Traba's Mike Shebat on AI-driven industrial staffing: 150 employees, potential roll-up strategy, and robotics readiness

That's why we asked the dumb question. figured it out. Thank you so much. We'll talk to you soon. And up next, we have Mike Chevet from Traa. Uh we have a video update from him. Let's play that and welcome him to Come on over. How you doing? Good to see you. Um can we play the little bit of the video that he shared?

Let's pull that up uh and get the update. What's going on request qualifies thousands of workers for the best match? This is uh is this your key hero marketing video right now? Describe proper form for lifting a quick reel just to show all the products that we built. Sure.

Uh cuz in staffing there's so many different manual workflows and this video just basically breaks it down with how it all comes together. How old is the company now? We're four years old. Four years old. Are you still in New York? We're still in New York. Manhattan. Yep. All 150 of us. 150 now. Wow. Okay.

So I I I toured the when did I come by and do an interview with you? That was maybe years ago or so. That was across the street. We were across the street to across the street. Okay. Um so yeah, take take us through the basics of like the the the problem, the market. It's a highly fragmented market.

Um but what's the what's the high level like 140 characters that you describe Traa? Yeah. So basically millions of workers across the country work in industrial staffing and then hundreds of billions of dollars get spent on staffing.

But if you break it apart, it's really just like a highly fragmented industry with like tons of manual opex and things like that. So we basically replace the whole suite with tech and we provide double the fill rate, better quality workers and workers within a couple hours versus weeks. Yeah.

And uh like the staffing industry in general, I think of it as like highly lucrative but highly fragmented. Yep. Is that is that just generally your experience?

Like I I I guess the I guess to just jump straight forward is like why build tech startup instead of private equity rollup like you're in a dress shirt you could go do a PE rollup right like like I don't know like it's not like you have to do it the Silicon Valley way. Why are you doing it the Silicon Valley way?

Well basically because of the advancements in AI this never really was able to happen before but on the staffing end there's just so much manual work and tons of opex. We basically just like from a top to bottom end to end just have completely redone it with tech. Sure.

Um, and that's why building it as a technology company has been so much better. And so that's like when you say AI or tech, you mean like lead scoring, basically understanding who's right for what job, placing them, screening. Well, it's it's like a ton of things.

So we do the vetting, we do we actually guide the worker to the shift. There's fraud detection and like essentially follow-ups with the workers, and then as the workers perform shifts, we actually that feeds into our model. And but it's not the AI doing the job. It's always No. Yeah.

You're you're you're you're sticking it out for the next decade. Yeah. Yeah. On the back on the back end, the customer doesn't really see the AI on the back end. We're doing all that work. So, what the customer sees is just like an incredible group of people showing up for work every day and like helping them out.

Did you see the Uber news that uh Uber drivers are going to be able to do one-off AI tasks? I saw that. Yeah. What is your take on that?

Do you have have any AI companies approached you where you're like just I don't know if I'm describing the company correctly, but uh I remember a couple case studies is like there's a big Taylor Swift concert in town and uh the organizer might go on Traa to pull in a bunch of folks really quickly or if it's uh the rush holiday season and then e-commerce warehouse.

I don't want to put you in a box, but like those are two examples, right? Yeah. Yeah. basically like manufacturing, fulfillment, food processing, all those industries just have like crazy volatility in their work workforce needs. So we help like smooth that out for them. Yeah. Yeah. Exactly.

Uh and so my question is have any AI companies uh like reached out to you and said like hey you have a big pool of labor we have a unique use case that we could like Yeah we actually have gotten a few inbounds companies who are just like hey we need these workers who do all these other things but right now we're laser focused on just industrial supply.

Yeah. Yeah. Yeah. Uh so focusing on that and we may expand out in the future. Have any humanoid uh companies come to you and said like we'll give you robots like put them out into the field or are they not quite at the level where they actually would be willing to let them do unsupervised activity? Yeah.

So I I actually like see this how I talk to our customers about this all the time right now in like when it comes to humanoid robots. They're not quite there yet, but we're going to be well positioned to essentially like lead that charge when the tech gets a lot better in about 5 years or so. Yeah.

because you're still going to have the the kind of variability in in in uh workforce needs, right? Where you might need even even if you have a a hundred robots like in a facility and then suddenly it's rush season, you need to deploy like a hundred more on top of that. It's like where do you where do you get that?

And then all these workers are going to essentially have to get connected to new earning opportunities. So we'll be able to help them with that.

Yeah, that's a little bit of like I guess the narrative violation behind like AI taking every job or AI being useless is like I'm pretty sure Amazon is the largest robot operator but also one of if not the largest employer as well and so they're really doing the both robots and humans at scale thing within the facility.

It's a lot more dynamic and a lot of these companies they have to change things really quickly. So just commit to a certain robotics workflow doesn't work today.

Um, which is actually why if you actually go back to Elon Musk's tweets in like five, six years ago, he actually said he's like, "We tried to make the Gigafactory all robotics and then we went back to humans because we couldn't necessarily like get there yet. " Yeah. And they had to do a hybrid hybrid.

Uh, talk a little bit about where the structure of the market is going in terms of staffing agencies broadly. Um, I imagine that like a AI and technology generally are like an accelerant to growth, right? you can just f tools in the mobile tool kit allow you to understand where people are going.

Um, how does that play out? I mean, I imagine that competitors are going to try and catch up. Um, are you planning to just out compete them? Are you looking to eventually get into doing acquisitions? Like, how do you think the long-term plan plays out?

So, I was in a staffing conference in Dallas and it was pretty crazy. Electric. why we do it. Literally this year, everyone is like, "We are getting disrupted. AI is coming for us.

" And they were just talking about how like they can't organizationally roll it out because there's just like thousands of people at these organizations that have all these different tasks.

So we they actually approached myself and my chief of staff and they're like, "We want really want you to help us move into this new age. " So when it comes to rollups, we're potentially looking at a few uh acquisitions.

And in that case, it would basically be like uh companies that have really good retention on the business side. So like they have customers continue to spend, but then they're just like we have terrible opex and just so many manual expenses and we want you to essentially improve these margins and take carry it forward.

How do you operate the business? You're obviously like incredibly aggressive, I'm sure, around growth, but at the same time, like you also feel like somebody who you're planning to run this business forever, I I imagine.

And part of putting yourself in a position to do that is like maintaining good unit economics and just running a great business. How how do you balance like growth and and uh and burn and those factors? We're very thoughtful about capital efficiency with growth.

So fortunately in staffing the margins are actually pretty good to play play with. Um so yeah, we're just like but we're operating in the physical world. So there's so much that's going on which is why our team just like works so hard to kind of get in there.

There's not like one specific tool that can essentially get cloned. It's like hundreds of thousands of workers that use our app and like thousands of businesses. So you get those real network effects as you scale up. But yeah, it's basically growth, unit economics, 10x customer experience.

That's what we always talk about internally. Yeah. Uh, take a victory lap on the 996 thing. Uh, it is hilarious. I mean, you didn't obviously invent the 996 invented 96. Uh, you invented China. Yeah. Yeah. Yeah. You stole it from them or something.

But no, I mean, I I I think you were the first to like really um go out there and you were willing to say it when it was like going to essentially get you a little canled. Yeah, exactly. Yeah, you get a little bit canled.

And and I think it was it was an interesting framing for the brand of Traba to say, "Look, we're not trying to create super intelligence. We're not trying to cure cancer. We've just found a great business that delivers value to customers, delivers value to our clients.

Uh, you know, everyone, everyone, all the parties are happy with this. What's going on here? And so we're going to work really, really hard. " Um, what was the actual journey of the, you know, get a little canceled? Did that ever really manifest? Were people ever actually mad at you?

And then now what are you seeing out there? Has everyone else adopted this? Are they taking it further? Can they take it too far? Just walk me through your thinking. Yeah, I think it really has to go into what the goal of the company is. So we are a very ambitious company.

We want to be a massive publicly traded company. And if you work backwards from any very successful company, the early team was just like allin. It was their number one priority always.

So, we basically were like, we did this thing called anti-elling where we're like, look, we're gonna get people working in person with us. We're g to go build some awesome stuff, and if you're not interested in making this your number one thing, then that's all good.

But it created something really great internally because every single person is just like it's like a team sport. Everyone's in it together. Yeah. And we're all trying to create leverage on the time that we've done. So, yeah.

I I I think it's there there's something underrated about this where people have been mapping like the missionary versus mercenary thing onto uh just how sci-fi the project is. And if and and they assume like if you're working on something sci-fi, everyone's a missionary.

And if you're working on something that's maybe just a little bit more tractable of a business problem, everyone's a mercenary. And I think that that's just not true at all. Like we we see it here like we're building like a media company, but I feel like everyone we have a really great culture.

Everyone's really bought in. Everyone is thinking creatively and working really hard and getting a ton of reward. And at the end of the t at the end of the tunnel is not time travel machine that takes us to Mars or cures cancer. It's it's just a show. But we're all happy and aligned on that.

And so um what what has the road been? Where have the uh where have the difficult moments been in the journey where you've had to kind of re reignite the flame of of missionary? Yeah. So, yeah, shout out to your team. They're awesome.

Like they agreed to me here and everyone's like so locked in and love what you guys do. And I think a big part of that is just you guys being authentic to who you are and like look like we're TBPN. We're going to make this this company. It's a show and everyone gets gets involved in that.

Um with us, you know, there's like challenges every single week. It's just part of building a company. And uh I think some people really they opt into that. They're like, I'm going to go learn a lot. I'm going to work with a great group of people around me.

Uh the likelihood of success goes up if everyone's equally committed and really bought in on on making something awesome. And then people just have a great time.

Like they look back and they're like you you remember the war stories in the days where you're like in the Airbnb trying to get the customer like this crazy request comes in. You're like, "How are we going to do it? " Yep.

And you're really only going to create that if everyone that opts in and joins the company is like that sounds exactly like what I want to do with my life. Yeah. So we get a lot of exathletes because they remember that in sports and college things like that. Yeah. So it's great.

Uh tell me the story of Uber your experience there and then I want the update on like the how you think about opening markets now because this is something that not every software company has to do like OpenAI launches a browser. they don't need to send a team to Dallas.

But at Uber, you did and at Traba, you have been doing this. So, walk me through like the best practice for when you're going hand-to-hand combat in a software business as a tech company, but you still have to deploy a team. Yeah. So, operating in the physical world, it's quite different.

At Uber, I was a launcher where you essentially drop into a city, you hit a bunch of restaurants on the platform up on the Uber Eats product, and then you have to essentially get the couriers and then you run marketing. Sky skydive in, right? skydive in, sell the restaurants so we can make you some more money.

Uh what's different with Traba and Uber Eatats is that selection. Like people aren't like, "Okay, I want to work at like five different warehouses this week.

" They actually are fine with working in this like middle ground where like I'm going to work for 3 to 6 months at this one warehouse and then maybe I'll switch again.

Um, so our sales cycle is a little bit different where we do have market specific like leaders where people do own a market, but we go for these big accounts if they want hundreds of workers versus, you know, like three to four people. Yeah. Yeah.

And then the workers kind of like it goes viral because they get their friends and it's like a very social job and things like that. Yeah, that makes sense. Has the Has the playbook changed at all? Are you in every market now? Are you still on the war path? We're in most markets in the country.

We're not in California yet. So I was in Vegas before being here for the nation customers then came over. Yeah. Um the And that's not a capital constraint, right? No, it's actually more just the employment laws in California. Right now you're set up. Yeah. We offer two different ways to work on travel.

One is $1099 in which workers can get paid within 30 minutes and the other is W2. Uh but we're very intentional about every market we Yeah. You want to make sure you check all the boxes so you have some, oh, we forgot to check we forgot to file this form and then it comes back. You don't want any of that.

That makes sense. Yes. But we're coming. We're coming soon. Let's go. There we go. Let's go. Um, yeah. I I I'm thinking about all all the different uses for a flash mob of human labor that we could put to work. How do you uh any any learnings around like the causes of burnout that you see within your organization?

If you're pushing people super hard, that means you you want to avoid burnout. Yeah. Uh, I don't get burned out when I'm working on something that I love and I feel like I'm making real progress on it.

I feel like burnout can come from not maybe finding meaning in the work or not making progress and running into a dead end over and over. Uh, but what's your framework?

And I'm I'm sure CEOs have asked you this of like, okay, if you're pushing your team super hard and you're pushing yourself hard, how do you avoid uh how do you avoid that? Yeah. Yeah. So, the number one thing is people don't get burned out if they feel like they're winning.

We try to get people in and they're they're just winning. Um, so you got to get the right role, get them some wins under their belt. It's kind of like in school if you're like studying non-stop 7 days a week and you're getting straight A's, you're not really burning out from that.

So, you're putting them in environment to actually be successful. And then everyone's got something that they do to kind of like take care of themselves. Like a lot of people, they work out. Like usually at TRA, people will work until like 7ish, hit the gym, come back.

like it's a very healthy culture, but it's very much like happy, healthy, wealthy is kind of like what people are aiming for. So, uh they're all there together and like yeah, that's great. Uh how do you think about the the like how rigid is the 996 thing? Uh obviously some people shift that forward backwards.

Now there's this article in the Wall Street Journal about 002. What is that? So you work from midnight to midnight. You're working 24 hours. you take two hours off a day. Uh I don't know. Is this is this real?

Uh I mean I can pull up the article because it it would be good to get your reaction, but it says uh AI workers are putting in 100hour work weeks to win the new tech arm race and there's like a 50% chance that this is like uh you know someone trying to get a PR piece to be like yeah we work even harder than this guy.

Uh Josh Batson no longer has time for social media. The AI researcher's only comparable dopamine hit this year is on anthropic Slack workbased messaging channels where he explores chatter about colleagues theories and experiments on large language models and architecture.

So he's on a social work platform socializing somewhat of a network. Yeah. Yeah. Yeah. Yeah. If you're trying to 996, don't count your slack time. That's fun. Like Yeah. If you I think so.

So So the way it plays out actually is like when we first started the company, we were actually like let's make this a little bit more structural. Now with 150 people, we have all these different types of roles. It's more just like you got to be locked in and like make work your number one thing. Totally.

But what I will say is you go, we are an inerson company. If you swing by Traa at like 8:30 in the morning or 9:30 p. m.

Literally any day of the week, there will be like people there building really cool stuff and that's pretty awesome because then you can just like show up and build with your friends and people feed off of each other's energy. Yeah. You can't be too dogmatic about it. I feel like uh I mean we both have kids.

We're also on the West Coast and so we run more of like a 6 a. m. start time. Uh and and so we Yeah, we we just stack like some extra hours there because then you have Yeah, that's that's cute that that it really picks up around 8:30 at Traa.

That's why I'm like, wait, oh my gosh, I thought we were intense and you guys talk about this two 002 and I'm like I'm like calculating the hours. Like man, we like we have the burnout question and then we're like the 002 it's it's like is that in here?

I I think if you sleep for 2 hours so uh working 002 the most intense periods for many come while working on models or new products when time working extends beyond the 9966 schedule that stands for 9:00 a. m. to 9:00 p. m. 6 days a week.

One startup executive jokingly referred to the schedule as 002, meaning midnight to midnight with a two-hour break on weekends. Yeah. Yeah. We don't I don't think anyone can actually do that. Like you're just going to burn out and like you need sleep. You actually do need sleep. Yeah. Yeah.

It's more about just like look, like are you all in on this? Especially in New York, there's infinite things you could be doing. You just want people to like think twice before filling out their social calendars during the week.

It's like look, we're trying to build something epic here and it's awesome to just know that you're going to be around your colleagues.

Also, I just feel like there's something about New York City, Manhattan, where if I was at the office late until 9 and I get off, like there's still all the restaurants around like like stuff's going to happen.

Whereas in LA or in Pasadena, like older with kids, like I want to be home with the kids five, six, like you know, doing dinner. Yeah. That have kind of shifted, but they still probably give it a They're all parents. Look, like if you got kids at home, like we definitely have a a group of parents at Travo.

They make it work. Uh, shout out to them for sure. But there's definitely a huge cohort of, you know, people that don't have the kids and they're like, you know, at the office a little bit more than the parents. There's something super comforting building a business if you're working as hard as you possibly can.

Knowing that lack of hard work is not going to be the reason that you don't you don't achieve the level of success that you want. Because if you're people out there, bunch of people are not pushing themselves as hard as they know they could.

And then it's always going to be in the back of their mind of like the whole time building the company that maybe I worked a little bit harder I would have achieved like you know whatever and success in a startup it isn't just this binary thing where you either get the gold medal or not.

There's like different revenue targets you can hit. There's different valuations different like like ways to please customers and things like that. Um so yeah it's great to like live a life where you look back and you're like I gave it absolutely everything I got.

There's nothing else I could have done better and like keep pushing forward. So, well, well, that's a good that's a great place to end it. Place to end the show. Gave it all we got. We gave it all we got. Thank you for Thanks for hanging out with us. Thank you so much for tuning in today.

We will be back tomorrow at 11:00 a. m. Sharp Pacific. Can't wait. Uh, have a great evening. Goodbye. Love you.