2396 - A New Approach to Recruitment for Veterans and Employers with Red Balloon's Andrew Crapuchettes

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0:46Visit podverified.com if you'd like to be featured as a future guest. I'm Josh Elledge. Let's get into it. With us right now, it is Andrew Caprichet. Andrew, you are the founder of RedBalloon.org and RedBalloon, if found on the web at RedBalloon.org, and also MilitaryHire.com, which I'm so excited to talk about, you know, the great work that you're doing out there, Plus, just your take on where we are right now. A lot of employers are part of our audience. So your vantage point, I think, is going to be really valuable. Andrew, thank you so much for joining us. Josh, thank you so much for having me.

1:28I'm excited to be here. Yeah. Before we get going and talking about the work you do and the impact you have in the world, I always love hearing what high-level leaders do when no one's looking, kind of the things that they're into. A lot of times I just say, what are you geeking out on currently? Uh, so what, what are you into, uh, when you're not at work? Well, I actually just started playing ice hockey, um, at nearly 50 years old, starting to play, um, ice hockey is actually a bit of a leap, but I was a rollerblader growing up in California. I had, you know, friends on team rollerblade. We were jumping cars, did the Hills of San Francisco and rollerblades.

2:04Did a lot of stupid things as a young man that if my kids did, I'd be like, Hmm, maybe you shouldn't do that, but I did them. Um, and so recently a friend's like, Hey, you should try and start playing hockey and ice hockey is so much fun it's so fast and just learning that I'll be honest I've got a whole setup in my basement and I'm practicing slap shots and wrist shots and watching YouTube videos and just totally geeking out on ice hockey right now great exercise and super duper fun well you're in Idaho so you would think right yeah yeah so so you're in the right location for that pretty pretty getting pretty close to to the canadian border up there i see moscow moscow is um just trying to think of where that is geographically oh you're way way way up there yes we're way up in the panhandle so we have university of idaho here in town and then we have washington state university right across the border so you basically have two major land grant universities within five miles of each other because the state border which is actually part of the reason that i started my first business and I've started and sold about seven businesses now, but the first business was just like, I'm like, look, we have a labor arbitrage here in town, having grown up in the Bay area, moved up here for other reasons.

3:17And I'm like, wow, there's a ton of talent that would love to stay in town, but there aren't jobs. And so you have two universities with all these kids with huge amounts of skills. And honestly,$60 ,000 for a, you know, software developer sounded amazing to them. Whereas in San Francisco, I couldn't, you know, get a janitor for that. So Yeah. Right. And so it really was an opportunity when I started my first business to like, how do I bless my community, create a bunch of jobs, but also win on the labor arbitrage front. So it's a nice little community. Now, you pivoted so beautifully into your professional work.

3:49I'm not done talking about hockey yet. So, you know, so naturally you can hear the the age in my voice as I ask this question is like, how do you keep from getting hurt? That's question number one. And question number two, how many fights have you gotten in? yeah no i i have not gotten into well uh i would say there was at least one fight but it wasn't a serious fight we were just having fun uh no it is uh it's a low contact hockey because it's not you know we don't have a bunch of 20 year olds out there playing with us it's a lot of people in my age bracket and so you know but we skate our heads off you know i completely sweat through my shirt um and yeah do i hit the boards really hard sometimes because i'm going after a puck absolutely uh you know as long as you stretch and exercise it's a good way to stay young stay fit and is again super fun also building connections you know i go to a church where i get to meet people in kind of my little community but i went out and started playing hockey and you know i'm now best friends with the guy who runs the tattoo parlor and we go out and have beer and i wouldn't have met him in any other context so it was really kind of a cool thing to be part of a different community in Moscow here.

4:58And I just love it. It's really fun. Yeah. It sounds like it sounds like it sounds like a blast. Have you ever tracked how many calories you burn in a game? Well, yeah, I did have my little Apple watch. I asked it one time to track. Clearly, it had an error because the first time I did it said I burned 84 million calories. I think that's an error. I'm pretty sure. I'm pretty sure that's not true. No, I mean, And, you know, you're burning seven, 800 calories in a one hour game. You know, and it's so funny to watch my heart rate because it basically, you know, you're on the bench and it goes down to, you know, 120.

5:34And then in a, in a, you know, when you're on, when you're on your shift, I think I was hitting 190 on heart rate. So it's definitely like this, you know, up and down as you're doing it. Cause you're, you know, you're in for 90 seconds and you're out for 90 seconds and you're back in. It's just, it's a really good physical exercise. it's also like you know and i hate to you know careen into business but as business guys like we have trouble getting out of our own head sometimes yeah and like when i'm on the ice i'm not thinking about business i'm not thinking about finance problems or sales problems or technology problems i'm just trying to get that puck and i just think it's a really healthy thing thank you so much for indulging me on that all right let's talk about red balloon yeah and we'll talk about military hire as well however you want to cover the both of them Yeah, yeah.

6:19So Red Balloon was the founding business, about four years old now. And basically it came out of my story. I have started and sold, as I think I mentioned, seven different businesses ranging from$100 ,000 to half a billion dollars. And generally technology businesses. 2020 was kind of a funny year, if you all remember that. And my board just basically said, look, you're a little too conservative and Christian for our liking. So we're going to have you leave this business. And at that point, the business was about a$50 million business growing 25 % a year with a 40 % margin. So honestly, it was cranking.

6:52Customers were happy. Employees were happy. But the board just saw this cultural moment, and they wanted someone with a different social media profile. And that was fine. I'm doing a housing development. I've got a bunch of other things going on. I'm like, well, I'm going to take a year off, hang out with my kids, learn hockey, although I hadn't gotten into hockey quite yet. But so and I just thought, you know, I want to create a job board because I just basically had to make a decision between my job and my values. And I think this is also just, you know, classic business lesson. If you have a problem, other people might have the same problem.

7:21So why don't you start a business to solve your problem? And it might just solve problems for lots of other people. And that really was the heart of it is like, OK, well, fine. I'm going to make a job board where the focus is on merit and hard work and kind of traditional values rather than the latest political correctness. and we exploded. I was on Fox News quite a bit and Glenn Beck. All of a sudden we went from a little startup to thousands of businesses, millions of job seekers. And we started doing recruiting services. We now have applicant tracking software, hiring automation software. And just being able to bless all these people has been incredible.

7:59I will tell you of all the businesses I've run and run quite a few is the only business where I get unsolicited thank you notes from perfect strangers. Because when you're this close to the connection between someone not having a job and having a job that supports their family, it's amazing. And so literally thousands of thank you notes from Perfect Strangers because a job is such an important and defining feature of a person's life. And if you can help someone find the right job for them where they're in a spot where they can not only pay the bills, but they can feel fulfilled with the work they're doing because they feel like it's a good fit for them, that's amazing, right?

8:32And I can die a happy man if I can pull that off at scale. So Red Balloon, we've grown that quite a bit. We've got about 40 employees, so we're not enormous, but we're small but mighty here in little Moscow, Idaho. And because of that success, we actually were able to acquire MilitaryHire.com about six months ago. Military Hire is basically a 25-year-old business that had really old technology but was founded by a West Point grad basically trying to help veterans transition from the military into the private sector. But their technology had really fallen behind the times and Red Balloon had very modern technology where we were using AI, we believe effectively in the hiring process because we see hiring is a distinctly human activity, right?

9:15You can't quantify with a resume, work ethic or grit or desire, but you can use AI to bring the humans closer together so that you can make that human to human decision on hiring. And so that's what Red Balloon was all about. And we realized there was a huge need in the veteran space. And that's part of the reason we acquired MilitaryHire.com. Yeah. Well, very cool. You know, I want to point out something that is right on your front page here. Big, big, big, big letters here. At Red Balloon, we start by screening for values and work ethic. That makes all the difference. I could not agree more.

9:50I feel like hard skills to me, and again, I'm just kind of talking about my space, my industry. You know, when we bring on somebody. look as long as they're competent at that it's wonderful if they're exceptionally gifted and talented i love that uh but i feel like most hard skills like look listen i don't know what you did at your last job but we are going to retrain you vince lombardi style here's the football like we're going to start over um because our value in our culture is so critical how we do things we believe to be very different than others in our industry. So listen, again, the skill sets, that's kind of a given, but the soft skills, I mean, I have found they are either there or they are not there.

10:44And that is insanely difficult for me to retrain someone's values and philosophy. um and so uh i just want to say i agree with with your point of view and tell us all about that yeah basically when we go through and i'll you know we have the job board piece but i'm gonna i'm gonna focus on a recruiting service so when we start with a customer um we do this um kind of interesting model for recruiting i used to use recruiters there's some wonderful people in recruiting but i hate the model because if you're using a headhunter you're probably paying on average 33 % of the first year salary for the person they place.

11:23Right. And so now as a recruiter, I'm incentivized to get you the most expensive person possible because then I get a bigger check. Right. So we have this misalignment of incentives. And there's also just this tension of like, hey, well, are you really working for me or are you working for that commission? Right. And so when we started doing recruiting, I wanted to do it differently. So we do a flat nine thousand dollar recruiting process and we have filled CFOs, CEOs, controllers, VPs of sales, VPs of engineering. but also forklift operators. Because if you're a business, you know, a bad culture fit employee can cost you tens of thousands of dollars.

11:57And I've heard lots of stories and I won't go into all of them, but there's a lot of stories about companies that basically ended up going bankrupt because of an employee lawsuit, because they just had someone who was not a good fit. And look, we want in a business, diversity of ideas, diversity of innovation. We want diversity of experience, but you need to have some cultural alignment of like, Hey, here's how, what we believe generally about the world? How are we going to go after it? Do we believe capitalism is a good thing or a bad thing? Well, if you disagree on that, it's actually going to be hard to work together and accomplish great things together.

12:31And so what we do is when we kick off a recruitment process, we do that one hour kind of onboarding call. And it's not just talking about skills. We do need to get someone who's a good skill fit, but we understand what is your culture? How do you define your culture? Tell us about your best employee. What do you like about them? Why do you like them? And then let's go see if we can find someone who's going to be a great fit like that person who's going to fit with your culture. And they may look, feel, sound totally different than that other person, but they're going to have those cultural distinctives that you want to build within your business.

13:02And it's going to make everybody happier. It's not only going to make you as the employer happier, it's going to make the employees happier because they're in a place where they feel like, hey, we're all rowing the same direction and we don't have to fight all the time. So that's what we do when we kick off this$9 ,000 flat recruiting process. And then we ask a lot of open-ended evidence-based questions from the employees focused on the culture of the business to help understand if they're a good fit for that business. So again, we use a ton of technology, which I'm not going into too much, but we're going to use a ton of technology.

13:33But at the end of the day, we have humans who are talking to humans who are helping you hire the right person. I dig it. And in your world, there has been so much movement. There's been a lot of disruption over the past couple of years. Some things are a little bit systemic, but one of the major factors right now that is impacting workplaces is AI. And I know that before you and I started recording, you'd mentioned that this impacts military veterans a bit more than the general job market. Can you just maybe start a little broad. And then if you want to narrow in on that group, that would be fantastic.

14:17As a fellow military vet, I really appreciate your, you know, kind of your care, you know, for this community. But yeah, Andrew, what's going on in your world regarding the intersection of AI? Yeah. So as we know, like we use AI all over our business and, you know, I sit down with my employees and if you're not AI fluent, if you're not an AI enabled employee, at some point you're going to fall behind the curve. I look at our engineering team and I was talking to our head of engineering yesterday and he says, we are probably three times as efficient as we were six months ago per employee. We're able to create that much more great code, great software for our customers.

14:58So we're a big believer in that, but we also know that AI can't do everything. And that's what people get stuck on. They're like, AI is amazing at this, but it doesn't mean that it can do everything. And we believe that hiring, there's some human factors there that are actually frustrating and causing a lot of disruption in the job market. Let me tell you what that looks like. Basically, job seekers today can use AI apply or robo apply, and they can apply to 100 jobs a day while sitting on their couch watching Netflix. So they have this AI bot that will find the job, customize their resume, customize a cover letter, and then apply to the job.

15:30That sounds magical. The problem is what's happening is that employee doesn't actually know that they're applying to that job. It's just going out there and spamming the market with their resume. So now employers, have thousands of resumes of a lot of job seekers who are probably real, but they don't even know that they're involved in the conversation, right? And so what do employers have to do when you have thousands of resumes? Well, you have to use AI to filter through them. The problem is AI really likes AI resumes and really doesn't like non-AI resumes. So there's actually an article in SHRM recently just talking about everyone's using AI and no one's getting hired because there's this translation issues, almost this AI war between the job seeker and the employer's AI bots are fighting it out over here and the humans are kind of getting left out in the cold.

16:16And so, but this problem is even more acute for veterans because when a veteran generates a resume and they apply to a business. So I was talking to a veteran, he said, I applied to a job at 6 PM at night. And by 2 AM, I got my rejection letter. And he's like, I'm pretty sure the HR department wasn't pulling it all night or rejecting people. It was the AI, ATS, it was the electronic gatekeeper that basically said, you don't have enough keywords on your resume to even see a human being have a conversation. Well, that was really frustrating to him. And he's like, and I've now applied to 100 jobs, and I've never actually talked to a human being.

16:48So that's a problem, we think, because that can be extremely discouraging. And the issue is, it's not a skill gap. It's a translation issue. That veteran had all the skills necessary to succeed at that job. He just was using the wrong words because he was using military words. The skills, knowledge and ability he had achieved while protecting our country did not translate to the keywords that the ATS that that corporation was looking for. And so that's part of the problem that we're looking to solve in the military higher side. And it actually is working and we're pretty excited about it. Yeah.

17:23So what's the future look like for the job market? Like, you know, and I'm thinking, you know, the typical person who listens to this podcast, a lot of SMB founders, owners, a lot of leaders, a lot of people leaders. And so, you know, obviously, you know, we have way more of our operations that are human led, but, but AI operated, right. So that, you know, it's almost like we're creating superhumans, you know, because we expect them to use the best tools available. So again, as you mentioned, AI fluency for us, it's just, it's mandatory. I appreciate that some people are very skeptical, don't like it.

18:04You know, in our very tech centric, you know, space that we're in, it's, it's just not, it's, it's not, it's a non-negotiable. And I suspect, you know, while we kind of find our way that we're probably moving in more of that direction. But, but if you, if you had your crystal ball out and you try to imagine, you know, and again, I know there's a little bit of a fool's errand here because we We just don't, there's so many things we don't know. However, I think that you probably are seeing, to use a hockey metaphor, where the puck is going. That's right, that's right. And I think the issue is gonna be, AI is gonna be incredible at a lot of things, but not everything.

18:41And I think that's where everyone's struggling. I believe human beings were made to work and work is really good for us. We have two hands and one mouth. We should be producing more than we're consuming. We should be doing things. And AI is an incredible tool that should be used to make humans more efficient and effective. And so humans need to find what are the things that AI is not good at. And what we believe right now is that some of that interview process, right? We believe that AI should bring the right job seeker into that conversation, but you kind of have to look someone in the eye and understand their work ethic and their grit and their desire.

19:16And at least for right now, AI is not good at that. So I think people who are going to win are going to not be afraid of AI, but they're also going to have a clear-eyed view of what AI is good at and what it's not good at today. And that's going to change in a month. And that's going to change in two months. But you need to not just go all in, but you also need to not be afraid. And so embrace this new technology while still being clear thinking about what is it good at and what it's not. And you won't know that if you're not studying, if you're not fluent in what's going on in the world of AI.

19:47So that's what I think is going to be, uh, it's going to help businesses win. Don't be afraid of it. And that will actually help you think clearly about what it's really good at and what it's not. Yeah. Andrew, your website, um, share with me. Um, I just want to make sure we've got very clear call to action to our friend that's listening, obviously interested in this topic. Um, so, um, red balloon.work, uh, and then if you can as well, share kind of next steps for our friend, that's listening, militaryhire.com, who would go to each of those websites? What intention might they have and what should be their next steps?

20:26Yeah, if you're a job seeker, everything is free on both sites. You can fill out a profile. There's a ton of resources. There's opportunities to meet employers. Everything's free, and it's great, and we want to be a blessing to job seekers. If you're an employer and you want to hire a values-aligned employee, someone who's going to show up, work hard, have the diligence. Sometimes that's a veteran. Sometimes that's not a veteran, but it is someone who actually believes that hard work and meritocracy is a good thing. We have a variety of solutions that will help you find that great employee and help you avoid those really nasty labor lawsuits that can sometimes come along with getting the wrong employee.

21:04So we have recruiting services, we have software, we have job board on both sides of the fence. And so if you want to hire great people, we're going to be able to solve that problem. And we'll have a discovery call with you, understand what the needs are and be able to tell you, here's the right kind of group of products that we think are going to make your business go faster and have way more fun. I love it. Andrew, Krabuschette. I'm sorry. I was at Krabuschettes. Krabuschettes. Nailed it. Yes, exactly. Terrifying. Yeah. Founder and CEO of Red Balloon, found on the web at redballoon.org. and militaryhire.com.

21:42Andrew, thank you so much for joining us. Thanks for having me.

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