Before Mo Bhende and Jeff Spector decided to go all-in on a startup idea, they took a little trip around America. It was a six-month market research project of sorts, designed to learn more about how companies hire software engineers.
The entrepreneurs noticed a common thread: inefficient interviewing techniques.
“Every company in the world interviews and they’ve been doing it for hundreds of years,” Spector said. “And it hasn’t really gotten a lot better.”
Karat wants to help. The Seattle startup has quietly spent the past few years conducting more than 20,000 first-round technical interviews for companies such as Intuit, MuleSoft, Jet, and Box. It employs 40 people and has raised $13.6 million in funding from investors including Norwest Venture Partners, 8VC, Founders Co-op, Founder Collective, and others.
Bhende, a former director for Xbox at Microsoft, and Spector, who previously was chief of staff to Melinda Gates at the Bill & Melinda Gates Foundation, both saw holes with the interview process in their previous jobs. Engineers were spending hundreds of hours vetting potential employees instead of coding. Companies didn’t have data-driven tools to address inconsistent hiring techniques, and as a result had trouble meeting hiring goals.
Compounding the problem was increasing demand for software engineers — employment for the job is expected to grow by 24 percent from 2016 to 2026, according to the Bureau of Labor Statistics.
The co-founders found a solution by “effectively creating this new type of job that never existed before,” said Bhende.
“We basically professionalized interviewing,” he added.
Clients come to Karat with candidates they’ve pre-selected for an open position. The startup then uses a network of vetted interviewers who conduct the interviews via video conference, using a question format and scoring rubric based on research and analysis done by Karat. The companies receive feedback on the top qualified applicants, based on Karat’s diligence.
Bhende said Karat is able to reduce the number of hours a client spends on interviewing by 60 percent, on average. It also aggregates data from each interview to improve their own practices while providing feedback to clients, who, for example, may want to know how they can be less biased and more inclusive with their hiring process.
That data can be revealing. Karat’s insights show that 60 percent of candidates prefer to interview on nights and weekends, or that companies only end up interviewing 10 percent of candidates in their applicant tracking system.
Bhende said Karat aims to be more predictive than their clients about their own recruiting processes.
“We’re interviewing at such a scale that’s so much bigger than any one company,” he said.
Karat can also provide a data-driven “signal” — and one that isn’t just about past education or companies. Its interviewers don’t look at the background of any candidates before the interview.
“We’re trying to empower everybody to have an equal and fair shot to get the best job,” Spector said.
Karat, which is headquartered at the University of Washington’s Startup Hall, makes money via annual subscription fees and by charging for a set amount of interviews.
There are a flurry of existing hiring-related tools, from LinkedIn to Workday to Indeed, but Bhende said Karat has no direct competition. The bigger challenge is convincing companies to shift from in-house interviews to trusting something such as Karat.
The startup is focused on technical interviewing for now, but the platform “could have legs beyond software engineering,” Spector said.
“It could be much bigger,” he said.
