Use Case Podcast – Storytelling about YellowBird with Michael Zalle

Music: 00:02 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: 00:26 Ladies and gentlemen, this is William Tincup, and you’re listening to the Use Case Podcast. Today we have Michael on from YellowBird, and we’ll be learning about the business case, the use case, for why his prospects and customers purchase YellowBird. So, let’s just jump right into it. Michael, would you do us a favor and introduce yourself and YellowBird?

Michael Zalle: 00:45 Sure, happy to do it. Thank you. So, I’m Michael Zalle. I’m excited to be here and tell you about my journey and YellowBird. Little bit about me before I get into YellowBird itself. I am a lifelong techie geek. I’ve been in technology my entire life. Most technology that I’ve been in started when I was 16 years old and I was selling computers. I just fell into that job, right place at the right time. And it was many moons ago. I was fortunate enough to be part of an internet startup just after that, which was in 1994, ’95. So, that’s giving you a little bit of an understanding of how old I am.

William Tincup: 01:33 That’s the beginning of PCs, the beginning of the personal computer movement.

Michael Zalle: 01:39 Yes, yes.

William Tincup: 01:40 Michael Dell and all these folks. Mark Cuban, one of his first companies was building computers. So, you were way ahead of your time. That’s fantastic.

Michael Zalle: 01:53 Yeah. I wish I could take credit for it. As people say, I have a motor. When I do something, I go all in, whether it be startup or whether it be falling in love with my wife 22, 24 years ago. I guess we dated for a couple years before we got married. I go all in whenever I am passionate about something or someone. It’s my superpower, I would say. And so, that tells you a little bit about me is that I started in technology, I stayed in technology, and I went all the way through from the computer side to the fiber optics and got into satellite communications, funny enough.

William Tincup: 02:39 Oh, cool.

Michael Zalle: 02:41 In high consequence industries, as I like to call it, which basically is anywhere that is high risk. So, satellite’s really one of those things that you don’t realize has a lot of impact into how people communicate when they’re building these off the grid environments, like oil and gas sites and mining locations and agriculture and pipelines and solar farms, all these places that they don’t build right there on the highway. And so, communications is an issue. So, I got involved in that for 20 years.

During that wonderful career, and it was very, very fulfilling, and I loved 95% of it. And I think that’s as much as anybody could possibly say about their career. Nobody loves a hundred percent of the career in anything. But I really did enjoy it. And during that time, my wife and I were married. We have two kids, a 17-year-old son that you and I were speaking about and is going to be a senior this year, and a 13-year-old daughter now. And YellowBird is my newest passion. I started it in July of 2019.

William Tincup: 03:54 Okay. Well, the solution itself. Let’s start with the problem and solution. So, you could have done anything after this illustrious career, but you chose to do this. When you looked around, because you probably studied and looked at a lot of different things.

And I remember the guys at hotels.com telling a story about going down to I think it was The Bahamas. Might be Aruba. But basically, they went down and they put 10,000 Post-it notes up on the wall of just crazy ideas. And then it got it down to a number, and then hotels.com was born out of that. And I thought it was just fascinating. Now I don’t know if if any of that was true, but it was just a fantastic origin story.

Michael Zalle: 04:46 Well, it’s funny. I was just going to say, that’s a great origin story.

William Tincup: 04:49 Yeah, exactly.

Michael Zalle: 04:50 My origin story is actually… it’s an interesting origin story, but it’s not a story. It’s the reality. I haven’t changed it at all, and I’ll tell you exactly how it happened. Which I was actually in an Uber going to Dallas from… Where did I live at the time? No, I was here in Scottsdale, Arizona, which is where I live now. And I grew up in Southern California, which is why I made that mistake at first.

And in the Uber, the gentleman that was driving me was a senior officer in the military. And he was picking me up at my house at 5:30 in the morning in an Uber. And he was very articulate. He was very well spoken. He got out of the car and grabbed my bag and handed me a bottle of water. And I was just so impressed with this guy, especially at 5:30 in the morning.

And he was not a young guy. And I said, “Well, how did you become an Uber driver?” Again, this was several years ago. This must have been three-and-a-half, four years ago. And his answer was, “Well, I retired from the military, and I wasn’t ready to sit on the couch. And I don’t really know that many people in Phoenix because I moved up here from Chile to be closer to my grandchildren.”

And as he put it, my grand babies. I remember him saying my grand babies, which is a nice way of referring to his grandchildren. And he wanted to do something. So, he said, “I figured I’d drive.” And I said, “Well, do you make any money doing this?” And he starts laughing. He goes, “I think it cost me money to drive this Uber.”

William Tincup: 06:22 I’ve always wondered that. Yeah.

Michael Zalle: 06:24 Yeah. He goes, “But I meet a lot of interesting people, and I do it.” And he had a full structure. Right? He goes, “I wake up in the morning, and I work out, and then I go to a coffee shop, and then I walk in, and I do this for five or six hours, and then I go home, and I feel like I’ve accomplished something.” And I’m like, “That’s such a great gig for somebody who’s retired.” And I said, “But somebody like him who was a senior officer in the military,” he tells me he had over 40,000 people reporting to him.

William Tincup: 06:55 My goodness. Okay.

Michael Zalle: 06:59 I mean, obviously not direct. He was high up there. He had reports of reports. And now he’s driving an Uber. And I’m thinking to myself… And there’s nothing wrong with that. But a man of his caliber and skills should be able to consult or do something to monetize his skills in a better way.

And then I started pondering it. I was thinking about my next stage of life of after we sell this satellite business. And YellowBird came to me. And the concept, it wasn’t actually called YellowBird. It was called Zip EHS is what I called it. Horrible name, I admit it.

But I had this idea, and it was just bouncing around in my head. And the reason was because I knew the safety industry really well. Because when you sell satellite, the number one sales pitch is what do you do if somebody gets injured? How do you call 911 or how do you get help if somebody’s injured on the job site?

And the quick answer for most people is that we have cell phones. It’s like, okay, check your cell phone coverage. And if you don’t have them, please contact us. And of course, every time they get out to these sites, they’d look at their phones, they wouldn’t have anything. And they’d already be starting the clock on their day rate labor and all the rental equipment and everything. And they’d say, “I need satellite as soon as I can get it.” And that was basically… So, I got to know that ecosystem very, very well.

The challenge of safety, which is essentially I have all these varying parts with all these varying skills and all these talents that I need. And generally speaking, in the industry, we have a “safety guy” in quotes, and it’s usually one person who is responsible for hundreds and hundreds of various requirements, everything from fall protection on scaffolding to forklift and heavy equipment training, to hazardous materials, to CPR and first aid.

I mean, if it has to do with health and safety of your employees, your “safety guy” in quotes, or gal, is responsible for it. And they’re all overworked, underpaid, and just a scarce resource. And so, I started thinking, you know what, this is an interesting idea for an on-demand gig economy model. And so, that’s how YellowBird was born.

William Tincup: 09:28 I love it. Okay. And just for the audience’s sake, folks that have skills, I want to say retired, but let’s just say folks that have skills, they’ve accumulated skills, 20, 30 years of skills, this is a way to leverage those skills and monetize those skills and those experiences. And it’s a different kind of an ecosystem or marketplace where you can go and find experienced people.

Michael Zalle: 09:54 Absolutely. So, what I look for… When I say I… We’re giving you a little bit of a fast forward. We’ve raised capital. We’ve grown. We started with myself and… I always say two people and a goat. And now we have over 850 professionals on the platform. We’ve got over 25 full-time employees that work for YellowBird, and we’re in all 50 states. And so, that’s only in the last two-and-a-half years.

And so, what I say is if you have been involved even in an ancillary way to safety, we likely need you. So, you could be a former firefighter who’s retired who… Firefighters are often trained, hazardous materials training, fire programs. They do the fire inspections. So, that’s under health and safety very often. Facilities management, things like that.

You’ve got people who are involved… Maybe they were the safety person or responsible for safety of their company. And they’ve been educated enough that they could review documentation or they could help do a loss control survey for an insurance company if somebody says, “Hey, I need somebody to go out and do this inspection on our behalf.” We’re doing a lot of that kind of work. And it’s very flexible, which is the best part about it.

William Tincup: 11:18 So, the marketplace concept and the over 800 professionals that you have on there, these are highly specialized, and again, safety professionals. I could see this going a couple different ways where you become the in-between between two parties that need consulting done. I could see this is a recruiting play. This is a talent community.

And ultimately, if people want to hire full time or part-time or however they want to hire, this is a way to then… Instead of searching LinkedIn, if you will, this is a target rich environment of people that are exactly what they want. And I hate software categories. [inaudible 00:12:02] despise the concept of software concept. But I also know that HR budgets and TA budgets have Excel rows and columns. So, how does the buyer think of you?

Michael Zalle: 12:17 Such a great question. This is actually a unique question and I love it. So, it’s interesting. So, there’s three ways that people look at us. One, they look at us as a consulting company and says, “Well, I would either go to a temp agency, or I’d go on LinkedIn and I try to find a consultant, or I’d go on Google and I’d type in environmental health and safety consultant.”

Or maybe you’d type in something very specific like I need a site supervisor for construction for six months, which happens a lot in construction. We do a ton of that kind of work. So, that’s kind of a consulting gig. Right? And we compete with that a bit, these independent consultants, but we really are a mechanism to finding them.

The second way is a temp agency that people look at us and they say, “I want to do attempt to hire structure.” We’re fine with that, and there’s no fee. Unlike temp to hire, there’s no lockout and there’s no handcuffs. So, if you use YellowBird and you say, “Look, I want to interview this person, see if they’re a cultural fit, and see if they’re a fit in general,” we require that if they plan to hire full-time, that they engage them for 60 days. And that 60-day period allows them on all parties, it allows all parties to evaluate if this is a good match.

William Tincup: 13:42 Yep. Try before you buy.

Michael Zalle: 13:43 Yeah, try before you buy. And that’s actually what we call it. And what I don’t like about the temp to full time model, generally speaking, is it’s really challenging. Because let’s say that you try before you buy in a temp to full time. They generally have a nine-month lockout period or a high or a high penalty.

William Tincup: 14:04 On both sides, sometimes, for both the candidate or employee or the talent as well as the employer. So, it’s really punishing. It’s like punishing for just no reason. And I think some of that, at least historically, comes down to emotional stuff, like you’re stealing our people.

Michael Zalle: 14:25 Right.

William Tincup: 14:25 And it’s like, well, they’re not technically your people.

Michael Zalle: 14:29 Right. Exactly.

William Tincup: 14:30 But it’s really emotional because I know a lot of staffing folks. And I think historically it’s been thought of as like they’re just testing us out, and then they’ll go behind our backs and hire our people. It’s like, well, we’re using really all the wrong words there in this scenario. But yeah, very emotional.

Michael Zalle: 14:50 And I actually feel for the staffing folks, the placement folks in their model, because they basically are an eat what you kill environment. So. they go, and they’re searching for the right candidate, and they’re looking around, and they’re doing everything they need to do, and they’re pre-interviewing, and they get all this stuff done in advance. And maybe that takes them a month, maybe that takes them six months, whatever it takes them. But they’re working for free at that point.

And then if you’re on a… They need to make their commission. Right? And so, that model, which is not our model, but that model is basically you are walking in a commission so that you can’t get circumvented. It’s not really about stealing the people. In fact, they’re welcome for you to steal the people as long as you pay the commission. They really don’t care about you stealing the people. They care about trying to get around having to pay for it.

William Tincup: 15:46 That’s right. That’s exactly right.

Michael Zalle: 15:48 And for me, our model is that we onboard people at their own time. We interview them at their own time. We have these people that are willing to be available for work. And if some of those people want to get a full-time job and it’s offered to them, we didn’t have the model that is expecting the huge commission check. I mean, some of these fee structures can be 12 months. So, that’s big. If somebody’s making $70,000 a year, that’s a $70,000 fee that you have to pay. Or let’s say it’s 40% or 50%, $35,000. It’s thousands and thousands of dollars.

And so, it’s punitive to the employee more so than even the employer. Because they say, “Look, we’re going to keep you on temp for nine months until this runs out, then we’re going to offer you something. But by the way, you don’t get any benefits. You don’t get your stock options. You don’t get any of the internal employee benefits. So, you’re going to be working here as a contractor without any benefits for nine months because we don’t want to pay 50% of your salary as a fee.” And it just feels to me like there’s a better way, but we’re doing it differently.

William Tincup: 17:01 Well, there’s a dirty… You almost want to take a shower after you hear them all. It’s like, that just feels dirty. I just feel dirty after hearing all of that. First of all, I love the… I talked to a gentleman earlier today, and he does his staffing. It’s a pure staffing play, but it’s just for maritime logistics.

Michael Zalle: 17:29 Yeah. Okay. Great.

William Tincup: 17:29 And I told him, I’m like, “I absolutely love this play because it is laser focused. You know everybody in the industry. Everybody in the industry knows you.”

Michael Zalle: 17:39 Yep.

William Tincup: 17:40 And so, this is something similar in the sense of taking safety professionals that have accumulated these skills through all of these experiences, worldwide lifetime experiences, and basically saying there’s a better way to interact with these folks. Here they are. And now how would you like to interact with them? If it’s full time, okay, well, that’s great. If it’s a project or consulting, great, fantastic. It’s temp and you want to do a bit, great, fantastic. But what I love about is what typically in our world what we call talent community.

Michael Zalle: 18:19 Yes.

William Tincup: 18:20 And so our talent pool, talent community, they get used interchangeably. But it’s like Stack Overflow for technologists or GitHub for technologists.

Michael Zalle: 18:30 Yeah. Yeah.

William Tincup: 18:30 Similar to that concept of you’re putting these people together and then saying, okay, now what we’ve got is a wonderful community for you to interact with if you’re looking for this talent, very, very specific talent.

Michael Zalle: 18:46 Plus, it’s so interesting because I was thinking. I actually in a discussion like this earlier, and it was actually on an insurance podcast because we do a lot of work with insurance companies. And I was trying to give an example, because everybody thinks that we’re so specialized and we’re such a unique niche.

And I said to them, I said, “Okay, let’s take a traditional retail tire shop, and let’s look at that from an example perspective. Okay, you’ve got general public coming in, so you have slip, trip, and fall. You have general safety that you need to keep in place, policies around people can go in the back or they can’t go in the back. You need to make sure that the general public is safe.

Then you have lifting risks. So, you’re going to do ergonomics because people hurt their backs all the time. You’ve got high pressured equipment. And so, you’ve got people that are doing what they call lockout tagout, which is essentially when you’re doing maintenance on equipment, you need to make sure that you lock it out so that somebody doesn’t go and flip a switch and electrocute Johnny down there. So, you’ve got the lockout tagout mechanisms that are going on.

Then you have ergonomics and you have that. Most places do oil changes. Well, if you’re doing an oil change, you now have oil that’s coming out, so you have hazardous materials. And then you have hazardous material distribution or disbursement. And how do you manage that? This is a three-man tire shop that I’ve just brought in five or six different specialties.

William Tincup: 20:19 Yep.

Michael Zalle: 20:20 And you knowhow much budget they have for a full-time safety person if they could find somebody who could do all of this? Zero.

William Tincup: 20:26 Zero.

Michael Zalle: 20:28 Zero. They don’t have the money for it. But they have the need. They have the need.

William Tincup: 20:35 In some places it’s not just the need, it’s compliance. There’s laws regulated some of this, like with hazardous material. I think the way that some of those folks would, if it’s like let’s say a brand and there’s a region. So, then there’s like you did earlier with Safety Todd. So, now Safety Todd has 180 stores that Safety Todd has to run through. How’s that ever going to work? Like, come on. You put a Band-Aid on it, but it’s a cut the size of the Grand Canyon, so good luck with that.

Michael Zalle: 21:15 Yeah, my belief in our model is that I never want to replace anybody who’s a full-time employee.

William Tincup: 21:22 Right.

Michael Zalle: 21:23 I want to make them into air traffic control where the person who is running their environmental health and safety programs understands what they need, because that’s the most important piece. So, I know I need a hazardous materials plan. I know I need ergonomics. I know I need this. Now how do I access the best person for that particular job and that location?

And that’s where they go to YellowBird and they say, “Okay, I’m going to have somebody come out there for two days and do forklift training. Forklift training is the most ubiquitous, scary, dangerous need that America has. I can’t tell you how many people get killed or injured from forklifts every year because they don’t have proper forklift training.

William Tincup: 22:06 I can give some firsthand experience because I drove a forklift for an entire summer when I was like 16, maybe 15. And let’s just say that mistakes were made. We’ll just leave it at that.

Michael Zalle: 22:19 Yeah.

William Tincup: 22:20 So, let me ask you a quick question, just kind of a non sequitur, but I know the audience is going to be interested in…

Michael Zalle: 22:26 Sure.

William Tincup: 22:30 On both sides of your marketplace, how do you find new safety professionals? And also, how do you find clients that need safety professionals?

Michael Zalle: 22:40 It’s the number one question that I get asked. And the good news is, and this is where I do agree that you’re right. In the industry, there are specific organizations that focus around environmental health and safety, and then there’s subsets. So, as an example, if you’re an industrial hygienist, you’re doing with airborne particulates like asbestos in the air or dust or things like that. Right? Bloodborne pathogens. It’s all these weird nuanced stuff.

But there’s an industrial hygiene association. It’s called a AIHA. In safety, there’s BCSP, which is an association which is the Board of Certified Safety Professionals. There’s all these various associations. And then there’s subgroups. So, when you start to know the ecosystem and the industry, you know how to advertise in the right places, you know how to be at the right shows. It gets real small real quickly.

William Tincup: 23:38 Right.

Michael Zalle: 23:39 So, that’s the main way that we find… We add between 100 and 150 applications a week right now to the platform. Yeah. It doesn’t mean that they’re all approved because, to be honest, we are very discerning. We look for soft skills. We look for capabilities. We look for honestly, did they show up on time and were they courteous and were they professional? Were they prepared? Because if I’m going to put somebody out under the YellowBird umbrella, we want to make sure that the end customer’s going to have a great experience.

William Tincup: 24:10 Dumb question. Do you do background checks?

Michael Zalle: 24:14 We do.

William Tincup: 24:15 Yeah.

Michael Zalle: 24:15 We do. Yeah.

William Tincup: 24:16 I was going to say. With safety, you almost have to.

Michael Zalle: 24:18 Yeah, we do. And we’re pretty open because we do believe in second chances. And so, there are people who have had felonies and misdemeanors and so forth. We have certain lines we do not cross, and you could probably imagine what those are.

William Tincup: 24:34 Yeah. In this Dateline episode… Yep, got it.

Michael Zalle: 24:37 Yep, yep. So, there are certain things that I don’t care if it was 10 years ago.

William Tincup: 24:42 Right.

Michael Zalle: 24:43 If you’re perceived as a child predator, you are not going to be on our platform.

William Tincup: 24:47 At all.

Michael Zalle: 24:48 At all, period. And we have a right to do that. There have been people who say, “Look, everybody deserves second chances,” and I don’t disagree with that. But it’s too much of a risk for us to take that on.

William Tincup: 25:01 Again, you’re dealing with safety, which is tethered to risk.

Michael Zalle: 25:05 Yes. Yes.

William Tincup: 25:06 You can’t increase your client’s risk. You’re trying to diminish their risk by bringing in expertise.

Michael Zalle: 25:13 Correct. Absolutely.

William Tincup: 25:15 So, I mean, the algebra doesn’t work. I know you got to get on to the next thing. So, last question. A year from now when we have this conversation, what’s different about YellowBird?

Michael Zalle: 25:27 A year from now, we will have a subscription plan for HR. And that is super exciting. It’s going to be a platform that allows for the general small industry HR, and large industry, bit small industry specifically HR people to have a phone a friend on speed dial where you can call in and say, “Look, we just got a notification of complaint from an ex-employee that they wrote a letter to OSHA. What do we do?”

William Tincup: 25:57 Right.

Michael Zalle: 25:58 “Or we just had somebody get injured on a site, and we made a claim to our insurance company. But what can we do to prepare for any investigation that we may have? We need to do training three times, four times a year, every quarter. Do you have a subscription plan around quarterly training?” Which the answer will be yes.

So, that’s where we’ll be a year from now is we’re going to have that level of service that allows for an arsenal of, at that point, we should be 2,000 to 3,000 professionals available on demand. That’s at a much more reasonable cost than having to pay an average salary of… I think the industry pays about $87,000 or $90,000 a year on average for a safety professional.

William Tincup: 26:46 I love it. I absolutely love what you’ve built and what you’re building. And I very much appreciate… Michael, I appreciate your time and educating our audience.

Michael Zalle: 26:57 Oh, thank you so much for letting me come on. Appreciate it.

William Tincup: 26:59 Absolutely. Absolutely. And thanks, everyone, for listening to the Use Case Podcast. Until next time.

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