SaaS Founder Interview with Josh Millet, CEO & Founder of Criteria
Criteria is an assessment company dedicated to helping organizations make better talent decisions using objective, multidimensional data.
Tony Zayas 0:03
Hey, everybody, welcome to the SaaS Founders Show where we have fascinating conversations with successful SaaS founders and hear all about their journey. You know, and the road that they take the path they take to where they find themselves today. So I’m Tony Zayas joined by Andy Halko. Andy I feel like I talked to you just yesterday at one of these.
Andy Halko 0:26
I know we’re now doing two of these shows a week.
Tony Zayas 0:29
Andy Halko 0:30
We’ve got the tech founders talking about really interesting technologies on Tuesdays. And, you know, continuing this long line of amazing SaaS founders, but that’s fun, right? You know, some amazing conversations across all these folks.
Tony Zayas 0:48
Yeah, it’s been pretty awesome. So I’ll get into today’s founder, we have Josh Millet, from Criteria. He is the founder and CEO. Criteria is an assessment company dedicated to helping organizations make better talent decisions using objective multi -dimensional data. So let me bring Josh in here, and we will get going. Hey, Josh, how you doing?
Josh Millet 1:12
Good, Tony. Thanks for having me.
Tony Zayas 1:14
Yeah. Thank you for joining us. So just to get started, just we’d love to hear about Criteria. Tell us about the business. And then we’ll we’ll dive in to hear about the journey.
Josh Millet 1:26
Yeah, so as you mentioned, Tony, we’re an assessment business based in Los Angeles, we have about 150 employees now. So we really like to think of our category as kind of people science. So it’s really about helping people, mostly HR people, but really anyone who’s involved in hiring or making talent decisions, and then can make more informed and more confident decisions. And we feel like the kind of data that assessments give you not only help employers drive better outcomes, but also makes kind of a whole world of work more fair and objective for employees and job seekers class.
Tony Zayas 2:05
And that’s super interesting. And a big thing that we talk to almost all the founders that we have on is the whole idea of hiring and how you find the right people and all that. So this one, I think will be exciting, certainly for us. And I’m sure everybody that’s that’s tuning in, so very cool. Where did it? What’s the origin story? Like? Where did this, where did you start? Where did the concept come up with? Obviously, assessments are play a big role in the hiring process.
Josh Millet 2:33
Yeah, so we founded the company now 14 years ago. So it’s so it’s been a while a bit of a run. But the origin of the of the company was really, I had a small startup right out of grad school, a tiny test preparation business, actually, it was just five people. And we sold it to a company out in LA, and at the time, I was on the east coast. So I moved out to LA and started working for the company that had acquired us. And after a couple years, I became involved in hiring and I had no experience whatsoever doing that, because we had only been a five person team. So I’m not quite sure why they put me in charge. But I became involved in it. And the genesis of the idea was actually, and I think a lot of people a lot of your listeners can can relate to this is, it was one of those terrible interviews, you know, where you’re kind of looking up at the clock five minutes into the hour, and you kind of realize on both sides, probably, like it’s just not a mutual fit, but you have 55 minutes left. And that was sort of that got me thinking about, since my prior business had a connection to testing and assessment, you know, there’s got to be a way to use objective data to to help save some of these bad interviews and drive better results in hiring. So it was really born out of frustration with the process, like so many companies are.
Tony Zayas 3:57
Andy Halko 4:01
You know, startup origin story look like, you know, what were the first couple months prior, and then after, like, how did you actually make the product come to life?
Josh Millet 4:14
Yeah, so in the early years for us, Andy, we’re definitely not sexy. We took a while to get going. So you know, kind of wrote a business plan. This was back in, you know, 2006 and seven, when people were still writing business plans, not growing, not just doing the x. So, so wrote a business plan, took a while to raise funding, honestly. And so when we launched the product at the end of ’07, it was it turned out to be, you know, uniquely terrible timing because it was right before the financial crisis. So all of a sudden, we’ve got this idea for hiring software. And then within six months of launching it, you know, there’s kind of a hiring freeze across the US. So, so we really had to get strapped scrappy, and, you know, we just had there were four of us. Kind of four or four people in a room and trying to figure out, you know, product market fit. Luckily, we had raised an angel round that, you know, carried us for, I think, almost two years. But you know, honestly, we really bootstrapped the business for for almost nine years before we took our first real outside funding. So it was a, you know, the first I would say, four or five years were a grind, you know, when you, when you don’t have a lot of funding, you’ve got to obviously manage for cash flow as much as growth, right. So. So it was really about just building the product, getting customer feedback, and took us a while to kind of get that product market fit. I think.
Andy Halko 5:41
You know, I think a lot of founders that are, you know, before they start, they see the stories of the overnight success, the 20 year overnight success, can you talk a little bit more about some of the the grind, and that those challenges that you face the first couple years, because I think those are the stories that people don’t hear enough of?
Josh Millet 6:04
Yeah, and we had sort of a strange transition from from, you know, eventually, when we did get funding, it sort of, we took our first outside funding in 2015. And at that point, there was all of a sudden, this really intense interest in HR technology. And, you know, there have been a couple of high profile M&A events. And so there’s just a lot more investor interest in the field. And all of a sudden, it went from, like, nobody or return my calls to like, net now, everybody’s called calling us. And it’s, it’s a strange feeling when that happens, because we felt like what we were doing, you know, had been important for a while, there’s just like, no external recognition of that. You know, for us, it was really about we always, like, the milestones we had were like, okay, we have enough cash flow to confidently hire one more employee that was literally, you know, the, the sort of the KPI that we had. You know, can we afford someone else now, you know? We definitely weren’t, like throwing off a lot of cash or anything. So in those early years, I would say, from, from four to, you know, kind of 12 employees was probably, you know, I don’t know, four years or something. And so it was really measured. And, you know, the one thing, as you all know, in SaaS that really sustains you, as you know, as long as you got good renewal rates, feels like the business growth is pretty predictable. You know, you can, you can make a lot of other mistakes, as long as you’re retaining your existing customers, so.
Andy Halko 7:33
I’m kind of curious to that that that market change, because I think there’s something to that as the market, you know, ready? Or is there demand for a product? And so, you know, when you were in the earliest stages, was that something that you measured? Or, or looked at and said, You know, there there is, or isn’t the demand. And then as it started to change. You know, what, what indicators were coming that helped you see that?
Josh Millet 8:05
Yeah, that’s a great question. I mean, for us, you know, we weren’t, we weren’t at the time pioneering a new category. You know, like, assessments have been around for, you know, companies been using them one way or another for 50 years. So it’s not a new category, but we felt like we were doing something really new in the category. And specifically, you know, we’re really the first SaaS assessment product of pure SaaS assessment product. And we thought that and, and our competitors, were selling test transactionally at the time, so Okay, you want to buy assessments, they’re, they’re $30 each, or $50 each, or whatever. And we thought that wasn’t very customer friendly. Um, and so, you know, it’s it’s hard to pinpoint, like an inflection point. But I will say, General, even though assessments have been around for a very long time, I feel like about about five years ago, there started to be this real shift in terms of HR. Where in all other parts of business, you know, across corporate America. You know, every department was, was now using data to make better decisions. So all of a sudden HR people, the ones who had kind of been reticent about using assessments or using these objective tools, were coming to the realization like “Hey, everyone else in my business is using data.” Why am I still kind of swinging from the hip, you know, in terms of hiring people. And so it went from like, being kind of a headwind, like, you know, we use resumes and interviews, why should we also use assessments to like, Hey, this is a data driven approach. I’m being encouraged to, to adopt those, you know, let me take a look at this. So so it really was sort of a change in the attitude of the market. I guess that was sort of an inflection point for us. And then it was also just, you know, picking up on on the signs that like, you’re kind of taking more of the product boxes as well.
Andy Halko 9:54
Andy Halko 9:59
The one thing I, I’ve used a number of assessments over the years and hiring. You know, and the funny thing is, I was using one at one point, and I remember hearing a radio show while I was using this, where they talked about the merits of the testing. And I’m just kind of curious from your perspective, and this is this could go for any company, but you know, it’s your clients, users. But you know, do you ever have to deal with the PR around, you know, oh, you’re judging people, or, you know, making this assessment? Or, you know, even what I’ve heard is people trying to game the system and figure out how to do it. So I’m just kind of curious, in a market like yours, you know, is that part of your thinking that you have to do it within the company?
Josh Millet 10:52
Yeah. And that’s where the science comes in. So there’s all sorts of different assessments, you know, we’ve cognitive ability assessments, personality assessments, skills assessments, which would be more kind of basic stuff, like, you know, can you type can you use Excel, that kind of stuff. We recently bought an Australian company that has a great game based emotional intelligence assessment, that’s kind of a newer area that we’re really interested in. And so it definitely depends, you know, my answer might be different depending on what type of assessment you’re talking about, with, with personality assessments, you know, trying to gain the assessment and sort of thinking about that candidate perception of the assessment is really important. But also the way we like to position it, Andy, and I think the the reason that I think we’ve sort of had a shift in the market that I just referenced is, you know, you have to look at what you’re doing in your hiring process. If you’re thinking about assessments, you have to look at it versus those are legacy techniques that we all use. And we still all use, right? I mentioned that the the origin of the idea came up during an interview, right. And that’s pretty ubiquitous, everyone interviews people before they hire them pretty much. And everyone uses resumes, or if not a resume, you know, some kind of application, right, which is sort of similar to a resume. And if you think about resumes, and interviews, there’s just a huge and growing awareness, I would say, among most HR people, that like the research on those is pretty clear that they don’t work very well as predictors of success, you know. And also, besides not working all that, well, they also can inject a lot of bias into the process, right? They’ve done these studies on, on resumes, where, you know, these researchers sent out all these fake resumes to job posts, this is sort of a famous study in HR, it was probably 10 years ago now, but it’s been replicated a lot of a lot of times, and just by changing the names at the top of the resumes, you know, medical credentials, but just changing the names, you know, from like, white sounding names to ethnic sounding names, or male to female, the response rate, the callback rate to these fake, you know, applicants went way up or way down. So, and we’re talking about like, HR people generally tend to be quite progressive, quite open minded, sometimes they’re very focused on diversity. But, you know, this unconscious bias, you know, we all have it. We’re all human. So. So it really is a way to get to strip some of that away and get at the active, standardized measures of, you know, what, what is this person all about? So we think that’s a really important element of the story. And same with interviews, right? There’s all these studies that show that a lot of interviewers kind of make up their mind about an applicant in the first five minutes. And if you recall, the story I told you, at the beginning, you know, I was guilty of that with this, this applicant, right. And if you think about what happens in the first five minutes of an applicant, really, you’re just sort of seeing how they look, you’re maybe making some small talk, not too much substantive happens. And yet a huge percentage of the time you’ve already kind of decided Yea, or nay, you know, so. So they’re really subjective interviews in a lot of ways. And we’re trying to get past that to really look at objective information that is going to be relevant to job performance that we know through research is relevant to job performance. So we feel like that, for a lot of people opening up the talent pool, right? It makes you look at people who based on their resumes, you’d never have taken a look at.
Andy Halko 14:29
Yeah, that’s great. I have to admit, I have an employee that’s been with me almost 10 years. And he tells me that he can tell him the first four minutes whether I’m interested in the candidate or not. So he’s got a pretty good predictor of my level of interest, just probably based on body language or questions, but it’s I always find it funny. Yeah.
Tony Zayas 14:53
Yeah, John’s just tickled back a little bit. I would be curious to hear saying that you know, what you offer is something that almost any company, you know, every company hires, and it’s a challenge for everybody. How did you originally take this? Take your product to market? Who are you targeting? And how did you make that decision? And then I guess part two of that was kind of how did that evolve over the over the years? 14 years? You guys have been around?
Josh Millet 15:22
Yeah, you’re right, Tony, we like to think that, you know, our market is pretty broad, because it’s basically anyone who’s having any kind of pain around hiring, which is, which is almost anyone who’s ever hired, right? I mean, none of us have a perfect record. So at the end, the pain is very, like, it’s very painful. When you when you have like a high profile, flop and hiring, and everyone’s been there. So I think, you know, initially when we looked around at the market, it’s really changed for us. So it’s this the second part of your question, initially, we were really focused on small businesses, small and medium sized businesses. And we felt like, there was an opportunity there, because when we got started, and again, this, you know, 13-14 years ago, we felt like the fortune five hundreds were pretty well served by what was out there in the assessment market. It tended to be very consulting heavy, so like, you would have to buy all these consulting services along with the assessments. And that’s, that’s great if you’re, you know, well capitalized, big company that has the time and resources to do that. But what it meant was that the the science, the predictive science that assessments give you wasn’t really accessible to smaller and medium sized businesses, because they can’t hire an army of consultants or, you know, take six months to implement something, they want to, like, make a better, you know, hire a salesperson tomorrow, you know. So, so we really set out to, I guess, demystify the assessment business and the science behind it and make it accessible. And for us, that meant, you know, pricing it affordably making sure that you know, that our service had like a candidate grade UX, right, that it was that our consumer grade UX, that it was really friendly, user friendly, easy to use. And because of the way we priced it, the way we delivered it over the internet, it had to be pretty easy to use, otherwise, it wouldn’t, you know, we couldn’t have onboard people. So we really are- our sort of product mantra was accessibility. And that worked really well, for the for the small and mid market. You know, most of our customers in our first seven or eight years were sub 500 employees, the vast majority. And then, about four or five years ago, we really started getting customers in the enterprise space. And I’d like to say that it was like an intentional plan. But it really just initially happened kind of by accident, where we got a couple big customers, and then we, you know, these big customers, sometimes they give you some great product ideas and sort of influence. Nudge your roadmap and in a certain direction, but we basically realized, hey, this this product, you know, there’s a few things we need to do to make it more enterprise ready, but like the same reason it works First, for midsize businesses, you know, some some enterprise, they’re going to find it appealing. And so now, you know, Flash forward to five years later enterprises over 50% of our business.
Tony Zayas 18:15
Andy Halko 18:17
How did you end up like acquiring those first customers? You know, as we talked to founders, some of them talk about it being a grind and having to just, you know, go out and meet and greet everybody, while others kind of stumbled into it. I’m curious, how did you acquire those first customers?
Josh Millet 18:36
Yeah, I mean, I can kind of give you a one word answer on that. Google. Yeah. So you know, we definitely at the price point, we were selling it at, we couldn’t like be, you know, getting on planes or even driving. So people, so you know, we really built our business on the back of Google search. And in the early years, and especially for the SMB market, that was a great way to find them. So you know, initially, it was a lot of paid Google, honestly, like pay. And then over time, as we built out our content strategy and acquired a little bit more of a brand it was it was more and more organic. And now we have great, we still, you know, still our biggest check each month is to Google. But it’s like now our organic traffic is like three or four to one more than our paid so but initially, it was it was great because as a bootstrap business, you know, even early on when our product frankly was not all that good yet, like in the in the first and second year. We were already getting, you know, three or sometimes even $4 back for every dollar we spent on boom. So that was a, you know, we wanted more of that.
Andy Halko 19:48
Yeah, that’s where you kind of hinted at pricing, your pricing. I’m always curious how companies figure out how to price their product. There’s so many different factors you can think of as the demand versus what’s your cost? You know, how did you guys go about that process of pricing your product in the early days? And then how is it evolved over time?
Josh Millet 20:14
Yeah, so it’s a great question. And I think it’s like the most, it’s one of the most important things for SaaS founders to nail and I wish I’d spent much more time early on thinking about it. So again, when we were all about accessibility early on, and so we didn’t want to lose a single deal on price, right? We wanted everyone to have access to this. And, and it turns out, that’s not necessarily the right approach. So we really, you know, over time, as we’ve, you know, evolved the product that, you know, customers are getting, you know, I would say eight to 10 times the value they were, you know, 10 years ago, we’ve raised our prices, not not that much. But I would say that underpricing our product in the early years was probably the single biggest mistake we made. It allowed us to get a lot of customers, but there’s there’s a lot of money left on the table. And we you know, I remember someone asking me a question, one of our investors asking the question, you know, five years ago, when we first took monies, they said, you know, who owns pricing at your company? And I was like, that’s a good question. No one. No one really, I said, I guess it’s me by default. But, you know, we didn’t have anyone certainly who’s like, dedicated role was primarily oriented around pricing. And it’s important enough that you, if not at 40 employees, pretty soon you can have that person who’s just focused. And now we have someone who, who focuses on pricing and packaging, and we have a whole pricing, you know, committee that meets each year when we redo our pricing. So I think it’s like an incredibly important thing, because as you all know, the the math of SaaS is like compounds, right? So if you get all these great customers, and they come to love your product, and you say all of a sudden you wake up and you’re and you realize. Okay, we’re really underpricing our product. We got to really raise the prices. That doesn’t really help you with your existing base, right? to new customers, you can charge whatever price you want. And they’ll either say yes or no, right. And so you get that data pretty quickly. But even though we have a really loyal customer base, that really great NPS and all that stuff, you know, if you raise the price, 100%, they’re still not gonna love that, because there’s this, you know, psychological phenomenon of anchoring, where once they’ve heard the price, that’s what they think the value is. And so, so, you know, I think being deliberate and more, I guess, scientific about price would have really benefited us early on.
Andy Halko 22:49
I love the concept of like, who owns pricing the pricing committee? I mean, I think that is advice for founders. That’s, that’s, that’s gold right there. You mentioned being more scientific, is there anything, any specific steps that looking back hindsight 2020 that you would have taken, whether that’s more investigation, or the market surveying, you know, talking to mentors, like how would you have potentially approach to pricing differently in your early days?
Josh Millet 23:23
Yeah, it’s a great, it’s a great question. And I think one of the things for us, and Tony, you asked about this earlier, you know, our customer base is very diverse, not just in terms of size, but we’re really kind of agnostic as to the verticals that we plan. So, you know, there’s certainly like customer concentrations, and technology and medical. And there’s some other verticals, we don’t do quite as well, and where maybe some of our competitors are more focused sort of exclusively on those verticals. So there’s definitely a mix. But, you know, we market to about 17 different industries, and, and across those industries, they tend to use different assessments, right? Which shouldn’t be surprising. But they also have very different perceptions of value. And so I think, if I had, if I looked into that and realize that a little earlier, then you can you can adjust right by either focusing on those industries that that see higher value and where you probably they see higher value because you’re delivering higher value in that industry, right? Like, I’ll give you an example in technology. Our customers use our software to hire you know, a lot of them are VC backed PE backed companies fast growth. And they’re they’re hiring salespeople and engineers, right? That’s what they do at scale is those two positions. And some other ones but those are the two main positions. And if you think about the Delta in performance between a high performing engineer and a low performing engineer, or or a high performing salesperson over I mean, you know the the software pays for itself within half a hire right? So Whereas in other industries where maybe the primary metric is, you know, do you show up on time regularly, there’s not as much of, it’s still important for your business, but there’s not as much of a tangible value on that performance Delta that you’re driving. So it’s so it’s so you know, focusing on those industries that have a really strategic view of talent can allow you to have a totally different pricing model.
Andy Halko 25:28
Tony Zayas 25:29
Andy Halko 25:30
I really want to put a pin in that idea for folks watching is this, you know, understanding the value and the difference in value across different target markets. And using that as part of the comparison, I think that again, that’s gold.
Tony Zayas 25:48
So Josh let’s go shift gears a little bit. I’d love to hear about your team. I forgot. I think you mentioned how big your team is now? over 100? Correct?
Josh Millet 25:59
Yeah, we’re around 150 employees globally, now. Yeah.
Tony Zayas 26:02
So what is your hiring process look like? And what are some, you know, some little tidbits that you can share?
Josh Millet 26:12
Yeah, so I mean, obviously, we use our own tools. That’s our, that’s our primary human capital. strategy, I think. And so we’ve, we’ve just been very fortunate, we have such an amazing team. And we have a lot of stories, and we love hearing these stories from our customers too. But But, you know, we have a lot of stories in our own team, where we found people that based on their resume, or based on their background, just had no, you know, there’s no reason we would have focused on that person. And so using our assessments is really helps, especially in fields like sales, we’ve, we’ve hired people with no sales experience whatsoever, and some from from very varied and sort of comic backgrounds. And in terms of like, unrelated to sales, and, and they’re some of our highest performers now. So I think, you know, assessments are of the greatest value, when, when you’re, we like to preach hiring for potential, right? Versus hiring for experience. There’s certainly some exceptions to that, right. Like, if you’re looking for highly specialized positions, you don’t want to hire an inexperienced brain surgeon or inexperienced, like employment lawyer, right. But for the majority of positions that most employers hire for, which are, you know, sales, customer service, engineering, admin, you know, all these positions. Really, you should be focusing on who has potential to grow long term into integrate employee. And, and that’s what we’ve done. That’s the approach we’ve taken. And it’s worked out really well for us. For a long time, we had almost no turnover, you know, as a 4045 person company. I used to brag that no one had ever left the company. But then I made it realize that I realized that it sort of made it sound like a cult, so I sort of backed off. And, and, you know, of course, as you grow, you do have some turnover, but I think we’ve been really fortunate to keep our turnover low. And that’s partly because we’ve hired great people and, and then I really view my role as we scale to be, you know, keeping the culture at a point where people want to be to be there. And, you know, that does get more challenging as you grow. And especially this year, you know, what, as converting to all remote, you know, overnight, that was a very new muscle for us, you know, we had a only very partially remote, you’re not a very fully baked remote strategy. We had some folks working remote one, one day a week, that’s a big change to go from that to everyone’s, you know, in their den or living room, you know, every day. So. So that’s been challenging, but i think i think that’s been really, you know, key to our growth is basically, you know, hiring great people. And then once once you have them, you know, focus on retention.
Tony Zayas 29:07
That’s great. What is your take on culture? Like, how do you how intentional are you about it? You know, helping to define what the culture looks like for the company? And what are some of the things that you know, you’re trying to do to help people understand the vision and get on the same page and get people you know, I’m more excited and, you know, just promoting a healthy, strong cultural, I’d love to hear just your approach and what that looks like.
Josh Millet 29:37
Yeah, it’s a great question. And honestly, it’s one I think about all the time because I think sort of my informal job title is, you know, culture guru. Right. It’s my, it’s my job to make sure that people still want to work there, you know, in two years, three years. And it’s funny, I think, when you’re starting up and when we were 15 or 20 employees. We thought we had a great culture, but it wasn’t intentional. It just sort of happened by accident. And you know, it’s When you’re kind of fast growth and mission driven as a company, it’s kind of, I think, easy to easy to have that. I mean, not to say they can’t go wrong in those stages, too. But, you know, at that point, you can kind of set a tone from the top and, and everything works out. But as you scale, like, you got to realize over time, you know, I, as a CEO, my co founder, the COO, and our CTO, we’ve been there from the beginning, and we have less and less influence, you know, as you move on, it’s really that inculcating a few key values, and really, then that the culture is created by the company from from the ground up at a certain point. So there’s only so much you sort of lose your span of control over culture a little bit as you scale. And the only way to avoid that is by running a culture that no one would want to be in. So you kind of have to accept, you know, growing over time will mean you, you lose control in a lot of areas, and culture is one of those. So I think it does come back to really, you know, hiring great people and, you know, establishing some ground rules, and then, you know, letting them do their thing. So, yeah, there’s so many elements to that question, though. It’s, it’s, it’s really something that we think about a lot. I always, you know, when we’re raising our first round, a lot of investors ask you the same questions. One of the questions they ask is, you know, what are your key KPIs? And they want to figure out how you think about the mechanics of the business? And I would always say, to investors, that one of our KPIs, or Glassdoor reviews, you know, and that is a real KPI for me. I feel like the investors didn’t believe me when I said that. But it really is something that I pay attention to. It’s not always the best answer for people, I’ll say, roll their eyes a little bit. But for me, it’s been really important to focus on like people and culture. So
Tony Zayas 31:54
I’m curious to hear when you talk about, you’re focusing in on, you know, the fact that you’re going to have to give up some control. As a founder. How do you deal with that? Because I imagine that’s challenging. You’re building this, it’s your vision, you and perhaps your co founders and leadership team, they get to a point where it’s like you said, you don’t have as much influence as you once did? How do you deal with that? Just psychologically, how do you let go? What were some of the challenges with that? Perhaps? And because I think that’s a great point, that unless you’re building a culture that no ones going to be a part of. You’re going to start to lose some of that control. Before?
Josh Millet 32:39
Yeah, I think I think that’s a really, you know, thoughtful way to think about it. I – you know, for me over time, I guess. You, you realize that, you know, when you when you’re 50 employees, and the journey from like, 50 to 150, for me has been like, a succession of, of me giving up things, right. And my co-founders giving things and having a narrower remit. Right? And so, you know, I remember at one stage, I was like, No, you know, you’re not, I’m not going to be a product meetings that I can’t. You know, that can’t be. You know, but you realize that at a certain point, you know, I think of myself as something of like a generalist, and at a certain point, you need specialists, right? Running different departments, both from a bandwidth perspective, and because, you know, I remember when we stopped being bootstrapped and took outside capital for the first time, you know, we went through a couple of heads of marketing, but once you find the right one, it’s like, oh, wow, yeah, there’s so much better than I am. And now I get to just from a very high level, kind of look at, at what they’re doing. So, you know, so that’s been a, that was a big breakthrough for me. But it can be painful, because you, you don’t want to lose touch with any, you know, any area. And I think, for me, one of the toughest things is, there’s, there’s obviously a lot more meetings, when you when you start, you know, and and when you start giving up some of those areas, and, and that can be a tough adjustment, you know, for anyone, not just for me, but I think the leaders of our business groups, we have like five business groups. And the same thing, you know, happens in each individual group. And it’s tough to know how to manage that. It really is.
Andy Halko 34:30
You know, we had a good conversation with another founder, where we talked about culture fit, and I think you’d have an interesting insight is that, you know, I’ve hired folks that have left me. That I didn’t have a good experience left and you know, they thrive somewhere else. And same thing, vice versa. You know, folks that I’ve heard didn’t thrive in another organization came to me and did amazing. And I’m kind of curious and we were talking about But you might have an interesting opinion on this idea of, you know, how certain employees potentially thrive better in different cultures or environments or with different co workers?
Josh Millet 35:12
Yeah. Yeah, that’s an interesting question, Andy, because we have a really kind of strong perspective on that. And frankly, some of the customers that we talk to, it turns them off a little bit, but more of them Luckily, understand, and, and I think have embraced our approach there. Which is, you know, we think that we think that culture is incredibly important. And I, as a founder believe that and and, you know, wrestle with how to optimize culture, you know, every day. That’s, that’s definitely one of the main things I think about. But I think that hiring for culture fit is a little bit dangerous, and doesn’t always yield the best results. Because if you think about it, that’s what interviews do, you know, it’s sort of this, like, this thing they used to say about, you know, how people think about presidential candidates, like what I what I like to have a beer with them, ultimately, that’s not the most relevant thing to whether they be a good president or not, it’s relevant to whether you’d like to have a beer with them. Right? Right, relevant to whether they should be running the free world, you know. So so I think we think about hiring in the same way, where too often in interviews, that first five minutes, where it’s where it gets derailed, or where it gets fast tracked is, they have something in common, or they find a route for the same sports teams, or they know someone in common. And that establishes a connection where others, you know, fall flat, you know, if you got, you know, a Yankees and Mets fan or whatever. And, and it just, it’s just not relevant, ultimately to whether they can do the job. So we like to focus on culture ad rather than culture fit. Like, sometimes you hire someone that you know, looks a little different than your team or acts a little different or has different interests. But the most relevant thing is, are they going to be good at their, at their job? Now, of course, there’s exceptions. If you know, someone is, or suspect someone is toxic in some way, then of course, that’s something you should be on the lookout for. But in general, you know, I think culture fit is something that companies gravitate to, because it feels comfortable, right? I think organizations are like humans in that regard, they gravitate towards what’s comfortable, it’s it’s natural. But, you know, at times the best growth comes from stepping outside the comfort zone and hiring someone who, who’s going to open up perspectives for you.
Andy Halko 37:39
Over the years that you’ve had the business, how have you defined like, the vision for the product and for the company? And then, you know, evangelize that within the organization?
Josh Millet 37:53
Yeah, it’s interesting, because we’re in the middle of, I would say, in the fairly early stages of kind of transforming the way we think about our category internally. Like, initially, if you’d asked our employees, you know, for many, many years, you know. Oh, what does your company do? They would have said, we’re a pre-employment testing company. And now we’re, we’re kind of moving towards this broader category of some people call it people analytics, I call it people science. Where it’s really about not just using assessments at this one point in the HR lifecycle, like, Who should I hire? Right? But using them throughout, like, we just launched this product that’s aimed at using assessments post hire to develop and build teams, right? So you guys, I’m sure have heard of like the Myers Briggs, which is, which big in that in that market? You know, so that brings you a whole new set of use cases for using assessments. You know, you’re onboarding a new tune team member. How does the manager, you know, best relate to him or her, you know. How do they build a team with that person? How do they integrate that person to the team? So there’s all these decisions you have throughout an employee lifecycle where we think it’s good to use data and to use like a science based, you know, methodology for making decisions. And that’s a really big opportunity for us is, you know, expanding the vision of the market. And that starts to your question that starts internally, right, our own team has to know exactly what that means before we take it out into the wild.
Andy Halko 39:29
Yeah, are there and I’m kind of curious now that you’ve grown because we talked to founders that are at five to 50 people and they can get in a room. And, you know, talk about, you know, this is what we’re gonna do in the next six months. And here’s where we’re headed. You know, as you’ve grown, what’s the way that you disseminate that information to the team and potentially even gather feedback for it?
Josh Millet 39:59
Yeah, it’s, it’s It’s a great question. I think it is harder to do that in a remote setting, I find. I mean, I think that’s, you know, there’s pros and cons to remote. But when you’re, you know, we have all staff, for example, once a month on zoom. And I will say that just from not seeing the body language and the, you know, the shifting in the seats of people in a real all staff. You know, it’s like, it’s like a comedian, you know, you don’t know, if you’re bombing, you know, you can’t hear the clapping or not, you know, everyone’s on mute. So it’s, you know, it’s really tough to get an unbiased, unfiltered view of how your messages landing in zooms. I will definitely say that. So it’s a challenge. And then you, then then you find out two weeks later, because someone honest on your leadership team, you know, gives you the feedback. Oh, that yeah, that bombed? You know, so. So I do think it’s tougher to gather that feedback and get, you know, kind of genuine, like reactions to it remotely. But you know, I tried to do it with smaller groups, and then bring it to bigger groups once it’s kind of fully baked, I guess.
Andy Halko 41:09
That’s great. You kind of talked a little bit about product features in this new direction. I’m kind of curious, who in your organization now? Or how do you determine new features and create roadmap for the product? I’m sure when you started it, you were deeply involved? How has that evolved? And what’s it look like?
Josh Millet 41:33
Yeah, I mean, that’s one of the last things that I think I, you know, gave up in terms of, you know, I was sorry, they were praying that out of my hand, right? So, I think like we about a year ago, right around the beginning of COVID, hired a great CPO guy named Greg Isaacs. He’s, he’s our first Chief Product officer, and our CTO, Wayne, who, who’s been who’s basically a founder has been with us from the very beginning. He’s he and I have always kind of had the roadmap in our heads, and built it really, the two of us. And we just felt like we’re at the stage where we also needed a dedicated, you know, product leader. And so it’s really been great having having Greg on board, and now product and technology, Wayne, and Greg, really, really own that. And it’s my job to sort of just set set really broad general directions and conversations with them. But you know, I’ve said that in the last couple years, I probably went from, you know, if you look at our company, probably there were very few people two or three years ago, who knew the product better than me. And now there’s like, 50 people better than I do. So that’s been a, you know, difficult transition, for sure but necessary, though.
Tony Zayas 42:54
How have you, as you mentioned, you know, over the years, you’ve, you know, you give up different roles or responsibilities and things as the founder. So how has that been? Like, what was? What is? How would you describe the difference between, you know, end of year one, let’s say, as opposed to now, and how did you, you know, how did you handle giving up certain things, as you said, you know, like product development, if that’s something that, you know, you’re gonna hold closely to you? How do you deal with that?
Josh Millet 43:27
Yeah, I mean, it’s, it’s interesting, psychologically, for me, for sure. At first, I resisted it. I just said, No, I’m not, you know, I’m not giving up that. But then, over time, I think for me, one of the biggest transitions from, you know, when we were first bonded, we raised like, an $8 million round, you know, five years ago. And at that point, we were only 16 employees, and we’d been bootstrapped the whole time. So we were cashflow positive, you know, because you have to be. And at that point, as soon as we took the funding, like, literally, within a month or two, I realized, you know, how under invested, we were in all these different areas. You know, and that and then you get to six months out, and your perspective is like, how did we do that before? How did we do that without someone other than Josh running marketing? You know, it’s, it’s amazing that, you know, we were sort of holding it together with tape. And you know, and so I think there’s once you get to that point, where you are better capitalized and you can invest in growth, you realize, as you bring in these, like, domain expertise, leaders, you know, in different areas. You realize that they’re better than you at i. And, and that, you know, your perspective, like I think increasingly my perspective is one of the, one of the people at the company that thinks about the whole company and how the parts fit to make a better whole. You know, obviously our senior leaders think about that as well but they also are charged with running their department. And so increasingly, I think that like having that holistic view of, of how all the parts fit together is a big, big part of what my continued like value at the company, because now I have people who are better, better than me at running all these different departments. And, and so being like that generalist who has a perspective on all those pieces now has real value, right?
Tony Zayas 45:26
Andy Halko 45:29
Yeah, that’s, that’s great. I’m, I’m kind of curious. For you, you know, the thing that always, to me feels like the greatest learning lessons or mistakes and challenges you run into. So you’ve had the business for a number of years, you scale to 150 brought on a P, or, you know, different funding? What, what can you share, you know, maybe a mistake, or some of the biggest challenges you ran into along the way?
Josh Millet 46:03
Yeah, I mean, you know, looking back, certainly, you know, I think you asked earlier about, you know, our hiring and how we do that? I mean, I think we’ve we’ve had an incredible record of great hires, but the few that went wrong, you know, that those standout is mistakes, especially like a company that’s really proud of our service, and how it helps hire people. Like I can, I can understand the mindset of the customer now, because we’ve had very few bad hires, but they really, they will stick with you longer than the – psychologically longer than the ones who, you know, are great and are still with you. So definitely, you know, a few mistakes there. And luckily, not many. For me, I think, like the biggest thing that I would, I guess, not do differently, but just would benefit from the perspective I have now is that, you know, for a while we were really, you know, after the early years, we were really kind of stubbornly committed to bootstrapping, because, you know, initially that wasn’t, that wasn’t the plan is just no one was returning our calls. So it’s like, Okay, I guess we’re bootstrapping this thing, you know, indefinitely. But, you know, I think being really mindful and purposeful about the timing of when you do take funding. And, and not – And so we’ve done it a couple times, we’ve had two great partners. The last one, you know, still actively working with us today, investment fund called Zoomer Equity Partners, they’ve been an incredible partner for us. But really, as you think about, you know, growing the business, we probably honestly bootstrapped for too long. We probably should have, could have accelerated the whole thing, if we’d if we’d looked around for funding kind of three, three or four years, maybe three years earlier, the first time. And so I think the timing, and the reasons that you take outside funding are really important things to think about. You know, what you’re looking for, from an investment beyond just the check, you know, what kind of partner you want? And what kind of like we’ve had two very different stylistically, two very different partners. And, you know, they were both great for for, you know, the general stage we were at, I think, if we flipped them in the opposite order, it probably wouldn’t have been a good, a good fit. So, so I think, you know, being really sort of deliberate about that, and thinking about, okay, you know, just getting a good evaluation is not a reason to take funding.
Andy Halko 48:45
Is there any advice that you give folks, you know, starting off on that journey of trying to look into raising capital? of, you know, how they should do it? or things that they need to make sure they understand about their business before they go out and do it?
Josh Millet 49:04
Yeah, I mean, I think that, you know, getting getting, well, pricing is a really key one to nail because you get a lot of leverage from good pricing. I think, that that’s a great question. Um, you know, looking back, I think that for me, just again, thinking through, like, why you’re doing the funding, and and what you hope to get out of it is the is the key thing. Like, I think, I think with us, I really still admire businesses that have completely bootstrapped and become huge without, you know, hardly any funding. I mean, I think those those folks are heroes, right? And, and that’s kind of what what I want it to be for a while, but then, by the same by the same token, you know, it really was an accelerant for us once we once we took the funding. And and got over that, you know, we don’t we don’t need any anyone’s help, sort of attitude. It really did allow us to grow the business. And I think that had we not raise money the first time at all. Like, I don’t think we’d be in nearly as strong a competitive position. And, you know, it also just gives you like, we’ve done a couple of acquisitions in the last year. Obviously, we never could have done that without, uh, you know, being well capitalized. So, you know, so I think there’s so many advantages of it, I don’t think you need to, you know, the longer you can put it off, that’s great. But I just think, for me, like nine years was probably too long. To put it out. Yeah.
Tony Zayas 50:43
You’ve mentioned your co-founders a couple of times, I would just like to hear, you know, what’s the dynamic like, between you and the co-founders?
Josh Millet 50:54
Yeah. So, you know, so there’s three people that were there from the beginning, that are still there that are really amazing co-founders, our CTO, Wayne and my COO, David Sherman. And we had another co founder, who was active for many years, kind of from an advisory standpoint, who just as an advisor now. And, you know, I think for me with with David specifically, I mean, Wayne’s been amazing, because David and I are not engineers, and Wayne’s built, built the product, you know, himself. For a long, long time, he kind of was the product. And then David, you know, it’s interesting, I met him as, as an investor. I was pitching him as an investor trying to get him to be an angel. And by the end of the lunch, you know, he was a co founder. So he kind of, kind of out negotiated me on that one. And he’s been great, because I think like, it’s important to have co-founders where you have complementary strengths and weaknesses. But there’s a bunch of things that I’m not good at, and I don’t like doing and he tends to be really solid on those. And then I think I have some things that I offer as well. So it’s been really great to have that dynamic. Because, you know, obviously, it’s a long journey, you’ll have disagreements over time. But, you know, it’s been really great for us. And I think we’re both at that stage where it’s like, we’re having that similar thing you guys were asking about earlier, where, you know, we’re both stepping back from specific areas and figuring out. Okay, how do we add value to the whole thing instead of like, specific little parts?
Tony Zayas 52:33
Andy Halko 52:35
Yeah, that’s interesting. Um, I’m always the co-founder piece. You kind of talked about it, but were those guys that you knew before the business? And? And how did you all come together?
Josh Millet 52:53
Yeah, so I didn’t know David, before I met him for that lunch, someone connected us and he had just exited his last business, which was a much bigger, more successful thing than the startup I had just come off of, it was a much more mature company, the big exit. And so we just hit it off. And, and Wayne, I actually, he was one of the best engineers at the, at the company that I had sold my first company. And so, you know, I, I had my eye on him for a while.
Andy Halko 53:28
So what we talked about, sometimes with founders a work life balance, or as it’s been called, work life harmony by some of our founders? You know, I’m part of an entrepreneur group. And, you know, different guys have different mindsets of how they balance their personal life with work. I’m interested in your approach or mindset to. You know, having to be a founder, and all these years. how much effort it takes? And how do you balance that with your, your, your life?
Josh Millet 54:04
Yeah, I mean, and that’s become such a much more complicated question in the last year, right? where we’re all role working from our offices at home. And, and you get that the specifics of that question, and all the implications of that question are, like, brand new now, right? Because you’re, you know, I had to I had to tell my kids before this interview, guys is podcast don’t. That didn’t used to be a concern at the office. So, you know, there’s all sorts of elements there. But, you know, balance is actually one of our core values as a company and we really think about that. And, and, you know, for the broader teams, so not just for myself. You know, we really we pitch new recruits. And when we when we try to bring in people, new hires, we tell them like we don’t don’t mistake like a relaxed attitude for not caring. We’re deeply driven, but we also, you know, this is back in the office days, you know, we also, you know, go home at six o’clock. And, you know, you come here at 6:30, it’ll be pretty empty. But we work incredibly hard when we’re working. But we do think it’s important to to have that balance. And I try to, I try to, I guess, model that a little bit. Like, you know, I know, we had this big debate a couple years ago, we had unlimited vacation at the time. That was our policy, but people felt like certain people didn’t take vacation. And so you know, and I was one of them. And we, we voted on it, we voted on whether, you know, because there’s some downsides, I’m limited vacation, create pressures, and then if people leave, they don’t get paid out any, you know, accrued vacation, so, so we want to do the employee friendly things. So we took a vote on it, and people voted for a vacation policy, which, you know, was was interesting to me, it was pretty, it was like two to one people voted on it. So we implemented a vacation policy, we told them what it was going to be before they voted. So it was pretty generous. It wasn’t like they were flying blind. Right. But, um, you know, I think that’s, that’s really important. And now, like, I know, for myself, you know, when I get to the maximum accrued hours, you know, I try to take a day off. You know, and, you know, so so we like to model that for our team. Like, it’s okay, we, you know, we know, you’re more productive if you have a balanced work life scenario.
Andy Halko 56:30
Tony Zayas 56:33
So what is on the horizon here for the business and, you know, the next year to come?
Josh Millet 56:40
Yeah, I think we’re just really excited about the product roadmap. As I mentioned, we acquired a couple of companies in actually both in Australia. One of them just two weeks ago, and one of them a year ago. And, one of them was a specialist in game based assessments. And we think that’s a really important area for future growth because, you know. We realize not everyone loves tests as much as we do, at Criteria. So, you know, making them more fun and focusing on that candidate experience, while also measuring really important constructs, is, is a big trend, we think. So we’re excited about that. And then we also just acquired this company called alchemy, which is a video interviewing company in based in Sydney. And so, you know, as you can probably guess, video interviewing is taken off during COVID. And, and we think, you know, we always, as you heard me earlier, we always are kind of bashing interviews as a as a way of evaluating people. But the what the research shows is that if you do interviews in a structured way, where you ask people sort of the same set of questions, and you, you score them kind of rigorously, based on how well they respond, they can be much more predictive than like, so tell me about yourself? You know. And so, I think, I think we’re really excited about that. And we see an opportunity to kind of build these interviewing tools with with alchemy that- I guess are more like assessments, and more predictive, more data driven. So we’re excited about that.
Andy Halko 58:13
It’s a kind of wrap up question. I always ask founders, if you were able to go back in time before you started the business and have coffee with yourself? Is there one piece of advice that you would give? You know, pre-business, Josh?
Josh Millet 58:32
Um, yeah, that’s a great question. There’s so many things, but I’m trying to focus on the business. The business stuff. Yeah, there’d be there’d be a couple of stock tips in there for sure. You know, I think, I think for me, you know, maybe just sort of like the general advice of like, focusing on what what you can control. And that that’s sometimes the key to like growth for everyone is giving up control, because I think that was a really important inflection point for me. I’d also say, hey, look for funding in 2011. Not not 2015. So I think, yeah, that would be some of the some of the learnings.
Andy Halko 59:17
Tony Zayas 59:18
Awesome. Well, we’re just about out of time. Josh, this has been fantastic. Once again, thank you so much for your time here today. Where can our viewers go to learn more about you and Criteria?
Josh Millet 59:33
Yeah, so I’m on LinkedIn so they can find me there. And our website is criteriacorp.com. So www.criteriacorp.com. And got a lot of great content on there and white papers about assessments. if you’re thinking about, you know, improving your hiring results, lots of resources there.
Tony Zayas 59:52
Awesome. Well, thanks again, Josh. It’s been great having you and everybody out there. We will see you again next time. Take care.
Josh Millet 1:00:00
Thanks, Tony. Thanks, Andy.