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Anthony: Hello, and in today’s Founder Interview, we’re talking to Dries De Coster at Chat Automation. So Dries, tell me, what is Chat Automation?
Dries: Well, thank you first and foremost for having me. So Chat Automation is a B2B SaaS company where we build 24/7 digital worker bots that tend to focus on two main areas in the recruitment and staffing sector.
So the first one is to help our clients generate more well-qualified candidates. And we tend to use our conversational AI piece there.
And the second area is really to optimise and automate their back office processes through what we call Robotic Process Automation (RPA technology) to really improve their operational profitability.
Anthony: Okay. So RPA, some may have heard the term before. It’s Robotic Process Automation, most commonly associated with UiPath, the company that raised zillions.
Dries: Yes, correct.
Anthony: And you’re planning to take their business and put them out of business and focus on recruiting initially. Is that correct?
Dries: Yeah, so our intention is to go vertical by vertical in terms of our growth. So yes, we would love to eat into their market share. But with recruiting agencies, we found a sector really where RPA has either been unknown or been unaffordable. Going to the Automation Anywheres, UiPaths of this world, it’s just not affordable for some of these customers. So we’re bringing in at a much more affordable level.
Anthony: Okay, so for anyone watching this, if you’ve got a growing or a larger company, you’re probably inundated with recruiters pinging you. So Chat Automation is designed for the other parts of the process, which is for employees, people looking for work and how they connect with recruiters.
Dries: Yes.
Anthony: So let’s go through an example. I think this will be fascinating. This is a perfect example of AI replacing or, you know, removing humans and doing things hopefully better.
So – there I am, a recruiting company. I’ve got people that are fielding incomings. Take me through how it works and how it replaces and helps improve efficiency.
Dries: Okay, so let’s take the temporary recruitment world. So typically this might be blue collar type workers, right? Where actually a recruiter may be inundated with lots and lots of candidates. They are filling volume placements. So it’s kind of a low touch, but actually high volume kind of setting.
And what we do is help the recruiter see the wood from the trees. So, really qualifying those candidates – recruiters end up with a well-qualified candidate straight into their laps. Then the automation part that kicks in: in a lot of cases, for example, in forklift drivers kind of world, we then need to validate: “Hey, have these people got the right kind of licences, et cetera, to actually drive a forklift, say in Amazon’s warehouse?”
So that’s where the automation can kick in, in that kind of middle and back office process of a recruiter automating all of that, which tends to be where recruiters have a lot of people basically making up the shortfall of where systems don’t talk to each other.
Anthony: Interesting. And so what is your ideal customer profile? It’s a recruiting company, presumably. What sort of size?
Dries: We’d probably say kind of a medium to upper mid-market type recruitment agency. The really big ones probably can afford to go to like a UiPath, certainly for the back office processes, but only to automate maybe a handful of those. And even there, I’d say we’d be interested in the tail of the process. Because again, we can bring Dwight, who is our digital worker interface for generic human tasks.
Anthony: Okay, so your robot is called Dwight.
Dries: Yes, right.
Anthony: And Dwight is going to replace a person and cost less than a person. So this is fascinating because it’s all about AI taking on these roles. So tell me, how much does Dwight cost and what does Dwight do? And then we’re to get onto the market size.
Dries: Sure. So Dwight stands for digital worker interface for generic human tasks. And essentially, like you say, he’s a digital worker. So we want recruitment agencies to have the ability to contract him at a fraction of an FTE – that tends to be the cost, right?
So if you have a process that’s taken two or three people’s time, you can see how the ROI stacks up really quite quickly. And that’s our business model – what we like you to do is contract an army of Dwights. So, we may start with one or two processes, but then we want to do a good job and then obviously take the tail of the other processes within a recruiter as well and have basically a land and expand strategy with our clients.
Anthony: So recruiting is I think notoriously seasonal, whether it be you know, for some actual seasonal agricultural things or the tech market, which goes up and down. But of course you can terminate Dwight at short notice when you want and re-employ Dwight when you want when the times are good again.
Dries: That’s not quite how it works, unfortunately. Dwight’s under a 36-month contract, so we might want to scrap that one!
Because actually, Anthony, what we do is we will swallow the cost of the build. So we don’t charge an implementation for Dwight. We just charge a monthly recurring fee. But obviously we are spreading that cost of the build over the term of the contract.
And like I say to people, you don’t tend to hire someone into your business with a view of sacking them after six or 10 months, right? So that’s really how the business model works.
Anthony: Okay, so this sounds amazing. Now, you know, you might think, the recruiting company business isn’t that large, but it turns out there are tons of them. How many recruiters are there?
Dries: Well, it’s actually an ever-growing market because a good recruiter will often leave their recruitment business and start off on their own, right? Because it’s such a low barrier to entry into the sector. But there are about 29–30,000 in the UK alone. Our target markets are UK and US. And in the US, like with anything, everything’s bigger, right? So we’ve seen there our ticket items tend to be greater as well from a revenue perspective. But we really focus on kind of 10 recruiters or more, because typically that’s where you’re going to have some of these processes where it makes sense to automate – it’s not just a small element of someone’s job, but you have one, maybe two, maybe three, maybe more people doing these manual mundane processes.
Anthony: Okay, amazing. Tell me your traction so far.
Dries: So we’re at early revenue stage. In the last month alone, we’ve signed up about five clients. Actually, the one we signed up yesterday, just to give you an idea, is 20K plus ARR on a three-year contract as well. So each year we’re getting that kind of revenue. And that was a, you know, talk about demonstration of pent up demand. That was a sale cycle of two weeks from start to finish. And there we are automating an onboarding process in and out of different systems and essentially delivering a cost saving on three FTE into that business.
Anthony: All right. So if you’re a recruiting company, how should they get in touch with you?
Dries: Well, you can either find Dwight on LinkedIn or you can just message me. But yes, you know, if you can think of a process that actually you think “Hey, this is quite people heavy, it’s mundane, it has logic to the process.” Then we can teach Dwight to do that.
Yeah, you can absolutely find me on LinkedIn. So Dries de Costa or Chat Automation Limited. So that’s www.chat-automation.com
Anthony: Okay, great. Fantastic. Thank you.
