As usual, this week, Chad & Cheese dive into the latest news and developments in the HR and technology sectors, featuring updates on Deel, Klarna's AI integration, Google's data deal with Stack Overflow, and lots more. Drink it in:
DEEL's Acquisition Spree: We start with Deel, the HR startup making waves with its recent acquisition of African-based PaySpace, following last week's purchase of Zavvy. This marks Deel's largest acquisition yet, as it aims to strengthen its presence in Africa and reach $500M in annual recurring revenue, with plans for an IPO in 2025/2026.
ZipRecruiter and Appcast's Pricing Changes: While Deel celebrates its growth, others like ZipRecruiter are facing scrutiny for a nearly 74% price hike without clear additional value. Meanwhile, Appcast is transitioning its business model away from supporting customers below the $20K/mo. spend, raising questions about its strategy and impact on agencies.
Klarna's Efficiency with AI: Klarna's partnership with OpenAI has resulted in significant efficiency improvements, with its chatbot managing two-thirds of customer service chats in 23 markets and 35 languages. The integration is expected to increase profits by $40 million in 2024, raising questions about the impact on recruiting.
Google's Data Deal with Stack Overflow: Google's Gemini chatbot will now utilize Stack Overflow's Q&A for coding assistance, marking Stack Overflow's first customer for paid access to content used to train AI chatbots. This deal could have significant commercial implications for Stack Overflow.
Indeed's Missteps: Finally, we touch on Indeed's recent controversies, including a disappointing Willy Wonka chocolate factory experience and a racist job ad that was posted on the platform. These incidents raise questions about Indeed's oversight and use of AI in job postings. It's enough to make you forget politics, global conflict and the increase in prices at Chipotle. You're welcome.
Intro: Hide your kids. Lock the doors. You're listening to HR's most dangerous podcast. Chad Sowash and Joel Cheeseman are here to punch the recruiting industry, right where it hurts. Complete with breaking news, brash opinion, and loads of snark. Buckle up, boys and girls. It's time for the Chad & Cheese Podcast.
[music]
Joel: Oh, yeah. Two guys who are not quite ready to start cutting interest rates. What's up kids? You are listening to the Chad & Cheese Podcast. I'm your co-host Joel on the road again Cheeseman.
Chad: This is Chad flock off Sowash.
Joel: And on this episode, it's Deal's world, we're all just renting space. Indeed's new Oompa-Loompa job search category. Let's do this. It's been a week, Chad. It's been a week.
Chad: It doesn't feel like...
Joel: I can use some Vegas time. I don't know about you.
Chad: Yeah, I definitely feel some Vegas time. Yes. Vegas.
Joel: You need Europe soon. I could... Like you're almost on peak, ready to get the hell out of the US.
Chad: Yeah. This, I mean, it's a obviously an election year. That makes it worse.
Joel: Yeah.
Chad: So, yeah. 'Cause all of the stupidity just gets compounded and it's just like, oh, gimme the fuck. Cow gone. Take me away. Get me the fuck outta here.
[laughter]
Joel: So this just drops it out, if you saw this. Netflix is going to air a boxing match. Have you seen this?
Chad: Uh-uh.
Joel: Any guesses on who's fighting?
Chad: I have no clue. I have no clue.
Joel: All right. Old guy, Mike Tyson.
Chad: Yes. Okay.
Joel: Versus Jake Paul in a boxing match. Live on Netflix. I, for one am here for it. I, for one.
[laughter]
Chad: So this is not like a premium, you have to pay additional for it. Is that what I'm hearing?
Joel: If you have Netflix...
Chad: Okay.
Joel: You can... It's on. And, to me, this is the future of like live events because anyone in the world that has Netflix can watch it. It may be 4:00 in the morning in Malaysia or whatever, but when it airs, you don't need the local CBS, you know, affiliate. You can watch it anywhere. And for me, like YouTube and Netflix are probably the only two companies that have like a global anyone-can-watch-when-it's-on thing. And I think this is where, you know, sports and live events are going. So kudos to Netflix. I think it's pretty cool. I know, I'm gonna watch. And you'll probably watch too.
Chad: Yeah.
Joel: And knowing our listeners, they're all gonna watch as well.
Chad: Okay. So I remember Flat Blast from the past. I remember, I think it was 1990. It had to been, 1990 when Buster Douglas beat Mike Tyson. I was on the beach in Panama going through scuba diver training.
Joel: Scuba diving.
Chad: Scuba diver, training and it was a... I can remember it so vividly, 'cause I remember watching Mike Tyson up through high school, just batter and obliterate motherfuckers. And this guy comes outta nowhere from Columbus, Ohio and takes down Mike Tyson. I just thought that that was amazing.
Joel: Tyson was the most awesome, until that moment, the most awesome boxer I had ever seen.
Chad: Yeah. If you wanna see the best fight of all time, go watch Hagler, Hearns. That was probably the best, the best, I think two or three rounds of a fight [laughter] that you can get.
Joel: Yeah. There's some good ones. There's some great, great boxing matches. Oh, we're so goddamn old.
Chad: Oh, we are. Here we go. I'm going. I'm going. I'm gone. I gotta do this. I gotta do it. Are we ready?
Joel: I'm ready.
Chad: Okay. So this is a shout out to the dumb ass of the week after last week's idiot CEO at Wendy's pitched surge pricing. I mean, dynamic food pricing. This week eight... WK Kellogg's, CEO, Gary Pilnick earns the dumb ass of the weak monitor. Just watch.
Speaker 4: When you think about our consumer under pressure, there's things that we could do, but most importantly, what this category could do, the cereal category has always been quite affordable, and it tends to be a great destination when consumers are under pressure. So some of the things that we're doing is first messaging. We gotta reach the consumer where they are. So we're advertising about cereal for dinner. If you think about the cost of cereal for a family versus what they might otherwise do, that's gonna be much more affordable.
SFX: Doesn't anyone notice this? I feel like I'm taking crazy pills.
Chad: So, while CEOs, boards and c-suite wages have skyrocketed, and people actually doing the fucking work, can't keep up with their bills, the dumb ass of the week, Gary here sees a perfect, a perfect let 'em eat cake moments. Right? Let 'em eat cereal. I mean, how fucking tone-deaf is that? While that motherfucker's having Wagyu beef three times a damn day, [laughter] it's okay that the peasant labor class is having to, you know, have his version of gruel for dinner. I just, it, this is happening every single week. And [laughter] I just don't get it, man.
Joel: Where are the PR firms coming from that are advising these food companies, look...
Chad: Fired, I hope.
Joel: I mean, you know, I gave a better answer, I think than probably the most PR firms is like, they should have... The Wendy's thing should have been, we're gonna have pricing higher at lunchtime, but we're gonna give it back to the workers because that's when they worked the hard.
Chad: They didn't intend for that, though.
Joel: That would've been a great spin, right? For this move.
Chad: If it's true.
Joel: This move reminded me of, and as we're dating ourselves, you've obviously seen the movie Mr. Mom.
Chad: Oh God. Yeah. Yeah.
Joel: So, Mr. Mom, Teri Garr gets a job, which back in the day, that was, that was crazy that a woman could have an executive job. And they're selling tuna, and her thing is like, look, times are hard, we're gonna reduce the price of tuna, and when things get better, we'll go back to our old prices. But for now, we're in this together. You remember this, right?
Chad: Yeah.
Joel: You've seen this movie. He gets little flags out and everything. Like Mr. Mom would've been a better guide for this decision than any PR firm in New York would've been.
Chad: Tone deaf.
Joel: And they do the, it's just like, it's such a slam dunk to compare this, to let them eat cake, that I can't believe these people with MBAs and degrees from Ivy Leagues don't put those pieces together and think this is probably a dumb thing to say.
Chad: They're living an entirely different life than the rest of the world. That's the problem.
Joel: Yeah. They're tone deaf.
Chad: That's the problem. They're in the ivory tower, they're seeing the sunshine, you know, all that other fun stuff. And then there are the peasants in the fucking mud. And they're like...
Joel: You know this fucker hasn't eaten a Froot Loop in his life, and he's telling us to eat it for dinner.
Chad: Yes. Yes.
Joel: All right. All right. Okay. My shout out to getting off the food thing, 'cause it's lunchtime as usual. And I'm gonna be really hangry at the end of the show if we keep up with food. So I'm gonna give a shout out to Craigslist.
Chad: Okay.
Joel: Yeah. That's something we don't, don't do a whole lot on the show, but AIM Group, which we do mention quite a bit on the show, they've been, analyzing Craigslist for 20 years. They go in, they know what the cost of a job posting is because it's really transparent, and they count up how many jobs, and they give a pretty good estimate about where Craigslist is in terms of how much it makes, because Craigslist is this black box. It's a private company. It's just really mysterious.
Chad: Yep.
Joel: So they try to uncover the dollars around this. So they just came out with their new analysis of Craigslist. So the headline or the subtext is, "Craigslist is still the number one general classified site in the US, but the dinosaur may be slowly headed to extinction." So revenue for Craigslist peaked in 2018...
Chad: It's like a billion.
Joel: Which is quite a long time from when it started, right? Like, it took a long time to get to a billion. That was 2018 it 'em 2 billion. Today it's about a third of that in terms of revenue, which is still a lot of money. They have about 500 employees. Their expenses is 15%. So they've got a little bit of margin of profit there in what they're doing.
Chad: Yeah.
Joel: In 2023, they generated the majority of the revenue as they always have with jobs, which was 40%. So that was $58 million in revenue from that. So it is slowly dying. We see a lot of competition, obviously, but it's just fun to occasionally go back to the days of Craigslist launch in '95. It was a newsletter thingy really, before the internet was a thing. Craig Newmark is this weird hippie guy. I went to go to LinkedIn to look at, for information. There's no logo. They have that like building icon like we do, because we don't have a page, that's Craigslist. This is a billion dollar at one point company. No real official LinkedIn page. It's still a mystery, but thanks to AIM Group for making some sense of it. Shout out to them as usual.
Chad: Yeah. And I think, I mean, Craigslist, if you take a look at it, is really almost like a microcosm of a lot of these job sites. It was a lifestyle business, it was, and it exploded. They've embraced tech debt. They've, I mean, it's just like's one of those things like simplicity is working, when this thing dies one day, we'll all be millionaires anyway, so who gives a fuck? Right? So it's, to me, yeah, awesome.
Joel: Yeah. If my math is right, every employee is bringing in "a million plus dollars". So they're doing all right.
Chad: Yeah.
Joel: And when they were making a billion dollars, they were doing really, really all right. Yeah, this nonprofit in San Francisco in their Birkenstocks.
Chad: Oh, I love it.
Joel: And their sweat socks are doing all right.
Chad: I love it.
Joel: Yeah. Craigslist is still trucking just like Monster and CareerBuilder, they're the walking dead among us and just getting more deader all the time. But I'd like, I like some of the death in my bank account.
[laughter]
Chad: Joel wanting some job board into his...
Joel: Yeah. I want some job board with my Froot Loops.
SFX: Shout out.
Chad: I've got one. I've got a shout out to Hybrid.
Joel: Okay. Bring it.
Chad: So I was forwarded a head of talent acquisition job posting on LinkedIn this week from a company named Hybrid. So a TA executive sent it to me and said, hey, here's a job for another talent acquisition, you know, head of talent Acquisition at this company named Hybrid. It was an on-site only job. So...
[laughter]
Chad: I don't...
[laughter]
Chad: The irony behind something like that it's like, ooh, Hybrid. Welcome to hybrid. Okay, what days can I go home? You can't. We've got a, you can set up over here. We got a little bunk, you know, we got bunk beds or more time for activities. So yes, shout out to Hybrid for not being so hybrid.
Joel: I love it. And I love good irony, which is why I'm wearing my Nikki Haley For President t-shirt today.
Chad: Yes.
Joel: Speaking of, of dead campaigns, Chad and the walking dead with Craigslist, you probably saw that LinkedIn was down this week, and not that kind of down.
Chad: Recruiters went fucking crazy.
Joel: They went nuts. They went nuts. So it was, it was down for about an hour and a half. It follows a Meta crash and Instagram, which was, was worse, which also followed an a, an AT&T down downage. So...
SFX: That was big.
Joel: Bring on the conspiracy theories now, because Twitter's still up and TikTok is still up. So do with that what you will conspiracy theorist. But I felt like the shout out really goes to the people on Twitter and the socials who sounded off about LinkedIn going down. So here's just a, here's just a piece of what some of the, some of the Internet's famous said. So ChristineKK94 said, "LinkedIn bros already rehearsing their, 'I'm honored to be back,' speeches for tomorrow like they just survived a digital apocalypse."
Joel: Liam, LiamKillingStad tweeted, "It's crazy how LinkedIn is down, but PornHub is still working. At least that's what I heard." And our friends, our friends at HireEasy, Chad...
Chad: Yes.
Joel: Did not miss an opportunity to stick it to LinkedIn. They tweeted, "With LinkedIn down, it's the perfect time to embrace modern tech, to message candidates," promoting its AI email generator for recruiters products. So shout out to them for taking an opportunity to market their stuff while LinkedIn was down.
Chad: Kick kick 'em.
Joel: Kick 'em when they're down, Chad.
Chad: Kick 'em when they're down. That's what I'm talking about.
Joel: Kick 'em when they're down.
Chad: That's what I'm talking about.
Joel: That's right. But who's not getting kicked, Chad?
Chad: The people who want free stuff, because...
Joel: The free stuff.
Chad: This week, and I'm gonna let the cat out of the back here, kids. This week we've been going back and forths, semi arguing about what design's gonna go on the front of the t-shirt. Okay? We've been having fun with it. There have been like 20 different iterations. So I gotta give Joel big props for that, 'cause he's been going back and forth with the designers. But our friends at Aaron app. I actually have a sticker on my, that little sloth guy. He's a cute little guy. They're our new t-shirt sponsor. So be looking for those to come out here. And any event, at any event soon. Beer, again, you gotta go to free. You gotta go Chadcheese.com/free. Register for all this stuff. Beer by Aspen Tech Labs. Whiskey by Textkernel. Get two bottles of whiskey. One from Joel, one from me. And then if it's your birthday, you know, you want a little rum from Plum or at least register to win some rum from Plum.
SFX: Can you feel the tension in the air right now?
Joel: That's right. That's right. You know what that sound means?
SFX: I know I can. I can feel it all the way down to my plums.
Joel: Oh yeah. So celebrating another trip around the sun, I put in two weeks because we're gonna be in Vegas next week.
Chad: Okay.
Joel: So the list is a little bit long, so bear with me here.
Chad: Okay.
Joel: We got Iron Mike Schaeffer from Factory Fix, celebrating...
Chad: Nice.
Joel: Another birthday. Ashley Collins. Barb Francilo, Michael de Aloya, I always can never pronounce that. Mel Skasdden, Robert Williams, Tracy Morris. Jeffrey Wagner, Beat Michael Mueller. It's Beat or Beat, he's foreign.
Chad: Beat.
Joel: But it's Michael Jackson, Beat It, Michael Mueller. Bill Fanning, our friend, David Altman, James Cleaver, Ryan Gibbons, Remington Hampton. That's a cool name. John Middleton, Deb Ender Chuck, Leanne Chase, Dean DeCosta. Amanda Hon, Ryan Estes, Bruce Gee, Craig Watson.
Chad: Wow.
Joel: Down under.
Chad: Yeah.
Joel: And Kip Kyle Hager is celebrating another trip around the sun. So happy birthday everybody, happy birthday.
SFX: Happy birthday.
Joel: Happy birthday.
Chad: Oh geez. Well, hopefully we'll see some of those guys as we're at events. As we'd said next week, we're going to be at Transform, but then we're going to Europe. That's right. You know, synthesizers, you know, the Europeans love 'em. We're gonna be at the E-Recruitment Congress in Amsterdam, March 19th, full day in Amsterdam, dedicated to presentations and knowledge around the AI shift in recruitment and technology. We're looking forward to it. I don't know, I think it might actually be full up. I don't, not sure that there are any seats left, but just in case, go to Chadcheese.com/events. You can look to see if you can register there. You might get the last couple of, couple of seats.
Joel: And I'd be remiss without mentioning, Chad, that it is the beginning of the month, which means we're gonna get our monthly report from the Feds about the job market, which means it's another episode with the Sasquatch of Statistics. Toby Dayton from Linkup is gonna hook up with you, 'cause I'm gonna be on a plane, I think en route to look over the numbers which come out tomorrow as you're listening to this. So make sure you tune into that. Only on YouTube, youtube.com/atChadCheese. Tune in.
Chad: There it is.
Joel: And subscribe and like, and share.
SFX: Stop it!
[music]
Joel: All right. Chad, are you ready some, ready for some news from Africa. All right. HR startup Deel is acquiring African-based PaySpace. Its largest acquisition yet, although terms were not disclosed. That's following last week's purchase of Zavvy which we've talked about. PaySpace serves 14,000-plus customers across 44 countries, including major brands. Deel made the deal, get it? Sorry, I...
Chad: Again, two weeks in a row.
Joel: Yeah, it's too easy. As it aims to strengthen its presence in Africa, while it reaches 500 million, that's up from 400 million in ARR with plans for an IPO in 2025 or '26. Chad, your thoughts on one of the greatest songs, frankly, of all time...
Chad: Thank you. Yes.
Joel: As well as the news. The news out of Deel.
Chad: Never get enough total. Africa is a huge growth market. I mean, not to mention PaySpace services over 14,000 clients in 44 countries across Europe, PaySpace is perfect for Deel, which is a global EOR, employer record company looking to pick up some great tech services anchor to a growth market, and is moving quickly to, that's right, kids, HCM, the human capital management platform side of the house. So when they go from EOR to HCM, that opens up Deel's total addressable market making Deel a global workforce HCM, along with the EOR services that they provide. How many HCM providers actually do EOR today themselves? That's native to their platform? I can't think of any off the top of my head. So I think this is big for Deel. ADP's revenue in 2023 was 18 billion. I mean, I love the subtle flex, not so subtle flex of adding $100 million...
Joel: Hundred million. [laughter]
Chad: To your ARR because it's just a few weeks ago we were talking about, oh, holy shit, they've got 400 million in ARR, that's pretty fucking awesome. And then a few weeks later they're like, oh, no, I'm sorry about that, [chuckle] yeah, we did, we forgot to carry a one. That's 500 million, right? So subtle flex, but there's great opportunity not just from an EOR standpoint, but opening up and really starting to, you know, take, maybe take some of the, not just the ADP revenues, but the Ripplings. There are tons and tons of big whales out there that don't have quite new tech. I mean, Rippling not one of those. They're pretty new, but there's great opportunity.
Joel: Yeah. Yeah. It's big.
SFX: What are you doing step bro?
Joel: Chad, I'm running out of adjectives for Deel, frankly. You know, the world at large has NVIDIA, these guys might be our NVIDIA at the moment. You mentioned Rippling. There was a whole flock of these, that we talked about extensively, Remote, Oyster, et cetera.
Chad: Flockitys, is that what you said? Flockity? [laughter]
Joel: Any metric that's publicly available says that Deel is crushing all of these guys.
Chad: Yeah.
Joel: Rippling may be the closest to it, but, it's just an impressive onslaught of deals and growth that Deel is dropping on our community. I can't wait for the IPO. We're gonna talk about that a lot, obviously.
[laughter]
Joel: It could be the damn break. I mean, to me, this is like the next Indeed, this is the next Workday, this is the next LinkedIn. Like I think we're gonna be talking about these guys as the 800-pound gorilla in that category. And we're watching it unfold, in front of our eyes. So unless this is some like Enron level bullshit fraud, that's gonna take us all off our...
Chad: Don't say that. Don't say that.
Joel: No accusations. I'm just saying, unless this is like, what the hell was that? They pulled it on all of us. These guys are crushing it. Just a few numbers for you. In terms of hiring, their sales department is up 170%, in a year. Their project management is up 702% headcount on the year. Their engineering is up 328%, biz dev, the guys that make the sales, the guys, the gals doing the real work, 632% growth in the year. Look at their competition and it's nothing, no. Double digit growth is good. Oyster is shrinking like Oyster, we might as well just disregard. They might be an acquisition for Deel next to get them to a billion ARR, I don't know. Long story short, I'm running out of adjectives. They need to like slow down because I can't keep up.
Joel: It's a lot of fun covering these guys. And by the way, who's doing shit in Africa? Real, like, we hardly ever talk about that. Like these guys are so large, these guys are making shit happen so aggressively. Like they're talking Africa, they're gonna talk... Antarctica. They're gonna be growing into, pretty soon. They're gonna be launching Antarctica Deel any minute now, I'm sure. But yeah, this is fun to watch. It's exciting. It's fun. I can't wait till they go public and we have public numbers to see actually what's going on and, really, really have some fun with it. Because talking about ZipRecruiter stock is a little boring, Chad. It's a little bit of a downer in my opinion. Anyway.
Chad: Yes.
Joel: Speaking of downers, let's go to our next story, 'cause I'm, I'm running out of words for Deel.
Chad: Which is, a ZipRecruiter, and this is somewhat of a downer, especially if you are a client of ZipRecruiter. This next one comes from a friend of the show, Tim Sackett, where Tim writes, "Hello Chad and Cheese," no, just kidding...
Joel: Hey, dip shits.
Chad: ZipRecruiter. Yeah. Hey, assholes. "ZipRecruiter came out today and is asking for price increases for current clients. Our current contract is roughly $92,000. And to keep the exact same products, they now want roughly $160,000. They aren't even a top source for us. So we'll be saying goodbye." So Joel, is this really time for an increase?
Joel: Well, if you do it right, anytime can be a time for an increase.
[laughter]
Chad: Oh, so should they have done surge pricing? Is that what I'm hearing?
Joel: Well, I'm surging right now after talking about Deel. There's price increases and there's like desperation price increases. Like, you gotta know how to boil the frog, right? You gotta know how to do it at a degree at a time. Look, Netflix is great at this. Netflix is a great service. But over time, like before you know it, you're not paying 7.99 a month anymore. You're paying 14.99, and you're like, what the hell happened? But it didn't hurt, so like you keep doing it and pretty soon before you know it, you're paying 29 a month. And if they keep having Mike Tyson fight, it might be 99 bucks a month. But this reeks of stupidity, you don't just drop 73% increase or whatever it is on, your customers. And I'm guessing Sackett had been a customer for a really long time.
Chad: He had to have been.
Joel: I'm guessing. Yeah. So like, let's take one of our, let's take a customer that's been around forever, that is a figurehead in the industry that a lot of people know and let's stick him with a big price increase. And now he's gonna cancel and not come back and tell all his recruiting buddies like ZipRecruiter is full of shit. And then they're gonna think twice about using ZipRecruiter. I don't know how you walk back from this. It's kind of tough. We talked about their quarterly earnings recently, like, life is not great at ZipRecruiter and this is gonna make it a lot worse. Like, you gotta learn how to boil the frog. I mean, as much as we love Indeed, right? They stuck the price increase in the terms of service. Like the new thing made it look, did it right, At least. And before you know it, you're spending a lot more at Indeed than you would otherwise. But it doesn't feel like it because they didn't put a 73% increase on you overnight. So bad move, another bad move in the many bad moves that we talk about from ZipRecruiter on a regular basis.
Chad: So if you take a look at it, same product, almost double the price, at least Indeed is trying to fake giving more value, with the new price increases. I mean, we all know it's bullshit, but they're trying to fake it, right? We'll see if that actually passes. But we say it all the time, The SMB market is a bitch. It it is. And that's where Zip that's where they, earned their bones, man was on the SMB side of the house. Zip entered the enterprise market way too late. Bigger accounts, less transactional and more sustainable, right? Expanding the total addressable market just isn't that easy, especially when you're going after it this way.
Chad: Not to mention they were spending much like, and this is very reminiscent of Monster, CareerBuilder, Indeed spending loads of money on Super Bowl commercials for that SMB market to try to drive those single postings, those small job packs and whatnot. But that was more on the transactional side. Spending that kind of money is just not sustainable. Now, Zip didn't do Super Bowl commercials, but they were the biggest, and I don't know if they currently are, they were the biggest spender in podcast advertising across the globe, right? So again, to be able to meet the SMB market, you have to spend tons of cash 'cause you have to be on the top of minds of those small businesses. 'Cause they don't need you every day. Right? Enterprise need you every fucking day so that they, went kind of backwards at it. So this is, it's kicking their ass right now.
Joel: In many ways and I know I've said this before, but they're a victim of their own success. They did such a good job of we're for the small guy, we're for that bar owner down the street that, you went to school with, that trying to pivot into enterprise, go public, try to be bigger than what you are, has bit them in the ass. And, yeah, if they're giving these price increases to Sackett, I can't imagine what, the bar guy down the street is thinking about the price increases.
Chad: Yeah. When I was at Monster, 75% of the revenue that we actually received was from staffing company. And Tim's a staffing company, right? Yep. So I guarantee you what they're trying to do, okay, let me knock on wood. What I think they're trying to do is they're trying to juice the staffing company.
Joel: Stick it to 'em?
Chad: Yeah. They're trying to juice the staffing company, say, hey look, they can't live without us, so we're gonna make them pay. Well, I think what they're gonna find is that they can probably, live without you.
Joel: It's good for Indeed.
SFX: 60% of the time it works, every time.
Joel: Well, let's go ahead and let's talk about another big name. Appcast. So a TA leader who is an avid listener and Appcast client sent me the following message from his Appcast representative, "With the acquisition of Bayard last year, we, Appcast, are currently rolling out some changes to our business model. Currently, we are transitioning away from supporting customers below a $20,000 per month spend." Whew. "With an end of March target date." So Joel, what would the response be from you if you received a message like this from your representative.
SFX: Take off will ya we're doin' our movie! Don't wreck our show, you hoser!
Joel: Look at what they do, not what they say. Chris Forman, CEO, founder, Appcast was on a charm offensive when they acquired Bayard saying nothing's going to change, it's all good. We love agencies, blah, blah, blah. And then you see stuff like this that says, you know what? We just want big companies with agency dollars to be our clients. And what it says to me is they're becoming competition for the shakers, the NASs, the Braden C's of the world. And if those folks aren't thinking about plan B and C, which I'm giving them the benefit of the doubt that they have, but they definitely should because Appcast is coming for them, period. And that's what this move says to me.
Chad: So, story time. Years ago, when I was in radio advertising, I would have prospective advertisers with smaller budgets that I would have to turn down because the budget would be enough to run one 30-second commercial in drive time for the entire month. Right? And that in itself is not gonna give you the sales and/or brand expectations, brand awareness expectations that you wanted. So I would introduce them to some of our sister stations who could help them, right? With their budget size. Unlike ZipRecruiter, Appcast understands their total addressable market. That's what I'm seeing here. So, is that a bad thing? Zip is all over the place and it seems like Appcast is literally just trying to focus and be more disciplined. So, what I don't agree with is the way in which this Appcast representative handled the situation. So, I assure you Appcast does not, I repeat, does not want to be the new most hated brand in the industry. I'm sure they'd rather allow that to just stay with Indeed, right? Or in this case, ZipRecruiter. Appcast and Bayard, who know who they are, they are enterprise. And as what we talked about before, that's not a bad thing. But in the journey, they can't tell clients to save money by eating cornflakes and spending that cash with them, right?
Chad: I mean, it's like, yeah, we'll just spend less over here and spend more with us. So, they're going to, and I think this is good for some of the smaller agencies, they'll be able to pick up some of those portfolios that just kind of like fall away. If they're spending $15,000 a month and they don't qualify, that's still $180,000 a year, right? That's not a bad size client. But I think, again, the difference between ZipRecruiter, who, they have no discipline. They have no fucking clue what they're doing. They are all over the place. In this case, it really feels like Appcast is trying to tighten things up. They're trying to focus. And the only way that you can do that is to have some of these very, very hard decisions.
Joel: I'm not saying it's a bad decision. It's the 80/20 rule, right? It's 20% of your clients are 80% of your headaches in most cases. In most cases, those are the smaller clients where you're their only...
Chad: Sometimes.
Joel: You're the only game in town. You're all they're doing. They are focused on what you're doing for them. Whereas the big companies, they give money to a lot of people. They're a lot less of a headache. So I'm not saying it's a bad business decision. I think it's probably a great business decision. I just think that it's a shot over the bow of every agency that App... You need to think twice about Appcast being your programmatic solution of choice for your clients. That's all I'm saying.
Chad: Well, I think this is literally Appcast targeting in on Rad agency, right? And saying, look, you guys are enterprise, we're gonna take you down, our tech's better. We've got Baird now we're, I mean, go after the the big fish, the big whale, right?
Joel: Sure. But there aren't many agencies that cater to the little guy.
Chad: I Mean, little guy we're talking about close to $200,000 a year, right? I mean, yeah, depending on what your scale of little guy is, it's a good market. So, yeah, I think.
Joel: Sure is. And if you can take those branding dollars and those job posting dollars and, and, and it becomes a really good business, and that's what Appcast is doing. They're cutting away from the little guys that aren't like big picture, big dollars and they're focusing on the ones that are. So it's good for them. I just think it's a warning to everybody else.
Chad: And again, back to my analogy, if they don't feel like they can do what they need to be able to do from an expectation standpoint for that client, it's better that I push you off to somebody else who can actually give you what you need.
Joel: Do you think they should have a product for those little guys?
Chad: Maybe one day, but right now they're being focused and they're being disciplined. And I really like that. I like that they're doing that. So at the end of the day, sales needs to tighten up. They need to be more diplomats than strong arming perspective clients to get them from 15,000 to 20,000 or whatever it is, right? Because that seemed more like a strong arm tactic email than anything else. But when I talked to, Appcast you know, again, you gotta own it, you gotta know who you are. And I gotta say, I kind of dig it.
Joel: You Know where this is leading, Chad?
Chad: Uh-oh.
Joel: This is leading to that StepStone acquisition of CareerBuilder and Monster to where they have that US footprint.
Chad: No. No.
Joel: And they're gonna send all the little guys...
Chad: No.
Joel: To Monster and CareerBuilder, which they'll own for the little deals and they'll take the big deals.
Chad: No.
Joel: I'm telling you, Chad, I'm telling you I see it. The writing is on the wall.
SFX: 60% of the time it works, everytime time.
Joel: We'll be back. All right, Chad, what a great first block. We have a lot to live up to after that one. All right. Let's talk about, a recent headline from Fast Company that reads, "Klarna says it's AI assistant does the work of 700 people after it laid off 700 people." A Fortune headline reads, "Klarna froze hiring because of AI. Now it says it's chatbot does the work of 700 full-time staff." After partnering with OpenAI, Klarna has seen significant efficiency in its customer service interactions, which is likely to influence other companies around the world to follow their lead. And I think that's probably gonna be a bad thing for recruiting, but maybe we'll unfold that. Chad, what are your thoughts on Klarna's 700?
Chad: So yesterday I spent 20 minutes on hold, right? And I did that 'cause I wanted to, talk to a human being customer service rep because I've used these chatbots and I've used chat on customer service for a few years now. And I don't like it, 'cause it doesn't give me what I want and what I need. I will be async on chat with a service rep for hours, hours. When I wait for 20 minutes. I know I can get on with a human being. I can generally get that taken care of within 45 minutes, right? So yes, I see this as in some cases an opportunity to be able to replace some repetitive types of positions. But the real question is why is Klarna doing this?
Chad: I mean, they could easily just cut heads slowly without filling those positions and still find themselves in this situation without risking the, we like robots over people optics, 'cause that that's what they're looking for here. They're pushing for these types of optics. So why risk bad optics? I think it comes to these three letters. They're your favorite three letters, Joel Cheesman, IPO. They are trying to make a ton of splash in the media with these numbers because they want to go IPO and they want to go big. So we will have to set expectations that any jobs that are routine and repeatable are obviously at risk. Okay? That's gonna happen. But at the end of the day, these guys care more about going IPO and their bank account than any of that shit. And I mean, that's what this feels to me. Every time I hear anything about these guys, they're always pushing toward that 700, 700, 700 and go, oh, wait a minute, what are we looking to do? Oh, IPO. Okay, that makes sense. Perfect sense.
Joel: Did you say IPO?
SFX: I'm happy.
[laughter]
Joel: I agree with you. I think historically, automated customer service blows. Push one for, push two for Spanish, one for English, okay. Especially with a digital phone. And so, are you, you wanna check your balance, press one, you want, like that's an awful experience. But if you had a voice that sounded like a human and I could talk to and I didn't know the difference, maybe a little bit of nuance, here and there, which will probably be cleared up at some point. Like, I'd be okay. Just like job seekers posting, giving their resume to a company and doing a chatbot as opposed to the black hole, that's a good thing. So here's some numbers, from the story. So the bot is managing two-thirds of customer service chats, roughly 2.3 million conversations, 23 markets and 35 languages. So the bots can speak any language and apparently they're getting better about what your accent is, what region of Germany you're from.
Chad: No, it'll get better. Yeah, it will.
Joel: Like it gets better around there. Okay.
Chad: It will.
Joel: The integration is expected to increase profits by $40 million in 2024, the company said. The chatbot's efficiency has resulted in fewer errors, a 25% decrease in repeat inquiries and reduced average conversation times from 11 minutes to two minutes. So I've not talked to this bot, but at least metric wise it's better. So if companies can eliminate headcount and make the customer service experience better, everyone's going to do it. And that's the bottom line of this. Any public... Look, this is the year of efficiency. We keep talking about it. Zuckerberg proof that you can fire 20 million people or 20,000 people and your stock is going to go through the roof because you become more efficient.
Joel: Twitter by still being up or X as Meta crashes and LinkedIn goes down just proves that you can cut 80% of your developer staff and you're still up, right? This is going to bleed into companies all over the place, laying off customer service, laying off sales staff because automation is the way of the future. I'm not saying it's right or wrong. I'm just saying this is the way that it is and this is going to impact recruiting. It's going to impact hiring. There's no doubt about it. And how fast it happens and how big of a breath that happens on a global scale, we don't know, but we're going to talk about more and more companies that are doing these kinds of things. We talked about, was it the Indian company a year ago laying off 90% of their customer service?
Chad: Yeah.
Joel: And that was probably some hack job, whatever automated system. This is ChatGPT integrated. Now if you listen to the All-In podcast, a more popular podcast of four really rich technical guys, they talk about this extensively. So if you want to know more and kind of their take on it, listen to what they said. But it's, any tech company is going to want to create efficiencies like this and would love to cut their customer service if they could, as well as their staff and marketing and everybody else.
Chad: I do agree. The Facebook thing though, you got to stop using that. That's such a fucking red herring. 'Cause they killed VR, they killed VR and they were bloated. I mean, so they actually just, all they did was they were doing business very irresponsibly for a long time and then they're like, oh, we're going to be responsible. So what you're saying is total bullshit. It's a red herring. It doesn't make sense because they were doing bad business. Now they're doing better business.
Joel: But we agree this will be a trend. We'll be talking about more of these stories.
Chad: It's already a trend because we had tech bloat in the first place. So, I mean, that's what happens. It's called a cycle.
Joel: Well, there's bloat and there is replacing the bloat with bots, which is different.
Chad: Yeah. Well, in this case, no question, like anything that's routine, repeatable, I mean, that in itself these, this is OpenAI by the way. And they actually they partner with OpenAI about this. This is what's gonna happen. And we've talked about this on other podcasts too, is that AI is a commodity, period, right? This is all about training the AI. So you get a company like Klarna who is going all in on AI very quickly. The reason being is they know if they train it, AI is like a puppy, it's going to piss on the carpet. You got to train it. So it doesn't have stupid responses. And the next thing you know, it's doing just as well, if not better than humans. If you have it co-pilot a human, then the humans also teaching it the best responses. So, I mean, there are many models that are in place right now, but OpenAI, Gemini, Perplexity, Anthropic, some of these big names, I think they're going to be the ones that win.
Joel: They, the guys on the All-In said that, wouldn't it be interesting if they made this an open-source and made it available sort of to everybody to build onto, that would be interesting. They also made a prediction. You'll find this interesting if you haven't heard. They're predicting at some point we will have a one-person unicorn or a single person will build a company around AI and automation and create a billion dollar company.
Chad: The reason being is they will hype it and fund it.
Joel: Well, they'll fund it. Yeah. [laughter]
Chad: All four of those fuck sticks, all four of those fuck sticks will, they will fund it, they will hype it. I mean, it's just, okay. I mean, so what? So what?
Joel: All right. Sticking with high tech. Stack Overflow has secured its first customer, Google, for paid access to content used to train AI chatbots. The deal allows Google's Gemini chatbot to utilize Stack Overflow's Q and A for coding assistance. Terms of the deal were not disclosed, but Stack CEO said, "This will be a meaningful commercial offering for us in the near term, medium term, and long term." Chad, what are your thoughts on Google's data deal?
Chad: So I think it's interesting because I'm wondering what kind of hallucinations will happen after letting that beast loose, right? No matter. It's a very smart play by Google. We just talked about Klarna and what they're looking to do. This is all about data. This is all about walled-off data. And they're going to be playing, they're going to be paying Stack Overflow for this. And that is genius. And they are setting a precedent, which I think is awesome because there is money to be made. There's money in them Thar Hill. So Stack is one example. There are many data lakes, data oceans that are out there that I think there's going to be a race to those lakes of data from Google and Microsoft, obviously with OpenAI and so on and so forth. But people using the models, the beautiful part about it is that they're starting to understand that the large language models are not the voice of God. They are imperfect and yet still incredibly helpful at the same time. So I think at first we got in there and it was like, oh, it's a toy, let's play with it. And it was all good. And it's like, wow, this is pretty good. And then people got really serious about it. And then they were like, we're gonna snipe every single issue that we see. We need to go back to, remember, this is a puppy. It's still pissing on the carpet to some extent.
Joel: Yeah, this is unfolding to be a common story. We talked about the New York Times and certain publications suing the LLMs for using their content. Now we're seeing these companies get paid for their content. And Reddit most recently, another IPO, you know how I love the IPO talk, Chad. They're doing a deal with Google that Google can access Reddit's content to then train their models to the tune of tens of millions of dollars. I think it's a three-year deal. It's non-exclusive. I'm sure they're talking exclusives with some of these, but my guess is these companies with a lot of content know their value and are going to try to get as much money as possible with as many of these high-tech, big-tech companies as possible. What I find interesting is Google's going to need a new revenue model. If Indeed Search is not going to be, here's a page of links, go to a website and click on the ads that we have on the site. If it's more of AI, talk to me, I'll give you the answer you're looking for. Then it becomes, how does Google make money on that? And subscription seems to be like where it's going. And you can already pay for Gemini...
Chad: Services.
Joel: You can pay for OpenAI for their better services or enterprise. Obviously, APIs will be part of that. But you look at Google, you also have to make the websites happy. Websites aren't happy if they're not clicking on a link to Google and coming to your site. That doesn't make websites happy. And they really don't like it when you take their content and put it on as the answer to the question, I don't have to go to your site, I can just stay on Google.
Chad: Personally, I don't think Google at this point gives two shits about making websites happy. They're going to find a way to be able to monetize off of data that they're paying for, number one. Not to mention also, you're going to have transactional, let's say for instance, businesses who use Google One or the Google Suite, they're going to pay for additional Gemini infusion or something of that nature. I mean, there's going to be transactional and they're going to be bigger business opportunities where you're actually using the large language models with your data, much like Klarna is doing with OpenAI. So I think there are many, many different ways that they're going to be able to not just focus on search and to be able to evolve search, but it's beyond that. Right? It's all the different tentacles that they can get themselves into.
Joel: All right. Let's take a quick break and we'll talk about Indeed. All right, Chad, the internet loves a good fiasco and the Glasgow Willy Wonka Chocolate Factory Experience is no exception. Let me say that again. The Glasgow Willy Wonka Chocolate Experience, Chocolate Factory Experience is no exception. The event took place in a mostly empty warehouse and the few scattered candy-themed props and actors in shoddy costumes left attendees disappointed and demanding refunds. One photo in particular caught the internet's attention, featuring an actor dressed as an Oompa Loompa in a meth lab setting. Meth lab is in quotes there. The actor, Kirsty Patterson, has since become a viral sensation and meme of 2024.
Joel: And where did she find this opportunity? Well, Indeed, of course. When asked, she said, it was listed on Indeed. I don't normally get my acting jobs through Indeed, but I just thought, all right. To be honest, I was a wee bit skeptical because it was not through an agency. They were offering 500 pounds for two days of work, so I decided to go. But wait, Chad, there's more. There's more from Indeed. A racist job ad stating, "No African-Americans needed," was apparently posted on Indeed. To their credit, the ad was quickly deleted and the company claimed foul play. But one has to wonder, how in a world of AI and Indeed's immense resources does a job posting like this even see the light of day in the first place? Oompa Loompas and racism at Indeed, Chad, what are your thoughts?
Chad: Was it racism against Oompa Loompas?
Joel: As long as it's not racism against Oompa Loompas, because they've been through some shit, man.
Chad: Poor things. Yeah, that poor kid that was a part of the Willy Wonka, I mean, she was not acting. She looked like she was just horrified to be there. I totally get that. It was also compared to like the Fyre Festival. Have you seen that?
Joel: Oh, yeah.
Chad: Just a low price Fyre Festival.
Joel: The lunches. Yeah, the food, like a piece of cheese and a bread.
Chad: It's almost impossible for an Indeed to actually take a shit scam like that and not know that it's a scam. The racism piece though, I mean, I think this literally just identifies once again that Indeed is not the leader in technology in our space. You talk about AI, I don't know what they have it doing over there, but it's definitely not going through and doing reviews or checks on the system. If it is, it really sucks at it, should probably pick another one. But yeah, at the end of the day, we're talking about the LinkedIn's of the world a lot of the times, the Indeed's of the world a lot of times, ZipRecruiters and most of them, I think Zip, Zip's a little bit more advanced, but Indeed and LinkedIn, they have old ass decrepit shit that they're still trying to sell and they can't even get the basics right. I mean, we talk about matching. You can't even do matching right. You can't do a lot of this shit. So why do we expect it to catch racism? I think we're asking too much of LinkedIn because it's kind of like that 90-year-old in a walker that has a shit ton of cash.
SFX: That escalated quickly.
Joel: Yeah, quickly on the racism thing. Like they should be able to have some filters before a job goes public with something like, oh, let's see, what was it? No African-Americans, like that key phrase is pretty obvious. If they had done it as like...
Chad: It's fairly simple.
Joel: Yeah. If they had done it as like a star or an exclamation and tried to get around the filters, I get it, but the fact that that phrase got through is a little bit concerning and they should probably fix that. In terms of the Oompa Loompa, Chad, I'm going to put my PR hat on because I'm sick of these big companies making stupid mistakes. I'm going to fix Indeed's problem. So Indeed needs to hire Kirsty Patterson and have her go to Indeed to find a better job and have her graduate from Oompa Loompa land to, I don't know, an accountant or a real estate professional. I don't know. But this is a grand opportunity for Indeed to take this social phenomenon and make it something good and help her get a real job. You're welcome, Indeed. We out.
Chad: We out.
Outro: Thank you for listening to, what's it called? The podcast. The Chad, the Cheese, friend. 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. Not one. Cheddar. Blue. Nacho. Pepper jack. Swiss. So many cheeses and not one word. So weird. Anywho, be sure to subscribe today on iTunes, Spotify, Google Play, or wherever you listen to your podcasts. That way you won't miss an episode. And while you're at it, visit www.chadcheese.com. Just don't expect to find any recipes for grilled cheese.
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