The transcript from this week’s MiB with Kathryn Minshew of The Muse is below.
You can stream/download the full conversation, including the podcast extras on Bloomberg, iTunes, Overcast, and Soundcloud. Our earlier podcasts can all be found on iTunes, Soundcloud, Overcast and Bloomberg.
ANNOUNCER: This is Masters in Business with Barry Ritholtz on Bloomberg Radio.
BARRY RITHOLTZ, HOST: This week on the podcast, I have a special guest. Her name is Kathryn Minshew and she is the Founder and Chief Executive Officer of themuse.com, a site that finds itself somewhere in between LinkedIn and Glassdoor and some of the other recruiting employment career management, HR-related sites. Her client base are both the companies that are hiring millennials and others and the people who are seeking jobs.
This is kind of a fascinating conversation in that there aren’t a lot of relatively young women entrepreneurs who have successfully navigated the entire startup venture capital et cetera. There are many, but we don’t know them as well as we know some of the more infamous male counterparts in the world of tech and I found this to be a very fascinating and eye-opening conversation.
So, with no further ado, my conversation with Kathryn Minshew.
My special guest today is Kathryn Minshew. She is the founder and Chief Executive Officer of themuse.com, a career platform which has been used by over 50 million millennials to help manage their careers. The Muse has 5 million unique monthly visitors, tens of thousands of career advice articles. Kathryn is also the author of a national bestseller, “The New Rules of Work,” and she is an operating partner at X Factor Ventures, a venture capital fund investing in the next generation of female founders. Kathryn Minshew, welcome to Bloomberg.
KATHRYN MINSHEW, FOUNDER AND CHIEF EXECUTIVE OFFICER OF THEMUSE.COM: Thank you so much. I am excited to be here.
RITHOLTZ: And I have been looking forward to having you for a number of reasons. We will get into some of them later. One of the reasons I really wanted to speak to you is you are a relative rarity in the world of finance and tech. There aren’t a lot of women co-founders, let’s put a pin on that and come back to it later. Let’s talk more — start talking about the whole background of The Muse. You founded the site in 2011. What was the inspiration for the site? And what was the muse behind the name, “The Muse.”
MINSHEW: So the very short version is I wanted it and it didn’t exist. The slightly longer version is, so in 2008-2009, I was living here in New York City working at McKenzie and Company as a consultant and I knew that I didn’t want to be a career consultant, but I wasn’t sure what it was I did want to do.
So, you know, like many people my age, I am sort of on the older end of the millennial demographic, I went online and I looked at all the big job words, the major sites that everyone here is familiar with and I just kept thinking, there is something really broken about this experience. To give you an example, on one of the biggest job aggregators, I was typing in business strategy director and it was showing me Assistant Store Manager, 7/11, Secaucus, New Jersey, and I remembered thinking, like, “This can’t be the best there is.”
And even, you know, I am a big fan of LinkedIn, it was just showing me more consulting jobs. The same thing I had been doing, but more of the same and I kept thinking, you know, when I look at other people — and my peers said, people that are getting started in their career, people that are in their early 30s, changing jobs, many of them are making decisions about where they want to work based on things like the growth opportunities involved in the role. The culture and values of the organization, and none of that was evident on most of the job search sites that I was seeing and using.
And so, I thought, “Well, what would it look like to create a better one.” And my co-founder and I, we had a white board, a living room in Brooklyn, it was very, very stereotypical, but we started to imagine this much more visual personalize, immersive career site that really took people by the hand and helped them navigate their careers, and for companies helped them tell a story about what it was like to work there, why would somebody want to come join their organization and what sort of person would be most successful or most happy there and that is really where the idea for the muse came from.
RITHOLTZ: So, that raises a question that’s fascinating and I don’t recall if I read this on the site or in your book, but the phrase, “career satisfaction” comes up over and over again. What is career satisfaction?
MINSHEW: Career satisfaction is a feeling like you are in the place that you’re meant to be or that you can wake up on most days — not every day, but days on the balance. You wake up and you’re very excited to go into work. You know, I mean, I am a realist. No job is going to be perfect. We’re not talking about sort of this you know, follow your bliss kind of pie in the sky thing, but at the same time, I think all of us, you know, in our relationships and our friends and our family, the difference between when someone is at some measure, satisfied or content in their role at their company and their career and when someone is deeply dissatisfied and I believe that the benefits both to the individual, but also frankly at a macro level, to the economy, to companies when you have people in the right spots are massive.
And I think, we’re at a point where we can and should expect more from our careers and that sort of career satisfaction is one of the things that I think a lot of people are driving towards.
RITHOLTZ: So how do you get from a consultant at McKenzie to making the lead to, “Hey, everything is broken and we can’t even patch it. We have to start by building a new site from the ground up.” How does that transition take place and the big consultancies like McKenzie, they are a pretty cushy gig. It’s very challenging to say, “I am going to give up all the money and the job security and make a leap.” How did that come about?
MINSHEW: You know, call me crazy, but I have always been willing to take a jump if it was something that I was significantly passionate about and for the idea behind the Muse, it actually started small at first, so in the fall of 2010, I started I guess you could call it an online blog, a community that was aimed at sort of driven ambitious women in their 20s and 30s and I started it with a couple of other women and it was a side project for all of us.
We had other roles. I actually left McKenzie in goodness, June of 2010 and moved to Kigali, Rwanda to work with the Clinton Health Access Initiative on vaccine introduction, which is a whole other story, but I had come back from Rwanda, was still working for CHAI and all four of us started this project.
RITHOLTZ: CHAI is the name of the site that you guys were…
MINSHEW: No, no sorry. CHAI is Clinton Health Access Initiative.
RITHOLTZ: Oh okay.
MINSHEW: It’s just a mouthful. It’s the sort of health wing of the international nonprofit that does vaccine introduction, HIV-AIDS work, et cetera. So, that was my day job and the other women were all at McKenzie including my co-founder of The Muse, Alex and we just — we started building this small community and what was so interesting to me is, other people, other women in the community had the same issues that I was having around the broader search for a satisfying career, finding the right job, the right company and I don’t know, it wasn’t so much you know, a single individual lightning bolt, as a series of small ideas and moves and once I have realized that the entire industry was effectively ignoring a lot of the needs of the millennial population, it suddenly just became so clear to me that there was this massive opportunity and if you know, if I didn’t step in and try to build something, who would?
RITHOLTZ: Let’s talk a little bit about the old business model which you have described, the old business model for finding, recruiting and hiring new employees, you’ve described that as broken. Explain.
MINSHEW: I think the days when a company can expect to just stick an advertisement for a job on the internet and that the best and brightest talent in the world are going to walk right up and compete for the that job, those days are over.
And what I am seeing in the market and I think one of the principles that The Muse was built on is that the balance of power between candidates and companies is changing. Companies and The Muse works with around 700 of many of the best, most recognized brands in the world. They are competing for great talent and they are not just competing with their traditional competitors, you know, a major technology company might be competing with a large global financial institution who might be competing with a CPG or consumer — you know, consumer goods company.
And I think especially when you look at talent like engineers, top sales people, many of them want to join a business where they feel like the values of the organization align with their own. They are looking for growth opportunities, we call it the 3 Ps — people, purpose and path, but they are looking for these things within their employer and companies are starting to have to focus on their talent brand, recruitment marketing and other elements of really showcasing themselves and competing for talent in the open market and I think that’s opening a really interesting set of opportunities for the businesses that are doing it well.
RITHOLTZ: So, let me push back a little bit on a phrase you said that clogged my ear which is candidates want to work for a place that aligns with their values. Now, theoretically that sounds wonderful, but realistically in the real world, how significant a factor is that? Is this something that is genuine? Is it a function of a fairly fully-employed workforce and the balance of power, at least at this phase of the cycle seemed to have shifted to the employee or is this a permanent change in how employees or potential employees get to behave?
MINSHEW: Yes, I believe that change is permanent, although you’ll see it flex stronger and weaker as the economy cycles through. A couple of data points I think are really interesting here. So, Deloitte recently did a millennial survey that indicated that 44 percent of millennials had turned down a job because they didn’t like the values or the employer brand of the company that the job offer came from.
Similarly, in a survey about what is important to you in life, 94 percent of millennials indicated that meaningful work was a core component of what was satisfying to them and this was I believe, a Wells Fargo study and so when you look across the demographic, they are raising the expectations on employers, and of course, this isn’t going to be a perfect alignment, but I think even recently, and politically, there’s been a lot of talk about some of the chief executives withdrawing from various presidential advisory councils.
Some of that has also been driven by internal employee groups and advocacy groups standing up and saying, “As employees, these are our values,” and pushing their chief executives to take a stand and I think that this is a really interesting time because again, we are sort of redefining the contract between individual employees and the organizations that they support and I do think some of these changes are permanent and I think the businesses that understand how to navigate them, they are going to have a huge edge in recruiting and retaining great people over the businesses that don’t understand this.
RITHOLTZ: So, who — I want to better understand the business model of The Muse and the natural comparison is LinkedIn, so who are the clients? Are your clients these companies? Are they the millennials who are potential hires? Is it the nexus? The marketplace between the two? How does Muse actually operate?
MINSHEW: Yes, so we started as a marketplace. As you mentioned, we have 50 million people every year who come to the Muse to navigate their careers and that is our sort of most important and initial user community et cetera.
But our business model is based on the employers and it’s a few things. One, we are able because we have this massive community to leverage a huge amount of data and information about what matters to the individuals. Sometimes, we call ourselves the voice of the candidate. You know, it’s funny because not all of our users are candidates. Many of them are happily employed and they come to the Muse in between changing jobs as well as when they are looking for a new role, but from the individual user side, we are able to really help people find new jobs, explore companies and career paths, take classes, get advice and information and that’s a mostly free service that we provide for the community.
On the employer side, as I said, we have about 700 customers and it’s essentially an annual subscription product, a SAAS business, in which we are helping them essentially capture, create, distribute and measure elements of their talent brand, so without getting hyper specific, although I am happy to go as deep into this as you want.
RITHOLTZ: No, that sounds fascinating. I want to get into the nitty gritty.
MINSHEW: Yes, so let’s start with the beginning, so capture. The days at which a company could just say, “We’re a great place to work,” or “We value diversity and inclusion.” Those days are gone. Companies now…
RITHOLTZ: Trust us.
MINSHEW: Companies now — exactly, trust us. That doesn’t work anymore. Companies now have to show not tell and the best way to do that is through the voices of their current employees. In fact, research has shown continuously that candidates are much more likely to trust a specific story, a real human anecdote from one of your people than they are some sort of generic marketing jargon.
And so, we actually help companies go in and we have a sort of story capture technology that allows them to source both qualitative and quantitative data about what their current employees think. Why do their best people show up every day and how does that vary based on the Dallas office versus the Chicago office or different parts of the company. Then, armed with both the data about what is this company’s talent brand, what are their own employees saying about it? And the stories that those employees are telling.
We can then help the companies create all of the materials that they might use in their recruitment marketing, so this is everything from helping them build out a better career website, helping them understand when their recruiters are reaching out and contacting people. How are they telling a story about why somebody would want to take a look at the opportunity that is actually going to resonate with a candidate?
And then we can help them sort of distribute and optimize those messages, so they understand what is working in the market and what’s not and essentially, the goal is to help for the companies, make sure the right sort of message gets to the right person at the right time and for candidates, we want to make the entire process of applying for a job and going for the interview process feel much more personalized, feel more human and to help candidates feel like they can make an accurate assessment of is this a good company for me?
RITHOLTZ: So, who are the competitors of The Muse? I want to say Glassdoor, but not exactly and LinkedIn, but not exactly. You kind of are your own entity. Who do you perceive as your own competitors?
MINSHEW: You know, it’s funny, when we started out and when I started the business, it was very much as you said, the Glassdoors and the LinkedIns of the world, as we have grown, we have seen that there are certainly areas in which we sort of rub up against those companies, but I think we’re also competing with frankly with the complacency and businesses who do nothing. We have seen some companies that are starting to enter the — what’s been called the recruitment marketing space. Honestly, I hesitate with that word because if I were an individual thinking about where I am going to join to spend the next you know, two, three, four or five years of my life, I wouldn’t exactly want to be a recruitment marketed to, but that’s a category name as it exists now.
We tend to play really nice with those companies. We are partners with many of them because we both have the same goal and we are targeting the different parts of the talent acquisition and sort of candidate experience space. I think that’s one of the challenges is we are essentially seeing a new category being created right now, within HR and human capital, and it’s kind of changing up who our competitors with who given that there is a lot of white space that companies recognize they need to do something about and I think the businesses — and so all of that need are just being built today.
RITHOLTZ: Let’s talk a little bit about the new rules of work. What are they?
MINSHEW: So, the new rules of work was our attempt to take all of the lessons we have learned over the past five years of building out the Muse and focus on what does an individual today navigating their career need to know?
So, we took the three main phases of career as we see it. The first being people — understanding what do you want so out of all of the possible career paths and roles, what direction do you want to head in? The second large step is how do you go and get it? So, tactics of finding jobs, applying to them, interviewing et cetera and then the third is once you are in a new role, how do you make sure that you are succeeding, so dealing with difficult colleagues, impressing your boss, handling performance reviews, communication in the office, et cetera et cetera.
And for each of those, we looked at the old way of doing things and the new. So, for example, everything from you know, technology has completely changed the way some people interview. There are video interviews that are synchronous like a Skype or Google Hangout. There is asynchronous where somebody might give you a sort of link to record your answers to questions, and then send that off to a hiring manager and the rules are subtly changing and in some ways that are very obvious and then in others that are harder to sort of put your finger on.
RITHOLTZ: How important is the aspect and I am projecting here a little bit of managing your career as a millennial or even someone in their early 30s. It was something I never really gave a lot of thought to, although granted that was a previous century. It wasn’t this century, but still — is this generation that astute that even their 20s, they are already managing their own careers?
MINSHEW: Yes, absolutely. And I think if I had to distill the entire book down to one single idea, it would be that you are in the driver’s seat of your career and it’s no one else’s job to get where you want to go and that plays out in a lot of really interesting ways, but yes, even people who are graduating from college today are expected much more than five or 10 years ago to really articulate what they want and to go out and take steps to get there, and I think that in some ways, there are you know, that there are opportunities that arise because of this, but there’s also huge challenges because there’s a lot you have to figure out if you’re expected to drive your own career.
RITHOLTZ: I’ve always seen this come up in terms of for lack of a better word, brand loyalty that companies are much less loyal to employees. There are big layoffs when they need to and conversely, employees seem to know, “Hey, they’re really independent contractors even though they may be working for someone,” and you don’t know how long that’s going to last for. Has that really changed the dynamics of how either this generation or the one before are participating in the labor force.
MINSHEW: Yes, absolutely, and I think when you look at the millennial generation, you have to understand that this is a generation that in many cases was coming of age or entering the workforce right around the Great Recession.
And so, many of them — that was a very formative experience and I think when you look at the relationships they have with companies, it’s interesting because you see these almost two themes that might seem to be contradictory. One is that there is less loyalty between companies and employees. People are you know, considered the sort of the CEO of You. Inc., or as we said, the driver’s seat of their own career. They need to be responsible for their own professional development, their own advancement, at the same time, individuals are raising the expectations they have for companies.
They want to, as we were saying find an organization where there is some alignment of values. They care about the, sort of the employee experience, the company culture and I think that when you dig a little bit deeper, these aren’t — I don’t believe they are contradictory at all because I think it gets to this sense that the relationship is becoming one in which individuals are saying, you know, not only do I want a paycheck, that’s sort of the base case, but I want a paycheck and growth opportunities or a paycheck and a chance to advance in my career or a paycheck and et cetera et cetera et cetera.
They are looking for companies to provide something more than just the bare minimum.
RITHOLTZ: There was a statistic on your site that I found astonishing and I have to share it with you, 79 percent of job candidates first seek out a company’s social media presence to learn more about a potential employer, so people are taking to Facebook and Twitter to check out a company that is recruiting them. Is that unique to this generation? Has that ever existed before in history?
MINSHEW: You know, I don’t know that it was possible 10 years ago. When you think about you know, the access to information that a job seeker has at their fingertips today, compared to a decade ago, it’s a massive shift and that’s impacting everything about the way companies recruit. You know, 10 years ago, if you were lucky, you could ask your buddy who worked for a company, “Hey, what’s it really like over there?” You know, “What’s the scoop?”
But if you didn’t have somebody you personally knew or if you weren’t sort of well networked in the industry that you were looking to move into, what else are you going to do? You might go in the corporate website, you know, but that’s not necessarily known for being a paragon sort of trust and authenticity, and now, you know, not only can you look on LinkedIn and see whether you have connections, but it’s much more common for companies to for example, put photo and video of their offices and their employees online that was the original product that the Muse built our business model on…
RITHOLTZ: Was trying to personalize and humanize cold corporate entities, so they look more appealing to potential employees or hires?
MINSHEW: It’s not so much that they look more appealing, but it’s this concept of fit, right? You know, five years ago, when I started the business, I used to have a slide where I took some sentences off the career pages of Dell, Intel and IBM and I had the three logos of the companies and the three paragraphs and I said, “Which one is which?”
And frankly, nobody could tell the difference because those were all you know, “We’re committed to authenticity.” We’re this, we’re that, but what’s fascinating is if you went into Dell, people all talked about certain themes and certain things that they valued about the culture there and that was very, very different from Intel, which had this really kind of cool, very competitive, you know different offices and those things are going to fit different types of people very well, but from the outside, you know, from looking at a job description or their company website, you’d never be able to tell the difference.
And I think that seems like such a missed opportunity. So, it’s less about making companies “look good” in fact we can get into this, but I don’t know that I believe in a sort of vertical sense of, “Oh, this company is good and this company is bad.” I think it’s more, who are you and what are you looking for? Do you want a company where people are constantly pushing each other to succeed, competing against each other or the clock or the Singapore office?
You know, it’s very go, go, go. Very driven, or do you want a company where people really you know, care about each other where things are, you know, and I am kind of creating a silly sense of opposites, but companies have personalities just like people or humans do and the best company for one person might not be the best one for another.
And so, I think that to me, it’s just fascinating you know, how can you help companies show that personality and to your question about social channels that’s exactly what candidates are looking for. They are saying, “Okay, how do they tweet? Do they have an Instagram account where their employees can post day in the lifestyle pictures? What happens on Facebook when I scope this out?”
You know, there was a fascinating — another statistic that the average candidate consumes, I think it’s 14 pieces of content before they apply for a job. That’s kind of wild when you think about just what candidates had access to several years ago, but now, people are doing their research and they are saying, “Okay, before I answer this recruiter’s e-mail before I go spend 20 or 30 minutes filling out my cover letter and my resume and everything, okay, you know, do I want what you are offering in the first place?” And again, this is especially true of the most talented individuals which are the people that everybody is fighting over.
RITHOLTZ: I want to get into the millennials and modern workforce, but before I do, I have to talk a little bit about all the craziness that has been going on with venture capital firms out in California and technology firms the role of women in these entities. This really has very quickly been revealed as an old boys’ club, only we mentioned social media before. There is so much of an intense spotlight and so much — there is no hiding anymore. This seems to be coming to the fore and changing very rapidly.
You have a unique perspective on the industry. What do you see?
MINSHEW: You know, it’s a fascinating time to be in tech right now. When I started my business, 2011, it was very different. I was often one of the only women at tech events. I would regularly get asked who I was there for, whether I was there because I was dating somebody or you know, somebody’s assistant. I was like, “No, I founded a company.” And you know, what’s interesting is, is most people didn’t mean badly.
RITHOLTZ: Somebody’s assistant though. That’s a little insulting.
MINSHEW: Yes, I mean…
RITHOLTZ: Honey, could you give me a cup of coffee? I mean, that’s a little — you know that’s right out of madmen practice.
MINSHEW: And it was to some extent, but you also have to take the intention behind it, right? Some people mean it badly and some people are just — they are just clueless. They don’t realize. And I do think what’s interesting is, you know, there have always been lots of good people working in technology, but frankly, any industry is going to have its bad apples. I think the challenge in tech was that for a long time, the industry didn’t want to talk about the problems, so the bad apples just kept doing their thing.
And what’s been interesting to me is as we have seen some of these revelations recently, women are coming out and saying that you know, that certain venture capitalists have behaved highly, highly inappropriately. It’s often many, many, many women with the same people because when you have a culture that allows certain behavior to go on with impunity, I think what you often happen is a few people that are serial offenders and to be totally candid, it’s been really refreshing this summer that a few of the most egregious harassers in tech have finally suffered some consequences…
RITHOLTZ: And this is both on the technology company and the venture cap. There have been lots of resignations and lots of founders, CEOs, others stepping down over the past not even 12 months, six months. It’s been a see change. Is this a temporary blimp and then everything will go back to normal or is this really a secular change that is taking place?
MINSHEW: I hope it’s a more permanent change and the reason I believe that that’s likely is I can’t tell you how many men in the industry I have talked to who have said, “God, this stuff is terrible.” Some of these stories that are coming out. You know, I don’t want our industry to be a place where this sort of behavior happens unchecked because when I think you look at — when you look at the technology industry, again, you have a lot of great people who want to work with the best of the best, be those people — men, women, black, white — you know, there is a lot of people who are very committed to the idea of making the best ideas, sort of you know, surface to the top.
RITHOLTZ: The meritocracy.
MINSHEW: Yes, exactly. Which unfortunately that word has been used in the past to play down some of the very real issues of bias and discrimination that do exist. But I am happy that as an industry, we are talking about it because I think awareness of the problem is the first step to making a change, second step is obviously, consequences for people that are the most sort of pervasive harassers. The one other thing I want to make sure doesn’t get lost in this discussion is that it’s very easy to write you know, an article — I mean, I don’t mean this in any way, downplay a lot of the articles that have come out have been the result of sort of exhaustive research, but let’s just say that it’s easy for someone reading an article about severe gender based harassment to be outraged by that, right?
Nobody should be put in a position where someone else is saying, “I’ll fund you if you sleep with me.” I think we’ve all — I hope acknowledged that that’s just not appropriate and so I think that it’s great that the industry is waking and saying, that’s not okay.
But what I think shouldn’t get lost in this discussion is that there’s also a lot of more subtle bias, what’s called unconscious bias that also can sort of hold not only women entrepreneurs back, but entrepreneurs that don’t look like the standard. You know, the classic hoody-wearing young guy who is a Harvard dropout. There’s a lot of research that are starting to come out and Harvard Business Review has done a really interesting job publishing some of the latest that across the board, male and female investors ask different questions of female entrepreneurs than male entrepreneurs. They are more likely to see young male entrepreneurs as promising and young female entrepreneurs as inexperienced.
They ask more questions around women, how do they protect themselves against risk; whereas male entrepreneurs, how do you capitalize on opportunities which leads to very different sorts of assessments of those entrepreneurs and what’s been fascinating is that there have even been studies where they have actually had entrepreneurs present the exact same pitch, but they play with the gender and the attractiveness level of the entrepreneur.
And they found that attractive men were the most likely to get funded, followed by unattractive men, followed by unattractive women, followed by attractive women. These people are making these unconscious assessments and I think that you know, first again, the first step to realizing this as an investor is to being aware of how unconscious bias can play out, but I also think as an industry, we are starting to grapple with you know, what does it really mean to create a technology industry where people can get funded with great sort of industry changing ideas regardless of whether they “look like” the person you’d expect to lead a successful business.
RITHOLTZ: You know, I have seen two specific unrelated to tech areas where they have done blind — for lack of a better word, interviews. One is in professional orchestras, philharmonics, what have you, where the player is actually behind a screen and you don’t get to see them. You only hear them because after all, that’s all that matters if you are a violinist or a saxophonist or whatever, and that process has completely changed the way orchestras “look.” It’s more gender diverse. It is more race diverse.
It has become a blind meritocracy and I think it might been Samantha Bee’s program when they were hiring comedy writers. They made sure someone literally went through all the applications, stripped out the name or any other identifying characteristics and people were hired just on the quality of their work, and lo and behold, you end up with a more diverse group of comedy writers or group of musicians and in net-net, you get a better product that way.
MINSHEW: There is a fascinating study as well where I think it’s adjunct professors were asked to grade mathematics proofs and when they —
RITHOLTZ: Which should be completely objective and not a subjective sort of situation.
MINSHEW: Exactly. You would think so, and when they changed the gender of the names on top of the proofs, and again, this was an academic sort of fully — I don’t even know the right words for it, but it was the sort of study that a university puts out and gets behind with all the right protocols, when they changed the gender of the names on top of the mathematics proof, female names scored on average 20 percent lower, I believe than male names.
RITHOLTZ: That’s substantial.
MINSHEW: You know, and your example about the orchestra, before the instituted blind auditions, a lot of orchestra leaders would say, “Look, it’s nothing personal. I am not discriminating. Women just don’t have the lung capacity to play these instruments at the same level,” they genuinely believed that they were hearing a difference. It was only when that difference was physically removed that the disparity in male versus female musicians who were hired went away.
And I do think, I mean, it is challenging in technology because to some extent, an investor is betting on the entrepreneur. They are betting on the founder, but the way that investors measure things like grit, perseverance, determination, ambition, they code those things differently in some cases in their assessment of male versus female founders.
RITHOLTZ: Like grit is a key component of an entry level tech job, right? Or is that just an excuse?
MINSHEW: Well, you know, I think that — I don’t think in some cases people mean to make excuses. I think people go with what they are familiar with and unfortunately, in tech, what they are familiar with looks like one thing and it often leaves out, I think some of the best talent and ideas right now that can help us you know — make big things happen.
RITHOLTZ: You would think market efficiencies would punish people who are misbehaving that way? But before I spend too much time on this, let’s talk about millennials a little bit because that was what I really wanted to discuss in this segment. You mentioned the data point earlier, I have to bring up, 44 percent of millennials turn down a job because the organization’s values did not align with theirs.
I can’t imagine any previous generation getting away with that. How is that possible? Hey, thanks, but I just don’t dig your values and I am going to turn the job down. Is that a realistic thing?
MINSHEW: It absolutely is and it is fascinating in how it plays out. I think we are only going to see that trend grow. So, firstly, there’s projected to be a shortage of 1.5 million knowledge workers by 2020 and in some fields, the shortage of talent is even more intense, so for example, there I believe are five open developer jobs for every single developer looking for work today, so you have these certain parts…
RITHOLTZ: That’s amazing.
MINSHEW: I know, it’s staggering and honestly, it should — you know, it should really concern you if you are a business that needs technology talent to survive, which by the way is almost everyone today. And so, what you are seeing when you have these imbalances in the types of talents that businesses are looking for and the number of people with those skill sets in the market is that those people have the opportunity to be pickier and one of the ways that they are voting with their feet is they are saying, “Oh, I want to join an organization with values that align with mine.”
Now, I want to be really clear about what this means. I think sometimes, executives will come to me after I have given a talk or a keynote and they will say, “You know, how do I compete with Facebook? They have free snacks.” Or “I hear Google has a slide,” but believe me, it’s not these sorts of flashy perks. They make for great magazine articles, but that’s not what is driving most millennials to choose one opportunity over another. It goes much deeper.
I mentioned the people, purpose and path earlier. Those have sort of become the 3 P’s internally, but many of the talent that uses the Muse to navigate their careers, they are looking for, okay, who are the people that I am going to be working with? You know, are my colleagues inspiring to me? Is the leadership someone I can look up to? What is the purpose of this organization? Does it have a clear sense of mission? Whether that’s social impact or not? Frankly, it can be making a complicated process much more simple for a specific buyer.
But is there some sort of why or reason that the organization exists and then path, what opportunities exist for growth and development? And when we work with companies, we try and help them really tell that story. And again, your employees are your best advocates because just trying to compete for candidates based on paycheck without taking a look at the rest of it, that is going to be a more and more challenging strategy as time goes on.
RITHOLTZ: We have been speaking with Kathryn Minshew. She is the Founder and CEO of themuse.com. If you enjoyed this conversation, be sure and stick around for the Podcast Extras where we keep the tape rolling and continue discussing all things involving millennial employment. We’d love your comments, feedback and suggestions. Write to us at MIBpodcast@bloomberg.net. Be sure and check out my daily column on Bloombergview.com. Follow me on Twitter @ritholtz. I am Barry Ritholtz. You’re listening to Masters in Business on Bloomberg Radio.
Welcome to the podcast. Kathryn, thank you so much for doing this. I have really been looking forward to chatting with you about this. We really didn’t get to talk about the millennials as much as I wanted, and I have some questions I have to follow up with you on that because I have a lot of millennials in my office and I find the general, I don’t want to say complaint, but the general descriptions of that generation to be somewhat a little off base, a little off kilter, you could take any extreme example and use it to paint a group.
So, first question that I find shocking. Something that is in one of your PDFs is 51 percent of candidates who have a less than and thrilling experience in an interview, what do they end up doing with the experience?
MINSHEW: So, many of them will sever their business relationship with the organization where they have that bad kind of experience, and it’s fascinating because when you start to really follow the numbers, you can actually put a pretty substantial business impact to not treating candidates well and it makes sense, right?
As the expectations that individuals have as consumers, let’s think about, you know, the way that people expect customer service to work or the types of interactions people expect to have with just brands in their day to day lives, when you contrast those to help those people who are treated as candidates, which frankly is very poorly, you can see that they are starting to disconnect and candidates especially individuals that have skillsets that are more valuable to the market are starting to stand up and say, “No, I won’t take it.”
When we did a survey of users on the Muse, the number one thing that they hate about the current job searching career process today is what they call the black hole. It’s when you apply to a company…
RITHOLTZ: They don’t hear anything about it.
MINSHEW: — and never hear anything, and similarly, you know, there are many cases in which people go through the experience of interviewing for a company and they are treated more like a resume or a number than an individual human. We have actually started to work with a number of our customers and our partners on candidate experience. You’ve spent so much time and money getting these people to apply, why would you want them to leave the process with a bad impression of your company?
RITHOLTZ: So, that raises two questions I have to ask. The first is about the black hole. Is it better to just politely say, “Thank you, we’ll file this away,” or “Thanks, but no thanks.” Or to actually turn around and do nothing?
MINSHEW: Our candidates uniformly would prefer just to know. They want to hear, “I’m sorry, we won’t be moving forward with you at this time, but thank you for applying,” and you know, the best companies leave the door open for the future. Just because it wasn’t the right fit today doesn’t mean there might not be a great opportunity. I actually think that that is a great approach that removes some of the hubris from companies saying, you know, “No, sorry, you’re not right.”
Because the truth is, a lot of great talent even if they are not right for you today, they may go off and work at one of your competitors, somewhere else in your industry and you know, six months, three years, 10 years down the line, that could be the person that you’re dying to hire and if you haven’t, at least treated them with a basic, sort of minimum of professional respect, you’re much less likely to be able to do that.
RITHOLTZ: So, that raises the second half of the question, which is, how much of this sort of hand-fisted, I don’t want to use the word rude, but just unpleasant experience as a candidate is the legacy of that power shift where it used to be, the company had all the power. They were the ones who were writing the paycheck, and now, suddenly that there is a short — especially in tech and areas where there is a real shortage of talent, how much of it is just these companies having quite recognized, hey, the power ratio has shifted and it’s now with the potential employee not the employer?
MINSHEW: Look, some of it is a legacy of the technology. Early application tracking systems did not make it easy to respond to people to treat them well. It was very much a processing system frankly, and I think that you had and I am going to keep this short because I don’t want to recount the entire history of the online recruitment industry, but you have this phase where all of a sudden, it became so much easier for individuals to apply to jobs that companies were swamped by applications.
When you think about just “Click to Apply,” versus having to mail in a cover letter and resume, and when this initially happened, when companies were initially swamped, they responded by just processing the applications as quickly and efficiently as possible and it became more of a — you know, let’s — how many applications, how quickly do we move people through? How quickly do we get a butt in the seat? And it was less about cultivating the people that you’re turning down today, but that could be right in the future.
It was also to some extent less about fit because there was more of a sense that as a company, you’ve just got a bunch of applications and you picked the best one and you moved on. Now, companies are starting to wake up and say, “What if the best talent in the world isn’t even applying to my jobs? Because they are not even thinking about me as a place to work?” And that changes the game.
Again, both with the candidates you receive, but also understanding the way that people talk to each other on social media, you don’t want someone to have a bad experience and perhaps they tell their friend or their colleague, you know, “Oh, that place treated me terribly. Never work there.” What if that person is someone that you are trying to recruit?
And so, I think that companies are starting to both obviously be more aware, but there’s also been a lot of data, hard data coming out recently about the business impact in terms of lost dollars, negative employer brand ramifications of having a candidate experience process that does not value candidates as people.
RITHOLTZ: I know. Who would have imagined that? But now that you mentioned it, it makes perfect sense. Let’s get to some of our favorite standard questions we ask all our guests. What is the most important thing people don’t know about your background?
MINSHEW: The most important thing — that’s a tough question to answer, the sort of most fun and random thing is that I love to travel and I have been to 61 countries since 2004.
RITHOLTZ: Wow, 61 in 13 years, that’s a lot of travel.
MINSHEW: Yes, including the border between Turkey and Iran, the border between Rwanda and the DRC. I love travel and I love exploring. I think the other thing is, you know, I really do believe that the entire industry around how people find their next job, how they choose what to do in their career and how companies are able to source great people, I think we’re going to see something in five years that looks radically different from how it looks today, and then especially from how it looked a couple of years ago and I am so unbelievably excited to be part of that.
RITHOLTZ: Tell us about some of your early mentors who affected how you think of the world and who affected your career?
MINSHEW: Yes, I was very lucky when I first started the Muse to have a few other founders, entrepreneurs, you know, individuals in technology that took me under their wing and explained some of the dos and don’ts. So, there was an incredible woman named Rachel Sklar who was very active with media. She actually helped me get on television the first time that I ever did a TV segment.
There was a business mentor from McKenzie, Joanna Barsh who was incredible influential, also actually my — one of my managers at McKenzie, it was a guy named Dan who I think was probably responsible more than anyone else for me — not seeing me like a total and complete idiot when I was a 23-year-old walking in to these client meetings as a consultant and I have taken a lot of those lessons with me ever since about just you know, basic presence and interaction with executives. It’s actually been very helpful as the Muse started to sell into enterprise clients.
And then I think as my company has grown, you know, we were part of Y Combinator, several of the partners there really helped us avoid some of the early pitfalls because there’s so much you don’t know as an entrepreneur and if you can’t find those other people to tell you, “Well, you may not want to do that because I did it and here is what happened.” That can save you more heartache than I can possibly express.
RITHOLTZ: Tell us about some either venture capitalist or technologists who affected the way you built your business?
MINSHEW: Oh, my goodness. I would say, here in New York City, I have certainly learned a lot from watching the way that Rent the Runway has been built. Jen Hyman has done a really incredible job building a company that again, that created a fairly new category in the space.
I am also really proud to be an entrepreneur from New York City, so seeing her build that company has been incredible. There is a woman named Nilofer Merchant who is a former senior executive, an investor. So, she recently came up with a book called, “Onlyness” about the concept of denting the world, bringing what only you can and she has been incredibly influential because I think that early on for me, there were times when people looked at the way I was approaching my business the way that I for example, wanted to structure the company or treat our employees or just — I don’t know, there were so many little things especially in the early days of the Muse where we were going kind of against the grain of conventional tech wisdom.
And there were a number of people who were very powerful in helping me realize that being different didn’t necessarily mean we were wrong.
RITHOLTZ: So, you mentioned “Onlyness,” what other books have you enjoyed? What are you reading currently?
MINSHEW: My goodness. Well, I loved, “The Hard Thing About Hard Things,” which is a Ben Horowitz’s book about entrepreneurship. I think he coined the phrase, “eating glass and staring into the abyss,” which is certainly the most accurate description of some of the low points of entrepreneurship.
Eric Ries who is an early new seed investor and another person that I got some incredible guidance from early on. His book, “The Lean Startup,” is a classic of how do you break you know these big complicated ideas and plans down to the most basic MVP minimum viable product and experiment, test them in the world. Nilofer’s book, sorry, “The Power of Onlyness,” is the full title. That actually just came out, but her, I think ideas and perspective have been very impactful, I mean for a long time.
And then, in terms of what I am reading now, I am about half way through, “When Breath Becomes Air,” Paul Kalanithi. It’s a fascinating book. He was a neurosurgeon, neuro scientist and eventually was diagnosed with cancer and it is his story and full of mediation on life and it is a very — it’s very, very impactful.
RITHOLTZ: So, you joined the technology/web industry six years ago? Is that about right? From McKenzie as a consultant, what has changed over the ensuing six years and is this a good thing or a bad thing?
MINSHEW: You know, I love being part of the technology industry and I think it’s a really great time to be a founder right now. In terms of what have changed, you know, the sense of what is trendy has changed. I know when I was first raising capital for the Muse, everybody that I talked to was really into daily deal sites that was when Groupon was really big and you know, investors probably funded 25 smaller niche opportunities and you know, now, it’s obviously AI, bots, there’s a lot of new trends. Some of them are going to be massively big.
I don’t mean to discount that, but I think that the industry — one thing that has not changed is this sort of sense of everyone trying to figure out what’s the one or two next big things. But that said, I think it’s a time where as much as there is a lot that’s very challenging about the world, the political system that we live in, I think there’s a huge amount of optimism in terms of what can be accomplished with technology and you know, when you look at just the career industry for example, there are — I could name half dozen companies that are innovating on different parts of the process, different needs that individual candidates that the companies have and I think it’s a great time.
You know, I saw — one of my favorite books, I didn’t mention earlier is “Arcadia,” it’s a play by Tom Stoppard. And one of the characters has this beautiful quote and he says, “It’s the best possible time to be alive, when almost everything you thought you knew is wrong.”
RITHOLTZ: That’s an interesting quote. Tell us about a time you failed and what you learned from the experience?
MINSHEW: My goodness. I have definitely, I have had some epic failures as well obviously some things that have been very successful and I think you probably could learn more from the stuff that goes wrong. The one that — I will give you the quick story is I mentioned earlier, in between leaving McKenzie, I had moved and then moved back from Rwanda, I started a blog, a community, essentially a project that became a company with several other women. That was sort of the predecessor to the Muse.
And it ended really badly — the four of us disagreed on the right direction to take the company. We had very different senses of whether it should be, you know, an every man brand or a high-end brand, how we wanted to set it up and we ended up in just this very painful situation that for a while, I ended up feeling like you know, all of the work had been for nothing and I felt like a total failure.
We kind of split two and two and the other two took the site that we’d been building and renamed it and sort of moved on and Alex and I ended up starting over and what we started over with was the Muse and it’s so funny because, looking back, I don’t know that we could have done what we have done with the Muse, with the company without that experience, but at the time, I mean, I was you know, in a fetal position for a couple of days just thinking to myself, “Has this all been a waste?”
And of course, even if the work feels like it’s been a waste, like what you’ve learned from it, you carry with you.
RITHOLTZ: The path to get from here to there requires sometimes, what feels like wasted effort and what feels like, “Well, that was for naught,” but very often, it isn’t. Tell us what you do to keep either mentally or physically fit or for relaxing or enjoyment outside of the office?
MINSHEW: Yes, so in terms of keeping mentally fit, I love languages.
RITHOLTZ: Oh really? MINSHEW: I speak French. I always like — last night, I was sitting outside reading a book and overheard a couple of French teenagers talking in very heavy slang, which was really fun to sort of remember, I used to live in Strasbourg, in Eastern France, so it was kind of a fun trip down memory lane.
But I love kind of getting and staying plugged in to other languages, other countries, other cultures. My other big kind of hobby right now is cooking and it’s totally ridiculous. I actually got a Vitamix a couple of weeks ago and now, I am just like blending and cooking and making all sorts of things.
So, those are probably my big two outside of work.
RITHOLTZ: I have to share a language story with you. I just got back from Paris — 10 days in Paris for my 25th Anniversary and having taken French in high school, and arriving at Paris — in Paris and realizing, “Wow, three years of French in high school and they did a terrible job teaching you to speak,” I downloaded an App called DuoLingo and it’s just a really simple set of — you can use it on your phone, you can use it on the computer, a tablet, and it — I feel like, you know, a week of playing with DuoLingo, I have learned more language than I did in years of high school. It’s amazing how we have taught people other languages so inappropriately over the years.
MINSHEW: I know. When I showed up for my first day of my junior year of college at the SILS the big political science university. I mean, I didn’t — I literally could not understand anything and I was probably six years into French language at that point, but then of course, you know, three or four weeks, sort of being immersed in it, I was like, “Oh, finally, I can understand my professor.”
That was a — it was a good moment.
RITHOLTZ: All right, and our two favorite questions that we ask all of our guests, and this question is actually really funny to ask you of all people, the ninth question we ask all of our guests is always, what advice would you give to a millennial or someone just beginning their career? And it’s funny because essentially, that’s what the Muse does every day, but what sort of advice if someone came out to you and said, “Kathryn, I am thinking of going into technology, HR, whatever,” what sort of advice would you give them?
MINSHEW: Yes, I’d say that anything worth doing requires grit and persistence. I think that sometimes, that can get lost in our culture’s focus on overnight success, things that just seem to kind of work magically, but literally every person I have talked to, be it an entrepreneur, a successful business leader, executive, whatever it is, maybe they just you know, run a small organization or company or nonprofit or being in a small corner of the world and they are not necessarily famous or someone you’ve heard of, but people that are deeply content or satisfied with their career have usually had to put up with some hard Knox to get there.
And I think grit is a fairly under appreciated attribute, but certainly, I believe it’s one of the most critical.
RITHOLTZ: There’s a new book out, “Grit,” I don’t know if you’re familiar with that, someone put out a book, “Grit” is in the title, when you get a chance, take a look at it. And our final question, what is it that you know about technology, venture capital, HR — anything like that today that you wish you knew seven or eight years ago when you were first thinking about launching the Muse?
MINSHEW: You know, the only constant is change, just because you have a great idea or a big innovation or something that moves your space or your market forward, that’s never enough. That’s the sort of opening stakes. You have to constantly keep moving, keep innovating, keep changing as a business.
And actually, I think it’s a very freeing and powerful thought, but it’s certainly important especially in technology today because the rules of the game now aren’t going to necessarily be the rules of the game in three years, and if you can’t commit to sort of learning and innovating and constantly updating your own assumptions, it’s going to be harder and harder to keep up.
RITHOLTZ: That is fascinating. We have been speaking with Kathryn Minshew. She is the founder and CEO of themuse.com. If you enjoyed this conversation, you can look up an inch or down an inch on Apple iTunes and you could see any of the other 150-something or so previous shows we have had. Be sure and write to us. We love your comments, feedback and suggestions. Send us an email at MIBpodcast@bloomberg.net.
I would be remiss if I did not thank my crack staff who helps put these podcasts together. Medina Parwana is my audio engineer and producer par excellence. Taylor Riggs is in charge of booking and also one of our producers. Michael Batnick is the head of research who helps delve deep into the background of our guests, coming up with better questions than I usually do. I am Barry Ritholtz. You have been listening to Masters in Business on Bloomberg Radio.