Storytelling About Sturdy With Joel Passen

Ever wondered what it takes to build a venture-funded tech company from scratch? Our guest, Joel Passen, co-founder of Sturdy, has done it not once, but twice! Joel takes us on an enlightening journey, sharing his experiences and vital lessons learned from founding two tech companies. Sturdy, his latest venture, is designed as a “check engine light” for businesses, providing a valuable early warning system for customer behavior and needs. What’s truly fascinating is the company’s focus on hiring managers, not recruiters or candidates, a fresh and much-needed perspective in the ATS market.

The second half of our talk illuminates the power of Sturdy’s technology in protecting customer revenue and reducing churn. Their product, deployable in under an hour, offers businesses a swift way to address customer behavior and needs. And it’s not just talk – one customer saved hundreds of thousands of dollars in MRR within a month using Sturdy. Plus, we’re giving you a sneak peek into Sturdy’s upcoming feature that can bring customer feature requests and confusion topics right to the product teams. This is one episode packed with insights and sneak peeks you wouldn’t want to miss!

Give the show a listen and please let me know what you think.

Thanks, William

GEM Recruiting AI

Show length: 19 minutes

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Joel Passen
Founder Sturdy

Joel is a proven technology entrepreneur with 20+ years of success creating value and driving measurable results at the intersections sales, products, and operations.

Before co-founding Sturdy, a next-gen multimodal AI solution that helps companies improve products, processes, and user relationships, Joel served as the Head of Global Revenue at Beamery leading enterprise go-to-market teams in the US and UK.


Storytelling About Sturdy With Joel Passen

William Tincup: [00:00:00] This is William Tincup, and you’re listening to the Use Case Podcast. Today we have Joel on from Sturdy, and we’ll be learning about the business case, or the use case, for why customers, prospects, spend money with Sturdy. Joel, would you do us a favor and introduce both yourself

Joel Passen: and Sturdy? Absolutely.

William, thanks for having me. I’m Joel Bassin. I’m a three time glutton for punishment tech founder.

William Tincup: That’s a good way of saying it, actually.

Joel Passen: This one’s harder. I’m approaching middle age and I started my first one in my 20s, [00:01:00] but actually it’s serendipitous. I met you really early on in, in my first journey.

I started a outsourced recruiting company at one of the first RPOs to service. Tech companies in Silicon Valley, lived in San Francisco for 20 years, and along the way also started an applicant tracking software company before applicant tracking was, there were dozens of them at the time I started it Taleo had just bought RecruitForce, this was way back in the day, man, and I met you, And you encouraged me to play the industry game and I didn’t I always regret that to some extent, but we had a really nice exit to Paycor worked out for both companies.

I was the head of global sales, global revenue at a company called Beamery, also in the WorkTech TA tech space. And in 2019, I joined with some former colleagues and friends to start Sturdy. It’s Sturdy. ai and Sturdy is what we call it anyway, William, is the check engine light for your customers and really it’s a passion project that turned into a full fledged project [00:02:00] and now a venture funding company.

William Tincup: And some of it goes back to Newton days, for those that do remember, Newton’s One of the things that made them so special is it was built for hiring managers. It wasn’t built, like a lot of these are built by engineers and they’re built for recruiters, or they’re built for candidates, or combination of sourcers, stuff like that.

This was the first one, and probably the only one that I can remember, that was built for hiring managers. And hiring managers… Loved it. They did. Absolutely. It was crazy. They loved it so much.

Joel Passen: Yeah, they did. And here’s the thing. I think part of the reason that Sturdy, I mentioned it’s it started as a passion project.

We, and I’ll get into it in a minute, but Newton was a passion project too, and we were running a big recruiting company. If you didn’t have the efficacy and the engagement of hiring managers in the hiring process, you ain’t hiring anybody. That’s just the way it works. We realized that if you could create something as [00:03:00] simple as green is go, red is no, we trademarked that back in the day.

Where a hiring manager could say, look at a candidate and maybe the recruiter’s notes on the candidate and say, yeah, thumbs up, and make it super simple for them, like a consumer based technology. Easy to buy something, right? We had this sort of consumerization of the ATS market, it was really important to us.

And it was really important to hiring managers. And the thing is, people would buy it. And then a new TA leader would come along, and I respect this, and they had their thing, they needed, some other product or whatever, and they’d realize that they had 30, 40, 50, 60 hiring managers using this stuff, and it was super simple.

They wouldn’t rip us out.

William Tincup: No, or if they did, they got the wrath. They regretted

Joel Passen: it six months later when no one used the ATS, and they were wondering why the hell no one was using it. It’s because the hiring managers were back on the line.

William Tincup: It wasn’t built for them. Again, all kudos to all of the players, ISIMS, Jobvite, all of those players.

The [00:04:00] technology is built for a specific audience. Y’all just, because of your backgrounds, and interacting on the staffing side all those years, You’d interacted directly with hiring managers. You knew what they wanted. You build technology that was easy, intuitive, super to use. But, one of the things that, that I’ve always found fascinating because the, some of the idea for Sturdy.

Came from your experience with Newton and looking at why do we have some customers that stay with us? Why do we have some customers that don’t? A black box. It’s voodoo. It’s mysticism. It’s a combination of things that we don’t understand, etc. But why? And I think what I fell in love with Sturdy is answering that question with data.

Trying to figure out okay, check engine light, I love that, because again, when your check engine light goes on, that could be anything from your gas cap isn’t tight enough to your drivetrain is about to go out. Yeah. Your

Joel Passen: transmission is [00:05:00] dragging behind the back of the car. And on this line of a passion project.

Here’s something we were really passionate about at Newton and the story. You mentioned Jobvite and ISEMS Greenhouse was coming up when we were building Newton and Lever, but basically there was a hundred million dollars of reasons why we should have failed. The industry took off.

TA Tech got heavily invested in. And we were here, we bootstrapped that company, we didn’t take a dime of outside funding, and we were up against the monsters, and by the way, looking back on it, I know a lot of the leaders at the ATS companies were battling, and kudos to them, a lot of these companies have become really valuable companies, and the thing that I hated, if you think about what I just described, is, every decision for us, William, was like atomic level with customers.

Our cost of acquisition went up because the industry got funded. And so we got into these meetings, we called them, I guess I can be a little off color here, [00:06:00] but we called them tight shirt meetings. We’d round up our teams, literally, four or five people, customer facing people, and we’d do reviews of our customers to try to understand.

Through telepathy, through osmosis, like what customers, I would coin this phrase, what customers are watermelons? They’re green on the outside, but who’s red on the inside?

William Tincup: And it’s a key word. Sometimes it’s a key word. But it’s I always want to, when I’m on the ad agency side, whenever a client would ask for a proposal, not a proposal the contract, excuse me, whenever, whatever whether or not it was new, whether or not it was somebody that’s been there for years, if they ever referred on the phone.

Or in an email to, hey, do you mind, I can’t find a copy of our contract. Could you send that to me? That never ended for me, that never ended well. That was like a precursor to, we’re going to figure a way out of this contract.

Joel Passen: Yeah. 60, we found some data on this at Sturdy. Now having analyzed a [00:07:00] lot of these comms, 55 billion words millions and millions of conversations, 66 percent of the time.

If a customer asks, when’s my renewal date, or they mention the word renewal, or they mention the word, copy of our contract, the phrase, they churn 66 percent of the time within the next six months. If you don’t do anything about it. Now, it’s just like a lead that comes into your business. If you hop on it right away, within 24 hours with the right person and it’s escalated, you have a 33 percent chance.

At least saving that customer for another couple of quarters, if not renewing them. But it’s,

William Tincup: it’s understanding that signal. So they sent you a signal. I’d like a copy of the contract. Okay, that’s the signal. Pretty specific signal. Okay, but then you got to do something, which means that not it’s just you, because this is easy for a business owner.

But we’ve got hundreds of people in front of the owners of C suite and the front line of customers, and they’re making decisions on our behalf.[00:08:00] Are they reading the same signal in the same way?

Joel Passen: Think about this, we talk about this term multimodal, which, means nothing to nobody, by the way, so with your marketing brain, you’d be like, yeah, don’t use that word.

Yes. It sounds like a disease. But really, what it is imagine this. If they told one of our better, let’s say, CSMs or account managers, Hey, I need a copy of my contract. Our people are really well trained. And they would be like, Oh, that’s got to go right to Jonathan Shannard, our head of customer, and Joel.

Because we’ve got to resell that value to that customer. Remind them, in this case, how many hiring managers they had in the product, right? Immediately, that was our play. That was the playbook. Oh, geez, William, you’ve got looks here. Oh, boy, you got… Wow, you have 28 hiring managers that are in the product every single day making decisions.

Are gosh your engagement is really high. Oh, is it? And then, we could prolong that account. Imagine if that contract request or renewal language came into just a [00:09:00] frontline support queue. Somebody’s been on the queue for a couple of weeks. And they say, sure, here’s a copy of my contract.

And the CSM, that really highly trained CSM or AM, never would have even known about it. So the multimodal is if this stuff is mentioned in a call, if this stuff is mentioned in tech support, and God forbid, by the way, that this stuff goes to finance. Because that’s what people do. They get an invoice and they reply to the invoice.

Yeah, can I have a copy of my contract? And the finance team doing, their job yeah, here’s a copy of your contract. And it takes three or four days for them to remember, maybe if they do, to forward it to the CSM or AM. You’re days behind that contract. You’re done. You’re toast. You lost the account.

And that’s big. So we aggregate all of that data across all of those different silos.

William Tincup: And pulling out the nuggets that then they can, again, you want to get insight leads to action. So again if we’re just talking about customers, because I think that some of this is [00:10:00] customers are an indicator of health of an organization.

Okay, how healthy are we? If we’re, if we’ve succumbed to the thought that, okay, we know we’re just going to turn. So 20 percent of our customers, like we do with turnover years ago, you’d talk to a retailer and they’re like, Oh yeah, 17%. If we can get that down a point or two, that’s great. It’s what it is in the industry.

There were almost like, it just is a turnover is, it’s I don’t always fight that and go it is when you’re going into it or the defeated attitude. So what if we changed

Joel Passen: our attitude? One of the lines that we use quite a bit with investors when we’re raising money and also with CEOs and COOs, CROs, CCOs, is you can have higher expectations.

You you can solve this problem. So in the inevitable 8 to 12 or 13 percent churn, whatever you’re admitting to yourself, doesn’t need to be inevitable. 85 percent of that stuff is preventable. 15 percent of it, by the way, William is not preventable. If a [00:11:00] company gets acquired, they go out of business, some of that stuff, you just can’t, there’s nothing you can do.

But 85 percent of this stuff, You have the opportunity to transact on in a way that helps you retain revenue and ultimately lift your net dollar retention, which is the North Star for a lot of our subscription based businesses these days, all of them maybe. And the other thing I would say to that is, I think the software and services market is projected in 2023 to be about a 400 billion market.

It’ll churn 13 percent of that. So when we look at this yeah, it’s a passion project. We hate churn. I hate churn, man. I hate losing customers. It’s a cancer. It sucks. Imagine if it’s preventable.

William Tincup: Like we’re talking about preventable because like in the turnover game, a turnover itself isn’t a bad word.

It’s regrettable turnover, right? So I think about the churn in kind of the same way, at least my brain does, it’s okay, churn, not necessarily, because you have bad customers. [00:12:00] If I’m being frank, you could have a customer that’s taking too much of your time, not paying you enough money.

They’re a cancer. They’re toxic, etc. They’re, your employees are leaving because they’re so horrible, etc. So churn isn’t in and of itself a bad thing. It’s a tree in a forest that dies that lets other trees then get light. However, it’s regrettable. Turn that drives me, like preventable.

We could have, had we known that this person said frustrated in their Slack messages or in their text messages or in their email or whatever, they should never be frustrated. And if they are, we should do something about their frustration. Let’s

Joel Passen: hear, I talked to a leader the other day and they had, it’s a scale up company, probably 35 million in recurring revenue in ARR.

And they’ve got 20 people. On the post sales side of the team that are responsible for managing the customers, [00:13:00] right? The revenue, the lifetime value of the revenue. So if you take an, and they’re all in the United States, you take an average salary of 80K. These folks are spending north of a million to protect their customers.

Essentially that’s what they’re doing, supporting their customers. And our belief is that if we can arm those people with the insights so they know what to work on now. Know what to work on next. They’re not guessing, they’re not just looking at usage data and throwing their finger in the wind and saying, yeah, I think it’s a yellow.

Yeah, they’re yellow, greenish. Ah, that’s rife with opinion when in. In effect, the customer is telling us the answers to the test, what they need training on. And here’s another point. It’s not that it’s just they’re saying, hey, I need a copy of my contract, and you can all of a sudden attribute it statistically to churn.

Churn is death by a thousand cuts, man. Customers that want this feature, customers that mention a competitor. Maybe they’re, looking at other things. Customers that… Keep asking, how do I do this? How do I do that? [00:14:00] It’s confusion. So it’s not just those like behaviors that we have 30 behavioral models that are trained in our product day one that all lead up to the end goal and the end outcome is keeping your customers satisfied and ultimately protecting the revenue.

But a lot of this stuff is clandestine. And by the way, It’s the frequency of occurrence. So if you have a customer that, God forbid, it’s had an executive change, you lost your sponsor, right? And then they’re asking, how do I do this? How do I do that? How do I do this? Do you have this feature? Do you have that feature?

That is an indication that customer needs to be worked on and addressed. And They need love. They need love, man. And that’s the stuff that we pull out of. Really unstructured, gobbledygook data that is really the value proposition of Sturdy. It’s taking all of that dark data, 90 percent of the stuff, William, that companies collect.

By the way, good news is you’re collecting it. It’s just in the back end of some person’s… Email. Exactly, man. [00:15:00] It’s exciting.

William Tincup: How fast do people see… Like results okay okay, makes sense. Okay, anybody listening to this is going to say, I hate SHRM too. No one’s there’s not a counter argument.

How long, if we work with somebody, how long can we stand it up? What do we need to, and then how do they see the results? Like what, what happens? Cause I’m assuming that the first time they see results. They probably wet themselves a bit, because, go ahead,

Joel Passen: I was going to say, we call it the Great Reveal.

So it takes we don’t, that’s the internal name

William Tincup: right. Scraping them off the ceiling with a

Joel Passen: great reveal. I’ll give you a, I’ll give you an example and I’ll give you a concrete example. So it takes us about 30 to 60 minutes of IT resources left. Super thin, right?

Like we can stand the stuff up. And we had a customer and get them live and start ingesting this data in a compliant and secure way, by the way, which is really important.[00:16:00] De identify all the PII, make it so you can buy this stuff, get through InfoSec teams. We can do all of that in 60 minutes.

We go away for about 24 hours, load all the stuff into a user interface that’s slick. And then we come back and bring the stakeholders that are interested in Sturdy to a meeting. And we say, hey, let us show you what’s in your data. And those meetings are the tipping point for where people are like, holy shit, this may work.

This is incredible. And they get addicted to it, and they start spelunking through this data and finding this stuff. And, we had a customer, a company called Hawk Media, it’s a marketing services company light this stuff up, reluctantly, I think, at first, to be honest. And within a month, the CEO came back, and there’s, I think there’s a quote on our website now, or it’s about to be a quote on our website, where he’s hey, and he basically flat out says, you’ve saved me a hundred, couple hundred thousand dollars of MRR, that’s how they calculate their revenue, of MRR, almost immediately.

And I’m glad we didn’t do value based [00:17:00] pricing or something like that, because we owe you guys hundreds of thousands of dollars. Literally, the thing that’s really exciting about this technology, it’s not like buying a CRM, or for that matter, buying an ATS, or buying something that, It has a loose value proposition where, you might start to see some value or lift in six or 12 months.

With Sturdy, the really exciting thing is you start getting actionable insights in days that can impact this quarter, results for this quarter, like right now, right? That to me is really exciting because it’s not like the age old promise of enterprise software, add, turn it on and do all this digital transformation and change the way your teams work and you’ll be better.

No, it’s. It’s days. Wow.

William Tincup: That’s, that is fantastic. So the remaining months that we obviously I must see you, I think at HR Tech. What is what’s the next couple of months look like for for

Joel Passen: starting? Yeah. We’re really excited about the we have a product, we have a functionality [00:18:00] release or feature release that goes into GA in just a couple of weeks where it starts to morph over into think about this, like we’re selling a product.

It’s not our services teams that people are rebuking and churning. They’re not saying Oh, I don’t like these. I don’t like the customer service. Sure. That’s a thing, but it’s really the product or service that a company has sold them. We can, for example, take like feature requests or, when a company asks, how do I do this?

There’s some confusion. We basically can analyze all of the communications and then topically identify the top, three, five, 10 things, feature requests, confusion, topics train, training requests, whatever it may be, and then give that to product teams and it’s evidence. That leaders can then work with other teams with it creates this collective reality.

So it’s yeah, the customer. Our customer base at the enterprise segment in this particular cohort is asking for these specific features right now, and it’s helping to [00:19:00] inform product roadmaps, it’s helping companies to rethink their processes, how they’re dealing with their customers, how they’re building their playbooks, how they’re building their customer engagement strategies with real data, not just this hand wavy Opinion based data.

And that for me is really exciting. So that’s the next six weeks, what we’re really going to be focusing on with our existing customers and also going to market with. Done

William Tincup: and done. I can’t wait to see you in a couple of weeks at HR Tech. Brother, always love talking with you and I love what you’re doing.

So thank you so much for coming

Joel Passen: on the show. Thanks for having me, William. And as always, I look forward to seeing you. And thanks for your time. Surely. And thanks

William Tincup: for everyone listening until next time.

The Use Case Podcast

William Tincup

William is the President & Editor-at-Large of RecruitingDaily. At the intersection of HR and technology, he’s a writer, speaker, advisor, consultant, investor, storyteller & teacher. He's been writing about HR and Recruiting related issues for longer than he cares to disclose. William serves on the Board of Advisors / Board of Directors for 20+ HR technology startups. William is a graduate of the University of Alabama at Birmingham with a BA in Art History. He also earned an MA in American Indian Studies from the University of Arizona and an MBA from Case Western Reserve University.


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