Audio Version EP271
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[00:00:00] Welcome back to the episode of the startup therapy podcast. This is Ryan Rutan joined as always by Will Schroeder, my friend, the founder and CEO of startups. com when we think entry level talent, I mean, entry, entry, entry level talent, the earliest people we're going to hire to start a company for the lowest level of the jobs, where do us college grads.
Rank on the list right now. They used to be number one and there was no number two. And I've got to be honest, they are a very distant number for now. U S college grads as startup entry level, going into a startup are my fourth draft pick. And there's three other draft picks ahead of them now. And that's what we're going to talk about.
What's the, give me, give me a timeline on this. Like what's the evolution been like to get to this? Like it, it clearly didn't happen overnight. So what walked me through it? I think we're at a fascinating time because I think a whole bunch of things have all happened at the same time, all beneficial to startups, by the way, maybe less so to us college grads.
And by the way, as a disclaimer, we're not [00:01:00] trying to create a commentary here on college or us workers or anything else like that. We're just telling you how the world has changed. That's all right. So that's all this is about. I posted this on social like a week ago or so, and some people went crazy.
They're like, how dare you talk about hiring anybody, but us college grads. I'm like, dude, slow down. Like that's. I'd say we're not hiring them. I'm saying they're not our first choice like they used to be, or only choice for that matter. So a couple things have happened, like major, major C changes, right?
The one we talk about a lot, and the one that, that certainly is, is ranked number one if, if college grads, US college grads are ranked number four, is AI. Yep. Right? Now, AI isn't entirely ready for prime time. No, no. The reason it's It's ranked number one is because it's fast, it's repeatable, it's infinitely scalable, and it costs next to nothing.
Yeah. If I can do a task with AI and not need a human, Why the hell am I going to hire a human to do it? I think of AI at this point, it's a bit like, and I used to run the internship program that we did every year at startups, uh, when, when I was still in [00:02:00] Columbus and to me, AI replaces some of that function, right.
In terms of like how I think about how I'm going to use it, right. I'm not going to trust it to do something super high level. Like you said, it's not ready for prime time. Right. It's not ready for primetime yet. And I think of the college intern in the same way. They weren't ready for primetime, right?
They were ready to do some stuff. They were there to learn. They were there to be trained. They were there to help validate things where we could just throw extra resource that was relatively low cost and low friction. Right. And that's exactly where, where AI is into the picture. When, when I've got something that's like, let's see if this works at any level, I'm not going to go and hire somebody for that.
Number one, I think it's unfair to the person to be hiring. I'm going to hire you and be like, Hey, let's try this. I'm going to throw you at the wall, like spaghetti and see if you stick. Right. That's a horrible way to be hired. Right. So a lot of this is just validation that we even need someone in the role at the AI level for me.
It'd be equivalent right now. If you had a role that could be done with AI. And you're hiring a human for it, right? And again, I'm not trying to get into this whole AI versus humans thing. At some point we're startups, we're broke. We don't have a [00:03:00] lot of choices, right? Like we need to get stuff done. We're going to look for the most economical answer.
Now, whether or not major fortune 500 company does that totally different discussion, we're not talking about what they do, right? We're talking about a founder that has next to no money. It needs to get shit done. That's it. Yep. If we want to be able to hire people in the future, hiring AI today is a great way of getting, right?
Yeah, look, here's what I'm saying. If you have a task that AI could do, let's say it's writing all the product descriptions for all the items on your Shopify site, right? And you can hire a college kid to do it right. And pay him like 60, 70, 000 to do it. Or you can have chat GPT do it faster, better for 20 bucks.
There's no startup in the world. That's not going to look at that and go, well, 20 bucks, right? Like it's now a 20 activity, right? So why wouldn't you pay 20 for it? Okay. We've got that change. And I would say like, like AI is just in the forefront and we'll dig into each of these more, but the second major change to your question is the fact that what I'm going to call global talent, which is such a funny U S [00:04:00] euphemism, right?
Like the rest of the world does look at themselves as talent. Yeah. So I'll just call it what it is, right? But particularly in the U. S. where we tend to pay the highest wages, we now have really good access to global talent, right? Whereas before, like I'm going to use a platform like Upwork, Fiverr would be in there, there's others like it.
It used to be you'd go on there as a last resort, right? It was like, Oh shit, we couldn't find anybody or we have no money. So I guess we'll just go here and get, you know, Whatever the hell we get, right? But the rest of the world kind of caught up a little bit. And I don't think a lot of startups get it.
And I know this because I was in a conversation earlier this week in one of my in person founder groups, the bunch of CEOs founders, I brought this up and a bunch of them leaned in and they were like, wait, hold on, you can get what? For what? Yeah. And I was like, dude, in Brazil, like. Tenure seasoned software engineers make 5, 000 a month, not 5, 000 a day.
Like they get paid here. I'm kidding, but like, and those are legit people, right? Those are engineers, which are the most sought [00:05:00] after the most expensive, all that good stuff. Ryan, you might want to comment on kind of how disparate, you know, some of our organization has become. Oh, it's massive. I mean, and this is nothing new for us either, right?
Like, in fact, like just to put a stamp on it, we have an employee from Upwork. Designer from the Philippines living now, I think back in France, maybe Spain. I forget he's somewhere between the two 13 years ago. So this is something we've been doing for a long time. We have people from kind of every corner of the globe.
We've got people from Asia, people from North Africa. We've got people in Europe. We've got people in Central and South America, North America. And I think that's the other interesting thing, right? It isn't just about global talent, right? A platform like that is just about talent. Talent you can compare on a relative basis with a lot of feedback now, right?
Like in as much as we've been doing this for 12 or 13 years on that platform, so have a lot of other people. And so there are, there are folks who their entire resume is going to be a platform like that. Yep. And I don't want to get too far off on this tangent, but there there's also the fact [00:06:00] that like, in a lot of cases, these are done on a fractional basis and that's how those folks prefer to work.
So not only are you getting really, really qualified talent at a very reasonable cost, you can, some of the, sometimes the cost, the reason it's reasonable. Is it, you're not hiring an FTE, right? You can't go to a college graduate and be like, yeah, we'd love to buy, you know, like five hours a week from you.
They're like, but student loans. And I, but I need a job job and they do. Whereas he's, and they do, and there are jobs out there for them. Right. That in early stage startup trying to make its first couple of hires is probably not the one. And I think again, to this point, so this is again, where like AI and fractional work or remote work, global talent fit really well is when we're in that really big, Painful period where like maybe we've made the first hire in a particular role.
Maybe we've got our person who's leading marketing, but now we've grown just enough where we don't really have enough money to hire another full person, but we've got more work that needs to be done. We're burning out the person we've got in the role and that's not going to end well, but we can't afford to really expand the team fully.
We [00:07:00] need some way to make what we're doing more efficient to get us through that interstitial period until there's a, it's kind of like when you're, if you're building factories, I don't know who the hell builds factories anymore, but when you hit 100 percent capacity on your machine, You need another machine to produce your next one out of a thousand widgets, but you're only going to sell 10 more widgets.
You got to pay for the whole damn machine, right? Not a good position to be in. And this is where most early stage startups are from a growth perspective. They don't need another full FTE, but they do need more help. And I think that these two first solutions that we're talking about in particular are incredible for them.
The third thing that changed. And again, all these are just really like. Whether you believe in hiring these people, it doesn't matter. These trends that exist with or without you, right? The third one that I'm calling kind of euphemistically, what I call young and hungry and what I mean by that, and maybe it's not the best descriptor, but this is the third rank in my stack, uh, rank, what I mean by young and hungry is You can now just get experience.
It used to be like you kind of had to go and get the degree so that you could get a job so that you could get experience, [00:08:00] right? That that was kind of the pecking order, but that's bullshit. Now, if you're a graduate in college and you don't have any real world experience, you didn't try. It's that simple, right?
Because now what I look for, I don't care whether somebody has a degree or not. Like it actually. Doesn't even occur to me. It doesn't even register. What I'm looking for is what have you done? Oh, cool. You got a great GPA. Did you ship any code when you did that? Did you take a product to market when you did that?
And then it's who cares? Right. And a lot of times opening up another university for you to go to all you did as a student means nothing to me, but now, and this is what really changed. There are so many ways to be able to get that experience. Without the degree or before the degree, I'm going to say without and before.
That's a big deal for a lot of people who wouldn't, maybe couldn't have gotten the experience or the opportunity through a university, by the way, myself included, having never graduated, [00:09:00] but they're really good at what they do. You know, our CTO, uh, is, was shipping websites when he was 16, right? Like, it's amazing.
Like by the time he came to us and we did get him out of college, right? He was still in college. He hadn't graduated. By the time he came to us. He had almost 10 years of experience of shipping code. And couldn't grow a beard yet, right? Hey, grow one now. Knock that. Anyway, so we now have this massive pool of resources to hire from as startups.
And sadly, you know, however you look at it, because I think there was, you know, this golden idea of, of the U. S. college grad. The U. S. college grad is number four. By the time I quote, have to hire a U. S. college grad, and we hire tons of college grads, so again, let's just be clear, right? It's because I've already exhausted all of those other options at entry level work.
When you get into senior managers and stuff, it's a whole other discussion. Like, that's all about resume and things like that. But holy cow, things have changed. And they've changed significantly. In like the [00:10:00] last five years. It's amazing. Yeah. I mean, realistically, I mean like AI has been around for a long time, right?
And we've been using versions of it for a long time, but realistically the discussion around it actually taking on entry level roles, it's 12, 18, maybe 24 months old and not more. All right. So this is all very new. There's something else that I do want to, and this isn't just justification after the fact, but I do want to talk a little bit about the fit of a college grad in a startup.
Again, we're talking about startups. I'm not talking about going to work for one of the big three accounting firms and them trying to do the same thing. They may well be doing that. No idea. Not my business. Don't care what I, what I'm talking about is like, what, how well is a college grad fit for a startup and how well fit is a startup for a college grad?
Right. And again, this isn't justification, but I think it is worth, worth talking about for just a minute. In most cases, a startup isn't a great place for a new college grad, right? One of the things we don't find at, at most startups is a very defined career path, which is something that most college grads want.
[00:11:00] We don't find competitive wages or benefits in a lot of cases, right? Early stage startups, you're not going to find like management. Right. You might be the only person in your role, in a role you've never done before and, and have never worked in or ill prepared for. And then you're looking for, for mentorship, right?
You're looking for guidance and it doesn't exist. And I think this is why, when we go back to your third category, they're the, the young and hungry, they fit so much better because they've gone out. They've already got shots on goal. They know what the work looks like. They have demonstrable evidence that they can complete it.
Saying that I can feel very comfortable bringing him into a role that I know isn't going to have a lot of handholding and mentoring and guidance. Right? Right. Conversely, you bring in a college grad and a lot of times they will absolutely suffer or stymie their growth. Again, not trying to justify it, but I think it is, it is fair to go into these things eyes wide open in terms of what all of the outcomes of just taking this job away from something.
It's not what we're talking about. Well, and remember, like we're saying, taking the job and everybody kind of runs the rescue of U. S. college grads. Remember, they're [00:12:00] number four, which means there are two people in front of them that are also losing, losing to the other competition, right? If you were a person on fiber, Right.
Two years ago, who wrote descriptions for products on Shopify, right? Exactly. Exactly. Like that, that was getting, you know, for essentially these menial repetitive tasks that just went away, like your entry level into that level of task just went away. Right. So everyone thinks about it in terms of there's like us college grads.
And when I say everyone, everyone in the U S U S college grads, and then. Against everyone else. Everyone else. Yeah. That's not the way it's working, right? Yeah. And again, this is about, our focus here is about this new pecking order for what is entry level. Now, here's what's interesting about entry level changing and morphing.
As more and more of these, quote, entry level jobs, and we're using the euphemism entry level but what we really mean is shit work. Really, like. Grunt work that like a lot of people don't want to do the kind of stuff an intern [00:13:00] got handed like the go get a coffee and make copies kind of thing that stuff is moving off the table now What's interesting when that stuff moves off the table Ryan?
How many people over the course of the last hundred years got entry level jobs for no other qualification than they were cheap? And they would show up. Yeah. Right? Because they had, they didn't know squat. Right. That's the other thing that I think people need to start understanding. The bar for what each of these tiers of folks needs to be able to do to retain its entry level status Yeah.
is going up geometrically. Yeah. And it's happening very quickly. It is. And, and look, I think that if nothing else, think of it from a U. S. college grad perspective, or maybe somebody who's in college right now, Yeah. If you're in college right now, one of the things you should be thinking about is if you're following along and you're, you're hearing the ranks here, if I'm a college grad, who is AI capable has done some, some side hustle, so that's tier one and tier three and is globally competitive in some sense, and this [00:14:00] doesn't mean you need to be the cheapest resource out there, right?
Like very rarely when I'm on Upwork or I'm, I'm looking at global talent, I'm not just like, okay, what's the cheapest way I can get this done. I'm looking for the most effective way to spend my money. All right, that's it. So if you can show me that you have the right kind of experience and that you check some of these other boxes, all of a sudden, you know, you can move up in these ranks and, but again, like maybe that's not entry level, we're talking like entry level, first job and entry level work, right?
So looking at that from both sides, like this isn't just your, your first job. This may not be the first job we're doing in a startup, but maybe we've just launched a sales function for the first time ever, and we need some sales support. We need to craft messaging. We need to be doing outreach. We need to be doing all this stuff.
Well, The first choice is going to be an inexperienced salesperson who's never done that before. It's going to be, can we automate some of this messaging using best practice? All right. Can we have somebody who's a globally competitive talent who really understands this work? Monitor that on a very, very fractional basis.
And maybe we do roll in somebody with some side hustle, [00:15:00] right? Maybe you don't have a college degree, but you did door to door sales selling Kirby's or something that just shows, right, that you've got the muscle that it takes to go out there and hear no a thousand times you get to a yes. This is the pathway to changing some of these dynamics.
Another version of this was always the internship. The internship was this quasi apprenticeship. Again, it was really just a reason that people to give people grunt work for little to no pay. Yeah. Right. And no one was saying, I have an internship that I want to pay a ton of money for and give high level work to.
Right. I mean, so clearly like that was the intent. And so again, the qualification of being a good intern was maybe you're going to a good school that whoever was hiring you appreciated, you know, the school maybe, and that you're just willing to show up. What is your resume for being an intern? Right. The idea was nothing.
The work that you were gonna get handed, you're not gonna get anymore. Right, right. So that's step one. Now I wanna zoom out, 'cause again, I wanna make this a bit less about woe is all of these folks for not getting their entry level work. Yeah, yeah. And more focused on what we talk [00:16:00] about, which is how does this help founders Immensely is the short answer.
Right? So the reason we opened up the episode talking about U. S. college grads and the fact that that used to be our hunting ground for all of our talent is because we needed people that were young so they could take risk, that were inexpensive because we didn't have any money, right? And were hopefully smart enough that like, you know, they could get some stuff done.
And, but that was our only option. Now that also came with some pretty big liabilities. And you touched on a few, I just want to recap those really quickly. Right? Number one, it came with cost. I mean, those folks, if they were coming out of the U. S., right? Were expensive. Relative to all the other things we're talking about.
So even if we're paying somebody in the U. S., like a quasi minimum wage is gonna make 15 bucks an hour. That's just not a lot of money. It is if you're paying it. Right. It is if you're paying it and you're uncertain of what the ROI on that's gonna be. Again, like if we're just testing something, we're doing something for the first time.
We have no idea how far down that spend hole we're gonna have to go before we see any results. If we see any results. And, [00:17:00] and this is even more important than the cost at that price. We're almost certainly only going to be able to afford somebody that didn't know what they were doing. Let's overlook that part.
You're right. Which kind of thumbs the scale on the result in the wrong direction. Right. I mean, like, but we were willing to accept it because we were broke. You take what you can get. So it was like, ah, this developer has never shipped anything, but I can't afford another developer. So like, you know, I'll hire this person.
Right. The third part, though, was it came with an understanding, or at least an implicit understanding, that there would be a long term relationship here. Yes, I'll do this crap work for you because I'm hoping that I'll get a job with you, etc. That was always the implication. You clerk at a law firm because you hope to work there.
You residency at a hospital because you hope to work at the hospital. So on and so forth, right? Now you have these other options as an employer that don't have those hooks, right? That's a massive change in liability that hasn't changed in decades. That's a big deal. Yeah, it is. Now, I think that's one of the things that we got to look at here is the, the speed to stability here, right?
[00:18:00] The speed to certainty where it allows us to test so many more things at once, because like when you've only got a very limited amount of money, which is every startup ever, the number of bets you can play simultaneously is so limited. At a time where you need to be making lots of bets and trying to figure out what's going to work, right?
You need to be testing when that's limited to one or two lanes at a time. Your progress is going to be really slow. And as you and I both know, the time to results is life or death for a startup company. At some point when you just run out of money, if you haven't achieved any results, or you just run out of steam or passion, right?
Just energy in general. Like we've been at this for a year and because the pace of progress is so slow, we just can't do this anymore, right? We told ourselves, we're going to give ourselves a year, 18 months to see if this worked. Well, the reality is, we can't. It's not a fair test at that point, right? If we'd had all the resources that we need, and we could test as many things as we wanted to, we probably would have found out very, very different things and may have stabilized a business that could now move forward.
So, so many startups die in the vine simply because of this, this resource starvation at the early [00:19:00] stages. And I think that this, the, you know, the, the tiers that we're talking about now, and the, the new avenues that have opened up for hiring, quote unquote, have completely changed that. I think you can, you can make progress so much faster now and prove or disprove.
Right? Like getting to product market fit is so much faster. Now, early stage idea validation so much faster now, right? Marketing channel validation so much faster. Now to your point, now I can build out a team, not one person, one person, very small amount of money. That is a massive sea change for all of startups, right?
It is a very big deal. At the corporate America level, like again, that's what this episode is about. Who cares? I have no idea how to fix them. I'm sure it's somehow better. Maybe who knows, but it's life or death for startups. If we, we can say, Ryan, you and I are just getting started, right? And I'm going to use some, some quick numbers just so we can kind of paint the picture in people's heads.
We built a small SAS business. We've got 10, 000 a month in AR, obviously MR, not all the money in the world, but like [00:20:00] something's happened. We got a little bit of cash, right? We can afford to pay for some stuff. Right. Are options in the past, not at present. In the past would have been, we can hire one person, maybe part time for like three or 4, 000 a month, honestly, it doesn't even matter who they were because you have a cost of living bias that like you, you, you've got to cover.
Right. And most people would be like, if you're coming from a big city, like wait, three or 4, 000 a month, like that, that doesn't even pay rent. That doesn't work in my city. Right. Most people don't live in your city. Just. And so the second thing, though, is to your point, we got to place one bet. And by the way, one, the shittiest bet possible, because the only person we could afford was a fraction of a human that was willing to do that, which reduced our buying pool, so to speak, so incredibly small.
That what we're really hiring for is who is willing to take the job, right? Which by definition gives us the shittiest person we can find, right? That's the very nature of the criteria. Go back to the singular bet thing, right? Cause it's such, I'm laughing, but it's not [00:21:00] funny, right? It's that you find startups stuck in this position all the time where they're like, all right, look, we can either afford to build product.
We can't market. Or market a product we can't afford to build. There it is, there it is. That's the crux of this whole thing, right? If you can start to do both of those things, then all of a sudden, like you said, it's a sea change, right? All of a sudden, everything is now different because we can start to actually make meaningful progress on things that, by nature, have to coexist in order to have any leverage or real progress, right?
If you build the entire product, and you're like, well, we did it. We built the product. Awesome. How much money do we have left to market? Negative 50, 000. Fuck. Like, and this is like every startup ever, right? We all run into this problem at some point where there's resource starvation and it forces us into making, like, I can't even call them decisions, right?
It just forces us into gauntlets where the chance of victory is so small. This is what drives startup [00:22:00] failure rate, right? We talk about why startups are hard. This is it. This is the absolute center of that discussion. I want to keep on, on our example. Okay. So we've got 10, 000 of MRR. Okay. But we need four people.
We need a developer. We need a marketer. We need someone in customer service and we need somebody doing some light outbound sales. Let me send a couple of quick emails here. Uh, chat GPT said it's available for all four of those. And we need managers that replace us. Done. All right. So we need four people.
I want to pause on that for a second. We don't get to have four people in current terms. At best, we get to pick the shittiest version of one. Now, how does that other work get done? And obviously, Ryan, you and I figure it out. That's going to figure it out. But wait a minute. Hold on. What if some of those other roles don't need a full time person or in some cases, they rarely do right at 10, 000 of MRR?
We have a lot of like support tasks that are piling up, but there's not enough work for a full time person. So hiring a person anywhere really full time [00:23:00] makes no sense to us, right? On top of that, half of those requests that are coming in could actually just be automated scripts going back out, right? We could automate them through AI.
It doesn't require a person consistently. It would just require a person there long enough to set up those scripts so they can go work on other stuff. What we can do here is, is we can start to create a recipe of what can we AI, what can we automate through AI, So we don't have to do it again. So we don't have to incur that cost, right?
A perennial cost. Second, who can we find on a part time basis that could do this work at a highly competent level? I want to say that that 3, 000 that we're going to use to hire an engineer who is going to put five to 10 hours a week on it. Could get us a full time engineer somewhere else. By the way, with experience.
You know, something that's really funny about everything we talk about here is that none of it is new. Everything you're dealing with right now has been done a thousand times before you. Which means the answer already exists, you may just not know it. But that's okay. That's kind of what we're here to do.
We talk [00:24:00] about this stuff on the show, but we actually solve these problems all day long at groups. startups. com. So if. If any of this sounds familiar, stop guessing about what to do. Let us just give you the answers to the test and be done with it. Probably contextual to the project we're doing, right? I think that's the other thing that like the global piece of this opens up so much is that you can find people because the pool just, it's exponential at that point.
I mean, I know we think of like the U. S. as being this massive market and it's not a small market. Certainly from a number standpoint, from a financial number standpoint, it's, it's a big market. One of the biggest. But from a people standpoint, it's a whole lot more people outside the borders, right? And, and when you look at it from that perspective, finding somebody who's done the very thing that you need them to go do, as opposed to someone who's never even done anything like the thing you need to do, and they're going to go learn on the job and hopefully figure it out in time.
And at that time we'll sync up with when we do have a marketing budget, et cetera, et cetera, et cetera, right? So the access to that talent [00:25:00] and having somebody who can. that needs to be done is game changing for startups. And it's something that we just haven't had, right? There's very few startup founders who are like, yeah, I remember when I just hired that person who knew exactly what I needed to do.
And they just built a thing the first time. And it was awesome. I've never heard anybody say that. Let me stick with that because this is some of the inquiry, not so much pushback, but inquiry I got from some, some other founders when I talked about this over the past couple of weeks, they're like, yeah, but quality.
And I said, well, hold on, back up, back up, back up. Okay. Number one, I have hired thousands of people. Okay. There is no rubric where all of a sudden it's all quality. It's like, Oh yeah, but if I hire a us college grad, it will always be quality. Bullshit. You've never hired enough us college grads to know that's true.
The other kind of misunderstanding we get is, Oh, overseeing it. I hate even using this term overseas talent. This is such a us thing. Overseas talent is those people that are annoying on Dell customer support. When I call it and they're from India and they don't speak English and blah, blah, blah, like, yes, that sure.
Totally. That, that exists. It's not what we're talking about. [00:26:00] Right. At all. Right. As if you've never run into bad apathetic customer service in the U. S. Oh my God. Seriously. You've never been to an airport? Come on. So, you know, the first thing I say is, look, you got to understand, right? Like the folks that are the cream rising to the top at a global level, a lot of them that are showing up work with tons of, you know, feedback, et cetera.
Yeah. Are legit. They were the hardest working people, by the way, not incidental. We can talk about work ethics separately. But those are the hardest working people to get there. So, so the level of filtration by the time you're hiring those folks, you're hiring the top 1 percent of 1 percent globally, right?
You know, as far as, you know, people who have that service available. But the bigger part, the bigger part that I think is important is for the first time, startups don't have to make one decision. Like we were saying, we get to hire a developer, but there is no marketing. This has been in us. What if we can have all four people?
What if we can pay each person a thousand dollars a month? And, you know, we'll extract as much as we can, versus what they're willing to provide for that value. But we're not betting all of our time for five hours of some college kid's time. We're building [00:27:00] a team. And to your point, that team, because they're all essentially freelancers to begin with, we'll cycle through a whole bunch of them.
You guys haven't done this for a long time? And they'll be fine with that. And we'll be fine with that because we don't represent a hundred percent of their take home pay. And that's the beauty of it is something else I want to stick on for just a second here, which is the parallel nature of that type of work.
So when we can hire all four, sure that that seems like just generally speaking better, but let's talk about something really specific that happens there. Well, you and I both know this, we've had multiple failures and we've seen like where they fail. You don't necessarily know where the point of failure is going to be.
Right. And so that's why validating these things in parallel. If something was going to break, like if we go develop our product first, right? And then we learn to market it, but then we somehow fail at customer support later. If we did that sequentially, we're now a year and a half, two years into an adventure that if we had learned early on, that support was going to be our issue, or there was just some fundamental thing that we couldn't solve for, or maybe it was the product that we couldn't build, right?
Or [00:28:00] maybe that we can't market it at a cost that allows us to actually deliver right. Deliver knowing that sooner than later. Is so important. Like when you learn these things sequentially, it's painful. This is where things like technical debt come into play or pivots come into play, right? Pivots often happen because we started building our product and we built for a long time.
And then we went to market it. And then we start marketing it and we realize it doesn't actually fit the market. The cost structure wasn't right. We have to change it up. Like we were delivering service plus SAS, but nobody can afford to pay for service plus SAS. We've got to turn it into all SAS. Would have been good to know that when we were building the product before we started marketing, right?
So there's so much benefit that comes out of this parallelism as opposed to having to do things in sequence, where we get learnings that should feed into each other when they're being done in parallel, that just can't happen sequentially. And so from a startup standpoint, from a founder standpoint, it's impossible to ignore this.
We're looking at all of these new categories. Never, never underestimate one's ability to bury their head in the sand, but yes. Or just not, no, to be fair, like Ryan, you and I are on the [00:29:00] cutting edge of this stuff, like it's our job because we work with startups to understand exactly what's working, exactly what's new, et cetera.
And there's pros and cons to all of it. You know, we said this before, like AI in its purest form. Current state, this is 2024 when we're recording this, in its current state is basically a really smart college grad that you hired that you constantly have to manage in order to get the answer that you ever want.
You know that the potential is there, but it ain't free, right? It requires a ton of overhead to get that answer, right? And there's some costs associated with that. The difference is once you get it right, you can hit repeat a thousand times at zero cost. The second part, you know, when we're talking about the global level of talent, we got to remember, like we're talking about really talented people.
We're not talking about like interns, right? We're talking about people with five or 10 years experience that are full time at half the cost or in some cases way less. Of their US counter, by the way, with validated outcomes. Right? Because I think one of the challenges that you run into when you're not hiring on a platform like that, you're sort of taking their word for it, right?
There's very little objective [00:30:00] feedback. You know what? People's resumes never have star ratings of the jobs that they did previously, right? Yeah. Or any mistakes. It's like, it's binary. I did it. Yeah. Or I didn't. And sometimes even that's not necessarily true. Whereas you go to a platform like that, there's a ton of social proof and validation.
That this person can do the job, right? You get to understand a lot more about them than you otherwise would through an interview process or anything else. Yeah, you can ask for referrals, but I mean, like, like that's not thumbed, right? Like, sure, I'll let you talk to the three people who love me the most in the entire world.
Of course I will. And the other thing too is when we look at these different roles again, you know, I'm talking about the number two rank here being global talent. Yeah. We look at a role like a social media manager. And we say, oh, that's an 80, 000 job, okay? Which means we're just somehow arbitrarily saying that that's an 80, 000 cost setter.
Because people that happen to be in the market, again, in the U. S., that's what they can command. Do you have 80, 000 worth of need? That's what I'm saying. Right? Do you have 80, 000 worth of ROI? Probably not. As an early stage startup, probably not. [00:31:00] Which means that like, if we're doing the calculus, we just have to say no to that.
And I think that's part of the challenge that, I mean, how often have you seen this, well just a curiosity question here, but how often have you seen people not decide to enter into something simply because at that point in time the cost structure didn't work, even if that would have been a great idea or something you do need to build, but when you look at it you just go, objectively, mathematically, I can't do this right now.
It's the wrong reason to say no to that. Correct. And what you'd also be saying is, look, I'm paying 80, 000 not because I have 80, 000 worth of value in that particular role. I'm paying it because that's the least I can pay people. In this world to show up and do any job. One of the places where that gets gnarly is if we can't pay more, if that role isn't worth more to us, then we really have no way to invest more in this person, which should be their only thought is how do I get out of here?
How do I get out of here? Or how do I get rid of them? Right? Because the other side of that is if you do hire somebody entry level and you, you pay the penalties for that and you, you work through that and you validate that. Okay. Social media is a great [00:32:00] channel for us. You probably just leapfrogged their capabilities and now you need somebody that's not them anyways, right?
Correct. So do you hire somebody that sits over them and triple your cost or do you let them go and hire a replacement who has better skills? One of the beauties of, again, we'll go back to just the fractional talent here, whether you're starting with some AI or you're starting with global talent on a fractional basis.
If you're hired somebody who is experienced, but you're paying the equivalent of an entry level college salary, not necessarily because you're paying them less per hour, right? You're just paying them for less hours. You now have a built in ability to scale that role with the same human. Because they were only putting in 10 hours a week.
Now you can double it to 20 or maybe just 50 percent increase to 15 as needed. It changes so much for startup companies when we don't have to hire in full human chunks. Right. It just, it's so much better for us. Which brings us to the third category being the young and hungry. Really what we're talking about is people who have experience.
They're young [00:33:00] 20 years old. They have a lot of experience. They've got like four solid years of work experience. They're not some newbie just showing up for the first time saying, teach me how to work in the past. It was hard to cultivate that person because the world didn't exist in a way that person could get those kinds of opportunities that early tools didn't exist, right?
Like now you can be 16 years old and have a, have a million followers on Instagram. That is a real thing. That's been exist before. Like that wasn't a thing that'd be like having your own TV show. It just didn't exist, but now you can do that. Shopify store, right. And actually make a ton of money. You know, there's so many things you can do now.
Educate yourself on YouTube in the first place, right. To understand how to do this stuff. Right. Like the knowledge gatekeeping where it is, we sort of, I mean, and also it's like, it's not real, but we used to pretend that like you went to university to get the skills, you needed to do a good job really wasn't what it's about, right?
Like how many people, you know, that came out of college, like I have a marketing degree, I'm ready to market. No, you're not right. You're still coffee and copies for now, but we'll get you there. Right. Right. Unlike [00:34:00] now where, you know, you want to learn how to do B2B marketing through social media, you can go and give yourself a masterclass in that with 30 or 40 hours, uh, on, on YouTube and then go start practicing it tomorrow by just doing the work.
Right. Absolutely. And all of a sudden now, like, You're a candidate, right? Now you are somebody. You're young, hungry, experienced. You've proven that you've got the desire to take on the skills and you've shown through demonstrable evidence that you actually can use them, right? Here's some outcomes. Here's some stuff I did.
I created this. Our CTO, uh, Steve had two companies under his belt by the time he joined us, right? And again, he wasn't even 22 years old yet. You and I both did. Right. You know, if we look at our own careers, right. And we had to earn it very differently just because the tools weren't available at the time, but the point is, if you're 22 years old right now and you haven't had at least two or three jobs, like jobs being maybe projects, side hustles, whatever, like resume line items.
So I'm not talking about the drive thru at DQ. I'm talking about [00:35:00] actual. Where you're volunteering experiences, nothing against volunteering, by the way, but like, does it qualify you for a job to work under me in marketing at a startup company? No, it does not. No, it does not. Right. I'm glad that you went to the soup kitchen.
That's awesome. It's great. You help people. Wonderful. You're a good human, but that's a whole other component. Right. But like, if you've got a degree right now in communications and you're like, I want to become a social media manager. Right. Cool. What campaigns have you run? Where have you been successful?
Right? Well, I haven't. I've learned about it in college. Why would I hire you over somebody that already has that experience? Right. That's the same age. Yeah. Again, the, the C change being that wasn't, you weren't competing with that before. If you were a 22 year old coming out of college with a degree, you weren't competing with people your age that are already shipped, that had already, like, been, like, Delivered.
And now you are at a scale never seen before. It's a big deal. Yeah, there's probably an entire other conversation around this, but just the fact like, I think I'm gonna be real careful here, but the entitlement, [00:36:00] right? The fact that, you know, if we go back, not very far back, right? Like maybe our parents generation was the first one where really at scale, people were able to obtain that college education.
That was something that their parents really had to work for to make that happen. And they did. And they were proud of that. And they were proud of the outcomes it achieved for their children. And then that kind of became table stakes where just like everybody had to go. Right. So I think part of this and part of the pushback that we see against this discussion, part of the, you know, the vitriol that you faced over social last week comes from that place, right?
It comes from, we had to work so hard to earn the right and earn the capability to put people through this program. That that should then entitle them to something on the other side. And I think that I get it, but it's a really dangerous way of looking at that. Right? Like, who is entitled to the job?
Somebody who did something that's unrelated, admirable, but unrelated to what I need, or the 21 year old kid who spent a couple weeks on YouTube and then a year doing the work. I [00:37:00] think we have to be really careful here because it sets us up. I mean, like if you, if you want to be like, like when you saw some of that, we saw some, some pro America stuff in, in, in the feedback.
And I was like, you should hire American first. Sure. Okay. But like on the basis of pure entitlement, simply because they're American and because they completed a degree, Can't do that at a startup level. We can't do that. We'll hire that person and fire them a month later. And we got a business, right?
Doesn't work that way. So I think we have to be really careful about rewarding the right things here and, and making sure that this isn't about entitlement and it isn't about the sacrifices that were made to unlock this wonderful thing that is a college education, if it's not fit for purpose, where we're talking about early stage and entry level startup hiring.
Yeah. I mean, look, to be fair. These things go through an evolution. There was a time when getting your GED was what you needed to get into the workforce, right? That was the whole point of it, right? It was graduate high school. That's how you make it in the world, right? That was also 1948, right? Like a couple things have changed since then.
A little bit of industrialization happened, right? And it became, all of a sudden, college [00:38:00] got you from the factory into the office, right? And that was your rite of And it worked for a very long time, like 50 years, right? But it changed. Like, that's all we're saying, right? And so, if you're like, oh, college degree is still the most important thing.
Yeah, again, remember, so was a high school diploma at one point. And then everybody had one. And then that wasn't enough anymore. And then college degree became, you know, the threshold. And that's kind of gone by the wayside. It's not going everywhere. If you want to become a doctor or lawyer, you're gonna need your degree, right?
And this isn't us knocking degrees. Get whatever the hell you want, right? I don't care. Be realistic about who you're gonna go to work for afterwards. Yeah, just, just be mindful that, like, it isn't the hall pass that it used to be. And that's okay. And not only is it not the hall pass, but you're competing now, right?
If you're coming out of college right now, and this is also the parents thinking about how they're prepping their kids coming out of college, right? You're competing with stuff that just didn't exist before. Five years ago, you weren't competing with AI. Ten years ago, you weren't competing with what I would argue is the best.
Is the level of global talent because in to the credit of the rest of the world, right? You know how we say in [00:39:00] the u. s To the credit of the rest of the world people leveled up people around the world got smart And the folks that are coming to us now that maybe 10 years ago Like there's so much overhead with maybe a language barrier or an experience barrier or something like that Folks that we're talking to now, there is no language barrier.
By the way, we're all remote, which changed everything. We're all remote anyway, because we're on Slack all day anyway. So I can't tell the difference if you're in Lithuania or Ohio. I don't know the difference. But the other part is to their credit, they're really good now, like really, really good to the point where in many cases, it's harder to find a U S equivalent of their skillset.
Take price off the table. We're just talking like. Pound for pound talent now, that's a big deal. It is. Yeah. I think that one of the, I was going to comment on something there. You brought it up early. You brought up now again, which is some of these, the foreign talent was hard to work with language barriers, or it was low quality work or whatever.
In 90 percent of the cases that I dug into, and I was guilty of it myself as a startup company, you often don't know what you're asking for, you know, who wasn't complaining about that foreign [00:40:00] talent. Large corporations who outsource to them, right? Why? Because they were good at documenting what was needed.
They were good at managing projects. They were good at managing people in general, right? When a startup company goes out and they're like, well, we kind of need this, right, a much easier way of doing that. Not an efficient or effective way of doing it, but much easier way of doing that is having somebody sitting next to you in an office where you can be like, yeah, not, not there, there, right?
No, don't, but move this there. Oh, wait, wait. Oh, that won't work. Oh, Hey, what's this question. What's that? And there's just this kind of like progress through osmosis. Whereas with, with a lot of those, like, especially where language bearers were concerned or management was concerned, you had to have really clear requirements.
You know what I rarely saw when I was like, people would come to me and they're like, this is failing. Like we were upside down in this. We're on our third, you know, iteration of this product. It's still not working. I was like, let me see the requirements. Let me see what you told them to build. It was like 90 percent of the cases they built exactly what was asked.
They did what you said, not what you meant. That's a huge problem. I want to give you a parallel cause I can never [00:41:00] get this out of my head. In the mid 2000s, you know, I moved out to Los Angeles from Ohio. And at the time I had a team in Ohio that were running, you know, a lot of the companies, some, some of them that we, we have now when I would meet with founders, LA and San Francisco, and I would talk about like our cost structure of things that we can get built.
And I love this example because you can take the nationality off of it. People were like, how the hell can you get a developer? In Ohio. I mean, I'm not even kidding. Not one or two of them said that like 90 percent of the people I talked to said this guy. And I was like, wait, you do know that people like get educations and understand math and can like write code.
Did the calluses on their fingers from shucking corn impact their ability to write code? Right. And I heard this from VCs, from founders, like not from a couple of people. Now, the funniest ones, the funniest ones by far were the people like, Oh, You're from Ohio. And I'm like, motherfucker, you're from Michigan.
You moved here like eight months ago, right? You moved here a year ago. What are you talking about, right? Which is [00:42:00] most of California. Anyway, what was interesting was they had it in their head that the only way you were going to find competent, the right level of talent, as they described it, was to Was to find them on the West coast, right?
Or people who had also recently moved there and swelled the rates by three X for no other reason that that's where they are geographically. I'm like, Oh my God, are you kidding me right now? I like every person in this room isn't from California, right? Like, how did you lose that sense of that one? I'm a, I'm Californian by salary only.
Yeah, exactly. Right. The joke I always make, it was like a bunch of people in the room that, that talk about the city they lived in as if they invented it. Right. Yeah. Yeah. Like, you don't get to take credit for being here. Anyway, my point is, the folks, even in the U. S., right, at the time, couldn't believe that there were somewhere else that wasn't where they chose to base that could possibly be as competent as them.
And they had this whole stigma in their minds that, like, if you were hiring people that weren't from the Bay Area, et cetera, they must not be that good, and that's why they're not there. Oh, some of that was just pure ego, [00:43:00] man. Some of that was just pure ego to say that, like, because if that is true, then you're I'm an idiot for paying what I'm paying to get this work done, right?
So like that, I can't possibly accept that. So that, so it must be that cool that you're going to do this with an inferior staff and take longer to build an inferior product. Cool. That's not how we're going to do it, right? Yeah. Yeah. That was the other part. Okay. And we touched on this a moment ago, but I just want to come back to it for a second.
The other part was, Hey, you know what I'm not doing with my folks in Ohio? I'm not watching them switch jobs every six months. Right, you're right. I'm not having them complain to me that they only have five thousand dollars a month to pay rent, right? You know, etc. I'm like they're gonna drive a bmw live in a beautiful house and have an incredible family for less Than your your lowest paid employee the quality of life for my team is going to be a hundred times better And we're still in the united states, right again, and we're still in the u.
s Yeah, it's like we're still in the highest cost structure in the world and folks didn't see it. And I'm using that again as a proxy to say, now when I talked to CEOs and I explained to them, like, Hey, there's a social [00:44:00] media manager in Serbia that is bad ass, probably better than anybody you have on your staff, has a better work ethic and to them increasing their salary, their comp by a thousand dollars in a month is like two X ing it.
Like they get two more BMWs that month, right? Like the quality of life that you can provide. Is extraordinary. And they actually don't believe it. Almost like it's too good to be true. What's the catch? Yeah. Can't, can't possibly. Yeah. What's the catch? What's the catch? And then there's all the justifications, right?
Like, well, but you're, you're taking, you're taking jobs away from, from these people or you're, you're putting money outside the country, whatever, like, okay. Sure. Look, like here's, you got to consider it. Yes, that, that is true. You're absolutely taking money. You're taking it from, by the way, where you couldn't afford it to begin with, because the idea is that you could have just afforded it either way.
If I could afford to pay somebody 10, 000, 10, 000. Maybe I'd be paying them 10, 000, right? I don't have 10, 000. So I don't have a choice, right? That's the part they're like, Oh, you're taking jobs. No, those jobs weren't available. I literally, that's the whole point. Let's start up. I couldn't hire that [00:45:00] person to begin with.
I went to that store and they, they told me to leave and come back when I had real money. Right. Like that's the equivalent of saying, Hey, when you drive onto the Honda lot, you're taking sales away from Ferrari. Oh, really? Yeah. Because you were just as soon going to buy a Ferrari, but you just randomly decided to buy a Honda?
It was a coin toss. It came up tails. Here I am at Honda. That's the dumbest argument ever. What I think is fascinating with all of this is for us, Ryan, you and I as founders and all the folks that listen, world's changed, folks. World has changed. World has changed significantly in good news. It's good news for everybody, including the U.
S. college grads, et cetera, because they're going to find even better jobs to compete for. But it's great news for us as founders. Because now all of the things historically, and that's really what this is about, all the things that historically that might have prevented us from making hires or, or making bets, et cetera, now are way more affordable by orders of magnitude than they ever have been before, which means more and more and more folks, including some of those U.
S. college grads, a lot of them [00:46:00] can now start startups at a fraction of the cost, get exponential returns and build bigger companies that guess what? Overthinking your startup because you're going it alone? You don't have to. And honestly, you shouldn't. Because instead, you can learn directly from peers who've been in your shoes.
Connect with bootstrap founders and the advisors helping them win in the Startups. com community. Check out the Startups. com community at www. startups. com to see if it's for you. Could be just the thing you need. I hope to see you inside.