10 years, $110 million, and $500 million in funding from TPG Growth & The Rise Fund later, co-founder Danielle Schitt of Greenhouse and I sit down to have a reflective conversation about what has worked and what hasn’t on the journey to this significant milestone.
I’m particularly excited to share Greenhouse’s story because of its mission-based impact: reducing hiring bias. Greenhouse now helps more than 5,400 customers globally, including HubSpot, Stripe, Airbnb and Peloton, to hire more than two million new employees globally. Since the beginning of 2021, the Greenhouse platform has managed over 55 million job applications, processed over 1 million referral requests and scheduled over 8 million interviews.
In January 2021, Greenhhouse’s significant work in creating economic opportunity led to an investment of $500 million from TPG Growth & The Rise Fund in 2021. In the world of venture capital, Rise Fund is unique in that it seeks investments in startups that aren’t just mono-curricular The potential century, but what Good Unicorns coined: companies that serve our people and our planet in beneficial ways. The Rise Fund invests in fast-growing startups that serve one of the United Nations’ 17 Sustainable Development Goals. Its investment in Greenhouse was due to the company’s core service to Goal 9 of the United Nations Sustainable Development Goals: Industry, Innovation and Infrastructure.
With that, let’s dive into the deep end!
Diana Tsai: Let’s start with the good stuff. What did not work?
Daniel Chet: Oh my God, how long is this interview.. it’s only an hour?! There are a lot of things that didn’t work. You go down a lot of blind alleys. In 2016, she wasted $10 million. How do? In 2015, we added $10 million in sales and marketing thinking: We’re a project-backed company, let’s go! And after 12 months there was no revenue growth. That was bad. What we realized in that moment was that we were in a different place on the company’s journey than we thought. We thought we had already come up with a scalable sales and marketing approach. We didn’t. We had a great product on the market. Early adopters were buying in droves. This was a hard lesson to learn, to be patient.
Tsai: I like vulnerability. Now let’s talk about what you did right. What was so important to you to grow this company to this $110 million milestone?
Chait: My co-founder John Strauss and I created Greenhouse in 2012 to help companies become great at recruiting. We knew that more comprehensive hiring was an integral part of better hiring. We believe that if we succeed in our mission, we will unleash the power of human potential at work. John and I have always thought this company was a big, ambitious venture. We were never interested in acronyms. We wanted to build. No cardboard houses – quite the opposite. We intended to build on granite. We’ve seen a lot of companies in our area announce shiny new ideas and initiatives, and then look back a year later and those initiatives are gone. We think about how we take things, every time we make a decision to go after something, it’s solid, it’s good, it’s dependable. It shows in how we employ, and which markets we choose to follow rather than in the markets.
Tsai: Speaking of building a lasting company – they say success is a combination of preparation and luck. What unexpected breaks occurred along the journey without which you wouldn’t be here today?
Chet: There sure is a lot of luck. When we started the company in 2012, we had a low unemployment rate, a talent shortage, and the conditions were right for us on a macro level.
Tsai: Amazing. Let’s get back to your mission, reduce hiring bias. You’re helping thousands of companies hire better, I think 5400 companies to be exact. How can you actually reduce hiring bias for the companies you serve?
Chet: Everyone asks about our secret sauce thinking that reducing hiring bias is really complicated, but it’s really simple. We help companies become orderly in hiring, which means we help them implement specific and thoughtful processes when hiring. Structured hiring means we can measure pipeline parity, which means we can measure things like: Do the offerings we offer align with the pool of talent that has been applied? If about the same mix of people who applied is about the same percentage that was assigned – this is a healthy indicator of a fair process. If not, you may have a problem with the process that you need to fix. It is an important health measure for any company.
Are we helping more and more people across different companies? Are we able to get more and more people into the right role? What is the effect of getting more and more people into the right jobs? More women in the right roles, than if they were, on equal pay? How is this implemented for the individual with a short circuit, and how does this affect society? This is what gets us excited.
Tsai: I am intrigued and inspired by your partnership with Rise Fund (their $500 million investment in Greenhouse) and how you are fundamentally together to achieve one of the United Nations Sustainable Development Goals. This combination of emerging growth and massive, scalable impact is one of my obsessions. Can you tell me more about that partnership?
Chait: We just talked about pipeline parity and how to measure the reduction in hiring bias. We’re actually working with Rise Fund on this: they have an in-house team of scientists and mathematicians working with us to build these models. It really helps us measure impact, and holds us accountable for that. When we show up at board meetings, we don’t just show profitability numbers – we’re asked to explain: How do you improve economic opportunity? How can you do more? amazing thing.
Tsai: This is incredible. An example of Silicon Valley went right. I need to speak to The Rise Fund about my research on Good Unicorns! Now let’s explore the opposite – what have you done in direct contrast to conventional Silicon Valley wisdom that has been critical to your success?
Chait: When we hired our D&I director, I had a very prominent investor tell me not to hire her. His view was that it would lead to a destructive culture in the company and enable people to raise complaints loudly and stir up trouble. It led to a full board room battle, in the end, we stuck to our values and we hired a D&I director and she was great.
The lesson there for entrepreneurs, is that investors don’t always know what’s right, and many will reflect pattern matching, and their own biases.
Tsai: Thanks for sharing that. I want to take us back to the beginning of your story. I can tell from this conversation that you are a really flexible and calm type leader. You’ve said many times that you’re in this for the long haul. When did you know that this task was worth dedicating several decades of your life to it?
Chait: My co-founder and I were brainstorming in 2011. We worked through these criteria that we wanted to focus on. We had all these ideas and none of them would work. We’re starting to get really frustrated with the amount of ideas we’ve come up with. We’ve been researching health care issues in the developing world and sub-Saharan Africa, exploring all of these ways to make an impact.
The defining moment was when we stopped and looked at each other and asked, “What do we really know how to do?” And we realized that we spent a lot of time recruiting and recruiting at scale. Everyone complains about recruitment and we have been constantly surprised that they did not do the orderly work that we did in our recruitment processes. So we decided to set out to make companies better at hiring.
Tsai: I absolutely love this question: “What do we actually know how to do?” I love how that breakthrough moment was for all of you that led to this moment, a decade later. One last personal question, as you look back on your journey to where you are today, what basic habits and best practices would you tell your former self to triple?
Chet: First, trust based on vulnerabilities starts at the top. I come from the biz, which had a different set of rules, more masculine, all that stuff. With Greenhouse, it’s about developing a healthy culture and leading with weakness. Second, reading “Getting Things Done” by David Allen – This book helped me organize my life!