Episode Transcript
[00:00:08] Hi everybody. Today I'm going to update the trailblazer list a little bit and let me just give you a little preface that these are vendors that I and we as a company consider to be trailblazer implementations of new technology and AI. And particular, they're big enough companies that you can buy products from them. They're not startups, they have very successful customers and they're companies that we know pretty well now. Because the reason I want to tell you that is there are also hundreds and hundreds of smaller vendors, startups, really creative tools out there that we talk to all the time and we write about them as they grow and we write about them in case studies and examples. But this group are vendors that I think are just worth looking at to learn about what's going on in the space. And they exemplify production quality innovation in this world of constant reinvention driven by AI. First of all, striver. Now Striver Labs is a really, really interesting company founded by an ex quarterback from the Stanford football team who used virtual reality in his training as the Stanford athlete. And he and his brother Derek and Danny Belch started the company seven or eight years ago. And they had this idea that they could use VR for corporate training. And of course, there have been lots of other experiments, lots of other companies that have done this. There's tools you can buy to build VR solutions, there's off the shelf solutions and dei, there's character simulations, there's virtual environments for training and recruiting. But they went deeper than that. They wanted to build real hands on operational training in a 3D immersive environment. And they did this very, very successfully. And they pioneered 3D camera technology, the use of interactive interactions on the screen, the way to do assessments in VR. And they're now widely used by many large retailers, by banks, by conservative manufacturing companies for many applications. And of course, when the Apple VR headset is into production and the Facebook stuff, the meta stuff continues to evolve and it's gotten better, these guys are going to be way ahead. And the reason I consider them a trailblazer is they're not doing a lot of AI yet, but they will because they're capturing huge amounts of data. If you think about the amount of 3D data that's captured in a virtual reality training program, it's many orders of magnitude greater than a traditional corporate training system. So they're looking at all sorts of ways to use this data and to use AI in the development of content and the delivery of a virtual experience. And if you're interested in VR, I just suggest you talk to them because they really will blow your mind. And I've mentioned them before. Second company is seekout. Seek out came to us a couple years ago, really smart ex Microsoft guys, worked in Microsoft Research, a lot of background in AI, and they looked at what companies like Eightfold and Beamery and other sourcing tools were doing. And they said, we can do this even better. And in some sense they have. They're not nearly as big as those companies yet, but what they built was a real time binding skills engine that can infer and improve its assessment of your skills based on many, many forms of data. There were two things that appealed to me when I first talked to them. The first is they were inferring the skills of software engineers through GitHub, in a sense, looking at actual work experience and ratings by other software engineers to determine the skills of a candidate. And they have done that in other applications. They've done it in leadership, and they're doing it in more white collar applications that are not necessarily software engineering. They're doing it in nursing and it works very, very well. And the second thing they did, which some of the other vendors have done too, but they've probably popularized it in my mind a little bit more extensively, is they're looking at the context between skill and job. And a lot of vendors have looked at this. Cornerstone's looked at this, retrain AI has looked at this, Eightfold's looked at this. But when you think of a skill, what a word skill means in a given context, and if it's inferred or developed by a technological assessment, it really makes a big difference what the job is. I mean, machine learning for a salesperson is not the same as machine learning for a marketing person, which is not the same as machine learning for an It implementation person, which is not the same thing as machine learning for a software engineer, which is not the same thing as machine learning for a computer scientist. So you could call that a skill, but it's kind of a meaningless term unless you know how it's being used in those different applications. And interestingly enough, we just finished a fascinating call with a large healthcare provider who is trying to solve the problem of getting more people into the medical assistant role, which is a feeder role to nurse, and one of the biggest leverage roles in extending the productivity of the nursing population. And you know, how shortage, what a shortage we have of nurses. And what they found was that the role of medical assistant wasn't well defined. And they had 17 different job descriptions in their particular hospital chain of what a medical assistant is. And they had to consolidate those by looking at the actual activities that were written down in these job descriptions and coming to a combined definition of what the medical assistant role is. And once they did that, they could determine the skills needed in that role. And once they did that, they could look at the adjacent skills and who would be good fit to train for that role. So the kind of thing that seek out does is very, very powerful and initially seek out positions itself as a sourcing tool. And it's very good for that, one of the best. But it does generative AI, generates job descriptions based on the data about your company, and now it does talent management too. And so I think they're worth looking at. Sort of a direct match with eightfold, but slightly different implementation, slightly different user experience, and different customer set. They've done a lot of work in healthcare. They've done a lot of work in government contracting and government integrators where there's lots of technical skills in science. And so I give them a definitely high mark as somebody to look at. The next one I want to talk about is Sauna. Sauna is a Swedish company. We've met with the management team. We're doing some work with them on some projects. They are a full fledged AI platform for learning, and they look like an LMS, but it's much more than that. I talked about Docebo and their Shape product in the last podcast. Sauna does that plus more, and they're a relatively new company. Not huge numbers of customers yet, but they're growing fast. And I personally think that what's going to happen to the Learning platform market is what we currently consider to be an LMS will be the compliance features of a large language model based system.
[00:07:25] I think the poor old LMS market that I've been poking around in for 25 years is finally going to get disrupted by this stuff because since most of what we do in Learning is manipulate, find, deliver, and manage and track content, the LLMs are so much better at that than the old fashioned relational, database oriented systems. Sauna is going to be one you're going to want to look at. Next one I want to talk a little bit about is Hibob. The reason I mention Hibob. Hibob competes with companies like Lattice Bamboo, HR, ADP, small, medium sized HR HCM platforms. And by the way, that's a very interesting market because for SMB, I'll talk about Rippling in a minute. SMB is sort of 500 employees and less. That's a giant, giant, giant space where you basically have lots of payroll providers. But when you get up to 1000 employees, 1500 employees, 2000 employees, you're talking about a company that might be half a billion, a billion, 2 billion in sales. It's a good sized company. You need an enterprise class system. But Workday and Oracle and SAP is really overkill. I did talk to a client of Workday at their user conference who had about 1500 employees, and they're happy with Workday, but she told me it cost them $3 million to implement it. And I think a lot of people aren't willing to pay that much money. And so these newer vendors like Lattice by the way, Lattice introduced an HCM HRMS, so they are now fully fledged in the HCM platform business. And Hibob are in a very, very interesting space. The reason I mentioned Hibob in particular. And Latice is a great company too. Is that what Hibob did? Is first of all, it's an Israeli backed company. So they have that kind of innovative, creative, passionate Israeli type of engineering team. And I don't mean to be biased in any way towards or against Israelis, but a lot of really creative engineering people come out of the Israeli military. But they really built a user experience that was designed for managers and employees, not HR. And I know how well it works because I've talked to lots of high bob customers and we use it. And I think it's worth looking at again just to understand how these HCM systems can be much, much easier to use. The next one I want to talk about is Ripling. Now Ripling is a company founded by Parker Conrad, who was the founder of Zenfits. He's been around this market a long time. Very, very smart, strong engineering technology team. And what they've done, and I wouldn't say they're an AI pioneer yet, but I would say they're an architectural pioneer. Is their idea is that the HR platform shouldn't really be limited to HR.
[00:10:14] I mean, if you look at PeopleSoft success factors workday HCM EDP most of the HCM platforms, what they really do is they start with the HR applications and they look at the payroll issues, the job architecture and job data storage issues. Then they go into recruiting, then they go into mobility, then they add benefits administration, then they add learning functions, then they add compliance functions, then maybe they built a portal piece on top of it, they put a bunch of analytics and the whole system is designed around the HR functions needs in a company. But as you know, the HR function is a particularly unique set of applications around people. But there's lots of things in the company that have to do with people that are not HR. When you file an expense account, when you get a new computer, when you schedule your hours, when you pick a city or location, and you check into an office with a badge, you order uniforms and equipment for your job location or your particular type of job. When you file compliance information, that's kind of not HR. It's kind of just operations stuff that has to be organized around people. And these are hundreds and hundreds of applications. Some financial, some operational, some compliance orientated that you organize the data around an individual and you need to know that individual's job title, location level, a variety of other factors, but they don't classify as HR applications. So if your Workday or Oracle, what you end up doing is you end up building these other systems that might be in the finance app. I mean, Workday calls it Office of the CFO, oracle might call it Oracle Business Edition or something like that. And you use this HR database that was created in the HCM side to leverage the HR data and hopefully the HR data or the people data is well organized so that these financial applications work well across the organization as the organization changes. But the problem with that architecture is it's kind of an old fashioned idea. It goes back to ERP, it goes back to the idea that the financial system is the core system of the company and the HCM system is a small spinoff of that, the supply chain system is a small spinoff of that, and so forth. The most sophisticated integrated business system that I've ever seen is SAP, because SAP really does have a data model and a people model for hundreds and hundreds of business workflows that cross all of these functional domains. But most of the HR systems don't. Certainly the mid market ones don't. So if you go by Lattice or ADP or Hibob and you want to use It for financial stuff or time tracking or project management, you got to wait for them to build that. Well, what Ripling did is they said, well, maybe we should really think of the HCM platform as if it's the salesforce.com of the entire company. And so they've architected the system so that it not only does most of the HR things you need, but it has an open API and a set of workflows. So you can add other applications to It using the HR data. You can add time tracking, you can add expense management, you can add It provisioning. I don't know how many of those things they've built out, but they're attracting a lot of partners and so I give them credit for rethinking the problem. I mean, it's a subtle difference between Rippling and the traditional HCM platforms, but it's not trivial. It's actually a pretty big differentiation. And I think Rippling is going to grow very they are growing very, very fast. I think they're worth $12 billion last time I checked. And so they're another trailblazer that I really appreciate and I suggest you guys take a look at. The final one I want to talk about is ServiceNow. And I haven't talked about ServiceNow for a while. There's a whole bunch of things about ServiceNow that you have to give them credit for. They in some sense, pioneered the idea of a workflow management system that sits on top of these core HCM and other applications to provide employee experience. So between case management, knowledge management chat, and other services, they in some sense defined the idea of an employee experience platform for enterprises. They originally position themselves as a platform of platforms. So in other words, it was really a workflow engine with certain applications that came out of It service delivery that were then extended into HR. And so most HR large organizations use it for HR service delivery just like they do it service delivery. But then they went further. And as I talked to them over the years, I always used to ask them, are you guys trying to become a system of record? And they said, no, not really. I mean, we're a system of record for cases and we're a system of record for knowledge, but we're not a system of record for core business applications. Well, along comes Gretchen alderkhan, who's now running the HR product, and they become a much bigger company, and they have bill McDermott as the CEO, and they say, well, maybe we are a system of record, actually, after all, maybe we are just a different type of system of record. They go out and they build a survey tool. They go out and they build a small learning tool. They go out there and they build a set of development tools to develop custom journeys that data's got to store somewhere. They obviously have all sorts of deep links into the core HR systems, and then they go out and they buy hitch. Hitch was a really well designed, early stage talent mobility, talent, marketplace skills based talent system. It was originally designed for a large mapping company called here technologies. And the founders were HR people, and they really understood the problem. And of course, once they got into the market, they realized the market was very competitive and kind of hard to deal with, and they eventually sold the company to ServiceNow. ServiceNow is now taking a lot of this functionality and embedding it into its platform. So ServiceNow is becoming a different type of HCM system. They don't do payroll, they don't do core HR, they don't do LMS, they don't do ATS, they don't do those things, at least not at the moment. But they are becoming a system of intelligence because hitch is an AI based system for skills that can use skills and employee data, unstructured data at the employee experience layer. And you could argue that's what Microsoft is doing too. So they haven't announced a big generative AI chatbot yet. I'm sure they're working on one, or they may have announced it and I missed it, but I think you got to take a look at them. The problem of course, most companies have with ServiceNow is it's very expensive. It's in a sense, almost an ERP like decision in itself. But nevertheless, if you're a medium to large company and you've got 810 15 back end systems, which most companies have, there aren't a lot of options for pulling that all together. There are a few. There's a bunch of great ex companies out there. There's a company called simpler, which is doing very well. There's firstup, which is doing very well. There's workvivo, which is doing very well, owned by zoom, and there are others. But I think ServiceNow is a trailblazer in the sense that they have been creating this category and pioneering new ideas. So these are companies that I frankly admire because they're great thinkers. They're great software developers, they're great at sales and marketing. They take care of their customers. They have happy customers. There's plenty of innovative companies well beyond this list. And so maybe what I'll do over the next coming months is I'll continue to tell you about some of the more emerging ones that we talked to, because we talked to lots and lots of vendors and I have lots more to tell you about. But that's kind of my update on the trailblazers for this morning.
[00:18:41] We, by the way, just launched our research on the dynamic organization. I wrote a pretty good sized article on it over the weekend. I really urge you to read that and join our membership and get your hands on that research, because this is the type of thing you can show to your CEO and it will show him or her why what you're doing in HR is so critical to your company's success in the future. And you can couple that with the research we did on the post industrial age, and it's basically a business lesson for every CEO on how to run their company in the decade we have in front of us. Thanks very much, you guys. Talk to you again in the next couple of days.
