John Waldmann, Homebase Founder and CEO joined Yahoo Finance Live to discuss the company's latest funding round, how the company is helping small businesses, and the labor shortage.
- The unemployment rate remains stubbornly high. We have job openings at a record high of 9.2 million, yet companies still can't find the workers that they need. We want to talk about what's going on, specifically what's going on in the restaurant sector. For that, we want to bring in John Waldmann.
He's the founder and CEO of Homebase. It's a company that helps restaurants with their hourly worker needs. I guess, John, what are you hearing from your clients and from your customers? Has this situation, the labor shortage situation improved at all, specifically for the restaurant industry?
JOHN WALDMANN: It has been a really hard time to hire. We're hearing that anecdotally from our customers, and we're seeing it in our data. Staffing levels still lower than they were pre-COVID, and job posts at the highs within Homebase. We have a hiring product, and we can see how hard it is for people to hire.
- It must be a nightmare to have to be an owner and then operating a business where so many people are relying on hourly schedules. And that's where you got the inspiration to do this. You actually talk about doing it to help your family and friends, right?
JOHN WALDMANN: Yeah, U have friends and family members who own and run restaurants, family members who work in the hospitality industry. You know, their life back in 2014 didn't look any different than my life looked 10 years earlier. The world of our work had not evolved as technology was evolving, and there are lots of ways that technology could help, from scheduling to hiring.
- John, I read that you just raised $71 million, a Series C funding round. You have a list of many well-known investors. Among them you have Matthew McConaughey on there. Athletes Drew and Lauren Holiday are among those as well. What are you hoping that this funding enables you to do?
JOHN WALDMANN: Yeah. From the beginning, it was never about building the world's greatest scheduling company. It was about how do you help local businesses manage their teams. It is brutally hard to run a small business in the best of times, and we are not in the best of times right now.
So they need all the help they can get in managing their teams. And that's really what this funding is for. And it's to help us to continue to expand the tools and make that work experience better for both the business owner as well as the worker.
- Tell us about some of the new pay advance features that you have. I mean, when I was a dishwasher at Dan's Diner, I would have loved to have been able to get some of my pay upfront. How does that work?
JOHN WALDMANN: Yeah. You know, what we could see in talking to our users is there were a lot of workers who were incurring negative financial events on a fairly regular basis, whether that was overdraft fees, payday loans. And it was not because of the pay. It was because of the timing of the pay.
They might get a paycheck two days after a cell phone bill is due, after a car payment is due. And so they were bridging that in really expensive ways. Those same folks that may not have had $100 in savings had more than $100 coming on their next paycheck. So what we're doing is just giving them access to that pay early to help them meet their income with their expenses.
- John, what has COVID done to your business? I guess, on one hand, have you seen a drop in the number of clients just because so many small businesses have been struggling? Or on the other hand, do more businesses need your help at a time like this?
JOHN WALDMANN: Yeah, it's a fantastic question, and it has been a very different story over the past year. April 13 of 2020, a date burned in my mind, over 60% of our customers are closed. You know, we serve over 100,000 small businesses across the US. Over 60% of them were closed.
And they were dealing with just challenges that they have never faced before, whether that was furloughing their teams, whether that was the question of whether they would ever be able to reopen. A lot of those businesses did, but many of those businesses shut for good. It was a really, really hard time for small businesses.
Now, as we kind of adapt a bit to the new normal and we come out of this and we have vaccinations and all of this great stuff, there's a whole set of new challenges. We start off talking about staffing.
But I think the thing that's true across all of that is it becomes increasingly hard to run a small business or to run a small business team without help. And that's where our home base fits in. It's only become more challenging to manage a team, whether it's more regulation, whether it's staffing shortages, whether it's hiring. You know, the things that make it hard to run a small business or so long, and technology can genuinely help now more than ever.
- John, you've got an incredible database. I'm just curious, do you use that-- we know the business side of it, but is there any kind of, like, team of OK, we got these people who are dishwashers and waiters and waitresses and whatever, they're on standby, they need to go to this place today, that place tomorrow? Anyone doing that? Is Homebase doing that kind of thing?
JOHN WALDMANN: We're not doing that. The way that we are helping businesses hire today is by helping them get more applicants. So we work with a lot of partners to get their job post out and make sure that they're getting more applicants. We give them ways to filter through those applicants. And so we want to make that hiring process much, much easier. For all of the businesses that are struggling to hire, we know that there are still workers out there trying to find work too. So it's about making that match happen a little bit faster.
- John Waldmann, great to speak with you. Founder and CEO of Homebase, we wish you all the best.