Max Shapiro | Youngest NBA Scout in History, How Tech is Disrupting the Labor Force

 

Max Shapiro  4:23  

Right so so one of the players for the Hawks took a liking to me and his name is jack McMahon, and he was a starting guard on the Hawks NBA championship team. He went on to coach to Cincinnati Royals, and then in 1967, he became the general manager and coach the San Diego rockets. And he asked me to move to San Diego and be as chief scout I go into some of his training camps in Cincinnati. He liked the way I evaluated talent and and I got to move to California and work for an NBA team.

 

John Corcoran  4:51  

Wow. And how did you evaluate talent? What were the metrics back then?

 

Max Shapiro  4:56  

You know, someone once said, if we knew what was in the head in the heart, we’d be scouts You know, that’s that’s the challenge to know what kind of drive a person has has in their, their character and how much they want to succeed. You know, you’re always looking for speed and strength and quickness and, and accomplishments but you know, what’s more important than that, you know, many, many times is, is how much a person really wants to work and how how how hard they will work and you know, one of the best players ever play the game Steph Curry is you know, is a workaholic during the season, offseason, the end of practice spending hours on the shooting So, you know, finding guys like that is is a challenge.

 

John Corcoran  5:36  

Yeah. And so you were an entrepreneur at heart because at the same time you’re doing this, you also build a company producing sports camps for kids and basketball fantasy camps for adults as well and you partnered with some really big names in sports. Tell us a little bit about that experience.

 

Max Shapiro  5:54  

I was very fortunate to to work with john wooden who was the the late great, UCLA Coach while he was coaching at UCLA and after he retired, we did kids can’t kid camps for many years basketball youth camps. And then I also partnered with Bill Sharman, who was coaching the Lakers at the time, Pat Riley Magic Johnson, Don Nelson up here with the warriors and others. And then I was subsequently I was partners with several major league teams putting on baseball fantasy camps that recreated the major league spring training experience or work with the giants and the Dodgers and with Mickey Mantle and Whitey Ford with it with the Yankees. And that was that was just really a blast. And, most importantly, in what I did in that sports camp in the fantasy campus was having the opportunity to get to know and spend a lot of time with john wooden who was as close to a saint as anybody and I know sometimes you know, you meet famous people and they’re not what they’re cracked up to be. But he was everything he was cracked up to be and more just a very special human being.

 

John Corcoran  6:53  

Yeah, and I actually met him once my younger brother, who was a basketball player in high school, went to one of his camps, and maybe we overlapped back then

 

Max Shapiro  7:01  

we might have Yeah, it was it was I’m sure you enjoyed it and learned a lot.

 

John Corcoran  7:05  

Yeah. And my business partner Jeremy is always quoting john wooden all the time. Huge fan of his wisdom, but what was it like, you know, getting to know these iconic figures? You know, I’m sure you know, Mickey Mantle Willie Mays Pat Riley Well, it wasn’t like kind of interacting with all of them, working with them getting to know them.

 

Max Shapiro  7:25  

They were all you know, they were all very different. I mean, Mickey Mantle said if he didn’t know he was going to live as long as he did, he would have taken better care of himself. And he was you know, he was a party guy, Pat Riley. I met when he was a rookie with the San Diego rockets and saw him develop into a great coach and general managers through his hard work. You know, getting the Magic Johnson we did his first camp when he was just 19 years old, and he had just about a month before the camp started had had led the Lakers to a championship victory over Philadelphia and spoken before the game, you know, he said he was so relaxed and said hello to everybody back Coleman, East Lansing, Michigan when he got to the camp, at Sunday afternoon, he was going out to talk to the 300 Kids assembled and he said, What am I saying I’ve never done this before he was nervous. Because that was a new experience for him. Now he’s obviously a very accomplished speaker, and very successful business person and a wonderful guy.

 

John Corcoran  8:18  

Wow, what a cool experience. That was. Are there any similarities to you know, what you do today with recruiting for tech companies and and recruit what you did recruiting within the NBA?

 

Max Shapiro  8:31  

There is I mean, you know, what we’re looking for is that proverbial needle in the haystack and I’ll give an example when in 1967 or 68, I was scouting a Christmas tournament at Madison Square Garden and and one of the teams was University of Massachusetts. And they had a sophomore and their team that no one had ever heard of, because no one because you know, there wasn’t social media. There weren’t you know, there, two magazines that listed all the schedules and scouts put their schedules together for the year in terms of knowing who someone was In high school or their freshman year, because back then freshman couldn’t play in the varsity, not many people knew about anybody. And there was this guy playing for the University of Massachusetts who found out early in the third quarter, he had about 13 points and eight rebounds, and five or six assists. But he was like this amazing, amazing player, and he was just head and shoulders above everybody else. His name is Julius Erving. Wow, Jay, and nobody, nobody knew about it. And so it’s sort of like, you know, when you’re recruiting, and you’re looking for somebody great, you see some mediocre people, and then you see some good people. And then all of a sudden, there’s somebody who was like, Whoa, this is the perfect candidate for this client. You know, he’s just I can’t believe that he or she is, is here and interested in available and that that’s the exciting part about recruiting.

 

John Corcoran  9:44  

Yeah, that’s so cool. So let’s flash forward some years and you’re running a company that exports Levi’s jeans abroad?

 

Max Shapiro  9:54  

Correct? Correct? Yeah, correct. My my brothers in the metal recycling business in St. Louis, and At the time he was buying, buying cans to be recycled by by Anheuser Busch because their base their friendly has said there’s somebody buying us Levi’s and Phoenix 10,000 per month you know why don’t you look into that because at the time, I was looking for something new to do and so in 1992 we started American recycle were also called Green for jeans here in the Bay Area and in our heyday, we were exporting 10,000 pair to 20,000 pairs of us Levi’s a month. We actually bought one pair of 75 year old Levi’s that have never been worn for $10,500 and went to went to Japan and I created a denim auction with a with an auction house and we put them up for bid for $21,000 and there was one bidder and bid the opening price. So we you know we sold a pair of jeans for $21,000. This guy had a head of head of us denim store and vintage denim store and he was this was a basically a trophy for him. You could put it up on the wall and said these are the oldest most expensive Levi’s Made in America ever.

 

John Corcoran  11:02  

Wow. Wow. So they were so you were exporting them and people were buying them for big prices overseas just

 

Max Shapiro  11:09  

just Japanese for the big prices. Most people recently usually by business existed back in the 90s is that a pair of five old ones back then here would cost $30. But Levi’s marketing wise positioned themselves as the American gene. So if you were in Barcelona or Bangkok or London, you might have to pay $80 for a new pair. When you get him to put 30 here and then people, a lot of people wanted a worn, faded look. And so we were able to we have 75 stores throughout the San Francisco Bay Area, mom and pop stores buying for us and we pick the genes up and refurbish them in Washington clean them and and send them overseas.

 

John Corcoran  11:46  

Wow, that’s so cool. And so right around the time you didn’t know this at the time because this is 99 or so when you exit that business and 2000 is when you start, you decide you know what I’m going to start New new business and a new industry. You probably didn’t know at the time that it would be an epically hard time to start a business, especially in the tech industry. But what is it like starting a staffing business? And then middle of the.com crisis?

 

Max Shapiro  12:13  

Well, we were we were fortunate john, we actually got in about a year and a half before that, before the bus hit big time. So the first year and a half, it was easy to make a lot of money because it was still like a gold rush and recruiters weren’t. There were clients that we work for that asked if we interviewed our candidates before and if we knew them, and of course we did. But there were other recruiters who were just getting resumes off of back then off of fax machines and, and sending them into it to companies so that they got credit for him if they hired him. So but it went from, you know, just a complete boom to a complete bust. And in 2002, I joined the karatsu forum, which is the world’s largest Angel organization and companies were coming looking for about a half million dollars and they were software companies primarily. And what they were going to do with the money is either hire salespeople, or hire some developers to finish their, their software. And, you know, we said, we were reluctant to invest. And we said, you know, if you if you had those people on board, we’d be more likely to, to invest in your company. And they said, Hello, why do you think we’re here? How are we going to hire those people without any cash and the light bulb went off, and I thought maybe some people would work for options only for three months or so. And, and, and they did. So. It was, you know, we call it employees without paychecks. And we were able to help some companies, you know, move further along. And if the companies got funded, and the people started getting paid, and some of them did, some of them didn’t. We still have that model. And I say it makes us the most unique recruiting firm in the world. But it’s, you know, it’s just about 20% of our business now falls in that employs category and employs that paychecks category and the rest were working for companies. That are further long we can pay people from day one, the old fashioned American way.

 

John Corcoran  14:04  

As an American with and you, I assume you weren’t being paid either. So you were also rolling the dice and hoping to get paid if the three months.

 

Max Shapiro  14:14  

Right? Yeah, we Yeah, we took a small fee if we were successful in finding somebody that would work without a paycheck, but the bulk of our fee was not paid until the company had enough money to put Joe or Susie on the payroll.

 

John Corcoran  14:27  

Got it. Okay, good. So, you know, it’s been quite some time 818 years or so now since you founded the business. And, you know, I imagine it’s been through some ups and downs as the Bay Area economy has changed over the years. What are some of the ways in which the businesses business is different today from the way it was 18 years ago?

 

Max Shapiro  14:50  

Yeah, I mean, it’s things have changed so much, you know, you know, I live in Marin County over the Golden Gate Bridge and used to have to go down to Silicon Valley to three times a week, which is a long trek, but you know, starting about seven years ago, and when the cloud came into being and open source source software, which cost the company maybe $50,000 to start versus, you know, 500,000 before things changed in, you know, everything moved up to the city because most of the people doing the startups were young and young, particularly young, single men and women, you know, don’t want to live in Palo Alto or Sunnyvale where they, you know, they roll the streets up at 830 at night. So, you know, they could be anywhere in the Bay Area and invest the boom in the city and the crazy real estate prices that we’re experiencing, not only here, but in the valley as well. But as a result of that, you know, the high tech became centered a lot more in the city of San Francisco versus Silicon Valley. And it saved me a lot of time. To be able to work in the city is exciting.

 

John Corcoran  15:52  

Yeah, but at the same time now, I know a significant impact is You know, in San Francisco in particular, it’s so expensive. The Bay Area is so expensive, that a lot of companies are, they’re outsourcing, they’re getting labor overseas or they’re getting engineering talent and in other countries, how’s that affected things for you?

 

Max Shapiro  16:16  

Well, you know, I mean, that’s, that’s very true. And it’s very important. You know that it is too expensive to pay programmers developers here unless you’re, you know, someone like a, you know, Facebook or Google or LinkedIn or some of the, some of the big unicorns. And so people are outsourcing but they’re not just outsourcing overseas, they’re outsourcing to other parts of the country and we have clients having all their their development done in in, in Jacksonville, Florida, because there’s a great Computer Science program in Florida or Florida State there. And, you know, all over the country. It’s it’s less expensive than here we have a client that we found the Chief Technology Officer for who asked us to find him some developers in other cities and You know, in Austin or Portland or Denver, it’s about $30,000 less per developer than it is here in the Bay Area. And people aren’t moving here as readily as they were before because of the, you know, the housing crisis, which means super, super high rents.

 

John Corcoran  17:16  

Right. You know, I interviewed another guests yesterday, Joe Riley is the founder and CEO of senseo, which is a software company that is helping to eliminate bias in the workforce. And one of her premises is that there’s a lot of bias in hiring. For example, She said, you know, we tend to favor Ivy League and male and Caucasian sounding names and people worked for a fortune 100 company, but she said the reality is that that’s not really reflective of chances of success and who was really successful. What are some of your thoughts on on that and having been in the recruiting business for a lot of years and, you know, how much is that a factor and How do you adjust for that adjust for your clients expectations. Maybe the client says, I want Ivy League I want you know, for someone to work for a fortune 100 company and yet you find a talented candidate who doesn’t have those things on the resume but you just know they’re right for the job.

 

Max Shapiro  18:16  

Yeah, I mean, it’s clearly a challenge. We I understand why people want to hire smart people but just because you’re smart doesn’t mean you’re going to be successful. I had hired two salespeople for me in a in another sports related business about 30 years ago and one was a graduate at Chico State in the other had a degree from Cal and and the guy from Chico State had all this drive he may not have been as smart as the guy who graduated Cal but he was much more successful. So certainly intelligence is something that you have to factor in but but you know, what’s what’s also most important is you know, what does a person actually accomplished in their last job or last three or four jobs that’s that’s a better indicator than then what school they went to her how many degrees they have.

 

John Corcoran  18:56  

Yeah, how do you see new tech melodies coming along like AI affecting the labor market. You know, there’s like, as we record this, we’re in October of 20 2019. And one of the right not to get political here. But one of the rising political candidates right now presidential candidates is Andrew Yang, who’s going out and saying we’re going to have such disruption in the workforce, that we need to have a minimum payment to people. Do you think that AI is going to come along and really disrupt the market? Are you seeing that sort of thing happening already?

 

Max Shapiro  19:36  

Or no, I’m seeing a lot of companies throw around AI and you know, ml machine learning and it certainly is having impact. I mean, I just I just scheduled a phone call with someone who said, you know, let me have my AI virtual assistant, get back to you. And sure enough, that was software. It wasn’t it wasn’t like use calendly or anything like

 

John Corcoran  19:55  

Yeah, yeah, I’ve seen that before. Yeah,

 

Max Shapiro  19:58  

yeah. And it’s I mean, it’s, it’s

 

Who knows what’s what’s going to happen but it’s it’s a little scary and you know, if you think about all the autonomous cars which now everyone’s saying and take couple more years than what they had been saying, and all the people are going to be out of work, it’s you know, there’s there’s going to be certainly still going to be some major challenges for our society for the for the workforce.

 

John Corcoran  20:20  

Yeah. Let’s go more exciting though to what are you excited about what changes in the workforce and the tech community are you saying that you’re excited about?

 

Max Shapiro  20:30  

Well, when I would really his his is going crazy now is CBD and hemp and cannabis. I mean, two years ago, there was more money spent on on cannabis. Before it was legal recreationally in California, there was more money spent in 2017 on cannabis than there was and McDonald’s and Starbucks combined. So this market is growing exponentially. There are a lot of publicly traded companies almost all of whom are in in the Canada, we’re way behind the eight ball but we just started doing recruiting for some cannabis related companies. We just placed three people in a hemp biotech company in Denver and it’s growing I mean to think that you know, you can get CBD now and at CVS and Bed Bath and Beyond on what imagine that could have happened and how that’s going to affect, you know, so many different industries, you know, including pharmaceuticals. So it’s, I see that, you know, as a major change, and I think they’ll be recreational cannabis will be passed by in all 50 states, you know, in time within the next couple of years. So that’s, that’s growing like crazy. And, you know, there’s just so many different ideas. I, I I just love seeing all the all the new ideas coming up, whether it’s in, in biotech, or whether it’s in SAS, or our apps, so many different things.

 

John Corcoran  21:54  

Yeah. I want to ask you about one of your other companies you’re involved with. You’re the founder of Pitch force, which gives startup founders and CEOs a platform to network and you have weekly events in San Francisco and Silicon Valley, I’m always interested to know how people combine their vocation with some kind of outside involvement or activity or something like that, which is which complements the work that they do. So why did you I have an idea why you founded that organization, but why did you found that organization and what role has it played in your career?

 

Max Shapiro  22:35  

So we started a pitch for us to give companies an opportunity to pitch to panels of investors representing different Angel groups. So whether it’s the correct some form of the band of angels or Harvard angels, Sandhill angels of angels, there are companies that are looking for half a million to 1.5 for seed or Angel round, gives them an opportunity to pitch to these investors and hopefully, hopefully they get invited Then present to that group. And many of those companies are interested in our services. So pitch force is a great business development tool for people connect, but at the same time, it’s it gives these companies a great opportunity to get feedback from really savvy angel investors, the companies that present get get four minutes of non rebuttal feedback, which they videotape and they learn a lot and hopefully they’re, you know, they’re invited to pitch that group, but if they’re not, they’ve learned and a lot of them will work on their pitches and, and and pivoted and come back and if they didn’t do very well, the first time do a lot better the next time. So it’s a it’s a really unique opportunity. It’s it’s run differently than any other pitch event I’ve ever seen in that we have. When people attend the event. We give them five fake $1 million bills. But with their money, we have 10 companies and only the top five, get to do their full pitch will actually the bottom five get a chance to do a full pitch because we could they have a one minute elevator pitch pitch off with No notes in the panel pics of six company. And so it is a real world aspect to it of you know you’re competing for the opportunity to pitch to these angels.

 

John Corcoran  24:09  

Yeah, it’s fun. I’ve been to events like that before. And it’s interesting to see people on the fly. And just like you when you first saw Dr. J, right? Every time something comes through, and it’s just like, boom, wow, that’s going to be a huge idea. Yes. Yeah, that’s exciting. Well, I want to wrap things up with the question that I always asked, which is, Max, thank you so much for your time. And I would like to ask you if we were at an awards banquet, like the Oscars of the Emmys and you are saving Award for Lifetime Achievement. You know, in addition to our family and friends who everyone acknowledges that’s totally cool, but who else who are the other mentors, business partners, peers, coaches, who you would acknowledge in your remarks.

 

Max Shapiro  24:51  

Um, you know, Coach john wooden who I mentioned before, very special human being. George raveling, who’s a longtime back basketball coach who, who asked me when I was scouting at the end of a conversation, he said, Is there anything I can do for you? Which, which is a great question, you know, thinking about other people, and that was very impactful. And, you know, Coach coaches like that people who, who I’ve met through my contacts in the angel world where I’ve learned a lot about technology and investing some very, very wise people. And I would say those, those are the people that you know, other than other than family and friends and you know, my mother teaching me that, you know, ask somebody for something the worst they can say as know, which is, you know, which is a pretty pretty, very, very sound advice and very helpful. Yeah, and, and then jack McMahon, the guy who was the player and coaching the general manager at the San Diego rockets, who gave me my break. I learned a lot from him about about how hard work and in the NBA.

 

John Corcoran  25:55  

Excellent Max, thank you so much people connect staffing. com Pitch dash force calm or to have your websites anywhere else people can go to learn more about you and the work that you do.

 

Max Shapiro  26:07  

And those are those are the best spots john.

 

John Corcoran  26:09  

Excellent. Alright, thanks so much.

 

Unknown Speaker  26:11  

Thank you.

 

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