00:13:37 · Daniel Chait
[00:13:37] S0: Okay. So that... The story takes place over about a year from March 2020 to March 2021. March 2020, COVID. Right? And we went from the world changed all of a sudden. And for us, we went out of this zero interest rate environment where everybody was growth at all costs, hire as many people as you can, to this crazy time where in April 2021, the unemployment numbers came out. And for context, typical employment report comes out and the number swings by a 100,000, maybe a few 100,000 if it's a big swing. You might see 300,000 jobs created or a 100,000 jobs lost. 13,000,000 unemployed in one month, in one job report in April. I mean, you look at economic charts from early twenty twenty, they all just have this spike. And so a lot of people panicked, including us, and it was like this existential moment. And so we actually did a layoff. We were... Realized we were geared for for hypergrowth. We couldn't count on that anymore. We cut about 30% of our team, mostly in sales and marketing, on the theory that, hey. We've got some customers. We've got a business. Let's keep that at that level. And then whenever all this pans, you know, subsides, it could be years from now, then we'll be we'll be able to withstand it. And within a month, growth had resumed. And by end of May, it was a frenzy again. And so we had a six week period of uncertainty followed by return to hypergrowth. And we immediately tried to hire back everyone we could. They had all gotten jobs already. You know? I mean, that was, again, it was a a frenzied moment of growth or in tech as much as it was a a difficult time and lots of other... So that was our experience. So as that year played out, we were getting tons of business. We were growing like a weed, but we couldn't hire. We literally didn't have the... We couldn't get talent. And so we were incredibly constrained, and it was really painful. And we knew we needed more resources. We knew we needed to fund a lot more growth. And so I started thinking about how that was gonna go in the fall. And as we realized the scale of the business and what we needed and where we were at, we started talking to some of the larger investors and private equity funds, and we came across this really interesting offer product that TPG had on offer, which was they called a growth buyout.
00:15:46 · Daniel Chait, Guillaume Moubeche
What this was was they were finding late stage opportunities at growth tech companies that they believed in the management, they believed in the strategy. These companies needed resources, and they wanted to bring the resources, not just financial, of a large firm like that to bear in these type of situations. And so it was a really good fit for what we needed. We were nine years into the business. We knew we wanted to provide some liquidity for early investors, for early employees, but we knew we needed lots of money for what we were gonna do next and for the growth that we were experiencing. And so that growth fund offering of TPG has just had a really nice fit to it. And know, it took a few months to get that deal done. We closed it, as I said, in q one of twenty twenty one, and it was both an opportunity to buy out the early shares of those people that had, you know, put 25 or $50,000 into the company in 2012, as well as to provide, you know, tens of millions of dollars onto the balance sheet for the future growth that we're experiencing. [00:16:44] S1: And I think like during your growth journey, you've also decided to acquire other companies to kind of do like external growth, drive also like more innovation from like young startups. Can you like walk us through your decision making when it comes to buy versus deals?
00:17:02 · Daniel Chait
[00:17:02] S0: Yeah. You know, each situation's a little bit different, but there's some of common principles that I think that are obstructive. It's like the old saying in software, like, anyone can build anything. Right? So on one level, it's like, it's always a question of, could we just build it ourselves when you're considering acquisition? But the truth is that a lot of technology does require very specialized know how and skills. So often, there is a component of how much specialized know how is there in what this solution involves. And then there's always the time to market, which is as much as anything about trade offs. We like to say here at Greenhouse, I think the one thing that we think about is if we're gonna have a given solution, whether we buy, build, or partner, if I'm gonna bring something to market, it's gotta be relevant to most of my customers. I don't wanna have a bunch of products that 5% of my customers are gonna need. That's a great example of where, let a partner bring that to market. We'll help them get to our customers that want it and need it. But for most of our customers, that's not gonna be something I'm gonna invest in. So I'm thinking about, is this something that has the potential to be used by, you know, most of our of our customers? And is this something we... Is this a business we need to be in? And if those two things are true, you know, then often often is not, then it comes down to, like, how are you gonna get there?
00:18:14 · Guillaume Moubeche, Daniel Chait
[00:18:14] S1: And when you look at it, like, do you want basically to do a one plus one equals three, like your revenues, their revenue plus additional cross sell that you could do to your user base, or how exactly do you stress test it? [00:18:28] S0: I think that's one way that those deals happen. I think that's not always it, and I don't think that's been the majority of the the things we've done. Because we've typically done earlier stage acquisitions where... Like, if you take the acquisition we did of Ezra AI Labs, right, to bring our voice AI product to market, that was a product that had proven itself with some really demanding customers in a very cutting edge technical space with lots of know how involved. [00:18:55] S1: Can you explain maybe what the product does?
00:18:58 · Daniel Chait
[00:18:58] S0: Yeah. So it's a Voice AI interviewer. So, basically, the idea is we can automatically deliver a really relevant, very user friendly interview at the top of the funnel. So, like, as part of the job application, finding out stuff about you as a candidate is simply not on your... Resumes are are getting increasingly, like, it's just AI slop. Like, it's hard to know what's... What the person can really do. And as a result, candidates are left out of the process. Candidates are really struggling right now, which we should talk about that too. The job market's really busted in a bunch of ways because of AI. And if you talk to job seekers, which we do a lot of, what you hear is they're just flinging the resumes into the black hole. They're never hearing back. You apply to a job. There's a thousand people in line in front of you. You're never gonna get seen. And so this is a way to provide everyone the opportunity to have a shot, to take the first step in the process, have a conversation, prove your skills out, and get seen on that basis versus what keywords are on your resume. So that was a theory, and we had conviction that the world was headed in that direction. But it wasn't about, oh, you have this much revenue, and we think we can get that much revenue. It was more like, this is a fundamental enabling technology to a whole new way of working, to reimagining hiring in the era of AI in some very different ways. And so it's less about, yeah, let's get our bean counters, you know, to look at a spreadsheet and and do some multiplication, and more about, this is a bet we're making on the future of hiring and the future of software.
00:20:22 · Guillaume Moubeche
[00:20:22] S1: And so far, like, how exactly have you seen the market evolved? Because I I think you're saying that it's kind of like getting screwed on on both sides for the candidates, but also from the recruiter? Can you maybe expand?