What started as a project in a Harvard dorm is now a Mount Pleasant software as a service company that raised $3.4 million in January to help companies make better hiring decisions.
Sprockets CEO AJ Richichi created the applicant matching system to fix flaws he saw in the hiring process. He said too often decisions are based on a piece of paper, a phone call and one meeting, with hope that a hire is going to be successful within the organization.
What if the hiring process instead had a new layer that evaluated applicants against the traits of a company’s top-performing employees?
Richichi set out to create artificial intelligence that could determine which hires could be successful long-term. In doing so, customers that use his software increased their 90-day retention by 43%, he said.
“Any company across the country can use the screening technology to really decide who out of their applicant pool has what it takes to be successful at their company and who’s going to stay long-term,” he said.
He focused in particular on the hourly workforce, which he said, on average has a 130% annual turnover rate.
Richichi developed Sprockets, formerly Sentio, in 2014 to help professional sports teams make sounder decisions on who to draft in the recruiting process.
“Despite having all the resources in the world, they kept picking the wrong people,” Richichi said.
He watched teams select first-round drafts only to have players leave after the first year or finish the season with marginal success. Richichi believed this was because professional scouts look at the wrong metrics when identifying talent.
“They look at how fast somebody runs, how high they jump or how hard somebody throws. They neglect the most important thing and that’s what’s between the ears,” the CEO said. “Does this person have what it takes beyond athletics to be successful as a professional athlete? It’s a demanding job beyond are you big, fast and strong.”
Rather than focus solely on the numbers, the undergrad developed a program that would take the qualities of a team’s top three players and grade draftees against them. He found success in the industry over the next few years and professional sports teams still use his software today.
But with a finite market of teams to work with, Richichi expanded his program into hiring, which has very similar challenges with the selection process.
To add efficiencies to hiring, particularly for those employers who aren’t human resources executives, Sprockets converted its technology from only serving sports to a self-service online platform.
Each company creates an account via Sprocket’s applicant matching system and benchmarks its top three employees, who take a brief survey. From there Sprocket evaluates the top shared needs, values and characteristics to build a success profile that is uniquely tailored to the company.
When individuals apply for a job, whether by LinkedIn or Indeed, they then take the exact survey and Sprocket provides predictive analytics on how they’ll perform. They’re then graded 1-10 based on how long they’re expected to stay at the organization and whether they are a cultural or intellectual match.
Since the company went to market in 2019, Sprockets has grown from four to 30 employees in Mount Pleasant and garnered just shy of 1,000 customers — including franchises like McDonald’s, Chick-fil-A and HomeWell. On average, Sprocket customers now spend 37% less time screening candidates, Richichi said.
He added those several years in between idea and launch were necessary to get the technology right and make sure the test didn’t have adverse effects on any protected class of worker.
“One of the great distinct advantages of starting the company with a slow burn and accelerating later was our opportunity to talk to hundreds of prospects, shadow hiring managers for days, do validation statements and validate the pain points so we could build the best possible solution,” he said.
January’s funding round was led by Lytical Ventures of New York City, with contributions by Thayer Ventures and Healthy Ventures in San Francisco. Sprockets first investor, VentureSouth in Greenville, also made another investment.
“We feel like we have something really, really special here,” Richichi said. “We’re making tremendous impacts with customers, and we’re growing like crazy as it pertains to employees in the state, and we anticipate even more growth here in 2021.”