Ep 104: Will AI Replace Coders? Terminal Co-Founder & CEO Dylan Serota
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How much is A I making soft codes Better isn't more commotio ing a low end was happening here.

So what of things I do every month who to dinner? A different city around the us. With some of the top cats are up in coming bps.

And I asked.

I question them and I I question them. Do you think A I is gna replace to your team or part of your team? And across hundreds of CS, the answers been.

Everybody who works with me knows how much I talk about the importance of talent in the innovation world. A I is changing. How talent works is changing as possible for recruiting talent.

The frameworks of talent are very different than they were even a few years ago. Dylan error a is a founder of terminal, which is helping a lot of top technology companies build their talent teams and and their talent teams around the world. Excited for to hear from him.

I'm joe long ziem. Welcome to american optimists. Today we have our friend delon to hear with us from terminal delay. Thanks for being here. Thank you.

So pressure to be here.

You know, before we begin to tell a little bit about yourself .

with your background. So my background prior is starting terminal. I spent seven years at a company called event bright, a kind of did a tour duty across sales product strategy. Maso helped .

d teams globally.

latin america, canada, europe, had a great time left, right before the IPO, really with inspiration to build a company, and saw big opportunity around global talent. And that will let me to eventually start terminal .

dive in a terminal later. But just a high level, what is terminal do terminal .

is a global talent platform for hire ing developers. So we're a managed marketplace of talent, the best companies, the best engineers coming together to solve great problems. And so we're elevating the the talent pools from around the world and helping companies build global teams to global talent.

Tells a bit about state of engineering talent today and hiring today, like the major trade, lies default, becoming more global. While we could not hire here, people here are very easy. All you have to go global. What's going on right now?

Prior to cove IT, there is definitely still the prequel ceive notion that you had to build a company in a team all around one kind of three mile radius office. I saw that break down when we were building teams at the amperage, just the strength of global talent pools really emerging, and that was really accelerated by covet. But the the chAllenge we still face in the U.

S. Is the deficit of technical talent relative to how much demand is growing. And I think us has been the innovation hub or increasing demand, increasing capital investment.

We're seeing all different types of industry moving into technology. And so you have a demand curve that is at an extreme slope. Meanwhile, we're not keeping pace with amount of supply. So inevitably, we're going to see and we have seen demand start to move to different global talent pools.

Let's talk about the global town first and about the supply question as well because I think changing a little bit this now on global side. So i've seen a lot of talents originally. There's a lot of talent in china is number two.

I don't really like to work with them as much right now given the ccp issues. A lot of talent in india used to have kind of really back office kind of simple things there. And now I have really advanced talent there. But I mean that companies high top in scotland, in israel, in eastern europe and obviously certain parts of lab amErica like where you seeing the very top town to we're you're .

focusing IT depends on what type of hotel are looking for. But broadly, software talis emerging in every part of the globe. Fact is, today, most engineers can do a lot of self, self directed learning, used to be that a lot of the technical skills you need was in the classroom.

And today, with open source, with the ability to really learn independently, software engineers are popping up all around the world if people are hungry and if people are self directed around learning. So if you look at just major population centers, there's top talent in those markets. And it's compounded by the fact that a lot of the best us companies have had to go to different markets.

And so not only the talent there, but they're glooming them. So you've got google offices all over, you ve got amazon offices all over. And so that is taking kind of the rate potential of a talent pool training them. And now they're really there's a lot of different markets are coming to the .

forefront with top talent. Does actually in new york became a strong market hiring after google been there twenty years ago? So of the same .

thing in in canada and then you have uh, different homegrown companies robby in land america, you ve got shop of fire in canada, and they're also doing a good job of of training up the talent.

These markets. I want to push back on the on the demand side little bit. It's definitely in the case that there's a lot more hiring.

There's a lot more you thought hard to find top engineers i'm hearing right now the last year to that a lot of new grads are really struggling to find jazz. Hearing that AI has made engineering, in some cases, whether it's twenty or thirty or forty percent, has made IT more productive. So it's no little bit of push back where companies hired at time on their not hiring as mark ly.

Doesn't this go back and forth for some years, there's like people really struggling to hire. Other years, there's too many people on the market. How do you think about that?

So historically, there's been about four open jobs for everyone back in engineer in the us. So there are more open jobs than are available talent. The impact that we've seen in the startup recession over the last two years has had some impact, but IT has definitely been outpaced by the fact you have all of these traditional industries also moving into software development.

So you talk about india used to be a place of kind of low level outsourcing. That's exactly what a lot of the big financial institutions used to do. Jp Morgans, a good example, used outsource a lot of their technology today.

They're hiring thousands of engineers in the us. If companies like nike hiring a thousand engineer, cbs, thousands of engineer. So non traditional tech has moved in to really drive up that demand and replace a lot of maybe what we've seen the chAllenge in the cortex market today.

What is nike doing with engineers?

You tell me selling shoes, selling a perl, building websites, different consumer apps, different data. I guess .

that's interesting. I, I, I agree, a lot of people do need engineers didn't need before. But and there's shocking some of these companies are hiring so many engineers.

That is we'd expect now. I mean, we great kind of our self ruggs and they have one of the most advanced data analytics teams out there.

Wow, when you build teams, i'm i'm curious because for me, like when I do to start up, I ve got a traditional i'd like to to be together and interact. And then you often do have a second office, but as usually for me is always like a second office where you have a culture there, you have people come there. I haven't found that IT works as well for things i'm doing to have people just everywhere, like how do you think about this due sometimes build hubs for people like in one place.

We do um everything from completely distributed hiring, which some companies have a preference for down to building a collocation team in the market. And I think the different discussions around remote hybrid distributed, to me, there's one answer, which is you're going to need global talent.

The question is how are you going to access that and what is the trade off you're going to make? Do you want to be captive in certain markets and leverage or influencing those areas to build teams? Or do you want to vastly expand your supply pole to reach a bunch of different talent? I think there's many different ways to build.

When you guys are screening town, you're looking for people. I'm also curious, so I remember back when I was in college because your science had just become hot in the late nineties, and then I kind of crash in two thousand, one when I was there because the bubble went away. And I feel like that something happened similarly recent.

I think the number of computer science graduate rose one hundred forty percent the last few years version a decade ago. So obviously became really hot. One thing i've noticed or some people I excited hope to include myself among this. Originally, we're just really interested in computer science and use like I really like math and I really like figuring out how systems algorithms work.

There's something that I thought was fasting and there's other people who are like, well, may and disgust not really what I want to be doing, but I want to get a job and and IT feels like maybe that shows up when you're hiring people. Little bit like how do you differences between people who are always passionate about this? First of the people who went to a high area, IT. Is that matter when .

you're selecting cannot I think that always happens when you see kind of an expansion in a certain sector. Know I graduated from pen phildee pha at that time, all my friends went to a new york to do finance. I was kind of the one auto cat coming out to sever cisco to do technology.

Then you fast forward a few years when things started really expanding, a lot of people flooded out here. So I think you're always going to see of that. That urge for people are kind of follow where where the puck is going and and try to pursue those.

What we look at is a lot of who are they, how they actually how have they developed their own skills? And often times, it's what are they doing on the site? Are they contributing to open source projects? Do they have side projects? Have they build companies or they build products before?

So a lot of the way that we're looking at, at screening them is being able to actually dive into their history of what they've done and then do some personality assessment on what are their ambitions. You know, is that just about money? Or they actually someone who wants to be mission driven, and that's a big aspect of our screening.

Tell me, how does the I affect this? Like did you first do you use A I in your screening at all? Is A I doing for you to help .

you look at its a lot of the way we're using IT is I would call the marketplace Operations. We are building A A global talent marketplace and one of the hard things is getting completely differentiated supply of talent organize and merchandise on the marketplace. Unlike you know car marketplace where you have make model years, people are all different.

And so we leverage our ability to scream and interview someone, capture a lot of those unique insights, organized them, tag them and then merchandize m. So we're using IT on the marketplace Operation side first. And formose, we also can do different levels of scoring because we can predict how likely is someone based on their experience and background going to be to pass one of our customers interviews. And that helps us prioritize thousands of engineers up to. Really the criminal crop.

So you can you make model on your way, you can kind of classify into a certain .

types of makes models. We try our best. It's very difficult supply pool of humans um unlike other inventory of marketplaces.

When you look at what A I is doing on the other side in terms of like their jobs, like how is IT changing your business? Because like first of all, how much easy I making soft codes Better is IT? Is IT more fact? Isn't more commodities ing allow in?

Like what's what's happening here. It's interesting. I'm definitely seeing the huge productivity efficiency gains, but I don't think the role of software engineer is going anywhere, anytime soon.

So one of things I do every month hosted dinner. Different city around the us with some of the top cats are up in coming VS. And I asked that question of the VP.

And I as I question them, do you think A I is going to replace your team or part of your team? And across hundreds of C, T, S, answers been zero. No one thinks it's actually going to replace people are seeing productivity gains and different shifts, but calling IT more can to having spellcheck. It's it's going to make you more efficient and getting the work done. It's going to allow you to abstract some of the work to actually core engineering versus writing the code itself, but it's not going to take away the the need and desire, at least at the enterprise level where you're building product serving millions of users.

IT might change a little bit. You're hard pushed back and see you're SaaS for me. I've think what i've heard, at least i'm not running these teams myself these days. I obviously investing companies and I help build companies. But but for a lot of our companies that feels like the value of a really senior engineers gone up well to the valuable junior engineer, thanks to some of things that could do, is that people are seeing or on your .

I seen that the value is coming a little bit more from the junior engineer who is having to do a lot of a task related work. The senior engineers that are often times thinking about there's ten different ways you could build a bridge. What is the right way for us to build IT when they're thinking about those things that is not being added today by by AI, but the junior middle vel engineers are able to be a lot more efficient, feel like they are able to actually learn by having the AI just code seeing in a little bit more of the the opposite that is actually up leveling a lot of them. The middle vel engineers, the senior engineers, and I think this is the trend, keep getting abstracted to more architectural al engineering decisions for suspending so much other time, writing the actual code itself.

And I guess that so much of what we're seeing with some sales guys where Michael dell was telling me earlier that you actually can take a more pick general sales people and make them specialize sales people using some of these AI technology. And I you're seeing this making that more efficiency. And that's the analogy you're giving her, the engineers, because exactly which is different, different than some other possibility.

Like chest. In the old days, you like A I, as I got Better, I would commodities the tactics, commodities certain parts, but then like the judgment parts of position play, you still need to like the very, very best players. And so used to be, if you want to be the best at chest, you have a person plus computer, and you have a really good chess player who understood positioning well enough, and then, and then the computer will do all the simple things. So one argument to this kind of like hybrid human computer is that you want to really wise person for some really our, our decisions, that you want the computer that will be the different model. You you're not seeing that one as much for coating.

not yet. And I think at least the companies that we're working with there so many encies when IT comes to the systems that they're building. So in a very small subset of code, IT, IT can help an aid and how to finish a complete and point. But when you think about security user data, different transactions um where does not seeing the ability to go of towards that state of fully autonomists for the task related work yet. But IT is making people just more efficient at getting the work done.

So IT seems that, A, I can make a little more complicated. Everyone going to run the red me through chat. B, T, it's going to all look the same and really impressive and optimize what you want. And like, how do you dig through this? Like how are you using technology or your business to help people figure out .

it's a really hard chAllenge and worsening that today with many other companies complaining that they are getting five thousand applicants. But then when they started shifting through, they realized that ninety five percent of them are fake until they're getting fake resumes, fake applications.

And IT puts a lot of owner on teams now to go back to more of a traditional in person or face to face type of interview during the kind of post COVID boom of hiring people didn't have time. And so they're sending people take assessments and just looking at kind of online resumes. A lot of that is now breaking down and fAiling.

And so a lot of companies are going back to actually coating with people live to make sure that there that they're good. There's different ways that I think we can help to solve for with with different tools. But it's kind of this cat mouse game between what candidates going to do to try to get in versus what can we do to really ensure that someone is who they say they are and that the quality is actually stands by. Um in front of a resume that that might be fake.

I think that's a crazy problem that if I guess, if you want to screw through your competitor, you could just send them like thousands of fake resume. It's credibly with A I this is like I considered as I was kind of evil way. But it's also really understand, is all these rumors of like this maybe really good engineer, but you might have four jobs and he turn europe and and how do you figure out he's not doing that? Because that's that's your job now is that you've on the ground and .

what do you do that is a huge problem. And we see IT. There's articles coming out around even different gangs or different countries that are trying to infiltrate companies by posing as engineers, getting job ceiling code. So we have built out a whole identity verification process and location verification.

So we want to know that when someone is applying for a job and we do a background check, that the person who is interviewing is going to do the job is who they say they are and in the location that they say they are. We've seen many companies, higher folks, and then all the sudden that engineers logging in from china or from other markets. So IT is something that I think is becoming much more prominent and is definitely something that companies have to be very worry about, but an opportunity, I think, to solve that problem with some interesting tech.

Fast is a security aspect your business and is exactly so like about terminal. I was a little bit involved at beginning of jack braham building this and obviously saw huge need for talent some time to as well in some ways. Why are you passionate about building a town platform? 我的， for really two things to me.

drive my passion for terminal. The first is, am a tech optimist. The end of the day, I believe that the more innovation we can push, the more of society y's problems we can solve, and if we can unlock more innovation, we're going to solve a lot more problems and make everyone happier and Better, and live more fulfilled lives.

The one gating factor to that that I see is that deficit of technical talent that again, our demand for for innovation, our demand to build is outpace our ability to reach that supply locally. And the solve for that is raising and providing access to that global pool of talent to unleash a lot more innovation. And then secondly, firmly believe that people's lives can change with profession opportunity.

And some people aren't as lucky to win the the geographic lottery to be born in the us. But the way in which we can actually provide some of the best values of the us mattock acy innovation, capitalism, is allowing those opportunities to come to people around the world. And so being able to unleash american innovation, be able to bridge that towards providing professional, global, world changing opportunities for people.

really drives me, I guess, in some ways, is positive on the us. If you believe that we don't have enough engineers are graduating here, we're still going to build to build things clear .

despite the that like absolutely, it's a bottle neck that we can unlock. That's going enable us to build Better companies, faster companies. It's enable us to hire more sales people, marketers.

It's going to enable the us to still be the innovation how even if for leveraging different polls. So I think we're going to see this trend of much more of a globalized workforce. I think we saw kind of globalization happened at the manufacturing low skill level, and I think we're starting to see that and pretty quick manner at high school level. I think engineering is one of the most effective ways of doing that globally.

So there's already obviously a big outsourcing market. What's wrong with the incentives and outsourcing?

Said in house terminal, different outsourcing has very incentive model. And so their record value from the beginning, when outsourcing companies were being developed IT, was that I was nearly impossible to go into a new market, find talent, open entity, employ people. And so what they did was they swooped up local talent, they kind of held them captive, and then they would least them out to to companies.

Problem is their incentives to charge the companies most as possible and pay the people as least as possible. And that's their black box margin. And so they literally sell engineers on a rate card. So there's no agency of the engineer to decide what they work on. There's no agency for them to demand a higher value based on what they going to contribute to the project. And so this inner mediation um you know is I think putting companies at at a point where they're behold into these outsourcers where they can never break away because it's not their team and the engineers really don't have agency around their career because a kind held captive. And meanwhile, there's this black box instead of structure that I think drives the wrong incentives .

to terminal different. Why they were Better were transparent.

and we try to provide agency on the team. So when companies are building teams on terminal, they're building on the terminal platform, leveraging our talent. But we're not getting in the way of them controlling the team and having the agency around them.

So they're negotiating salaries directly. The engineers are able to ask for what they want to make. They're providing equity and upside. They're really part of the teams. It's not that there are terminal engineer is that they're part of any one of our client teams is also happens that we're enabling those transactions. And that economic interaction to be .

possible is rather than finding talent itself, what do you do to manage things?

So at the top were a managed marketplace. And so we are sourcing talent, vetting talent and making sure that the best engineers from all of our markets are available to be matched ed with our client opportunities. The hard part is when you think about kind of global commerce around talent is you ve got to do IT compliantly.

You've got to think about IP assignment payments, compliance, al benefits. And so we have different transaction types that you that we can enable for customers if they want to have full time equivalent or if they want to build teams of contractors, they want to have a contract to higher model or if they want to build their own team and their own entity. So we have different kind of transaction enablers that allow that talent that's on the marketplace to be able to cohesively join and be part of our our client teams, which is something that hasn't been built before.

And so people can actually try contracting this, maybe a few these engineers in in columbia, what not you have on your platform. And it's going really well. They get them higher than with that .

quality or something like that. A big trend right now basically just try before you buy for talent going to a market proof that it's good, very low risk. K, when you think about contracting our customers, tendency that they never want these engineers to leave them, we'll convert them to being full time and y'll scale large team around them.

Who are some of your customers. You could say.

how do you win him over? We've been lucky to work with some of the fastest growing tech companies, himes and hers, fastest growing health tech company, to an IPO. We look at companies like crime, like grinder, like next store and a lot of companies that can probably talk about. But many companies that most of listeners ers, I think we would be very familiar with behind the scenes. We're playing a key part anywhere from ten to twenty percent of our customers teams are powered through terminal.

What are some of the big chinese you guys are facing just killing .

chAllenges around supply, like I asked, but like I I mentioned before, building a talent marketplaces is unlike other types marketplaces. It's it's double locked in. And you've got this unique chAllenge around supply.

The people who reveal might not be the best engineers to people get laid off. You want to hire always those guys.

You've got to vet the supply and IT to human on the other size. You've got to also make sure you're fighting through a lot of what people are selling you out. Um and then it's also perhaps you know people are on the market for certain amount of time.

So there's a lot of complexity around how do you aggregate the supply baLances, the liquidity for the demand that we have coming in. Give both sides a really great experience and try to optimize for speeding quality. And so as we look at expanding to different world types markets, there's a lot of considerations that that go into um that go into how how are thinking about building the team in the company.

So have any examples of a start up that was getting going and partner with you guys? And I turned out to be a big win for them. What does that look like?

Aging names. Many starts in a very similar positions where they're growing fast. They're actually growing faster than they can hire. And they're also feeling the chAllenge, whether that be around location or cost or arti quality.

And so in in one example um company that went on later to to IPO and reach millions, millions of users. We're able to set up teams across three different markets in parallel. And so by the end of the art cycle of working with them, they actually had more engineers employed through terminal than in their court team. And they looked at those team members on power, if not Better, in many ways, in their court team and and kept coming back to say, for work, for terminal, we wouldn't have been able to reach the scale or th Epace o f i nnovation t hat w e h ad. And is this maybe after ising.

like a series b or something, the ada bunch of resources, and like we gotta grow faster.

we can suppose we are helping them. That's usually the inflection point, like early on, people getting their friends involved. But once you get a lot of money, you get a lot of pressure to grow you, you are you.

The traditional ways that you could attract talent start to fail. And you need to look at different talent pools. And if you don't have cousin or an uncle that knows people in a different market, you need a solution that can actually do that.

Historically, if I want to build in a different market, i'd have to happen to find the leader there who was really good. And if you don't already know when, it's really tough. So you guys kind of take the place that sometimes .

exactly that could take six months to find the leader, then find the location and then start to build a team. And so most traditional expansion efforts are two years. We can get a team of twenty up and running now in a quarter.

It's awesome. So then we started the american optimism to push back along the pessimism and issue in our country. You work with engineers all over the world. What makes the U. S. Innovation ecosystem unique?

A lot of what we do a terminal is evaluating different markets. And we look at a lot of different data points, up over eighty different data points to evaluate is a market kind of suitable for for terminal. And that allowed us to really take a hard look at um the way in which businesses can Operate.

And to me, IT puts in dress a contrast just how great IT is to be part of the U. S. Economy and the U. S. innovation. We've our problems, but we've got countries where it's impossible to let someone go, or you have to pay them a year of severance like france.

so you can fire people .

IT takes six months to open a business and get a license or they're going to hold you up for a year based on um do you know some some basically crua politician um a lot of those problems you don't really we probably take for granted Operating us until you kind of get outside and look at really how these other places Operate. I'm very grateful for, for what we have been able to to build and and be able to be in the U. S. For that people don't realize.

I think I think we've made we've made hundreds of thousands of people multimillionaires here in the last decade from being own pieces of things that are building. And there's a lot of countries you literally won't be allow to own what you're building because you have to get taxes on ahead of time, university getting options. And so and there's actually little people here, oh, we should change is their tax side time.

We literally have created hundreds of thousands of people who are really wealthy in our country who have the motivation to build. And people wonder, why is us people on? People can. Well, for me only a piece of its a really big deal huge.

And many countries still don't allow IT. They look at IT um they look at IT very oddly and they, for whatever reason, don't want there their people to have share in the upside what they're creating. And that creates a very uh, dool class system where you know there's so much more upward mobility based on ownership in the us.

I think a probability keeps the society more free people on. Once I don't want that, I think they will. You have a front rose seat to global hiring needs. Young people, smart, smart might want to be engineer as might want to be involved in the technology is should be focusing on like like what were you trying to hire?

What there's no ough of? I think that the speed at which A I is going to and engineering is definitely there. And I think that people need to just stay on the forefront of what's happening. There's a lot of ability to join in different projects, but the thing that I don't think AI is going to a replace and the thing that companies need is collaboration.

And if I was a Young engineer today, i'd really focus on how can I work most effectively with other really smart people because I think what we see is a lot of great talented engineers don't end up succeeding at some companies purely because they're not able to collaborate around really complex problems. And so finding ways to actually enhance that as a skill set for engineers, I think, would make them a much more, make them much more effective. Um you know.

in the future world, one thing to be a genius, but people in the real world to get things done exactly. It's so early when you call yourself a technical timide. I'm also a technical timide.

I'm just so inspired. What's going on with starship recently, with what we're seeing in the bio world, with what we're seeing with builders, really can solve a little problem matter of our society. I'm curious, like curious what makes you a tech optimize? What do you where do you build on?

I think very similar stories. Es the fact that we can send rocket ships to to outer space, the fact that we're solving some of the um the the biggest diseases in the market it's coming from entrepreneurs, is coming from innovation, is coming from a lot of the technology that, that we've built. And that's always been a bedrock of of america.

Thanks for often people build and thanks for joining us still.