TRF Best of 2023 - Chris Forman Appcast

[00:00:00] Welcome to The Recruitment Flex. We will have a brand new episode next Friday, but in the meantime enjoy some of our best episodes of 2023 and this was one of my personal favorite Chris Forman from Appcast. Enjoy! Welcome to The Recruitment Flex with Surgeon, Shelley. I'm Serge.

[00:00:27] And I'm Shelley. And we talk all things recruitment starting right now. Balls you and welcome to The Recruitment Flex. Shelley, we've got another exciting episode. This one is pretty on topic. Yes, I am very excited and honored. We have joining us today, Chris Forman, who is the CEO

[00:00:50] and founder of Appcast. Thank you for making time and joining us here on the show. So happy to be here. Thanks guys. So Chris, I can't imagine anyone in the TA world doesn't know who you are, but for those who just

[00:01:03] love a good story, tell us a little bit about your personal background. But also the evolution here in the story behind Appcast. Yeah. So hi everybody. My name's Chris Forman. I live in the

[00:01:16] Northern New Hampshire right near Dartmouth College, Angel and I live on a dairy farm. We have four kids. They're getting older now. In fact, my daughter and her husband Alex let us know a few

[00:01:26] months ago that Angel and I are going to be grandparents. Oh, congratulations. It's a pleasure. And I have spent the last 20 years structurally unemployable and focused on building businesses in a recruitment technology space. I've been lucky to be part of a team of people that

[00:01:44] going back to early 2000 was part of a company called Ares. A lot of you out there have been in TA for a long time. Remember Ares training and the CRM that we built? Well, through four different

[00:01:54] companies, Appcast is the most recent. This Ares team has stuck together and we keep on building stuff that is new and hopefully innovative and fun in recruitment technology. So that's us. You know, a lot of listeners probably don't realize that Appcast has deep Canadian connections

[00:02:12] and I'll tell you why. So one of the first four A in the market was a partnership with Work Opless when I was there. It's the first time they actually met Chris and they have their biggest

[00:02:22] office in Fredrickton, New Browns with my home province Chris. Fredrickton and Candid in general, there's multiple things that went into the recipe that has made Appcast successful. But Fred is one of them. As an organizing principle and this is actually part of an investment

[00:02:39] thesis that we hold dear in the businesses that we build. We believe that talent is equally distributed around the world. Smart people just everywhere, hardworking people are everywhere. You don't have to be in Silicon Valley. You don't have to be near Union Square. You don't have

[00:02:54] to be in Cambridge, Massachusetts to go build tech company and hire great smart people. So guess what? We're in Lebanon, New Hampshire. The largest Appcast office in the world is in Frederickton, New Brunswick. We hire smart, awesome folks and we actually invest in communities

[00:03:12] that are often overlooked by technology companies because we find we get smarter people. They stay longer, they're happier and quite candidly they got a chip on their shoulders. So it's fun to

[00:03:23] go compete against folks up San Francisco. Love it. How clever. Oh my gosh. That just says to me about why you've always been one of those companies that anybody in the TA space will say the same

[00:03:38] thing. You're just the nicest people to work with. It's intentional. It's by design. Absolutely. So getting on to some big news, some very big news that I think created ripples around the world was Appcast acquiring their advertising. They were one of the larger recruitment marketing

[00:04:00] agencies in the US. So tell us about this decision. Yeah, so to understand the now we need to understand the past a little bit. We found it at Appcast in 2014 with the thesis that there

[00:04:14] was a one time secular shift occurring in the recruitment marketing or recruitment technology space where companies instead of buying duration based job ads were starting to buy performance job ads. And buying pay for performance is great, right? No one wants to buy pay for non-performance.

[00:04:35] But there's a dirty secret to this whole thing that if you start buying on a paper-click basis or any other pay per model to get your money's worth and to get the value that comes when you get

[00:04:46] charged when somebody looks at your job ad rather than when you post it, you need to manage those job ads, right? Some jobs will get too many applications. Someone won't get enough. How much are

[00:04:57] you willing to pay for an eyeball? You want to pay something different for an administrative assistant than you do, let's say for a software developer or truck driver. So there's a lot of

[00:05:06] work that has to go into it. And our idea was we would build software that would help recruitment marketers. So people that are in talent acquisition but have a recruiting view to manage those job ads more effectively. And the idea worked, like we're one of these technology companies

[00:05:23] never pivoted. We had an idea, we did it. And until July 10th of this year, we were in the same business. It scaled really quickly. Hundreds and hundreds and millions of dollars worth of ads

[00:05:34] spent every year. You know, it's about a platform close to a billion dollars. So it's billions of clicks, hundreds and millions of applies. And I think we're getting close to a hundred million hours at scale. It's just turned into this crazy successful business. But there's a saying that

[00:05:49] if you're a hammer, everything looks like a nail, right? So what do we do? We bought job ad better than anybody else. And our big strategic customers would come to us and say, thank you, Sheldon. Our

[00:06:01] people are so nice and they're so hardworking. You guys are great. We love working with you. This stuff actually does work. Now, I got this other stuff over here that's part of my recruitment

[00:06:12] funnel. Can you guys do what you do for performance job ads for that? And we're like, nope, we do one thing. That's it. I guess at a particular level, we're like Chick-fil-A, right? You

[00:06:22] just make Chick and Sam. That's all we do. But the reality is that consumers are different than big companies. You can decide one day to get a Chick and Sam watch the next day to get a

[00:06:31] taco. If you're running a recruitment funnel, there's only so many people that you can work with. And you want to have everything in one spot. You want all your analytics brought together. You

[00:06:41] want everything working as a unified system. And so we realized about two years ago that we needed to expand beyond job ads. And there's two ways to do that. You can grow the business organically,

[00:06:55] which is our entire background. We built four companies. We sold four companies on recruitment technology. We've never bought one. But organic is slow. And also we didn't have the expertise. Like, we know job ads, we know Rectac, but starting to get into search, social,

[00:07:12] content optimization, even data driven, software driven, brand development. And so the thesis with acquiring Bayard is pretty simple. We believe they're the best in the world at doing the whole enchilada. Yeah, we acquired an incredible group of people. Two, their customers are

[00:07:35] awesome and love them. So we acquired an incredibly great group of customers. And number three is the products that they have. Well, traditional in their delivery represent the products that we

[00:07:49] want to have in the future. So it made sense, piece and a pod. You know, we fit very well together. And the thesis is that appcast is fundamentally a technology company. We're good at building software.

[00:08:03] In fact, Tom Chivalier and Disney Trenakitz and two members of our founding team that run technology and product have won every award for HR tech innovation that there is. We're going to be taking the platform that we've built and deploying it across the entire sourcing funnel

[00:08:20] for recruitment. And that is going to take what may be offline management of search and offline management of social and offline management of x, y, and z, and putting it into for lack of a better word of programatically managed platform. And it's the first company we've

[00:08:36] ever bought. So I really hope it works out because I had to go to mom and dad in Europe and ask for a whole bunch of money. And they said, be sure not to spend your allowance all at the same time and

[00:08:45] save some and do a good job. So hopefully it works out. I love that. So you went from 238 headcount to over 550. I'm assuming this is the biggest company that you've ever managed, right?

[00:08:59] It is. And so appcast was larger. So we were in the 300's and the art was about 230. Yeah, no, I'm completely out of my depth. I'm having it all and luckily my colleagues are super good and

[00:09:09] super smart. And the in essence run the company. The last two weeks, I was in 10 cities and 10 days. I got to visit all five of the new appcast offices. And I got to meet a slug of new appcast customers

[00:09:23] that came from the acquisition. And I'll tell you, appcast may have a reputation for being nice. Every meeting I went into, the traditional historic Bayard team that came with me, we're hugged. Literally hugged by their clients. And what was cool is we went in and none of those

[00:09:39] conversations were fluffy. They weren't like, hey, everything's great. But we talked about some stuff working, some stuff isn't working. Yeah. But the depth of partnership there is just remarkable and we're super excited. Well Bayard has an incredible reputation as well, right?

[00:09:54] It's combining two really great companies together and hopefully the synergy works. But now you have over 2,000 clients in the US and 10 other countries. You're one of the biggest full service recruitment marketing agencies in the world. The, the, the, where the largest buyer

[00:10:12] of indeed in the world, where the largest, the recruiter in the world by media under management, where the largest recruitment advertising buyer in the world. You know, we're a 550 person

[00:10:23] can't a what pass. So it's going to be fun. I love that. The biggest topic of conversation by cynics in the industry is, okay, this is great. But it's a little bit of a different model. I guess the

[00:10:33] only comparison to it is recruiters acquiring care, TM, and 2019. But the question is you have a lot of job boards and recruitment marketing agencies as clients. And now you are acquiring one of the

[00:10:48] biggest players who is their competition. So I guess the question here is how do you plan to manage that? How do you plan to mitigate the risk that is associated with doing this? Yeah. So first off,

[00:11:01] the Sunday before we announced, I called a bunch of my friends that own and run ad agencies. And I was scared would be the wrong word like you don't want to call your friend and give

[00:11:11] some news that they may not like. Yeah. And just for your listeners, there's two types of solutions providers in the recruitment marketing space. There are agencies that have built their own or acquired their own technology. And that's what crews can see. Okay. There's agencies that

[00:11:28] licensed technology either from us, Jovio, Pando. And then their pure play programmatic providers, which used to be what appcast was. But now is more specifically like Jovio and Pando. Everybody in all those categories, great companies, and they make slightly different versions

[00:11:45] of pizza. The agencies that use Jovio and Pando as their demand side platform to buy job ads, this was no different than yesterday were competing with everybody. The folks that have their own technology, it's like, okay, it's not really all that different. We're not dependent on appcast

[00:12:00] and we've always been competing with them a little bit. So the phone calls I made were to the people that run and own the agencies that use our DSP. And a couple things about these folks won,

[00:12:12] the vast majority of them have been our friends and have been mentors to me. And their businesses have been important to our business and continue to be. And so the conversation went like

[00:12:24] this one. We're never going to do anything that's going to hurt you. We're not pulling our technology away from you guys. In fact, in those phone calls and in an immediate email afterwards

[00:12:34] if somebody's using our DSP we offered to extend their access to the DSP on the same contractual terms, same contract, no negotiation, same prices, no increases for three years. And they just get

[00:12:46] to change the date. And if they want to do it and most of them are doing it. Two, I said, listen, if you got to make change, I totally get it. You got to make her own business decisions. We will

[00:12:55] make whatever transition that you need to make as easy as possible. And we will be very good partners there. And then the third thing that I said was the realities that we've been competing with each other.

[00:13:07] Yeah. But the competition to use kind of a teenage boy version of the analogy is playing pick up basketball with your buddies on Saturday afternoon or let's say young 20s because I'm going to

[00:13:17] talk about having a beer. When you play basketball with your buddies, the rules are there and you play by the rules. But you may throw an elbow and they may throw an elbow to you and every once

[00:13:27] in a while somebody gets a bloody nose and the yellow each other, it's okay. The day men's, the winners buy the losers the beer and you're still friends and it's okay. And that's the way

[00:13:37] we've always operated. We've lost customers. This is one of the ironic things is funny. This we lost customers to Bayard and then we bought Bayard and the customers were back. That happens in the agency space. There's always been kind of an understanding that

[00:13:51] everybody plays fair. Now, there's a concern that some of them have because they use our DSP. Elements of our team have access to information that is competitive. We've always siloed that we will continue to silo it. Some folks have asked us to do even some more things

[00:14:07] just to make sure no one outside of their direct account teams and the technology team have access to it and we're happy to do all that. So, at the other day people are going to make good

[00:14:17] business decisions for their companies and their families and that's all that we want. We recognize this decision may have an impact and some folks may move. My expectation is I don't think they will.

[00:14:28] But we'll see. On the job board side, interestingly, all the job boards are really happy with what's going on. The publisher response has been excellent. We're now not surprisingly we're a big customer of

[00:14:40] like all of them. So you would expect everybody to be nice but it's been very well received. There's some things that we've done technologically at app cast in terms of how we integrate with publishers

[00:14:53] that they're happy to see being moved onto a broader amount of spend. The responses that we got from our big partners and indeed ends up recruiting been warm and kind, it's been really good.

[00:15:03] I was going to ask what the response from indeed ends up recruiting. So thank you for preempting that. The question I have for you, so let's look in a crystal ball. Two years from now.

[00:15:13] This acquisition, the dust is settle. What is going to be success for you? What do you measuring that you're going to be like this was a good move that we acquired bear?

[00:15:25] The first thing is, and I'm going to answer it in a way that is going to sound kind of goofy and they're all interrelated. Number one is, app cast currently has a 67 employee NPS score.

[00:15:37] So for again, your listeners and PS is, would you recommend working at app cast? It can go from minus 100 to 100. Anything above zero is positive. Anything above 20 is considered pretty damn good. Anything above 40 is considered exceptional. And so one, I want to see that number the

[00:15:57] same or better for the community of people that are building app cast. Two, our customers need to be seeing better outcomes for their goals. It's easy to say, oh, we want to get more hires for less.

[00:16:13] Interestingly in this environment, that may not be a goal. The goal may be I need a certain number of hires period. And in other places, I want absolute efficiency. Or in other places, I want to

[00:16:25] titrate my hires over time in the right way. But fundamentally for the customers that trust their recruitment marketing budgets with us, we need to be showing material, double digit improvement in our performance against their goals. And then third thing is, we got a number.

[00:16:45] And that number is growing a lot. And it's hard for me to answer questions about, oh, we want to be this strategic idea. I'm not a strategic idea guy. What I want is if your business is growing,

[00:16:58] that means new people are coming to you. If you're delivering for your clients, they're exceptionally happy with you. And we have a 99% customer retention rate. And that's good. And number three is those two things growth and customer attention and happiness is a function of the

[00:17:14] people that come in and build the business every day. That's not Chris. That's not my executive. That's the people that are doing the work. And those are the three things I want to see.

[00:17:24] Very interesting. I do want to talk about stepstone. So last time you came on the show, it was right after the acquisition. And now we're what two years in, approximately a little bit more. So it was July 2019. We predated the care to acquisition by a couple of weeks.

[00:17:40] How's that working for you? How is the relationship with stepstone? How is it help grow appcast and put you in a position that you're in right now? Yeah. So first off on a personal level,

[00:17:50] I'm 53. I got gray hair. I've been doing this for a while. I'm playing for the love of the game. Chris, you had gray hair when I met you 10 years ago. I know it's an old saw. That's my kids. But anyway,

[00:18:01] I'm playing for the love of the game right now. I start working typically at 530 in the morning because I'm having a ball. The team at stepstone specifically Sebastian Deppmer is who's the

[00:18:14] CEO of stepstone is one of the smartest, most hegic guys. I've ever met. I don't work for people. That's not my gig and I love working for that guy. It's interesting. The combination he thinks

[00:18:27] in long horizons. And I'm a company commander. I'm fighting the battle every day. And so it's been a super positive professional development and experience for me. So I love it. And I don't have

[00:18:43] any reason to stay. And I'm staying because it's great. For Appcast, what's interesting is the North American business or I guess now we call it the Solutions Business because it's going somewhat global is completely and utterly independent of the market place business. Okay? So like

[00:18:59] we buy traffic from our sister and brother companies over in Europe. The same way we buy traffic from indeed zipper crude or linked in like everybody. And I'll be sitting in briefings and our marketplace teams will be talking about the challenges that they're having in the European

[00:19:17] market. And I'm like, oh well those are my partners. We're totally different thing. And financially Appcast has always been profitable. And from an investment standpoint we've been investing in ourselves even after the acquisition. And so there's that the support that we've gotten

[00:19:35] comes in two forms one is the professional development for our people. Steps don't has a fantastic global professional development program just world class. And the second thing is the confidence to skate in aggressive game of hockey. I never in a million years if Appcast was

[00:19:52] still independent would have had the courage to buy Bayard. But it was knowing that like, okay, we're good. The business is solid. How do we take this to the next level? And so

[00:20:07] if we want to talk about the greatest impact that being part of stepsonous had is just a confidence to not play a defensive game but to play an offensive game and plus just a bunch of great friends

[00:20:19] and great care of our people. Love it. So this is without intention Chris has turned into probably the best employer branding at. For Appcast because I'm listening to you thinking, okay,

[00:20:34] this is the type of company I want to work for it's such an incredible marriage. My fear I have to admit Chris when I heard about the acquisition, I thought, okay, I have worked in my

[00:20:46] lifetime for a company that was 100 years old. You ain't never changing their culture. It doesn't matter what you do. Even if you turned over the entire population of the company,

[00:21:00] you'd never get rid of the culture. But I do have more of a technical question for you and that is around what we are seeing in the job board world specifically indeed most recently reported

[00:21:12] that there was a 17% drop in full-world job. It's stuff out there. Yeah. Let's go went on. Well, it's an interesting set of macroeconomic impacts that are impacting the largest job ad business in the world, the United States. So let's think about it first off. Labor participation

[00:21:37] rate is going up. More people are coming on sidelines to take jobs. Economists will talk about all the different reasons why some of it is the bank accounts that were stuffed full during COVID are getting smaller. People need to move back in looking at the female participation rate

[00:21:54] in the labor market is increasing. There's all sorts of stuff. But go back to macroeconomics. More people want a job. One, two companies are hiring less. Why? Money is expensive. So if you think

[00:22:11] about gig marketplaces, a lot of those business models are still speculative and run on venture capital and private equity. Well, new interest rates go on up. That money is way more expensive

[00:22:22] and as a result it comes on down. Two, stock market dropping. It's getting way better now. Go check your 401k. It's much better now than it was six months ago. All of a sudden you started to see

[00:22:32] organizations focus more on bottom line versus grow at any cost. That reduced hiring. And then also consumer demand are parent companies, parent company, Axel Springer owns Politico and Business Insider. And so Insider today, there is an article talking about the demand for cardboard

[00:22:53] is down 10% this year. Cardboard goes into boxes. Boxes deliver to our homes or what a drive a lot of hiring. You need some of you put stuff in boxes. You need some to get the box

[00:23:06] to the airplane. The airplane to this, like 10% down is 10% down. Yeah. And so that has not gone effects. So the bottom line is less jobs being posted, more people in the market has two impacts.

[00:23:21] One, there's just less money being spent on job advertising. But it's more than that. More people in the market creates more organic traffic, more free traffic to be on career sites. Increased organic traffic reduces the need for people to spend money to get the applicants they need

[00:23:39] to hire. And then the other thing to remember is in the United States and this is different than in Asia, different in Europe. The marketplaces are marketplaces. So the cost of what a click

[00:23:52] costs is a function of how many people want to buy that click at that point in time. So if demand goes down or supply goes up or both, then marketplaces have more clicks to sell and the price comes

[00:24:05] down. So far this year, you've seen market pricing decrease. So more organic traffic, meaning, spend two less jobs being advertised, which means less money is spent. And three, increase supply of job seekers and lower demand equals lower prices. All three of those things

[00:24:23] are what's driving what's going on in the marketplaces. It's hitting everybody. And so the winners in this marketplace are the people that continue to grow their customer account. Even if they're

[00:24:32] not spending a lot grown new customers and two, hug them to death, make joy come out of their ears. So that you retain them because at some point you're going to be doing a flex on, oh my gosh,

[00:24:46] everything's becoming more expensive. Why? It's a supply and demand change. Prices are going to up fast. And we're going to be seeing what we're seeing now on the upswing. So do I see it? Yes,

[00:24:58] is it hitting every job marketplace in the United States? Yes, is it hitting some more than others? Yes. Is it hanging out? Because yeah, we're super lucky. We look at our business through a couple

[00:25:08] core segments, employer gig and then wholesale and our employer business is still growing, which is different but gig and wholesale is wholesale's job sites. Those are structurally down because people are just business and the prices are lower. So Chris, let's pretend no one is listening to this.

[00:25:27] But I'm not going to ask you to go off the record. What is coming up for appcast? So obviously massive transaction, there is some consolidation it looks like in the marketplace right now.

[00:25:39] Who are you acquiring next? Is it agencies? Is it job boards or what's coming? Dude, I'm going to go visit my mother. I've been on the road for 10 cities and 10 days. I'm exhausted. Everybody here is working so hard. Haven't had a real vacation this summer. And the most

[00:25:57] strategic thing I'm trying to figure out is how to go see mom and dad at San Diego. Okay, I guess you've had a lot on your plate and this is like, you know what? I thought it was fascinating

[00:26:08] when you mentioned that this is the first acquisition that you've ever done. Kudos to you. This is like a big one. I don't think you'll be able to beat this transaction for the rest of your career or

[00:26:17] maybe you will. But on that note, Chris, thank you so much for coming on the show. This information was really insightful, but also I think there's a lot of curiosity of this transaction because

[00:26:28] a lot of other players in the marketplace are thinking how is this changing and how can we adapt to it? So you guys are ahead of the curve. Chris, if anyone's looking to get a whole of you,

[00:26:38] find out more about Chris Foreman, what's easiest way for someone to reach out to you? First. Foreman at appcast.io 80 cahst.io and Foreman is spelled like Uncle George No E. Fawara Man. Perfect. Chris, thanks again. Really appreciate that. So much Chris, wonderful to see you again.

[00:26:57] You guys are fun. Do you love news about LinkedIn, indeed, Google and just about every other recruitment tech company out there? Hell yeah, I'm Chad. I'm cheese. We're the Chad and G's podcast. All the latest recruiting news and insights are on our show.

[00:27:22] Dripping in snark and attitude. Subscribe today wherever you listen to your podcasts. We out!