Born in Saint Petersburg, Russia, Gershon Goren moved to Israel in his teens with the wave of Aliyah that came shortly before the fall of the Soviet Union. After dispatching from the IDF, Gershon completed his studies at Ben-Gurion University of the Negev and got his engineering degree in Information Systems and Industrial Management. Fresh out of school, he was recruited by the Israeli high-tech giant Amdocs, who sent him on the “tour” of the US that eventually landed him in Boston in 2000.
Serving as CTO for WebDialogs when they were acquired by IBM in 2007, Goren acted as a Chief Software Architect in IBM’s new Software as a Service division. In 2010, Goren left IBM to found Pirfit, a web-based company aimed at providing effective employee wellness programs. Looking at individual health led Goren to examine company-wide wellness and, with the help of Harvard psychologist and data scientist Steve Lehr, Goren created Cangrade, a pioneer in the realm of new data-driven talent management.
How do you define your venture?
Cangrade is the new way to look at talent management. Instead of using preconceived notions of what leads to employee success, it puts the data in the driver’s seat. Sophisticated statistical analysis and machine learning allows Cangrade to transform the data about the existing employees into predictive models that can evaluate the chances of a future candidate’s success.
Not only are these analytical models significantly more accurate than traditional heuristic or intuitive ways to assess candidates and employees, they also help irradiate implicit biases built into traditional decision-making mechanisms. The ultimate result of this approach is a more successful workforce, happier employees and greater diversity.
What gave you the idea?
After spending years in the workforce, hiring and being hired, managing and being managed, it became very clear that an employee’s success in a job is a matter of a great unpredictability. It was also self-evident that employees constitute the biggest asset for companies that make them stand out in the crowded marketplace. The gap was obvious, but the solution was not clear until I met Steve.
Steve spent years in academia, looking into our deeply-flawed processes of selecting and identifying talent. He found that these methods are riddled with implicit biases and lacking in predictive validity. He sought alternative ways of predicting job-fit, using data science and a new multivariate approach. His experiments showed that the accuracy of these new methods is higher than the known accuracy of other commonplace practices (such as competency models and even job interviews) by a wide margin. Not only that, but the data-driven predictions…were free from bias and discrimination.
Despite coming from opposite directions and backgrounds (I knew very little about data science and psychology, Steve didn’t know much about enterprise software), we immediately connected in our understanding of the problem and strong commitment to finding a solution for it, by combining the power of the data science with the power of software technology.
Who is your customer base or demographic?
Most of our direct customers are HR executives in companies with a large number of existing employees and ongoing hiring needs. The ongoing hiring dictates the necessity for better screening, and the existing employee base provides the data necessary to create extremely accurate predictive models for employee success in a specific role or function.
We work with a wide range of industries and role types: from sales to fast-food service, and from manufacturing to Biotech. Our customers include Applied Industrial Technologies, Boston Scientific, CareerBuilder, and CKE, just to name a few. The two things that these customers all have in common is that they have clear metrics for their employees, and they know what they want to improve. For example, with Cangrade’s software, CareerBuilder was able to reduce their employee turnover by 40% in just one year.
Job seekers and employees are our indirect customers. Placing them in the right job (instead of just any job) increases their chances of being successful and happy at work. Everybody benefits from removing implicit biases from the selection process, which results in true equal opportunity employment and a more diverse workforce.
How do you hope to fit into the market?
The Human Capital Management (HCM) industry is a complex and interconnected network of solutions rather than a set of standalone tools. From candidate sourcing, to selection, to tracking, to onboarding, to performance management, to development – it’s an unbroken chain of steps that any HCM solution should fit itself into at one point or another. The natural place for Cangrade to fit into the HCM cycle (at least for its pre-hire solution) is between candidate sourcing and applicant tracking. It goes without saying that customers need to be convinced about the effectiveness and the necessity of this extra step. The three things that help us to convince customers are:
- The team’s impressive science background: (we also have industry experts like Dr. Greg Willard)
- Flawless execution using the latest technology
- Partnership with a top-rated job-board (CareerBuilder)
As we have developed a very tight, exclusive relationship with this leading HCM advertising and software company and have effectively became part of its ecosystem, CareerBuilder customers with a need for pre-hire assessment or screening now have the access to the best assessment solution available on the market.
What do you most need to be a success?
Just like in the case of employee success, there is no single model or dominant factor that will make or break us. It would be a fun project (or maybe even a start-up idea) to collect all the data about different start-ups, including some key performance metrics alongside other factors such as raised capital, amount of media exposure, team size, etc. and then factor-analyze it in order to discover the ultimate start-up success model. That would be pretty “meta.” But in the absence of this, we’ll have to suffice with my own experience.
Among the elements we need for success are the following:
- The right talent. Being a talent management company, we are unwilling to compromise on the quality of our own people
- Inbound leads. In our day and age, sales are no longer done by coercing a customer into buying. Rather, customers need to be educated and convinced prior to making a buying decision. That is the purpose of marketing, especially “content marketing.” Our name should be known in the industry.
- It’s not a pressing need. We’ve been cash flow positive since last year, but any significant and exponential growth (which we of course are hoping for) can be only possible with a sufficient capitalization. It seems inevitable that sometime soon, we’ll be on the money-raising trail.
This interview is part of Matt Robinson’s continuing set of Jewish and Israeli entrepreneur features. Please look for it on Sundays and suggest subjects. Todah!