Tech that Solves Talent Shortage with Lucas Mendes, Co-Founder of Revelo

(Joel Beasley at 00:00:03) Hello, my friends. Today we're talking to Lucas, co-founder of Revelo, and we discuss how the normalization of remote work is enabling companies to recruit tech talent from around the globe, how Revelo connects companies with pre-vetted developers in Latin America, and how Revelo uses their own service to hire great engineers internally. All of this right here, right now on the Modern CTO podcast. Here we go.

(Intro Narrator at 00:00:31) This is the Modern CTO podcast.

(Joel Beasley at 00:00:40) So tell me a little bit about your background, Lucas. How did you get into technology and find your way where you're at today?

(Lucas at 00:00:48) Sure. I'm an engineer by training. I started my career as a good engineer in investment banking. After one year, I knew that that was not what I wanted to do with my career, and a couple of years later, I started my own company.

(Lucas at 00:01:03) My first startup was an e-commerce company. That time was a time of great learning for me because I discovered the Internet. I obviously knew what the Internet was. I learned to program when I was 14 years old. I was building websites when I was 15 years old in the distant year of 1995, and working with the Internet, owning a startup, being the lead of a team that is building a service that is consumed by millions of users online really changed the way I thought about scale, the way I thought about customers, data, you name it.

(Lucas at 00:01:41) I just fell in love with it. I eventually sold my stake in that company and moved to Silicon Valley where I went to business school at Stanford. That's where I met Locke, my co-founder at Revelo, and we both connected over the fact that we love the problem that we're now solving, which is connecting great companies to great tech talent. Great tech talent is the scarcest resource you can find on planet Earth, and you can ask any CTO and they'll confirm that for you. We wanted to make it easier, and we knew that there was great talent available, not only in the Bay Area or in New York, but also all across the U.S. and all across the world.

(Lucas at 00:02:23) And we wanted to build something, a tech platform that would help U.S. companies to find that talent and put them to good work. I think that's how we ended up doing what we're doing today.

(Joel Beasley at 00:02:37) So when did you start Revelo? Because I know, obviously, it's probably blown up quite a bit since the pandemic and how much work has changed in the past couple years. When did you get into it?

(Lucas at 00:02:50) So we started in 2015, so that's seven years ago. Feels a lot longer, I have to say, but we've onboarded over 1,300,000 candidates for tech jobs over the course of these seven years, and we've placed over 7,000 of them across three different continents. So we have operations not only in the U.S., but in other countries as well, but we are really able to achieve the sort of scale that we have by using technology. So all of our onboarding and interview process is automated, and that makes the scale of what we're trying to build a lot more attainable and a lot easier to achieve.

(Joel Beasley at 00:03:29) So I know a big drawing point for working with a third party for sourcing engineers is that they're pre-vetted, and especially with Revelo, you can trust that they're quality engineers you're bringing in. What's your vetting process like, and what's the acceptance and rejection rate like for engineers?

(Lucas at 00:03:51) And regarding how the pandemic changed things for us and how the past few years have been different, I mean, the world of work has changed dramatically. Five years ago, working remotely or working from home was a fringe thing. I mean, I think one in every five engineering teams were really working remotely. Now it's maybe eight out of ten. It's become the new normal.

(Lucas at 00:04:14) I hate to use that expression, but it is the new normal. So what that did to the job market was that the job market stopped being city-based. That notion that you have to work in the same city that you lived in, that went out the window. That's not something that people consider anymore. So that also means that the talent pool that CTOs and tech leads and tech managers in general can tap into is now global, is not restricted by geography anymore.

(Lucas at 00:04:45) Everybody's going to be working over Zoom or over Slack. It doesn't really matter if they're across the street or across the ocean. As long as they're pre-vetted, as long as they speak English, and as long as they are working at the same time zones, they can be part of your team, and they can feel like they're part of your team. And that's something we really care about, creating that experience of augmenting your tech team, not to hire a project worker or a low-cost team that you're going to outsource work to.

(Lucas at 00:05:18) It's to expand the talent pool that you can tap into to build your own team.

(Joel Beasley at 00:05:23) So it's hiring full-time engineers, not freelancers?

(Lucas at 00:05:27) Exactly. That's a very important point that you bring up. So everything in Revelo is built to enable long-term connections. We want the engineer to feel like they're a first-class citizen in your company. They want to wear your company logo on their T-shirt. They want to participate in town hall meetings, all hands meetings. They want to be part of your company Slack. They want to work on the same time zone.

(Lucas at 00:05:44) So we find that startups and fast-growing tech companies, that's what they're looking for. They're not really in need of another outsourcing platform that can do the work for a lower value. They want to grow their teams. So, yeah, that's a long answer to say that that's what we do—full-time workers.

(Joel Beasley at 00:06:12) That's awesome. And do you help with the regulatory and compliance challenges? I know it's just a lot more complicated to hire people internationally if you're just doing it on your own, hiring remote workers in other countries. Is that something that you've built any tools around as well?

(Lucas at 00:06:31) Yes, we had to. When we realized that people were using Revelo to hire engineers across the entire region of Latin America, from Brazil to Mexico to Honduras to the Dominican Republic—I mean, no one's going to want to deal with the complexity of labor laws and regulatory environments of such different ecosystems—we built tools that essentially make it a turnkey solution. So if you're a CTO, if you're a tech lead or an engineering manager, you can use Revelo and pay one invoice.

(Lucas at 00:07:02) We'll take care of not only compliance and tax, but also benefits, perks, workspace, hardware—anything that you need for your team to be productive and to deliver results. That's what we'll be working towards. And, essentially, we feel good about what we do because we know that if there's one thing limiting the potential of American innovation, it's access to more tech talent. And we know that if we can give more tech talent for U.S. companies to grow and thrive, we will unlock a lot of potential to the extent that they can have access to that additional talent pool. And that's really our why. That's really why we do what we do.

(Joel Beasley at 00:07:48) Yeah. That's amazing. Are you able to share any of your favorite success stories that you've witnessed in your time at the company?

(Lucas at 00:07:57) Yeah. I can share one. I can share a story of a founding CEO in Utah who was looking to hire a developer to build their first prototype, somebody that would just come in, code, develop a first version that would help him raise money so that he could go then back and hire a proper team. He hired that first person through us. That person became their engineering lead, their engineering manager.

(Lucas at 00:08:27) That person started hiring their entire team through us. They still have most of their team running through Revelo, and it's great what happens when leaders across the U.S. see the quality and the potential of pre-vetted talent pools from anywhere across the world. So it's really breaking that preconceived notion, breaking that paradigm that remote offshore tech is necessarily worse quality. That's something we're really proud of.

(Joel Beasley at 00:08:58) Yeah. I think offshoring is definitely losing its stigma. That's something I've picked up on from a lot of the interviews that we've been doing. There's just a lot more companies that are open to it. And I guess it's probably also driven by the necessity of having to expand your talent pool given the talent shortage that we're dealing with right now in tech.

(Lucas at 00:09:22) It used to be about cost. In the nineties, in the early two thousands, it used to be about cost. But now it turns out that cost is one of the least important factors. What does that mean? It means it's about access. It's not an effort to reduce the price of labor. It's you just need to have that critical need to access a deeper talent pool.

(Lucas at 00:09:35) And look, it's—I have to say that it's the future, and it's been the future for a while, if you know what I mean. I mean, everyone spoke about the future of work, and when they spoke about the future of work, they meant remote work, more flexibility, distributed teams. What the pandemic did was bring that future to the present, and things that we thought were going to happen in ten to fifteen years' time happened over the course of two years. And if you couple that with 80%, 90% of CTOs and CIOs saying that their biggest problem is finding great talent, then it's coming at a good time.

(Joel Beasley at 00:10:21) Yeah. So, obviously, you're someone that has thought a lot about and put a lot of effort into solving the talent shortage in engineering. What do you think are the main drivers of it today?

(Lucas at 00:10:34) Well, I think about it in two ways. First, I think there's a short-term, long-term mismatch of supply and demand. So the tech industry has grown exponentially over the course of the past two decades. Well, it has been growing exponentially, but it really accelerated over the course of the past two decades. And it took a while for educational systems to adapt in the U.S.

(Lucas at 00:11:01) So today we see a lot of boot camps and short-term courses and reskilling and upskilling tools that can help people get into tech from other areas. Those systems, those institutions were not in place fifteen years ago, and it really takes time for them to produce the results that this kind of demand needs. So that's one thing. I think they will catch up. I think that there's been a lot of progress, but the problem is that the demand for tech talent just keeps accelerating. So when they're catching up, I mean, the game has changed already.

(Lucas at 00:11:25) The second point is related to what type of software engineer companies are really looking for. So if you speak to most CTOs and most tech leads, they will be looking for mid-level to senior software engineers above everything else. So specialists, people who have done the work before. That is really the most pressing need of somebody who is building or growing a tech team. If I triple the number of boot camps in the U.S. overnight, I would only solve that problem fifteen years from now. There is no choice but to look elsewhere.

(Lucas at 00:11:57) So, really, if you need to bring more senior engineers to your team, you have to look elsewhere. And that's where I think LatAm, Latin America, looks like a gold mine, because if you're hiring remotely, it's a region that is very well aligned with the U.S. time zones. And as we said, to have time zone alignment, that's something that's really important for full-time work to be possible. Also, it's a large region. It's over 600 million people, twice the size of the U.S.

(Lucas at 00:12:30) The two largest cities in the Western Hemisphere are located in Latin America: Mexico City and São Paulo, Brazil. The educational system is solid. There's a good level of English proficiency. And if you're following the news on venture capital, it's a thriving venture ecosystem. So these tech workers, these engineers, they have not been educated necessarily to work in the U.S., but they have been trained by local startups and fueled by foreign venture capital for a few decades already.

(Lucas at 00:12:57) So there is definitely an advantage from a cost standpoint. So U.S. companies are able to access senior full-stack engineers with six years of experience for significantly less than what they would pay a junior engineer in the U.S. But, again, as I said, it's not because of the cost that they're doing that. It just comes as a cherry on top. It's really because of accessing the deeper talent pool.

(Joel Beasley at 00:13:53) So is that the main differentiator for you as Revelo from your competitors—being able to align on time zones, given working with South America?

(Lucas at 00:14:03) I think that's one. I think that we have an unparalleled presence in the continent. We have been doing this for seven years. We have local job marketplaces for our software engineers in Mexico and Brazil and other of the more representative economies of the region. So you get access to a much deeper pool of talent through Revelo.

(Lucas at 00:14:26) But, also, there's differentiation on how we vet our developer pool. So it's a very thorough process. We have the knowledge of seven years and billions of data points collected from CVs and job experiences from companies and candidates. So we're able to pretty much diagnose what are the best matches between potential candidates and jobs. And, also, we provide that turnkey service that we spoke about.

(Lucas at 00:14:53) So companies don't really need to worry about what health insurance they should use for a different region of Colombia. We'll take care of that. So it's really a turnkey solution for a CTO or a tech manager in general. If you just want access to the best talent and want to manage them and have them be productive, we can take care of everything else.

(Joel Beasley at 00:15:18) So what's the onboarding process like for the engineers when they come on to your platform?

(Lucas at 00:15:25) Right. When an engineer comes to Revelo, they are usually interested in hearing about new potential job opportunities. Most of them are already employed when they do that. We provide them with an amazing job discovery experience. They are completely in control. They determine what kind of offers they are open to hearing, what kind of salary ranges they are open to entertaining, what types of programming languages, frameworks they would like to work with, and we use all that information to make the best matches possible between them and the potential job offers.

(Lucas at 00:15:41) Once they go through the vetting process, they are then shown the job offers that are most likely to be a good match with them. And if they accept to take the interview, they're then put in contact with the company. It's usually the CTO or an engineering manager that does the process on company side. They schedule the interview. They connect. We receive feedback and intermediate all of that. And from there, it's just if they like each other, they start working together.

(Joel Beasley at 00:16:29) And how are you finding these engineers and making them aware of Revelo as an option for them?

(Lucas at 00:16:36) Yeah, I think that's one of the key differentiating factors of Revelo and probably of any company that's been doing what we're doing for so long in the same region. So we have a great community development effort at Revelo, and we have deep links with the developer community across LatAm. We have our technical blog, which hosts technical content from several engineers who just want to share what they've discovered and what they've developed. We have several engineers in our team who have contributed to core repos on GitHub, like Rails Core or Flutter Core.

(Lucas at 00:17:15) We specialize. I think that in summary, that's what we do. We're not a recruiting platform for anything. We are really all about developers, and we are all about the region of Latin America. So we really have no competitors that are doing exactly the same thing as we are, not with this level of focus, not with this level of specialization.

(Joel Beasley at 00:17:35) That's really cool. I mean, it makes sense that you have the advantage from being established seven years into it, which—it is weird that 2015 is seven years ago. But it all makes sense, just being there for long enough. I'm sure lots of engineers just hear about you from other engineers as an option for employment. You're also involved in doing VC work as well, so as an angel investor or an adviser, what are some things that you look for in a successful startup to work with?

(Lucas at 00:18:09) I think the first thing is the team. The first thing that I need to have confidence in when looking at a startup is, do I think the team is capable of enduring and executing the mission? Are they capable of working together? Do they have the technical depth that is required to build a truly technological company? And the second thing is just the size of the market.

(Lucas at 00:18:31) Size of the market, I like to say that it just gives you margin for error. If you have a good team working with a lot of margin for error, you can build great things as long as you persist for long enough. So, yeah, I think that from an early stage angel investor perspective, that's what I think about.

(Joel Beasley at 00:18:47) And what makes a team great? What are the qualities of a founder that you believe in?

(Lucas at 00:18:53) I think they need to be obsessed, not about the solution that they're building, but about the problem that they're solving. I think that most times when a founder goes into an entrepreneurial endeavor, they will see that the first solution will not work out. But if they're passionate about the problem they're solving, they will come up with something better. They will iterate. They will pivot.

(Lucas at 00:19:16) They will do whatever it takes to get to that solution that actually worked, so that product market fit. And that is something that you can pick up really quickly when you're talking to someone. Of course, there's other aspects that you need to consider. What is their business sense like? Are they well connected in the domain that they're looking to start up in?

(Lucas at 00:19:37) Are they able to recruit a tech team and retain a tech team? Do they have the technical literacy that is required to run that company? So that's definitely also in the list of things to check.

(Joel Beasley at 00:19:49) Yeah. On being obsessed with the problem, that reminds me of recently we had on a guest named Eric Weiss who's an executive coach. And I believe he's actually starting up his own podcast soon, which is going to be cool because he was excellent. One thing that he brought up in his interview on Modern CTO was that he advises a lot of executives to stop building the stuff that's in their head and stop trying to just build a product that they think is cool because they're obsessed with the product. And just like you're saying, it's all about finding the problem that needs to be solved.

(Joel Beasley at 00:20:24) And he talked a lot about how important it is to get super close to the customer and to find out exactly what that problem is. Because if you find the right problem, you can charge as much as you want for the solution. And yeah, sorry, that's just what you were saying really rang true to that, which has been on my mind recently.

(Lucas at 00:20:44) But it's a good thing that you mentioned that because that has a strong connection with how we started Revelo. So I spoke about how I connected with my co-founder. I didn't say how we actually started. And we started by making tons of interviews. We started talking to CTOs, engineering managers, and to developers to try and figure out what was wrong with that. What was wrong with that market? Why was this such a pain? Why was this so hard? I mean, on both sides, the experience of finding and recruiting tech talent was difficult. But if you spoke to developers, none of them actually liked going out on job search.

(Lucas at 00:21:24) Everything that existed before was really unpleasant to use, but it was more the process of interacting with these people that taught us about what solution we should be building. I remember that in the space of two months when Wach and I started Revelo, I interviewed over 430 software developers and started just asking them about not only their experiences. I was not trying to technically vet them in any way, but what did they like? What did they not like when finding a job? What would be a good experience of discovering what the next step in your career should be?

(Lucas at 00:22:02) And we did the same thing for the company side. We spoke to dozens of companies to try and figure out what was stopping them from being faster in finding and recruiting those engineering teams that they wanted to have. But you're right. I think it's obvious in hindsight, but it only becomes clear to you what kind of solution you should be building when you just rub yourself against the problem for so long that it becomes second nature to think about it.

(Joel Beasley at 00:22:30) That's really cool, and it sounds like you had to do kind of twice the market research to do a great job with a two-sided marketplace. So when you were starting, did you secure funding at the beginning to be able to do that process, or what were you doing to pay the bills when you were in your market research stage as a company?

(Lucas at 00:22:53) Honest answer, going into our credit cards. So we did not raise capital for the first year of our operation. We were bootstrapped. It's an experience that really shapes how you think about your company and how you think about startups. My co-founder and I were interviewing candidates and speaking to companies during daytime and coding at night.

(Lucas at 00:23:15) So it really changes how you see the product that you're building. It was a different time back then. 2015, the funding ecosystem was not what it was in the past two years. I know everything's changed over the past six months, but it's been very different two years ago than from the past two years compared to 2015. So, yeah, it was tough.

(Lucas at 00:23:36) It's not a pleasant experience, but I think you come out of it as a better entrepreneur.

(Joel Beasley at 00:23:42) I imagine starting in the trenches doing both the market research and the product development day and night, obviously, you come out of that with a better understanding of your company and product than anyone else could possibly have on Earth. So how did you go about finding the first couple employees that you hired on, and how did you get comfortable with giving away some tasks that I'm sure you felt like you were best equipped to do, but you just needed to get rid of them?

(Lucas at 00:24:15) Yeah. I think it takes time. I think it takes time for you to understand that you should be working yourself out of a job. Right? As a founder, that's your job. Right? You need to create an organization that really creates value by itself. So there was a business school professor that said that as a leader, your job is not to complete tasks, but to build teams that learn how to complete those tasks. That really stuck with me for a long time. And I think that going after those first employees was hard because we did not have a lot of recognition, nobody knew who we were, but we did have a core belief that resonated with the right people.

(Lucas at 00:25:02) I think that we believe that in connecting high-caliber engineers from Latin America with opportunities in the US and around the globe, we would be driving prosperity. By doing that, we would be changing the lives of people in a very meaningful way. I think that that's a purpose that people will subscribe to. And believe me, I've had an e-commerce company that sold shampoo online, and it's a much harder sell for you to get people to go crazy about your purpose. But it was an honest belief.

(Lucas at 00:25:38) We do think that great talent can change the world. It's not a sell job. It's really honest. And I think that that helped us a lot in bringing in those first great people that helped us build the Revelo that we have today.

(Joel Beasley at 00:25:51) Yeah. I mean, that makes sense as a big selling point. We've been talking a lot about the talent shortage today in our conversation, and I've heard from a lot of other tech leaders over the past year or so that the way that they differentiate for hiring is with their culture at their company and the purpose that they're able to give their employees. And, yeah, I think the cause of connecting talent with employment is a really good one. I mean, that's personally where I get the most satisfaction out of my job because I worked for years as an audio engineer, which, there's not a talent shortage for audio engineers right now.

(Joel Beasley at 00:26:33) There are a lot of them because you get into it from music, and there's a lot of people that like music. And it's hard to find good work. So the fact that I'm able to, as a part of my job, give good work to talented audio engineers is the coolest thing about what I do. So I resonate with that and what you're saying quite a bit.

(Lucas at 00:26:56) And what CTOs should maybe think about when they're looking to hire software engineering teams from other countries such as Latin American countries is that there's an added layer of purpose when you talk to people that are not in the US. The US is the largest tech market in the world. It's 30 or 35% of the total tech market. All the companies that every programmer has heard about since they started writing their first lines of code were created in the US. So if you give somebody the opportunity to be part of a US tech company, they will just jump at the opportunity, and they will work with such energy and such dedication that you as an engineering manager will get a lot more results out of them.

(Lucas at 00:27:48) And that's purpose. I mean, they're fulfilling a dream. It's not just about the salaries. It's not just about what this can do to their livelihoods, but it's also the fact that they will be playing in the big leagues. It's almost like, you know, going into a professional sports league when you've always played in the minor leagues.

(Joel Beasley at 00:28:10) Yeah. So I gotta ask, do you use Revelo to hire engineers at Revelo?

(Lucas at 00:28:17) 100%. No exceptions. And that's probably the biggest source of minor product improvements and bugs and disruptive ideas that we have at the company is when our own engineering team has to use the platform. And they realize that there's one click too many in this screen, or I would like to see this information close to this other one. It's really something that we've been doing for the past seven years.

(Lucas at 00:28:42) We've never diverted from it. It's a great habit.

(Joel Beasley at 00:28:46) That's cool. I mean, I asked that because I was curious if the platform itself was useful to you, but that also makes a lot of sense that it creates a really strong feedback loop within your company to keep making the product better. That's really cool.

(Lucas at 00:28:59) Yeah. We also, we're a fully remote company. We're headquartered in Miami, but we are fully remote. We have people across 11 different countries. And in doing that, we build a lot of empathy with the clients that are hiring their remote teams.

(Lucas at 00:29:17) So we understand the pains of not only hiring, but onboarding and managing remote tech teams. And if we were doing our work on premises, I think that would be a lot harder.

(Joel Beasley at 00:29:31) Yeah. So what's the remote culture like at the company? I know there's a lot of stresses placed on remote culture in general right now with everybody remote. How do you replace those spontaneous interactions like the water cooler conversations and whatnot?

(Lucas at 00:29:49) Yeah. Great question. I think it's one that we had to develop over time. It's a culture that values autonomy, and it's a culture that values informality and data orientation. So we give people a lot of autonomy because we're able to measure the results of everyone's work and the results of different initiatives, and we make decisions based on that data.

(Lucas at 00:30:12) But on a day-to-day, we want conversation to flow as freely as possible, as informally as possible. So our Slack channels are full of memes and jokes and everyone making, not taking themselves too seriously, which we think is a great sign of people enjoying their work. We found that that's the best replacement for water cooler talk. But I think that every time someone questions whether a tech company should stay remote or not, because for many months, this was not an option, and right now, some of the companies are trying to get back to the office. I would just caution them against what that does to the engagement of your tech teams.

(Lucas at 00:30:56) Software developers, if they have the option of working remotely, most of them will prefer to stay working remotely. And if you try to force your company to go back to the office, I think there's a lot of cases of this happening in the Bay Area and other parts of the country as well, but you'll end up losing your tech team. I think that it's becoming less and less of a choice for companies to have on-premises tech teams. And I think it was Marc Andreessen that said it. A few years from now, the idea of on-premises tech teams will become so outdated as what today an on-premises server is.

(Lucas at 00:31:37) So nobody uses a server on premises anymore. Isn't that the same?

(Joel Beasley at 00:31:43) Yeah. That's really crazy. I haven't heard that quote before, but it does make sense. I mean, at our company, we've been remote since the pandemic, but we made the conscious decision to stay remote forever because it does open up all the benefits that we've been talking about in terms of hiring. So I got one more question before we start to wrap up.

(Joel Beasley at 00:32:08) If you could give yourself one piece of advice when you were first starting Revelo, what would that be?

(Lucas at 00:32:16) I think it would be a message of persistence and belief that our vision for the future of work of efficient, distributed teams that foster American innovation, a message that that vision would come true. I think that before COVID, it was hard to see when that would happen. It was hard to see when the scales would tip in favor of remote teams, which happened during COVID, but no one could foresee. If you truly believe in a long-term trend, not just a trend, but a secular shift, go after that. Because when that happens, the results are completely outsized.

(Joel Beasley at 00:33:07) Excellent. I think that's a great note to leave off on. Before we end it, is there any extra shout out you want to make? Anything we didn't get to touch on today?

(Lucas at 00:33:17) Yeah. I mean, thank you for the opportunity of being here and spending time with you and chatting about things that we're passionate about. I'd just like to invite everyone that's listening to us, if you're interested in growing your team with great tech talent that is in the same time zone and pre-vetted and proficient in English, go to revelo.com/moderncto. And, yeah, and check us out.

(Intro Narrator at 00:33:42) Thank you so much for listening. And if you found this episode useful, please share it with a friend or colleague who you think would get value from it. And if you have topics that you would like to hear discussed on the podcast, either add me on LinkedIn, or send me an email, [email protected]. Every time I get an email or LinkedIn message, it absolutely makes my day and inspires me to keep going.