EP 262 – Hans-Justus Daase – CEO of Mertus – We Have to Start With a Really Positive Approach

Read the best-effort transcript below (This technology is still not as good as they say it is…):

Michael Waitze 0:00
Okay, we are on let’s go. Hi, this is Michael Waitze. And welcome back to another special edition of the Asia Tech Podcast. Today we are joined by Hans-Justus Daase. Nailed it… a co-founder and the CEO of Mertus. Justus, thank you so much for coming on the show and for putting up with my mispronunciation of your name. How are you doing?

Hans-Justus Daase 0:27
Thank you very much, Michael, for having me. Now, you did actually pretty, pretty well, there. So I’ve heard a lot in my life.

Michael Waitze 0:38
I think I told you I know another guy named Justus. So at least I’ve heard it before, do you not? I mean, I’m not making it up on the fly. Anyway, before we get into the main part of our conversation, can we give our listeners a little bit of your background for some context?

Hans-Justus Daase 0:52
Of course, sure. So yeah, as you already introduced my name, so from my background, actually, I’m, I’m located in Germany, from my occasional background, I’m a lawyer. But always during my my legal education times University, I was always really into into founding company being an entrepreneur I worked on on different projects all the time. So that’s what really got me into entrepreneurship, basically. And now, after finishing my legal education, I focused on a new project with one of with a co founder of mine, and we’re in the in the IT contracting it recruiting business. So that’s, that’s our focus at the moment. And yeah, he’s the tech guy in the company. I’m the legal guy in the company and together, that’s, yeah, that’s how we teamed up

Michael Waitze 1:44
for the company imagination. Can I ask you this, though? Like, I had a corporate job for 20 something years. And during that entire time, like it didn’t occur to me to go out and start my own business? Do you come from like an entrepreneurial family? Is your like, brother, your cousin running their own company as well? Or is it just something you graduated from your legal studies? And you’re just like, I can’t do this, I got to start my own thing. Like, how did that happen?

Hans-Justus Daase 2:09
A lot of people asked me that. And I think my parents, despite being entrepreneurs themselves, don’t really get why I didn’t choose the usual corporate lawyer track after 10 years of legal education. So I’ve had some discussions on that with my family as well, to be honest, but yeah, actually from from from my back from my family background, yeah, they are also entrepreneurs, or my dad is a doctor, but he has is, had his own practice. And my mom was an entrepreneur as well, my brother changed from a large corporate consulting company to being a solo entrepreneur himself as well. So it must be something genetic, I would say. And, yeah, that’s, that’s probably one of the largest influences

Michael Waitze 2:49
Do you think so? My brother is my brother’s a neurosurgeon, right? He’s a doctor. He’s also in his own practice? And do you think most people actually understand just how entrepreneurial doctors and maybe this is just true for the west of the East is a little bit different, but just how entrepreneurial doctors are? In other words, I don’t think most people think of them as business people. But to be fair, I think my brother spends as much time running his business as he does, operating on people’s brains and spines. Is that fair?

Hans-Justus Daase 3:17
Well, I’m not really an expert on that point. But I must say, from what I saw, in my father’s life, at least, I think he really was the kind of person that just wants to help people. And he wasn’t really focused on the business. But he had to cope with all the challenges of having, you know, having his own business, but they’re not I would say, they’re not born businessmen, they’re more like born to actually help people. And that’s how they understand themselves as well. And I think a lot of doctors are actually bad business managers. That’s, I’m not sure. But I think a lot of them, yeah. They didn’t become doctors in the first place, to Yeah, to make, make large businesses, open large businesses, but more apt to actually help people.

Michael Waitze 4:01
Look, I spend a lot of time talking to entrepreneurs. And one of the things I really like to know is the response from the family. And you know, you’ve mentioned this a little bit already. But, you know, your family does. You don’t come from a family of entrepreneurs. But you said they were surprised when you actually went out and started your own business. You know, my family expected me to be a lawyer. And I just wasn’t interested in doing it. So you went further than I did. You at least went out and got the education. I just went right into finance. I’m curious what those conversations were like, if you don’t mind me asking.

Hans-Justus Daase 4:34
Well, these discussions, well, I’ve never really had discussions in a form that they wanted to push me into any direction that that would be wrong to say you say it and that form, but at the same time, so I went to legal education for about 10 years. I did a master’s abroad in Australia as well on top so I really have the full package to become become a full on corporate lawyer in one of the big five law firms. So So of course, at some point they ask, are you really sure you want to take this uncertain path of being an entrepreneur and start your own business? And isn’t it also attractive just to start earning the big money right away instead of having all these risks associated to to being an entrepreneur? And well, I didn’t really have to persuade anyone, because it’s my decision in the end of the day. But, of course, as if, as a functioning family, you want to have everybody on the same track. And I think they trusted me to perform really well, because they just see that I really enjoy what I’m doing. And I think that’s what’s most important for them. And, yeah, I’m happy to have my family support as well. So and now that they see everything is really picking up and they’re actually curious to hear more about what actually do I think they still don’t understand 100%, maybe everything what I’m doing. But yeah, that’s,

I’m curious about this word, you used uncertainty, right? I mean, for those of us that are running our own businesses, it’s hard to it’s hard to explain to people just what it’s like to operate inside of an environment of uncertainty. And yet you do this doubly? Right, because if you’re dealing with it, I’m recruiting and IT consulting, I think you said, you know, there’s a whole bunch of people that you need to work with that aren’t necessarily working full time, like, you’re not really sure what’s happening. How do you deal with this uncertainty? And then how do you help other people that you’re either recruiting or working with also deal with that uncertainty?

Well, uncertainty, I think, is best to be dealt with, by really clear communication. So it’s not, for example, I get some client reaches out to me with some kind of project request. And everything is really uncertain. So that’s, I kind of restart my work on that. And I kind of put high hopes, high hopes on an opportunity that is really uncertain. So what we try to try to tell our team as well, and what we have to like implement in our daily lives is, yeah, how to really handle uncertainty and open and clear communication, not like rushing in on things immediately. But like, also, working on your own expectations. And managing your own expectations is something you really have to do on a daily basis. Otherwise, you’re basically wasting time and putting hopes and then you’re getting frustrated as well, if you work on certain projects, and nothing turns out in a positive way, in the end of the day,

Can you back up for me for a little bit. And you know, I spent the last 30 years living in Asia, but I’m, I’m aware that Germany is the largest economy in Europe. And I’m curious when you step back and look at the it businesses in Europe, like how would you characterize what that market looks like to you, and then maybe, maybe dig a little bit deeper, and how you’re attacking it from your perspective.

So I think I can really not talk I think, at least the whole European mark, because it is really versatile within Europe as well, we have really different cultural backgrounds within Europe, it’s such a such a multi multinational continent. So it really varies, whether you like talking about UK, Ireland, or if you go more towards the east of Europe. So it can, it can vary. But at least in Germany, what characterizes our market most I think a lot of companies are at the moment in a real transition mode. So a lot of organizations are still working really old school, school, everything is working in German language, everything is still focused on people working on site, of course, COVID first a major change in a lot of organizations. But a lot of these organizations are actually going back to old habits again. So they’re forcing their workforce to go back into the office on a percent. And there’s some friction that has been created in that. In that context. And especially in terms of it that is a huge problem, because we have a huge, yeah, a huge demand of skilled labor in our country. So companies are really, really struggling to find the right people for the project. They all have huge roadmaps, and they’re it. So of course, digitization, automation, automation of all kinds of processes is right up there on the list, but they don’t really find the people to get to pick up these challenges and really make a difference. So that’s, that’s a situation a lot of organizations are in and their internal culture is not really suiting their demands. And that that friction is really is really an issue. And I think that’s one of the major aspects of organizations in Germany have to be working on

that. How do you help them solve that right? In other words, if you’re doing IT consulting, and if you’re doing it recruiting, right, you’ve got to be a solution to that problem. Where do you Go to find these highly skilled people. And I think this is true everywhere in the world, right? I mean, their entire business is built around. How do I get people to do my technology projects that are endemic to what I’m trying to build? If I’m in Silicon Valley, if I’m in Berlin, if I’m in Munich, and yet I can’t find the right people or the right amount of people. So it’s a multi layered question, right? Like, how do you find them? And then how do you get the cultural match, right? Because this is also super important, you can hire a great technologist, but if they don’t fit culturally, with the business into which they’re embedded, that’s also a challenge, like, how do you work around all of this stuff? And make sure you find those right things?

So a lot of questions and one question. Yeah, to be honest, I’m interested in doing so I. Yeah, I think. So. First of all, maybe it’s interesting also, to have a look at the at the scale of the problem. So in 2022, we had 137,000, open it vacancies, and until 2030, they’re expecting 1.1 million open it vacancies only in the German market. Wow. So that that really gives you an impression of the problem we’re facing in the next, we’re 2023. Now, so seven years. And yeah, a lot of companies are going to be struggling more and more. So if you cannot really find the skilled labor in your own local market, or with at least with with the prepositions you have in terms of like working, working hours, work location, language requirements, whatnot, you really on the one hand, to have to change as an organization, you have to be open to English speaking candidates, you have to be open to remote work policies or home office policies. That’s that has to be a new standard if you really want to attract skilled, yet skilled labor. So just just last week, I’ve spoken to two friends of mine who work in like medium to large size organizations. And they mentioned that their companies rolled back on the on the home office, your home office rules after the pandemic, so they want everyone to be on site. 100%. Now 100% in the office, and they just one of the companies actually had to take back that decision already. Because they just had too many people quitting their jobs within two weeks of that notice, because people just got used to it. It is the new standard. And it’s what people expect, if you want to be a modern modern employer. Yeah. Well, so I think organizations really have to work on work on that. But if you just have to look at the numbers, it’s it’s not going to be solved by having home office and English speaking people in your in your team and like being open minded culturally. So you also have to also like, as economy itself, like you mentioned, largest European economy yet, but we have to really attract skilled labor from abroad. So we have to be attractive for immigration. I think that’s, that’s a huge aspect. And we have to have really fast track immigration options. And I’m not really sure, maybe that’s also an interesting question in your direction, if Germany is still is still such an interesting country, for tech people on a global scale, to emigrate to, I’m not so sure what the answer on that question would be.

But what do you think, right? In other words, when people think about people look at what governments are doing, right, they’ll look at the Irish government in some ways that look at what the City of London is doing. The US is just a show of all of its own. But you know, you look at what Singapore is doing. And you even look at what Fukuoka in Japan is doing offering special visas to people that are adding value in what they consider to be sort of like S curve growth style companies. Tech is a big part of this. I don’t know. Right? But is the German government doing that whether it’s in just one city like Berlin or another city like Munich? Or is it doing it for the whole country? Like how is that working? What do we expect people to think about Germany when they think about it?

Well, of course, we have, we have some models that are supposed to enable, like, easy immigration into Germany, for for skilled labor that we are actually that are badly needed in the market. So especially it so there is there’s Fast Track procedures in that regard. But still, the whole process is extremely, extremely tough. And it’s not that it’s not it’s not as digital as one would maybe expect. So you still need your paper documents in original. So we’re actually employing a guy from Colombia who’s joining our team next week. And I had to send the original one page certification from some German authority by post express to Colombia so that he could bring the original to the to the embassy in Colombia. And it cost me 86 years just for one page to arrive in Colombia and is super slow and it’s it’s it’s just a huge hustle, hustle, and it’s it’s not what I would call a fast track easily and easily accessibility of process. So definitely something to be improved. Or there

again, in in the region where I live, you have some of these governments that are setting up specific, I don’t even know if their agencies right to handle some of this stuff. Is there an avenue to the government in Germany, whether it’s the regional government or the federal government in the national government to try to change these policies? Right. Like, I feel like around me, I hear constant discussions in both in Thailand, but in Singapore as well, about how do we make this easier for people to do this? Are those discussions also happening there? Because for your you know, if I look at the stats, you talked about 137,000 open jobs now in a million open jobs by 2030. Like this is going to be a problem. And it’s not just in Germany, it’s everywhere, I think, where this problem is going to be, but are those discussions actually taking place?

Are they they’re just they’re really good at discussing, but they’re not as good in actually changing and adapting, I would say, so everybody’s really aware of this. But nothing is like, at least it’s only my personal opinion. But nothing is changing in a dimension, or in the dimension that really fits the numbers that we already discussed. Right. So there’s, there’s still a lot of room for improvement. And yeah, but that’s, that’s also the the aspect of digitization in the public sector. So public authorities, they’re, they’re really far behind, I would say, in terms of digitization. But yeah, I think that that’s a completely other aspect. I would like to get back on something you mentioned earlier. So what’s what’s the alternatives? On an actually challenge? Yeah. Yeah, like, what, how can we actually approach these challenges. So if you’re unable to find workers to actually skilled labor to join your internal team, you kind of have to find a different solution. And one aspect that is adding to the problem, I would say, or that it is a new dimension in the whole topic, is the generation that is completely different to the expectations of Generation X and the baby boomers. So they’re completely new, and we’re still having to figure out I think, what effect they’re going to have on the labor market, or our future labor market, they’re only starting to enter the labor market now. And they have completely different demands to what the generations before head, so they want to be more flexible, they want to be they are really into remote working, they will, self determination is is really an important aspect for for the generation is that that’s, that’s something I would say the classical nine to five position as an employee in a large enterprise cannot really provide. So what we identify and the numbers also show is freelancing becomes more and more interesting for, for modern it. Experts really, and that’s why we say at myrtus, as well that companies really have to figure out a way how to really integrate freelance experts into their IT roadmap, how can external, it raw resources actually, actually provide a benefit in order to be able to get to reach the goals of your roadmap. And if you’re not going to be open to working with external experts, because they want to work in a self determined flexible remote base, then you’re really going to probably not get access to the best talent you need for your projects. So

here’s where it gets super interesting, right? I think you’re right. And again, I don’t I interact with a lot of people from Gen Z. And I’m trying to understand like, how those ideas around being more flexible actually working for freelancing, but working for big companies, right. And then the self determination and also working on things that are important to them. Right, like I remember when I was working, Stanley, it’s super important, right? When I was at Morgan Stanley, I remember my boss came over to me literally on a Friday. And this happened to me a bunch of times and said, Okay, we need you to move to this new department and start this new thing. And I was like, I really don’t want to do that. And literally, my this was a five minute conversation. And my boss said to me, that’s great. You start on Monday, and there was no other discussion. You’re smiling, but like that actually happened. And I can’t imagine today that that same conversation happening with a Gen Z. But here’s what’s super interesting for me, in the context of murtis, right? You’re hiring people, but you’re also consulting with people. And at some level you may be and tell me where I’m wrong here, you may be placing some of these people that come on to your team, to work on projects for big companies. And you’re sitting in the middle trying to figure out how do I motivate this gal? Who’s a kind of a freelancer to work with this big company? And how do I communicate between the both of them to make sure that they understand each other right? Like how big of a challenge is that for you and how do you handle that?

So there’s, there’s there’s different Part of this question as well. So on the one hand, we do not only hire people directly, so we also do a lot of subcontracting. So people really work as freelancers, they can really choose the project they want to work on. So basically, we have a client looking for a developer, let’s say front end developer, whatever, technology, and then we provide the resource, and they actually made it freelance. So they are a contractor or subcontractor. So this way, we can really actually achieve the goals that that these people are, why they actually chose to work as on a freelance basis in the first place. But if we, if we bring some of our internal team members into a client project, yeah, it can be a huge challenge. And it’s it really depends on the client organization, some of them are really well prepared, they have process processes in place that can really have a clear path, they have Agile methodology in place. So it’s really clear, who has which role, and there is a meeting structure and you have clear responsibilities. So then it’s really easy for people with this, yeah, with a mutual attitude to project organization to actually collaborate in whatever team so they can, they can work together pretty neatly. But if you have a client organization that is not as well prepared, it can be really challenging. And that’s where, where friction comes up as well.

So I just want to use the person that you’ve hired from Colombia as kind of an example or a metaphor. Because, you know, again, if I’m in Japan is my main experience, right? So if I’m sitting in Japan, and I’m hiring a Japanese person, I understand both culturally, right and education wise, like what I’m getting, because I’ve been there particularly, I’m not Japanese. But if I were a Japanese person, I would know what I was getting basically by just like having a conversation with this person. Once you expand out of your kind of known universe, right? So when you go outside of Germany and end up hiring somebody from Colombia, like unless you’ve hired 100 Colombian people, how do you incorporate that? Because we talked about culture and language as well? Like, how do you incorporate that into all the other things that you’re doing? Like that alone is a challenge if you’ve ever been in an international relationship with anybody, you know, that like, what you say, and what you mean, end up being two different things, but in a work environment can be really difficult to deal with? Like, how does that work as well?

It’s going to be really interesting to see how it ends up. So it’s nothing I’ve done before as well. So I’m curious as you are, to be honest, but I think, first of all, we have to start with a really positive approach. So it’s also about your own attitude towards the situation. So I, it’s not even like the phrase benefit of the doubt. That’s, that’s already the wrong attitude. So yes, having having a puzzle, it’ll, it’ll work out in the end. And so we have, we have huge partners, it’s not only our company, every every consultancy, whatever, probably Europe wide has a huge demand for skilled developers. And if they have the right skills, we have to be open as well. And I’m really, I’m really convinced also, I’ve, I have lived in Central America, and I’m not sure if that’s if it’s going to be a similar attitude, I’m going to be I’m going to be facing or like similar cultural aspects. Yeah, we’re going to be confronted with. But in the end of the day, if somebody decides to relocate to Europe, they already bring this kind of personality that they’re open to a new culture as well. So it already kind of kind of hints that it’s going to be just an individual that is open to working with other with other cultural or with people from other cultural backgrounds, as well. So I think that’s going to be a huge advantage. But otherwise, again, I think it’s the aspect of communication. So you really have to, you really have to figure out the right means of communication. And it’s, but that’s something that also accounts for, like for really, for real for a team that consists of members only, let’s say, from from one region that all speak the same language, even within a really like culturally home again, we say in which homogeneous group is homogeneous genius. Sorry, thank you very much, Michael, homogeneous team, you still have hugely different people, and it’s just a new dimension of having a less homogeneous team. And yeah, but otherwise, I must say, I don’t have extensive experience in that. And I’m also curious to see if, if my positive attitude is going to be rewarded, or if in a year time I got to be there. Ah, maybe I was too. Yeah. I’m bullish. true positive about blush. I don’t think so. I don’t think so.

No, I think you’ll be able to fake this real here’s the other thing though. How do you find, like discovery is really difficult whether it’s having people discover your business, meaning mine, right or discover any business, but how do you discover the right talent? Particularly if they’re not in the same place as you right? In other words, finding a killer person in Colombia or a killer person in California in Kansas? How do you judge like whether they’re going to be great or not to actually make the commitment to bring them all the way to Germany? Right, it’s a big commitment on your side and on their side? Yeah.

That’s, that’s actually very true. So I think, yeah, our digital globalized work, really a world really helps in that aspect. So we can do video meetings in advance, before we actually meet people, I would never rely only on a one time meeting, I would say, okay, at least see somebody twice before we can actually hire someone. And best case scenario, that you are actually able to meet them somewhere in person beforehand. So we were really lucky. We were able to meet in Germany before we actually made the decision of hiring the person. Awesome. So that was a our advantage. And I think it’s something that really minimizes the fear or minimizes risk, whatever way you want to put it. But that’s, of course, something you’re not always going to be able to do. So. I think, again, it’s about open communication in both directions. So you really have to communicate well, what the expectations are, and also what the risks are. And that it’s that it’s clear to everyone that if it doesn’t work, you’re not going to hurt anyone’s feelings, because it’s a test both ways. So if I will be hiring someone that I’ve never met in person before, we’ve only had two video calls. Yeah, they don’t really know me, either. It’s, it’s a two way street. So yeah, it has to be clear to everyone that you have a mutual goal and mutual interest that that which you’re going to try to achieve, but that a lot could happen on the way. And I think if that’s clear to everyone, and if everybody’s willing to work on these issues, by communicating clearly, then you have a good chance of making it. But But your question was, where do you actually find these people? So? Yeah, I think it’s about putting yourself out there. And having having a good reach. And social media is a huge thing as well. So you can actually do job postings that reach people at the end of the world without ever having heard of the place that these people are from. So let’s just take LinkedIn, you put a put a new job opening on LinkedIn, and you receive applications from all over the world. And that’s, it’s only a first touch point, of course. But if you really take these applications seriously, there’s a lot of low quality fit to the positions you may be looking for. But there is occasionally it is these one or two candidates that really suit your the skills you may require pretty well. And and in relation to that it’s really about having a streamlined process to actually pick up these these candidate leads. And having a good process in place to actually figure out in how far these candidates do fit your team, not only from the technical, but also from the from the personal standpoint,

in in a world where Sam Altman seems to be coming more famous than Bill Gates, and where Microsoft is investing billions of dollars into open AI. Is there a tech component? I wouldn’t wouldn’t say solution to the way you vet the candidates that you are hiring both for internal and external. Does that make sense?

Yeah, definitely. So there’s, there’s a lot of solutions that attempt or that at least, pretend to be AI based matching of job descriptions and candidates. And I think, in reality, it’s a lot of like just filters, looking for search words and saying, Okay, this profile, Id may be accurate for this kind of position. And of course, it can be a good starting point, but it has nothing to do with AI. Really, it’s just, it’s just filter, right? So if a profile, if I’m looking for a Java developer, and the profile states Java, yeah, great. That’s a fit, but we all know, it doesn’t really mean it’s a fit, it has really nothing to say it could be anything. Yeah. So that’s, that’s when, where that gets us so maybe it can help me like to at least reduce the amount of candidates I’m going to have have a series look at, but it’s not going to solve my problem of really matching the person for a suitable position. I think AI in its current state, especially like chat GPT everyone is talking about it. So that’s that’s like a textual machine learning text text tool, really. And it’s, it’s, it’s great in helping you maybe writing content for your website, blogs, I don’t know social media posts and all that. But it’s it’s it’s is not even meant to solve that kind of problem. I think so Sam Altman. Also in a, in a recent interview, I think mentioned that people are going crazy on their expectations regarding the chat GPT for the GPT for so the next version, and like all these rumors and crazy expectations on what what the next version might be able to do by he went like, Okay, people like you’re really asking to be disappointed with down level you’re putting out there. Yes, slow down. So it’s not going to be that extreme. And I think, I don’t know, if you’ve tried out chat GPT yourself can be really useful, especially in the in the context of, of writing text and structuring text and summarizing text or that, but also the AI tools. Again, back to the to the matching part, I think they they can of course, help maybe to filter candidate profiles to a certain extent, but they will never be able to reconstruct really the elements that are so important in the people’s business or HR, it’s always about people. And I think there’s two aspects to this. On the one hand, the AI will not be able to predict empathy, sympathy, like first impression in the in the, in the conversation. So that’s, maybe it’s only me being ignorant to deny artificial intelligence disability, and maybe in the future, it’ll prove me wrong. But at least from today’s perspective, it’s something that’s not that is that cannot be replaced by AI. And on the other hand, I think we also have to look at like, the we I think we heard this at a NFU Summit, as well as speech from from young on the net value of technology. Yeah. So why are we actually using technology? Is it only about having the most efficient process? Or is it that we actually have a process that fits, that really fits our needs in the organization. And if it comes to HR, if you apply to a job, you want to have have human interaction as well with somebody it’s about like having somebody value in your, your, your application, and actually being showing interest in your application, and wanting to find more about your personality, if it fits to the organization. So if you only have a completely automated process, you get an email. Thanks for application. And now please upload this. And then next round. Yeah, please answer this question, whatever. You don’t have any personal interaction. And HR is a people’s business. And I think if you really want to succeed in this so called war on talent, especially in this highly demanded labor, demanding labor markets like i, t in regions like Germany, you really have to be fast. And organizations are really bad at being fast. And you have to kind of approach the people also on the personal level. And that’s also something Yeah, technology cannot really solve.

Michael Waitze 33:05
He says, that’s an amazing way to end. I really appreciate your time today. Justus Daase a co-founder and the CEO of Mertus. Thank you so much for doing this today.

Hans-Justus Daase 33:15
Thank you very much, Michael. Thanks for having me again.