March 27, 2023
Dualta Doherty

LOXO's Product Expansion & Matt Chambers' Recruitment Insights

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Thank you for listening to the Recruiter Startup Podcast.

Dualta and Matt discussion about Loxo's Product Expantion and Recruitment' Future

Dualta: Okay, welcome to the Recruiter Startup Podcast. I am joined today by Matt Chambers, the CEO of Loxo long time longtime sponsor of the podcast. And we have been working with Matt really since he entered the UK marketplace. So great to finally get you on the show. I know we've talked about doing it for a while.

Can you just give us a bit of an insight into the, the size and scale of Luxo and what it does for recruiters before we jump into everything about Matt?  

Matt: Yeah, thanks so much. Thanks for having me, Dualta. That's great to be part of your show and community and yeah, I'm really excited. Yeah, so Loxo, you know, we're chatting a little bit, but I think a lot of your community, especially over in Europe, might not realize how big lock is, but we're around 60 employees now.

You know, started out at. Beginning of 2022. And so yeah, now we're growing pretty quick. We're hiring like crazy. We'll probably be around 125 employees at the end of this year. And yeah, it's all organic growth. Customer funded, not venture funded, which we're pretty excited about, but that's the, the size and scope of the company.


Dualta: Okay. And it's I, is it for search farms? Is it for, like, how would who, who would be your ideal costume?  

Matt: Yep. our ideal customer our core focus ICP is is agencies professional recruitment. And I think might get into the why and kind of where we're going, but you know, I think that's important.

But our core focus is professional recruitment, and it extends from, well, I'll just kind of share it. We, we built, Intentionally six different platforms. And I think that's something really unique. And, you know, most companies we'll talk about is there never before has been a high tech company ever built for agencies, right?

And they're kind of mom and pop shops that built in a t s and it, it kind of grew organically and there are more sophisticated organizations obviously. But we decided to build different versions because the nuances and recruitment are so different for retain search and executive search, RPO. But our core bread and butter focus is and will always be you know, professional recruitment that focused on direct hire, perm placement you know, at scale.

That's our kind of bread and butter.  

Dualta: How did it begin? Did you come from a staff and background? Did like where, where did, where did the genesis of this start with you?  

Matt: Yeah. You know, we'd be here all day if I gave you the long version. But you know, I've always been entrepreneurial when I was 23, I'd.

I actually left university. I wasn't a cubicle guy. I knew I wasn't, my friends were going to banking and you know, management consulting or whatever. They go, it wasn't me. I didn't, and I didn't know what I wanted to do when I grew up, but I had this intense desire and fire to be successful. I didn't know what that was.

but I started writing a business plan. I wrote a whole traditional business plan. Actually bought a house when I was 23 cause I'd been working since I was 14. And I put it into that com. What, what were you working at at 14? My father was a custom home builder. Come from very humble beginnings. Worked with him right.

Doing custom home building growing up and, you know, put every nickel I had into kind of equities and… So I was fortunate position to be able to purchase a home early, had all my buddies move in and I was gonna, you know, flip the house. But I used this home equity loan to build this business. And I, I had the business.

I checked out, I'm like, oh my God, I have no idea what I'm doing if I fail, lose my house. And thank God I put myself around some SaaS entrepreneurs when SASS was kind of just starting, learned a lot, cut my teeth from there, three different businesses, and I finally got the courage to start my own company and said, You know, I spent, I'm very methodical.

Spent 18 months kind of doing research kind of understanding what market. Started talking to some recruiters. I'm like, wait a second, what software do you use? Because I, the SAS companies I worked with really learned a lot. And then it showed me their platforms. I'm like, you've gotta be kidding me.

These are the systems that you're using. I fell in love, said I was gonna build the apple of recruiting software, but apply machine learning and kind of web 3.0 principles. And that's kind of how we, how we got here.  

Dualta: That's a very concise answer for a very complex problem. It, when, when you were analyzing the, the players out there in the market, how w was Bullhorn?

Like the market leader or, and, and do you, do you have a look at that and think, where, where's the problems here? How can I make this better?  

Matt: Yeah, great question. So, I. I spent 18 months and you asked if I've ever done recruiting. I'm a first principal learner, always have been. I can't solve a problem unless I do it myself.

I spent a lot of time understanding, building a business model, conceptually researching, looking at the landscape, thinking about what's new and novel before I even entered it. Then when I entered it, I spent almost another 18 months. I tried recruiting, wasn't learning fast enough, went direct to an hr director that I knew, got my first search fee.

Struggling had had no clue how to interview nothing. And so then I'm like, I'm not learning quick enough. So I partner with seven search firms in Denver, Colorado in different segments, industry segments. And I started kind of learning from them and what tools to use sourcing from them. And from that, started learning pretty quickly, started making split fees.

I took those split fees and. some early contractors and UX designers, and that's how I started really putting myself in the tech ecosystem that Techstars mm-hmm. Find best in class designers and you know, engineers and kind of built the core Mv mvp and then started try to sell it to people and then kind of go from there.

But you know, that's, that's kind of how we started. How did  

Dualta: you embed yourself in the recruitment community? Get enough sales and traction. How does somebody, like, how does somebody who's not highly connected in this space come up with a conceptual idea, have have six or seven people that you're kind of working with, and then go from that to how many customers have you got at the moment?

Matt: Yeah. Their over 13,000 globally, which is, I used to share this quite a bit, so, and you asked about Bullhorn when we founded The company, I didn't care. I've never done this for the money. I've never, I don't care about being on TechCrunch. What's, what I'm most passionate about is doing the impossible against all odds with an a small elite team.

That's, that's my why. I like doing the impossible, but I'm also just curious and I like to solve problems and I look at the world and I. When I look at how recruitment was done, and I learned about it, I, I realize like this is extremely inefficient. It's very manual, and there's a much better, more, more scalable way to do this.

And it, you could also build gorgeous, elegant, delightful software. And so we had this North star, right? We didn't know what it would necessarily be. We didn't know all the different pillars of the business. Of course, but we never pivoted, never once. My co-founders like, this is remarkable. Most CEOs pivot all the time, or founders we haven't.

As we looked at the l  we started to get into it. It's like, wow, this bar is really high. It's gonna take seven years to build enterprise software to compete with the leaders. Bullhorn. If I would've known, it takes seven years to build enterprise software. No matter how much capital you have, I don't think we would've made it.

Thank God we didn't. And it was brutal, right? Five years in, we had maybe six years, we had 50 customers. People will not switch their plat. You have to be better than bull. It's hard, you know, it's hard. And so 50 customers and now in the last few years we have over 13,000. There's not a single at t s here in the entire world that we're not beating consistent.

We have an 87% win rate. So a a lot is changing. I think it's gonna change really rapidly and I think it's Naloxone's getting really excited. And we've recently did a whole new website update. We are helping the world understand. We believe the future is a talent intelligence platform. An at t s a traditional at t s doesn't do anything.

It's a database, it's a shell. Data goes in there in a black hole. You can't search it, it does nothing. You have to bolt on a a dozen, half dozen different tools to gain efficiencies and be a professional recruiting org. Sourcing tools and drip email tools and contact fine over and over. Right? And we could go on and on about this alone, but that world.

When we built our vision, we built it into one. The market wasn't ready for a talent intelligence platform. It was too, it was too new. It was too big of a leap. Now it is now when every single prospect that we talk to that are recruiting agencies, we say, what do you use or pay for? And they list a laundry list of five to 10 tools and we're like, and they.

This is what are your problems? And paint. I can't stand that. We have to duct tape these all together. We're spending so much money, none of them work. They're not natively integrated. We have to train new team members on every solution. Right. Nobody wants that. And so they're all getting rid of it. They're, and they're moving to Loxo and you know, so we're pretty passionate about this and we're kind of going on it, but yeah, that's part of our.

Dualta: How do you compete with somebody like Bullhorn?

you're, you're not institutionally invested. So they clearly are, and yeah, a, anytime they face a problem, they just buy a company and bolt it on like they recently bought source breaker and they'll probably buy the next thing and it, it must be an incredible. Incredible, like, person to take on that has such a, a market dominance.

What, what's the unique thing that you're gonna try and beat them all?  

Matt: Yeah. And with, I have the greatest respect in the world for Bullhorn and art and the co the competitors that became before us, right? They paved the path and you know, we're, we're grateful that the companies are out there.

Competition makes everyone better. Amazing companies, right?  But it's okay. We have a different view on the world. We would never attack companies head on either because you're not gonna win. But people do not understand, especially in Europe. In the us we have a much bigger brand name. But in Europe, I think people, every time we talk to them, they're like, how have we not heard of you?

How have we not realize this? And they see Naloxone. It's like a mind-blowing epiphany. We do extremely well head-to-head. We do extremely well with Bourne, unbelievably well. It's only only going to continue.. it's only gonna continue. So the future of this market will be a talent intelligence platform, I have no doubt.

Dualta: What's a, what's a talent intelligence platform? Just for anybody who, who maybe like me isn't very technically?

Matt: Yeah. So I, we had an all hands meeting about this yesterday and we do all the time, and it took me a long time to understand this. We're creating a brand new category and in a talent intelligence platform, no one's done this.

And so you can't look around to Bullhorn, you can't look around to industry leaders and say, what is this? Define this. That's up to us. Right? And yeah, Oxo was a smaller company, but we went for it with 13,000 global customers. It works. And why this works and why the market knows, and they validated it. Bullhorn has acquired Inters, or not, sorry, greenhouse acquired.

Interstellar Bullhorn acquired source Breaker, right? They, they keep acquiring Bolt on after Bolt on not just them, but all of these companies that kind of laughed at what we were doing. are now doing the same thing. Same thing is Isems, right? Isems Joint company. Unbelievable. CEO E one of the best out there in the whole market.

They were in ATS and then they tried to acquire Point Solutions and each one was just like what OXO is doing. Yeah. That's what every company is doing because you can't build one of these pillars. It takes it seven years to build. We've built this from day one, so we feel very comfortable competing. The Legacy ATS is, it's not just Bullhorn, right?

Bullhorns got the best brand name in the market, but, and you know, all the, all the players, right? Sure we could go on and on and on and list them. A lot of them vent Cherry just got out of, you know, was acquired by Access. , you know, and I think on that, they, they actually have  

Dualta: moved right beside me here.

I, I haven't met up with them yet, but they're, I'm in Alta and they've the guys who sold Van Sherry are, are just, just down the road. It the interesting piece here from a recruiter's perspective is, you know what, I, I have a small recruitment company, and let me tell you, it's, it's tough taking people in and trying to, getting them using all the tech.

and that, so we try, and Charlotte tries to run a lot of the tech for them, and we we're obviously on locko and it, it, I, I think that's probably my favorite thing is that you've tried to simplify lots of different things in, in a catchall solution. Ha. Do you just, are you just constantly trying to evolve that product or do you have a visualization of where it's going over the next period of time?

Matt: Yeah, I, my brain , I spend a ton of time thinking. I think early on at survival, right? As a startup, you need to survive and then you focus on, you know, early team and then product market fit. And none of this matters. But when you reach a certain, you know, post traction and scale, you have to be much more strategic.

And every year we do annual planning. We do a three year planning. We do five year planning, extremely long-term think. And so that's really where I spend a lot of my time. And yes, we look at the entire landscape and the landscape has shifted dramatically in the last two years dramatically. And I think in the next two, three years, it's gonna consolidate.

Right now there's hundreds and hundreds of ATS CRMs, there's lots of fragmentation in each one of these kind of bolt-on tool market. There's, it's too much noise. There's too many different competing products for. The buyers and they're not wanting it. Right. There's gonna be tons and tons of consolidation.

Dualta: Do compete in the European market, I know you've had to invest a ton of energy into your analytics from the, from the management perspective to come up to speed with Cube 19 or one up or what, whatever, [whatever the software tool that somebody's using out there. Is there a reason that you didn't do that earlier in your journey?

Because, Is that a cultural thing with the USA and the way that they run their businesses as opposed to how it's ran in in the UK and any other markets really? Yeah.  

Matt: Good. Good question. I think a lot of things, it's not that we didn't try, that's our fourth attempt. Reporting's extremely complex and it's difficult.

We spent all of last year building our brand new dashboards and reporting, and as you know, you know, cube 19 is an unbelievable company. They were acquired by Bullhorn. I know Boho could have built it, but they didn't. Right. Bullhorns, it's not easy, it's not trivial. It's a massive undertaking. And so yeah, it was our fourth go at it.

We invested most of our engineering time and resources to it, and a big driver of that was definitely our…you know penetration and acceleration in the UK and in Europe. So the candidate driven market, everyone's much more metric driven for sure. But yeah, our customers have been asking for a while in the US it's just, we're North America, we have APAC customers but it's an acute pain.

We weren't good enough. Our competitors were much stronger than we were or starting to become, especially, you know, bullhorns ecosystem. You know, other comp competitors had some decent products there. So we want, we don't want to have any weaknesses in the business, and we're not, we don't wanna be number two or three in certain things.

So if it's core and it's upper right quadrant then we're gonna go all in on it and make sure we have the best product in the market in that space.  

Dualta: And why know that you're a bigger company? Is the temptation. There not to acquire something amazing in the market and bolt it in and integrate that in as opposed to keeping everything inhouse and funded in-house.

It must be incredibly difficult.  

Matt: Great question. I mean, tho those are difficult, right? I There's no every business is different. It all depends. Acquisitions are great for organizations, but they're primarily acquiring the revenue, trying to consolidate a business and their culture and their, they're, you have two completely tech stacks.

This is why, in my opinion, the model of these organizations, the Isems, the greenhouse, the bullhorn, they won't work. You can't just acquire this bolt on tool. Yeah. You get the revenue that used to work in Web 2.0. It won't in Web 3.0. It has to be unified and elegant and delightful. In one workflow, in one system, Boltons will not.

And so when you acquire companies just like Salesforce acquired slack mega acquisition, right? It might be 26 billion. It's not going well. It's hard to integrate. You can't just the product design requirements and UX complexities and technology, it's you, you have to almost start from scratch and re rebuild it.

That takes seven years for most enterprise software. So if we were to acquire. Certain organizations, it would be adjacent or it would allow us to penetrate into new market spaces. You know, so we, we'll look at some of those. Who knows? There will be a lot of consolidation, but it would have to be really strategic.

And I don't think it's, if you're a product driven company and product design led is part of your business model, you should have that in your DNA muscle to be able to build. Product pretty quickly. So like HubSpot, their co-founder c t o, just built some really new co cool stuff with chat Open a, open a AI's G P T.

Right? It's pretty inspiring that, that he did that. But they have that muscle, right? One of the biggest companies on the planet. Mm-hmm. So that's kind of our nature. That's how we approach things. We like to build or  

Dualta: our own that with LinkedIn being the be all and end all for a lot of recruiters out there.

What, how do you, how did you work to get an integration with them that work that, that you're satisfied with and what, what does that look like? Somebody trying to negotiate with? Yeah. Bohemoth like that.  

Matt: Yeah, so LinkedIn is a walled garden and they're professional social network and they have a preferred partnership program.

We applied to it twice. They actually rejected us twice. We have some board members on our board that are also part of uh, very close to the top sea levels that uh, LinkedIn and we're very grateful they did. Thank God a lot of people don't know this, but bullhorns on there, right? Bullhorns on their preferred partnership network, but it, it doesn't work.

They require a very clunky klugy work. Every single company we talk to, we're like, how does that work? Like, we don't even use it. You don't need to. And we thank God we invested a lot of time to go out and acquire our own data. We don't touch LinkedIn, we don't touch their servers. There's other ways to acquire data and enrich it.

And it's part of our social our, our core IP as well and our competitive advantage. And it took us a long time to figure these things out. But there's many d we have a hundred different data sources. You know, it's a lot of public data out there. we also are able to integrate and push jobs to LinkedIn.

So, you know, we've built a lot of different things in technology. We should live where recruiters live and make it easier. But the way that Open Web works is it's links, it's an open web internet technology you can get to inter, you know, to to, to operate with the screen that you're on. in elegant ways, and you don't have to necessarily have an open api.

In my opinion, LinkedIn should have opened up their API to everybody. Mm-hmm. That whole ecosystem would've been, had more fluid you know, much stronger user experiences, but they, you know, they, they did it for obvious reasons. That was a great approach. But yeah, there's no official formal integrations.

And they, for 99% of companies is the same way they reject them, and there's 10,000 chrome extensions out there, right.  

Dualta: For all of these reasons you know more about technology than, you know, I'll be able, ever able to understand. But  I think  I've been equally interested and fearful of chat g p t coming out and what it means for our industry and where things are going to go.

As somebody who's. To what's happening out there. Well, how do you think it's gonna affect things and how quickly give me an insight into what the future looks like.  

Matt: Yeah, it's, it's terrifying for everybody, right? I think the jobs of the future haven't, don't even exist yet today, right? So our children's generation and, but it's been like that since the time of caveman, right?

And technology helps to make people more productive and they can focus on higher value. Activity the days of post and pray, people are not adding value. That's too easy. That's lazy. Recruiting, recruiting agencies, professional recruiting orgs, they, they don't do that. Anyway when job boards popped up, everyone said the same thing, right?

Oh my God, indeed. Career builder, they're all gonna replace us. That it didn't happen. It became their best tool. So it, we have a long way to go. Technology will make, and our goal, our customers are professional recruiting organiz. We need to make them super recruiters, but you're gonna make, be able to make a lot more placements per recruiter with less work.

So it's more profitability. But it's gonna, in my opinion, it'll look more like a tech company. And you might even have like marketing, you know, high level marketers, building different kind of drip campaigns and optimizing those versus just people kind of, you have your traditional research and sourcing model.

You have your, you know, full desk or 180 degree model. It's going to evolve with the technology, in my opinion, it won't replace recruiters.  

Dualta: Yeah. I kind of feel for a long time it's probably going to replace a lot of the heavy lifting. It. It will require somebody with a brand that can do trust and, and that piece, and that can just point the magic wand at a certain thing and it pulls up the list and then, There should be enough intelligence to show where these people should go on at which time.

And it's a fascinating thing. I just can't see how the traditional telephone way of communication is going to keep on going for the next 20 years, the way it did 20 years before, because younger people now don't use the phone in the same way.

Matt: Yeah, I mean, everything you're, you're talking about I think is on, you know, front and center for every recruitment organization, every, every business.

And it should be. Mm-hmm. In my opinion though, our job is to be a technology partner for the best recruiting organizations. And you shouldn't have to worry about that. We, we need to stay ahead of it if Floo doesn't exist. You, you have some high tech companies that primarily build software for the in-house corporate.

you need a more sophisticated, intelligent you know, platform and partner. And that's our goal. People will not fall behind, but the market will shift and evolve. And I think that's also part of our d n A. We are very long-term thinking. We will get more and more efficient. But yeah, the, I think recruiters should be really excited.

The ones that wanna learn kind of new things and do different, but it's not going as, you know, the top talent. You still have to get on the, you have to have conversations. You have to help convince them. Here's why this is an amazing career move for your family and, and your path, and like you have to go get the job orders.

You, you know, there's way too many elements and pieces in there that are higher value that technology doesn't necessarily need to solve and, and probably won't solve  

Dualta: in a technology hiring market out there where Elon has caught a load of people and then everybody else has caught a load of people.

You've done the ss that salespeople you're hiring? Is it operations? What, like when a company's growing as fast as you are, what, how, how, how has that changed what your job is and what your strategic plan looks like?  

Matt: Yeah, we're because we purposely, we decline capital all day, every day. I get bombarded, bombarded.

We don't, we don't want to tier one VCs, pe we're, we don't want it. We're intentional about it. We, we take a look. We're optimistic and, and aggressive, but we're cautious, right? The market condit. But we do build an annual plan. We take a look at it. What's been fascinating for me is really just how valuable it is bringing in senior strategic leadership and how big of a difference that has made to the company.

So I can fire myself from a lot of these things. I don't have to get involved in everything where so many hats that's been. Just a force multiplier, right? And so now we get to be a lot more strategic. We get to, but yeah, we're pressing on the gas every single department. We finally built out our marketing department for the first time in 10 years, which is, we've tried Gorilla Marketing, we tried all stuff.

It didn't matter though. It's all about business timing, market timing. And now yeah, we've always been product led. We invest every nickel into the product for a long time. Venture funded companies are the opposite. They hire a lot of sales, go to market, you go try to ask customers what to build and they try to build it.

We're the opposite. Start with a vision strategy. We built it once. We felt the market was ready for it. We try to kind of hide from competitors and now we're going full throttle and we're hiring pretty aggressively just, you know, with the market. So that's why we're, yeah, we're growing the sales team pretty significantly.

Now in marketing, I'll go to market.

Dualta: Where at, where does Loxo, what does Loxo look like in in three to five years?  

Matt: Yeah, so our goal we're very ambitious with this now. We want tap 75% market share within the professional recruitment space. So seven outta 10 agencies, executive search recruiting agencies globally on Locko.

And let's talk with our, our team. I think a lot of platforms are an ATS or a crm. a sourcing tool or a drip email tool. Our goal and I didn't know if I, when we founded it wasn't necessarily his goal was to solve the problem As we see it, we believe that Lock so's special. We believe the team's special.

I think we, we, our goal, our mission is be the greatest recruiting software company of all time. So that's a 10 year goal. I think we can get there, but short term, three to five 75% market share. globally within the agency side.  

Dualta: Talk to me about the, the statement you put out the other day on Loxo for free.

Loxo for everybody. What, what's the story?  

Matt: Yeah. Mind blowing, right? We're getting wow. Internally all over the whole ecosystem. It's been pretty remarkable, the, the buzz. But this took a lot of thought. It wasn't an easy decision. Here's, here's the reason why. Nobody understood what a talent intelligence platform was.

It was too early. The mar it was way too early Over time, like I shared, every single recruiting agency we talk with, they, they pay for all these point solutions. They pay for them. Now they understand the value. They're paying $200 a month for this tool. They're paying, you know, 20,000 a year for this tool.

The market is dying for it. They're ready and it's time for us to help define that. An ATS and a crm. Is part of that, that's the difference between a a, a drip email tool or a, a regular traditional recruiting crm. It's all part of it. And so the ATS and CRM for us we believe that we offer so much value to the market in our.

Dualta: Competitors. I can see your customer success team jumping out the window though, Matt. Like what, how does, how do you, how do you turn on the lights world at the same time? Yeah,  

Matt: I can just, let me tell you the panic our team had when we started sharing these oh my God, do we, how we have enough people, how are we gonna do this?

Right? Yeah. It's, it's like any, any, it's o it's okay. You, you build a big plan, you think strategically. But those are good problems to have, right? It's, it's a good problem to have if our site goes down and crashes. That's the holy grail. That that's a good problem I have. It's not going to happen cuz we have backup con contingencies.

But this is a big deal. It's a really big deal. I believe we have the best at S CR CRM in the entire market. We compete all day, every day. And now we do offer that for free companies on our competitors. The bullhorns, the job batterers, anyone. It's free. It's free. And there's a, you know, so there's different options.

Dualta: What, what do they get for free and what do they get if they, if they pay you? What  the difference?

Matt: A lot. Yeah. So that's where the talent, you don't get the talent intelligence platform. So if people go to our site, they can check it out. We actually offer a 14 day trial on the professional plan, which is, that's everything Locko has.

It's the, the full plan. It's our data outreach automation Loxo source, all, all of it on the website. But, you know, high-touch customer service, onboarding, training. you also, there's like reporting and dashboards, the brand new reporting dashboard. So there's a lot in there that is not necessarily part of the free, right.

But you get the core entire at s they've re also the recruiting, crm, those are two different things. And it's self-service essentially, right? So it's for people that are not necessarily amateur, but they, maybe they just don't have the budget. Maybe they're just getting started. Maybe they don't value their ATS that much and they would rather just have the most simple, modern one in the market.

and they're okay bringing their own bolt-ons or add-ons right there. There's options for everybody. But I just personally don't believe that legacy at t s or traditional a t s will be around in five years, and we believe so much in that value. It's we'll put our, you know, we'll put our money where our mouth is and we went for it.

And I think that's going to help the market understand the difference. This is a talent intelligence platform. This is a legacy at S C R M. And there's a, this is what it includes and this is what, and people can define like, here's how much that.

Dualta: Oh my God. This is an obvious decision and choice. Pretty good.

All right, Matt, that is us today. Thank you so much for coming on. Thank you for being a sponsor of the podcast now for, I know, a couple of years. And we enjoy using your product and we appreciate the relationship we have with you.

Matt: Yeah, thank you so much for inviting me, Alta. I really appreciate it.

And yeah, I'm gonna go check out Stone Jujitsu around my neighborhood too. I just don't wanna run into you.

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