Ståle Fredlund Husby: "We talk to new investors every week, not one has asked me how what we are building can make this world a better place. That’s worrying."
Article by Ståle Fredlund Husby, Co-founder and CEO at Relink. This Nordic, venture backed startup, uses machine learning and AI to match applicants to jobs and jobs to applicants.
When making big strategic decisions, how many of us tech founders think “social impact” first? I mean really — impact, first. I’m going to guess not too many, and that is totally understandable. We are primarily here to build businesses. With that said, I think the more time we spend thinking about a secondary (social, if you may) impact, we might just find ourselves building a hell of a lot more interesting and potentially valuable business.
The philanthropic case for social impact has been made time and time again. I’m here to make the greed case for social impact.
When I hear people pitching their startup, I almost never hear them talk about how their work or product can have a positive impact of the lives of the groups they are reaching and solve real (not first world) problems for them. I’m not saying that everyone ought to run around saving the planet, but I really believe we should find problems to solve that affect more than incremental efficiencies (Peter Thiel’s definition of 0 to 1).
Most startups build their business around the notion of breaking new ground to benefit their prospective new customers. Behind this lies the firm belief that their idea is to do things better: “we are here to invent something new or to disrupt the status quo.” The urge for novelty and market fit is the driving force for most startups. This drive is often a direct response to what the target groups need and want (or in most cases, want but don’t need).
We know that the target groups decide more and more. We also know that consumers are hungry for consumption that gives them pleasure without damaging themselves, society or the planet. And they are willing to pay for it. A 2015 survey by The Nielsen Company in the US reveals that almost two-thirds of the consumers are willing to pay extra for products and services that come from companies who are committed to positive social and environmental impact. That represents a sizable jump from 55 % last year and 50 % the year before. So apart from a pure Mother Teresa case for social impact in this fast, rough world – there is a case to be made purely on greed (whatever works, right?).
So, we know that consumers want to associate with businesses that are moving towards a more sustainable direction. Increasingly, this push is being seen on the investor side as well. Investors are now asking companies to blast such sustainability efforts in financial filings.
With that said, I have yet to see this push. We talk to new VC’s every week and so far, not one investor has asked me how what we are building can make this world a better place. That’s worrying. We need investors and founders that think in big, very big, in terms of what we can achieve beyond mere financial ROI.
Investors need to understand that “sustainable is the new black” when it comes to business.
We need to ask how our business, as we build it, can make a real difference and have some real impact on this world.
During our journey with Relink, opportunities started coming up that made us realise the potentially large social impact our technology could (and ought to) have.
In all honesty, this was not our raison d’etre. Rather, it was a consequence of spending so much time navigating and trying to understand this complex and archaic HR Tech space. We have always seen the potential in increasing the efficiency of this industry. We started off solving a first world problem and have stumbled into solving a real world problem (as well). For us as a team, this adds a new layer of value, pride and purpose to our work. It makes us feel that what we do matters. Believe me, the difference is huge, both in terms of purpose and the means to get there.
The world stands at a crossroads: skills that were valued five years ago are being rendered obsolete. Millions of people around the world are unemployed and underemployed and such stressors are being felt in political movements trying to slow down this iceberg. But it is coming, and it ain’t slowing down. What if we can help those displaced find jobs based on their skills? We know something is out there for (almost) everyone. Access is the real bottleneck and guess what? Technology, trained properly, doesn’t see these bottlenecks.
We build and train machine Learning technology to understand the fit between people and jobs. The immediate (and frankly obvious) use case is to fuel existing recruitment processes with more intelligence and help recruiters make better hiring decisions. There are other use cases as well. Some less obvious and with far-reaching implications is using our technology to create social impact. One example of this is a collaboration with Danish technology startup, CodersTrust.
CodersTrust is backed by the UNDP, World Bank, Rockefeller Foundation and Grameen Bank. The company provides funding for students in emerging markets to acquire digital skills, giving them the opportunity to work and make a living through various freelance sites (such as Upwork, Fiverr, Freelancer). Currently there are more than 5 million companies across the US, EU and AU with >200,000 job posts across 150 freelance portals. However, it takes an upfront investment — a laptop, access to the internet, and the right skill-set — to compete for these jobs. CodersTrust provides the required seed investments into early-stage freelancers, based on a ‘human capital contract’. The freelancer receives student funding to learn coding, graphical design, or internet marketing in exchange for a percentage of their income from a freelance profile over a fixed period of time. Next is access to jobs.
CodersTrust is now working with Machine Learning technology from Relink to filter through, understand and match freelance jobs with the skills and experiences of profiles on their platform. Using recommendation and ranking capabilities, each individual profile is presented with job opportunities that are specifically relevant for their level of learning. This gives freelancers the chance to secure work and income as well as to further advance their careers.
This is also future robust. Freelancing might in many ways become the new normal of how to work. According to Forbes freelancers made up 35 % of the total U.S. workers in 2016. The number is expected to rise significantly this year.
The ultimate potential of this cooperation lies in reducing the huge discrepancy in global wages and in creating a mechanism to provide education and job opportunities for the 200 million young people in emerging markets currently without or little access to education. The Relink x CodersTrust collaboration can reduce the uneven distribution of opportunities and provide a more equal playing field to previously disadvantaged populations.
This collaboration shows how HR tech and machine learning can create substantial social impact. This is not merely a race to better equip recruiters with (fancy, shiny) tools. It’s an opportunity to use our technology to fight reduce bias and make a more even distribution of opportunities.
Going back to a “social impact first” mentality. When I look at the tech industry in 2017 and see what passes for innovation: apps that let you hire a private chef, without all the horrors of cooking yourself, or outsourcing your dog’s laundry instead of doing it yourself like an adult— I’m pretty sure that there is a whole world out there that we don’t fully understand or even see. We could apply our minds on more real projects.
The fact is that we are are some of the smartest, most empowered humans who have ever lived. We have so much. Can we use our companies, our products, our minds to make the world a better place for people who don’t have the opportunities we have? It would cost us so little, and we can accomplish so much.
The social applications of the amazing technologies that are being built exist—we just have to go out and find them. That is the journey we as Relink now have embarked on. We, sitting in our humble little offices, with our grand dreams and aspirations, can truly be heroes.
Building business for profit is a two legged stool. The third leg is social consciousness and it is here to stay. Investors should start asking us founders how our companies can make a real world difference. After all – this ecosystem follows the money.
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