Sven Merten, Managing Director US, COMATCH
Sven Merten, is a former management consultant turned builder with a background in growing ventures around technology innovation, experienced in building coalitions to overcome systemic obstacles to innovation, Steve is now the Managing Director U.S. at COMATCH, an online marketplace that connects independent consultants and industry experts with companies for consulting projects.
https://www.comatch.com/
https://www.linkedin.com/in/svenmerten/
AUTOMATED EPISODE TRANSCRIPT
[00:00:01] You're listening to Scaling Up Services where we speak with entrepreneurs authors business experts and thought leaders to give you the knowledge and insights you need to scale your service based business faster and easier. And now here is your host Business Coach Bruce Eckfeldt.
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[00:00:58] Welcome, everyone. This is Scaling Up Service, I’m Bruce Eckfeldt. I'm your host and our guest today is Sven Merten and he is Managing Director of the U.S. for COMATCH. We're gonna learn a little bit more about the industry. We're going to learn a little bit more about Sven and what he's doing in helping him come into the United States. COMATCH is a talent network focused on high end management consultants and industry experts. Fascinating space.
[00:01:20] This whole kind of gig economy and finding fractional and outsourced resources obviously is huge. I think some statistics that I heard recently were just 20, 20, over half of all employees will be some type of freelance type of basis. So definitely a space we're moving into in the business world and certainly in services.
[00:01:39] A big factor in where this industry is going to go. So I'm excited for the conversation come out has got a really interesting angle. Been very successful in Europe and now moving to the U.S., we're going to learn a little bit about their strategy, what they've learned and some of the things they're learning about the space with that. Sven, welcome to the program. Thank you for having me. Yeah. So let's talk a little bit about your background and then we can talk about Comac and learn what that's about and what you're doing. But let's learn about spend a little bit. How did you get in the space? What was your professional history personally?
[00:02:07] I joined McKinsey after after undergrad where I focused mostly on clean tech technology innovation. And was there sort of thought that whole right of building out what was at the beginning, the climate change special initiative as it grew to a massive global practice?
[00:02:25] So most of my time was spent with clients that had developed some technology. We're looking at acquiring some sort of smaller or innovative start up or another technology and other business model. And they were trying to figure out, you know, what to do with this. How do you scale it? How do you take it from lab or small initiative to actually building a business out of it? You spend. You know, I'd have to check scale 7, eight years. There is something that's it's all a blur. And then at some point at some point, I moved on and started working with with the number of startups in an advisory capacity. And we founded a telemedicine startup. And over time, as you know, we all meet each other twice or we have a weird connection. So I started getting getting connected to call Manch where Young and Krystof the two co-founders, both ex McKinsey. So we had some overlapping professional history. We'd worked in the same office at some point. And our chief sales officer, I knew through a mutual friend who's actually on our platform. So there were multiple connections and you start talking. And over time, because I had lived in the US for just a really long time, even though I have a German background, we started talking about the U.S. market and how how the business would translate into North America. And then things got more concrete when I moved on after after the telemedicine startup. We relatively quickly connected and said, hey, while this wasn't, you know, planned years ahead, we think it's a good opportunity and also was available right then. And fortuitously, yeah. And most of all, that the personalities just fit. And we said, you know what? Let's give this a try.
[00:04:15] Yeah. So tell us a little bit about Comac, because I get the general idea. I think the audience, you know, understands that the general idea of kind of a talent network and to, you know, being able to access, you know, folks on a fractional or part time basis as needed. But give us kind of the history background of co-manage and the strategy, because I think it is it's kind of a different or unique talent pool.
[00:04:34] And then how you typically engage who typically hires you. Give us some details there.
[00:04:38] You know, if you think about gig economy and and access saying talent quickly, in the first few years, a lot of solutions have basically focused on much more fungible talent.
[00:04:52] And by that, I mean something that was very easy to create as a pool around a certain set of standards. So I think of an Uber driver or even if it's not talent. Think of air BMB. There's a set of guidelines you could have that say, here's what qualifies you to be on this platform, right. And here's what the customer needs. A customer needs a ride. The customer needs accommodation. And that's how you scaled up quickly. Once you started. Thinking about much more complex skill sets, it becomes more difficult because now the question is how do you even vet for quality right now? And when you think of talent, access by corporations or consulting firms, private equity funds, those are usually people that have either really deep expertise in something or have a skill set that translates very well.
[00:05:45] So it's not necessarily a one on one. OK, this person has a driver's license and a good criminal record and now they can be on the platform. So that space hasn't been. I mean, of course, it's been been tapped, but it hasn't been as developed as other parts of the gig economy. And when you think of freelancers. So in our case, it's management consultants for top tier backgrounds and it's industry experts. You find yourself in a situation traditionally if you for what ever reason don't want to, cannot work with, let's say, a larger consulting firm. Because there are multiple instances where you have a project that just necessitates that, say, one person running the program management office or something like that, or you might not have the budget. There are myriad reasons why you might need a little bit more flexible setup and you look to freelancers. The issue is one, how do we even find them? Yeah, exactly. And to once they found them, how do we even make sure that they're good and not just how do I do it, but also how do I do it without spending three months vetting resumes and calling people and testing them out.
[00:06:58] And then lastly, if I found them and though and they're good, have I made sure that they're actually the right person for the job? Right. Just because Bruce worked for a consulting firm does not mean he can do anything and everything a consultant could do. Yeah. And then that's where we come in and we basically cut that process short.
[00:07:21] What we're doing is that we're building a talent pool and now it's worldwide. We started in Germany, then Europe, now the US, where we pull folks that come out of the big consulting firms, the leading boutiques and straight out of industry. So those are people with 10+ years of experience and a very specific topic, not just job experience, but here's what I stand for and I have very, very deep expertise in it. We vet them to ensure a minimum quality standards so that at that point you have a talent pool where you know, okay, everybody here meets a minimum bar. And from there we flipped some of the traditional marketplace dynamics around a little bit where if you think of a marketplace, you oftentimes have a situation where all customers can browse all the talent and all the talent can browse all of the projects. Yeah.
[00:08:21] But you're just it's like an open marketplace. You're just it's up to you to sort of search and filter and ask questions. There's no curation, really.
[00:08:29] And that really solves for, you know, the first issue. How do you find the right course? Huge access. That's great. But then the question becomes, how do I make sure that they're good without spending too much time? And for that talent, oftentimes it's so if I'm very good, how do I make sure that the client, because they struggle to, let's say you weed through hundreds of people, doesn't just focus on price
[00:08:56] You know, if you come in and you'll have 20 years of very senior industry experience and there are 30 others pitching or a hundred or 10. As long as there's no curation, you oftentimes get stuck in a situation where you're direct competitor is someone, let's say, half a year out of school by pitching or a few hundred dollars a day. And then the first question you're faced with is raped by the client notes while this person goes for a few hundred bucks a day, you go for a few thousand. Why? And the discussion goes down the price channel. This is where we keep much tighter control over the process and it plays into quality control directly and indirectly, as well as when a client comes to us and posts a project, we connect them with someone on the team who works out the details, make sure that we get very granular on the requirements and then take those requirements and we filter that pool. At this point, a little bit over 10000 consultants and industry experts worldwide to, let's say, you know, five to 15 depending on the project. Campbell. Who really, really fit the bill?
[00:10:10] Since it seems like there's two, there's going. Be hearing how you describe the process.
[00:10:15] There are two big operational key operational activities that I see. And I'm just kind of. Curious on how you've actually developed them or what you've learned around them? I want one is the I'll call it the sort of talent acquisition and betting side. So, you know, given the vast pool of, you know, even high level, very experienced acts, you know, top tier management consulting folks, how you pull in, the people that really are going to, you know, not only have the skill sets that are in demand, but also are the type of people that work well in this kind of gig economy. I just I find that you can have someone who's incredibly experienced, incredibly knowledgeable. But if they're not fluid in in working in this kind of freelance basis, you know, being a good consultant in this model can ultimately not deliver the value you need to this whole kind of. How do you that the people not only for skill set, but for kind of the ability to work in this model and then to is that whole matchmaking process like how do you kind of diagnose what a customer, what a client really needs and how much you know, how much are you gonna taking it at face value? How much do you really need to probe with a customer to understand, you know, what they're really looking to do and maybe actually consult with them on the types of people they need? How many people they need at what level, what skill sets and doing that matchmaking. I'm just curious how you've kind of evolved those two things, because for me, that's been certainly the second one is really different. I mean, I think most of the platforms that I've seen out there are basically open marketplaces and it's up to the users to kind of do the best they can to find people. So the matchmaking is really is really curious. But talk to me about those two areas and how you've developed them.
[00:11:46] Maybe, maybe I'll start with the with the vetting turns and translates to the matchmaking and then we will circle back to acquisition and finding finding the right kind of people. So we when we go through the vetting, which is, you know, a CV background check, but then also an interview that goes very, very deep into a candidate's expertise. We try to not only that, the background in terms of, you know, have you done what you say you've done, but also to classify talent in a very granular way. And that goes straight to your point is how do you find the right kind of person to start? We we really only I mean, say for, you know, the very occasional exception. But but 99 percent of the pool, we only work with truly independent talent. So someone who, you know, let's say is employed somewhere full time and then does this on the site doesn't go to really work for. Yeah, exactly. Exactly. It avoids interest conflicts. It avoids all kinds of capacity constraints. We just we just go straight for truly independent individuals, not for folks who actually have a quote unquote, day job and do something on the side. So that that clears up a lot of issues already. But then this initial interview and the classification really goes. Where do you shine?
[00:13:11] What do you do? You usually work as part of a team. You lead the teams. Are you usually engaged as a standalone expert and, you know, maybe on a retainer where you have input once in a while?
[00:13:23] Or is this something where your hands on on the team just working on the implementation and really trying to get to what kind of individual is this? We've not that long ago. But at this point, you know, not that long ago. But then and start a world of ages ago, we started classifying for soft skills as well. Try to understand, are those folks who come in usually in very contentious situations and work on turnarounds or hire those folks who are very good at stakeholder management? We have someone in the pool who who who really focuses on connecting creative leadership and very sticky situations, trying to find a turn around. Companies that are led by that, by creatives and the values all you know, in the creative talent. But then sometimes the business behind it needs a little bit of work. So you know that that person, for example, is a great example where if you know what that person is about, you can really match them to the right kind of client.
[00:14:28] Yeah, it's interesting. You know, you're gonna have these gems and it's like, you know, figuring out that that perfect kind of connected fit that curation.
[00:14:35] I'm curious how you mentioned the soft skills. Have you? What's your take? Let me guess, what have you use already be looked at in terms of some of these assessments and, you know, whether they be kind of personality or the more psychological assessment stuff and anything that you found interesting? Not interesting. Have you looked at them?
[00:14:49] You know, full disclosure there, I think, in terms of letting it influence the way we we classify. You know, I'd be hard pressed to say here's a winner right now. Anyone in the consulting world is familiar with the MBT Eye and with the Riveters. They're off. Right. And that makes sense as a starting point, oftentimes, right. Because because the talent is familiar with it.
[00:15:14] It's it's something easy to talk about. Ryan, hey, what's your what's your NBPA? And you've done the. Probably. And let's take that as a starting point to talk about and talk about soft skills. But we will currently not working with sort of a rigid outside system say this is what we what we used to to solve for. For soft skills. What does help though, is client feedback, honestly. You can talk about soft skills all you want at the end of the day. It's the client who gives you the kind of feedback that is really important right at the end of an engagement. You start learning a lot about folks as well.
[00:15:49] Yeah. Now I could see that I was there. I said that. But the only thing that interviewing really tells you is how well somebody can interview doesn't doesn't necessarily tell you how well they can do the job. So, you know, that feedback process seems important.
[00:15:59] And yeah, I mean, talk it talk to them in between the two. And I can't help myself but think that that's because there's a difference between what really drives behavior and what's learned behavior over time in your professional setting. But it does come out in the actual work, and that's where the feedback is super important for us.
[00:16:20] So that's the kind of the vetting process. And then so the matching process, you mentioned that you you take your 10000 plus candidates, you know, and for a given assignment, get this down to five to 15, something like that. What is what does that process look like as a super smart algorithm, A.I. component that you've you've developed?
[00:16:39] Is it, you know, a bunch of people really thinking hard in a conference room with a profile, photos moving around on it, on a whiteboard? How do you do this now?
[00:16:48] I would say I mean, the vast majority of it is printed resumes and boxes. Now, what we've done is we've created a platform algorithm based at the beginning where we can just get very granular and move the right kind of variables into the algorithm itself. So this is where depending on the project descriptions and this is why we we have that conversation with the client as well.
[00:17:13] Now we can get very granular to filter out the right kind of people that then gets combined with with the actual teams who work on the same types of projects and industries and functions over and over and over so they can influence the end result at times where someone gets picked up by the system who shouldn't write or for some reason someone who would be perfect for a project doesn't get picked up. And that's where that personal relationship with the consultants and with the clients becomes just invaluable because we can we can move the right kind of people in, because as you imagine, depending on the project, their skill sets were just very nicely transferable into a new setting. And it's not a literal filtering out of, you know, new checkbox that one, two, three, and therefore you're in. And then as a last layer over the last couple of years, we've been training a machine learning engine to start aiding us in, you know, at the beginning, of course, the most simple kind of filtering and to then learn and get more and more accurate in suggesting the right kind of talent for the for the project at hand.
[00:18:26] That's that's currently, of course, or, you know, probably always will be. And in further development right now. But even when we're when we do anything manual or manual, we we try to run it in parallel to compare results and say, hey, this part might not be ready yet, but let's see how it does while we do something either manual or just through another straightforward algorithm to see what results we would have come up with.
[00:18:53] Yeah, that's interesting. Zuma I was curious around this this kind of kind of talent matching and team design, you know, where I'm putting multiple people onto an assignment.
[00:19:03] What are their skill sets? But also what is the sort of the personality interpersonal skill dynamics going to be? You know, client dynamics. Yeah. I just imagine that there is, you know, as you kind of put people on teams, you're getting feedback, you're learning about what's working, what's not. But some some of these algorithms run this machine learning stuff. Could could start generating some interesting insights or at least giving you possibilities. You know, I think things to consider in terms of, you know, matches that you might not otherwise either think of or just have mental access to. Like if you once you get so many people on the platform, it's gonna be tough to, you know, kind of keep all those possible people in your mind. Well. Machine learning can start giving you suggestions that may not be top of mind, but actually meat may be really good, really good matches just because you hadn't thought of it or it's not they're not immediately at your fingertips from a data point of view.
[00:19:47] And you mentioned a crucial point here. The relevance of teams with that proverbial push of a button, as cheesy as that expression is, this is going to become more and more and more important.
[00:20:01] It's already very important for a lot of organizations, but it's only going to gain significance.
[00:20:07] Has organizations themselves just need to react much quicker. They don't just draw in individuals from the outside, but they also have to think about how do it quickly or reorganize my own. People and match them with outside talent. How do I quickly staff a complete external team? Because there is a topic here that we need to react to. We don't have experience. We don't have the right kind of people. But it's not a one person kind of job. It's a it's a team effort. How do I very quickly get the five, six experts to match with, you know, two or three folks who can run the project and the support of the analytics?
[00:20:47] How do I quickly start something in the realm of two to six or more people? Right. And then quickly ramp it down. And if you take that one step further, you can absolutely see entire departments.
[00:21:01] Right. Being staffed up for, you know, maybe not a week or two. Right. But maybe half a year or three quarters or something like that in a room ramp down again while the people then go back to quote-unquote their regular jobs. But the task is done.
[00:21:14] Yeah, it's just kind of the shift in the whole economy or the whole kind of the talent sphere here where, you know, it used to be you'd hire someone, you'd spend six months, twelve months kind of training, sharpening their skills, you know, getting them really kind of culturally aligned with the organization, you know. And then you'd have several years of recouping that investment with the returns that you've have, productivity and things like that. And we're just shifting to this. You know, here we're we're bringing people in for months at a time around an initiative and then disbanding the team, you know, if work on other things. And that's that whole kind of investment stuff is it's just changing. And I think that the skills around that are gonna be huge, like if you actually have that insight, not learning that data, that's gonna be really powerful.
[00:21:50] And I'd say it goes further than just shifting towards, you know, quickly stuff something up and then and then dissolving it. I would say the two models of merging where if you think about recruiting and I'm sure you've gone through, you know, hiring yourself where you said it didn't work out so well, but just maybe once or twice. Right. It takes a lot of time. It costs a lot of money, especially for for uncertain situations where something, you know, we have something we need to react quickly, whether that's a startup or a large organization, just needing to deal with a quick shift. There is no better tool to recruit than to work with each other. And that goes for both. So I bring in someone from the outside first for a project as a as an organization.
[00:22:37] I can assess whether that's the right kind of person to work with us. Skillsets, mindset, cultural fit. And as an individual, I can do the exact same, right? I would argue as an individual. Hiring is is even more tricky, you know, getting hired and then and then making the right choice because the employer sees, let's say at another hundred five hundred, a thousand kind of applicants for a specific role and and starts gathering data.
[00:23:05] The applicant might just apply to that one role and then talk to five people and go, yeah, I'm going to make my decision based on this.
[00:23:12] Yeah, I know as an employer blur, you gonna hire a couple of people and decide who you want to keep as an employee. You can't you can't go to work for a couple different companies and then decide you're going to stay. Exactly. And the ramifications are much bigger.
[00:23:24] Right now, if you let go or leave that job because it's not working out, this is your livelihood and you need to find something else. So the stakes are much higher, I think, for both sides. A model like this really helps to sniff each other out and see if you know.
[00:23:41] Exactly so. So all of this has been sort of developed or matured to some extent in Germany and Europe. You're now working on bringing this to the U.S. I mean, I guess I'm curious what you're noticing. And I think for the audience here, this is a great case study in sort of reverse for a lot of companies in the U.S. that are looking to abroad. But I think a great case study in terms of what you run into, what you need to be aware of, what might surprise you in terms of, you know, taking an established model or established business and bringing into another culture, another geography, another economy. What are some of the things you've learned as you've you've looked at the U.S. market? How have you approached it? What's been your kind of strategy and what have you kind of had to change in terms of the business to make it successful here?
[00:24:21] You know, I think there are a number of things that we've that we've learned that are that are quite interesting. I mean, nothing if you think about it, right. Nothing on paper is that groundbreaking. So I'm not going to tell you that I know discover new species and exactly like paper here.
[00:24:39] But it's as it is so many times, it's the things that you have in mind that are common sense. The learning then is how important it really was or is how hard it really was or is.
[00:24:53] And for us, it's a number of things that starts with starts with the sales process.
[00:24:59] In in Germany, in Europe, selling works a little differently, especially if you think about cold selling. So the networking, right. That what industry association tell you part of do you leverage your alumni networks i.e. that companies you've worked for or schools you've gone to or or. Or, you know, yo, AYP, all those kind of organizations. Did you make connections that way? That is pretty transferable across geography. So I would say but when it comes to a cold outreach, it's completely different.
[00:25:31] I mean, if you if you reach out to, let's say, executives in in Germany or in Europe and you have something solid, solid product to sell into and the facts to back it up, you can with, you know, with the right kind of e-mail or the right kind of phone call or generate meetings and generate sales.
[00:25:55] And a big part of that is because that market isn't yet overrun with cold outreaches.
[00:26:04] It's right here. I mean, I'll give you an example. When we when we sell in in Europe, it's a few outreaches, but it's the right kind of people and very targeted. Whereas here the frequency just needs to be much, much, much, much higher. I mean, we all know how low email conversion rates are. Right. Even if you do it all. All right. And in addition to frequency, it needs to be a true omni channel approach.
[00:26:29] In the US and for a U.S. audience. Right. I am not telling anyone anything groundbreaking here that if you if you want to target someone especially cold, you email them.
[00:26:40] You might call depending on the person and the organization. You combine that with the right kind of performance, marketing linked ads, going to conferences, putting up your own events, generating your own content.
[00:26:54] Right. But doing it all together and doing it very, very well coordinated. It is absolute standard. I would say in the US now, whereas Europe was much more about who do you approach and do you get to them? And then it just takes that that right message. Right. And the learning for us coming to the US was while we knew there were there were cultural differences and I had worked in the US. I mean, I've been on and off in this country since ninety nine. We knew instinctively that there would be a shift. We didn't know how pronounced it would be and how much we actually had to just really refine every single part of it. And then drives home that the age old message of this is no silver bullet.
[00:27:44] Write it out. But there's a little bit of a silver lining in it, right. Where once you really realize that you eliminate the frustration of silver bullet isn't working. Right. You gain a whole new frustration of this is really, really hard work. But the silver lining is if I just do it, I can get there.
[00:28:06] It makes it. The other thing is, like once you figure out this competitive advantage, it just it does create a barrier to entry for everyone else, because if they haven't figured this out yet, they're not going to be effective. It actually gives you gives you an organizational leg up on folks.
[00:28:20] And then I think there's a different barrier or barrier slash way to success here. And there was a second learning, which was the customer group in Europe selling, let's say in our case, selling a value proposition of, hey, 10000 people, we could do anything for everyone.
[00:28:41] Right. We have all this talent here. Whatever you need, it's there. Here are the stats. 14 percent of the pool are in this industry, in 16 percent are in this industry that works really, really well, whereas the U.S. is or North America, for that matter, is much, much more expertise driven and it's much more inch wide, mile deep. Let's just really, really get in to a few spikes. Let's identify where we are good and where the market picks up. And that takes a little bit of little bit of trial and error, because in a situation of a marketplace like ours, you need to not only find out what our clients are buying and where are the clients, what are the or the industries and what type of clients in those industries.
[00:29:30] But it's also where are we building the right kind of expertise. And if I find out that there are a number of clients looking for specific expertise in a very, very narrow sub segment of an industry, but also the reason why everybody's turned into the outside is because there are five experts worldwide who do this. That's probably not where we can and should play. And and that is something that was pretty big for us or is pretty big for us, because you start in one market and you start to realize, hey, this product works right in the works a certain way. Then you go into another market and you start realizing the basis of this works really well and the mechanism. And, you know, in our case, that the tech platform of that. Insufferable, but we need to fundamentally rethink our customer base and how we sell to them. Right. That once you go very deep and very expertise driven, it's a very different setting exactly than it is for for a market where generalists of, let's say, you know, a just a top tier consulting background, for example, work really well versus a market where the premium is well, you know, the top tier background is taken as a given. And the premium now is what specific super deep expertise you have. You can imagine that that's completely different conversation to have with what the customer base.
[00:30:57] Exactly. Yes. It's fascinating. And I think this whole kind of shift in the nature of work and kind of the rise of this gig economy. And I think what you're doing with kind of the high end of this or the management consulting on of this is you know, is really it's fascinating. I think it's going to be the area that really gets developed over the years and, you know, personally and having worked in the consulting space for a long time and then see this kind of play out. I think it's a fascinating business model that people wanna find out more about you, about co match. What's the best way to get that information?
[00:31:23] Best Way is likely. Our website called COMATCH.com or finding us on LinkedIn. And of course, just dropping me a quick email is is is probably the easiest way. I don't know if you can put that in description of the share of the podcast. I will.
[00:31:42] I'll put that in the show notes so people can get to the Web site and contact you. So this has been a pleasure. They love sort of this sort of talent and technology and business models has been a fun conversation. I'm curious to see how other business plays out. And best of luck with with the U.S. North America expansion. I'm curious to see how things go for you in the coming months and quarters.
[00:32:04] Thank you for us. Thank you for having me.
[00:32:05] And of course, as you as you build out your media empire, if you if you to read the occasional consultant or experts or listeners, you can hit me up anytime. I appreciate that. Thank you so much. Appreciate the time. Thank you for us.
[00:32:21] You've been listening to Scaling up Services with Business Coach, Bruce Eckfeldt. To find a full list of podcast episodes, download the tools and worksheets and access other great content, visit the website at scalingupservices.com and don’t forget to sign up for the free newsletter at scalingupservices.com/newsletter.