Do the names H3, Zubka, YorZ, Jobster, Refer.com and KarmaOnef mean anything to you? How about Indeed Crowd? Still no? Well, they're all that created a referral marketplace and eventually called it quits. History does not look fondly on empowering regular people to promote jobs to their networks for money. Draftboard, however, thinks they've cracked the code. CEO and founder Zach Roseman joins the boys on a lively episode of Firing Squad. To say Zach had a mountain to climb is an understatement, but he just may sway the world into his way of thinking. We are all recruiters? Well, maybe ... maybe not. Gotta listen to see if Draftboard survives the Firing Squad.
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Intro: Like Shark Tank? Then you'll love Firing Squad. Chad Sowash and Joel Cheeseman are here to put the recruiting industry's bravest, ballsiest, and baddest startups through the gauntlet to see if they've got what it takes to make it out alive. Dig a foxhole and duck for cover, kids. The Chad and Cheese Podcast is taking it to a whole other level.
Joel Cheeseman: All right, all right, all right. What's up, everybody? It's Krampus's favorite podcast, a.k.a the Chad and Cheese Podcast. I'm your co-host, Joel Cheeseman. Joined as always, the Max to my Grinch, Chad Sowash is in the house.
Chad Sowash: Gello. Yes.
Joel Cheeseman: And we are excited to welcome Zach Roseman, founder and CEO at a startup called Draftboard. Zach, welcome to Firing Squad.
Zach Roseman: Thanks. Thanks for having me here. Excited to be here.
Joel Cheeseman: No problem. No problem. Now, a lot of our listeners don't know who you are. We'll get to the business stuff after. We want to know about you. What makes Zach tick? Tell us your story.
Chad Sowash: Business in the front, party in the back. [chuckle]
Zach Roseman: Oh, this is gonna be fun. Yeah, my name's Zach. I grew up in New York, lived there for most of my life. I actually just moved to Tel Aviv, Israel a few months ago, so it's been an exciting, wild time...
Chad Sowash: Hello.
Zach Roseman: The last couple of months. Talk about moving to a new city, and it's like, "Hey, war." So that's definitely gonna...
Chad Sowash: Whoof.
Zach Roseman: A slap in the face, but also pretty crazy to see in a lot of ways, positive and negative.
Chad Sowash: Yes.
Zach Roseman: So yeah, that's been a lot of my life the last eight weeks, but I've got a beautiful wife and a lovely daughter with another one on the way. And yeah, I love what I do. I wake up every morning excited. I like working out. I like going on hikes. And yeah, I'm a pretty simple guy.
Joel Cheeseman: There it is.
Chad Sowash: So we generally don't ask questions on this segment, [laughter] but I want to know as an Israeli, what is life like? I mean, us in America, we see what's going on in Gaza. Is it normal? Is it business as usual? Are people scared? Talk about what it's like in Tel Aviv right now.
Zach Roseman: Yeah. I mean, I'll let you guide me, but I won't go too long. But there have been phases in the first few days after the terror attack on October 7th. I live in Tel Aviv, which is like 40 miles away from the Gaza Strip, and we were wondering if there were terrorists that were gonna be coming out with AK-47s in our neighborhood, right? They're not... That seems to be a concern. And then the last seven weeks since that point, since a few days afterwards, it's been more about, "Okay, the country is sort of starting to deal with the aftermath of that. And so you've got 300,000 people in a country of 10 million called up to reserves... Army reserve duty. So in the tech space, 20 to 30 percent of pretty much every company has lost people to the front lines. And then from a living perspective, it's weird.
Zach Roseman: It's kind of Twilight Zone-y, like Black Mirrory. The shops and restaurants are sort of open again during the day. Everything's closed at night. There's no nightlife to speak of, really. Most of that's because they can't find waiters and waitresses 'cause everyone's on the front lines. But also you can go to coffee and grab it with a friend, and then you stand up and there's a teddy bear sitting on a public bench that's with simulated blood and the picture of a nine-year-old has been captured and taken hostage. And so there's everyday reminders of what's going on.
Chad Sowash: Whoof. Whoof. Wow.
Zach Roseman: Sorry to take it dark, but that's where we are right now.
Chad Sowash: Yeah, no. I mean, war is not light, my friend. Yeah. And then, sorry to hear that you and your family and other families are having to go through that. That's ridiculous.
Zach Roseman: Yeah, it's not fun. But you've also seen some amazing things like really, the country is more united than ever. People helping each other in ways are just wild, and the projects that have been grassroot initiative that have got off the ground in the last two months, some of them are not public yet and some of them are. It's just mind-blowing to see what people have done and the way they're volunteering their time.
Chad Sowash: Well, Zach, the Israelis are incredibly resilient. Hopefully, you will be resilient today. Because today on Firing Squad, this is how it's gonna go. At that sound of the bell, you're gonna have two minutes to pitch Draftboard. At the end of two minutes, we're going to hit you with about 20 minutes of Q&A. Be sure to be concise or you're gonna get those crickets. At the end of Q&A, you're going to receive either a big applause. Congratulations, Zach. '24 just started out with a bang in a good way. Golf club.
Joel Cheeseman: Easy. Easy with the puns. [laughter]
Chad Sowash: You've got some noise happening there, but you're gonna need more of an arsenal to move this market. And last but not least, the Firing Squad. Such bad things right now. Jesus.
Joel Cheeseman: Metaphor. It's a metaphor. It's a metaphor.
Chad Sowash: This is worse than Andy Cohen and Kathy Griffin on the New Year's Eve party.
Joel Cheeseman: Ah start us on a downers, Zach, please.
Chad Sowash: Just preemptively apologize and go on with something else in your life, my friend.
Zach Roseman: We're going to save space though, right? We're going to say it's all good. [laughter] Everything happening outside the walls of this podcast is irrelevant for now.
Chad Sowash: This is a trust tree. Trust tree, yes.
Zach Roseman: Exactly.
Chad Sowash: Take it away. Take it away, Cheeseman.
Joel Cheeseman: All right, Zach, give us your pitch in three, two.
Zach Roseman: So I founded a company called Draftboard and the basic concept is very simple. Most companies offer their employees a referral bonus if they refer a new hire. It could be $1,000, $3,000, $5,000, all the way up to $10,000 or $20,000 I've seen. And our pitch to companies is very simple and it seems to be an effective pitch. Why are you limiting that referral bonus to only your own employees? The point of a referral bonus is to incentivize people, your employees, to refer better people so that you can hire better people faster.
Zach Roseman: Hire them two, four, six, eight weeks faster. So why limit it to just your employees? There's a whole wide world out there with a huge network that's much bigger than your 3-person startup or 10-person startup or 200-person startup. And so that's what we do. We're a marketplace. On one side of the marketplace, companies sign up. It takes literally 90 seconds. We integrate with applicant tracking systems like Greenhouse, Lever, Workable, and a few others. Three clicks and you're in. You decide what bonus you want for the jobs to be listed on Draftboard. You can list a bonus for some jobs, all jobs, one job. You can have different bonuses for each job. Totally up to you as the company. You can list bonuses and then take them down. You can keep them up for a long time, whatever you want. You can change them from second to second. So that's one side of the marketplace, the jobs are listed.
Zach Roseman: And then the other side of the marketplace is what we call scouts. A scout is anyone in the world. It's you, me, it's your parents, your siblings, your partner, your friend, your spouses. Everyone in the world has a network. That network was built from who you went to kindergarten with, who you went to college with, who you play basketball with on the weekends. And that network is valuable to the right company at the right time for the right job. But right now, those companies have no idea that candidates that they want to reach even exists, let alone how to reach them. And so the second side of the network is scouts. And scouts are essentially, it's a fancy word for referrer, right?
Zach Roseman: So I refer you, you refer someone else. I can go onto draftboard.com as a scout or anyone can. And you can see what jobs are hiring and what the referral bonus is. So literally in seconds, you can go to draftboard.com right now you can see a job for, I don't know, SeatGeek or Veer or Formlabs. Click share. And within less than 10 seconds, you can share a link to that job with your friend. Your friend clicks in the link. He sees a job application page that's hosted on draftboard.com. We've ingested it from the company's ATS, and they decide whether to apply or not.
Zach Roseman: There's some magic that happens afterwards to make sure that we can maintain quality, which we'll, maybe we get to in an hour or hopefully we'll get to in the Q&A, which I think is actually the most important part of Draftboard. But that's it. The basic idea is that companies can get better distribution for their jobs by offering an incentive, because incentives do drive behavior. And scouts is this sort of new concept where we're not allowing anyone in the world to either make side hustle money 'cause they love meeting people and introducing people. Or they can build an entire business on draft board. There's a lot more to it. It's idea was heavily inspired by my wife. She would kill me if I didn't mention that. So I'll pause there.
Joel Cheeseman: All right, Zach. Pretty tight, man. Pretty tight. I like it. Let's talk about the name. The good news is I really like it. I mean, it has some connotations with military, [chuckle] with professional sports.
Zach Roseman: Exactly.
Joel Cheeseman: I love that you have the.com, so my question is, what's the genesis of the name? Did you have to go drop some coin on the.com? I can't imagine it was available. Tell us about the story of the name.
Zach Roseman: Yeah. So I came up with the idea last June, so June, 2022. And I called, this what a lot of people do, friends and said, "What do you think of this?" 'Cause I did not want to be a founder, like I came from the corporate world. I was the CEO of a large or mid-size company, depending on how you count. I didn't want to be a founder. I acquired companies with founders and they had terrible lives. And so it really took a lot of people convincing me to do it. So once I decided I was gonna do it, and I sketched out what the product would look like, then I was like, "Okay, well, in order to raise money, you need to actually have a name for it. And so I sat down and I was like, what are the best names I can come up with? And this idea of professional sports where you draft your team, they're literally the draft board in football in the rookie draft.
Joel Cheeseman: Oh, we're familiar.
Zach Roseman: You literally have a whiteboard.
Joel Cheeseman: Yeah, we're familiar.
Zach Roseman: Right?
Joel Cheeseman: Yeah.
Zach Roseman: And then you cross out names. And I thought about that a lot as when you're building a team for your company, you're drafting your team, right? You're choosing who you want. And so I liked that concept. It really meshed well, yeah. Actually, the military angle, I didn't even realize until I was talking to my wife's grandfather and he heard the name and his face, his eyes went wide and like fear. And he is like, you know the word draft board is like a very negative word for me. 'Cause those are the people that can call you to go to World War II. And I was like...
Joel Cheeseman: Yeah. Go to war. Yeah. [laughter]
Zach Roseman: Yeah. So that's where it came from.
Joel Cheeseman: And the.com, did you have to buy it or it...
Zach Roseman: No, that was a story. I'll keep it simple. I got the draft code that was available. The.com was actually owned by a fantasy sports company, maybe unsurprisingly, that had failed. I found the people, I figured out a way to get in contact with them and said, "Hey, I'd love to buy this off of you." They just said, "No." And so I tried three or four times, and then finally, once I raised money, I was like, "Hey, I've got some investors. I think I might be able to do a little bit more." And so you are given a price that, for me, was a steal, but it was real money. But he was finally like, "Yeah, it's a matter... Like, "If you pay me what I bought it for, I'll sell it to you." And it worked.
Chad Sowash: Oh, nice.
Joel Cheeseman: That's nice. That's nice. Now you've had executive positions, I would say. You've had some finance, some wall streety positions in the past, but no sort of recruiting, no HR. Now obviously you've ran companies, so you've nibbled on that, but with no experience, why was this ideas that appealing that you would sort of dive into it? You have some experience at IAC, which is a big internet company, so you have some competency there, but you're not from recruiting this idea was just that good, I guess.
Zach Roseman: Yeah. So I think there's two things I'll answer to that. One is, it touched on a lot of the pain points or some of the major pain points I had as a CEO. So my last company, I was a 500 person company. We had offices around the world. One of the biggest challenges, and I'm really serious about one of the biggest challenges, friction between hiring managers and our talent team. Our talent team were busting their butts to find great candidates. And yet they would... The hiring managers always felt like they weren't getting the best or it wasn't coming fast enough. And it created this real issue because the hiring manager committed to, "Okay, I'm gonna do X, Y, Z in this quarter and in the next quarter and by the end of the year." And they would come to me and say, "The talent team isn't sending me the right candidates. Can I hire an agency? Because otherwise I can't deliver to you as the CEO what I promised."
Zach Roseman: And so they're putting me in this position. And then the talent team would say, "No, I'm sending them great candidates." They just keep saying no to everyone. And actually they didn't do like an onboarding call with me to like talk about what they actually wanted for the role. And so now they keep changing it. So it was this massive problem. And so when I had the idea, I sort of thought about that and I thought of like, incentives aren't necessarily aligned between hiring managers, talent team, talent team gets paid a salary. They're not incentivized to move as fast as an outside recruiter, but at the same point... Oh, it's boring. Okay.
Joel Cheeseman: I'm sorry Zach. Let's move on to money. Now you mentioned investment. You are not on Crunchbase. So you have investors listed on the site. Talk about the money. I'm guessing this is either pre-seed or seed round. How much have you raised?
Zach Roseman: Yeah. So I haven't disclosed that yet. We'll announce that pretty shortly. But for raise from some great investors, you guys are smiling for some reason. [laughter]
S?: Woo.
Zach Roseman: Raise for some amazing... I can tell you the funds we raised from Founder Collective, Animal Ventures, Twelve Below, Ground Up Ventures, some great early stage funds, mostly based out of New York.
Joel Cheeseman: All right. You don't wanna break any news on our show? That's cool. That's cool.
Zach Roseman: Yeah.
Chad Sowash: Okay, Zach. So let me get this straight. Anyone can refer a candidate. So why would I want an anonymous person that's out there? I don't even know referring people to my jobs. I mean, is there any QA, QC that's involved to ensure that these people that are being referred actually meet the requirements to my job? 'Cause I already have enough shit coming into my jobs in the first place. I don't need more. I just need quality. How do you ensure that I get only quality?
Zach Roseman: I couldn't agree with you more. I've literally sat on calls. People have screen shared their screens and lever and Greenhouse with 4,000 applications. 1600, 843. That number sticks in my head. The job boards do a disservice to their users, both the companies and the candidates. 'Cause they allow one-click applications. There's no friction in the process. We introduce friction. And so if you apply for a job on LinkedIn, your application goes directly to the company's Lever at Greenhouse. And the company now has to deal with sorting through all that crap. There's a 3% accept rate, right? One out every 30 resumes. The company says,"You're good enough for me to have a call with it, with someone on my talent team." With Draftboard, when a candidate submits an application.
Zach Roseman: The scout who referred them, the person who sent them the link first is the line of defense. So the application gets sent to the scout first and the scout has to either approve or reject it. Now why would they reject that application? Because anyone they approve, we track the status of that application because we're in an integrated with the company's Greenhouse or Lever, whatever, ATS. And so when Scout approves an application, we send it to the Lever or Greenhouse system and we can track the status of the application. It moves through... As it moves through the recruiting funnel. So we know when it's in screen by HR or even before that resume received, first interview, second interview, third interview, all the way down through the funnel. And we can assign a score, or scouts earn a score, what we call a reputation score. And so if that score... Let's say you're a really good scout and 80% of the candidates you send are getting through the first stage of resume review. You're gonna have a 4.7 and a 5-star rating. Think of it like an Uber score, or an Airbnb rating, right?
Chad Sowash: How are you tracking down that far in the funnel?
Zach Roseman: Because we have permissions from the... The company gives permissions to track the candidates...
Chad Sowash: But, yeah. But that doesn't matter because Lever and Greenhouse break shit all the time. So if you put a pixel in there, they're gonna break your pixel. It's gonna be a pain in the ass. So how do you specifically, do you use a Pixel? Do you use a sort... What do you do to actually ensure that you're...
Zach Roseman: We have permissions within Lever and Greenhouse. We're official partners with them. We literally have permissions to track the candidates. So there's no pixel, there's no...
Chad Sowash: Okay.
Zach Roseman: There's no funny business, there's no data issues. There are permissions you can select within the ATS to say, "Yes, give this person permission to know what stage the candidate is at."
Chad Sowash: Okay. So now once I see that, do I see the referrers review score at that point?
Zach Roseman: You do. But even before that, you as a company set a minimum. You say, "I won't accept referrals and scouts with a score lower than 4.0 or 4.1 or 3.9." You can choose that. And what that does, it creates a world where the scout is really careful about who they refer. 'Cause if they refer crappy people and their metrics drop, they're not gonna be allowed to refer to companies anymore. And so it creates this nice sort of reinforcing cycle where I'm careful of who I refer. Then the companies get the best resumes and candidates and they have higher accept rates. Instead of 1 out of 30, it's about one out of six on Draftboard now.
Chad Sowash: Right. All right. So from a go-to-market standpoint, it sounds like you're very closely integrated in with Lever and Greenhouse. Are you just focusing on those two ecosystems to be able to sell and penetrate into, or how are you doing that from a go-to-market standpoint?
Zach Roseman: Yeah, so we're official partners with Lever, Greenhouse, Co-meet, Ashby and Workable. Those are the five we decided to start with because we're focused, in the beginning, building out a jobs marketplace or tele-marketplace, you need to focus on a particular category. We chose tech, and those are sort of the five biggest ones in tech. I'm sure you... There's other ones that of course arise, seeing that here and there. But those are the ones that sort of, opens up a whole wide swath of companies to us.
Chad Sowash: Okay. So you mentioned it earlier, this feels like a side-hustle platform. So are you mainly seeing recruiters engaging in this? And then, obviously, it's kind of like a little side-hustle for them.
Zach Roseman: Interestingly, it's not recruiters. We're mostly seeing doing the side hustle. So, mostly, we're seeing people who are super connectors and people who run professional communities on WhatsApp or Slack or wherever they run their communities, on Meetup, whatever it is. And so those people, for the super connectors, I'm sure you know people like this whenever they meet someone, they're like, you should meet these three other people. And they love making introductions. And when I said that the idea was inspired by my wife, she's introduced 30 people the jobs they actually got, let alone hundreds of jobs, they didn't get, the most she ever got as a thank you, was a bottle of wine. In most cases, the companies don't even send her a thank you note.
Joel Cheeseman: Yeah.
Zach Roseman: And so part of this was driven by like me productizing my wife being like, "Hold on." If she can make two grand, which is what the company's paying their own employees, she'd be rich, right? And so we're seeing a lot of people who make introduction in any way saying, "Hey, the candidate's not gonna be mad at me for making introduction?" 'Cause they want the job, right? They'll be thrilled to get the job.
Joel Cheeseman: Right.
Zach Roseman: The company's happy because, and because they want to hire people faster and they're more than willing to pay the two grand or three grand. 'Cause they've already decided they'll do that for their own employees. So it's a win win win.
Joel Cheeseman: What is the time period by which I refer someone and I actually get a check in my account or payment in my account.
Zach Roseman: So it's one of our challenges, right, is the timing issue. So I refer you, Joel, where let's say for a job, you look at the job you apply, it takes you a week. You're not gonna apply. It takes you a week to get the interview scheduled, right? Then it's four weeks of the interview process. Then you get an offer, you start two weeks later, and then we give companies the option to set a probation period. How long does the new employee have to work for you before the scout is paid? And anywhere we set it from anywhere from 0 to 90 days. So if a company chooses 90 days, you're talking about four and a half to five and a half months lag between a candidate first starting with you and us paying them. And so part of our challenge is to convince new scouts that we're good for the money, right? And so we've experimented with a bunch of different ideas. Do we give a little bit upfront to make them like, "Hey, you're actually gonna get this on the backend." We have testimonials from scouts that have actually received money already. We've had a few placements. And so yeah, it's a challenge, but they're what... We'll see, I guess that's the answer.
Joel Cheeseman: Knowing that, what's the... And you're young, but what would you say is the attrition rate of scouts? Are there committed scouts that are doing it on ongoing basis or is like, "Oh, I know one person and... " I mean, we're in a get-it-now world where I order something online, I get it, in 24 hours and now...
Zach Roseman: Yeah.
Joel Cheeseman: With your stuff I got to wait months before I get my gratitude. Are there ways that you give badges or like...
Chad Sowash: Exactly.
Joel Cheeseman: Show them tracking in their account or emails like we're almost there. I mean, how do you slow down the attrition rate, which I guess that would compound.
Zach Roseman: You're right about what you're suggesting. So we have... Since we see the candidate status, anytime there's a change in status, we message the scout and say, "Hey, this person moved from stage I to stage II or stage II to stage III." And that gives you that little endorphin push, like of a rush. So you're like, "Oh, that's actually moving forward." Beyond that, we haven't done it yet, but we're gonna be building a leaderboard for scouts to sort of compete with each other, right? And see who's doing the most referrals, the most quality referrals, getting the most applications. In our case, one thing I really care about is reject rate. I actually want the scouts to reject as higher percentage of candidates as possible. 'Cause that means we're sending the highest quality to the companies. Sorry, there was another part to your question that I'm blanking on right now.
Joel Cheeseman: Well, it sounds like you'll... Some competitiveness, but you are tracking of every so often, "Hey, we're almost there. We got this point in the process, the payment's coming."
Zach Roseman: Exactly. Exactly and you'll be... You have a dashboard where you can see, okay, this is what you have in flight, right? You have three people in interviews, you have 10 applications you need to review, and you have 15 recent activity things, meaning something has changed in the activity recently.
Joel Cheeseman: Okay. Now on your site, you have some promotional language, and I'm gonna quote your website here. Earn up to $276,500 in referral bonuses by sharing jobs.
Chad Sowash: Whooo. Wow.
Joel Cheeseman: Come on, man. 207... Is that a real... Is that real? Or did you like just pull $276,000 out of your up your ass.
Chad Sowash: And who, Who did you write a check for that much?
Zach Roseman: I don't know what site you're on. Our site says 190... Our site is 197,200. And yes, that if you... We actually have 86 jobs on that, on the site right now. We've had over 200 listed since we launched a few months ago. We've had almost 500,000 of real jobs posted. These are all companies I've physically talked to and led them through the integration process and actually gotten their jobs on.
Joel Cheeseman: Do you know how much the leading scout has earned on your site?
Zach Roseman: Yeah. So we're super early. So we've had six placements and each one is from a different scout. So the most was $5,000. We've got a couple of people who have earned $5,000 each.
Joel Cheeseman: Okay. It is a real argument. Talk about the external referrals.
Zach Roseman: Most of our jobs are US. Actually, 80% of them are US.
Joel Cheeseman: Well, America is number one. So, obviously, that should be the case. So external...
Zach Roseman: I'm still an American citizen. [laughter]
Joel Cheeseman: We have external referrals and internal, right?
Zach Roseman: Yeah.
Joel Cheeseman: What's the percentage breakdown? It sounds like you're really focused on the external, people from outside referring inside. But there's a piece of your business that's internal. Talk about the division, the focus, the breakdown.
Zach Roseman: Yeah. So right now, we're actually purely external. We have it on the product roadmap to build a feature for companies to manage their internal referral process, which would be essentially just a private label version of what we've already built. And we will build that at some point. But right now, we're focused on the external. And I think, Chad, you asked a few minutes ago, why should I trust an external person? Well, one is because of the reputation score, that it's a data-driven point that can tell you whether the person is a good or a bad scout. But two is because these people have an incentive to make sure they're sending you candidates that you're going to accept, right? It's a monetary incentive. And so it's again, incentives drive behavior. And I think that's sort of the beauty of this model, if I may say so. [laughter]
Chad Sowash: Well, I guess you can. You're the CEO. So is Draftboard more than just referrals?
Zach Roseman: I guess the short answer is no. Or is there a particular place you're going with that? Meaning...
Chad Sowash: Yeah. Do you do more than just referrals? That's the question. [chuckle]
Zach Roseman: No, I mean, we're a source of talent. That's the basic idea. We use referrals as the mechanism, but we look at the world as... Lets say like, "Okay, employee referrals tend to have super high accept rates, anywhere from 30% to 80%," right? What percentage of them... Of the candidates that you get referred as a company that you'd actually talk to?
Chad Sowash: But your entire business model is predicated on referrals. Okay. Okay, good. So how do I share referrals? I get an XML feed from the applicant tracking system, or you guys scrape the board or what have you? How does that actually work? Just walk me through. You said it takes three clicks, but after those three clicks, if I import 2,000 jobs, well, let's say 500 jobs, then I've got some management to do. So talk me through that.
Zach Roseman: You're talking from the company's perspective?
Chad Sowash: Yes. The people who are actually spending money with you, yes.
Zach Roseman: Right. So from the company's perspective, you go through our onboarding. I sit with you in the onboarding process, like say, authorize a greenhouse there's an OAuth, and then an API token with some of the other ones. It's just an OAuth click. It's literally three clicks. You see on our dashboard, you see all your jobs show up with all of the irrelevant data, the location and the job spec and everything else that's loaded in Greenhouse, that we take that. And then all you do is a screen that shows you, it says, "Okay, what bonus do you want to set for this job?" And there's a button that says list this role. And you can choose to list all your roles. There's a bulk list button, or you can choose select roles to list. And you have different bonuses for each job. And then the next part of the process is now they're listed, and any scout can refer you a candidate. But for you as the company, it's the same experience as getting an application from any other source into your ATS, right, whether it's LinkedIn or your website or Indeed, meaning it comes into Greenhouse for that particular job. The only difference is this, is the source is tagged as Draftboard instead of LinkedIn or website or whatever other source. And we also give you some information about the scout who referred it, right, the first name, the last initial. We're probably going to just give the full name.
Zach Roseman: I don't really care about doing the full name if you want it. And their scout's reputation score. And so you get that additional data. But from your perspective, you're going through... You don't have to change anything about your workflow. Your workflow stays exactly the same. So it's really a set it and forget it solution. We also have the ability for companies to do something we call a job sync, where anytime they add a job to Greenhouse, it automatically gets listed on Draftboard at a certain default bonus setting. And so they can choose that bonus setting. So that way, instead of them having to manually go and update Draftboard every time they add a job, it happens automatically.
Chad Sowash: Okay. But from the standpoint of being able to go in there, I can have let's say, for instance, all my tech jobs default to $5,000, all my sales jobs to $2,000, so on and so forth, correct?
Zach Roseman: Exactly, exactly.
Chad Sowash: Okay, okay, okay. So have you ever heard of H3 or a Jobster?
Zach Roseman: Jobster, I have. H3, I haven't.
Chad Sowash: Okay, how do I get my LinkedIn network involved? How can I get them integrated into this whole process?
Zach Roseman: Yeah, so sneak peek of a feature we're gonna be launching called Matchmaker. You're gonna be able to download your LinkedIn connections, upload them to Draftboard, and then we're gonna do matching of your LinkedIn connections with the jobs on Draftboard and start to suggest matches for you. And that's a really critical feature because a lot of people will come to Draftboard, I think Joel, you said this earlier do you have people do one referral or do you have people doing 10 or more referrals, right? And so a lot of people say, "Okay, there's someone I have in mind, I wanna refer them to a job." And they just do that one referral. And then it's just I don't know who else, I can't remember who else is looking for a job for that particular software engineer job. With this, we're gonna be able to say to you, "Hey, these 10 people in your network are a fit for this job. Do you want to share it with them or not?" And so it turns Draftboard from a sort of pulling information out of your brain to hey, pushing information that exists somewhere else to you and sort of packaging it up and ready for you to choose an action which is sharing it with them.
Chad Sowash: Okay.
Joel Cheeseman: And is that an ongoing, I guess, query that you're gonna do with my network in LinkedIn? In other words, new jobs are posted all the time.
Zach Roseman: Yes.
Joel Cheeseman: Most of my connections may be in a certain location or maybe a certain profession, but as new jobs in my network grows, will I get an email every week like, "Hey, we scoured your LinkedIn folks and the jobs we have and here are some matches and do you wanna share those with your matches?"
Zach Roseman: Exactly.
Joel Cheeseman: You're shaking your head, and that's the idea.
Zach Roseman: Yeah, 100%. And so there's different ways you can do it. You can either do it based on the jobs. You could say I'm interested in these types of jobs. Then we could say, "Hey, these types of jobs just came up." You have 10 people each. Or you can say, "I wanna find Joe Schmoe a job. Show me jobs for Joe Schmoe." So we'll have like a way for you to say, "Here are the 20 people I care about finding jobs." And then we'll only send you candidates for those 20.
Joel Cheeseman: Got it. So Chad took a step or two down memory lane. I'll go a little... A few steps further. So H3, which you mentioned was basically a company that does what you do about 18 years ago. Jobs was another one, Zupka, Yours, Refer.com, Karma One, probably none you've ever heard of but you probably have heard of one called Indeed. So a company called Indeed, little job site global... Global footprint launched Indeed Crowd in 2016, [laughter] which is basically this idea. Companies would put a dollar amount, a bounty, if you will, people could share jobs, etcetera. Two years later, they shut it down for whatever reason. Obviously, it didn't pan out the way that they thought it would. So I guess my question is, how is this time different? How is your company different than all the companies I just named?
Zach Roseman: Yeah. So the biggest change is that even five years ago, none of the big ATS, I don't wanna say none, but they either had, or it was much recruiter, they didn't have, or it was much recruiter. The API integrations took into them were much recruiter or didn't exist at all. So I was talking to the team at Greenhouse and like this didn't... The ability to do what we do today and read the stages from them didn't exist five years ago, let alone 10 years ago or 18 years ago. So that's a huge change in the infrastructure of the HR tech space, is that you know this better than me. Every company now wants to integrate with everyone else because if you don't integrate, you're losing customers. And so now everyone has open APIs, they do, and they move from APIs to OAuth and to, in order to make it easier. But this couldn't have happened. The other thing that exists today that I'm sure Indeed could have built, and maybe they did, but that there's amazing payment providers. Like we use Stripe that have literal marketplace products. So we actually don't have to build any of the payment infrastructure. Stripe handles that, right?
Zach Roseman: And so when we go to a company we say to them, "Hey, you don't have to worry about issuing a... Collecting a W-9 or issuing a 1099 'cause these are scouts. You're paying the people like independent contractors. We take care of all that. And for us, we actually don't have to take care of all that. Like Stripe takes care of all that. So it's sort of this one solution. And then the other thing is, look, Indeed is Indeed, Indeed has a lot of products. Some of them are competitive with other ATSs. And so it's, it's harder, it's hard to go out and say, "Hey," you are like, "Greenhouse, play nice with me on this one product I have." I was talking to the founder, I won't name the company of a very large old school ATS. And he was saying, "LinkedIn tried to launch an ATS however many years ago." And they just were like sort of a bull in a China shop, and no one wanted to work with them. And so I think you have to be really careful who your partners are, and it helps that we're independent.
Joel Cheeseman: So I used to write on this, this topic and a friend of both of Chad and I an Ohio State fan, that's just a side note. Anyway, so when he launched this, there was no social media and there was a thought that, "Well, now that people have these big networks, that that will be the thing that makes this thing work. That didn't pan out. And then I asked him when Indeed dropped its thing, what he thought the reason was. So his comment this is quote, and this is the founder of H3. Quote, "You can take a horse to water, but you cannot make him or her drink." Only 4% of people are actual connectors, perhaps proven by the fact that fewer than 4% of LinkedIn's members are in the 500 or plus connection category. So I'm hearing from you a lot of technical things, but how much is human nature part of this, like being in the job sharing? I'm gonna blast this out to people, or I'm gonna like actually put in the thought work about who would be a good... And how many are we really connected to on LinkedIn that are just sort of passive connections. So what's your opinion on human nature? I mean, I'm an old white guy, so I'm open to the fact that younger people might be more open to this. Talk about the human nature part of this business.
Zach Roseman: Yeah, for sure. I don't envision this being there are 300 and what, 30 million Americans. There's no way that all 330 million are gonna be scouts, but we need to do... And I think about the... When I started fundraising, I was very clear with investors, first of all, this is like a 0 or 100. There's no middle ground here. We're a marketplace where they're gonna succeed amazingly or die. And then the second thing is, we're not the easy side of the marketplace, quote, unquote, "Is the companies," right? I've heard this literally dozens of times, why wouldn't I do this? There's no risk, there's no cost. There's no reason for me not to do this. The hard side is the scouts, as you point out, right? Who are the scouts? What's gonna motivate them? Is it just money? Is it esteem? Is it being known as the person in your network who we don't know that yet, right? But the whole vision of draft board is built around building a cohort of Super Scouts in the same way that you think about like eBay Power sellers or Airbnb Power or Super hosts, or even on Uber, right?
Zach Roseman: They want their drivers to drive 40 to 50 hours a week. They're not gonna turn down the person who drives five hours a week, but it's not what their whole core business is built around. And so for us... For me, the human nature part is who are the people that have either built a skillset in sourcing talent? So AKA recruiters or former recruiters or laid off recruiters, or people who don't have enough business right now, and they're like, they have a ton of silver medalists. And I say, "Hey, come on to Draftboard and you can place them." It's people who run communities who wanna, who wanna give people in their community, a benefit, right? I have a proprietary source of jobs you can't find anywhere else. And by the way, because I have a 4.7 score, my jobs are gonna be... My referral's gonna be taken more seriously than if you apply on the company website, which is absolutely happening. Companies now look at Draftboard referrals first, 'cause there tend to be higher quality. And then the other thing is, there's super connectors who are already doing this. And so I think the human nature side is both finding the people who are already doing this and are more likely to, but also the companies. They're already offering employee referral bonuses. And so it's a very... It's sort of like they're, "We're not creating anything new under the sun. We're taking existing things and just making it a super simple, easy experience." And yeah.
Chad Sowash: Okay. So let's go back to go to market. Who are you focused on, you going direct to brand on this? Are you going to recruitment ad agencies? I mean, how are you actually getting a portfolio or brand penetration.
Zach Roseman: Amongst the companies? The company's listing jobs, you're saying?
Chad Sowash: How are you actually getting sales? Who are you going to, are you going directly to the brands? Are you going through agencies? What's your focus? How are you doing it?
Zach Roseman: Yes, so in the beginning, it was mobilizing my networks. So I spent 10 years in corporate America and built a lot of relationships. And then I had my investors and angels and whatever, and going through all of their networks, being like, "Here are our target companies. Here are the ones that can... You can make an intro to this person." And now we're hiring our first BDR who's gonna do more of like blocking and tackling, just getting... Setting up meetings. But we are... We're staying focused on startup. So really our sweet spot is 30 to 500 employees. We have a few companies that are 1,000 plus like Veer and Formlabs and SeatGeek, and then a bunch that are smaller at 10 employees that are just looking to hire the first one.
Chad Sowash: So mainly SMB, you're talking about small to medium sized businesses?
Zach Roseman: Yeah, I would say if you're a company over 2000 employees, we're probably not the right fit for you right now, right? Because if you put a hundred jobs on Draftboard, it's too much for us.
Chad Sowash: So give me... Yeah. Give me some pricing around the... Because this is an SMB model.
Joel Cheeseman: Sounds expensive. Sounds expensive, Chad.
Chad Sowash: Yeah, sounds expensive for Joe's Plumbing around the corner. How much is it?
Zach Roseman: No, we're not doing SMBs like Joe's plumbing. We're doing like startups. I mean, startups, like plus, I mean whether they're C-stage to series C-stage, series D-stage.
Chad Sowash: Okay, still, what's the pricing?
Zach Roseman: It's zero, it's free.
Chad Sowash: It's free. And the only thing that you pay is you guys take... You take a commission.
Joel Cheeseman: Well, companies are paying you.
Zach Roseman: No, no, companies aren't paying us.
Chad Sowash: So you get... You take a chunk out of the actual commission or like a commission out of the dollars that are paid.
Zach Roseman: Yeah, exactly. So the companies don't ever pay us any fees. They list the jobs, it's free. If they hire a candidate, then they pay $3,000. Let's say that's the... They decide on what the bonus is. Let's say they put a three grand bonus. We take 20% of that from the scouts cut, not from the company. And so the company is never paying us a fee. And yeah, that aligns us with the company. It means that like, we don't... We're not trying to get anything more out of them. We're not trying to get them to stay longer.
Chad Sowash: All right, Cheesman.
Joel Cheeseman: All right, Zach. By the way, plumbers are people too, Zach. [laughter] Plumbers are people too. All right.
Zach Roseman: Before I started this company, I was looking at starting a plumbing company. So have no fear, I agree.
Joel Cheeseman: I refuse to show you my plumbers crack for the podcast, by the way. So let's go back early days of the internet. Amazon launches affiliate programs. Affiliate programs are huge. They make a ton of sense, right? You don't have to spend the advertising. Let people advertise for you. Let them email, put banner links on stuff. Made perfect sense. And when it came into the employment sector with H3 is the first one I remember, I'm like, "This makes perfect sense. Why spend all this money on recruiters? Why spend money on job postings?" Just empower people to share links to people and track the process. And if they make a hire, then get a check. And I literally did get a check back in 2006 from H3 for a recruiter that I referred to a job. So that was pretty exciting. And I was a little bit shocked when the company didn't pan out.
Joel Cheeseman: And then I watched all the other sites that I mentioned come and go. When Indeed did it, I thought, "Man, if they can't do it, no one can do it." But the problem is I still think it's a great fucking idea. To empower people to promote your stuff, you have social media, you have people connected more than ever. But for whatever reason, Facebook didn't change. It didn't turn around. The growth of LinkedIn hasn't turned around. Now, maybe your solution of integrating with LinkedIn, and that's gonna be the secret sauce. Historically, LinkedIn doesn't love it when you create shit like that, and API... It's just rarely ends great. I like it as an internal thing better than I do an external thing, although external things sounds better. But I just... As much as I love the idea, I can't deny history. 20 years of history says this idea does not work. If you're the first one to stick it up, stick it up the ass of history, then good on you. But for me, I can't in good conscience. 20 years of history says this idea is not gonna work. So for me, Zach, again, this is not personal, man. It's a great idea. The world just isn't ready for it.
Zach Roseman: I hear you, man.
Joel Cheeseman: I hope you're the first Zach. I hope you're the first. Chad?
Chad Sowash: Woo, woo. I'm gonna take a little bit different angle on this, Zach. First and foremost, I love that you're focusing on integrations down Funnel, Lever, Greenhouse, etcetera, etcetera. I can tell you, you've never been in HR because HR doesn't trust anyone, let alone referrals, right? I mean, they don't even trust internal, right? So...
Zach Roseman: Oh, I've heard. [laughter]
Chad Sowash: Not a big trusting group. But so again, I'm a big believer in referrals. I believe referrals can be executed much better and more efficiently, but most companies stumble over all of the referrals that they're getting that are coming in, and they're either number one or number two source of hire. So could the process be better? Yeah. Could we even do more referrals? Well, fuck yeah, but employee referrals aren't a perceived problem, which is why they are never a top three priority and they don't get substantial budget. Well, hopefully, you've got an answer to that by the free aspect. Joel talked about human nature. Well, this is HR nature, which is something that you really need to get your head around, especially when it comes to adoption and history. It's a solution to a problem that the industry doesn't believe really even exists.
Chad Sowash: So as we talked about before, we've seen historically companies like Jobster, who I believe first... Their first iteration in 2004 was a referral platform. H3, 2007, the list goes on and on and on. H3 never evolved past just being a referral platform and they died. Jobster had an identity crisis and they died. I believe the answer is somewhere in the middle and coupling the priority pain points with referrals and then looking at different aspects of things that will actually go get you budget. Because last but not least, my friend, the straw that broke the camel's back for me is that you need to charge the damn company. They're the ones with the money. Don't charge the little guy. Don't charge the little guy. So again, from a historical standpoint, from a product and a focus standpoint, you're going to have to slowly edge open that product, Tam. But until then, it's the Firing Squad.
Joel Cheeseman: God damn it, Zach.
Zach Roseman: Love the feedback.
Joel Cheeseman: I hope you're the first one.
Zach Roseman: No, it's great.
Joel Cheeseman: I hope you're the first one.
Chad Sowash: Oh, I wanna see referrals work so badly. So badly, Zach.
Joel Cheeseman: It's such a good idea. There's just human nature, something...
Zach Roseman: I could address it, but I... It's not... Look, to your point, Chad, it's not a question. I close one-third of companies I talk to. I've talked to 150 heads of talent. It's the highest close rate my investors have ever seen. They literally tell me now, part of that is 'cause it's free. Obviously, their companies are going to close free.
Chad Sowash: Yeah, yeah, yeah. Well, it's like Indeed closing, getting jobs on their site the first time they came on free, right? That's not a close rate.
Zach Roseman: Right, no, but the reason I mentioned it is that all of the companies that when you talk about it, these companies, the biggest problem they have is what we talked about in the beginning. They get 4,000 applications crappy that they have to go through from their team. And as you said, no one's giving them a budget to spend 100 grand on some fancy AI tool that's gonna spot the best candidates that are not. Those tools exist. But unless you're a big corporate like IAC, you're not doing that. And so you have to have a way to filter out the crap from the diamonds. And I think that the referrals for me, again, it's a mechanism to do that. It's not the... I don't claim to have reinvented the wheel here. But yeah, look, I hear your feedback.
Joel Cheeseman: Zach, the Firing Squad is over. It's over. When you knock it out of the park, you can come back on and tell us how wrong we were. But until then, my friend, I hope you're the first that proves us wrong. Make this referral thing work. Until then, let our listeners know where they can find out more.
Zach Roseman: Joel, I'm gonna make it work for you, specifically, so you can finally regain faith in humanity. You can find us at www.draftboard.com. We'd love to have you on.
Joel Cheeseman: In the can, Chad. Another one bites the dust. We out.
Chad Sowash: We out.
Outro: This has been the Firing Squad. Be sure to subscribe to the Chad and Cheese Podcast so you don't miss an episode. And if you're a startup who wants to face the Firing Squad, contact the boys at chadcheese.com today. That's www.C-H-A-D C-H-E-E-S-E.com.
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