The Business of Being Unemployed – Transcript

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Adriel0:05Unemployed people do have a lot of money to spend, hundreds or thousands of dollars, and plenty of examples of how they spent them on partners through us. But the one thing they need before they spend that money, is they have a high bar of trust. They're pretty vulnerable. There's a lot of scammy things out there. If you're going to charge them, they've got to really, really trust you.
Marc0:27Hey everyone, I'm Marc Randolph and welcome to That Will Never Work. I've been an entrepreneur for a long time. Netflix, which I co-founded, it was actually my fifth startup and since leaving there, I've had the opportunity to work with scores of early stage companies and talked to thousands of aspiring entrepreneurs from all over the world.
Marc0:46On this podcast, I speak with folks who are at every stage of building their own businesses, whether they're leaping from side hustle to self-employed or are already generating revenue and ready to take things to the next level. My goal is to draw out their biggest challenges and then try to nudge them a little further down the path toward realizing their dreams. If you've been told That Will Never Work as much as I have, you've come to the right place. Together we'll prove the naysayers wrong.
Marc1:16Even in 2019, considered by many to be one of the best economic years in American history, 22 million people were laid off. Today's guest Adriel was already thinking about a service to help unemployed people save money and expand their network. Then COVID hit and Adriel lost his job, giving him a newfound empathy for the unemployed and freeing him up to dive into his new company Riveter. Now with a tiny team and minimal funding Adriel is quickly ramping up, powered by a free to the unemployed model. The question is how can he build his customer base and challenge the entrenched players already providing outplacement services to major companies? Listen in to hear my advice to Adriel.
Marc2:07So, Adriel, thank you so much for joining me today. I think what I love to do is just start by having you tell us a little bit about what you're up to.
Adriel2:18Sure. So about last year, started thinking a lot about unemployment. I was working at a self-driving car company. The robots are coming. They're taking all the jobs, that whole usual spiel. And I started remembering last time I was unemployed thinking about how I was a lot more than somebody who needed a job, someone who spent a lot of time and money on my education. I took classes. I spent a lot of time on fitness. I worked out more than ever and meditated a lot. I traveled and it was a lot of fun because I had all that time.
Adriel2:44So I was thinking about, "Well, shouldn't unemployed people be able to do that more?" Early this year started kind of working on that idea. How can we save unemployed people money? How can we help them sort of explore the positives of unemployment? Then right as we started building, COVID hit. And I was like, "Well, good a time as any." We started building. Two weeks later, I got laid off myself from the self-driving car company for all the irony. And so since then, I've been building Riveter which helps unemployed people save money and spend their time better.
Marc3:12So this is essentially a service for people who have lost their jobs.
Adriel3:16Yup.
Marc3:17That's got to be a challenging thing, trying to sell a service to someone who doesn't have any money now.
Adriel3:22We've played around with a bunch of business models, looking for how this works. We started with outplacement, and I think we'll talk a little more about that, but outplacement is basically when a company does a lay off, they might pay between $750 and $15,000 per person that they laid off for a career coach, resume writer, things like that. So, we started trying to break into that. That didn't work for a bunch of reasons. Then we started partnering with outplacement firms. Didn't really work. Started charging unemployed people directly didn't really work. Did a freemium model, didn't really work.
Adriel3:54And then what we started doing in early October that did start to work is we actually became free for unemployed people and sponsored by advertisers where advertisers: fitness companies, education companies, career companies, things like resume writers, career coaches actually want to pay to get in front of unemployed people because they know either those people do spend to actually, a surprising amount of money.
Adriel4:17If you're unemployed, we've got one user Kathleen. She came to us and spent $250 on a resume rewrite, which is normally 320, but we saved her money. Then she spent another $80 on a career coach, which is normally a hundred, then we saved her money. Then she spent another seven bucks a month on a fitness app, which is normally 14 bucks a month, but we saved her money all through us. So, advertisers are paying to reach them and actually unemployed people do spend more money than you might expect, which is I guess, the counterintuitive part of the business
Marc4:47That certainly is the counterintuitive because I was actually kind of joking about the fact how hard it would be to sell a service to someone unemployed but, in fact, there's a lot of people who want to sell services to people who are unemployed.
Adriel5:00I mean the career coaching business is $16 billion, not that all of them are unemployed, but it's big. Resume writing is a majority unemployed and that's hundreds of billions of dollars spent a year on that. I think the big thing that we struggled with months ago when we were young, when we tried charging people directly for what we had, is unemployed people do have a lot of money to spend hundreds or thousands of dollars and plenty of examples of how they spent them on partners through us.
Adriel5:25But the one thing they need before they spend that money is they have a high bar of trust. They're pretty vulnerable. There's a lot of scammy things out there. And, so, if you're going to charge them, they've got to really, really trust you. When we tried to charge them four months ago, they didn't really trust us yet and we're getting more trustworthy so I think we can move in that direction. One of the things I'm sure we'll talk about is which business model to really double down on.
Marc5:51Well, the other thing that kind of strikes me about this story is the fact that you tried all those different approaches to figure out what the right business model was. I kind of lost count there, but five or six different-
Adriel6:04Five, yeah.
Marc6:05... approaches. And how did you think about how much time to give each of them?
Adriel6:09So, the first one we started with is with outplacements. It's a big industry, it exists, and we were doing it in a slightly new way. And on that one, we probably spent three or four months before we pivoted away from that and that's because we thought it could really work and we knew that we were doing something special there because when we talked to users who had outplacement services, they weren't happy but then they came to Riveter with all our free stuff and they were like, "This is so cool. I wish my company just told me about this." So we knew we were doing something special. That's why we kind of stuck to it.
Adriel6:41But I think there was really two things we learned about outplacements that made us fail in that: that the buyer, the Head of HR, cares about really two things. The first is what do they know about you? The trust is the same thing. It's a very relationship based thing. The big outplacement firms have been around for 40 years and just kind of serving the same folks and they all go to the same conferences. So, we got to build that brand better.
Adriel7:05And the second is they're not really looking for innovation for the sake of innovation. It's not that kind of buyer. They're looking for security. They want to make sure they're not going to get sued by the employee and they want to make sure that they're not going to get written up on Glassdoor in a negative way. Until we are able to prove those two things, like we were really able to build a connection with the HR world and they knew more about us and could trust us, and two, we could really prove that, "Hey, if you give your employee Riveter they're not going to sue you and they're not going to disparage your on Glassdoor." It didn't work.
Adriel7:36So, we pivoted away from that. Then we tried to partner with outplacement firms and we got a bunch of first phone calls where we were like, "Hey, why don't you charge your clients extra to give Riveter on top of it?" And we got the phone calls, which was really promising, but then five out of five said no and they all said no for the same reason which was their clients aren't looking to pay more for innovation, they're looking for something reliable. So we moved away from that.
Adriel7:57And over time I think, Marc, what we settled on is to say, "Hey, all right. We're doing something really special for unemployed people. Something that's never been done before. So let's stop putting all these barriers in between us and our users. Let's get as close as possible to them and build as much as we can for them and then we'll be able to make other ways of monetization either by moving back into outplacement when we've built that service or by finding a little bit of success with advertising." And so it was only in early October that we actually became free for users. Our user growth has tripled since then. We actually have advertising dollars that have come in. So, the growth has finally happened but I think most importantly, the thing I'm happiest about is, I've gotten really, really close to hundreds of unemployed people through this because I removed all the barriers.
Marc8:45Wow. That's pretty impressive. So tell me who was we?
Adriel8:48My fianc̩e likes to say, "I use the royal we way too often," but in this case, there actually is a we. I have myself, my co-founder and CTO is Andrew. He and I worked at a self-driving car company together. He was the Head of Engineering. I was the Head of Sales. So, we worked a lot together, really loved working together, and then we have a wonderful part-time designer out of Spain who works with us. So the three of us.
Marc9:08And you're entirely self-funded at this point?
Adriel9:11We haven't tried to raise any money actively but when good opportunities have come up, we're taking them. So we have raised $85,000 from friends and family. A friend texted me two weeks ago said, "Hey, I like what you're working on. Can I give you some money?" And it's I guy respected for, now eight, nine years, and it meant the world that he said that. So it came in and I was happy about that but we are funded in that way. We haven't paid ourselves a dime. So, neither Andrew and I have taken a penny in income. We've paid the designer, paid for some marketing stuff, hosting, things like that. So we still have most of the money because until we can really spend it on engineering and marketing in a bigger way, we're sort of being cautious with our spending.
Marc9:52And how are you finding unemployed people?
Adriel9:55There's two things that we're doing now. And I think there's things that we need to continue to do better. The way people find us now, the first is referrals. So unemployed people are really, really loud consumers. They're very vocal on LinkedIn. They network constantly and they have these micro networks, these Slack groups of, "Hey, the hundred of us got laid off from the same company," or "Hey, we're unemployed, job-seeking designers in Philadelphia." So they have these groups and they're really loud and talk a lot and a lot of them refer Riveter. We just launched the referral program two weeks ago and we just had our first person earlier this morning hit five referrals and dozen other people have made referrals with our link as well.
Adriel10:36The other way is we're actually catching them at the very, very beginning of unemployment and this is kind of what we need to do better too. 20 million people lose their jobs every year. About 10 million of them are granted unemployment benefits, which means about 15 million apply because there's a whole contingent of people who aren't granted them. So, we put up all these tools to apply for unemployment, to make unemployment applications easier, figure out if you're going to qualify, and so people find us for that and then they dive into the rest of our resources.
Adriel11:03But I think that's really what we need to do a lot better job of. That moment where somebody transitions, we got to capture them. So, maybe somebody finishes a bootcamp and then they're going to be unemployed and looking for a job for two months after that bootcamp, we got to capture them the moment the bootcamp is done, the moment a college senior graduates and doesn't have a job coming out of college. We got to capture them. The moment somebody gets laid off, maybe we're not able to come in as the outplacement service, but if we're able to find out through a war notice...
Adriel11:35Today, actually I was emailing with someone. 136 people at a seafood chain in California all got laid off last week. So I emailed the Head of HR at that seafood chain and said, "Hey. I know you did this lay off. I know that really stinks. You're probably still in communication with some of your old friends. Here's a free resource for them all to apply for unemployment. Will you send that around?" And hopefully word gets around. So we're kind of running some of those experiments.
Marc11:58Yeah. So, I have obviously a bunch of questions, like going a whole bunch of different directions. What do you want to talk about today?
Adriel12:04There were three things that I wrote down, Marc. The first is with one engineer, there's always a battle of what are we going to build next? And so wanted to just brainstorm that a little bit. The second was how to leverage the moment in a bigger way, all of a sudden everyone's talking about unemployment and they have been for a little bit and I feel like we're not doing a good enough job of taking advantage of that. And then the third is this transition that we want to make into being an outplacement firm over time. We're making some money through advertising right now but advertising is not like the business. We're not building an ad tech company. So I wanted to talk more about we're going to start raising money hopefully in January for the first time, how to talk about that transition we've got to make of, "Hey, advertising is paying a few bills right now but outplacement is where the bigger business is." So those three things, kind of, product development, leveraging the moment in a bigger way, and the transition of this business model.
Marc12:55Okay. That sounds great. We can certainly jump into that in just a minute. Tell me about your thinking about COVID and its impact on the number of layoffs and to what degree you're concerned about what the world looks like in six months or 12 months.
Adriel13:10Sure. Important thing to note, in 2019, one of the best economic years in America by most measures, 22 million people were laid off. And 40% of them, so something like eight or nine million people, were actually unemployed for over four months. What COVID did was make a huge swell of the number of unemployed people to 55 or 60 million people who have lost their jobs at some point. But I think even more importantly for the business, sadly for the people, more importantly for the business, the duration that they're going to be unemployed is longer.
Adriel13:49It's taking longer to find jobs. We have a user who has been unemployed for over two years now. He's a legit guy. He was a director at CBS. First he traveled the world for a little bit. Then he took a break, took care of someone's health. Then he started getting into the job market again in early January this year and COVID basically shut him out of it.
Adriel14:07So, I think what COVID did is to say there's more unemployed people, they're unemployed for longer, and companies are now going to go through a multi-year phase of staying lean and of investing in robotics and automation, doubling down on less touch with people and I think that's just going to mean more people annually, per annum, lose their jobs and, again, stay unemployed for longer.
Marc14:34Interesting. Yeah, I kind of suspected that would be the case. Initially, when I heard about what you were doing, I was thinking, "This is crazy. It's a COVID thing and it's all going to blow over," and then your business goes away. But I think, you've shared with me some of the numbers about how many people get laid off every year and then, kind of more importantly, the number of dollars that are spent on the outplacement services was astounding to me. Just the fact that companies are willing to invest that much to avoid bad word of mouth, to avoid the bad reviews on Glassdoor, to avoid being sued and they're certainly is a business to take care of that.
Marc15:08Let's dig into that a little bit since I think that's a fundamental decision that will impact the other things I think that you are curious about. For example, customer acquisition and being more aggressive about customer acquisition, more clever about customer acquisition, is going to depend a lot on who your customer is and you're kind of in an interesting position. There's a bunch of different possible customers. I mean, certainly, there is the obvious customer which is the unemployed individual because without that the advertising doesn't work. Then there is the advertisers are customers in that you're actively selling to them as a great place for them to connect with the unemployed. But the third thing you mentioned, which was the possibility of transitioning your business model and to being outplacement, that creates a whole different customer, which are the corporations or the companies and in the event you're successful in the third one, unless I misunderstand this, it'll make the other two problems go away.
Adriel16:12It will but I also think that there's something really special about... If you get an outplacement service what happens is this, "Marc, I'm sorry. You're fired or you're laid off. We're cutting the business. By the way we got you one of these outplacement services. It was really expensive. You know, we paid $5,000 for you. Please tell your friends that Adriel Incorporated is a great place to work." And what you're going to get is you're going to get a coach who calls you and says, "Hey, Marc. Sorry about that. My name is Joe from LHH. Let's see your resume. Let's talk every other week and do some career coaching."
Adriel16:46What you don't get, that's super, super important, is any network or any community. And when you're unemployed, you are desperate for community because you've lost your whole social circle of work, you need people to talk to, to engage with, to bounce ideas off of, and you need network because network is what's going to get you that next job. So the reason I kind of pushed back a little bit about, "Does the problem go away," is because I think if we're going to do outplacement, we're going to do it differently.
Adriel17:13Where we're going to say, "Hey, Marc. Your company got you an outplacement service. Let's write your resume. Let's do the career coaching thing but also join this incredible community of thousands of unemployed people who didn't get outplacement services because they just didn't work at a certain company, not at a certain level, whatever, didn't get outplacement services but had a lot to contribute to both your kind of community and your network." So I think we'll still need to acquire tons of unemployed people who didn't get outplacement services in order to make our outplacement services truly special.
Marc17:45Do you really believe that that community is the core differentiator for you to be an effective outplacement service?
Adriel17:51It surprised me in a big way and I wouldn't have said yes a few months ago, but I really believe that now. If you come to one of our events, you have an 80% chance of coming back to another one of our events. The people who come to our events, every single one of them connects with every single one of them on LinkedIn and helps each other out afterwards. It's different. You can only write a resume in so many ways. Your career coaching can only be so good. I think the community is very different and it's something, at least, I see our users respond better to than I would have imagined.
Marc18:21Do you envision the outplacement being the dominant source of revenue at some point in the future?
Adriel18:27That I think so, yeah. I sense a little doubts in you, Marc.
Marc18:31No, what you're sensing is me trying to sort out to what degree I believe you, so there's that, but the other one is I'm trying to sort out where the acquisition of non-paying unemployed falls in the hierarchy of importance. Okay, if what you're saying is that the dominant reason why our outplacement service is going to be more effective, we're competing for that business. When we're competing to be General Motors outplacement company of record, is the fact that we have this community of other people? Yes, you're right. You do need that.
Marc19:09I'm trying to figure out whether it's a need or a want, whether it's a nice to have or a must have, because I kind of suspect you are not necessarily in the position yet where you guys can afford to spend a lot of time on the nice to haves and, the other one is, to what degree is there a critical mass? With advertising your revenue is pretty much linear to the size of your community because it's on some version of a cost per thousand basis or the cost per click converts. It's related very much to how many people are there.
Marc19:41But something which becomes a checklist item, in other words, we have all these values we deliver, which is discounts, blah, blah, blah, whatever the whole list of items that you would deliver as an outplacement service and one of the check boxes is, and you'll be part of this great community of people who are all in the same boat. Where in the hierarchy is that checklist of the other ones and how big does that audience really have to be in order for that to be delivered effectively? You know better than I do, way better, because you're so deep in it. My gut is that it's probably not in the top ones.
Marc20:17It comes back to who the customer is. It may, in fact, be the top one that the person who is using your service says, "That was the best part of being part of Riveter." But the person who would have to say it was one of the most important parts of being Riveter would be General Motors or whoever it is that ultimately you're competing with to get the business. And they in fact may go, "No, that's really nice but the thing that we liked the most about this is something else."
Adriel20:46That's fair point. Who the buyer is makes the difference. There's one other aspects and yeah, you can't have two priorities otherwise you have no priorities, but I guess the other components having just a lot of people in addition to the actual community is the fact that if we have a lot of unemployed people on the platform, some who came through outplacement, some who came through other places, we have better negotiating leverage for these discounts that we're able to put together.
Adriel21:13We're able to go to Starbucks and say, "Hey, I've got a million unemployed people." Starbucks doesn't care that 10,000 of them came from outplacements and the rest of them came for free. "I've got a million unemployed people, Starbucks, unemployed people drink a lot of coffee. Will you please give a free latte a week to our users?" And they'll only say yes, if we have a lot of people.
Adriel21:35So, maybe community is one aspect but I think volume matters both for the community but also for negotiation. And if you're an outplacement firm, I think what I learned in our first experiment is that we can't shock the buyer with our innovation. We can't be like, "Oh my God. Come give your employees our outplacement because they get 50% off of Starbucks." They're going to be like, "Well, I'm just going to go with the resume thing because it's tried, true. I won't get sued and they won't disparage me on Glassdoor."
Adriel22:04I think you're right that the buyer is Macy's or GM or some Head of HR somewhere and if they're going to spend $2,500 on someone, the way it works is usually they'll have to put out an RFP. They'll have to talk to three different outplacement providers and they'll just kind of compare them all and not that price sensitive because if you get sued, it's a big problem and if you have a bad Glassdoor review it's a big problem. They're going to compare you all. And I think if we hit the baseline of like, "Look, here's a hundred reviews of great resumes that we've reviewed and here's a hundred reviews of our career coaching because our career coaches," we hired some really amazing career coaches. Then we're pretty much on par with a lot of other outplacement services but the volume of unemployed people that we have, it means I can also say, and your people are going to not give a bad Glassdoor review because immediately they're going to get a free latte from Starbucks that we negotiated and they're going to have this amazing community. So, I guess that's to say volume matters anyway.
Marc23:03Okay. Let's accept that as a given. Then maybe, as a suggestion, maybe you do with outplacement the exact same you did for the unemployed. You should do it for free. And you start with anything up to X is free and you approach all these companies because if General Motors says, "I'm only laying off 50 people." That's a small layoff. That's just a tiny lay off in a huge company which definitely has the resources. It has entire staffs who are dedicated to managing layoffs. What might be an interesting market is the long tail of small and medium business in America, which also is laying off people, but they're laying them off in fours and fives and tens and twenties and for them, they have no experience in this or less experience. They certainly don't have the resources to put out an RFP for a proposal. They don't even know who to call.
Marc23:58Maybe you become the freemium version of this. Now in the short run that doesn't help your revenue problem except for the fact that it is a way, if you can begin driving this in some relatively aggressive way, it will drive more and more people being fed into you via the small and medium businesses doing layoffs. But it also is going to give you this huge piece of experience in being a outplacement for real agency for real. Doing it for hundreds, if not thousands of small and medium businesses and maybe in some sort of semi-automated way or some sort of low touch way so you can actually afford to do it for free.
Marc24:39:00But then that allows you to begin moving yourself upstream or doing some sort of freemium for them. Where you go, "These services are part of our free service for helping you lay people off. And listen, if you want this one, yes, it's going to be $2,500 per." There's a higher level they can opt into. But again, since your objective in the short run is generating a huge network of people who are unemployed to feed your advertising business to begin building this community, that could be a way of incrementing your way into it that kills two birds with one stone.
Marc25:16:00And becoming the low end version actually could be an interesting position that you work your way up from rather than trying to break in where General Motors, and I'm sorry to keep using those you'll probably have a better example than I do for who to use, but they are the ones who the cost to us of a mistake is huge and you overcoming that will take a long time. You're going to have to find the more progressive minded companies but screw it. That's too hard.
Marc25:48:00Start at a place where they can't use those big services. The big services don't want them because they can't afford to pay that much because it's all too much handholding and you can provide some kind of freebie or freemium to them that might kill two birds with one stone.
Adriel26:02:00I think that's actually an awesome idea. One of the thoughts we had a while back was how do we do this for startups. Startups fail all the time and some of them are just two people who go out of work. Some of them are 20 people or a hundred people who go out of business because they run out of funding. And I think that community is one we can really tap into because I think a lot of our resources right now are a little more like nice to have, white collary things. It's fitness. It's meditation. It's therapy. Things like that. It's not a bus ticket.
Adriel26:31:00So the thought was, "Hey, if we can get a startup that's run out of money and closed and say something like what you just said, that gives us the experience and the credibility." Small businesses close every day. There's always a restaurant that goes out of work or something like that, a mom and pop shop that closes down, COVID or not. One of the challenges of long tail is how do you reach those smaller groups in an effective way? What are some ways that we might be able to reach either closing small businesses, closing startups, whatever with those messages?
Marc27:00:00I'm not a debate expert about this by any means, but there's a lot of organizations whose business is providing services to small and medium businesses, Chamber of Commerce immediately comes to mind. Chamber of Commerce knows every single small and medium business in their geography. They're always looking for new ways to support the small and medium businesses in their geography and knowing that this is yet one very, very powerful service that they can help offer or refer or make their network of businesses aware exists could be a very, very powerful thing. So that's one. Another one could be banks which have very, very large numbers of small, medium businesses. They're also looking to support and especially being able to refer people to a certain risk which will not cost the small and medium business anything, could be powerful.
Marc27:49:00When you mentioned startups, I was going a different direction and I'm saying, "Interacting with VCs could be an interesting category as something, a service that you're willing to provide any of their portfolio companies," which is not necessarily a bad thing, or having them actually know more about who you are, which might come in handy at some point. But again, these are always, if you're trying to get out and provide this when you're thinking about how to reach people who aren't being referred to you in through a company who you're providing, if you decide to go down the route of providing a free outplacement service for these small, medium businesses, you can position yourself now as not just a domain expert or a credible source to talk about how to deal with being unemployed. You can become a resource for talking about how do businesses deal with laying people off, which again gets you visibility in a public relations sense, in a content sense, but also begins introducing you as someone who actually knows that category which begins chipping away at the, "Who are these guys?" when you begin wanting to move upscale.
Marc28:54:00But I would suspect that before you moved upscale, before you actively said, "We're going to start dealing now with 1,000 seat companies rather than a a 100 seat companies or 10,000 rather than 1,000," I think you're probably going to end up going premium to the small and medium businesses first as a revenue model. And all those things, in two or three years, will eventually lead you.
Marc29:12:00And in fact, it might even be a way to demonstrate that there's a natural progression of lead to paying customer that you can use when it is time for fundraising as a way of demonstrating you really understand how to acquire customers and how to eventually monetize them. I suspect that number will be large enough if you can build this big community of the small medium businesses and if you have to backfill, your PR does that.
Adriel29:36:00Yeah. I think a couple of these things, we actually tried a few months ago-
Marc29:39:00Dammit.
Adriel29:39:00And they didn't work. No.
Marc29:41:00I hate that.
Adriel29:42:00They didn't work, but also, I think that's not because they're bad ideas. I think that's because I'm smarter today than I was four months ago and can speak to it better. We tried the Chamber of Commerce route. I actually thought that was brilliant. It made perfect sense to me. But we were trying to ask the Chamber of Commerce if they'll just share this or even pay to distribute this resource, what we should probably try is just reach out to a Chamber of Commerce in a struggling town, say, "Hey. Can we pay 500 bucks to advertise the service to all of your businesses?" And they'll say, "Yes, please." Always looking for a way to make some money. And then we'll see if we get one or 10 or 20 companies to actually use it within a certain period.
Adriel30:21:00And same thing with VCs, I reached out just to some VC friends and said, "Hey, do you talk to businesses that go out of business?" And they said, "Well, to be honest, once a business is at such a bad point, we've kind of moved away to started focused on the good ones," but if it can maintain a good relationship with the CEO or just because it's the right thing to do for a company to support, just to say, "Hey," send them an email, say, "Hey, sorry you're going out of business. We partnered with Riveter and they'll actually give you all these nice perks for free or something," is definitely something that we can do with a little more confidence and when I was thinking, "All right. We're going to get into outplacement in six or eight months," my thought was always, "Man, we're going to have to compete with these big outplacement firms in six to eight months and go on RFPs against them."
Adriel31:04:00But I think you're right. The innovation here, the business model innovation here is that it could be so easy for a small or medium business to do something that they would never be able to imagine doing for their employees with one of the big outplacement firms. That we can start there, build up credibility, build up revenue, build up resources, build of everything, and then two years, three years be in a position where we can match up in any RFP and just have a better chance at minimizing the risk of that of GM, which actually is a better example than you might think in a big way. This whole business was inspired by the closing of a General Motors factory plant and the New York Times coverage of it, but separate story.
Marc31:46:00Yeah, it really is, in a way, kind of a Squarespace story at first where you're basically providing a tool to do something at an economical way, in your case free, that normally they'd have to pay a lot of money for, and that you can probably provide 90% of the service at a fraction of the cost, zero in some cases, but you might even tier it different.
Marc32:10:00It'll be really interesting to begin entering that market because of how close it is to what you're doing and part of the measurement for whether this is successful or not is going back to the thing, which I'll now accept, which is that it really has to meaningfully contribute more volume to the mass of unemployed workers you're servicing in order to establish that community that you're looking for. And hopefully it could do both things. Get you on a path for being a true outplacement service company to large corporate clients as well as having this being the largest community of currently out of work employees in the world.
Adriel32:43:00We started as an outplacement and then we slowly made our way towards this, call it direct to consumer outplacement. One thing we had to navigate was that when we were making that transition and we were like, "We have the outplacement thing but also anybody can join for free." We had a For Business tab up on the thing as many companies do and what we found is that so many people clicked on the For Business tab and basically just, I don't know, got nervous, got distracted, didn't like the messaging, got offended. They're like, "Oh, I'm unemployed. This person is trying to bite off more than they can chew."
Adriel33:18:00So we need to be very tactful. Learning from that experience, we need to be tactful. Our blog too. Our blog had: here's how to look for a job. Here's how to be unemployed. Here's how file for benefits. And it had: here's how to lay off your employee. Here's how to have a firing conversation. And I got feedback from a user that was like, "I get it. You're trying to do it all but like that really hurts my feelings where you're coaching people about how to do a layoff." So I think if we're going to go that route, which is the correct route, it's going to be a challenge. We're going to need to very gracefully manage the fact that I don't want to be offensive or distracting towards our unemployed people. Folks just coming our way.
Marc33:59:00But that's as much a branding challenge as it is a user experience challenge.
Adriel34:03:00Yeah.
Marc34:04:00Because these really can be two separately branded companies that are just related to each other. In other words, it's not like an unemployed person availing themselves of your services is going to then go, "Oh, this is awesome. I'm going to also hire you." It's not.
Marc34:23:00They're two different markets and obviously they both live in the same general space but I think you can have one thing one place and one another place and just have them interact with each other.
Adriel34:33:00Yeah, that's a cool thought.
Marc34:35:00But I don't know. I see the complication here and I can understand why that would be tricky, trying to build two platforms, to have two things happening on the same platform, so to speak.
Adriel34:44:00But I think, as with everything, we learned so much going at it the first time totally blind and then it was so infuriating because it just wasn't working, wasn't working, wasn't working, and then backing away from it and saying, "Let's just pause for a minute and just really serve the people we're trying to serve." Now, whatever it is that I'm ready to do more of this long tail and outplacement, or just come back in to outplacement in any capacity, we can take all those lessons: the branding challenges, the sales challenges, the how do you talk about it challenges, the knowledge of the existence of RFPs, any of that kind of stuff and just come at it with a little more grace and tact and confidence.
Marc35:23:00Yeah. The last thing I'll say is that you obviously don't need to plunge into this as you know. You can certainly just say, "Let's see if I can sign up 20 small businesses to use these services and see what happens. I can recruit them by hand if I have to. I can call people up who were unwilling to pay me in the past and say, 'I'll do it for free.'" just to see how many people do you need to have on board to generate any kind of reasonable amount of velocity and volume.
Marc35:49:00You'll learn so much from just doing it. But that's kind of my whole thing here is that we can talk for hours about what might work and what's a good idea or a bad idea but fundamentally you just got to try some stuff and see what happens.
Adriel36:01:00Usually the case.
Marc36:02:00But I think its cool hearing that, obviously, you and I have chatted before and at the time it was just at the beginning. We talked while you were still at the car company and then just a few weeks later I got the email saying, "Well. Now I'm all in." I think it's fantastic to see the fact that you've managed to iterate through these different versions of trying things and have landed on one, which although it may not be the ultimate, you've at least found yourself a stable platform that you can rest on for awhile while you explore this next phase. And I think that's just really, really the perfect start-up story. It's an awesome place to be.
Adriel36:39:00Let's hope it has a happy ending.
Marc36:40:00Oh yeah. It will. And listen, I know everyone's probably telling you that will never work and how can you do a business to people who are unemployed and et cetera, but, listen, plug on because sometimes it actually does work.
Adriel36:51:00And for our listeners, if you haven't read the book That'll Never Work, this is your opportunity to pick up a copy at your local Barnes and Noble.
Marc36:58:00Well, thank you. I couldn't have said that better myself. Well, listen, thanks so much. But one thing I do want to check in with you again at some point and find out what's happening, what totally surprising new direction you've taken it in, what's worked, and what hasn't worked. The follow up is kind of the fun part.
Adriel37:13:00Season two. Let's do it.
Marc37:13:00Season two. Great. Well thanks.
Adriel37:18:00Thank you, Marc.
Marc37:18:00Good luck.
Adriel37:21:00Awesome. That was really fun.
Marc37:26:00Riveter is one of those rare startups that has benefited from the COVID crash. More people unemployed and for longer periods of time and it's impacting companies of every size. That's why I suggested that Adriel think about small businesses, the ones who've generally been priced out of providing outplacement services to their departing employees. Adriel has launched what is literally a recession proof company. The opposite of it actually. And I think he is ambitious and open-minded enough to make it work.
Marc37:56:00But before we go, I'm curious what you thought about Adriel's idea and my advice to him. So, I'd love for you to join me, Adriel, and your other fellow listeners on my website where we'll be discussing this episode. You'll find us congregated at marcrandolph.com/podcasts. Just click on the appropriate episode and scroll to the bottom.
Marc38:20:00And if you want to discuss your business challenges with me, I'd love to hear from you. Just visit me at marcrandolph.com or call me at 1-888-Marc-pod. That's 1-888-627-2763 and together we'll figure out your best next steps.
Marc38:42:00In the meantime, if a 30 minute podcast is too much for you, you can check out my short form ramblings on Twitter @MBRandolph or see them all prettied up on Instagram @thatwillneverwork. You can also follow me on LinkedIn, Clubhouse, TikTok, Facebook, and YouTube but I'll leave it to you to figure out how. Thanks again for listening. I've got a bunch of great new shows coming up, so if you're new to this podcast, don't forget to follow me so that you don't miss an episode.
Marc39:14:00Either way, if you like the podcast, don't forget to smash that like button and leave a review at Apple podcasts. If you didn't, well, thanks for listening to How I Built This. No, I'm kidding. I'm kidding. This is the That Will Never Work podcast. Thanks again. And I'll see you next time.