After five extraordinarily lucky years running Applied, last month I decided to step back as CEO, and am thrilled to announce that Khyati Sundaram (our head of product) will be stepping in as my successor. I’ll be staying on the Board and in the team, but instead focusing more of my time on research and impact.
In these strange and uncertain times we live in, it may seem odd to be making a transition like this, but actually it was one we made long before the impact of Covid.
In fact, as you might expect, it wasn’t a decision I came to lightly, in large part because without a doubt, even when days are hard as they often have been of late, it’s the best and most rewarding job I’ve ever had the good fortune to do. Who else gets to say that they work with an incredibly dedicated team of people, championed by fantastic users and advisors, delivering a product that can prove with a level of statistical confidence that it helps people get jobs that would otherwise be overlooked due to bias and discrimination? It's hard to imagine that I’ll ever have an opportunity as great as we have at Applied to make an impact on the world. So why the change? For both personal and professional reasons, I felt this was the right decision for me and for Applied.
Applied’s own story of how we came to be is as non-traditional and unlikely as they come: a sort of company-imitates-product if you will. In the dying months of 2014, I was working at the UK’s Behavioural Insights Team armed with a deadly combination of passion for social mobility and wads of research on all the ways that the brain gets in the way of it. I’d worked in education and welfare policy for a number of years and realised with dread and dismay that even if we succeeded in creating an education system that provided equal opportunity to all young people, we would still hit a brick wall when they entered a labour market that systematically overlooks minority candidates even when they’re as, or even more, qualified for the job. Study after study showed that these barriers were not only persistent across countries and over time, but also people - including those who profess a strong commitment to diversity. While there are undoubtedly some people who consciously discriminate, most of us want to treat people fairly and to work in diverse and inclusive teams where we don’t all think alike, but are held back by the small but powerful misfirings in our brains which cause us to unconsciously see and evaluate people differently based on their race, gender, accent, and other factors.
At the time, Theo Fellgett was the person responsible for managing BIT’s portfolio of wonderful (and at times hair-brained) ‘product ideas’. I approached him with a remarkably basic idea: could we build a tool that would help people hire great people but avoid all the bias? Instead of just doing the same thing we’ve done for the last 100 years, could we make this most basic and yet critical act of all organisations - hiring - smarter, fairer, and easier? All the other tools we had at our collective disposal for solving this problem - legislation, employment tribunals, even social and attitudinal change - had yet to translate into actual changes in the labour market, and the cumulative loss of potential was extreme.
On the edges of our day jobs we began working up the idea - him on product and strategy and me on research. In March 2015, we pitched BIT and Nesta for a small grant to build out the MVP of what we now know to be Applied. Shortly after we hired Rich as CTO, whose bent toward anti-establishment thinking was piqued by our radical idea of ridding the world of CVs and delivering greater diversity. Rich’s unenviable job was to take the outcomes of all the experiments we were running to remove bias and help us encode that in a platform. At the same time we also made an unexpectedly successful moonshot outreach to Harvard Professor Iris Bohnet - specialist in behavioural science and equality - to see if she would be willing to be an advisor to us.
Fast forward 6 months and we had our first real candidates applying to real jobs (cute heart stopping moment!) through what was by then known as Applied. Fast forward another 3 months and together with colleagues at BIT, we conducted a large validation study which showed that over half of the candidates that got jobs through the platform would otherwise not get the job if they were running the usual gauntlet of CVs and cover letters. It was a sort of triple threat win-win-win, not only were we better able to identify who was a good fit the role, but teams were benefiting from greater diversity, and candidates were suddenly able to get a job based on their actual skills not their ‘pedigree’.
After a year and half of working on Applied in our evenings and weekends, it became apparent that if we really cared about achieving impact at scale, we needed to get out of the proverbial lab and have a crack at making a successful company out of it. The problem we were trying to solve was not a lack of awareness or desire - over 8bn USD is spent annually on diversity and inclusion and/or unconscious bias training in the US alone - the challenge was behavioural. It’s frankly impossible to be less biased just by wishing it so or mandating it. You have to redesign the very decisions we take in our everyday lives and make it easy to do them better (see Iris’s book for the most comprehensive guide to this). To do that, we had to be a tool that people actually used. And to do that, we had to build an incredible product which meant we needed investment. Over the course of 2016, with BIT’s blessing, we spun out Applied as its own company and started the simultaneous shoe-leather-wearing processes of finding customers and wooing investors.
The thing no-one tells you about, the power of other people and the inequality of help
A common misconception (and admittedly one I’d held myself) is that the idea is everything. What I’ve come to learn over the past five years is that it pales into insignificance compared to the challenge of execution. Going in, I was woefully lacking in any relevant skills in either product or, frankly, business (!). The overlap in the Venn diagram between the types of people who become bureaucrats and those who become entrepreneurs is fairly slim. Applied would have died a sorry death were it not for Theo’s fearlessness and commercial nous and Rich’s abstract thinking and Da Vinci-like coding abilities. In more recent years, it also wouldn’t have survived without Andy’s capacity to systematise and scale the commercial team, and Khyati’s capacity to do the same for product. It goes without saying that Applied would be nothing were it not for the now-30-odd exceedingly talented, dedicated and creative people who make it up, the advisors and investors we’ve relied on over the years, the founders who’ve been willing to help us out by sharing their own successes and failures, the customers who’ve worked with us as partners to evolve the product, or a healthy dose of good luck.
It takes a level of self-delusion to start a company, and as a behavioural economist masquerading as an entrepreneur, I’ve always struggled to ignore the harsh realities of early-stage company failure. The best way I ever found to describe them is that these companies always feel a bit like Shroedinger’s cat: simultaneously dead and on the cusp of the kind of ubiquity that means your company name morphs into a verb.
At the risk of sounding some heinous combination of self-pitying and self-aggrandising, it occurred to me the other day that much like they say a dog lives seven years for every human year, the same might be true for running a startup. The past five years have been a dizzying rollercoaster ride: wild, unexpected, stomach-leaping, and exhilarating.
While some days feel like you’re living the archetype of the startup CEO (invitations to billionaire’s mega-yachts spring to mind), most days feel like you’re a slightly discombobulated octopus desperately trying to master 8 different jobs all at once and hoping the music doesn’t stop before you’ve at least passed the first chapter of whichever Dummy’s Guide To… most needs your attention at that point in time. And in many ways, this latter part is where there is a huge overlap between what we do in the exalted world of startups and those hundreds of thousands of small business owners all over the world whose jobs are just as challenging (payroll, tax, legal challenges, marketing, customer retention, supplier management and cash flow management) but who are far less likely to have their faces splashed on the front cover of newspapers or have their experiences become the subject of Netflix series. These things are all the more true in trying times like these where the support we receive in the start up world far exceeds that offered to ‘regular’ small businesses owners. My parents both ran small businesses, so none of this should have come as much of a surprise to me. But I have infinitely more respect and empathy for the daily struggles of the gentleman at the end of my street who runs our local everything store than I could ever have thought I would.
While many people know there’s as much evidence of bias in investor decisions as there is in hiring; we count ourselves incredibly lucky to have had a band of exceptionally supportive, constructively challenging, and courageous investors (more than 50% of whom are women) support us from the get-go. I also know that data show my gender might be unconsciously counting against me when I pitch (and depending where I am, my Aussie accent!), but other than that, I’ve had every other privilege in this, whether I’ve known about it or not. Not only am I demographically advantaged in my ethnicity, access to education and income, English being my first language, and able-bodiedness (to name a few), I’ve had extraordinary mentors (both acknowledged and unacknowledged) and been championed by friends, family, my partner and even sometimes the odd person who comes up to you at the end of a talk when your knees are trembling and tells you you did a good job. That all accumulates over time and makes an immense amount of difference. I’m grateful to more people than a groan-worthy Oscar speech could withstand. I hope that in turn, I can offer some of the advantages I have had, to support others. And thankfully, there are lots of exceptional organisations out there looking to change the face of both who invests and who gets invested in, and we’re happy to partner with many of them.
The impact we aim to make
We’ve had our fair share of fundraising challenges, presentations that flopped, technical glitches in the middle of demos, and roadmap about-faces. But we’ve also been lucky enough to present what we do to more than one Nobel laureate, current and former heads of state, students all over the world, peers in the startup landscape, and many of the luminaries in our field. We tripled revenues again last year, and now have the honour of working with over 100 incredible companies who use our platform on a daily basis to hire candidates all over the world. Coming up for 200,000 candidates have applied to jobs through us, over 1,000,000 unbiased judgements have been made through the platform, and well over 6,000 users champion what we do and help us make the platform better every single day. Of particular importance to me and the team, we also have data which suggests over 2,500 candidates have been hired into roles that otherwise wouldn’t have were it not for the platform, either because they wouldn’t have applied if it were through a traditional process (see Shruti) or we know statistically they would have been overlooked through conscious or unconscious bias.
We also know that of those who have gotten a job through Applied so far:
- 60% have gone to women or people who identify as non-binary
- Over 25% have gone to people who identify as Black, Asian, Mixed, or Other
- 6% have gone to people who declare a disability
- 40% to those who come from families where neither parent went to university, and
- 17% to those who had free school meals (in the UK)
We also know that candidates really appreciate knowing that they’ll be assessed fairly and on things that are relevant to the job. Our average score from candidates across the board is over 8.4 out of 10. But what’s even more heartening is that number is even higher for traditionally under-represented groups who we’ve built especially to support (for example, those from ethnically under-represented groups).
But our ambitions are real and big. In normal times, more than 200,000 people are hired into jobs in the US, UK and AUS alone every single day, so we are still only starting to have the impact we believe we can have.
And it was that realisation, and all the expectations, challenges and opportunities that lie within it, that forced me to confront a question we’ve always been open about talking about in the team: am I the best person to do it? You don’t run a hiring platform predicated on finding the best person regardless of their background without the requisite self-reflection to ask yourself if you were hired now, would you be right for it, or to recognise that just because you created it, doesn’t mean you’re always the best-placed to lead it.
And personally, did I feel like I could give Applied what it deserved every day, while also giving myself and my partner the life that we wanted? After much consternation I realised that while my passion and drive has not changed one iota, I wasn’t the right person personally or professionally to take us to that next level.
But I know Khyati is.
Her own story is one that demonstrates both why she’s the right person and also why Applied exists. She embodies the essence of Applied while also bringing something new to it, and I’m extremely excited to work with her as she takes forward this new era of Applied’s history.
You can read more about Khyati's vision here.
PS: As many of you know, we’re all about busting myths surrounding talent and hiring, and we’re also all about using data (not hearsay, faulty intuition, or gut) drive decisions, so I thought I’d share a nugget with you too: Most of what you read about CEO transitions online is wholly unhelpful for this kind of task, by the way. For those who know me well, you might not be surprised to learn that I sought not only some helpful advice from people I trusted, but also what data I could find. What I learned might surprise you: even though our tendency is to conflate ‘startup CEO’ with the Zuckerbergs or Bezos’ of the world - the kind of founder CEOs who stay on - it’s actually not the norm. What evidence there is shows that actually only half of founder-CEOs are there after 3 years, and less than 25% take their companies through the IPO. Giants like LinkedIn, Yahoo, eBay, and Twitter actually all had more than 3 CEOs before IPO-ing. Surprising, huh?!