Hiring is a major challenge for employers. On the flip side of the coin, socioeconomic and other barriers can prevent certain job seekers from identifying opportunities.
The aptly named Solve offers a solution. Led by CEO and founder Matt Strauss, the software platform helps companies find and hire talented people in underserved communities. It also connects prospective employees with nonprofits that can help them tackle the barriers preventing them from getting jobs.
Even better, these good intentions are backed up by a solid business model. “We call our market B-to-B-to-M,” Matt explains.
“Our first B is a nonprofit employer or a foundation. They then bring an M — a market. They upload all their employer partners, all their subcontractors, and other nonprofit partners. They then use our software as a way to track all this data.”
At the WGN studios, Matt explained why Solve isn’t just paying lip service to doing good — and how he convinces investors to come along for the ride. An edited version of the interview appears below.
Diversify your markets
Scott: You’ve got the challenge of raising enough funds to get you where you need to go, but there’s also this huge revenue opportunity, because if you don’t solve this we have a gigantic economic problem. How is Solve solving these things simultaneously?
Matt: What excites me about Solve is it’s finally a 1:1 — if not a 2:1 — impact to revenue. Usually when you have a social good business, it’s like a 1:0.5, so you can’t always have the perfect margin. But what we’re realizing is that the more Solve grows, the more we bring together a market that’s really fragmented, and we’re also optimizing this whole space all in one place, that leads to 3x impact the more it grows, and the more revenue we get, and the more transparency and accountability that happens. That’s what really keeps me and our team going, because I’d never seen a business that’s actually like that.
There are huge market opportunities to help people as well as make money, because government is usually the slowest innovator.
In “The Third Wave” by Steve Case, he identifies five industries that are really ripe: healthcare, fintech, education, government, and nonprofit/social enterprise. We fall in the education, nonprofit/social enterprise, and government spaces, which are actually three addressable markets.
From my brief experience in venture capital at Venture Connects, I learned that if you have at least seven different markets you can attack or grow into, you have a much likelier chance of growing into a larger and larger business, because if one industry completely changes their regulations or whatever their goals are, you lose that whole market.
Luckily we now have a number of industries that we can actually go after, because there’s a huge entry-level hiring challenge across the country as well as nonprofits, who need a lot of help streamlining their work and trying to source people for their programs, or help people find jobs.
Selling the mission
Scott: Looking at your investors, all of these people have had success with the major advantage of network effect — and all of them are invested in the community.
Matt: Everyone’s like, do these investors want to make a lot of money, or do they want to help? I’m like, it’s both. I would say this is one of the first businesses you can see a 1:1 ratio, like more revenue means more growth.
A lot of the green energy businesses have this same model now, but in helping underserved communities, this is the first one I’ve ever seen. There’s a huge foundation in Chicago that’ll be sponsoring our nonprofit user software, and in return they can start to see outcomes at scale across our city.
Scott: When you start pitching, what are you thinking?
Matt: I grew up on the West Side, in Wilmette, on the North Shore. Most folks there don’t understand what’s going on in underserved communities. I’ve gotten the privilege to build so many relationships in our South and West Sides that I’ve learned the processes and just how broken everything is.
My family and my friends are like, just get someone a job in those communities, and I’m like, you can’t just do that, guys. You’ve got to provide wraparound services, you’ve got to provide extra access. So when I talked to a lot of our investors, it was actually more educational. I showed them how broken the process was, and where the real opportunities are, and where we are wasting time.
Scott: Do you go straight to the mission?
Matt: I’ve realized everyone has a mission in life at this level of success, or they have some past experience like volunteering at a nonprofit or donating to a nonprofit, or some big vision of how this should work. The question then becomes, do our visions align? Because what I’ve realized is that a lot of successful people already have their plan, and I’m like, I don’t think it’s gonna work. So it depends on their past experience. I try to relate to that and then say, hey look, this is how we could go about it together.
For example, there’s an investor we might close in the next few weeks. He’s worked a lot on housing authorities across the country, and that’s exactly how we want to grow when we get big customers across the country: we want to send the housing authorities to help them more efficiently, through our software.
Build to scale
Scott: Now you have these new investors and you’ve got the money, it’s your time to start scaling the business.
Matt: Yeah, we just secured our second nationwide contract. We call our market B-to-B-to-M — I made this up and I’m proud of it. So B-to-B, our first B is like a nonprofit employer, or a big government, or a foundation, or real estate developer — they’re our first customer. They then bring an M — they bring a market. They upload all their employer partners, all their subcontractors, and other nonprofit partners.
They then use our software as a way to track all this data, because we can start to track what a participant does: for example, someone creates a profile in Englewood, then goes to a nonprofit in Bronzeville, gets an interview, gets a job, applies to another social service. All those are powerful outcomes for a real estate developer for diversity inclusion, for big contracts, and especially for a nonprofit to get more grant writing etc. So we became a B-to-B-to-M model, because they actually invite all these nonprofits and employers for us.
What we’re getting better at now is qualifying those leads so we don’t waste too much time on ones that aren’t perfect for us. They can still be on Solve for free, forever, but of course we want to find more leads to then repeat that model again and again.
So yeah, excitingly, we’ll be growing in about 10 to 15 new cities with those tier two customers already, and we’re building a couple of features to make sure we can do everything that we want.
Scott: What is the one thing you’ve got to get right now in order for the big vision to work?
Matt: We purposely haven’t really tried to build an algorithm yet, or a machine-learning flow. We’ve been having, in Chicago, 50 to 200 people signing up a week to create a profile to find nonprofits, or find career fairs, or find employers. Our team member Demetrius then tries to figure out the best way to match them. So we finally wrote down a flowchart to automate that, and it’s a HubSpot-kind-of tool and a few others that we’ll probably use to automate that signup process. Because what’s slowing us down potentially is that we can’t have a full staff helping job candidates every time. We have to be able to match them as fast as we can to the right nonprofits. That’s where we can all use some machine-learning.