Companies that offer role referral bonuses do so on the assumption that employees are the most knowledgeable about their company's work culture and the requirements of the role. But what happens when companies open up these referral bonuses to people outside the organization?
That's the idea behind Draftboard, co-founded by Zach Roseman, former CEO of mobile app development group Mosaic. Draftboard allows employers to post referral bonuses and allow referrals to compete for bonuses as they scour their network for talent.
“If you're a large company, you're going to receive thousands of resumes for every role you post,” Roseman told TechCrunch. “So either you have a large talent team spending huge amounts of time on each test, or there are big downsides like privacy, bias, errors, etc., and there are definitely big downsides to AI screening. He spends six to seven figures a year on solutions.” Either you're doing it, or you're doing it.''
Draftboard is Roseman's first project following Mosaic and IAC, the American holding company that owns a number of consumer brands including Allrecipes, Handy and Care.com. At IAC, Roseman served as senior director of strategy and M&A and often had to deal with finding the best fit for talent.
“The idea behind the draft board was, why not leverage existing referral bonus programs and the power of the networked world to identify the best candidates,” Roseman said. Ta. “We are much smaller, but we can attract much higher quality applicants, which allows us to hire more quickly.”
So how does a draft board work?
Image credit: Draftboard
Free to companies, Draftboard notifies approximately 1,000 referrers (“scouts” in Draftboard terminology) as they move through various stages of a company's hiring process. The referrer will be evaluated according to the quality of the referral and the draft board will receive his 20% of each referral bonus.
I asked how Draftboard found the initial referrer group. Roseman answered the cold call.
“We started by making calls to our networks via WhatsApp groups, listservs, LinkedIn, etc. to people who run and own tech communities,” he said. “I did discovery calls with them and asked them what their pain points were. In addition, I did calls with founders and HR people to get the company to list roles on their draft board. Every time, most of the time, they ended up saying, “I know three people who would be great scouts, and I'm going to contact them right now.''
Are there any requirements to become a referrer? No, says Roseman. This may sound like a big risk for companies to take. But in reality, he argued, it democratizes the process in a kind of meritocratic way.
“There are no requirements to be a referrer; it's by design,” Roseman said. “We thought, what if we made the system data-driven and self-reinforcing? Companies set a minimum score, and if their score is below the minimum, we can no longer send them referrals. So instead of policing who can become a referrer from the top down, we let referrs self-regulate their behavior in a bottom-up way.”
However, some may argue that draft boards are essentially responsible for headhunting and recruiting. Roseman insists that's not the case. In fact, many recruiters support the platform and say they use it to pursue side hustle work.
“Scouts run the gamut from substackers to recruiters to regular employees at tech startups like Amazon, Spotify, Deal, and TikTok,” Roseman said. “We believe referrals can and should be open to everyone, not just company employees. However, as long as we can control the quality, we do it through a reputation scoring system. .”
Image credit: Draftboard
This business model certainly seems attractive to brands. There are currently approximately 70 people on the draft board, including SeatGeek, Via, and Formlabs.
It's clearly of interest to investors as well. Draftboard has raised $4.1 million from investors including Founder Collective and Twelve Below at a valuation of $13 million.
“Job sites like LinkedIn, Indeed, and ZipRecruiter exist to connect job seekers with companies, resulting in strange incentives and selection biases,” Roseman said. “We don't do that. Instead, we connect companies with referrals, whether they are active job seekers or just passively accepting opportunities. We bring in talent.”
New York-based Draftboard, which has 10 employees, plans to spend most of its initial capital on hiring and growing both sides of the market: referrals and companies.