Aurel Davidyan 0:00

Andrew, thank you for joining uh us here at the Oral Dividian show. I want to uh pronounce your last name correct. Andrew.

Andrew Crapuchettes 0:11

Uh crap shoots. Unfortunately, it's crap you uh just like it looks like, and then shit, uh which is kind of weird. So if you break it in crap you, it's it's kind of funny. I actually worked for a university for a small amount of time, and they had this hard and fast rule that the email address had to be the first letter of your first name and the first five of your last name. So I was a crap you at that was my email address. So unfortunately it's uh I've had fun with it my whole life. It's definitely uh you might as well lean into it, right? Yeah.

Aurel Davidyan 0:45

Well, Andrew is a CEO of Red Balloon, also president of militaryhires.com. Andrew's a leader in uh culture building uh a first hiring, been uh doing this, uh spent decades in building and scaling high performance teams. We are super excited to have you on our podcast. And uh I got a bunch of questions for you here. And I'd love uh for you to start off and tell our viewers a little bit by yourself and who you are and uh kind of go from there.

Andrew Crapuchettes 1:15

Yeah, thank you so much for having me. Uh yeah, kind of the quick flyover on Andrew Crapuchetz. I grew up in the San Francisco Bay Area, did the dot-com thing while I was down there, really learned a lot through that time period, got to be part of some early startups in the heady days, the dot-com era, call it the late 90s. Super fun, but I got tired of traffic and everything associated with being in the Bay Area, so I moved up to beautiful Idaho, realized there were no jobs up here, no good jobs. Basically, it's a university town, so you could work at university, the hospital, or Walmart. And so I thought, well, I have all these skills, I should use them to bless other people because I bet if I want a job, other people want a job. So I should just go make jobs rather than sit around and hope that I find a job. So I started building businesses. I've now built and sold businesses eight different times. So I have eight successful exits under my belt, ranging from 100,000 to half a billion. Yeah. So, you know, it's been it's been fun. God's been good. Yeah. And uh yeah, so I met my wife up here in Idaho. We live on 60 acres, about 10 minutes from downtown, and uh, we have five kids, and it is absolutely the good life. So uh my current adventure is Red Balloon and Military Hire.

Aurel Davidyan 2:25

Idaho is so beautiful. Uh I actually told my wife, I said, if we're gonna ever move anywhere, it would be Idaho. So but yeah, it's beautiful.

Andrew Crapuchettes 2:35

Yeah, I can see a hundred miles from my front porch. Uh and I was telling one of my investment banker friends from San Francisco that I could see a hundred miles from my front porch, and he's like, that's cool. I can see a hundred homeless people from my front porch. I'm like, I think I'm winning.

Aurel Davidyan 2:50

Well, yeah. Uh I mean I'm in Vancouver, Washington, but um, you know, my business is in Portland, and there's definitely uh uh way your uh statement is accurate about the homeless. Well, right. Yeah, well, uh hey, let's just dive right in. And I wanted to talk about hiring and values and business. Me, myself, a business owner, and uh it's very important to hire the right people. And I wanted to ask you, why do you believe hiring the wrong person is worse than being understaffed?

Andrew Crapuchettes 3:26

Yeah, no, it's a great question. And we hear this from employers all the time. They'd rather be understaffed than hire the wrong person. And the stats kind of support that position. Um let me unpack that for you a little bit. The cost of a bad hire, people estimate to range anywhere from the full salary, annual salary of that employee. So if they're a $100,000 a year employee, then it's gonna cost you $100,000 if you get the wrong person in there. What does that cost come from? Well, it comes from lost productivity. So managers who have a bad employee spend, on average, 20% of their time fixing the problems that that bad employee has. Well, if you multiply that by multiple employees, all of a sudden your manager is not actually doing anything productive. They're just fixing problems that were created by other employees. So that's the first cost. The next cost would be the kind of experience that your customers are getting. Remember, employees are often the only interaction that your customers have with your business. And so if you have a bad employee with a bad attitude, bad communication, doesn't care about employees, doesn't care about your business, that is gonna have an enormous negative impact on your business, but also just your perception of your business in the marketplace. Because remember, if you have a customer who has a really bad experience with your business, and we all know this, but if you have a customer with a bad experience in your business, they're gonna tell other people, and you're not even gonna be able to calculate the cost of that. And so, I mean, I've talked to so many business owners who are like, man, I'm just desperate to fill a customer service position, I'll just hire anybody. But just think about what's the cost of that? Why is that gonna hurt you so much? So those are kind of some of the direct costs. And obviously, if you need to replace that person, you have to run a hiring process, you have to do interviews, you have to think about the position. And then the worst part case scenario, obviously, is the lawsuits that come along with having a really bad employee. There are a lot of, I'll call it predatory employees out there. And I know that sounds terrible, but I was talking to a business owner in California, and he said he had a $15 an hour gal working for him. And after two weeks, he's like, Yeah, this is just not gonna work. She just doesn't work hard. She just really hurts the mood of the entire office. And so the productive people in my office are being injured, you know, or being hampered by her attitude. So he just goes to her and said, Look, this isn't gonna work out, so I'd love to give you a two-week severance. Um, so we'll finish out the month, but you can go ahead and go today. And she's like, No, I want $75,000. He's like, What are you talking about? She said, The last two employers paid me that much and you're gonna pay me that much. Yeah. And he's like, What in the world? So there are people out there anyway. Long story boring, he decided to fight it and lost because it's in the state of California, and it cost him way more than $75,000. So you need to understand that you should not just go into the hiring process lightly. I've talked to so many employers who they spend 15 minutes interviewing someone, they're gonna pay $80,000 a year to, and it's gonna be the face of their business to their customers. We just need to be much more thoughtful when it comes to the hiring process. And I know this from I have a master's degree in the school of hard knocks when it comes to hiring poorly. Um, and so that's one of the things I'm really passionate about.

Aurel Davidyan 6:38

That's awesome, dude. Like uh the what you said is spot on. I I actually was in a similar situation. I was hiring, I was growing really fast, and I, you know, I'm not an expert in hiring, so I was I was it was a startup company and I hired the wrong person, and they end up suing me for $25,000 after I fired them two weeks later. They won here in Oregon and a sad situation, but it's reality and it happens every single day. And going to kind of talking about environment and how important is culture in a company, you know, an everyday operation. Like, how do you set the culture? Like, what are your thoughts on that?

Andrew Crapuchettes 7:12

Well, so first of all, you need to understand what what is company culture, right? Uh, because people talk about company culture. Well, what is it exactly? Because you can't foster a thing that you can't identify, you can't define. And so Ben Horowitz says that company culture is what the employees do when the CEO is not there. So company culture is what the employees do when the CEO is not there, right? Well, that makes sense. So, what's their behavior? What are their instincts? What's their muscle memory? And what's the cultural momentum that you have in your business? So is it take care of customers? Is it play video games and be lazy? Is it leave early? What is that cultural momentum? What do people do when the CEO is on a vacation or on a business trip and gone, right? And so a lot of businesses, when you define it like that, they actually don't like the answer because they realize, oh, actually, I'm a kind of heavy-handed boss as a CEO, and I tell everyone exactly what to do, and they don't work very well when I'm not around. Well, that means you have a bad culture. You might be a dictator, but it doesn't mean you have a good, strong culture. Culture should have momentum beyond the manager just telling everyone exactly what to do, lockstep, right? And so when you think about hiring, you want to be thinking about culture is the sum total of the behaviors of all of the people within your organization, right? Because that's what people are gonna do when the CEO is not there. Okay. So with that in mind, you need to be extremely conscious about the cultural distinctives you want to foster and build when you're in that hiring process. Is this person that we're interviewing that we're looking at hiring, that we're looking at paying, going to build the culture that I'm establishing, or are they gonna try and tear it down? Are they gonna be an amplifier or are they going to be a thorn in the side of everybody else in the organization who's trying to follow our cultural distinctive? So um there's a lot of different ways to do that, but I think you just at least start by being conscious of like this is important and I need to do it, if that makes sense.

Aurel Davidyan 9:08

Yeah, yeah, of course. Of course. That's uh very great. I mean, uh reading some stuff by you here and uh not knowing, I mean, you lost your job over your values, right? How did that shape the way you lead today? I mean, I'm I'm excited to hear that side of your story.

Andrew Crapuchettes 9:24

Yeah, absolutely. So um again, I've always been passionate about hiring the right people and putting them in the right positions just because a job is such a defining feature of who a person is and how they work. So that's fantastic. Now, here's the trick 2020 was a funny time, right? We had a lot of disruption in the labor market. You had a lot of ideology that was being pushed on employees, on employers. We had boardrooms that were caring more about political correctness than performance. You know, we saw that with Silicon Valley Bank that ended up going out of business where they were focused on DEI and microaggressions way more than running a successful bank that was profitable. So um, and I got caught up in that as well. I had a board who basically came alongside and said, Look, you're too conservative and Christian for our liking, uh, given the kind of business environment that we're in right now, so we're gonna need to find a different CEO. This was not my favorite conversation, believe it or not. And we, you know, went back and forth quite a bit. But the reality is that there was definitely a time period during the COVID era where people were focused less on performance and more on political correctness, and I think that hurt a lot of businesses. And also when you think about culture, what kind of culture do you want? Do you want a high-performing culture or do you want a culture that is constantly, you know, looking over their shoulder, complaining to HR, getting on social media, complaining about your business? Well, I ended up losing my job because I was unwilling to change what I believed in kind of a belief system. And for context, the business that I was running at that point was growing 25% a year with a 40% margin. So we were a highly successful business with no complaints coming from customers, employees, or anybody else. But the board, in their infinite wisdom, decided that the cultural moment dictated that they get somebody with a different social media profile than mine. So, you know, it is what it is. Uh you can't let it, you know, get you down or get you bitter. But what it did is it also told me that culture matters everywhere. Culture matters on who your owners are, who your board is, who your employees are. You want to build a culture that is high performing and also safe, right? And that's part of what Red Balloon does today is we come alongside businesses and we assure them that they're gonna get people who are a strong culture fit who aren't going to sue them, right? We all want to avoid that that loss, the risk of a bad hire. The risk of a bad hire is extremely high, and Red Balloon mitigates that risk for you. And then we also will just save you a lot of time and energy in that whole hiring process. So we did that. We've now acquired military hire. We're doing recruitment for Department of State and thousands of businesses around the country. And it's really fun because if you put the right you put the right person in the right job, they're gonna thrive as an individual, and the business is gonna be more successful and more profitable. That's just how the world works. And so we get to be part of that story for lots of businesses and lots of job seekers.

Aurel Davidyan 12:22

That's awesome, man. That's such a good uh story. Hey, like you mentioned that because of your beliefs, technically your Christian beliefs that they didn't like that side. Is that what you met?

Andrew Crapuchettes 12:35

Yeah, it's basically uh they they basically sat me down and said, we need you to push for a number of um, you know, they wanted me to put out posts about uh supporting the last president of the United States, which I did not support, or pushing vaccines or masks or BLM or any of these things that were social issues that had nothing to do with my job as the CEO of a data company. And I was unwilling to do that, and that's really at the end of the day what cost me my job.

Aurel Davidyan 13:03

Well, hey, that's amazing. They you stuck to your true values. I put God first at everything I do. You know, he's uh every decision I make, it's it's based on you know God first. And is it gonna be a good decision, not just for me, but for my business, my family, the environment I'm in, and and congrats to you. Like you look where you're at now. You know, you're you're beyond blessed, and it's amazing.

Andrew Crapuchettes 13:29

Yep.

Aurel Davidyan 13:29

That's awesome.

Andrew Crapuchettes 13:30

God is good, and when you do the right thing, it in the moment it's sometimes painful, might cost you your job, for instance. Yeah. But it is often a long-term blessing, not only a blessing because a financial blessing, although sometimes that's the case, but also, you know, your kids, your community, people in your church, whoever it is, they're watching. And when they see you be brave, when they see you be faithful, it's going to encourage them, right? And so bravery begets more bravery, faithfulness begets more faithfulness, and courage give begets more courage. So when you do those things, you're actually not just doing it for yourself, you're doing it for everyone around you.

Aurel Davidyan 14:07

Yeah, wow. That's inspiring. I love that. Not a lot of people are willing to lose their job over what they believe in. It's a reality, but also very sad, you know? And uh for you to be strong in that that's uh very few people to do that. So congrats. Thank you. What signs tell you someone will truly perform well, not just a good interview?

Andrew Crapuchettes 14:32

Yeah. So obviously the interview process, you have to be careful. First of all, you can get yourself in legal trouble if you start asking questions about protected categories. So if you start asking people their religious affiliation, their age, their sex, their ethnicity, technically you're not allowed to ask questions around those things or have that be part of your hiring decision, right? Yeah. That makes sense. But there are things that you can do to help that hiring process actually kind of root out who the person actually is. And so a couple things that we like to do for our employers and train our employers how to do is we first of all we tell the employers, don't be afraid of what you actually believe. You need to have your values loud and clear on your website. And the reason for that is it's actually a filtering mechanism and a legal protection. Because a legal protection, because if you say we believe in merit and hard work, and then the person gets into the job, and three months in, they're like, Man, this is really hard. We're like, Yeah, we told you that, and you accepted the job, so you're gonna be fine, or go find another job. But they can't go after you for a belief system or a value system that you put on your website and you talked about. Then what you can do, which is totally legal, is in the interview process, ask them evidence-based, open-ended questions about your value system. So, again, if you believe in freedom and God, you should put that as part of your interview. And you don't have to say, what do you believe about God? You can say, We in our business believe that everyone is welcome, but we believe that God made heaven and earth, whatever it is, or we believe that America is a good thing and capitalism is a good thing. And so I'd love to hear some examples of, you know, what do you think about that? What does blessing mean to you? How would you go above and beyond your job to bless your customer? And so when you ask those kind of evidence-based, open-ended questions about your belief system, you're in totally legal to do that. And it really is hard to answer that in a lie if you really just don't understand what, for instance, the word blessing means, if that makes sense.

Aurel Davidyan 16:38

Yeah, yeah. That's so good. How do you balance hiring for values versus hiring for skill?

Andrew Crapuchettes 16:44

Well, obviously, if you hire red balloon to do your recruiting for you, you don't have to decide which one you want because our job is to find people who check both those boxes. So let's go. Um that being said, yeah, that's right. If you have to make a choice, I would always recommend hiring for values because a highly skilled person who is painful to work with, it's not worth it. And none of your other employees, none of your other highly performing employees will enjoy working with that person, no matter how skilled they are. So life is too short to work with bad people. So always focus on culture and values alignment first. Um, and if you can get the skill alignment as well.

Aurel Davidyan 17:22

Yeah, that's awesome. What separates companies that constantly attract top talent from those that struggle?

Andrew Crapuchettes 17:31

I would say employment branding. This is a concept that is really, really important right now and people aren't focusing on. But if you think about when you're branding a product, when you're trying to sell a product, it generally takes, they say seven times, I think it's probably more than that, seven times that they actually see your brand, interact with your brand, and then they're like, hmm, maybe I should buy that bag of chips or whatever it is, right? And it's the exact same thing in employment and and hiring, if you want to get really, really good people. So you need to be a consistent brand out in the marketplace that people think, oh, that's an employer that takes care of their employees and is doing innovative, hard work, interesting work, right? And I'll give you an example of this. Um, there's something, there's this statistic called posting intensity. It's basically if you are as an employer paying for job postings on multiple platforms, it tells you something about how hard it is for you to fill a position. Yeah. Microsoft, and I looked at this a couple years ago, but it yeah, it sets the example. Microsoft had a posting intensity of 12. In other words, they were paying for a job posting on 12 different platforms for every one opening that they had at Microsoft. At the exact same time, Tesla had a one-to-one posting ratio. Basically, they had so many people interested in their interesting work, their dynamic work environment, and it was even a harder work environment. Microsoft had better benefits. You didn't have to work as hard, but people want to solve hard things. It's how you build dignity in individuals, right? And so Tesla had a strong employment brand, and so it was easier for them to hire the best and brightest. And so that principle can be applied to any business. Do you have a strong employment brand? Or are you the last employer that anyone would ever think of when they're thinking about getting a new job? And if you want to get great talent, you don't just wait until you have an opening. You're always building your employment brand and talking about how awesome it is to work for your business. And businesses that do that, they're winning in the labor market right now.

Aurel Davidyan 19:32

That's awesome. So military hire does most of the stuff for you. What what industries do you attack or try to help companies hire?

Andrew Crapuchettes 19:41

Yeah. So Red Balloon primarily is working with the small to medium-sized businesses who are, you know, I'll say center right businesses focused on building their culture. Red Balloon has, again, established relationships with many thousands of employers, and there are 32 million small to medium-sized businesses in America today. And many of those are hiring all the time. So Red Balloon's growing just on that front. About 10 months ago, we acquired militaryhire.com. MilitaryHire is a site focused on helping veterans transition into the private sector. Some of our big customers are like General Dynamics or DHL or even Border Patrol and Department of State. So if you look at government organizations, they want to hire veterans because these are people who know how to show up, work hard, take orders, discipline, and deliver value for their employer, right? In a lot of disciplines. So we have a lot of, I think we just added Amentum, which is a big innovative defense contractor to the military hire roster. So we're working with a lot of large businesses who see it as a priority to hire veterans.

Aurel Davidyan 20:46

That's awesome. Good for you. Do you guys hire in logistics at all?

Andrew Crapuchettes 20:49

Yeah. DHL uses military hire extensively and has been able to hire a lot of veterans because veterans are very good at logistics. I mean, operational excellence is kind of the center of our higher military. So it's really fun. And I mean, look, part of the reason we acquired military hire is there's a lot of AI disruption in the labor market right now, and we're doing some really interesting things with technology and people to help with that. We believe that hiring is a distinctly human activity, and particularly for veterans, they need to have some translation work between the skills that they've achieved while protecting our country and the names of those same skills at corporations. And so we're building some really interesting technology and just people and process around that. So we're helping veterans do that transition. The other thing that's really important about military hire is one of the strongest correlations for a veteran not having PTSD, not having suicidal thoughts, is a good job. A good job that's actually fit for their skill set and their temperament and their mentality. And so that's one of the things we're doing as well. Not just are we capitalists? Absolutely. It's a for profit business, but it's very Missional. How do we help veterans find a job that's a good fit for who they are as a person? And if we can do that, then we're going to be a blessing to them as an individual, not just as our businesses who are getting awesome employees who are veterans.

Aurel Davidyan 22:14

Let's go. If you're a veteran out there and you're looking for a job, militaryhire.com is for you. That's awesome. How is AI affect or help you in your company now? And do you guys implement that a lot in your platforms and technology?

Andrew Crapuchettes 22:30

Absolutely. So AI is a really powerful tool. The problem is when people think it can do everything, right? So, like for instance, Excel is a very powerful tool. I love using Excel, but if I try and use Excel to build my website, it's going to fail miserably. And so what we're seeing right now is people are trying to use AI to run their entire hiring process. And again, as I as I stated earlier, we believe that hiring is a distinctly human activity. And then whittling a human being, a very complicated person, down to a piece of paper called a resume, which is the only information that the AI has to work with, is a mistake. And so we use AI to identify, to nurture, to engage job seekers. But we also have a whole crew of recruiters here who are actually getting on the phone with them, who are actually having conversations with them. Because we did a survey of a couple thousand job seekers. And the top thing that they wanted out of a job search process was just communication. They wanted to know what's going on. They wanted to not talk to an AI chat bot. They wanted someone who actually could talk to them and say, here's where we are in the process. Right. So we have a lot of people here at Red Balloon, a military hire who actually pick up the phone and talk to people. And that's what kind of differentiates us from what's going on in HR Tech everywhere else. So we think AI is a very powerful tool, but right now it is causing more noise than signal in the job market right now.

Aurel Davidyan 23:57

Okay. Yeah, that is true. I I agree with you on that. I mean, you you've been in leadership for over 20 years, I would say. What has changed the most about leading people today versus back then?

Andrew Crapuchettes 24:09

I would say that it used to be fun to hire people, right? It used to be like, oh, I'm going to give this young person an opportunity. They're going to grow. We're going to make money together. They're going to turn into a new, better, different, stronger person. And I think the labor market over the last several years has gotten less fun because you don't know are we going to hire someone who's going to sue me? Am I going to hire someone who's a bad culture fit and is lazy? I just think that it has become more adversarial than it used to be between the boss and the employees. Um and I don't love that. I want to be loyal to my employees. And I've worked really hard to have people work for me who love working for me. But the reality is that you don't have the loyalty you used to. It's not as much fun to hire anymore. And that's one of the things Red Balloon wants to do. We want to redeem the world of work. We want to make hiring fun again. I don't know what that acronym is, but that's what we want to do.

Aurel Davidyan 25:02

Let's go. Back to uh, you know, like I've been thinking about your story. And, you know, how has faith influenced the way you lead teams and make decisions in your companies?

Andrew Crapuchettes 25:15

So you should always know exactly what you believe. And I think that it is not possible to fully extract what you believe from your business, right? From the way that you act in every other area of your life. So if you're a religious person, that should impact how you raise your family. That should impact how you interact with your community and how you run your business, right? And I think people who try and separate those too much, um, it's a problem. Now, if you're a Christian, for instance, as I am, you shouldn't be using your business to go around and hand out tracks to all your employees or like because at some point it's like, no, you're actually just acting like you're a church. You're not acting like you're a business. And so you need to understand what those kind of uh there's uh Abraham Kuyper, who was a great thinker years ago, talked about sphere sovereignty. Um and it's basically okay, the sphere of the business, where do you have sovereignty here? In other words, if someone decides what, you know, they want to go for a hike on the weekend and you think they should go to the lake instead, that's just weird. If you're like, oh, I'm the boss, so therefore you have to do what I say, right? And so just understanding where your areas of influence are and where they're not. For instance, if I have an employee who I know has a huge anger problem at home, there's nothing I can do about that. That's not my sphere of influence. But if they have a huge anger problem in the office, that is something I can deal with, and I can actually help them kind of work through that and figure out how do they control their emotions in a different way, right? So, what is that? That's understanding where my sphere of authority is. It's not extracting my worldview or my religious beliefs away from my the way that I build that business, but it also means I'm not going out of bounds. I'm not struggling with boundaries and getting into people's personal life, if that makes sense.

Aurel Davidyan 27:00

Yeah, yeah. Very, very well said. I like it. Well, I guess I have one last question for you. Yes, sir. What's one hard truth about hiring or leaderships that most founders avoid?

Andrew Crapuchettes 27:14

Awkward conversations. Most people-based situations don't get better with time, they get better with awkward conversations. And they're never as awkward as you think they're gonna be, right? You think, oh man, I don't I don't want to have that conversation because I don't know where it's gonna go, it's gonna be awkward. But you'd be surprised often it's not as awkward as you think it's gonna be. Yeah. But it never gets better with time. And we just try and ignore it, and it actually just gets worse when you do that. But if you just have a direct personal conversation with someone, if you have a concern with them, you'd be surprised how quickly it can be resolved and how much better the work environment is. But I've seen so many founders that are just unwilling to have that awkward conversation. Um hurts their business a lot, and it makes it so their employees are not becoming better people. So they're actually stunting the growth of their employees by being unwilling to have awkward conversations. So and I've learned this myself, right? There's been plenty of times where I'm like, oh man, I'm just not gonna deal with it. I'm not gonna deal with it. And then it just gets worse. And then finally you have to deal with it, and then it's a big problem. So if I dealt with it right away, it would have been way better. Um, and so that's my encouragement to founders is don't be afraid of awkward conversations. They won't be as awkward as you think they are, and it's the best way to actually have a high functioning team.

Aurel Davidyan 28:23

Let's go. Andrew, thank you so much. Where do people find you if they are looking to hire a lot of people?

Andrew Crapuchettes 28:30

Yeah, you can go to Yep, you can go to redballoon.work, you can go to militaryhire.com, and I would encourage people to follow me on LinkedIn. I'm the only Andrew Crappy Shots out there, and I try and put out meaningful content every single day on LinkedIn about finding a job, about hiring. So hopefully good content for you. And I would encourage people to follow me on LinkedIn.

Aurel Davidyan 28:53

You guys heard him. Thank you so much.