A Q&A with Pairin co-founder and CEO Michael L. Simpson. The Denver, Colorado–based company was founded in late 2011 and launched to the public in early-February.
SUB: Please describe Pairin and your value proposition.
Simpson: Pairin is ‘friendly science’ that flips the hiring process to focus first on key human qualities that pair the best job applicants to your top performers. Without requiring consulting or understanding the science behind the solution, we can lower employee turnover and reduce time spent on the hiring process by up to 80 percent.
SUB: Who are your target markets and users?
Simpson: Companies that have a high cost of employee turnover, because employees are direct revenue generators or are highly trained, see the quickest ROI. Hiring managers and/or owners are also a sweet spot for us, because their lack of in-house HR expertise motivates them to make hiring as easy and predictable as possible. That is why our channel strategy is so important. It allows us to leverage the sales forces and customer bases of HR services companies with which we can integrate.
SUB: Who do you consider to be your competition?
Simpson: A general lack of understanding that our solution is uniquely different than consulting-based assessment providers and complementary to e-recruitment or Employee Performance Management providers is usually the first hurdle to a sale. When we get through that, there is a short list of SaaS-based providers in this space, like Clearfit and Matchpoint Careers, but we all have different approaches.
SUB: What differentiates Pairin from the competition?
Simpson: We believe in ‘friendly science,’ which means it must be accurate, repeatable, and peer reviewed in the psychology community, but there should be no requirement for it to be understood by our customers. It was a difficult thing to pull off, but our customers believe that our solution is the most scientifically sound, but also the simplest, least expensive, and quickest to get results. Structurally, our channel expertise and integration strategy are also quite different than our competitors.
SUB: When was the company founded and what were the first steps you took in establishing it?
Simpson: We publicly launched the company February 6th, 2013, but we spun-off from a consulting services company in December 2011. The original product was used in custom implementations for almost a decade, but needed to be completely redesigned to make it a business unto itself. We took a huge risk and spent a year building the prototype with our own funds. Once we were confident we could pull it off and protect our IP, we sought funding to bring it to market.
SUB: What was the inspiration behind the idea for Pairin? Was there an ‘aha’ moment, or was the idea more gradual in developing?
Simpson: There was a big ‘aha.’ My background is in products and marketing in the software industry, and Dr. Young’s [co-founder Dr. Ron Young] is in psychology and scientific testing. What brought us together in the consulting company with our other partner, Dr. Rick Forbus, was using this tool with our love of coaching people into the right roles and seeing how even their family lives improved. We realized that if we created a separate company and further automated the process, we could help thousands of companies hire well, and countless people become more satisfied in their jobs. It became more of a quest than just a business venture at that point. We had a three-day meeting to talk through the consequences and opportunities, then we pulled the trigger and never looked back.
SUB: How did you come up with the name? What is the story behind it?
Simpson: We struggled with finding a name for a year and were even called something else for a while. It sounds strange, but I was in the sauna in my house one morning thinking about names. Maybe it was the heat, or I was hungry, but my mind began wandering to a different business that my wife and I own that makes artisan truffles, when suddenly it hit me. The same thing we love to do with our truffles—pair them with the most complementary wines—is what this company does with people and jobs. I immediately searched on variations to ‘pairing’ and found that the URL for Pairin.com was up for auction for $12. We were the only bidder. Four days later, we changed our name.
SUB: What have the most significant obstacles been so far to building the company?
Simpson: Focusing the market strategy and product design was initially very difficult, because there are so many potential applications for our science. Our story wasn’t clear enough at first, and it looked a bit like childbirth when we pitched, but once we got it nailed we were a perfect ten-for-ten in one-on-one Angel meetings.
SUB: You just had your official public launch. Why was this a particularly good time to launch?
Simpson: It’s funny, but we have investors ask why we have a fully functional, released product and are seeking funding. They seem so accustomed to investing in ideas, they think there is something wrong if you are an actual operating business. Maybe it’s old school, but we wanted to prove we could do this before we made a bunch of noise about it. The product is stable and shipping. We have happy paying customers. It was time to tell people.
SUB: Have you raised outside funding to this point? If so, how much have you raised?
Simpson: We self-funded for a while, then raised a bridge round of $450K to deliver the product to market. We are now in the midst of raising a small Series A of $1 million, which is more like a ‘SuperSeed’ round, to help us bridge the staffing gap from partnership signings and bookings to revenue.
SUB: How does the company generate revenue or plan to generate revenue?
Simpson: We have two products available online: Job Pairin is $199 per 30 day job posting, and allows for unlimited employee testing to create your hiring Gold Standard. It provides unlimited applicant testing. Employee Pairin is just $49 for 30 days to pair one applicant with a single top performer. Both provide a custom online job application, custom employee testing site, hiring dashboard, and applicant-specific interview guide with hiring insights. Our greatest short term revenue potential, though, is channel partners that license our solution and white label it as their own. It’s a specialized kind of organization and skillset required to pull off a channel, but that is our background, so it is natural we would move in that direction.
SUB: What are your goals for Pairin over the next year or so?
Simpson: It will be great to get this funding round behind us to focus on closing a couple more channel partners and extending adoption within our existing customers. We’d like to be a catalyst in establishing the pre-employment selection market as its own entity, and not a niche part of another market. I’m a big fan of growing the pie, and seeing everyone’s slice get bigger. I saw first-hand the value of doing that in the directory services and CRM markets over a decade ago. There are many new providers in science-based hiring and not all of them are competitors to e-recruitment, employee performance management [EPM] and job boards. Some of us enhance all of those offerings.
Pairin – www.pairin.com