“A war chest of investors”: HR startup Shortlyster raises $5 million from heavy-hitting investors including Shark Tank’s Andrew Banks
Tuesday, March 12, 2019/
HR startup Shortlyster has raised $5 million to grow its algorithm-enabled tool helping businesses put bias aside and choose the best candidates for their workplace.
The funding round was led by UK investment fund Deepbridge Capital, and also includes investment from Shark Tank entrepreneur Andrew Banks and British founder of dotDigital Tink Taylor.
The startup was founded in 2017 by corporate psychologist Rudy Crous and Carl Hartman, who previously co-founded shipping platform startup Temando.
Having previously led a consultancy specialising in culture, performance and operational risk management, Crous tells StartupSmart he “saw firsthand the negative impact bad hires could have on organisations”.
Bringing the wrong people on board can affect culture, morale, turnover and ultimately the bottom line.
“Getting it wrong can be quite catastrophic for businesses, which makes hiring itself quite stressful.”
While we have seen advancements in the recruitment process, they have largely focused on the transaction. When it comes to making a decision, “organisations still rely on old, outdated and unintelligent practices”, Crous says.
Shortlyster uses algorithms “underpinned by organisational psychology and neuroscience principles” to match the candidates with companies, based on technical skills and qualifications, but also based on culture fit.
People are bad at decision-making, Crous explains.
“We’re emotional, subjective decision-makers, and under pressure, we’re even poorer,” he says.
“Technology can help standardise, and make the process more objective,” he adds.
Where people are bad at remembering specific facts and details, and find it difficult to approach others with objectivity, technology “obviously doesn’t have these biases”, Crous says.
Crous doesn’t disclose how many companies are currently using Shortlyster, but he says they come from a wide range of industries, from tech to mining, and span startups, small businesses and mid-level enterprises.
The startup also has clients in Australia, the UK and the US.
“Each of these companies, although they’re in different industries, have the same fundamental problem,” he says.
Brave new world
Speaking to StartupSmart, Banks said the founders have created a platform that is “advanced in many ways but very logical and simple in others”.
“It allows any company that is thinking of hiring someone to articulate what their culture is,” he says.
At the moment, the recruitment space focuses on assessing people based on their past experience, rather than who they are today.
“We’ve grown up in this world of assessing people based on what they used to do and what they have on their resume, not how they think and what their personality and style is about,” he says.
As more jobs are made obsolete through AI, robotics and other technologies, this kind of technology will become more and more important.
“If a third of the jobs that we know now are going to disappear in 20 years with AI and technology and disruption, then how the hell can you recruit people based on what they used to do?” Banks asks.
“You’ve got to recruit people based on who they are today, how they think and what they’re passionate about,” he says.
“It’s one of the first steps in this new, brave changing world, where the less tangible soft skills and attributes are much more important than the degree or the five years of past experience.”
A war chest of investors
This seed funding is pegged to help Shortlyster into its next business phase, and grow its market share, Crous says.
“Every dollar that’s coming into our business, whether that be revenue or funds raised, is going towards getting more market share and growing the business.”
They will be hiring talent to join their own team, and making a push to establish themselves in the market nationally and internationally, while working on new, additional solutions for the workplace.
“We will continue to launch additional products that focus on the world of work more broadly, and solving other problems beyond just the recruitment or hiring space,” Crous explains.
“How can we better aid decision-making and intelligence in cradle-to-grave employment and the world of work more broadly?”
The founders were very particular about getting investors on board who could help them on this mission.
“We wanted to build a war chest of investors and advisors who can open up doors for us,” Crous explains.
The investment had to be about more than money, he adds. There was also an element of “leveraging smart investors to help grow our business”.
Having Deepbridge on board was a strategic decision, and Shortlyster has plans to expand its presence in the UK “in the near future”, Crous says.
“It’s a much, much bigger market than Australia,” he adds.
Pitching to Andrew Banks was also part of the strategy.
“He’s got his ear close to the ground,” Crous says.
“Once he found out how good the platform is he was very interested and he wanted to explore further.”
Banks brings a lot of business knowledge to the venture, and is “extremely forthcoming,” he adds.
“He’s really opening up doors strategically and helping with our business model more broadly,” Crous says.
“He has the expertise and ability to get into the detail, but also has a bigger picture view of where the business is going and should be going.”
And for Banks’ part, he believes Shortlyster will become a go-to standard for recruitment.
“People will ask, ‘have you Shortlysted?’” he says.
“The ultimate business goal is being the category killer in your space, and I don’t know of any other quick, cost effective online tool that does what Shortlyster does, so I think we can take number-one position locally and globally.”
Crous’ advice for other founders centres around determination and consistent effort.
“It’s not the most intelligent or strong people that win,” he says.
“It’s about waking up every day and getting on with it.”
It was an “unrelenting belief” in Shortlyster that kept Crous going, he says. And, while this isn’t an easy mindset to embrace, he has some tips as to how to stay positive.
“As a psychologist, I really do use mindfulness,” he says.
“Every morning before I start work, I go through various mindfulness exercises. That grounds me, brings me to the moment and allows me to move into my day with clarity.”
He also notes the importance of setting goals each day, a practice that forms another daily routine for him.
“I go through exercises trying to understand what it is I’m trying to achieve for the day, and how I’m going to go about it,” he explains.
These are small exercises that can help founders maintain mental wellbeing, allowing them to approach their business with a positive mindset.
“When something is wrong with our car we take it in for maintenance, but very rarely do we spend that same amount of time and effort maintaining ourselves. And we are an engine after all,” Crous says.
“With any startup, you have to objectively weigh up your priorities. But at the same time there’s no bigger priority than your own mental health and wellbeing,” he adds.
From the frontlines
Alan Jones: How to raise investment for a startup with no customers and no revenue Alan Jones M8 Ventures partner
Canva's Melanie Perkins has 10 tips for startups with 'crazy-big dreams' Melanie Perkins Canva co-founder
Why Up's transgender controversy shows there can be no separation between founders and their companies Joan Westenberg StartupSmart columnist
Take a stand: Why being neutral hurts profitability and engagement Steven Maarbani VentureCrowd executive director
The power of passion: Naked Wines' co-founder reflects on what made the startup successful Peta Jecks Naked Wines co-founder
Hipsters, hustlers and hackers: Three instances of everyday bias in startupland Theresa Lim Play2Lead founder
Diversity and coaching will rid the banking sector of its toxic culture problem Hema Kangeson inSpur founder
Why you should find the right role for the right person — not the other way around Bruce Stronge Outfit founder