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Distributed CEO talks tech labor market and helping businesses achieve technical outcomes

Last month the company announced a £1.5 seed funding round for operations expansion

Entrepreneur interview by Abhay Vij
March 5, 2019
Short URL: http://vator.tv/n/4d3b

Distributed is a tech talent resourcing platform that uses artificial intelligence to help business achieve technical outcomes efficiently. The London-based company announced last month that it received £1.5 million in a seed funding round from Fuel Ventures. This round brings the company’s total initial funding up to £1.65 million.

I had a chance to interview Callum Adamson, CEO and co-founder of Distributed, to learn more about this platform and how it works!

What inspired the creation of this company?

There are 1.6 million unfilled computer science roles and we’re only bringing 45,000 new CS professionals entering the labor market every year. So, that gives you an idea of the size of the problem and how quickly its growing. We’ve basically innovated ourselves ahead of the talent pool. Sam and I both felt this problem as contract software developers and as part of businesses that were trying to continue to move fast and innovate, and we felt it so hard that we decided to try and solve the problem. When we looked at the solutions to the problem, we looked at the three most obvious and got to where we are today. So the first one is, we should hire market teams within an organization that build up our digital capabilities. When you understand that it takes around 5 months and around 50,000 pounds just to hire one specialist team member today, you get an idea of how expensive and how slow that process typically is. And then when you understand that of all digital specialist that joined the company to date, 85 percent will have left that company within 14 months, you realize that they’re not even sticking around; it’s taking 5 months to hire workers who’re barely staying on board for a full year.

We can’t hire permanently, hiring permanently is not the solution. When you look at the next best option, which is outsourcing or going to a near-shoring agency, you understand that they (the agencies) have the same problem as every other business on Earth, insomuch as they can only sell you what they have in the building, and they can only sell you the talent that is available to them. This means that they’re constrained on scalability, speed, and technology choices.

Now, the most obvious solution is to work with this new generation of freelance and contract talent at global scale, so you move your hiring and your recruitment to a global playing field. Sam and I explored this option and looked at everybody that had a product out in that space, and we were absolutely shocked that nobody had moved the industry beyond Craigslist. Every single product and service provider right now is literally just a list of people, and we can do way better. This means that on the demand side, businesses have to approve, qualify, onboard, manage, pay, and then maintain relationships with every contractor or freelancer that you ever work with. And if you’re a contractor or freelancer right now, you have to be your own sales pipeline, to be on-boarded into new teams, often teams that you don’t work well with or that you shouldn’t be onboarded into, to manage your own delivery, to manage your own invoicing and accounting, and to maintain relationships with every business you’ve ever worked with to hopefully get a repeat customer.

Distributed takes this relationship between complex supply and complex demand and improves it by 10X. We do this by giving businesses what they want and care about, which is really as simple as outcome delivery that helps the business to achieve a meaningful future. This could mean reducing costs, testing a new technology, or integrating a new department. Businesses can be honest with what they require, and not have to kind of upscale retool their organizations to care about this emerging workforce. And if you’re a contractor software developer or freelancer, you can focus on what you’ve always cared about: that you’re doing great work, having a predictable stream of work, having control over for whom/where you work, and getting paid quickly without any of the hassle.

So, we connect complex supply with complex demand to establish workflow on top of a bunch of rich datasets. This means that this generation of talent gets really personalized and actualized career paths, where they can focus on what they really care about, and businesses can move fast without retooling their organization.

Can you give me a case study to help me understand how this would work to help a company get the talent it needs?

The businesses that we work with, they never meet with or speak to any of our Elastic Team. The way that you solve this problem is by developing really sophisticated technology that’s able load that talent across multiple multiple different skill-sets in one interface.

To give you one example of how this benefits business, let’s take Capita. They’re one of the largest IT outsourcing providers in the UK. So Capita right now, cannot pay market rate for data scientists, and if you are a talented data scientist in the UK right now, you have offers from Amazon, Uber, Airbnb, Apple, Google, and so many others. What Capita needed done is a sweep of data visualizations around their life insurance pensions department, and their engagement is to simply write a paragraph that defines the outcome. In this hypothetical example, all Capita would need to describe is “we’d like these four datasets visualized in a form that’s acceptable by this department, we’d like the ability to manipulate and slice data at will at the individual record level”. Our platform and technology can then immediately deliver a cost and time for that work, and tell the team when and where they’ll be required in terms of their outcome. Capita can then accept that, they’re given a permanent project manager who is their point of contact, and on the app they can check every milestone to make sure they’re on track and to take off deliverables until the outcome is complete.

Who is your target market?

We’ve got two specific segments that we’re looking at. The first segment is customers who are purchasing the ability to move fast, so customers that will keep regulating. They’re basically startups that have raised a funding round of over 500k pounds in the past 6 months.

We have a second segment which is enterprise and that’s any business that spends over a million pounds a year on contracts and freelance workforce.

What do companies typically pay for this and how does the payment system work?

The payment system works on every outcome delivered, so any outcome required is immediately costed and approved by a customer; so it is costed by the platform, approved by the customer, and then delivered at a fixed cost. A typical outcome size would be somewhere in the region of 40 to 80 thousand pounds.

What is Distributed planning on doing with the new funds?

It’s really being deployed on infrastructure and operation. In year one, we were a team of four, and we delivered just under a million in revenue; we worked with fifty customers in year one.

The demand for what we brought to market was kind of huge. We never had a sales team in year one, it was almost 100% referral.

So we know that we’re going to need to scale quickly and that means bringing our product to market earlier than we would have liked, but we can do so because we worked with so many customers in year one.

But really, we want to scale up operations and infrastructure as quickly as possible so we continue to provide the same level of service our existing customers are used to, and improve on top of it with our technology. So we just need to get better at a lot of things quickly, which is the perfect reason to raise capital right now. You raise capital when you need to deploy it, not because its a fun and cool thing to do.

What advice would you share with aspiring entrepreneurs?

Make sure you really care about what you’re doing, because whatever you choose, you’re going to be doing it all day, every day until you go IPO or until the company fails.

Don’t take yourself too seriously.

Do you have anything else to share with the Vator audience?

We’re a very open and feedback positive organization. If anybody has a way that we can be working better or an angle we have not thought of or any ideas on how to democratize talent in the way that we’re trying to do, please get in touch and help. We’re very inclusive of everyone’s opinion and we want to maintain that culture as we grow.

We welcome any and all feedback at all times.

(Image source: Business Cloud)