🇺🇸 The Recruiting Revolution - Nicolas Tozzoli & Fabian Rittmeier

Ahoj and welcome to a new episode of the Starter Piraten Podcast.
My name is Fabian Rittmeier and in this episode of mine as a guest you will hear Nicolas Toczoli.
Nicolas is founder and CEO of Selectic and Selectic offers specialized services for an efficient recruiting.
That's why it's supposed to go into the next episode.
In addition, you will learn about his experiences as a founder while studying.
Stay tuned. We'll start right away. Let's go!
It's quite a fun experience but also a bit tough.
I don't know if I would recommend it.
It was actually a pretty crazy time since in the end of 2021 when we started thinking about Selektik,
it was basically in one of the dorm rooms in Fallendar where we were applying for jobs to do the summer internship
for the Mastery Management Program at VEAWU.
We were actually seeing that there was quite a bit of issue because we had the first calls with HRs
and they were just telling us, in Excel, because you would use Excel from morning to evening,
how good are you from 1 to 10?
And every time we were like, yeah, 9 of course.
Of course, at least 9.
Of course, I'm so fluent in that.
But the thing is that when you told that they were like, okay, nice, fantastic.
When will you be available for next call and everything?
So they just believed you?
Yeah, of course.
Yeah, they just believed you.
I like that there is still trust with people and society and stuff,
but I mean, how much trust should an HR have?
I mean, there is a lot of trust and you have to consider that every call is one hour.
And every one hour call after the HR fit call usually,
it comes with a person that works in that department where you would work
and it's a technical interview.
So you have to consider that every time that the HR has to filter the profile,
it's a bit crazy that they were filtering just on asking,
hey, how good are you in Excel from 1 to 10?
You can say whatever you want.
And then they say, okay, let me book one hour call with a manager.
That's one hour.
It's very expensive, right?
It's very expensive.
It takes a lot of time.
And so we were like, okay, that's a bit crazy.
You do that one hour call with the manager.
And still the manager doesn't ask you anything about technical.
You just talk in a bit like maybe stuff that you also know a little bit.
And then they send you this amazing case study,
which is something that we hated also.
We also saw that and we hate it because usually the company send you
a case study where you have to work in what you will do on the job.
So like to see if you have practical skills.
What kind of jobs were you applying for?
I think that's a bit simple context.
That makes context.
So this procedure that I'm talking about usually happens for consulting jobs
or financial analyst jobs.
But it happens as well a lot in marketing, in product management,
in general, back office also.
So you have a background in business administration, right?
Exactly, yes.
Basically, my background is in business administration as I come from Italy.
Also, as I think you mentioned in the intro,
I did a bachelor in economics in my land.
That's where I come from.
And yeah, then also for a reason that maybe you will dig in deeper,
I decided to move to Germany.
And so I did a master in management in Germany.
So that's a bit of my typical profile as you say in Germany,
Bevel and typical jobs do you apply to.
But what I've been seeing then working on select in the last
basically year and a half is the fact that this type of recruiting pipeline.
So all of the steps not only happen in consulting job or financial services
job, but it happens as I said, also in marketing, product management,
IT jobs, so software development, data analysts, data engineers,
also for law positions, we had some requests also for operations,
supply chain.
So usually how the majority, let's say of white collar jobs is
that at one point there is this case study.
So they send you this email with stuff that you have to do.
That is basically a simulation of what you will do on the job.
So you need to prepare either some slides or walk on an Excel
or give a project in coding, stuff like that.
And it usually takes like, and they tell you, yeah, in four to five days,
send it back to us.
And usually are this quite large project.
And you're like, Hey, I'm in university or perhaps I'm working.
I have my stuff as a candidate.
I don't want to take four or five days.
You don't want to do like unpaid labor.
I mean, it's like, it's usually like half a day of work
or something like that.
In the end, you don't, you don't know how it will go.
You don't know whether you, whether you will be hired by the company
or however it will go.
Then you send this thing.
And then the HR take time, review that.
And you have to present it in front of them.
But honestly, you have this week before where you know exactly
what the call is going to be.
And I have to say, my co-founder tried as a joke.
He's a data engineer.
He applied for a marketing position at a huge unicorn in Berlin.
And he got to the last step of the marketing position.
And after four steps, they said, we went with another candidate
because at the end, when they put him to do a bit more of practical stuff,
they saw that he didn't know even the basis about it.
And I'm like, like, what the hell?
That should be the first step, right?
Not like the last step in a four step interview process.
Logically, logically it should be.
So we were like, this was taking so much time
from a candidate perspective.
It's so, as you say in German,
because now I'm mixing German words.
Yeah, I don't know what you're saying.
And so it was like, that was insane.
We then decided that we could basically,
basically the company Selecting was born with another idea.
In the beginning, when we started, we wanted to do into video calls,
insert the possibility when you do a video call
to have some different interviewing,
video interviewing platform just for recruiting calls.
So where you can easily share exercises,
make the thing a bit more, let's say,
interactive with the candidate and share more things
because we thought to condense a lot of stuff into one meeting.
But then we saw and we thought that we could condense the case study,
a lot of questions that the HR asked in the first call
and a lot of stuff into basically a 20 minutes test
that the candidate will do on practical skills.
The HR already has a first overview
of those skills that the candidate needs
and then decides based on that
whether to, is it worth to spend one hour of time
of manager, whatever, or multiple hours of time
to invest in other interviews for this person, yes or no.
And there is also a huge concept of bias
because I have to say that, for example,
I saw many people that went to my university,
other universities that have in the industry a good name
but there were others that were rejected
that maybe in terms of skill were 10 times better
but just because you have a brand name, you get through this.
Obviously, I mean, it's like the whole point
to be part of that university
so you have this big university brand name in your background.
Exactly. But you have to consider also that
it's incredibly expensive, it takes,
like you have to move there, pay for the rent there
and stuff like, many people cannot do that
and they maybe need to live with the parents
or go to universities that doesn't have so high fees,
for example, and maybe in terms of skill
they will perform 10 times better than the other person.
But the CV contains a lot of biases of today,
think about it, it contains information about your gender,
information about where you come from,
information about what you did, what you studied,
like the whole point of recruiting for an HR
will be to recruit with the minimum amount of bias,
so just focusing on skills.
If you add a test like this at the beginning of your interview
with time you will start screening less CVs
and looking at that and then you have 50 people
that you would have even shortlisted 50,
but this 50 that we give you through this,
we are saying that you don't recruit,
you don't have a shorter pipeline,
you can have a shorter pipeline,
but those ones that you have is more likely
that they are in a better quality
or at least that they are more suited for the job,
at least that it's medic-based.
Just so I understand you correctly,
by that you mean this is what Selectic is doing right now?
So that's the change.
Then we switch from thinking to do that
and do tests that are let's say offline,
so they are sent to the candidate and then they can do.
So the classic process would be
I send my application and then I do the interview,
maybe then a technical interview
or something like that with homework
and then I go through this whole process
and at which stage are you now intervening?
So you're going before even the application
or after that, after the first interview?
That's a very good question
that actually we
where we think that the majority of value for Selectic is
is when the candidate sends the CV
and automatically he receives also a Selectic score,
a Selectic test.
So in this way the HR will be able to see the CV
and the score together, so in a ranking base
and with time we want that HR spends
the minimum amount of time possible on CVs
so that they can focus on why they became HR in the first place
which is to talk with people and not spend
I don't think that any HR decided to be an HR
because they wanted to screen CVs
and ask technical questions about Excel.
HR is wide range, it's also payroll, it's part of HR.
Let's say then people that work in talent acquisition.
Okay, so recruiters basically.
When we talk with them in the first interviews
deciding how to do the product
what they want to do is actually they became
they went into that profession
because they wanted to talk with people
see the motivation, the psychological profile
they didn't get into the position to do mechanical CV screening
so the mechanical work that doesn't include thinking
and that it also can include a lot of bias
as I said before we can basically automatize it
and make the whole process more fair
so as I said and as you rightly said
at the beginning when you send the CV
otherwise some companies also asked us
to implement this software later in the stage
so we have one company that as a test
they want to do that when they have at the end
of the whole recruiting process
four or five profiles they don't know which one to decide
they just send the test and they see the last
as the last thing which one
because you have to think about an important thing also
when HR do all of these interviews
basically they just take some notes on the paper
they talk with a lot of people
but it is a bit problematic
that there is no central brain
for the skills of the people that apply to the company
there is no data that HR can go back and say
hey why is the quality of the people that apply today
worse than the ones that were applying one and a half years ago
what changed, what happened
as of now they cannot track that
do you mean like a subjective kind of change
or is there really like numbers and figures
and stuff like that that you can track
to evaluate that change
like in numbers, in heart numbers
yeah totally because at the end the test will give
a final score from 0 to 100
as a mixture of how well the candidate responded to each question
and each test is done for each position
so also one problem is that as of today
companies use one single test
many companies need to filter a lot of candidates
they use one test that applies to every position
either I apply in accounting, in marketing
or product management
I get the same test
what we are able to do is that we are able to deliver
test based on each position
so this practical test, go to test
can you do one plus one
or then the company tells what level they want to see
for that job that you applied for
like if I apply for a marketing job
why do I get a logical numerical reasoning test
I should get a creative test that sees
hey can I set a LinkedIn campaign
in the simulation of the campaign
can I get the highest return on the advertising spending
that means you have to cover a lot of test scenarios
do you do that in-house
or you give the software out to an external company
or even to the client themselves
to develop these tests internally
so basically we have two ways to do it
Sylectic has a test builder
so if the HR wants they can simply drag and drop
the question that they want to create
in multiple choice or text
or other type of questions
otherwise also included in our normal service
they give us a list of positions
we have a questionnaire that they fill out
with some specific thing that we need to know
then we have a network of experts
that also we developed through the last two years
to our current investors
and basically these people are able
to create to us the test
upload it into the platform
and then the company automatically sees it
so either they create it by themselves
or we give it to them
from my perspective it's hard to understand
because it's such a narrow field
in which you're acting in
but what is Sylectic
or in what way is Sylectic better
for recruiting purposes
than let's say for example Pesunio
or like SAP
or these big tools that
digitalize basically all kinds of HR processes
what can you do better
let's say USP
USP, let's put it like that
you're totally right
the thing is that all the software that you mentioned
are ATS
so they are applicant tracking system
what they do is that they receive the CV
and every information about who applies
the HR can see it
and then through Pesunio
maybe they can see to what step they go
etc. but Pesunio, SAP
they don't test
they just get the CVs
so you know when you send the CV
you actually send it in Pesunio
so the HR sees it in Pesunio
or in SAP
so this software
just record the CV
and then record all the steps
by which the candidate proceeds
like first, second, third, fourth step
basically they just automate the process
on their platform instead of like
having everything in email and Excel lists
exactly because
if you don't have SAP, Pesunio etc.
you need to send via email your CV
the HR gets the CV
via email and then has to read it
so that's why ATS exists
so that you have a form on the website
where you send all the information
and everything is centralized
so also from there they can get a lot of statistic analysis
and everything different data
but they don't test
so what they do is just that
they provide this service
and then of course they also provide
all the services for
managing the people after they have been hired
like I don't know recording the timings
or payroll or vacations
that Pesunio does
we just focus on the niche of
testing the candidate
with respect to other testing platforms
because there are other platforms
on the market that develop tests
and work like that, that the candidate sends
the application, he receives a link
and does the test, is that they do multiple
choice testing
so basically they can be test about
also specific positions
but they are done through a simple
you put in there the number
you put there a text
where you write on the computer and that's it
but what we thought is that
the real value added would be
to actually test the candidate
on the software and the tool
that he will then use on the job
so from that question that I said in the beginning
how good are you in Excel from 1 to 10
we have been able to
take Excel, cut it
and put it into Selectik to do the
exercises to the candidate so one question
that sounds like a huge technical challenge right
it was quite a
huge technical challenge
and from the development side we learned
a lot about
what to do and what not to do when you are
developing a SaaS platform as
a first time founder
and basically
the same
will be done with every software so
let's suppose Excel, right now the candidate
in our test has a question that's
for example for an accounting job that says
hey in cell C6
there is a little issue
about how the net depth was calculated
can you fix it so the candidate
has Excel cut
into Selectik there is
actually Excel and actually the candidate can work
into Excel there and our software
can then tell how fast
it was to solve that if he managed
to do the solution etc etc
and for example also I don't know for data
analysts they use MySQL
we have been managed to put a simulation of MySQL
and the candidate performs
a little task in MySQL
and the software can return a score
from 0 to 10 of how well he
wrote the code so
the real USP is this that those are job
simulations and not
multiple choice questions so
the HR can, the score that the HR
has is not based on
a multiple choice question that the candidate
checked on the internet but
it's actually the candidate doing
the bare minimum that he says that he
knows to do on the CV to perform
the job that makes a lot of sense
especially in the context for example
in the jobs you just described
like data analyst
or financial analyst where
you have tools or
hard skills let's say that you can
test but what about
for example like designers
like photoshop skills
can you do that as well with Selectik
at the moment
where we are right now
at the moment we test code questions
we test a question on Excel
that can cover a wide range of jobs
SQL for data analyst
but what we want to achieve with time
is to obviously doing the simulations
takes time to put into the software
and it's difficult so by the time that we will
have more resources
and yeah basically more
resources we will be able to amplify
the number of softwares that we can simulate
into Excel and in the future
you can do that like interesting to say
for example we
will also implement PowerPoint
because do you know that in every way
that you do a PowerPoint slide
there is actually a JSON
code so let's say an identification
code that gets
generated for how you
did that slide
so the thing is that in the future
what we will do with Selectik is that
for example for a consulting job
we can do hey make a slide
about I don't know this little
case study and or make just a
layout of this slide in 10 minutes
the candidate does the layout into
Selectik into PowerPoint
and our software automatically can
read if it's in the range
of slides that are considered good
so automatically
there is always a way for
the machine to actually read
whether the candidate performed the
practical exercises in a good way
and in the future you can do it also with
as I said designer jobs because
if you say that you need to know how to use Photoshop
and you say yeah I can use Photoshop
but there are a lot
of levels in how you can use Photoshop
for example in how well you can use
shortcuts and how well you
do you actually know how to set the first
plan to then do the designer thing do you know
how to eliminate that thing maybe one
test in Photoshop once we will manage
to put that will be like okay you have this
image can you please eliminate that thing
out of the logo it takes
what three minutes like you're
supposed to know it it should take
three minutes otherwise it's going to be a red flag
right exactly so the candidate doesn't
get kicked out the time starts
and just record is for example how long it takes
and what he does during the thing
so there are many ways
to do tool testing in this
sense and in the
future of course
well this is something that
we were thinking to do it can be combined
also with soft skills you have to think
and in the future this test can be
a bit about the practical and technical skills
that the candidate does and at the same
time also some questions like I don't know
the big fight inventory that tells the
personality sides of the person so
10 minutes about technical question 10 minutes
about soft skills and the HR
immediately has an overview of both
but that does that not
put a lot of time and effort
for the applicant before
they even like get a first
feedback from the recruiter like
yeah from my perspective if I was
applying for a job and then I would
send out my application and they would send me
a link to just do a test for
half an hour I probably would say
next one how
do you like
how can you target that
actually it's
a thing that
in this type of job that I
described in the beginning what color jobs
in this industries
these tests already exist
like with the companies that we
are approaching for sales
90% of those companies
already have this test already
work with this type of tools
and they work with this type of tools for soft skills
so these things as of now
already exist in the
majority of large corporate
white collar jobs or any type
of consulting financial services company
the thing is that
we also for example
yeah fun to say
we constantly do like ghost
application to see the other tools
there is one test that we received that
required 85 minutes
couple of weeks ago so
there is a clear problem also in that
one of our pilot
clients it's
it's a huge corporation
that actually has this issue they want to keep the testing
but all of the solutions out there
are too long so
they have the problem of targeting Gen Z
and therefore they need a quick test
with Selectic you
actually gather so many data points
about a person by doing a simulation
that they are fine
to only ask maybe one question
which is a simulation
and that question takes 5 minutes
and then the other 5 minutes ask other
multiple choice and you just take 10
minutes of the applicants time
and what companies are saying to us right now
is that if the companies doesn't even
want to take such a short amount of time
then they also
don't want to proceed with this type of person
in the first place
where they can decide probably depends kind of
on the job themselves for example
in like I'm a developer
so in the developer space
I'm quite lazy to be honest
which is good because you find efficient solutions
usually totally but
if I would see something like that
I would probably be turned off a little bit
from like from the employer
from potential but obviously
in our space it's also very common
to have these like coding problems
that you receive as you always said like
half a day or so later in the interview process
so like
companies can choose basically
it's basically like I'm not sure right now
which one I would prefer
or hate more to be honest because obviously
like the smaller time investment is a lot better
but it's earlier in the interview process
so after you have like one or two interviews
under your belt let's say
you are more like invested
in this job application
and you have more sunk costs
you are more likely to do this
for our task than like the
10 minute task in the beginning
yeah I agree totally and that's
something that we offer to the companies also
so we tell them you can basically decide
when you want to send out this test
as I said before
give an advice to use it at the beginning
because it has in
from what we saw the majority
let's say value for the HR in order of
time savings and amount of data
and bias however
as I said some also prefer to send it later
it's I think that
when it regards to hard skills
it's still a new way
so usually it's done for soft skills so I think that
with time and with using it more
they will start understanding and as you
rightly said they will start
also with giving it out a bit later
in time
we talked about already a bit about the scoring
in the scoring system you use
what I'm curious about right now is like
what happens for example
if you are searching for
applicants and you let's say
only get 10 applications
or something like that and then every
applicant is not really doing good on your
test so
you have said the score is from 0 to 100
is that correct so let's say all are
like below 60 and you would like
someone above 80 or something like that
what would be
in your words like the process
what the company should do
in such a case or
maybe do you have
like a hierarchical
scoring let's say where the applicants
are scored relatively to each other
something like that or
if they receive the same test
basically they are
still getting the result
out of 100 because
that's the level where they are and this
is an interesting insight to the HR
is what we want to foster
to start giving to the company
not only to track the skills
of the people that they already hired
but also start tracking what is the level
of the people that apply to my company
through Selektik they can see
this the applicants
that received the lowest score came from
LinkedIn came from our website
came from that fair came from there
so with time we want to also give
the harsh reality to the company so it's
not comparative it's out of 100 for the
test how they score
and the test obviously are done
also by level of seniority so of course
the level that for example for an internship position
the test is tailored for that
for a mid level position is tailored for that
but in that sense
yeah it's
we actually like the fact
that the company can see
in a crude way what's the level
of the people that are applying because
if they would like someone that was
scoring better on the test they need to start
thinking okay where can I improve
how I attract talent
to my company and how can I
attract if I want better talent better talent
because it's as I said
as of now you conduct all
of the interviews all of the video calls
where does the where does the data go about
how good a person was
like nowhere it's just
notes that they take on paper notes that
maybe they write a couple
of things on the HES but
there is also the need to start tracking
what is the level of the people that
apply to my company start seeing
okay then maybe we are
we can do a better job in attracting
better talent you know
or with time seeing how
the quality of the talent let's say quality
of the people that apply to my company
why is it going down
why is it going up I want
people that at least score 70
on this because I need people that are more ready
so I'm doing
something wrong in the
in the beginning of the recruiting pipeline
maybe the adapter that I'm working with right now
it's not very good I don't know any type of
thing is it like a realistic
scenario that you don't hire
at all if the quality of the people is not
there or no I don't well
and it's
if you think about it it's kind of the same as
as the process usually
goes right now because if they see that
they do 10 interviews out of this 10
interviews they see that they don't like
any one of them but they still need that person
they will choose the
the best out of them you know in their eyes
so it depends
on the needs of the company of course if a company needs to hire that person
they just get that application
they don't like
the technical score
the skills of each one but they still need to hire
one out of maybe
maybe they can hire
they can go forward with the one
that got 45 on the score not the one that got
two something
people can develop obviously like
I'm like I like the idea
a bit that you can like teach
every hard skill and you should
focus more on the soft skills there's
like a trend in hiring that's
like this isn't a focus
of this of this trend basically so
how can you apply this
to like a hard skill
test like you were doing at the moment
I we have an interesting concept
as of now which is
basically HRs are employing a lot
soft skill testing and
this type of testing that we will also implement
but you have to think about
when you are
in the business of testing
and you go into
all the soft skill material
there is a huge problem
that soft skill testing are just
repeating what
then the HR does in the first call
I don't believe that there is anyone better
than a human to evaluate
how is your
way of thinking if you're
introvert if you're extrovert how you
interact with people so
I as of now
am not a fan of
selling to HR a soft
skill assessment
because in some way they will be
if you think about it they will be
substituting themselves
there are already automatized machine
that can read the city but isn't that the goal
like substitute the human because
machines can do it faster more efficiently
and cheaper? Exactly
that's not our goal
we still think that any candidate should have
a person that is the HR that is able
to talk with them and have an initial
evaluation about how that person is because
it makes the whole process more human
but the problem is that
HR can filter
in a better way less bias
and without substituting
themselves as I'm saying because we are
giving them data that they cannot
gather because if you think about it it's
impossible to think that an HR
is fluent in
to hire a data analyst to hire
software developer and then to hire someone in finance
like it doesn't make sense
obviously not because I need to have expertise
in all these fields. No one can
but isn't that like the whole point that
you say you want to have less bias
but then you still say you want to have the human
in there so I'm not like seeing how that
is out right now. Yeah totally
if you think about it this way
when you have the actual
test that comes from the hard skills
the HR has more
unbiased data about the skill of the
person and then can decide to
talk with the person based on that
then actually how the HR
thinks whether it's worth or not
to keep you into the process
based on how you
talk, on how you
that's not bias that is simply either
match for this job or not
the bias is when they screen the CV
can you like but for example
if you have like a position in sales
that you're advertising or searching for
and you are receiving
applications let's say
from a very introverted person
couldn't a test for example the 16
personality test or some other
personality test filter out these
very introverted people for the sales position
yeah totally because the like the profile
at least from my perspective would be
for sales you need someone
very extroverted, good
with people stuff like that
wouldn't that be easier to filter out
before with a test like that
it would be easier but
as of now we are
not focusing on that so for example
sales is a position
that every HR
that we talked to said that it would
be nice to have something that filters out the sales
people but sales
is the only position where
if you have to think about it there is
skills assessment developed at the moment
because sales
is human stuff
sales is something human like
if I have to think about a test for sales
I can think about hey how would you
change this template for a cold email
but then
of course your path into the companies
that at one point you will talk to the client
so in that sense as I said
I still don't see the role of the
human being replaced because there are some jobs
that we cannot test
we can test some positions
but it's also impossible to
say that we can test every position
like sales is one position where
it's something that needs to be thought out
and no company as of now is doing
sales test in the skills assessment
maybe it will be done in the future and has to be
thought of but
at the moment for example
you need a human to test that
and also like in your example
with the cold email if somebody
is good at writing emails it doesn't necessarily
mean they're good with people especially
in the face to face conversation or something
like that but that's the whole
point even if you're not a sales
person even if you work in
as I said accounting which is a role where
you don't have to speak a lot apparently
with people it's back office
still the company
needs to see if this person
could be a good fit to have
in the office working next to you
in the
desk next to you if it's someone that
you would like to spend your time with
if it's someone that you would like to go out with
to lunch with in the lunch break
so I think that there are some things
that even if you work
remote you need to have meetings with this person
like I believe that there are
so many aspects that
where the HR shouldn't
be replaced but the HR
needs to have
additional data to improve their work and work
and have a better outcome
I still believe that
that's where we're going with automation
to actually replace people
but I still feel that when you apply
you still need to go through
talking with the people that you work with
because that is fundamental
I think that it's
pretty wrong to enter into
this similar segment which is HR
with the thought of replacing
the whole
industry with a machine
because then that's the person
imagine if you were
the CEO of a company
and then in the future
your entire person that you hire is based
on how a machine sees you
from a video camera
yeah you save money but then
you lose a lot of money because maybe you realize
you don't want to work with this person you have to fire that person
so I still think
as I said I don't want to enter into the industry
we are not going to enter into the industry substituting
but making the work
less bias and
comprehensively better
from the point of view of data having the majority
of data to have the best decision possible
about who to
spend and invest time with
that's quite the interesting take
because like from a tech perspective
it would make total sense to
automate everything and then still
have interviews obviously but
I would like if I would
do a project like this because
obviously I've worked with some HR people
in the past and stuff like that but
I would always
prefer talking to the manager
directly because I will be working
with them directly how can the HR
rep evaluate
if I'm even a good fit for the team if they don't
work with the team on a day to day basis
totally that's
very good thing because actually
people in HR are
people that
have talked with
thousands of people through the time that they
went there and they then
actually know who
fit well with the company and who did not
if you talk only with the manager
that you work with
that person is maybe very good in the
technical things but doesn't have the
psychological basis and
didn't see enough people to actually
say and see some little things
like red flags or green flags
and HR people
are people that
are able to do so and that's
why their position and their work
exist to this day what I'm saying
is that maybe many of the things that
they ask you in the fit call they can
automatize it and ask it through
a questionnaire when you send the CV of course
maybe they can use better
the hour of time when they work with you
of course
but they still need to be there
because try to think that if every person
that applied to the company direct goes to speak to the
manager then the manager
wouldn't have any more time to work on his stuff
he would just to interview the whole time then he
is the HR so you still
need this filter and that filter
needs to be someone that is human
to try to understand
at best who
like one hour of manager is
costly for the company
it needs to be maximized into
possibly the best person
that he can talk with not the person that after 20 minutes
is like 40 minutes more
I mean to this call and already understood that
this person doesn't know how to do one plus one
there can be a lot of optimization
and improvement in
time savings and quality overall
of the process I mean that's like
when I understand correctly
your mission you try to
bring more
efficiency to the whole recruiting process
for HR and as
well for applicants right? Exactly
and the main long
term goal that we have
is to create
the first platform for
having let's call it
a central brain
containing all of the data of the people that
apply to the company
companies know perfectly
and also have some measurement
things about how
skilled is your current workforce
but HRs don't track
him anyway
how good are the people that are applying to my company
today they have meetings
where then they say yes
this year or in the last six months
I saw that
the feedbacks were a bit worse but
they don't have actual data that
can basically say hey this is
why this is and actually
to then deep dive in to understand why
has a data analytics
suite inside that tells
for example what is the score
of the people that come
as I said before from this channel
what is the average score
for that position today and what it was
one and a half years ago
and then you can go back one and a half years
ago into SELECTIC and see what you were doing
differently so that's what
we want to do to have a centralized brain
for skills
even before you hire people
so that
you can improve a lot maybe also your
budget for spending and marketing
because this market the budget that
they use for people the recruiters
from the company that then text you on LinkedIn
or email it's as well
money and that can be optimized
and can be done better and reach better profiles
I think that's what we should all strive
for like making better decisions
based on data so like data
that's what you're aiming for
I really love the idea to
have this kind of like you call
a brain but I mean
it's basically a big data set
where you can iterate over and make adjustments
and see like okay
my applicants are coming from LinkedIn let's say
okay the spend there
is too high I'll switch to another platform
or now the score is dropping
I'll go back to LinkedIn something like that
that's an
amazing take to be honest
but now we talked a lot about the product
and about like the challenges
of HR these days
so let's
focus now a bit more on the company
and your founder team and stuff like that
you already told me before the interview
that you got to know each other
at university right
why you were still studying so
take me through the founding process
a little bit
I know you all also
have a venture capital fund
in the background so how did the connection
to that happen
what are the big next steps let's say
what's coming for you this year
we basically met
as you said in university
we basically had
this idea one day
we started working on it and we applied
a pitching competition
for just companies in ideation stage
from current
and former VAO alumni
we applied to this competition
we were shortlisted
in the 10 best ideas
and so we were invited to this
it's called 3 day startup bootcamp
and it was incredible that
Friday there is the kickoff
and then on Sunday there is the
pitch and the pitch is done
it was done online
when we did it in 2021
still due to corona
in the beginning of 2022 still to corona
but it's crazy that how
on Friday it was
an idea in our mind with
an initial pitch deck that was
done a bit like that
and then they give to you
one mentor to us it was this
incredible mentor that was a former
that was a former executive at Y Combinator
he basically already
founded a lot of startups and stuff so
in this 3 days we work from
morning to evening on that
and in 3 days we had a company
we had just an idea
from 3 students on Friday and on Sunday
we did the pitch
we basically had an entire company
a revenue model set
initial little things already
even some initial
interview with
people that were HR
just in those 3 days
and from there
the head of the entrepreneurship center
virtually contacted us
that there was a venture capital fund
that works just with HR Tech
in HR Tech vertical
that was very new in 2022 Alligator
actually an interesting
partner to talk
so we just entered into
this call thinking to get some feedback
and we went out of the call with
a first investment
and yeah basically
creating a game Bayard from there
in one month so it was also
very interesting to think that
we just entered into that call normally a student
and during the call we were
texting like then like
holy hell are we doing this
like so yeah
you know it's just
because I'm going and you're on discord
or whatsapp or something like that
yeah yeah we were texting
and we were saying and we were
and during the call like he
the CEO of the fund really loved the idea
and directly was okay
I need to send me more material
need to talk a bit with the investment committee
but I think that we can do this
and the process was very quick
also did a bit of
let's call it minimum
due diligence on our profiles and everything
since it was
early early early early stage
and from there on
we founded the company
I have to say that
the funding process
was long so
since we were talking about
not about the foundation of the company but basically the whole
transfer of funds from
from the venture capital fund since there was also
venture capital fund invested
into the company it was long to do
to close to close the round like usually
they say that
it takes
6 months from the first interaction to closing
and it is true so it's a very
time consuming activity
now from the next round that we will do
it will be even more time consuming because
it will be of course not
only one fund but there will be multiple funds
some angels as well so
it's actually
pretty time consuming
and stressing to do but
as I said as 3 then
we went through
and it was very fun because we did
that whole process of funding the company while we were
doing our internships because in order
to finish our master program we had a mandatory
internship to do so we were
basically not saying
to the company you were basically working 24 hours a day
yeah totally in the evening
when we were finishing work we were hoping
on a call for selecting and start
and start working on that
and also during the day
you needed to do some
initial meetings or stuff so
as I was told it was fun that you needed to
do the bathroom break and then
put the filter and do the video call from there
and probably sounded like crazy
because there was someone talking in the bathroom
but it was going like that for
all of us 3
and during that time
we managed to fund the company
close the funding round
and go further
from there
when was that
last summer so it was June 2022
when we closed everything
okay and then you set up shop
and you started developing
from there it was
a very interesting turn of events
as I said we were first time founders
so we're still first time founders
this means that you have
an academical idea
idea from
online about how to actually
fund a tech company but
when you do it in practice
there are a few things that you need to consider
and the first thing is
of course they always say it
is important to start developing
once you have
the precise customer feedback
on a specific thing because
like 2 or 3 feedbacks that
oh this is nice it's not enough
you need to enter into hundreds of calls
to actually understand whether it is
worth to then spend a lot of money
to start development
I have to say that
it was very useful
our university network
we go from startup point of view
every time there is a new founder
you can text every person
that is a former alumni
in 2 seconds he will just answer and do it
it was incredibly
incredibly helpful
because as of now
it's the second
startup university in Europe
and the value of the community
was great because
the number of founders
is insane and one out of 10 companies
from Beahou
is actually a unicorn
so they wanted to
not a unicorn sorry
it makes it out to a series A
so the things that they want to
they have this idea of helping each other
everyone founds a company every 2 seconds
so there is a large network
that you can use
that's the thing so we did that
and other than that we were also doing
normal outreaches to just have feedback calls
and then we went to the development
development was very tough because
you three are all non-technical
one of us Antonio
he is a data engineer
so he is the CTO of the company
also has some
software development experience so he was basically
able to speak the same language of the developers
communicate and do the thing
but he couldn't call the thing itself
we still needed a developer
so either we hired a developer ourselves
or we went to a software house
and that was the funny thing
because from here
there was an interesting take since
we of course came
the software development houses in Germany
presented the project
and actually
selected stuff so you have
as I told you before
you have to cut out excel
and put it into there
and then the program needs to read in the
backend the answers and then
evaluate based on the answer and give a scoring
it's tough to do
so it's funny that
we actually had three software houses
that are very big in Germany
that completely refused the project so
it was super long because
every time we were contacting software houses
we had a lot of time
for them to do workshop to talk with us
and then they came back with
guys I'm sorry but like this it's not
possible to do
like there is a reason why it was not done
like how big are we talking
like the really really big ones
it's one
is one of the major it's really really big
I mean like they are kind of inflexible
like they don't have this flexibility
for example that like a
smaller software house does like
if they have like 50 employees
they find one who is willing to do it probably
and the bigger ones have the
internal processes and stuff like that
exactly we also went to a smaller
one out of out of this there was
a smaller one that
basically we did two calls
with them they said okay give us a bit of time
very small I'm talking about
a few people and then we didn't hear from them
anymore basically it disappears
so it was very tough to find one then
we went into then east of Europe
to find something
and there we
found a couple willing to do that but
the problem is that they said that it was so complicated
that they asked us some
fee that were insane
like really really really
insane prices I'm talking
you didn't even get an offer from a German company
German we never got an offer
because they were not
willing to do it
then from there we were a bit
scared about how
would this survive do we
even before having a
test customer like
need to get into funding again
and from there
Antonio our
technical co-founder he knew
from his
three guys out of university
that in Catania and south of Italy
they found that a little
it's not even a softer house they don't even have
it's not even a proper company
it's just guys that are doing that for fun
and they were very good
in everything
since the beginning once we talked with them
they were
incredibly receptive
and giving the good things so we were like
should we just
try with them so also
our fund wanted to meet them before
spending months into development with them
and we went into
development with us it was a huge bet
and it could have cost it almost one year
because now development took
almost one year just for the MVP
and but
they managed to do it it works
and also very interesting
for example there is
a company that is
unicorn in the space American that
does testing for developers
so do you know that this company
either you
write the code perfect and you get 10 out of 10
if you write it
not really perfectly
still very good but not very good you get 0
so we have one of our test clients
that is a huge company that
basically told us that they need to enter
every time into the test
and compare how well the candidate
brought the quality because the score doesn't reflect
the quality
our software is the first one in the whole space
that the score
actually reflects also how well
the code was written so you cannot get 0
if you write something get 1, 2, 3, 4,
7, 8 depending on that
and so they even managed to
insert this that somehow
yeah we are also lucky
with all the advancement in generative AI
that came perfectly
where democratized right when we
were developing the software
but basically Selektik is able
to read the code and give
what we call a dynamic scoring
but they even managed to insert that
so it was a crazy
crazy also
and a lot of luck
having developed
I mean like the story is also
very cool like 3 students
or 3 student founders
full time founders
together working with
3 also ex students
who are
by accident software engineers
and they can do what no
german software house
no east european software house
can do that's like
a real story basically
they had a very good experience
like they work for big companies
already from 2 or 3 years
one is also an amazing game developer
game development is
one of the toughest
branches also
for software developers
they had the skills and everything
to do that but we were also lucky
that they were interested
in taking on a project from
and do that
it went well
from this point of view
and we're happy
for that but it's
very interesting now to see in the future
what else can they insert
to the platform and also I think that
now the toughest part has been done
from here we can go to many spaces
we can start
inserting some psychological tests
we can use this platform also from
upscaling because for example one company
reached out to us and they said hey
I want to know the level of skills
of my current workforce and where they
can improve
they just send out the tests to the
people that already work in the company
and they can already see in the department
hey on this specific
aspect this
person needs to improve
and then they can do a course or whatever
so there are many different ways
in which such tool can be
used and I have to be honest with you
we are at a very early stage
so also for us
we need to also understand
in this point where
it can go or where this
simulation technology can
be used
so you're still currently in beta
so to speak right? Yeah we are currently in beta
we will release
basically from the 1st of August
with our pilot customers
and also there was interesting because
apart from the fact that from the traction
we had amazing
conversion results just from cold
outreaches we managed to get a lot of big
corporations which was
pretty good but
at the same time you know as first time
founders you're like okay do we straight
give out to them to test this thing
like no first with clients
first with clients that signed with us
medium companies to smaller companies
that can test the platform
and then handing it out to larger
clients to test which should be
the basis but also it's a little bit of stuff
that as a first time founder you
have to think
and so yeah
What kind of voice do you see there in not giving it to big
companies? Straight away with the first
version because
you have to consider that we are an external software
so when this big company sends out
send the Selectik test out
and sends out something from Selectik
their company name
is associated with us
if the company
if the platform stops working there is a bug
it works weird
also from the old point of employer branding
pretty tough then they don't work anymore with you
because then their name is associated
on an external part
with your company if it was an internal
fine but here we are dealing with
people that are external so they need to protect their image
and they want to be
set to the certain level of standard
and stuff so
it's delicate
it's delicate because then you have to think maybe a
candidate does a Selectik test
with the first version that something didn't work
very well and then the voice gets
over that company X, Y, Z
is using Selectik
it's not
so good the old experience when you send the
application they get less application or
they lose candidates
we need to be really really sure before handing out
to them that
at least the beta version is the
best usable beta version so not the first one
I'm going to switch to a different
topic or maybe just a little bit
but is privacy a big issue for
like from the development perspective
and how to treat the user data
because I imagine
especially for applications you don't want to
get this into the wrong hands
basically this kind of information
you have to consider that
the GDPR barrier
in Europe for this specific type of things
is very heavy
and other countries
overseas in the US and Australia
already a similar platform that does
job simulation also Israel exists
but the strong strong
GDPR didn't allow
to these companies to work
still in Europe so what
we're doing is that we partner
with a company that
took care about all of this stuff
for us we paid them
they went through the software also
a lot of the time that
Antonio worked it was product management
but maybe also even more product
management this whole data privacy
thing to make us compliant
and then
and then it's doable but we
basically outsourced
this whole process
to a third party provider
that there are startups and companies that
just focus on making
software GDPR compliant when they treat
the sensible data and it is
a big topic cost
a lot of money to make it also compliant
but you need to
you need to do it totally
would it be of interest
for you and also for the scoring
and maybe even the ranking
let's say I
I'm applying to
company A as a junior
role and then I'm switching to
company B for a more senior
role and they both have
selected in place I do the test both
times to
make the score for the first
company available to the second company
probably not allowed by GDPR but
the thing is that
you have to consider that if
we actually make
one score
available for
other times
then we lose a lot of traffic
our goal also as a company
is to make people do the
test every time they apply
to another position
because also the skills change
through time and etc so
what we have also been thinking is that
usually you go through application
processes in
a matter of time so when you
do the test this test can stay
in position for one or two months
but that's it not
longer because
we cannot make the same
score of the company that
he got in August
available the August of the next year
and still valid obviously things change
we will
do in that way
but then obviously the score
will go away but
this specific score can be stored
into our
databases and it can
be made and can be used for
other positions as long as the
candidate gives the
agrees to that
everything is terms and conditions
of course the candidate
clicks upset and there is that
that score can be reused when he
reapplies and he can choose
whether to use the old score and do a new one
so that we store his score and then give him the freedom
to decide whether to try again
to score or keep the old one
they can if they don't accept that
in the terms we cannot
actually store that
makes sense yeah
you already pointed a little bit
in the topic of
you said you would like to have a lot of
traffic on the platform
that brought to my mind
something like
what you are doing in terms
of revenue streams at the moment
so the typical way
for a SaaS company is
to do like a monthly or yearly subscription
and then by customer
you pay a fee or something like that
so how does it look like
for selecting?
it's interesting that we at the beginning
were targeting only large companies
because that's the ones where it made
most sense to pay a SaaS fake
flat fee subscription
but you have to consider that
this makes the whole market of
SMEs not attractive for us
in this sense because they go through seasonality
some months of the year
they don't hire at all
other months of the year they hire a lot
so they were already like
I'm not gonna pay a subscription for this
and then instead we came up with
a credit
credit type of let's say
pricing which means that
we agree on the price
of one test with the company
every month based on the amount
of credits that the company uses
then we build them out of usage
so for large companies
that have a lot of application
we go with the normal subscription
which means that
they will pay a fixed amount
per month
and with companies
that are a bit smaller we go
consumption based so depending on the seasonality
how much they use the tests
then we build them accordingly
if they don't use it
then they will be built zero that month
next month they will be built maybe 500
that's also like
a smart move to just keep the small companies
happy right and still
have the revenue coming in
when they have the need for hiring
or something like that
it was a huge barrier go to a company
that has a thousand applications
per year and say
yes give me
it's 100 euro per month
and for 10 months out of 12
they don't use the software
that is basically a market that
also other skills assessment platform
if they don't do this
the system
they lose a big part
of the market by doing this
we can virtually also open
our market to SMEs
we saw that they are happy about it because they activate
the software and when they activate the software
they don't owe us anything
if you use it, if you like it, you keep on using it
you pay us and that means that
we are also
since we did that
enlarging the pool of companies that
will test the software and will use the software
by much more
I mean also like
if the company is not using your software
they are not incurring any
costs on your side
no exactly
that sounds like a smart business
model to me
so let's focus now
a bit on
what's still in the future for Selectix
so you told us that
in the beginning of August
you will launch the public version
of your platform right
so what are the next steps
or big milestones after that
totally so
out of that
we will actually gather
some more product
metrics that are not based on
interviews and based on assumptions
so actual product metrics from
the platform and that will
be what we will do for
the next two months basically
out of that
we already managed to get
a very good number
of initial test clients and then
proper clients
so we actually
want to enlarge
as much as possible the
amount of tests that we can give and
tools that we can simulate
so this means that we will go straight away
into funding and
we are hoping to close by the end of the year
so we just kick started we officially
kick started our
fundraising process with the
VAU Accelerator event that
happened two weeks ago and
through that we are
right now gathering contacts
having calls and
and basically
starting the next
round the fundraising as of now
so that
as soon as we have enough
product metrics and something like that
that will also of course
help us to get even more clients
because we have even more data to show
how this can be useful
then we can
start enlarging the platform immediately
get more tests more simulations
hire also full time
more developers and not
rely on a software house
because as of now we are working with interns
we have
for interns that support us in all of the operations
of now
and then
we will also of course want to scale a bit more
into full time people that
so the goal would be also to
in source
the production or
the development of the software
we would like to include
much more the
guys from the software house that we are working
right now from Katania
with us because they put the hands on
the first version they are the ones that know it the best
we would like to keep them also them in the project
and also the only ones who can do these things
so it's yeah
apparently maybe yeah I think that it would be
a bit of a mess if we insert someone else
into this thing it will take a lot of
time and well
that's one thing that startups don't have
it's time so it's
good to optimize by getting them
immediately in or involving
them as much more as we can
with the next
with the next funding round
yeah so as you want
to involve them also in terms of shares
or yeah
we are also thinking
on a
on a whole compensation based also in
FISOP to include them
out of our pool
interselectic already so that they are also invested
more into reaching a
goal rather than just
finishing one little project
it's it will it will be
the value in that for sure
and but but they are open to that
we discussed that so they are invested
into the project and and that's
and that is something that is
that is something that is pretty good
but yeah so basically
it's about product metrics finding
the product market fit we have a few verticals
that are going pretty well for example head
hunting financial services
we saw that there is repeatability
in those two verticals
and we want to find
the verticals where we can repeat
and then hit them once we find this product market
fit with the next funding round
then we can really think about scaling into
a larger
a larger sense but
as of now interesting thing also our
customers will be on four different countries so
Austria, Switzerland, Germany and Italy
that's can also be a metric
that shows that this is applicable
not to only one market but the market
is actually pretty big how
how easy is it to go to other markets
then if you like say you find the product
market fit here in these four countries you just mentioned
and then you go to let's say
France or United Kingdom
or something like that do you think it's like
the same model is applicable there as well
yes I think so I think so
I think that there are some
slight differences but from the first
things that we saw is that
these four markets
worked in the same
way which we still
need to figure it out but the verticals
that confirm in Italy
are the same verticals that work the best in
Germany in Austria and Switzerland
so it's
very interesting that
for example Italy is a country that
it's very different from Switzerland
but at the same time
the same verticals confirmed
so we think that that is a good signal
that this thing can happen also
into other markets and
we will start targeting that the good thing
is that we provide test
and those are tests that
are in one second
able to translate in any language
because basically it's through the machine
they can be simply one touch
that can be translated so
virtually it is
very also the whole platform in two seconds
you can say so it's very easy to target different markets
once this assumption about
verticals confirmed but as of now
they are
sales in the markets are a different thing
they are a different thing
but I have to say that
as we are doing which is
called out reaches normal
and LinkedIn
the conversion rates
change a little bit but not very much
depending on the market
can you give us a ballpark
in Italy we are talking
about a conversion rate
and then they sign which is around 6%
and when we talk about
the region we go to
4% 3.5-4%
it's roughly about a lot above
market average right?
it is it is it was pretty crazy
because at the beginning
when we talk about
meetings we started shooting out this
emails in
in January and we shoot it just to try
we didn't have a product or anything
we shot out
not even 100 emails
and it's crazy because
we got like 30 meetings out of those
then the meetings were a bit
tough to follow up because you were like
yeah the platform comes out perhaps this
summer so very tough but
out of those already we got signed some LOIs
and things so we saw that
already with those few emails
it was it would have already
been hard for us three to keep up
with the amount of potential customers
if they actually use the platform
in that regard
the numbers were
we were also pretty
pretty shocked by that
but it
struck a nerve they are like
there's really a need apparently
yeah because if you think about it
when you tell to the HR
that they need to filter people
and their work is considered
how well they work based on
what is the actual quality that then the
manager sees of the person and when you
tell them that finally
they can also a bit do the
work of the manager
that's the manager hates or the
whatever person hates to take hours
to do interviews but that can be
a bit automated
then they love it because
when you think about the whole company like
you work in one department
which can be software engineering
you need to do the software engineer
you don't do the HR like it's crazy
that you need to take X amount of hours
per week to do interviews
but that's not your job
so that can be automated
and it's good if it's automated because
it replace hours of
work that shouldn't be there in the first place
to do technical because technicals
are not about
it's not a human aspect you either know
your thing or you don't
the logic of things is different
and I think that's like
the ultimate goal right to make
the life easier for HR
reps technical
interviewers and also the interviewees
exactly as I said
in the beginning I don't want to replace
the HR I don't want to replace
anyone I just want to
put the right
task at the right place
your job is to
work as a controller you should do
a controller you shouldn't have 20% of your time
to do interviews
because that can be automated
but a psychological soft
skill interview that the HR
does a bit of talking with the person
having a human contact
that you can never automate you can never
do it with a yeah you can never do it
with any machine and I also wouldn't want
to live in a future like that
that's a nice closing statement
to be honest let's leave it like that
thank you Nikolas for being here
thank you for having us and I wish you all the best
for your future and the future of SELECTIC
thank you so much and everyone of our
listeners that would like to get in touch
you can find Nikolas
linked in the show notes as well
as SELECTIC and the SELECTIC page
and if you want to get in touch
with Nikolas you can send us an email
the email address is also
in the show notes
bye bye have a good time
bye everyone
Nikolas you can send us an email
the email address is also
in the show notes
bye bye have a good time
bye everyone

🇺🇸 The Recruiting Revolution - Nicolas Tozzoli & Fabian Rittmeier
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