The Use Case Podcast: Storytelling about Terminal with Clay Kellogg

Music:   Welcome to RecruitingDaily’s Use Case Podcast, a show dedicated to the storytelling that happens, or should happen, when practitioners purchase technology. Each episode is designed to inspire new ways and ideas to make your business better, as we speak with the brightest minds in recruitment and HR tech. That’s what we do. Here’s your host, William Tincup.

William Tincup:   Ladies and gentlemen, this is William Tincup, and you are listening to the Use Case Podcast. Today, we have Clay from Terminal, where we are learning about the business case, the use case for Terminal. Without any further ado, Clay, would you do me and the audience a favor and introduce yourself and Terminal?

Clay Kellogg:   Sure. Thank you, William. It’s a pleasure to be here. My name is Clay Kellogg. I’m the CEO for Terminal. Terminal is a hiring and employment platform for building remote engineering teams. We provide a vertical specific solution for growing technology companies. That’s really broken into two products, but together, those products not only provide access to global talent, but also the platform to hire and support them as full-time team members.

William Tincup:   Oh, that’s nice. And with it being 50/50, is the business 50/50, or do you lean heavily one direction or the other?

Clay Kellogg:   Yeah. The vast majority of our clients use both products, and so we have, I would say, across the company, equal focus, but it’s really a symbiotic relationship between the two.

William Tincup:   Right, right, right, right, right, right. So let’s start with the basics. How did you get started with this?

Clay Kellogg:   Yeah. Terminal was started inside of the Atomic Venture Studio in San Francisco in early 2017. And what began as an experiment to see if we could help a number of the portfolio companies inside of Atomic gain access to global talent really turned into an experiment on, “Could we really productize all of the aspects that companies go through when they’re deciding to build an HQ2? And what we found in testing our solution in Waterloo, Ontario, and helping a number of companies build full-time remote engineering teams, was that not only could we productize our infrastructure, but that the pull from being able to do that just in one market, to be able to do that across multiple markets was very strong. And that’s what really led to the evolution of Terminal.

William Tincup:   I love that. And when we talk about engineering talent, are we specific to any of the genres of engineering?

Clay Kellogg:   So for us, software developers.

William Tincup:   Yeah. Occasionally, you’ll get some EEs in there, but most of the time, it’s just straight up software developers, okay? And let’s walk through, as we can, for both products for both parts of your company, how customers engaged, again, most, not all of them engage with both, they might come in one door or the other, but let’s explain the doors, each door, to the audience.

Clay Kellogg:   Sure. So our first product is called the Terminal Talent Platform, and this is really our technology supported by our team that helps source and qualify candidates in our markets. The platform creates a vetted pool of technical talent that is interested in engaging in interviewing for full-time opportunities. And really, the goal of the Terminal Talent Platform is to recognize that hiring managers at scaling and growing technology companies, the most valuable asset or the most limited asset they have is their time. Our goal is to reduce the friction and accelerate the hiring process for every hiring manager we work with.

So we do this by building these warm pipelines of candidates that we have not only vetted from a technical perspective, “Do they have this skillset required?” but also from a remote readiness perspective. “Are they ready to be an active contributor and a remote team?” And from doing that, we allow our clients to really skip their screening process, and when they decide to move forward with a candidate from Terminal, really dive into what we’d consider the second half of their recruiting process. The flip is we’re able to go out to our candidates and represent that we have remote-first companies that are coming to Terminal that have been vetted, that they support their remote teams, they’re committed to building a remote team, and they’re committed to supporting their remote team.

And because of that, the candidates that we get to Terminal tend to be better than what would be via people’s own efforts in the market, and that the combination of the two really expedite a hiring process in a market where a client is new. Our current markets are Canada, Mexico, Columbia, and Chile. We’re going to be announcing some more markets relatively soon, but that’s really the first product. It really enables our clients to hire, gain access to global talent, and hire much more quickly than they could otherwise.

William Tincup:   Two followup questions for the talent platform. One, obviously, when you say vetted talent, people will wonder what type of skills testing and how do you vet them? So we’ll-

Clay Kellogg:   Yeah, sure.

William Tincup:   So that’s one thing. And then the territories of the countries that you’re in right now, the talent pools that you’re in right now, why those? Is there a story behind that?

Clay Kellogg:   Sure. So let me answer the second question first. Before we enter a market, we go through a very detailed analysis, anywhere from 50 to 70 data points. on what are the benefits of that market and what are the potential challenges in that market? And that’s everything from, “What does the supply of talented engineers look like today? What are the pipelines of engineers, the universities, the dev community, all the way through, what are the local employment laws? Are there IP transfer rights? Are you protected as an employer?” to “What is the stability of the government? Are we going to see currency fluctuations while we’re in that market?” Things along those lines. So that is the first analysis we go through.

Then the second is once we’ve satisfied that analysis, we go into the markets and we start talking with the candidates. We survey the candidates, we ask them questions, local engineers, about the type of opportunities they’d be excited about. Do they want to work full time for employers? What else would be interesting to them? What sort of employers? And so when we have a match, then we’ll move in and we’ll provide both of our solutions in the market.

From our early days, one of the first things that we heard from clients was that they wanted access to global talent, but they also wanted the convenience of being timezone aligned, that many, many of our clients had experience building teams across the globe. But when you’re talking about full-time teams and you’re talking about critical parts of your organization, that time zone difference can start to be a challenge over time. And so for us, especially, keep in mind we were doing this pre-COVID, so we were really working with what I would consider the early adopters of remote work at that point in time. And so as they were going up their remote learning curve, they really wanted to have that alignment, timezone alignment with their teams.

William Tincup:   It’s interesting because sometimes you’ll talk to developers that like to have a 24/7, they want to be represented all around the world so that basically they can just pass the project all the way around.

Clay Kellogg:   Exactly.

William Tincup:   But more often, it’s the timezone alignment that I hear from people. They’re like, I don’t care if they’re in Buenos Aires, that’s really close to Eastern Standard Time. So, fantastic. If we need to, and normally, it’s not even video calls, it’s Slack or Discord or something like that, to be able to communicate with them in real-time. Have you all seen both, I guess, business cases for people that want to do 24/7 development versus the alignment?

Clay Kellogg:   We certainly have. I think what we have seen is just given the speed of development cycles that most of our clients are employing and, really, the agile processes that they have instituted, that real-time communication is extremely important. At lot is lost in translation when there’s a timezone gap and you’re waiting to hear back. And so the vast majority of our clients have really been leaning into that timezone alignment. Now with COVID, and really, the acceleration of adoption of remote best practices and remote infrastructure, we are seeing more and more clients who are saying, “Hey, look, now I’m open to really any time zone, as long as I can gain access to the best talent.”

William Tincup:   Oh, yeah. That’s the first thing. They’ve got to gain access to the best talent. So the platform itself, obviously, it’s gated. It’s a community. It’s a well manicured community of experts. Do they interact with each other?

Clay Kellogg:   They certainly have the opportunity to. Every engineer that is hired into Terminal with a Terminal client has access to our community. We have our own community platform. And in that, they have the ability to communicate, connect and learn from each other. What we find, though, that’s interesting is it really has provided much more of a support for maybe people who are early in their remote career. Maybe they’re employee number one in Columbia for our client, but they have this community they can turn to where there’s 100 other engineers that are working remotely for Terminal clients. And so it really has become that support structure that’s really hard to build. It has to organically come out from, I guess, people who are passionate about their community and have aligned interests. And that’s really what’s happened here.

William Tincup:   Yeah. And I asked the question because these folks are also not just high demand, that’s stated and covered, but they’re also really busy. They’ve not just got a lot of work and job opportunities and things like that, but they’re also busy lives. They’ve got really busy lives. So-

Clay Kellogg:   Absolutely.

William Tincup:   You mentioned hiring managers, and I just wanted to make sure that the audience, when they pick up on that, because I can see a hiring manager just loving this, just, “Yes. Give me. Click, click, click.” Just love it. I know it’s not that easy, but do you also interact with the sourcing or recruiters as well?

Clay Kellogg:   We do. So it really depends on how our clients are structured.

William Tincup:   Right.

Clay Kellogg:   We will work with the recruiting team, although we do require that we have direct access to the hiring manager. Our goal, again, is not to put 100 candidates in front of a hiring manager in hopes that we get one hire. Our goal is to put three candidates in front of the hiring manager and get two hires, and so we really work closely with our clients, one, so that we can help educate them on the markets in which the candidates are coming from-

William Tincup:   The expectations. Yeah, yeah.

Clay Kellogg:   Exactly. Salary expectations, just work environment expectations as well as really trying to educate them on how competitive it is in the markets so that they are prepared to move quickly. When it comes time to make an offer, they have everything in place, and that really leads to our second product, which is the remote management a platform. And this is really the infrastructure and services that are required to hire and support full-time employees in a compliant manner in our markets.

William Tincup:   Right.

Clay Kellogg:   And so because we have both products together, we can make it a very seamless, in what we consider a white glove treatment for our engineers. They are being told from day one, in terms of sourcing, what the opportunities look like, what the benefits look like, what the support that they’ll receive will look like. And because Terminal is actually providing infrastructure on the backend, we can stand behind that and make sure that we deliver on those promises.

William Tincup:   So with remote management, and I just want to make sure the audience understands, is that a staffing model where you’re the employer and they’re technically your employees, and the company then leases them through you, or are you just supporting them and the company that wants that talent, they’re employees of that company?

Clay Kellogg:   So it’s almost like a hybrid. So we are the employer of record in the market. We are running payroll. We run benefits administration. We are-

William Tincup:   Right. That’s the compliance part, yeah.

Clay Kellogg:   Exactly. But in the talent platform, we are making the connection. Our clients are interviewing, and they are making offers to candidates. They are negotiating directly with the candidates, and they’re coming to an agreement on their compensation, on all aspects of their employment. Once that agreement is made, they turn it over to us. We issue the offer letter. We issue the employment papers. And so because of that, it’s a very transparent model. This is not an arbitrage model where we are trying to hire somebody and build them out at twice [crosstalk 00:   15:   34]. Our belief is that transparency is where the market is going and that full-time employees want to work directly with their teams. They want to be able to impact the product. They also want the incentives that go along with full-time employment. And then, oftentimes, that means equity from clients.

William Tincup:   What I love about this is, again, you might interact with a customer that really falls in love with someone. They just so happen to be based in Chile, but they don’t have any infrastructure to do payroll or benefits or any of the HR compliance in Chile. So this is a model in which they can get to that talent, use that talent, but then also use your services to then get that person paid.

Clay Kellogg:   Exactly. Exactly.

William Tincup:   So how do you add new folks, new talent? So you’re going to add more markets, obviously, but what’s your acquisition strategy? And then, again, getting back to the vetting, screenings, sorting and just doing a lot of quality assurance work-

Clay Kellogg:   Sure.

William Tincup:   … obviously to make sure that people actually can do the things that they say they can do.

Clay Kellogg:   Right. Right. Well, what we do is we really look … Our goal is not to be in every market in the world. Our goal is to be in the right markets for full-time technical talent, and so when we decide to go into a market, we invest in that market. We go go into the market and we start an education campaign, the same way that most very large companies, when they go break into a new market, they are doing a lot of employer branding. We do the same thing, but we’re able to do that, as Terminal, as an avenue to bring in great remote jobs. And so we go through that process and we build our database of candidates, and through that, we start to gain more and more intelligence on verifying what we believed about the market, but then also adding to that.

And then as people come on board, we have what we consider what we call our passive referral technology. And this is, in essence, the ability to ask individuals who would they want to work with again. Based on their past, who would they point to as being people they would want to work with again, or would be a magnet for talent. And from that, we apply our technology to really highlight, “Who do we want to start connections with?” or “Who do we want to start relationships with?” And for a one-off hire, that’s a lot of work for any client or for any company. But when you’re talking about the goal being hundreds and hundreds of hires in the market in a fairly quick timeframe, that data becomes extremely valuable.

William Tincup:   So yeah, I was actually going to ask you about referrals. So you already went there. So I appreciate that. Does your prospects, before they work with you, because after they work with you, I’m sure they get it, but before they work with you, do they have any English as a second language concerns, or is there any testing on one’s acumen as it relates to English, or is software ones and zeros, and they don’t care about the English as much as the ability to code?

Clay Kellogg:   Right, right. No, great question. So when we do our vetting process, you asked earlier what are the tools or the processes that we go through? So the first is we do a technical assessment, and that is using a combination of best-in-class assessment tools out there, as well as our own homegrown tests as well, and then the second component is what we call remote readiness, and part of the remote readiness is communication skill. Now, some clients of ours feel that they need to have fluent in English for all candidates. Others feel that, “Hey, just business proficient is good enough.”

And so we go through that process of actually assessing the communication skill of the candidate and then sharing that with our clients. And then they can pick and choose if they determine that, “Hey, look, it needs to be a 10 out of 10,” then they won’t interview this candidate, if they’re a seven. But once the candidates are on board, or once they’re now employed, we do have learning and development programs in place. Language skill is certainly one of those that we offer.

William Tincup:   I love that. Two things from what you just said. One is the onboarding process. First of all, I just love that you were remote before remote was cool. I’m not sure I’d use COVID as the cool part of that. I know we were going there, and you were there already, but it definitely sped stuff up. So that’s good. One question is the onboarding process, because you’ve got the legal, the payroll, all of that stuff. So there’s an onboarding of that. And then I’m assuming with the company that they’re working with, there’s probably an onboarding with their team and the project and all that other stuff.

Clay Kellogg:   Absolutely.

William Tincup:   Take us into that. How does that play out, usually, with your clients?

Clay Kellogg:   Yeah, so we work with our clients so that we have a streamlined process for any member. That’s what we call any of the hired engineers so that they are not being overtaxed with the onboarding process across the companies are. The Terminal onboarding process is the similar to what most people go through, the HR side of the onboarding process at a company. So making sure we have the correct information for benefits, for payroll, ensuring that they have a setup that is appropriate for working from home.

If they are working from home, we offer a number of services and perks as well. One of them is called the remote concierge, and this is really our team making sure that the home office is set up for success, ensuring that our clients are paying for broadband internet into the work environment. We do an ergonomic assessment, everything that we’re doing for the long-term support of the employee. But as it comes to the day-to-day, who are they working with, what are they working on, how are they going to be judged? Performance management is all done by our client. So if you were to ask any of the members inside of Terminal who they work for, they’re not going to tell you Terminal. They’re going to tell you our client.

William Tincup:   I like that. I like that a lot. I just love your model altogether. This is always what happens when things go badly. So the company, not Terminal, but one of your customers, they go through a rough patch and they need to downsize, et cetera, or it just doesn’t work out. It’s not a good fit. Okay, so those things happen. That happens everywhere. What’s y’all’s response? What do you typically do? And we’ll take, not a riff, because that’s the [crosstalk 00:   23:   22] thing, but if it just doesn’t work out, Johnny or Tammy just doesn’t work out and doesn’t really to be documented any other way, what does Terminal do in that instance?

Clay Kellogg:   So there’s a couple things there. The first is, absolutely, there are always going to be misfires, mismatches at some point. But there’s two things that I think really help Terminal avoid those as much as possible. The first is that in the recruitment of the candidate, in the sourcing of the candidate, and then the assessment that we’re doing, hopefully we’re leveraging that data that we have from those passive referrals as well as other information that we’ve gathered throughout our existence there in that market to do a really good job of vetting and making sure that we’re filtering out the wrong candidates and we’re bringing in the right candidates.

The second component is that because we have the HR team that is in the market, when there are those little things that pop up that maybe a new employee is embarrassed to ask or doesn’t know where to turn, we have somebody there that’s there to help them. Now, of course, it’s over video or Slack, but they are there. They understand the market, and they’re there to make sure that the employee is feeling supported. Now, of course, even with all these, there’s going to be mismatches. At that point, Terminal is there to make sure that it’s a smooth process. So if it is, let’s say, past the probation period, but it’s not working out and it’s a termination, we’ll step in and make sure that we have all the paperwork required, that we are going through the process of either putting the performance improvement plan in place, or if we have to have additional documentation, we’ll have that in place.

Our goal is to make sure that on both sides it’s as efficient and as positive an experience as possible. If it’s one of those scenarios where it just isn’t a good fit, but there’s best intentions on both sides, and the candidate is a strong engineer, we will try and help them find a new opportunity. And so we’ll go through that process. But the intention on both sides coming into Terminal is that these are long-term, full-time engagements.

William Tincup:   Right. This isn’t a gig or a gig platform, et cetera. So in models like this that I’ve seen in the past, at some point maybe the customer wants Johnny to be their employee. Maybe they built up the capabilities. expanding into that country, et cetera, et cetera.

Clay Kellogg:   Right.

William Tincup:   First of all, has that happened, and/or do you all have a mechanism of releasing them from Terminal and then putting them in the care of Company X? I think probably getting paid for that, but is there a mechanism and/or has anyone done that yet?

Clay Kellogg:   Absolutely. Yeah. So we do support a build, operate, transfer model as well. What’s interesting, though, is we certainly saw that as being a pretty, I would say, normal sort of process, pre COVID. A lot of companies went through the, “Hey, let’s enter a market. We’ll test the market to see if it actually has the value or the quality that we’re looking for. In a post-COVID world, or at least a post remote adoption as a result of COVID world, what we’re finding is our clients don’t even want to be limited to one country. They want to be open to all of the pipelines of talent, and once you’re open to all pipelines, it really does make sense to have a partner who’s going to help you with the management and the compliance aspects of those employees, because it just becomes really cumbersome to be opening up multiple entities all over the world.

William Tincup:   Yeah, no, there’s nothing easy about that. Nothing. Zero. Two things really quickly. One is I can see, especially hiring managers that just got a bunch of funding and they need to actually get a lot of lines of code, I can see them spinning up teams, and I don’t want to put that out there if that’s not the case. Have you seen some of your customers work with Terminal to spin up just more than onesies, twosie? Have they spun up entire teams?

Clay Kellogg:   Yeah, absolutely. Our model is really built to help build teams. So we actually have a four-engineer minimum to get started with terminal and-

William Tincup:   Oh, that’s cool.

Clay Kellogg:   The vast majority of our clients are north of 10 on their team today and growing from there. One of the reasons why we’ve enforced that policy is that our clients need to be committed to their remote team.

William Tincup:   Yeah, 100%. When you first said it, I’m like, “Well, that gets rid of the entire kickers.”

Clay Kellogg:   Exactly.

William Tincup:   If there’s a tire kicker that’s out there, they’re going to hear that and go, “Yeah. That’s a bit of a commitment,” which is exactly the point.

Clay Kellogg:   Exactly.

William Tincup:   So really quickly, it could be from last week or whatever, but your favorite customer innovation story, without names, of course. Just something that you’ve seen one of your Terminal customers just shine and you’re really, really proud of what they’ve done.

Clay Kellogg:   Oh, gosh. Picking one is-

William Tincup:   I know, I know.

Clay Kellogg:   …. really hard.

William Tincup:   Who’s your favorite child? No, no, no. I understand. Go with maybe the most recent or just something that you’ve told recently.

Clay Kellogg:   Sure, sure. Well, what I’ll say, William, is what makes me smile, what makes our team very pleased is when we hear a client’s story where a client says, “I wasn’t sold on non-US talent,” or “I wasn’t sold on …” I mean, even worse, “I wasn’t sold on non Silicon Valley talent.”

William Tincup:   Right.

Clay Kellogg:   And then they come back to us and say, “That team that we’ve built with you, that we’re continuing to build with you that’s in Latin America, that’s in Canada, is my best team on staff. That’s the best group I have.” And we hear that frequently. In terms of what they’ve built, we’ve got FinTech companies, insurtech companies, we’ve got SaaS, marketplace, health tech. We used to have a counter for how many of our clients went public. That no longer is valid because it just seems to happen.

William Tincup:   Yeah, yeah. You’ve got to have a person that just does nothing. We keep track of that.

Clay Kellogg:   Exactly.

William Tincup:   I love the reluctance because I think that’s natural, especially for a lot of American technology managers. I can see the reluctance, and I like that. I also like that you can flip them over to, “This could possibly be your best team, your best performing team.” So I love that. Clay, this has been absolutely fantastic to learn, about both you and about Terminal and what you’re doing in the marketplace. It’s a wonderful business model, by the way.

Clay Kellogg:   Thank you. Thank you so much for having me.

William Tincup:   Absolutely. And thanks for everyone listening to the Use Case Podcast. Until next time.

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