Screening tech talent is smokin' hot right now. You know the names: HackerRank, Byteboard, Woven, Triplebyte and others. But do you know TechScreen? If the answer is NO, then you owe it to yourself to checkout this episode of Firing Squad. Chad & Cheese put CEO and founder Mark Knowlton on the hot seat to answer some tough questions. Does he make it out alive? Gotta listen.
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SharkTank Intro (1s):
Like Shark Tank? Then you'll love Firing Squad! CHAD SOWASH & JOEL CHEESEMAN are here to put the recruiting industry's bravest, ballsiest, and baddest startups through the gauntlet to see if they got what it takes to make it out alive? Dig a fox hole and duck for cover kids the Chad and Cheese Podcast is taking it to a whole other level.
Joel (23s):
Oh yeah. What's up everybody. It's your favorite snipers? This is the Chad and Cheese podcast. I'm your co-host Joel Cheeseman joined as always by my main man, Chad Sowash.
Chad (36s):
What's up?
Joel (37s):
Today the startup, the victim, if you will, of today's Q and A will be Mark Knowlton, CEO and founder of TechScreen. Mark welcome to firing squad.
Mark (50s):
Well, appreciate your time guys. I'm really looking forward to this.
Joel (54s):
Be careful what you wish for. Mark for our listeners before we take care of business, tell them a little bit about you. What's your Twitter bio?
Mark (1m 2s):
So I got into recruiting in the mid-nineties and they had the fortunate break of going into a high-end Microsoft solution provider, where I was working directly with world-class technologists. It was there I began doing my own detailed technical interviews, a software engineering candidates, and it's where I saw the real impact of how you can affect the process. And so it started me on a journey of self-discovery of really immersing myself. Now I've read the white paper on the C-sharp or the white paper on Java would attend conferences.
Joel (1m 33s):
Didn't I see you at a WestTech Conference back in '99. Didn't I see you at one of the those?
Mark (1m 38s):
I don't think so, but what it allowed me to do was to cultivate the facility to do my own real technical interviews. And I, you know, left the agency world to do consulting for major software companies where I was trusted to be the first round technical screen for them. And it was that work that had me come up with the idea of creating TechScreen, a platform that would allow a non-technical recruiter to actually effectively engage with the technical audience.
Joel (2m 9s):
Yeah, yeah. You get to your pitch in a second, Mark. We'll get your pitch in a second. We want to know about you the person.
Mark (2m 17s):
So yeah, I was originally got into the working world as a writer and editor in the newspaper racket, and I was being paid to as a sports writer before I was old enough to drive a car. It was when I saw the end of that industry coming that I got into recruiting. A lot of it has to do with the friction.
Joel (2m 36s):
All right, Mark. Well, clearly we're not going to get to you're walking on the beaches and reading poetry. So let's get to a telling him what he's won today.
Mark (2m 45s):
Excellent. I think that conference, you guys saw each other at were the AVN awards anyway. So Mark.
sfx (2m 53s):
Oh hell no.
Chad (2m 54s):
Mark, you will have two minutes to pitch TechScreen at the end of two minutes, Joel, and will hit you with rapid fire Q and A. If you get boring, you've already heard the crickets, you're going to get those again. At the end of Q and A, you will receive either big applause. This is the vaccine the recruitment industry has been waiting for. Golf clap, you might want to quarantine for a few months and focus on the business or the firing squad, total lockdown, not even Aaron Rogers or Novak Djokovich can get behind this business, get the booster, walk away, try again.
Chad (3m 36s):
Are you ready?
Mark (3m 37s):
Yes, I am.
Joel (3m 38s):
All right. In three, two.
Mark (3m 42s):
So TechScreen has what we call the world's only technical knowledge platform. And there's three primary pillars. We have a technical interview tool, it's got 120, the library of 120 skills, questions and answers to create custom interviews. Secondly has a technical training tool. We've created text means certified recruiter training. So recruiter can learn from the content we simplify advanced technical concepts. So recruiting can actually learn the technology and use the content for qualification questions. And then it's a tactical sourcing tool because when we create interviews and score them on the fly, our clients can go back through the database and look for, let's say the client came in with three needs for Java guys, will go in search for Java and then sort them by high score.
Mark (4m 33s):
So they're actually looking at vetted candidates. One of their colleagues had recruited into the past and you know, some of our large clients, they have thousands of vetted candidates that they can be reactivating instead of just worrying about new job postings to get new blood. Why not talk to somebody where you already have them vetted? And one of the problems in recruiting is that everyone gets in typically for the agency and they're forced to learn technology entirely on their own. And so what TechScreen wants to do is to give recruiters that what I call just in time information, to make use of technical content, that's not dependent upon their rote memorization of a terminal definition.` Because so much of the training you'll get where recruiters it's required them to carve out time outside of their core job, learn about, you know, watch videos or watch slides, and then hopefully retain some of that.
Mark (5m 28s):
Our platform is helping them engage in real-time, whether they're doing a technical interview that they create with our platform, or they're simply making use of the technical training content. Like they could have an app developer who needs to know, security.
Joel (5m 44s):
Thank you, Mark. That is the end of your two minute pitch. All right, let's get into the fact that you've been a recruiter for a very long time. And I assume that you saw a void in what you were doing or something that somebody was not providing, that was the Genesis of this company.
Mark (6m 1s):
Yes.
Joel (6m 1s):
Talk about that or am I off base in terms of what really inspired you to create TouchScreen?
Mark (6m 5s):
No, no, that was that that was close. It was mostly like friends were engineers and I would hear their frustration in their interactions with recruiting. So very often they'd forward me an email that would have a comically off target job description being pitched to them. And so I realized that the thing that has really harmed the recruiting industry in the collective reputation they have is largely connected to the fact that they don't understand technology at any meaningful level. You know, whether it's engineering managers or talent, and there's this massive gap that has recruiters at a total disadvantage. So I'm going to create a platform that would let them engage more effectively, but do it in a way that as they're executing their job.
Mark (6m 50s):
So an entity platform that lets us create a custom interview. And we you know, it's the only tool that, where they are the ones asking the questions. It's not like a coding exercise or self-paced multiple choice where the recruiter gets nothing out of it. Right they're just sending them a link to an online test and then they have to wait for them to take it. Hopefully they don't cheat. Hopefully they don't delete it because they feel like I don't need to do this because I got three other offers. And it really is about helping foster engagement between the recruiter and the technical audience, whether it's the hiring manager or the talent.
Joel (7m 25s):
Gotcha. Gotcha. So you guys have been around since 2015, is that correct? So an old startup, if you will?
Mark (7m 32s):
Sure.
Joel (7m 32s):
You guys you've bootstrapped this thing?
Mark (7m 36s):
Correct.
Joel (7m 37s):
It sounds like there's no. So you've grown organically. Is there, is there a plan to raise money? I guess at this point you've just grown so organically that there's no need for that. Like talk about that.
Mark (7m 47s):
You know, it's funny, we've gone back and forth because sometimes people say, Hey, if you have customers, you have paying customers and clients don't raise money. Others would be the other school of thought. So right now we're not planning on raising money because we just rolled out an enterprise pricing structure that two of our clients agree to those, you know, each one wouldn't be a six-figure deal. So if that were to happen, we would have absolutely no reason to raise money in the near term.
Chad (8m 19s):
Okay. So how many employees do you guys have?
Mark (8m 21s):
So believe it or not, we just have three. Okay.
Chad (8m 27s):
Okay. How many clients over the last five, six plus years have you accumulated?
Mark (8m 34s):
So we're in the low dozens because as being bootstrapped, we, one of our challenges is marketing and visibility. And you know, that wasn't my core competency, right? And so a lot of times when you try to do direct sales, no one wants to be sold something. So there's a lot of resistance. I'm not going to submit to you or, you know, your mental jujitsu and just say yes, but I'm getting greater visibility and getting more recognition out in the world would have people say, oh, I've heard of you guys. We go check you out. Getting more into trade shows is something we plan on doing in 2022, doing more things like LinkedIn lives and getting more visibility and public forums like this, are the way to drive recognition.
Chad (9m 21s):
What's your go to market from a revenue strategy standpoint? Are you just trying to hit companies, company by company, staffing firms, staffing firm by staffing firm? Do you have any type of a partnership strategies? What's your main?
Mark (9m 34s):
It's a mixture. I'm glad you asked that. So we recently formed a partnership with somebody in the training space, but they focus exclusively on staffing salespeople. And so this is a well-established outfit where their customers often ask them, Hey, do you do any technical training? And he has to say, no, we don't do that at all. But we do know somebody. So we formed a partnership with well-respected technical sales training company for staffing firms that has hundreds of clients. And we're already working on some deals that could be rather large going through that. We do have a direct sales force. And we recently brought a board, a chief revenue officer who's got 30 plus years in, in HR tech.
Mark (10m 18s):
You know, so we're really trying to position ourselves to scale from multiple channels in 2022.
Joel (10m 26s):
What does your typical customer look like? Or maybe what is your target market? Is it staffing? I mean, Chad kind of asked about that, but I want to dig in a little bit about what your typical client looks like.
Mark (10m 36s):
Well, right now it's more staffing companies because their revenue is tied to filling seats. But one of our best success stories actually came from one of our corporate customers where they had two junior recruiters screen in two months during the pilot, 155 software engineers, which led to managers doing 40 formal interviews. They made 28 FTE offers for 70% interview to offer ratio. And if you believe in this study job, I did some years back, the average interview to offer ratio in their study was like 17%. And so we definitely want to get more on the corporate TA side.
Mark (11m 18s):
In fact, we're envisioning another type of engagement where we work with them much more closely. So there'll be a professional services engagement wrapped around the software. But definitely through partnerships, we're starting to build partnerships with ATS vendors, be able to say, Hey, look, you can have us bolted into your ATS and now you're much more competitive. I mean, now there's like 41 ATS vendors who have between 0.02 and 2% market share. So there's a lot of competition and the needs to differentiate yourself in that crowded space would make us an attractive partner to a lot of those guys.
Chad (11m 56s):
From a staffing standpoint, staffing, to be able to bloat margins needs tech, to be able to be more efficient and scale. And we're seeing that RPO side. I mean, we're even seeing that with the applicant tracking systems. I mean, that's where everything's going. It's going toward tech, right? It's not going toward humans because humans suck at scaling. So the question is what is your scale-ability, right? For any type of staffing firm who needs to be able to be more efficient, to be able to bloat their margins, but yet keep their head countdown because their headcount is really the margin killer.
Mark (12m 32s):
One of the things we do to make it attractive to staffing companies, we actually let them white label the product. So they're actually working with us as a tip of the spear to say, you know, when someone asks a staffing company, what makes you guys different? We coach them to say what we care so deeply about quality we've actually deployed a SASS application, lets us create customized interviews, tailored specifically to your individual requirements.
Chad (12m 56s):
Humans have to do those, right? I mean, you're feeding the human information, but an actual human has to do that and that human's not going to scale well. So how are you going to be able to help them scale better?
Mark (13m 8s):
Well, we're going to help them scale better because they're going to start getting better ratios for their outreach. Usually it's terrible. Usually has to have a hundred outreaches to get two or three people to call them back. And by having better messaging in their emails to have better conversations, you know, in their interactions and just kind of come off as far more credible, you know, far more professional. I mean, there's no substitute for a person talking to a candidate in a recruiting scenario, we'll never be able to get away from that. But what our tool does, it just puts them in position to be much more credible, much more knowledgeable and much more confident to be able to engage with a technical audience and get far greater results.
Mark (13m 51s):
I mean our biggest sapling client between 2016 and 2020, they screened 5,046 candidates, they had a knockout ratio of 66%. I mean, that's unheard of! You know, and our second biggest client did probably 7,000 entities between 2017 and 2020 and they'd like a 50% knockout ratio. And so we're showing, you know, orders of magnitude, improvements in efficiencies, and as we go to our enterprise model with some of our bigger clients, you know, we're looking at being able to do, you know, six figure deals in one shot. Instead of getting, you know, a couple of dozen seats from client A or client B, we just want to be able to say, Hey, everyone gets a texting license when you join XYZ, you know, staffing firm.
Joel (14m 33s):
Mark, I don't have to tell you that this is a hot business.
Chad (14m 41s):
So hot!
Joel (14m 43s):
Screening, not just tech, but obviously tech is incredibly popular at the moment in terms of fundraising and interest, et cetera. I mean, I just, I made a quick list off of the top of my head of HackerRank, Byteboard, Clovers, Triplebyte, Woven, etc. These are, well-funded getting to be well-known competitors. When prospects talk to you and I assume they're asking, how are you different than these others? And if they're not, I'm asking it right now, how are you guys differentiating yourselves from all the other tech pre-screening solutions?
Mark (15m 15s):
So those coding exercises, or even the e-techies and Brian Benson tech check, all they do is help perform a technical evaluation. The recruiter gets nothing out of it because ours is a technical interview tool, a technical training tool, and a technical sourcing tool. So none of the codel and litmus and code pads or e-techies are doing anything to help improve engagement between the recruiter and their technical audience. In the same way, any of the technical training tools out there, the Dev scaler's, you know, the Recruiting Innovation, all these, some of these other tools, all it is is technical training content and does nothing to help them technically evaluated, technically screen candidates.
Mark (16m 0s):
It's certainly not doing anything to help generate a potential sourcing targets. And we do all three. And so, although there are plenty of technical evaluation tools, that's all they do. We're an interview tool, we're a training tool, we're a sourcing tool, all in one platform.
Joel (16m 14s):
What do you think has been the major hurdle to your growth in the years that you've been in business?
Mark (16m 22s):
Lack of name recognition and resources, and that ultimately may be the trigger that has a saying, Hey, we got to bite the bullet and part with some equity for a, you know, for big comma check, but we have enough guys doing our advisory boards and people would just know in the industry, a lot of them will caution about taking on money and in creating the dilution. But you know, it may be something that we find ourselves saying, Hey, you know, this is the right time and we have the right positioning to get the right kind of valuation that's favorable to us. So never rule it out, but it's just not the core focus of everything I think about when I wake up every day.
Chad (17m 3s):
Well, you are a training platform because you are trying to train humans rather than actually using technology in being able to fill them with that 120 skills. Have you ever thought of being able to, or maybe it's on the roadmap being able to do some of these engagements with either chat bots or maybe video interviews so that they are recorded, but they are scalable?
Mark (17m 28s):
Well, we actually have something in our roadmap that I want to be careful of how much I don't want to say too much, but it is going to leverage some things like AI and NLP that can handle scoring the interview on the fly. Not something that would, that would definitely scale, you know, there would be still a recruiter interface, but the ability to accurately keep tabs on the efficacy of the candidate's answers using technology is something that's definitely on our roadmap.
Joel (18m 0s):
What would you say is the biggest threat to your business at the moment?
Mark (18m 6s):
Honestly, I have to say if some calamitous economic event happened, that just because companies just stop hiring, you know, fortunately we have seen, you know, there's plenty of activity, but I see the only thing derailing us if some activity or some action that just had companies just completely locked down and just not hire at all, that would be the only thing that I can see that would really take the wind out of our sails.
Joel (18m 29s):
So how did, how did you maneuver the pandemic or did that not impact you much?
Mark (18m 34s):
It really didn't impact us much. I mean, we'll right at the very beginning we did have one client who just cut half their staff, but I think that was kind of an overreaction. But we've been hearing from our clients that they're experiencing pretty steady demand. And so knock on wood. We haven't seen the pandemic cause any major disruptions with the exception of one client who just, I think had a very sharp, initial reaction in early 2020, but they've since grown and they've actually more than doubled their commitment with us from the previous year.
Joel (19m 11s):
Lucky you. Lucky you.
Mark (19m 12s):
Yeah, so far so good.
Chad (19m 15s):
This sounds pretty expensive, Mark. That's usually Joel's, I'm trying to get into my Joel Cheeseman.
Joel (19m 21s):
All these humans!
Chad (19m 23s):
Sounds very expensive. So tell me what would this actually cost for an organization you're talking about six figure deals. How big is a company like that where are you going to be hitting six figure deals?
Mark (19m 34s):
Okay, so the enterprise licensing starts at a hundred seats, but just for the basics, you know, the, the monthly is going to be anywhere between 70 and a hundred bucks a month per seat, traditional SASS model. And that's based on how many seats, like up to 10 seats, it would be $100 bucks a month, 11 to 15, it'd be $90 bucks a month, et cetera. And at the enterprise level, there's a $50,000 commitment, but it starts at a hundred seats. Then we'll charge per month based on the, how many like between, you know, between 100 and 199 seats, we'll kind of charge you an extra thousand bucks a month on top of 50 K and then climb the ladder from there. But there's not going to be tons and tons of companies who are of the size that they would need to get a hundred seats and that clearly would be on the staffing side.
Mark (20m 19s):
You know, the corporate TA side, it's still going to be in the mid to low double digits, you know, per shop. And I just think that we have to get out there with greater visibility because there's no one who would argue the fact that recruiters lack of technical acumen is a real pain point in the eyes of the audience with whom they're asked to interact. You know, you don't have to do a research paper to prove that validity. And when we can just get out to say, Hey, look, we're a technical interview tool, a technical training tool, we're a technical sourcing tool, all in one product. I think it's a pretty compelling value proposition.
Joel (20m 58s):
All right, Mark
Chad (20m 58s):
There it is!
Joel (20m 60s):
That bell means it's time to face the firing squad. Are you ready my friend?
Mark (21m 5s):
I am.
Joel (21m 6s):
Well, we might be friends at the end of this, who knows. So I'm really torn on you. At the five-year Mark, which you guys have gone past, I usually like either a no, or a yes on my companies. And you are more of a maybe, which is why I'm torn. I like your history in recruitment and that core competency. You're obviously doing something right having been in business this long, but you're also doing things not as right as you could be. And I think that part of you understands that the marketing, the sales end, that that needs to be a little bit more of the steroid addict.
Joel (21m 47s):
So can you turn a, maybe into a yes or is maybe going to be a no. Is the question that I have to ask myself and I think a few things working for you are your history and experience, the fact that you're in a hot you're in a lane that's really hot right now. People need technical folks and they're willing to spend money to get them. I think coming out of the pandemic, that's going to be more important than ever. If you can come out, get yourself a Series A round, get yourself some people to start marketing and selling this thing. I think that you could turn it around, but those are a lot of ifs. So I'm going to stick with the torn thing and just say for me, it's a golf clap.
Joel (22m 28s):
I think there's potential there. I'm not gonna, I'm not going to shoot you down on him yet, but I'm also not giving you a big round of applause. So get to work, get some money and get some people, get some people to go sell this shit and scream it from the mountaintops. I think you could find some success Mark.
Chad (22m 46s):
Joel said, he says, get yourself into quarantine and focus on the business. Now I get that. So Mark, I got to say, I do love what you're doing here. First and foremost, you're getting recruiter certified and that's a great step forward and finding the right talent for the right gig. I totally get that. But this is a scale game. This is a tech game, and this is also a money game. These are all areas that you're not playing in right now. A few six figure deals will not help you keep pace with unicorns that are out there, kind of like Touring who just got $87 million and now, you know, they're evaluated over a billion.
Chad (23m 26s):
And I keep focusing on one thing scale. And as I started to dig deep into the company, I started to reach out to some very high level staffing firm friends of mine, to be able to grind on this with me a little bit. And they all agreed scale will not happen with human beings. Working with staffing companies today, even working with talent acquisition today, what's harder to find than a technical person, a recruiter? So what do they have to do? They have to scale with tech. So to be able to do that, you will have to, no question put all of this great knowledge that you have with these 120 skills into technology that will make it much more fluid, much less friction, and overall something that you can plug and play.
Chad (24m 13s):
Until you get to that point again, I love what you're doing, but until you get to that point where there is less, less friction, it's gotta be the guns for me.
Joel (24m 28s):
Ouch.
Chad (24m 28s):
Love you, Mark.
Joel (24m 28s):
Nothing personal.
Mark (24m 29s):
Nothing personal.
Joel (24m 29s):
We appreciate it. Mark and wish you the best of luck and hope that in a few more years, you can come on the show and tell Chad to fuck off for his bad reviews.
Mark (24m 40s):
I'll consider that an open invitation.
Joel (24m 41s):
Open invitation.
Chad (24m 42s):
Of course. Of course.
Joel (24m 43s):
If you can throw whiskey in the deal, then I'll be in on it too.
Mark (24m 48s):
Single malt.
Joel (24m 48s):
Love it. And for our listeners, you didn't, you did not get a chance to do this in your pitch. Where can they find out more about your company?
Mark (24m 57s):
So a TechScreen.com.
Joel (24m 59s):
We love it when people prove us wrong. Mark.
Chad (25m 3s):
Do it, man.
Joel (25m 4s):
Open invite.
Mark (25m 5s):
It's coming boys! .
Chad (25m 8s):
Excellent.
Joel (25m 8s):
Ooh, big talk. All right. And with that, Chad, another one is in the books.
Joel and Chad (25m 13s):
We out.
Firing Squad OUTRO (25m 17s):
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.chadcheese.com.
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