146 - Optimizing backgroung checks: Harnessing AI for speed and efficiency with KarmaCheck's Eric Ly

Welcome to Listening with Leaders. I'm Doug Noll, lawyer turned peacemaker. I teach executive leaders how to listen to emotions rather than words so that they can become the leaders everyone wants to follow. And I teach those same leaders how to be authentically present, available, and connected to their families despite being insanely busy. I have learned that we are 98% emotional and and only 2% rational. Learning how to listen to emotions is, in my experience, the foundational skill of life. Stick around to the end of the show and I'll reveal how you can be on our next guest in 15 to 20 minutes. So let's get started.

Eric Lee, welcome to Listening with Leaders. You are the co-founder and CEO of KarmaCheck, found at karmacheck.com, and you were also one of the original people involved in the startup now known as LinkedIn. Welcome to the show.

Hey, thanks, Doug.

It's great to be here.

So, uh, let's start off with a little background. What's your backstory? I know you're— you came out of engineering, but let's just hear your— hear how things develop.

Yeah, I grew up as a kid in Silicon Valley, and as many people know by now, uh, Silicon Valley is steeped in technology You breathe it, and entrepreneurship was really part of that as well. And so I, you know, continued on and went to college at Stanford and MIT. And so I definitely do have that kind of computer science technical background. And from a young age, I actually had entrepreneurial ambitions as well. And so in a way, you know, from a very early age, you know, my interests, you know, were identified and, you know, have come together.

And when did you get started in Silicon Valley?

Well, that should date me if I actually answer that question.

Because I'm going to date myself.

I grew up there.

So, you know, I, you know, probably from the age of, you know, 10. So it's been multiple decades., until, you know, very recently.

Well, you'll be interested knowing that I learned beginner all-purpose symbolic instruction code from John Kemeny at Dartmouth College in 1969. And I learned—

Fascinating.

I thought I knew everything about tech going all the way back, but these are some things that I don't know about.

We used punch cards and, uh, Hollerith cards and punch tape to— that had to then be fed into the machine to be optically scanned. And, uh, compiled. So we— you learned to code parsimoniously.

Well, I started in the era of floppy disks.

Um, yeah, so, you know, there was a phase there.

Of course, I thought that was a big deal. I mean, I remember, just to go back on memory lane, I remember back in 1971 there was a conference at Dartmouth and all these people had these boxes, and I went looking around, what are these things? And this guy said, well, this is a minicomputer, and in 10 years everybody's going to have one in their home, you know. I'm working the Keywood Computer Center with a gigantic building with a mainframe. I said, get out of here.

Well, I've had my time in, you know, timesharing terminals, and there you go, some tapes as well. I remember those in the early days of my Exactly. In 8 years.

So you've had, you've had a whole bunch of different experiences. Have you, how many startups have you been associated with?

Probably around 4, you know, and, you know, as I became a professional, I did have an entrepreneurial itch. And so, you know, pretty soon after, you know, working for some of the larger companies like Sun and IBM, you know, I would want to, you know, get into a startup situation and, you know, eventually decided to, you know, start companies of my own as co-founders. And so there's definitely been several, some more successful than others.

That's the way it is, isn't it?

That is a way.

It's better to be lucky than to, you know, really know all that you're doing.

Yeah. So tell us a little bit about KarmaCheck. This is your current project.

It is, uh, you know, KarmaCheck is a really, you know, special company, you know, for us. We are in the background check space, um, and we're trying to help make background checks, which, uh, you know, all companies essentially run, uh, on candidates, uh, to try to make them faster and more efficient and more automated. Uh, there are a lot of manual processes behind the scenes to get those things done, and they really create these friction points for people to get to jobs and opportunities. And so we're trying to make that faster and help make the world move faster and democratize opportunity for people more. So we're doing fine.

And I take it that in your role as CEO, obviously you're running the company and moving, guiding it along as it begins to grow and take off. What is it that gets you really excited in the morning? To get you out of bed and to the office or to the computer or to the screen, or maybe the emails and email, right?

Yeah.

Well, you know, I think one of the really, you know, great gifts of being a founder entrepreneur is the fact that you have the opportunity to set the agenda for your day. You know, your destiny is mainly determined by you and what you want to do, you know, each and every given day. Whereas if maybe you're an employee, you're getting direction from your manager, supervisor, and, you know, things are, you know, well, more well-defined, shall we say. And so, you know, every morning when I wake up, I think about, you know, what's the best way that I can apply, you know, the hours during the day to furthering the business and the possibilities, you know, for our customers. And that changes, and it's a creative process to, you know, figure out the possibilities. And so I'm motivated every day to get up and, you know, start going to the computer and usually writing messages, but also thoughts. And figuring out what I should be planning for that day.

Is KarmaCheck remote or hybrid?

We are fully distributed and we started that way about 4 years ago, but we've gotten to the point now where the company is growing so much. I feel, you know, some people feel like they miss that face-to-face interaction sometimes. I do too. It can only take you so far. And so hopefully as we have pockets of people in various parts of the country, we can start to maybe have, you know, small offices where people can go in and do some work together and at least, you know, do some talking together and some brainstorming, hopefully.

Yeah, you know, I hadn't really thought about that before, but you, if you have clusters, you can, you can really have like a cluster office where people can, can come and meet and talk and work together.

Yeah, I mean, I think some people, you know, work really well independently, you know, they kind of have their own track. I'm probably one of those people who, if you left me alone, I'd still be working. But there are other types of people who, you know, they really want to have that social interaction to, you know, get them moving. And so I think, you know, being able to spend time with other workers would be really valuable.

Yeah, I'm kind of like you. The best thing that happened to me was the pandemic in terms of getting people online. And, you know, in my, I do a lot of different things. I'm an arbitrator and a mediator and a peacemaker. And before people really got used to being online, I was sort of geographically limited to mostly California and maybe, maybe Arizona and Western United States. But today my business is all over the world. Really, really interesting consequence of forcing people online. Which is pretty, pretty, pretty cool for me. I, I really enjoy that a lot. Uh, so what is it— you, you, you've been involved in some pretty big projects. What, what is it that's unique about you, you think, that you've brought to the table that has allowed you to have the success that you've had?

Well, I, I've always been kind of a, you know, multidisciplinary kind of guy, you know. I, uh, do have a training in technology. As a kid, I you know, played with computers. And so I've known technology for the longest time, you know, you know, down to the guts of the technology, you know, assembly language, you know, type stuff. You probably know that too, Doug. But I really am interested in, you know, problems that people have and applying, you know, my toolset, which often is technology, to helping to solve their problems. And then I think the third part that I think is pretty unique about me is that I am interested in business and all the kind of dynamics around that and, you know, go-to-market, you know, market sizing and, you know, understanding pain points and, you know, kind of bringing those two aspects of technology and, you know, problems and pain points in the market together. And so hopefully in the mix of all that, there are some kind of productive, you know, results, shall we say, that can be done.

You have the ability because of your technological background to recognize there are technological solutions that are possible, and then you look into the market and you say, here are problems that need to be solved. That's right. And here's how we can use technology to solve them.

That's right.

And I believe that, you you know, often understanding what is not possible is also just as important, you know, what technology cannot do, right? There are tons of problems out in the world that actually cannot be solved in a kind of enterprise, you know, even for-profit setting.

Yeah, look at what I do.

It's important to understand that too, right?

Right. I mean, I help people deal with conflict. I teach people how to de-escalate conflict. I think we're a long ways away from having technology take over people like me.

Or even AI, you know.

Yeah, I've been following the development of AI and what I don't see in any of the journalism is the fact that what separates us from all other species is that we're emotional beings. Humans have emotions. No other species have emotions other than humans and emotions are embedded as a decision-making framework in us. And because of our biological nature, and I don't think AI is ever gonna be able to replicate human emotion because emotions are so deeply embedded in the living organism called a human being. Don't think AI, I don't think it'll ever get AI to that point. But it, but so it's really interesting to, watch people think about that. So as, as a guy who's done a bunch of startups and now you're working on KarmaCheck, what are the, what are the kind of challenges that you see on a day-to-day basis that you have to deal with? The buck stops with you.

Well, you know, what I would say to that is that, you know, maybe one of the things that people don't often realize is that The technology is actually the simplest part of the problem. You know, there's a real challenge in terms of understanding, you know, what your customer needs, you know, what the market is looking for and how to, you know, bring a product to market, you know, figuring that out, you know, in any given scenario is really a trick and it takes, you know, whether it's a founder or a team, It's a lot of time to figure that out. There's a lot of experimentation, you know, to that as well. And so that is definitely something that, you know, one has to do continuously. And then I think the other thing is that in my experience as an entrepreneur and just as a kind of company owner, you realize that, you know, people are your most important assets. But they're also, you know, people are also often, you know, present challenges of themselves, right? Getting a group to work well together, you know, handling conflict, disagreements, even motivating a team and inspiring them and continuing to inspire them because the journey is often long. You know, there's some, you know, real challenges and things that you have to do along the way that, you know, keep Everybody going, especially during the thin times.

Oh yeah. Well, this show is called Listening with Leaders for a reason, because I teach listening skills, deep listening skills, and I'm always interested in other people's perspectives on listening. Tell me, tell me about listening in your career, how important it is.

Well, I value it so much.

I think listening is one of those fundamental skills As a leader, which, you know, hopefully, you know, the best leaders, I would say, listen more than they, you know, speak. There's so much information coming at you that, you know, you want to, you know, process most of that and then kind of react to it in the best way and then act. And so, you know, listening, even when either, you know, people or markets are telling you something very softly, those are often really important things that you ought to pay attention to. And so, like you said, Doug, I think cultivating a talent or skill around how to pick up on those sometimes very weak signals and interpreting them, That's right. I think that really helps as a business leader.

I tell leaders that I coach, pay attention to your introverts. You can kind of ignore your extroverts to a certain degree because they're going to make their presence known no matter what.

The introverts have a high signal-to-noise ratio, right?

When I say something, it's usually pretty loud.

Yeah. So pay attention to your introverts. And, and when I'm coaching people on how to run meetings, I say, before you make a decision, go around the room and get everybody's opinion. Don't let anybody not talk. And yeah, that's right. You'll be amazed at what you get and listen to what you listen to, what they're saying, because you'll be amazed that you've gone for hours and hours or days and days talking about this decision. And now you're coming up and you're about to make a decision and there are 5 people in the room and they haven't said a word. And you get them to start talking, and all of a sudden you realize, whoa, we almost missed the boat here, right?

And often they have perspectives, um, you know, that the extroverts, um, you know, haven't said.

That's right.

You do want to get that 360.

Um, so I'm sure you've encountered people who don't listen very well. What kinds of things do you observe around those kinds of people?

Well, honestly, first of all, we try not to have them on the team.

That's good.

To prevent problems from happening.

That's a good thing.

But, you know, I think there's, yeah, I think a matter of coaching and, you know, giving them hopefully feedback that they ought to be, you know, great listeners, you know, as well. And You know, I do come back to this idea that, you know, to listen more often than speaking is actually a valuable trait. And there's also a culture of that that you can, you know, encourage, right? So that, you know, everyone sort of has the expectation that that's what they should be doing, you know, in any given team.

I, I think part of it too is controlling your ego as the leader, where you don't need— you don't need to have to be the guy in front. You don't have to be the one talking and all the bright ideas. I mean, in chatting with you, you strike me as being a very thoughtful, quiet, um, non-egoistic leader, and that's why you're probably so successful. Uh, I've There are plenty of other people out there who are out in front and brash, and we don't need to name names, but we know who you are.

I don't know who you're talking about, Doug.

I don't think they're very effective. What's been your experience?

Well, you know, I have a personality that I do.

It's probably, you know, built into a large extent, so I kind of fall into a a certain, you know, kind of personality.

But I believe that's right.

I mean, I think there are kind of numerous studies along the way that, you know, say that the most successful leaders, you know, tend to be the ones that are, you know, not the ones that have, you know, big egos, and they really do try to, you know, listen, which is something that we talked about. And so I think those are, you know, really things that are very important. And so when we, you know, look for employees, we look for, you know, people who, you know, can perceive, you know, what others are doing and kind of encourage that culture, you know, where we're really trying to understand each other and letting the best ideas, you know, float to the top and, you know, execute on those ideas and really encourage a like a marketplace of ideas for inside the company.

Yeah, I think a long time ago I read a study that correlated serotonin levels with stock price, share price, and there was a correlation between CEOs that had high levels of serotonin, which makes them affiliative and outgoing and calm, and as opposed to low levels of serotonin, which lead to aggressive behavior. And it was just very interesting that, that there was some support for the idea that if you're calm and reach out to build relationships, that it's— that your company is going to do better than if you, you're kind of that Wall Street maverick out there trying to tell everybody how cool and good you are. Um, really interesting stuff.

I agree, I agree.

So where does KarmaCheck go from here? You've got what, it's been out for 4 years now?

Yeah, we're 4 years old now.

You know, KarmaCheck, you know, looks like a background check company today, but, you know, we really started the company, you know, with this idea that we wanted to be a digital identity platform that could really create greater trust online. And we believe it's a very timely challenge on the internet these days with so much of the misinformation that is out there and makes it so easy to meet people, but you don't know if you can really trust them. And so what we're trying to do is to kind of build this trust layer that makes it possible to interact with a lot of people in this sort of so-called global village, but have that level of trust that makes interactions more meaningful, whether it's transactions or, you know, getting a, getting a job or opening up a bank account. And so there's a lot of things that rely on trust, and we believe that if we can be this trust layer, we're going to help, you know, expand opportunities online.

Is KarmaCheck going to go in the direction where some yo-yo like me can go on and say I want to do business with X person and I can do a quick check?

That would be great.

Yeah, we, we'd love for you to be able to, you know, verify someone's qualifications and credentials. Maybe look at their blue check mark, um, if they have one, and, uh, you know, gain some degree of trust that, hey, this is a trustworthy, uh, you know, person on the other side. It's, it's almost like, uh, you know, eBay, let's say, you expanded, you know, plus plus, you know, going beyond just the marketplace, right?

So because when I looked at the platform now, it looks like it's primarily directed towards employers more than anybody else.

Yeah, yeah.

And that's the main use case today around background checks. And so, you know, so many businesses use background checks to help with this, but that's certainly not where we want to finish up. We have some secret plans to go beyond those, but it's a great place to start and lots of opportunities even there.

So how is artificial intelligence going to affect the business?

Well, artificial intelligence is one of these things that I'm really excited about.

You know, I think a lot of people talk about, you know, artificial, you know, general intelligence, you know, AI that, you know, mimics what a human can do. But I, I tend to think about AI in terms of so many different areas where you can apply that technology to make things more efficient, smarter, certainly, but in, in all different diverse ways of application. And so I feel like AI is going to permeate the technology landscape and therefore what we do as a society, you know, everywhere. And in our own business, there are processes that can really benefit from, you know, AI. You know, they could be done, you know, faster and more efficiently. And we even see numerous places where AI we could apply in our own domain-specific way and make things go better. So I'm really excited over the next couple years to really explore that. I hope we'll kind of be this hybrid AI, you know, technology, you know, base in our product, and that we'll be able to, you know, really create some, you know, great features and functionality for our customers out there.

AI just reminds me how fast change occurs. I teach a graduate class in decision-making under stress and conflict at the Straus Institute of Dispute Resolution at Pepperdine University, and I teach a winter intensive. And this year, for the very first time in 20 years, I, in my syllabus, I had to put in a statement about AI usage, whether or not you use ChatGPT, for example. And I, I decided, hey, use it, um, just recognize its limitations, because the students, when they're writing papers, they're going to use it whether I say they can or not, right? Might as well just give them permission, um, but But I wouldn't have even conceived of that a year ago. And here we are today in a completely different world. It's just, it's mind-boggling. It's exciting. As you say, it's exciting to sit out there and watch this technology develop. And there are people have a lot of fears, which are probably legitimate, but still it's remarkable to see how it is going to change our society in so many ways.

5 years from now, I think the, the tools, the technology that we have is gonna look, um, so much unlike what we have today, right? And it's going to be mind-blowing. Um, you won't even be able to imagine it. I know, exciting part of it.

Crazy. I got one last question for you and then I'll let you go. What's— Eric, what's one thing about you that we wouldn't know? Unless you revealed it to us?

Oh, you know, I, you know, I, at the end of the day, you know, one of the things that I do to calm myself down, you know, so I can get some good rest for the next day is I watch Korean dramas. And so really?

Yeah. Yeah.

So you would, you know, think that those are just, you know, in the providence of teenagers. But Uh, no, it's great. It's great. It's very soothing and relaxing and gets my mind off work. So there you go. And that's surprising, right?

That's interesting.

And do you speak— obviously you speak and you're fluent in Korean?

No, no, I'm—

I, I don't speak Korean at all, but maybe I can pick up a word here or there by watching the dramas.

But you're just— you're getting it?

I just watched the subtitles.

Oh, it's mostly really interesting. I've never heard anything like that.

You asked for it, Doug. Absolutely.

Well, you know, I'll reveal I pick up— I play jazz violin. So every evening, 5 o'clock, computer goes off, violin gets picked up, and an hour of jazz.

Very soothing, I'm sure.

Absolutely. Well, Eric, it's been a great pleasure having this conversation with you. Thank you so much for your time.

Thank you, Doug.

Doug Noll here. Thank you so much for listening to Listening with Leaders. If you are a successful executive leader who would like to be on this program, please visit podcast.dougnull.com/podcast. If you got something out of this interview, would you please share this episode on social media? Just do a quick screenshot with your phone and text it to a friend or post it on the socials. If you know someone that would be a great guest, tag them on the social media to let them know about the show and include the hashtag #ListeningWithLeaders. I love seeing your posts and guest suggestions. We are regularly putting out new episodes and content. To make sure you don't miss any episodes, go ahead and subscribe. Your thumbs up ratings and reviews go a long way to help promote the show and mean a lot to me me and my team. Want to know more? Go to my website, DougNoll.com, or follow me on LinkedIn, Facebook, and Instagram. That's @DouglasEnoll. Thanks for listening, and we'll see you on the next show.