The Future of Work is About the People | Transcript

Episode 7

Guest: Michael Burdick, Co-Founder and CEO of Paro

Air Date: November 16, 2018

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Chad Nitschke:      

Hi, everyone. My name is Chad Nitschke, Co-Founder and CEO of Bunker and also host of this podcast, Ready.Set.Work. Ready.Set.Work is a podcast series focused on the future of work, specifically highlighting all different perspectives, from the gig economy, to on-demand platforms, and more. Join us each episode to hear from thought leaders paving a way toward the future of work.

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Chad Nitschke:      

Hey, thanks for joining us today. I’m here talking with Michael Burdick, Co-Founder and CEO of Paro. Michael and his team are empowering finance and accounting professionals to embrace the future of work and to disrupt the 150 billion dollar accounting industry.

Prior to joining Paro, Michael was a consultant with Deloitte, where his drive for recreating the finance and accounting value chain through technology began. He’s been a regular contributor to leading publications on topics related to the freelance economy, and we’re excited to have Michael here on the podcast.

Michael Burdick:    

Thanks for having us, Chad.

Chad Nitschke:      

Yeah, our pleasure. Maybe to kick things off, do you want to start off by just talking a little bit about what Paro does? We’d love to hear the origins of the company too, so if you want to shed some light on that. And maybe to kick things off, too, I’m really curious about the name Paro. Where did that come from?

Michael Burdick:    

Sure, I’ll tell you a little bit about what we do and what our vision around the future of work looks like. Specifically what we do, we help growing companies gain confidence in their finances. And what we do is match businesses with the highest quality pre-screened, pre-vetted finance and accounting professionals, so everything from FPNA folks to accountants, CPAs, and CFOs, who provide this remote on-demand expertise when those clients need it. Our quality imperative is real, we really care a lot about that. Our acceptance rate is less than 2% on the freelancer side of the house. So It’s a very curated marketplace and network, and therefore, clients know that they’re working with the best of the best. So that’s what we do and who we are.

In terms of Paro the name and the background there, the honest story is at the time of forming the company, we were looking through a list of two-to-three hundred different names, something that meant something to all of us and also had an available domain. Paro, in Latin, its Latin derivation means to reap or to harvest. And we felt like that preparation of financial statements really made sense, just from a meaning standpoint. So it was a little combination of creativity, mindfulness, and just what was available on the internet.

Chad Nitschke:      

Interesting, that’s a great story. So then was it your work at Deloitte that got you interested in solving this problem?

Michael Burdick:    

Yeah, that’s exactly it. My background started at Deloitte, and finance and accounting is what I know. I actually, in business school … So talking conservative background at Deloitte, to going to business school, which was also very conservative, not to stereotype or anything like that. But I was freelancing on the side and testing out a number of different platforms, and it’s just a friction-ridden, painful process for freelancers. So I married up those two, which was my background in finance accounting plus this pain point that is real and I perceived, and out came Paro.

Chad Nitschke:      

Cool. I’m curious on the freelancers that are on your platform today, is it really a combination of accounting and finance professionals? Is it more focused on accounting? What are some of, maybe, the highest number of types of freelancers you have on the platform?

Michael Burdick:    

It’s split about 50/50 down the middle. Accounting, we’re talking all white collar, very qualified, highly skilled professionals. Controllers, CPAs is on the accounting side of the house, and then on the finance side, you’re talking about VPs of finance, financial analysts, CFOs. So we’re split about 50/50. But the beauty of it is, usually all that rolls underneath the finance function at larger organizations, so we can cross-sell them additional resources over time.

Chad Nitschke:      

Got it. That makes sense. And then on the demand side of it, is it everything from small businesses that are looking for finance and accounting professionals, up to larger companies?

Michael Burdick:    

It’s the typical startup story, where you start small and then create disruption as you move big. Right now our focus is on the mid-market, and over time we’re building relationships with enterprises as well. Our value proposition is entirely focused on a quality imperative. So everything we do is embodying that and building a brand name synonymous with quality.

That value proposition really rings true with the mid-market, where they’re looking for the highest skilled professional who can tackle very specific problems that are company specific. As you move into smaller organizations, it’s usually more of a cost-conscious play, so it doesn’t necessarily ring true to what our value proposition is and what our values are. A mid-market really aligns pretty nicely with that.

Chad Nitschke:      

Got it. So if you target that top 2%, really top quartile performers, I’m curious, how do you find them? How do you vet them, and is there a credentialing process on the platform?

Michael Burdick:    

Yeah, so they actually find us for the most part because freelancing, as I mentioned earlier, is a friction-filled process. The biggest pain point that freelancers have is income predictability, i.e. they don’t have that. What I mean by that is freelancers, for the most part, don’t know much they’re going to make in the future – call it a couple days from now, a couple weeks from now, a couple months from now, and that’s pretty painful. That unknown future is scary. I experienced this firsthand whenever I was freelancing in business school, and so we’ve set out to solve specifically that. And because of the friction that exists within freelancing today, freelancers, because of the value proposition we bring to the table and help freelancers fill their pipeline with work, we have a ton of in-bounds from freelancers trying to make it onto our network, which is a very competitive process.

Chad Nitschke:      

Yeah. I really do feel like that quality piece is critical, because we’ve hired freelancers off of different platforms, and it is hard without some sort of vetting process. You just ultimately never know what you’re going to get, so that definitely resonates with me. I’m curious where you see the industry going. We work with a variety of on-demand platforms, and we’re starting to see more and more vertically focused platforms, similar to Paro, right? And I’m curious, as this on-demand economy continues to mature, how do you see that evolving with the specific niche focus versus the ‘everything for everyone’ approach?

Michael Burdick:    

Well, I think that brand name is everything. So whenever you think of brands, the iconic ones like Coke and Pepsi, they’re known for something, right? They’re known for the sugar-filled, amazing drinks that are filled with caffeine and make you feel great. That’s what they’re known for, that’s their brand. And if you think about that exact idea, “What do I go to someone for, what do I know them as, what are they valuable for?” You have to be associated with something, otherwise people don’t know what you are. They can’t wrap their head around what that value proposition is. And I won’t name names, but I think a lot of these horizontal marketplaces are a little bit lost because the end consumers are like, “What do I go to you for? Do I go to you for transcription services and low-end commoditized work, or do I go to you for the highest quality engineers out there, or the highest quality finance professionals out there?”

We want to be known as the go-to source for the highest quality fiance and accounting professionals. We are known as that, and that’s the brand that we’re building. And I think that’s incredibly important, to build that brand name recognition.

Chad Nitschke:     

Yeah, that definitely makes sense. I’m curious, let’s say I’m an accounting professional and I want to get onto the Paro platform. What do I do to distinguish myself to make it into that top 2% so I can be part of that network?

Michael Burdick:    

Well, it’s a rigorous screening process. And we take it pretty seriously because, as I mentioned around this idea of brand, what we’re constantly trying to do is build trust within the market. That’s tough because it’s not a short-term play. It takes a long time, pattern recognition. And the idea of trust is centered around, “Can I give Paro’s freelancers access to my financials and trust them to do a fantastic job?” That’s hard. We take our quality imperative incredibly seriously, and therefore, our screening process is more rigorous than if you’re looking to get hired internally within an organization.

So sure, there are a few false positives that we’ve had before. We’re learning from that and constantly trying to get better, but we do take it incredibly seriously. There are competency tests, background checks, interviews, reference checks, practice projects, a lot of things that take a ton of time. And so that value proposition of the quality imperative is completely real, and we take it very seriously.

Chad Nitschke:     

 Interesting. How long does that process take then, if I’m that accounting professional, from start to finish? What does that look like?

Michael Burdick:    

From a pure hours commitment, I’d say 20 hours-ish. From a timing standpoint, it depends on how quickly you’re going through it. If you’re super responsive and eager to make it in, it could be as short as one to two weeks. If it takes longer for you to get back to us, then it could be longer than that.

Chad Nitschke:      

That’s definitely quick when you contrast it with the traditional workplace, where you apply for a job and you don’t even hear anything for one to two weeks. That’s a good segue into the next question. When you think about the appeal, if I’m an accounting professional, a finance professional, and maybe I’ve worked W2 jobs in the past, what do you think … And you’ve probably heard this from your experts… But what do you think makes it attractive for them to be an independent worker?

Michael Burdick:    

Everything comes back to the qualitative benefits of freelancing, and I think they’re far and wide. I’ve heard a ton of statistics. One of them that rings through time and time again with me is, “50% of freelancers would not take a full-time job, no matter how much you’d offer them.” That’s kind of an astonishing statistic. It’s basically saying if you’re making a hundred grand a year as a freelancer, you wouldn’t take a job even if they offered you 250k. If you think about that, that basically says that the qualitative benefits of freelancing, i.e. choice and flexibility, working on passion projects, autonomy, they are so much more powerful and the benefits of them outweigh the opportunity cost of taking more money, to the point where they would not give up that choice. That’s kind of astonishing to me.

Chad Nitschke:      

Yeah, that definitely is. When you think about that statistic about half of the workforce being independent … And at some point you have to assume that people will be entering the workforce who basically want to start off being independent right away, so they’re not W2 shifting to be independent, they’re starting off that way. How do you think that will evolve without having … Let’s say you didn’t come from a W2 job, so you don’t have, maybe, credentials or background, but you graduated from a top school and you’re ready to work. How do you think that is going to shift for just the workforce over time?

Michael Burdick:   

First off, I’ve heard those statistics too. You know, “leading analysts project that by 2027, 50% of the workforce will be freelancing.” I think it’s a little aggressive, but there is a tidal wave towards the freelance gig economy. Statistics are showing that the freelance economy is growing 3x the pace of full-time employment within the past five years. So it’s happening, right? This is a big trend and shift towards the future of work.

Now, getting to your point around credentialing, and can someone who does  not have those credentials from the gig economy jump into the gig economy in a fluid way? I would reposition that and ask you the question of … Well, first off, past experiences, in my opinion, are the best indicator of future successes. So would you take someone for a full-time job, who didn’t have that past track record?

So, sure, first job out of undergrad, it’s a different story. But for looking for the skilled laborer that has experiences before, you’re going to look at their resume and what they’ve done. Regardless of whether they’re trying to go to freelance or go to a new job in a full-time employment capacity, you’re looking at that past track record.

Chad Nitschke:      

That makes sense, yeah. I guess, do you envision tiers – and maybe even not specific to the Paro platform, but like – When we hire people, we think of years of experience, right?

Michael Burdick:    

Mm-hmm (affirmative).

Chad Nitschke:      

… and education level. I’m just wondering if there is a more, somewhat quantitative way to measure that for on-demand platforms for workers? So it’s like your tiers and the more credibility you build up, there’s some kind of quantitative measurement that goes into that. I’m curious, what do you think about that concept in general?

Michael Burdick:    

Well, I think that the freelance economy has an incredible opportunity to shift the way we think about biases and how people are hired. In the traditional sense if you look at someone’s resume, and all else equal, someone has, you mentioned earlier, a Harvard stamp on it, and the other one has ITT Tech, which one are you going to go with? I would make a pretty strong argument that neither of those things matter. It’s all about what they’ve been able to accomplish in their career and in the freelance economy, whichever path you want to go. And so the past experiences are the best indicator of future successes and future outcomes. So I think the freelance economy, using matchmaking algorithms and machine learning, have a big opportunity to shape how we think about biases and hiring processes. Now, granted, if you train your machine learning algorithms to have inherent biases, that’s a-whole-nother story. But I believe that the opportunity exists for the freelance economy to make some positive impact there.

Chad Nitschke:     

Yeah, I personally love thinking about those sorts of thing, just because I’m kind of a contrarian at heart. So, I just think about all of the things that we’re tied to from a historical perspective, about how we think about employees or how we think about experience. Some of that is probably based on fact, right? But some of that is just based on, “Oh, well, it’s because we’ve always done it that way.” And, I definitely think there’s an arbitrage opportunity to look at experience and look at credentials much differently than we have in the past, to your point, to attract those candidates, find those candidates that maybe they don’t have that pedigree, but they have the exact skillset and the exact expertise that you’re looking for. And so, I’m excited about all the innovation and evolution of not only workers being able to identify with themselves as being that expert, but then also from a hiring and recruiting perspective, being able to tap into that.

Michael Burdick:    

Totally. I think you could think of the gig economy and the track record that a freelancer builds on a platform, using quantitative assessments and understanding what skills, tasks, and projects they’ve accomplished in the past. You can use that track record to almost assimilate the equivalent of a medical profile of that person. Right, so you’re using that score card to assess their physical health is the analogy I’m using here. And if you’re hiring a full-time employee, it’s essentially as if you have that medical history in front of you, right? So it removes all those biases. You don’t have to go do the reference checks. You don’t have to ask their previous about how they perform in the workplace because you have all that data at your disposal. That’s really powerful.

Chad Nitschke:      

No, I totally agree. Shifting gears a little bit, so we talked about the supply side, the worker side. If we look at the demand side, that mid-market company that you guys work with today, I’m really curious on if I’m that mid-market company, and let’s say I’m using Paro for the first time to recruit somebody. What advice would you give me? Just in terms of, “I want to differentiate myself, and I want to build a great onboarding experience for the worker than I retain.” What have you seen work well, and then what you seen not work well for the enterprise?

Michael Burdick:    

My advice is, if you’re a mid-market company, to make the freelancer feel valued because happy people are more productive. If people feel valued, they’re going to produce better outcomes. So treat freelancers like humans, as opposed to objects and numbers. And I’ve seen a lot of mid-market companies fail here, by just treating freelancers like a number and associating them with an outcome. The more that you humanize that entire process and treat them like they’re an employee, if not even better than an employee, you’re going to have those better outcomes. I’m not saying that in terms of building a name brand as a company that accepts freelancers with open arms, I’m saying it from a standpoint of, “You will get better outcomes if you treat freelancers like humans.”

Chad Nitschke:      

So if I’m that business and I am integrating a remote worker, what are some of the things I can do to make them feel like they are part of team? And maybe part of that answer is technology. But I’m curious, what are some tangible things that you’ve seen that make that worker feel like they are part of the team, even if they’re just working, let’s say for a few months, and it’s remote?

Michael Burdick:    

There are a lot of softwares that are enabling team collaboration. First off, in the finance and accounting arena, the rise of cloud accounting softwares is the ‘why now’. It’s enabling the virtual worker and people to do things, even halfway around the world. Cloud accounting, cloud productivity tools, exist to enable those office communications. And I think there a bunch of tools out there, Slack, for example, where you can just brings freelancers into the mix and those team communications, so they feel like they’re a part of that team versus sitting on an island, because freelancing can be a very lonely endeavor.

Chad Nitschke:      

And then I’m curious to extend that a little bit, what do you think is still missing? If you could wave a magic wand and create – maybe it’s a technology, but maybe it’s just something else that’s missing from the freelance economy – what would that be? And that’s maybe a call-out to entrepreneurs that are listening. What should be built that has a demand, that is just not being met today, to support the freelance economy?

Michael Burdick:    

I’m going to get a little philosophical here, because I believe that the future of work is all about the people. And I think that a lot of labor platforms treat freelancers like objects and numbers. I believe that the most successful people in the future are going to have a resilient, purposeful growth mindset, and they’re going to be problem explorers, is the best example that I like to give. What I’m getting at is, I think people should focus on humanizing freelancers, and that’s just a mindset. I don’t think it’s one specific thing. And if you humanize freelancers, then you’ll get better outcomes. It will open your world to the possibilities of leveraging on-demand experts and change the path and growth trajectory of your company.

Chad Nitschke:      

That makes sense. Shifting gears a little bit, one of the things that I really like about Paro is your company values. I was wondering if you could talk just a little bit about how you came up with those and maybe just one or two that resonate with you. Just expand on those a bit.

Michael Burdick:    

Sure. Team endeavor, for sure, we pulled them together early on. That’s something that I care a lot about, is creating a culture where people feel like they can bring their whole selves to work. A part of that is having a purposeful, mission-driven organization. And I see mission, or your purpose, as being like the North Star towards what you’re constantly driving, and then the values being the guard rails with which you’re making decisions, you’re hiring people, how you’re carrying yourself on an ongoing basis. So, all of our values are incredibly important. And from an early, nascent stage in our organization’s evolution, we wanted to do that as a team because it’s something that we cared about. We were growing very quickly. I think we had in the back of our minds an idea of what those values were, but we needed to put pen to paper to solidify them for the growth of the organization and making sure that we were hiring people according to those bounds. And you asked what I think are the couple most important ones? Well, first off, I think they’re all incredibly important. But I think framing it in another way as like, “Which one’s mean the most to me?” I’d say there are probably two or three. The first one is enjoy the journey. I think just having fun in everything you do is incredibly important. Take smart risks is another one of them. So for us, it’s constantly falling on your face and failing but learning from that. It’s just the idea of having a growth mindset and continuous improvement. If you learn from your failures, you will grow quicker than someone who doesn’t fail. And the last one is be yourself. And I mentioned this earlier, around creating an environment where people feel like they can bring their whole authentic selves to work. That’s really meaningful, and powerful, and important to me because I believe that if people feel that way, they’re going to be more productive; they’re going to be more creative; they’re going to be more innovative; and they’re going to love what they do even more. So I think those three values probably shine through above the rest for me personally, and I’m sure every person in the organization has different opinions about that.

Chad Nitschke:      

Yeah, that’s interesting. I can relate definitely on a personal level with those. I mean, I left the traditional insurance industry, partially because I felt like I couldn’t really be the same person I was at work that I was at home. I just didn’t feel like I fit in anymore to the industry, so I definitely resonate with that. When we came up with our values at Bunker, one of the things that we … I equated culture and values, a little bit, to equity in a company. Right, so if you think about equity in a company, the earlier you started a company, if you’re a Silicon Valley, venture-backed company, typically the more equity you own in the company. And culture is kind of the same way, right? Let’s say if you’re one of the first 10 employees at a company, you own a bigger piece of that culture. You can help shape and define that culture more meaningfully than if you’re the hundredth employee. I think it’s ultimately an opportunity, but it’s also a responsibility, and this is kind of how we talk about it as a team. Where, let’s say if we fast-forward the clock six months or a year, and the culture at Bunker isn’t what we want it to be, we’re the ones that are responsible for that. We all own a piece of it. And it is a great opportunity, because the earlier you start in a company, the more that you can influence and drive the culture to what you want it to be. So I like everything that you said and definitely resonates with how we think about it at Bunker as well.

Michael Burdick:    

Yeah. I’ve taken a similar, if not minorly nuanced approach there, which is every new hire that we bring on, I spend time with them, and I talk to them about our culture and what our values are. And I’ve received this question a lot, which is, “How are you going to make sure that we maintain our culture as we scale exponentially?” And my response is always the same. I ask them straight back, “How are you going to make sure that we maintain our culture as we scale exponentially?” Because, in my opinion, every person within our organization is responsible for maintaining our culture and allowing us to scale and grow. And every single person should take that responsibility very seriously. So even though I agree with you that early employees and founders have a disproportionate say in what those values and culture are, I think at scale and as you exponentially grow, newer employees have a disproportionate say in maintaining that culture.

Chad Nitschke:      

Yep, I definitely agree. Any finals thoughts that you wanted to leave the listeners with before we sign off?

Michael Burdick:   

In terms of advice, I would say experiment and try. I think that the future of work is upon us. And I think that traditional walls of employment, of having a 9-to-5 on site job, are constantly changing and very quickly evolving. So, embrace this future and just try – experiment with things in a low-risk environment, because that experimenting mindset, that growth mindset, the problem explorer mindset, will enable you as an employee of your organization to be more progressive and on the cutting-edge of these changes, and will position you for success.

Chad Nitschke:      

That’s great. I really appreciate the time that you took with us today and really look forward to seeing what Paro has in-store over the next few months and years as you disrupt the accounting and finance industry. Thanks for taking the time to be on.

Michael Burdick:    

Yeah, really appreciate it, Chad. Thanks a lot.

Chad Nitschke:      

Yeah, and of course, thanks to our listeners too. We hope you can join us again on the next episode of Ready.Set.Work.

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Chad Nitschke:      

We love to hear from our listeners. If you have ideas, thoughts for guests, or suggestions for future podcast topics, please reach out. Tweet us @BunkerHQ using the hashtag #ReadySetWork, or email us directly  at hello@buildbunker.com. Alright, back to work.

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Next Episode: “Get a Real Job” ft. Marion McGovern, Author of ‘Thriving in the Gig Economy’

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