Telstra Ventures – Navigating The New Normal With Saad Siddiqui

This is RecruitingDaily’s Recruiting Live podcast where we look at the strategies behind the world’s best talent acquisition teams. We talk recruiting, sourcing, and talent acquisition. Each week we take one over complicated topic and break it down so that your three year old can understand it. Make sense? Are you ready to take your game to the next level? You’re at the right spot. You’re now entering the mind of a hustler. Here’s your host, William Tincup.

Ladies and gentlemen, this William Tincup and you are listening to the RecruitingDaily podcast. Today we have Saad on from Telstra Ventures and our topic today, our subject today, is Navigating the New Normal. So we’re going to just have a lot of fun with this and I think it’s going to be really good for the audience. So, Saad, would you do us a favor and introduce both yourself and Telstra Ventures?

Sure, thanks William. Really appreciate you having us on the podcast. Yeah, so Telstra Ventures is a venture capital fund. We have about a billion dollars of total assets that we manage to date and have been investing across a bunch of different areas. Everything from cybersecurity to cloud infrastructure to consumer, and we’ve also been spending a lot of time in the next generation of HR technology as well. And over the last 10 years since we’ve been around, we’ve helped a lot of early stage companies get to pretty massive scale companies like CrowdStrike, Bot Zero, DocuSign, GitLab, and a bunch of others through the years. And definitely started seeing the landscape of the HR tech scene change over the last couple years, and really excited to talk to you about what we’re noticing in the market and how I think the HR texting will change over the next coming years.

So this is going to be fascinating, because I looked at Joel’s website and I looked at your portfolio of companies the other day and a) just the amount of funding that you all put into people. And also I think the care. Out of the site. I got a lot of how you read a little bit into things. So it just seems like you care deeply not just about the money. Yes state didn’t covered, but it seems like you really care about the entrepreneurs. So I really like that. Did you happen to go to HR Tech this year?

I unfortunately not, but I did definitely meet up with some of the folks outside of HR tech.

Right. So what themes kind of came to you? What… ‘Cause I have a couple and then I want to bounce off you-

Sure.

… but before I do, I want to hear what thematically some of the things that you’re seeing.

Yeah, totally. So I think, I’ve been talking to a handful of customers, folks that are at Fortune 10, Fortune 100 companies on the HR tech side so that was a really good event to go to, to meet with potential buyers of technologies and then also meeting with a bunch of different startups as well. So I think the name of the game is as we entered COVID, the game completely shifted and people had to learn how to work remotely. Everything had to shift, people had to literally, people that may not have home offices now had to have home offices and they dedicated infrastructure from the company side, the employer side. How do you manage security as an example and in someone’s home? And so that was becoming a big issue.

(03:58)
People having to secure their routers and things of that nature to now that we’re coming out of COVID, employers trying to figure out okay, do we continue this? Do we go to some sort of a hybrid model? Do we have everyone come back to the office the way it was pre-COVID and what are the trade offs that people are making? So I think as I talked to people at the conference and over the last couple years, it’s just been everyone trying to figure out what is the best path forward and what are some of the tools that they’re excited about that could be helpful in their journey as they figure out what the new norm are looks like?

So what categories or, so first of all, I hate software categories so I’ll-

Yeah.

… just say that especially in work tech, things just kind of blend off across all these little silly arbitrary lines of categories. But what are the themes that kind of pop out that you’re like, okay, we need to solve for this problem, we need tech to solve for these problems?

Yeah, one thing I’ll tell you, William, is I think technology is a piece of the solution. It’s not the only solution. I wish there was a bullet that says, hey buy this thing and you’re going to be remote first and you don’t have to think twice about it. I think in general, the way I think about the new phase of HR is it’s all around flexibility and what are the tools that help employers gain that flexibility? So flexibility around identifying the right people. Can you find people on a global level versus in the past maybe it’s a very geographic focus, flexibility around onboarding employees. In the past you could have onboarding seminars where people used to come to the office and just see how people work and stuff or you could go to the guy next to you and say like, hey, how do you do this in this workflow?

(06:18)
And that’s how onboarding was done to now everyone’s remote to ongoing training. So how do employees keep up scaling and get a better sense of how they’re performing in a remote first or a hybrid model. And then from a benefits perspective too, we’re also seeing benefits changing. Employees are asking for more benefits. We’re starting to see things like pet insurance coverage, financial management coverage where in the past it was just dental, healthcare and retirement. It’s shifting completely to mental health, to financial wellbeing and a bunch of other things that sort come along with it. So flexibility around that and what is the best course of action for the employees and the employer and stuff.

I think before you move off of that real quick, do you think that’s driven from the audience, i.e. candidates and employees or is there altruism in terms of this is just a better, I used to tell people all the time, a benefit isn’t a benefit if people don’t use it.

Right.

So it we’re just getting smarter on the benefit side of consumption and usage or a mixture of those things? How do you feel like it is?

I think that you hit the nail on the head. People were given all these benefits through the years and the utilizations are definitely varied, right? Not everyone uses all the benefits, but in general, on average men which are in their early ’20s, most likely aren’t going to the doctor. Maybe even once a year they go to the doctor maybe a couple times a year. But if they have a PPO, their employer are paying thousands of dollars a year to cover that health expense and so the utilization in that demographic may not be as intense.

(08:22)
On the other hand, if you have families that have severe health issues, that is a crucial benefit for them. So it is, we’ve built a system that can cater to the most vulnerable amongst us and given that benefit to everyone, but it has helped, which causes a bit of waste in the system. So employers are getting smarter in terms of, okay, let’s sort of figure out at different demographics what are the things that people really care about? And at the end of the day, this ends up being a tool that employers use to attract talent, right?

And retain. Both sides if done well. Yeah.

Exactly. So if everyone’s offering the same benefits, there’s no retention so now people are getting smarter and saying, Hey, we can offer X, Y, and Z benefits to you and your families and stuff and you can figure out what’s the best way for you to utilize that.

It’s funny, over the last couple years I’ve talked to a lot of people that are doing really nuanced benefits that are really interesting. Fertility or infertility treatment benefits, pet insurance actually talked to somebody at SHRM Aflac that they have a huge uptick in people that want pet insurance and ’cause there’s a huge amount of cost to that, that can be associated with pets. And it’s just really fascinating to things like, okay, we could give them that money. This was an old argument on corporate giving, but we could just give employees more money and then they could choose where to give or we could do it for them and it’s really interesting because the companies, it’s not an arms race, but it is kind of a differentiator race of people trying to do things different to attract that and retain that talent.

A million percent. Yeah, I think that’s sort what we’re seeing and the way the term that we like to use as the fluid workforce, so-

Nice.

… what the concept behind the fluid workforce is employers and employees are looking for flexibility from the employer side, get the most productivity out of their employees and from the employees side, be able to perform the best work that they can given the constraints that they have in their life. So in general, if you think about the past, everyone moved to the bigger cities because that’s where all the jobs were. You have to completely upend what you may enjoy around where your employer ends up being. Now in COVID, you are actually making those decisions around where your families are and the life that you want to live and can the new workforce allow for that? Maybe it can, maybe it can’t but that’s sort of the experimentation that people are playing and to us that’s sort where fluidity comes in is helping employers enable some of that functionality.

Yeah, it’s interesting because I think of this as both the hybrid workplace, i.e. and the workforce so it’s hybrid on both levels. As we look at whether or not you’re in the office on the extreme Tesla, five days a week, you’re always, if you want to work there, you have to be there to work there. Or Airbnb on the other end of the spectrum, we don’t own offices so there’s nothing, you’re remote forever. Now everything in between is fair game and I haven’t seen two models that are the same yet so whether or not, you pick your three days or every Wednesday or whatever the bid is, I haven’t seen anything suss out, which is fascinating-

Yeah.

… in a sense of, okay, companies are figuring out what works for them and their employees, et cetera, which I find great. And then the hybrid work force, which is people that want to work differently, gig workers, et cetera, there’s just all this freelancers, all this whole world of talent that doesn’t want to work full time for you. They want to be able to do work on their terms per se and does that encapsulate the way that y’all are thinking about it?

Definitely, definitely.

So I’ve written about this, but I want to get your take and when I went through HR Tech, every third booth had AI and I’m still not sure if the vendors know what AI is or if the practitioners know what it is but I’ve, when I talk to practitioners, I’m like, why do you care how something’s built like literally? Why do you even care if it’s machine learning or NLP or blockchain or whatever? Why do you care? I mean, if it says it does what it does and it does what it does, why do you care?

(13:43)
The other thing, as I saw a lot of, talent intelligence, a lot of vendors kind of purporting to be talent intelligence, both in recruiting but also in employees as well, which I found fascinating but I also thought is this just workforce planning using different words, like Animal Farm? The third thing is, which I really found fascinating was background screening is there was a lot of background screening that have moved off. They’re almost taking the screening out of their names and out of their bit to do employ identification verification, and monitoring. So more of instead of a one and done before you can imply, you know, it’s no, it’s the yes, we need to do that before you get a job offer, but we also want to make sure that throughout your tenure we manage risk.

Yeah.

Are you seeing some of the same stuff?

Totally. So there’s a couple things that you talked about that sort of resonated well, the first is the use of AI in honestly every sort of sector of the economy and I think you’re right, at the end of the day, people have problems and they want to get to solutions and it doesn’t matter if there’s a monkey that’s solving that solution or the most advanced artificial intelligence. Deep learning models are out there, people are looking to get their problems solved as fast as possible. And generally anyone that can do it in the way that people want to get solved and provide visibility into how they’re getting to those answers are the vendors that end up winning.

(15:34)
And to your point around identity, I think you know our friends at Certain, which is a background company that I’ve been involved with, and I think that is a perfect example of that. So identity has a bunch of different data that’s there so everything from a criminal background check to education to income, in the case of things like loans and stuff like that. When someone says a background check, there’s all these different components that kind of go into a full background check.

(16:13)
And in the past employees, whenever they did a background check, they would generally just put in their social security number in a portal and then a week or two weeks later they’ll sort of find out, okay, did it pass or not? And that’s about it, right? No one would ever, and as an employee, you would never have a sense of actually what’s in my background check? And when we got involved with Certain, the concept that we loved was everyone gets to see what’s in their background check or gets sent out. It’s not that you change it.

Right.

We know this across every facet of our life that mistakes can be made and there may be things in your record that you don’t know and because of which you may not be able to get that loan. So in the case of FICO, people can dispute the things that may be on their credit report and stuff that can’t be done in a background check today. So getting that visibility is crucial and that’s sort of what Certain allows you to do and over time, we do believe that there’s a world where using some of the backend technologies like artificial intelligence, you can surface the best candidates for you to go after from a recruiting perspective based off the skillsets that they have rather than maybe the logos that are on their resume.

It’s two things. One is, especially from the entrepreneurial perspective, do you care, ’cause we’re talking about practitioners, but do you care when you get a deck or when one of your associates gets a deck or whatever, do you care if they go into the way that their technology is delivered? Again, we just kind of talked about AI and machine learning and NLP and things like that. Does that matter to you more than or as a part of the deck? Or do you want to get into, if you’ve kind of turned on the idea, then you want to do a demo and then it becomes kind of a conversation point. At what point do you care as an investor about the tech?

Yeah, we definitely care about the tech, right? So as venture capitalists, to me, technology has two purposes. One is how easy is it to replicate? Because at the end of the day, if you have a solution with one of the bigger tech companies like the HCM companies of the world, why would you go and play something that’s like 10% better? Say something like 5% or 10%, it’s just not worth the effort because you’ve got all these different systems that are so built on top. So something has to be one, incredibly better than what you’re using today and then two, something that is very hard, if not impossible to replicate. So to me, that’s where the tech benefit comes in. What are you of doing as an entrepreneur that can’t be replicated? And then two, if someone gave one of your competitors 50 or a hundred million bucks, they can’t build what you’re doing tomorrow and so that’s where I think technology ends up being a bit of a moat for people to getting into the space that you’re in.

Right. You had mentioned earlier that tech is a piece that it isn’t just simply tech, it’s a process, it’s people, it’s transformation, et cetera and you reiterated a second ago, I was like, okay, if this is going to give us a 5% lift or 10% difference, why would we even consider it? You talked to practitioners a lot as well ’cause you know, that’s… You want to make sure that the investments you make are going to be read well by the customers. What do they think about tech? ‘Cause historically, I’ve gotten the, I’ve gotten it from practitioners that there’s a magic bullet and I won’t name any of the company names ’cause but they think that if they spend money on this company and this technology that’ll solve all of their problems, which of course is ludicrous. But do you find that as much, I mean, first, do you find it at all? I shouldn’t be assumptive, do you find that they view tech as silver bullet or a magic bullet?

Yeah, I think the way I think about technology is it sort of helps reduce cost in the system. So in the past you may have people that are basically putting in a lot of numbers in spreadsheets to try to manage their HR infrastructure. Now can that get automated away, right? So process automated away because all the data is there. If you can build integrations, why do you need to type those things in? From there, people take that data and then run analytics on top or try to make smarter decisions. Can that get automated away, right? So can the system automatically know what are the most important things to surface that you are looking for? And can it be predictive in nature in terms of identifying things that maybe coming down the pike that are worrisome? So to me, that’s an example of a workflow that gets automated away.

(21:52)
And those are the things that I think buyers are looking for. It depends honestly on the organization too, right? Because HR organizations are stretched to the max at this point. So in 2020, 2021, the focus was to try to, one, really try to hire the best of the best people they can. The demand across the board was through the roof, how to manage culture, how to manage all this other stuff so they were literally looking for anything that kind of helped make their job easier. And scaling from, we know companies that scale from 10 people to a hundred people in a year or 18 months, that’s a big lift.

(22:43)
So how do you one, build an org structure and HR systems to scale that from a 100 to now a 1,000 or 500 or something like that? So it’s in a really quick fashion. So people are trying to get that burden off their shoulders. The other thing that’s sort of happening now is as the economy’s tightening, we’re starting to see layoffs. The role of the HR manager is shifting on the complete opposite spectrum. So now it’s like, okay, we really need to manage things like layoffs and having some really difficult conversations with managers and things like that. And how do you do that? How do you keep culture as active as possible? All these different things come into place as an economy starts tightening. So in short, while technology can’t solve all your problems, it can help improve the workflow as you’re going through all the difficult processes you’re going through.

So I failed at the very beginning. I failed to ask you, where do you all play in terms of your investments? Are you more of a series A, series B, series C, D, E? I’m like, where do you see yourself at the size of investment?

Yeah, in general, the naming kind of moves all over the place.

It doesn’t mean when people are getting $25 million seed rounds, words, words of they cease to exist. Got it.

Exactly. So the way we of think about it is we are post product market fit investors so that can be done at the later state series A’s or B’s.

Right.

That’s sort of the focus area. Every once in a while we’ll kind of venture up to series C if there’s something incredibly compelling.

Right.

That’s where the place we play.

I love that. And you’re building out the work tech become more of a work tech practice and more companies like Certain?

Exactly, so-

Love that.

… so we were fortunate enough to partner with Certain, we love those guys and really excited about their future, and then invested in a company called Lively, which is in the HSA benefit space and called Spekit, which does employee onboarding and Forage, which is doing training for employees and stuff. So that’s a bunch of stuff in the space.

That’s a great portfolio right there, that’s awesome. So last thing I wanted to ask you is just the grounding of how y’all, especially in let’s just say in your practice, how do you ground yourself with what’s out there, what’s not available? And also what practitioners were willing to spend money on. Because I think sometimes what I see is people will build solutions that are solving problems, real problems, but it’s not something they can get on an HR budget and so it takes them three years to get to a place where they can eventually get on a budget. How you make sure that you stay grounded with those investments?

Yeah, so I guess I’ll try to answer that question in two ways. One is how do I get my information, seeing where gaps in the market are.

Right.

To be honest, that’s done through primary research. I talked to a lot of listeners of your podcast, a lot of recruiting managers and try to understand what are the problems that they’re facing. So one of the areas that we’re hearing a lot about these days is how do you train employees in a remote world? So that’s one area that we’re hearing a lot about. Everything from onboarding to ongoing training and things of that nature. Then how do you manage costs? Particularly around benefits, so healthcare premiums are going through the roof. If there’s a way for employers to reduce that cost, they would love to do that, especially for things that are not getting utilized. So what we’ll try to do then is of go out and try to find companies that meet those needs, and then from there I’ll go out and find companies and then I’ll introduce them to potential clients and if it works, then it helps me make those investment decisions a lot easier.

Oh, that’s cool.

So at the end of the day, if I can be a pre-sales person for an entrepreneur, everyone loves me, right? So the HR executives love me because I help solve their problem. The founders love me because I’m introducing to a customer and I may have found a partner from an investment perspective.

Well, that’s just savvy because again, if you introduce them to 10 people and you get 10 no’s, it could be as simple as they’re just too early, it’s great solution, great product, the market’s just not ready. Or it could be they’re a solution searching for a problem or another thing so a), I just think that’s just savvy business on all three fronts. Saad, I could talk to you all day. I know you’ve got a million things that you got to get done but thank you so much for coming on the podcast.

Yeah, thanks so much for having me. Really appreciate the time.

Absolutely, and thanks for everyone listening to the Recruiting Daily podcast. Until next time.

You’ve been listening to The Recruiting Live podcast by RecruitingDaily. Check out the latest industry podcast, webinars, articles, and news at-