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I see this huge opportunity of what’s happening between the coasts, it’s so expensive in Silicon Valley. It’s so expensive in New York City. It’s so expensive in LA to have teams. It’s so expensive to hire developers. And so what’s happening is it’s like this amazing force with the Midwest is taking off. And I just really started to buy into it and believed in it. And I’ve kind of bet my entire career on it that the center of the country is where the next wave of innovation is going to be.
Jay Clouse 0:27
The startup investment landscape is changing. and world class companies are being built outside of Silicon Valley. We find them, talk with them and discuss the upside of investing in them. Welcome to upside.
Jay Clouse 0:55
Hello, hello. Hello, and welcome to the upside podcast, the first podcast finding upsized outside of Silicon Valley. I’m Jay Clouse, and I’m accompanied by my co host, Mr. engaged to be wed himself. Eric Hornung,
Eric Hornung 1:07
I’m off the market. Ladies and gentlemen, everybody who was potentially interested.
Jay Clouse 1:13
Officially off the market. Eric, tell us about this proposal that people need to know.
Eric Hornung 1:19
Well, Jay, I’m a bit of a planner. I don’t know if that’s actually true or not. But for this occasion, I was definitely a planner, I had to lie a bit as well. I just had to have a couple little white lies out there. I recruited one of my best friends to help me plan a fake charity event that would have been located across the park from where we live, I recruited a restaurant to have a fake reservation setup. And then I recruited her parents to bring over our dog afterwards. And I recruited a photographer to capture the whole thing capture the whole experience. So I proposed in front of Music Hall, which is has a lot of sentimental value. It’s where her parents got married. It’s a place that we bring our dog all the time. It’s at a park that we hang out all the time, just a beautiful venue. So if you go to my Instagram, which is EK Hornung, you can actually see the marquee picture, but we have a whole album of hundreds more. Oh, and by the way, and she said yes. So that was cool.
Jay Clouse 2:12
Then you recruited friend of the podcast, Colleen to join you for the rest of your life.
Eric Hornung 2:16
I did. I mean, she still has some time to back out. This is just a promise to join me for that’s my life. Not not the real thing yet.
Jay Clouse 2:24
I think you’re a little bit more of a white liar than you are a planner.
Eric Hornung 2:27
I mean, hey, look, that’s your opinion.
Jay Clouse 2:31
I’m just kidding, Eric, I think you’re someone with lots of integrity. And I’m happy for you in front of the podcast, Colleen, on your engagement.
Eric Hornung 2:40
I got I got an eye for talent. I’ll just say that.
Jay Clouse 2:42
Speaking of integrity, and an eye for talent. Today, our guest is Kaleb demand, the founder and CEO of integrity, power search, integrity, power search was founded in 2012. It’s an 18 person recruiting agency focused on connecting amazing people to World Class technology companies. They’re based here in Ohio, but they do searches all across the middle of the country and a little bit beyond. They’ve done 600 plus searches to date, their companies that they’ve helped have raised $2.5 billion, collectively in venture capital funding. They work with 84 companies. Now. These guys smile and dial and they make the connections. They are the plug.
Eric Hornung 3:19
They are the plug for a problem that you wrote an article on, right?
Jay Clouse 3:23
Yes, I think talent is becoming more and more fiercely competitive in the Midwest in areas that are not Silicon Valley. Although it is plenty competitive in Silicon Valley. There are a lot of people moving and shaking all the time, it seems. But I came across Integrity Power Search, because they worked with one of Drive capitals, portfolio companies cross checks when I was at cross checks. And it seems that they actually work with all of Drive capitals, portfolio companies. And you know, we haven’t done much talking about talent here on the pod, Eric, at least not from a perspective, that’s just not one founder and one company.
Eric Hornung 3:56
Yeah, that’s true. I think this is going to be an interesting one to hear across multiple companies, but also within IPS, how they actually go about finding recruiting talent, I think that would pair nicely with your article, which was in the update, Volume Two, so you guys can check that out in as a nice little wine and cheese pairing here on the pod.
Jay Clouse 4:16
Yeah. And to get a little primer on that that piece was focusing on. There’s a lot of talk about tech talent, engineering talent, and how that becomes competitive easily in a lot of ecosystems. But from the conversations we’ve had, we hear that the talent wars go beyond engineering into things like product management, product design, data science, and especially also executive talent, which is hard to find in areas of the country where there have not been multiple large exits, and members of those leadership teams, spawning other companies out of it.
Eric Hornung 4:46
I think we’re supposed to use the term blitzscaling at some point here, right? Like, isn’t that like the isn’t that the buzzword? There’s not enough executives have been to like blitzscaling.
Jay Clouse 4:55
Yeah, what other what other? Can we do? I’m really interested to hear from Kaleb I, my present is for recruiting firm, it’s got to be just a lot of phone calls, not only not even just emails, I think it’s a lot of phone calls. So somebody who is willing to do that kind of calls as somebody who also appreciate sales. And that’s people. That’s somebody that I like to talk to Eric. guys wanted to give you a quick note and ask for a quick favor. Eric and I have once again, entered the South by Southwest panel picker competition to have a panel or maybe two panels at this year’s South by Southwest festival. Last year, you guys came out in droves and voted for our panel and gave us the opportunity to go and speak with people at South by Southwest about geography versus investing does location matter. And this year, we have two panels up for vote that we appreciate your help in supporting. Eric, you want to talk a little bit about your event.
Eric Hornung 5:51
Yeah, so mine is quite the tongue twister, Jay. So if I get through this in one take, it’s going to be impressive. It’s called capitalists capitalist, running a cashless fund. I nailed it. It’s about what Jay and I are doing here on the podcast, which is essentially running a venture capital fund without making investments of money. But instead of making investments of time and giving people media attention, I think this idea can apply to a lot of other spaces. And we’re going to tell our story. And also talk about other ways that you can think like an investor act like an investor without making specific investments. What do you got on the docket Jay?
Jay Clouse 6:29
My panel is called connecting tech communities outside Silicon Valley. It’s not nearly as fun to say as yours. But this is a panel exploring the ideas of how to connect community builders and different ecosystems across the country to one another is sort of this platform role for community that we’ve talked about more than once here on the podcast. And so if you guys wouldn’t mind tossing us a vote, you just have to go to upside.fm slash vote. I’ll say that again. Go to upside.fm slash vote, please give us a vote on both submissions. And hopefully one of them comes through and we’ll see you again this year at South by Southwest in Austin, Texas.
Jay Clouse 7:10
Kaleb, welcome to the show.
Kaleb Dumot 7:11
Hey, guys, happy to be here.
Eric Hornung 7:13
It’s great to have you. On upside. We like to start with a background of the guests. Can you tell us about the history of Kaleb?
Kaleb Dumot 7:20
Sure. Yeah, born and raised in Cleveland, Ohio, about 20 minutes outside of downtown Cleveland in a really small suburban town called Brooksville. Now, I spend my time 50% in Cleveland and 50% in Vancouver. Yeah, that’s a little bit about me.
Eric Hornung 7:38
Most people spend their time 50% in Ohio and 50% in like Florida, or Arizona, or somewhere warm YY, Vancouver.
Kaleb Dumot 7:46
Yeah, my wife’s from there. So we met five years ago, actually in Las Vegas of all places.
Eric Hornung 7:53
And she still lives out there?
Kaleb Dumot 7:54
Yeah so we split our time. So 50% we split in the winters in Vancouver, we get to enjoy a lot of the mountains and the skiing and the international city there, which is really great. And then the other half we spend in Cleveland to take advantage of the summers and the lake and boating and golfing all that fun stuff.
Eric Hornung 8:12
Little geographic arbitrage like that.
Kaleb Dumot 8:15
Yeah most people I know Do not spend their winters in Vancouver, but hey, man, it’s you know, we want to be close to her family. So it all works out well for us.
Jay Clouse 8:24
Tell us a little bit more about growing up in Cleveland how you spent your time did you ever move out of the state in the interim?
Kaleb Dumot 8:31
Yeah, it’s been good. I grew up went to public high school was a big basketball player growing up really competitive guy in college. I studied finance and political science did several internships across the US but then also studied abroad in Italy for six months with really shaped who I am today and helped me get the travel bug also spent a semester in Washington DC. I lived in Los Angeles six months I’ve lived in the Outer Banks North Carolina but something about Cleveland just always brings me home the people the authentic nature, the food my friends, my family. It’s just something that’s like a magnet almost it always brings me back.
Eric Hornung 9:13
The browns, the Indians, the Cavs. I get it. Where did you study in Italy?
Kaleb Dumot 9:18
And Florence. Yeah, so we spent six months there best time of my entire life. Every weekend, we got to go to a different country and see a different culture and it really just brought in my entire perspective on the world.
Eric Hornung 9:30
How much gelato Did you eat?
Kaleb Dumot 9:32
Tons GO pizza and spaghetti man, that was the diet.
Jay Clouse 9:37
Eric talking to somebody who spends time in Italy and he’s gelato just makes me more of an outsider on this podcast and I’ve ever been. This is one of his past times. But So Kaleb, you said you studied finance in political science? This seemed like two pretty divergent topics. How did you land on those two topic of topics of interest?
Kaleb Dumot 9:58
I think finance for me was I was so my mentor in high school. He was also my high school basketball coach. And my mentor, he was a wealth financial advisor for Morgan Stanley. And so growing up, I always looked at him as kind of the North Star. And I thought to myself, like that’s what I want to do. I love the life that he’s created for himself. I love that he’s coaching sports. And being a great father and spending a ton of time with his kids. Like, that’s what I want. And so that’s how I kind of was driven to finance. But then, when I was in Italy, I got really passionate interested in, in world politics, and also US politics. And so I ended up picking up another major and just I was able to since I got through all my finance courses really easily, I was able to just kind of double down and do kind of more of a passion major as well.
Jay Clouse 10:44
So you have this Northstar of someone in financial advising, you’re interested in politics, at some point, you stumble across entrepreneurship as a path. So what was that moment that you start to think? Okay, what would it be like if I was my own boss?
Kaleb Dumot 10:58
That’s a great question. So from a young age, I always knew I wanted to start a company and become an entrepreneur. I was always that kid in elementary school, like selling lemonade, and then eventually grew into like selling magic cards, if you remember those, and then baseball cards, and then in middle school, I started selling like Bert CDs of m&m and Tori is big. And it’s not the best story. But growing up, my parents always fought a ton. And most of the times their fights, always centered around money. And so I grew up in a pretty affluent area outside of Cleveland. And I think my mom really tried to keep up with the Joneses in a way. And you know, we had a lot of neighbors that made quite a bit of money. And we didn’t, some were doctors, some were lawyers, and a lot of them were small business owners. And so as a young kid, I looked at those families that were wealthy, and I said to myself, men, they seem really happy. They seem really like a great family unit, their parents don’t seem to be fighting, like. And so at that time, when I was a young kid, like I thought, myself, and mistakenly that money will actually bring you happiness, and a happy home. So since then, up until I actually started my company, like two years in, I always thought that like money equals happiness. And I always knew I wanted to become financially independent, as fast as possible. So my goal of getting there was to start a business because I definitely wasn’t going to be a doctor, or a lawyer or anything like that.
Eric Hornung 12:24
What about starting your company, change that idea in you that money equals happiness,
Kaleb Dumot 12:30
I think once I started to get some success a couple years into it, and I was able to move out of my parents basement after like three or four months, and I started, like really starting to earn quite a bit, I learned that I wasn’t any happier than I was when I had like 3000 bucks. And I had like very little money. And so like, material things, in my opinion, like, I’m just not into a more into experiences. And so I realized that like community relationships, variance is really what brings me happiness versus, you know, financial independence and money.
Eric Hornung 13:05
So bring me back to this basement that you just glossed over. You were starting a company out of their basement. Is this like the proverbial Steve Jobs moment or what happened?
Kaleb Dumot 13:14
Well, so kind of going back a little bit. During college, I did five different internships, and three of them were in finance. One was in forensic auditing for the Government Accountability Office in DC, where we, it was pretty cool. We got to audit every single dollar that the United States government spent, but I learned that I did not fit in and the government, they just moved so entirely slow. And then I did an internship working for a very small recruiting company in Cleveland, I fell in love with the recruiting business, but for many, like ethics reasons, I couldn’t align myself with the founder of that company. All my co workers during that internship describe this guy is like a wolf in sheep’s clothing. And so there was I was 22 years old, I had 3000 bucks. I was like, man, if I don’t do this, now, I’m never going to do this. And so one of the people in the office pushed me and said, Hey, man, you are the best recruiter I’ve ever seen. Like, this is insane what you’ve been able to accomplish during this internship, like, you should go and do this. I know, this is what your dream is. And so I went to my dad’s house at that point, my parents split up my dad was living with with his mom, his my grandmother, and my mom was still living in Brooksville. So I actually moved in with my dad, and started the company out of there. And I kind of split the time in between my mom’s house and my dad’s place.
Jay Clouse 14:35
What made you fall in love with recruiting and what made you remarkable at that position?
Kaleb Dumot 14:40
I think the biggest thing that I love about recruiting and the type of recruiting that we do, is all of our clients are startups, all of our clients are venture backed companies, all of our clients are trying to make the world a more beautiful place. And so I love recruiting because we’re able to help people were able to land them into a new position, we’re able to change their life for the better and get them an opportunity that they would never have found, if it wasn’t for us. So like that, that feeling of helping to skyrocket or connect somebody’s career. It’s just second to none. And then, like I mentioned, like the the startups themselves, like, actually, those are all of our clients. And so working with those types of companies, it’s easy to get up every day and get excited about you know, what’s going to happen three to five years.
Eric Hornung 15:24
Was it always the case that the business plan when you walk down the stairs and dear grandma’s basement at this point? Was the business plan always, hey, we’re just gonna work with startups? Or was there a v one that had to get like tweaked a bit?
Kaleb Dumot 15:38
Yeah, so V1 was Dot Net developers in Columbus. That was the one and I went after. And I built relationships with thousands and thousands and thousands of developers. I basically like the way I built out the database that we have now is I cold called every fortune 500 company 200 calls a day calling into chase Indonesia, wired into Patel, trying to find people’s phone numbers to get recruits, right. And so that’s how I built out the database. That was the one was going after.net developers and I was placing them at big companies, small companies, software, companies, agencies. And then, after a year or so I started to realize, like I really was just so drawn to startups into actual software companies. I got a huge break in the business when when Drive Capital came to Columbus.
Jay Clouse 16:28
So let’s take a quick step back and explain what Integrity Power Search is today.
Kaleb Dumot 16:33
So IPS is a full stack recruiting search firm for venture backed startups between the coasts. So when I started the company in 2012, until now, we’ve hired over 650 people, for startups across the middle of the country, our model is pretty simple. Today, we actually so we partner with a lot of VCs, about 25 of them. And then once they invest money, it could be 1 million 5,000,020 million, sometimes 100 million dollars into a company, we come in, and then help hire the most critical positions for the executives for the founders. So 50% of our business today is software engineering, recruiting. 25% are executive searches like CEOs and chief revenue officers and chief financial officers. And then the last 25% our clients assets to go and search for product managers, software sales, people, growth, marketers, customer success, folks. So that’s a little bit about us. We have 18 recruiters now. So over the last couple of years, I decided to kind of take IPS from a small lifestyle business of just myself. And now we have a team of 18 total recruiters here.
Jay Clouse 17:43
You mentioned earlier that you really loved the experience of working for the other recruiting company, but there are some ethical issues you have the founder, your current company is called Integrity Power Search. Is that a correct line that I’m drawing? Or is there more to that story?
Kaleb Dumot 17:58
That’s exactly it, men. That is how I named the company is because if you go on glass door, I’m not going to name the company that I interned for him. But if you go on glass door, now it’s like one out of five stars. And there’s a bunch of stuff on there about him. And it’s just like, I couldn’t align myself with that, like my dad taught me from a very young age, he opened up his computer, and he showed me his address book. And he said, these 942 people on here, Kaleb, they are friends, they are people that will do a favor. For me. These are people that I’ve helped and I have really strong relationships with. And you only want to align yourself with people that have strong integrity and strong ethics. And unfortunately, like this guy, I mean, he taught me the entire business, but ethics wise, I just couldn’t align myself with him.
Jay Clouse 18:42
Is that uncommon in recruiting as an industry?
Kaleb Dumot 18:46
It’s a tough question to answer. I mean, I don’t think it’s uncommon. I think that recruiters definitely get a really bad rap for sure. I mean, if you go on LinkedIn, there’s, there’s always hate recruiters post daily on there that pop up and you know, go crazy. I mean, I think it’s just, it’s a really tough gig right now, because of the unemployment rates are just so stinking low. So it’s really tough to recruit in today’s climate, and I think recruiters do anything and everything they can to get people on the phone. And I think sometimes they definitely do cross the line.
Eric Hornung 19:17
Take me back to this decision. What was the catalyst moment when you went from Okay, this is a lifestyle business I’m building out to all right, I’m going to scale this thing. And now I have 18 recruiters working with me, was there a catalyst moment? Or was that just like, how did that happen?
Kaleb Dumot 19:33
I think it was just a lot of self reflection. So during my 20s, I did a lot of traveling every year, I’d go on one or two big, like international trips to see the world. And it just like I kind of got just ready to settle down, got married. And I just thought to myself, like, if I’m not growing, I’m dying. And so I see this huge opportunity of what’s happening between the coast it’s so expensive in Silicon Valley, it’s so expensive. In New York City, it’s so expensive LA to have to it’s so expensive to hire developers. And so what’s happening is, it’s like this amazing force with the Midwest is taking off. And I just really started to buy into it and believed in it. And I’ve kind of bet my entire career on it, that the center of the country is where the next wave of innovation is going to be.
Jay Clouse 20:16
What is the model for recruiting firms for making money? Is it a placement fee?
Kaleb Dumot 20:22
Yeah we charge three different ways one is strictly equity. So I’ve invested in some of these startups that we work with, and we’ve taken percentages or half appoints of certain companies. So that’s one way for early stage companies that don’t have the cash to really do a search. The second way is a retainer base. So we charge typically $5,000 a month, and then we subtract that off of a total fee. That’s a percentage of the base salary. And then the third way is just a pure percentage of the base salary. So usually anywhere between recruiters will charge between 20% and 33%, of the first year total compensation.
Jay Clouse 21:03
So you said that early on, you’re calling in to fortune 500 companies, and generally, that’s almost a holy grail for people is getting clients that have big names and big budgets. And now you moved into startups where people typically say, well, it’s harder to monetize startups or make the money that you’re worth, has that decision paid off for you, and what made you able to make that transition and work with startups in a way that was good for growing your business?
Kaleb Dumot 21:29
That’s interesting. I do agree that a lot of our clients do try to go after enterprise deals, the deal volumes are a lot higher, the sales cycles are, of course longer. But for me, one of my worst qualities, I’m terribly impatient. And a lot of the times with these big fortune 500 companies I kept running into, we’re competing against five or six, or sometimes 10, other search firms for the same exact work. So a lot of times, I would do all this recruiting, and then find out like, they either put the roll on hold, or another recruiter that was also working on the same position filled it. And so to me, I just felt like I was staffing roles of, you know, one engineer out of, you know, 4000, inside of Chase. And that, to me, wasn’t as appealing as to hire one out of the first five employees of a new company, because that way I have like a real impact on their growth. And that, to me is exciting.
Eric Hornung 22:23
How emotionally tied are you to the company’s you’re placing employees in?
Kaleb Dumot 22:27
Absolutely, I mean, I, for me, like the companies that we recruit for, I wouldn’t represent them unless I would want to work for them myself. Like, that’s our hard roll. We have a lot of startups that reach out to us and a lot of tech companies that reach out to us that I have, like, heard bad things about their founders, and like, Hey, we’re just not going to work with these guys. Because I personally don’t want to put our brand and our name, and our candidate pool in front of them. And so and then like, as much as you know, we’re, you know, we’re selling the startups, they’re, you know, they’re they’re selling us to because we our services are pretty high demand right now.
Eric Hornung 23:01
Do you have any good stories of a company that you invested your time in early to get them the right kind of talent?
Kaleb Dumot 23:07
I would say the most interesting story, there is probably a company in Columbus called Root Car Insurance for contacts of those of you that don’t know anything about roots, they are one of Ohio’s very few unicorn, billion dollar tech companies. So Drive Capital introduced me to the two co founders of Root right before they actually invested. And we’re just getting started. And I met with them in a coffee shop to learn about what they want to build, and what it’s going to look like. And basically, the business plan was on a napkin at that point, right. And that was a little over three years ago. Since then they’ve grown to 700 employees, and now are selling car insurance in 25 states. So basically, the way that their app works is it’s iOS and Android, you download on your phone, and they discount car insurance to you if you have really, really good driving behaviors. So they track how hard you break how fast you turn the time of day, like how many miles You’re so they’re tracking all of this versus like to traditional insurance companies, like, you know, maybe nationwide or progressive, you know, they’re tracking a bunch of more antiquated data points. So I was fortunate, like I got in really early with those guys, and help build out a lot of the founding team. One of the cool ones that I’m most proud of is their chief data scientist that I hired for them. And then their head of design that I hired from Netflix for them, along with like their VP of product and many engineers. But yeah, it was one of those stories that I’m kind of most proud of just because of their growth and what they’ve been able to accomplish. What were those conversations like trying to get somebody to come to Ohio and work for a company that was just a business plan on a napkin? How did you how do you convince somebody become a very key early hire at a startup where there’s perceived a lot of risk? Interesting? Yeah. So I mean, recruiting at the end of the day is really sales. And so when you’re a recruiter, or if you’re a founder, or an employee, and you’re hiring, whatever you’re looking to hire, you have to think about how am I going to sell this particular role to a passive a player superstar? How am I going to get them excited, and the best talent, they get really excited by the problems that they get to solve, that’s first and foremost. So you have to know how to sell your company, the vision, the values, everything about the organization, where you’re going, and then you have to know how that role kind of ties into all of that. And I think that’s what separates us from other search firms is we really spent a lot of time up front like trying to get to know the businesses so that when we have an A player superstar from Netflix on the line, or from Google or Facebook, and we can get them really excited about this company that doesn’t even have a website yet. That’s just getting started off the ground, right? Like they just closed 5 million bucks. And now we’re pitching people that are working at some of the most premier tech companies in the world.
Jay Clouse 26:10
So these companies that bring you on this early, why do they trust you to go out and be a salesman for their company, as opposed to maybe one of the cofounders?
Kaleb Dumot 26:22
Well, they’re absolutely going to sell as well. I mean, we are doing all the prospecting and then hooking and baiting and getting them on the phone with the founders. And then, you know, it’s their job just to sell as hard as us. But the reason why they hire us really is because of time. I mean, it’s the most valuable asset that a startup founder has, and something that you’ll never get back. And so with these negative unemployment rates, it’s incredibly difficult to hire. You know, a lot of people a lot of founders don’t know how to hire, they don’t know how to store if they don’t know how to recruit, they don’t know where to look, the best where to look is inside your natural network, right? Your investors, networks, your employees, networks, your network, that’s number one. But once that taps out, a lot of people go blank. And that’s when we get a lot of phone calls.
Jay Clouse 27:05
You mentioned that things really changed for you when Drive Capital came to town around 2012, which is about the same time that you were starting Integrity Power Search. So how did that relationship get started? And why did this huge venture fund say one of the first partnerships we’re going to make is recruiting and talent?
Kaleb Dumot 27:22
They were asking around town, who, who’s the best recruiter in Ohio, we want to meet as many as we can. We know once we invest money in these companies, we’re going to need a talent partner that gets startups that can move really fast, and I can find the best people. And so Drive Capital, they interviewed me for like two or three hours, they called me up out of the blue. And that morning, we went and I did an interview. At that point, I didn’t even know what a venture capital firm was. This was like really early. And so they interviewed me, they gave me a shot with their very first investment, which was with Sean lane over at cross checks. And now all if I had absolutely crushed that opportunity that they gave me, I think I started the search on Friday. And by Monday morning, I had five like really strong senior engineers in the mix. And they had been looking for these positions for months and months and months on their own. And so if those of you don’t know Drive capitals, by far the largest VC in the Midwest, and they’ve raised, I think over a billion dollars in tech companies, you’ve heard of like dual lingo, etc, like root insurance. And we’ve been really fortunate we’ve been we’ve hired I think 150 200 people for drive capital across their portfolio of companies.
Jay Clouse 28:37
For you to turn around a search that you started on a Friday and have five strong senior engineering, interviews or targets on Monday. What does the top of that funnel look like? How many calls are you sending out? How many emails are going out?
Kaleb Dumot 28:50
Yeah, so we typically per search, it changed from then till now, back, then I would have to probably send out five to 600 messages is either LinkedIn, email, texting, calling, but today, it’s more like three to 4000 messages, texting, calling, etc, that we have to do to get 40 to 50 interviews lined up. And then of those 40 and 50 interviews, we can hand select the top three or four candidates for our clients to meet.
Eric Hornung 29:20
What does your company CRM system look like? Like the are you…how do you document all this?
Kaleb Dumot 29:26
So our CRM system, we have about 110,000 candidates in it. And they’re all hyper organized by skill, set, and location. And so when we get a new search, we already have a list of thousands of people to go after that we’ve had built and handcrafted of these are the superstar people that we want to talk to, in the middle of the country, either worked at startups, or we’ve interviewed them, we really like them. So we use our database, you know, to keep notes in there and obviously to rank rank candidates and then organize them by scalar. So when we start a new search, we can get moving really quickly.
Eric Hornung 30:03
How often are you guys adding new people to that database?
Kaleb Dumot 30:06
Probably about two to 300 per week. So my recruiters, on average, are are talking to eight to 10 new candidates a day. But some of those candidates are people already existing in the database. So I’d say that’s, that’s probably on average.
Jay Clouse 30:22
To be at thousands of messages going out daily or weekly…it’s no longer just you calling from your basement. How big is your team?
Kaleb Dumot 30:31
Yeah, so we have eight team recruiters now. And our group is actually 100% remote. So we have people in Cleveland, Columbus, Cincinnati, down in Kentucky, in Chicago and Arbor in Detroit. I’ve done that strategically, I love Cleveland. But the talent pool for recruiters here isn’t as great as other markets. And so I want to be able to hire the best of the best people. And so we decided to build out the team remotely about two years ago.
Jay Clouse 30:57
When you’re looking to hire an excellent recruiter the best the best, what type of skills are you looking for? And what kind of tests are you putting in place to see those skills?
Kaleb Dumot 31:06
Yeah, we have a pretty robust and comprehensive interview process, which involves behavioral interviews, background interviews, career overview, interviews, take on projects, well, I’m really looking for first and foremost, like someone that matches our values, right? Like integrity is something that is a table stakes deal breaker for us. That’s first and foremost. And the second thing is just like a competitive hard working mean, it takes a lot of persistence and due diligence to do this job properly. The other thing is just like IQ, like, you know, in a day, some of my recruiters are interviewing a CEO. And then the next interview is with a software salesperson. And then the next interview is with the growth marketer. And then the next interviews with the chief data scientist, right, and so you have to be super sharp, and super smart to figure out is the CFO vote on this one, like what questions I asked this data science? Like, what’s the difference between user research and user experience and visual design? Like there’s so many nuances and all these different roles, and so you have to be really quite sharp to fit in and do well here at IPS.
Eric Hornung 32:15
Are there any IPS standards or best practices that thread across all those different types of varied interviews?
Kaleb Dumot 32:23
I think the biggest thing that we try to sort out in an interview is what is most important to the candidate. So the number one question that I asked him every single interview is, what are the top three or four most important criteria that you’re looking for in a new position, or a new role or a new opportunity? Because that tells you number one, like what the person values and what they care about. But it also tells you what type of candidate are they like, if they care about like work life balance, and they care about, you know, clocking in and clocking out and their answers like only about money, mean, that’s not the perfect fit for a startup. But if they’re talking about like opportunities for growth, opportunities to learn opportunities, make an impact, and working with smart people like those are really good answers. So we typically ask that question to every single person because it tells us a ton about who they are, what’s important to them, and what they value.
Jay Clouse 33:19
Do you find yourself placing more candidates who have prior startup experience or pulling people from the corporate world to work at a startup?
Kaleb Dumot 33:27
We do a mix of both, I think, for the markets that we’re in right now, across the middle of the country, there aren’t a lot of startups to pick from and pull out of. And so we do recruit a lot of the big companies. And what I typically try to look for when they’re when there’s somebody that like, you know, a big company like American Greetings or Key Bank, or chase or nationwide, we look for people that are there, and maybe one or two or three years Max, and look for those folks that say like, Hey, this is not for me, like, there is so much politics here, there’s so much red tape, I want to make a real difference. I want to have an impact. Here’s the side projects that I’ve been working on. And here’s the meetups. And I’m going to and here’s the conferences I’m speaking at. And so we do try to look for people with startup experience. Like that’s great. But we also don’t discriminate against folks that are working at bigger companies as well.
Eric Hornung 34:19
From someone who lives in the world of talent. We hear about the talent wars and the talent gap, what does all that mean to you, in terms of the middle of the country? What’s your kind of insight on that?
Kaleb Dumot 34:30
Yeah, I think it’s it’s definitely challenging right now, like I mentioned earlier, like, we’re seeing negative unemployment rates for top talent, right. So that could be software engineers, that can be growth marketers, that could be salespeople, which basically means there’s way more jobs than there are qualified people. And so as a founder, like you have to know how to sell, you have to know how to get candidates super juiced up about your vision, your mission, and your core values. Those are kind of tables. I would say the war on talent, though, has just gotten progressively progressively progressively more tight over each month and year. We’re not just competing against companies in the middle of the country when you’re looking to hire right? Like if I’m hiring a CFO, I’m not just competing against companies in Chicago, I’m competing against companies all over the place. There’s a lot of startups and tech companies in Silicon Valley and in New York City, that are looking at the middle of the country of Hey, we can hire a ton of engineers there. And we can build remote teams there. Or we can just hire remote people there and pay them the same as San Francisco wages, right? And so they’ll have higher retention that way. And right now, in Silicon Valley, believe it or not, the average engineer only stayed at a job nine months. But in the middle of the country, you pretty much have between 18 and I would say 36 months ballpark.
Jay Clouse 35:54
How do you guys think about competitiveness within your own portfolios? Like you you have think 84 companies listed on your website in your portfolio 84 startup companies? How do you prioritize them over each other with each other?
Kaleb Dumot 36:10
We prioritize the candidates. So when we have a candidate, and they we interview them, we like them a lot. And let’s say they’re a full stack software engineer, and there in Columbus will say, hey, Matt, here are the opportunities that we think could be a good match. Maybe it’s Root car insurance, maybe it’s beam dental, maybe it’s bull Penguin, here are the opportunities, which ones do you want to meet? Which ones are you most interested in? We can answer any questions about all of them. So we are very candidate driven at IPS. And we don’t prioritize like one company over another.
Jay Clouse 36:43
With the giant list of candidates that you have in your purview? Are you at capacity for how many VC partners or companies that you can support? Or does that still have room to grow with the current list of candidates?
Kaleb Dumot 36:56
That is the biggest challenge in our business? It’s like a teeter totter, right? We have too many clients, we have too many recruiters to find all the candidates. And so that’s my job is to try to figure out that equation. And luckily, we just hired somebody that has a ton of experience in finance and modeling. And so we’ve gotten a lot smarter using data to try to figure that equation out. But we have five recruiters actually starting on Monday next week. So we’re gonna have a whole lot more capacity here. The next the next couple of months, for sure.
Eric Hornung 37:28
You said that you guys have a robust process for hiring recruiters. How do you hire someone who’s not a recruiter like what’s your process for hiring someone who doesn’t have was a different type of skill set than you’re used to hiring for?
Kaleb Dumot 37:40
My model for hiring it IPS is we typically try to hire, they can have recruiting background, they can have software sales background, they can just have general sales background, but I want to try to find people that have what 123 years of have that type of experience, I don’t really care which of the three it comes from, because at the end of the day, they’re going to be going through our robust training program. So although we’re tiny company, only 18 of us, I have built out a robust training program to put people through kind of like a boot camp style onboarding program to get people ramped up on how to hire, how to interview how to recruit, how do you source? How do you find candidates, how to use our systems, how to use our processes? How do you interview candidates, and so we built out a pretty robust training program to onboard anyone that we feel strongly that matches our values and has kind of that big sales motor.
Jay Clouse 38:34
You talked earlier about helping Root hire some of their first 30 employees or so when a business has the potential of a Root insurance, the business model is so great, or there’s such a customer need, how critical are those early hires? Or can a business model overcome a couple of bad hires?
Kaleb Dumot 38:53
I don’t think so. I really don’t Jay, I mean, for me, your first 10 hires in a company are by far the most important because think of it, they’re going to hire the next hundred people, those 10. So if you bring in a bunch of b minus and C plus, folks, they’re going to hire C and D plus people. But if you start with your first 10, super strong a player talent, they’re going to hire super strong a player town because that’s what they’re going to want to work with. And that’s who they’re going to want to associate themselves with. So like one of the big differences between fruit insurance, and pretty much any other company I’ve worked with, is they are relentless about bringing in only the best of the best talent, they don’t let business pressures and deadlines and investors pressure etc, dictate their talent bar, they are just absolutely religious about only bringing in kind of the best of the best folks.
Jay Clouse 39:50
When you’re evaluating a VC partner that you may want to work with. And you may want to support their portfolio. What are you looking for in that investor?
Kaleb Dumot 39:59
I think like one of the big questions that I always ask is like, how do you think about after you write a check? What’s your responsibility to the founder? What’s your responsibility to the team? And so like the answer to that question really tells me a lot. And so I care deeply about I like investors that don’t just write checks, but they actually support the founders. And they actually want to help out when it comes to hiring and recruiting and bringing in top talent, but also like helping with key customers and strategy and, and being active. So I’ve definitely met like both types of investors, ones that are purely, here’s the cash, that’s it. And then other ones, like Drive That are very, like hands on and, and supportive, and thoughtful and caring, and they want to go the extra mile for their team.
Jay Clouse 40:47
Is there anything we’re not asking about the world of talent or recruiting that we should be asking?
Kaleb Dumot 40:52
I think a lot of companies don’t think about like talent branding, for example, or interview process or how they look in the market and how they feel in the market. I think those things are really important. And I think a lot of startups like, either don’t think about them or don’t place time into or value into those two buckets. What is talent branding, so talent branding is, to me like how the market kind of policies and procedures you as a company in the market. And so one way to really get your brand out there is to treat candidates that are interviewing with your companies with respect and transparency, because every candidate that interviews at your startup, like they are going to tell their friends about it, they’re going to tell their co workers about it. And so they have to have a great experience, they’re going to other people are going to be encouraged to apply. And then I think like a lot of companies like cover my meds and Root insurance, they do a great job of just getting out into the communities and hosting different events and startup weekends and user groups and meetups. And so like any chance you as a startup or as a country company, have an opportunity to engage with the public at large and help your overall brand, you’re going to have more inbound than having to hire us to go outbound to go find people. So the more like you can get referrals and your your employees can go in their networks, like the better your talent brand, the better that’s all going to go.
Jay Clouse 42:20
is that part of your company’s onboarding with a new company you’re supporting is helping them understand that and implement that?
Kaleb Dumot 42:26
Yeah we definitely talked to them about that. We definitely help them with interview process training, like, what that should look like. And then also like giving them tips and tricks on what we’ve seen to make them more competitive in the market. That’s something that we do free of charge and something that I’m really passionate about. I think a lot of companies just don’t think about it. They’re so worried about the next product release or the next sale, etc. But they don’t. A lot of startups I find don’t place a big emphasis on this stuff.
Jay Clouse 42:56
Awesome. Well, this has been super enlightening. Kaleb, if people want to learn more about you are Integrity Power Search after the show, where should they go?
Kaleb Dumot 43:02
So my email is just Kaleb with a K at Integrity Power Search. com. You can drop me a line there or just go to our website Integrity Power Search. com.
Eric Hornung 43:15
Alright, Jay, we just spoke with Kaleb, from integrity, power search. What do you think? What do you think you learned a lot about talent there?
Jay Clouse 43:22
Still impressed by just the pure relentlessness that needs to happen for people in Kaleb’s position of getting people on the phone. The speed to make connections for people was also something I wasn’t thinking about. But when somebody has a job listing, you’re trying to fill that as quickly as possible, the story that he told of getting an opportunity from Drive on a Friday, and then having a bunch of candidates lined up by Monday, I think that speaks to the relentlessness that IPS clearly takes as central to their approach. And that’s probably a good reason why firms like Drive Capital work with them.
Eric Hornung 43:56
I never really thought about this before but the the numbers that he has, that’s almost like a moat that you’re digging or a competitive advantage or a flywheel or whatever buzzword you want to use today where the more people you can add to that database. And he said he’s adding what a couple hundred every week at this point. And the better you can keep that information. The stronger that data is, the quicker you can pare down to people and say, Hey, here’s our top hundred list, go after them and get them to this job. And that really increases that speed. That’s something I never really thought about is keeping this huge back end data repository of potential people for potential slots that you don’t know exist yet.
Jay Clouse 44:36
Something we didn’t talk about directly in the interview. But now you saying that makes me think of wonder how Kaleb and his team think about managing and dividing their time. Because you could spend a ton of time simply updating and maintaining that database versus calling people getting them into the room to do the interviews, getting them on the phone with the founder with with the team lead that’s looking to hire them? How do you decide what is more valuable, that incremental five phone calls to prospects versus increasing the database and building that moat? It’s got to be something they’re bouncing constantly.
Eric Hornung 45:10
I love them, we come up with questions we should have asked in the interview after the interview.
Jay Clouse 45:13
It’s it’s a constant is pretty much the main stage.
Eric Hornung 45:18
How often do you get reached out to by recruiters. Jay, you have a product management background?
Jay Clouse 45:23
Actually never. And I don’t know if I should be salty about that. But I get contacted pretty much never to consider a role. How about you?
Eric Hornung 45:32
Why do you think that? It’s?
Jay Clouse 45:33
I don’t know. I think there is a toggle that says open to opportunities are not in LinkedIn. And I’m pretty sure that’s off. But yeah, I’m a little surprised about it. I mean, I get hit up. I get solicited all day on LinkedIn for different things, things like, hey, try this sale software, hey, let us build this website for you. Like I’m constantly getting solicited for something but never being offered a job. Maybe Maybe I’ve just like done a really good job of painting myself as unemployable. Or maybe nobody wants to hire me, Eric, I don’t know.
Eric Hornung 46:07
Well, that’s, that’s good for me.
Jay Clouse 46:09
Do you get Do you get job offers? Do you get recruited?
Eric Hornung 46:12
Yeah, you’ll get I mean, probably once a quarter. So someone will reach out. But it’s usually something very hyper specific to my current job.
Jay Clouse 46:20
Something that stuck out to me about Kaleb and his story. He started in the fortune five hundreds helping people land those jobs, which I just know has to be more lucrative on a per deal basis than working with startup companies or even working with venture firms, which I think it’s also a unique part of their model. But it’s clear that he’s building a company that he wants to build that he wants to run that he wants to be in the day to day, working with smaller teams, growing teams, scaling teams and their founders to help build something new as opposed to I think you might have even said that the the fortune 500 words are a little bit more boring.
Eric Hornung 46:55
Well, yeah, but there, I’m guessing it’s also a strategic move where the fortune 500 hundred competitive, so yeah, every deal might be a little more lucrative. But there’s also how many talent agencies trying to fill that back end financial accounting role for a large fortune 100 company? And how much bigger is that talent pool? And how do you have a competitive advantage there versus someone else. So this is a place that he can carve out a niche, he can dominate. And as that flywheel keeps on turning, it’s just going to get deeper and deeper, in terms of who they know, and where they can place people.
Jay Clouse 47:30
I think the VC partnership model is smart, because there are some, there are some recruiting firms out there that I’ll be honest, give recruiters a pretty bad name, and who give a lot of people a bad experience. And from the founders who have worked with IPS and the team members who have gotten hired through connections through IPS, it sounds like a much better experience than some of those firms, most of those firms.
Eric Hornung 47:52
I wonder how you keep that culture going forward. As you get bigger and bigger and bigger, though.
Jay Clouse 47:56
It’s the it’s the time management thing. That’s hard. I’m telling you, because at some point, this can be I mean, all sales can be reduced to a numbers game. And so I think it is about building the culture. And Kaleb talked about the intentionality of how they interview people themselves. But I do think it’s a it’s a big component of culture to make sure that the people on your team who are making all these phone calls and sending all these emails, aren’t treating people like a number and aren’t treating people like a commodity, but putting some some real thought and intention. And you know, human human ality human ization?
Eric Hornung 48:28
Sure whatever. Either one of those don’t work.
Jay Clouse 48:30
…whatever word I want to make up…into the process of recruiting.
Eric Hornung 48:34
So Kaleb focuses mostly on the middle of the country. But I’m curious what percentage of his database exists in the middle of the country? Like, is he reaching out to people on the coasts and bringing them here? Or is it people like you who are product managers in Columbus looking for jobs, and looking to place them in their own backyards? I don’t think you mentioned anything about that in the interview itself. But I’ve seen him posting about the coasts on LinkedIn and on social media. So I’d be curious how much of it is actively pulling people from the coast where they have that kind of fast growth experience? And how much is placing people in their own backyard.
Jay Clouse 49:12
It’s hard to say can be part of the secret sauce, but I’m sure if it is not a large component of people on the coasts, it will only grow to be more so that way.
Eric Hornung 49:21
All right, Jay. Well, if people want to talk about talent with you or with me, they can find us at upside FM on Twitter, or send us something a little longer. At email@example.com. We’re also available on Twitter on our own handles that’s at Jay Clouse, and at EK Hornung happy to talk talent in the middle of the country. Or just hear your guys thoughts on upside and general.
Debrief begins: 43:11
Kaleb Dumot is the founder and CEO of Integrity Power Search.
Integrity Power Search (IPS) is a recruiting agency focused on connecting amazing people to world class technology companies in the middle of the country. Since 2012, they have conducted 600+ searches for 84 portfolio companies, which have raised a collective $2.5B in venture capital financing.
IPS was founded in 2012 and based in Ohio.
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Jay’s editorial on talent from the update issue two: https://upside.fm/help-wanted-were-short-on-more-than-just-engineers/
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