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Title: “Addressing The Tech Talent Gap Through AI-Driven Software Training”
Guest: Eliot Pearson – Catalyte
Interviewer: Jonathan Freedman – MAGE LLC

Click here to read the transcript

Jonathan (0s):
Welcome back to Radio Entrepreneurs on Jonathan Freedman. Our next guest is Elliot Pearson, COO of Catalyte welcome to radio entrepreneurs.

Eliot (8s):
Thanks for having me, Jonathan

Jonathan (10s):
Tell us a little bit about what your company and what it is that you guys do.

Eliot (13s):
Yeah, so, so Catalyte very simply we solve one problem. We’re actually helping address that tech talent gap and we’re able to do it with AI and, and it’s, it’s a, it’s an amazing platform that we’ve built. So really the premise of the company was that talent is equally distributed, but opportunity is not. So we actually had our founder, he actually created the company about 20 years ago. He actually talked to people about it. Nobody wanted to do anything about it. So he actually created a company. He went to Baltimore and he started trying to find tech professionals, really focusing in software engineering. He wanted to actually find people that have never looked at code a day in their life.

Eliot (56s):
And so what he did was he actually worked with the team, created what we call an assessment that assessment takes about two hours to take. And what it does is it actually measures your aptitude and it measures your aptitude and a couple of ways. First it determines your ability to learn software development. Second, it also will determine your perseverance because we’re going to work with you for a period of time. And then three, it just kind of looks at kind of like your, your grit and really being able to get through the success of our, like our program. And so what we do is we actually allow anyone to take the assessment. We are, you know, throughout the country, everybody is in a remote world right now, but we do actually have dev centers.

Eliot (1m 39s):
We have one that’s in Boston, our headquarters is in Baltimore. So it works like this. You actually will take an assessment. It takes about two hours. You score very high. We invite you into a cohort. We then give you free training and we are teaching you how to become a software developer. And at the end of this training, you’re guaranteed a job. You’re either going to work with us as a Catalyte being deployed to clients or you’re going to get directly placed into a client. And so we’ve been able to perfect our algorithm and our model for about 20 years. And what we’ve done is being able to say, okay, we actually have a bunch of high performing software developers.

Eliot (2m 20s):
We actually gave them the assessment and then we actually have more people coming in and then we see how well they line up to it. And so we’re looking at things in our assessment that are, it doesn’t really matter if you actually answer questions correctly is really gauges how you think. And so we actually have very, very strong success when people into our program. And so that’s really kind of what we do at the day. We’re, we’re really kind of helping companies fill that tech gap.

Jonathan (2m 48s):
So, so really interesting. And I hope it’s not too far-fetched to say the premise of the company was really nature versus nurture. And whether people had that innate ability to be software developers or there’s a learned skill and something that can be learned, correct?

Eliot (3m 3s):
Yes, yes, yes, yes. And, and really, we, we kind of look at it as, as more nurturing because we know that people have no skills. We have people that are baristas that start or an HVAC technician, and had never looked at a code like code to day in their life. And we’re able to upskill them into being a high-performing software developer in a very short amount of time. So

Jonathan (3m 26s):
Fast forward to today. And it sounds like, yeah, there’s really two pieces to your business. One is developing people into, into coders or software developers and placing them either permanently within, within the industry or providing a pool of talent to clients that might want them in a contract basis, I’d imagine, or for a project basis, something of that nature. And, and what is the, what is that cohort look like? What is, what is the composition? Is it people, as you said, there are people who have been embarrassed, those that become software developers. So is it, is it like, w w would we be blown away if we looked at the profiles and the backgrounds of the people that are doing this? Yeah,

Eliot (4m 6s):
Yeah. You will. You, you definitely will. I think it’s kind of interesting how it works, because let’s say we go into Boston. What we do is we go to places where people are looking for opportunities like indeed, and we post ads and then people come into our screening and they take the assessment. And what we’re finding is that because people are kind of self-selected into our program, we just naturally get the demographics of that region. And so when you look at the demographics of most major cities, they actually have a lot better, like diversity percentages than like Silicon valley. And so that’s coming in. And so when we work with our, our clients, just by kind of statistics, we’re actually getting better representation.

Eliot (4m 49s):
And the reality is like people, again are coming from all walks of life. I actually know somebody that was a roofer he’s actually on my team. He’s amazing. And you know, it’s just, it’s, it’s one of those things where you will be blown away by understanding where people came from.

Jonathan (5m 7s):
It’s really a fascinating story. So, so how many people are, are part of the program and what is the commitment of an individual to the program? How, how, how does, how does that work and, and the, and the timeframe associated with learning the skills?

Eliot (5m 25s):
Yes. So when we look at the, the commitments, the first thing we do is after we identify someone that is, has high potential, is that we try to engage with them like four weeks before we actually start a cohort. So we have kind of like this rolling cohort where we start every four to six weeks. So a person will, you know, maybe in January, we start talking to them, giving them equipment, setting them up for success, and then we actually will go and get them in training. And then when they’re in training, they’re actually paired up with an instructor and also a, what we call a, a teaching assistant.

Eliot (6m 6s):
And, and what they’re doing is they’re learning the mechanics of software development. It takes on average 26 weeks, but some people actually do come with some experience. And so they actually have like an expedited kind of getting through training that we could do where like our, our apprenticeship period, because we want to actually take someone and groom them to be a high performing software developer. And we do want people in training to kind of focus on this full time. It is free, but we do have people that have like, do train full-time and maybe have a part-time job because they need to kind of supplement their income. So that’s something that happens as well.

Jonathan (6m 43s):
So let me go back to something. I was going to ask the question about your business model, but let me understand you use that, that word free, because they’re very important four letter word. So, so to the trainee, it is a free program. They come into the program and there is a nominal cost. I’m not going to say no cost, but I would imagine there’s some cost to anything, right. They have to get to the training center or everything’s remote today, or there’s some tools that they need to buy along the way, perhaps. But the, all of the training that they receive is, is subsidized in some sense.

Eliot (7m 12s):
Yeah. So when we look at it, our incremental costs for bringing in one more person is really, really low. But what happens is, is like, we actually do give them a stipend towards the end, but when we kind of look at like our model, once we put them in the work and they’re, you know, performing for the client, the training just pays for itself. And so it’s just the economics work out and that’s really how it works. So when they look at their commitment, we really don’t want to put an extra burden because when you look at traditional paths, you know, a lot of people go through college and some people take on debt. We’re trying to get people in a career by doing the opposite.

Jonathan (7m 53s):
Yeah, no, it’s really, it’s really a fascinating model doing, doing well by doing good. It’s it’s great. How did you come involved with the company? What’s your background?

Eliot (8m 3s):
Yeah. So I’ve been in tech for about 20 years. I actually did about 13 and a half years at, it was first, but then it eventually became Verizon media. So I worked in their ad systems. And so these ad systems had billions of transactions as like tens of billions of transactions a day. And we needed to like respond within a 10th of a second. So I worked on the supply demand and data side, and then I learned about the Cadillac model and I was just fascinated. So I came over to Catalyte a little over a year and a half ago, and really this idea of just having like, kind of this factory where we can just produce like engineers.

Eliot (8m 45s):
It was just amazing. And now we’re getting to the point where we’re starting to look at different paths, other than software engineering, of being able to say someone that gets kind of basic full stack, and then adding on things like automation, adding on things like dev ops and being able to really respond to like what, you know, the industry needs. Yes. It’s just amazing. I was blown away by the model when I, and I was like, I have to be a part of this.

Jonathan (9m 13s):
So not to catch you off guard here earlier, but can you share some statistics? How many people have gone through the program? You said you have five hubs, four hubs, five hubs, different locations, I believe. Oh seven. Okay. And as part of the vision to roll that out on a larger scale, it’s, it’s amazing to me almost a week or a month, doesn’t go by where I don’t hear of another region, I’ll call it. That’s promoting themselves as a tech hub in the country, you know, forget about Silicon valley and Boston and New Jersey. Now we now have 500 tech hubs in this country. So it is the vision to morph into other geographies and develop people in those areas as well.

Eliot (9m 50s):
Yes. And we normally need like anchor customers, somebody that’s willing to take, you know, let’s say anywhere from 10 to 50 apprentices within a year. And so it can be one company or it can be a combination of companies. So that’s really how we determine how we move into a region. As far as like some of the statistics we’ve had around. Like I would say it’s over 2000 people that have went through our program. Cause we’ve been around for like 20 years. When we look at kind of the rates of people kind of getting through the first one is really the assessment. So about eight to 15% of people get, they score high enough to be invited into a cohort.

Eliot (10m 33s):
And we do that because we want to make sure people are going to be successful. Not just, they have like the ability to kind of learn to code. So we, we actually, it’s kind of rigorous, but when you get there, it’s, it’s, it’s very sticky. So when we look at people getting through training, it’s about 85% of people that start training, complete training.

Jonathan (10m 52s):
Wow. Very high success rate. Obviously something’s working on the vetting process upfront and that’s why it’s so low upfront. Yes, yes, yes. Kind of like med school, if you can, if you could pass muster to get in, you have a high likelihood of success. Yes. Yes.

Eliot (11m 6s):
And I, I think the other thing is that after, when we look at the apprenticeship, it’s like high nineties, it’s like 98% that people actually complete that apprenticeship. And then when we look at like the optics of, cause we have 20 years of data, like how well are people doing like five years after they start our program? People are coming in at around 25 grand on average and year five, they’re making $98,000. So it’s very transformative transformative. It’s also just, you’re starting someone’s career. So it’s, it’s, life-changing, it’s amazing.

Jonathan (11m 38s):
Hmm. That really is incredible statistics. And, and Elliot, what’s the time commitment. I dunno if you can chunk it out on a weekly, monthly basis, is it a full-time you said some people are continuing jobs while they’re doing their training, but what, what is the commitment from a training perspective? The amount of time that somebody has to invest?

Eliot (11m 58s):
Yeah. It’s like 40 hours a week. It can, some people can get through 30 hours a week. I would say 95% of our people are completely focused on training and that’s around anywhere from like, it can be 20 weeks, it can be 26 weeks. So that’s really the commitment. And, and most people are doing that. And it’s been about the same when, since we switched to everything being virtual. Cause we all, we switched to everything being virtual in March, before everything was in classrooms. So we actually have like a training room sitting in our offices that no one is using right now.

Jonathan (12m 32s):
And I would imagine you guys pivoted pretty easily because a lot of the stuff that you’re doing could be done remotely as well or virtually I should say,

Eliot (12m 40s):
Yeah, we were, we were ahead of the curve. We, we were able to like, look at a lot of things and say like, Hey, we need to automate this. And so we had a lot of our instruction, a lot of our exercises there everything’s digital. So it made it very easy to make sure people had the right equipment. We had to scramble a bit for that. Sometimes people need things like keyboards and monitors, but we were able to get through that.

Jonathan (13m 3s):
Excellent. Well, it sounds to me like Catalyte was really ahead of the curve because we, we all hear about the, the skills gap that exists within the tech industry. And you’re looking to solve that, that problem. How big, what are the current projections and, and the, the gap that exists in the marketplace. What’s, what’s the scale of that?

Eliot (13m 21s):
Yeah. You always hear about we’re we’re like at least like a million jobs short. And when we look at what, why is this the problem, or why is this the case,

Jonathan (13m 32s):
A million, a million bodies to fill those jobs? In other words, we’re going to need a million people to fill that tech gap.

Eliot (13m 37s):
Yes, yes. And the reality is that we have those people out there right now. They’re just not on a traditional path. And what’s happening with the universities is that like they’re producing people every year. That is either computer science, major or computer engineering major. But that group is largely the same. It grows a little bit, but new companies are being created all the time that need these resources. So everyone is kind of like fishing in the same pool. What we’re doing is creating an alternative pool with the talent that’s already there. We just need people to commit to acquiring that talent and developing that talent. So that’s how we’re solving it. But it’s, it’s over a million, you know, technical jobs that are just unfilled because we don’t have candidates available.

Jonathan (14m 25s):
Wow. Really incredible. It means that you guys got a lot of run room paths to get those people developed and into those roles. Fabulous. Elliot Pearson has been our guest you’re CEO of Catalyte. If people want to get in touch with you and learn more about your programs, become a client, all of the above, what’s the best way for them to reach you.

Eliot (14m 42s):
Yeah. You can reach me through email or LinkedIn. I’m Elliot Pearson. Very easy to find me for. My email is E Pearson E P E R S O

2 (14m 55s):
Excellent. Our guest has been Elliot Pearson, COO of Catalyte. It’s been a pleasure having you on radio entrepreneurs. Thank you. I appreciate your time. And we’ll be right back with another segment on radio entrepreneurs.

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