there's going to be a natural moment there And we are very good about sort of picking the partners that are going to match our customers that are gonna
[00:21:52] That are going to serve them good value that are going to be great tech collaborations And if some of them work out sure, I'll have that conversation and I'd be stupid not to frankly given where the moment is
[00:22:05] But when that moment comes it will come and um, it hasn't come yet for smart recruiters. So So you've had your crystal ball out a little bit. You've talked about uh, api focus You've talked about consolidation
[00:22:16] Take out the crystal ball on smart recruiters. What do things look like at the company in say two three years? I think it's a hard one to answer. It depends on Where we see growth, I'd say in the next six months as a leading european a ts
[00:22:32] We offer something that a lot of multinationals haven't been able to get from best of breed We could grow if we continue to double down in some of those markets and still be a key player Yeah, uh, what are your biggest markets amia for sure. Yeah
[00:22:46] Um, I mean that's where now more than half of our revenue comes from and we're seeing a lot of growth in api There's a lot of point solutions that serve a single country. Yes
[00:22:56] But uh, when you start crossing borders, there aren't a lot of best of breed solutions That sucks. That's that's hard. It's hard. That's hard work It's extremely hard and it's there's been a lot of north american players that have tried it and failed yes, and uh
[00:23:12] I actually think the fact that we're successful there makes us very attractive to a lot of big north american companies as a partner Just a tech partner or a strategic partner long term, right?
[00:23:23] And so I think you're gonna see some growth from us overseas. That's where we've invested a lot I think that that could service really well From a partner perspective and might be an interesting carrot for someone
[00:23:36] But it's my crystal ball is we'll see I mean we'll see that's the only way To go to europe is to acquire a successful company except you were Or you have a french founder like me. I was gonna say okay, so that being said a great segue so
[00:23:54] Jerome was very hands-on an amazing dude the founder pathetic dude. Sure loving dude Is is is he kind of like a guy? He's kind of like your go-to guy now. I know he's chairman Yeah, he's chairman
[00:24:06] Is is is he like a go-to guy still free because you've been at smart recruiters for a while You left I left and you came back. I did right so so tell me about that because that's that's an interesting relationship
[00:24:18] Yeah, well, I remember the first time I met Jerome my employee number is 19 Um, yeah, it was back in 2014. He's a visionary. He's he he is he loves this space He has a passion for the problem and I do too I left
[00:24:33] Because I needed to see how another company ticked Think I think that's a background company background checks Hey another unicorn that she just another unicorn But founder led french founder led yeah, yeah we we wow somebody has a profile
[00:24:54] No, but I actually at checker I worked in their incubator group building adjacent products to background check and I did a they're a payroll product. So it was cool Good experience came back because I really missed recruiting tech
[00:25:07] Like it's just what I know and what I love and there's a lot of problems to be solved here Yes Jerome is absolutely still involved still has a big vision great like support system and mentor for me
[00:25:19] But it's a uh, I I still have all the other board members in my air operational Yeah No, I mean He's uh, he's very supportive of the vision and the focus that we've provided this company very
[00:25:34] Excited about some of the partnerships that we're pursuing and still a big contributor to the conversation for sure That is rebecca car everybody cpo and ceo man. I could talk for hours. She's a busy woman
[00:25:48] She's a busy woman rebecca for the listeners out there that want to know more about smart recruiters Where would you send them smart recruiters dot com? Love it and I don't think we said ai wants in that whole interview
[00:26:01] Oh, that's a but we said branch out about 28 times all I gotta say is I I hope that soon they take the interim off And we can just have the the the ceo role so that you can just run
[00:26:13] I appreciate it. We would love to be able to see that We're rooting for rebecca and with that another one is in the can We are live from unleash in las vegas. We out Thank you for listening to what's it called a podcast the chat the cheese
[00:26:32] Breed they talk about recruiting they talk about technology But most of all they talk about nothing just a lot of shout outs of people You don't even know and yet you're listening. It's incredible and not one word about cheese But one cheddar blue nacho pepper jack swiss
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