50Skills Revenue (2024)

hello everyone my guest today is christian christensen he's the ceo and co-founder of a company called 50skills.com which is transforming the way businesses find and hire people christian are you ready to take us to the top sure all right tell us more about the company what do you guys do and how do you make money yeah so in a nutshell uh 50 skills is our recruiting software uh what we do which is a little bit uh different from other recruiting software's out there is that we connect directly with messaging platforms so companies using facebook workplace using slack it integrates directly with those and kind of changes the way people think about recruiting um in a way that we call conversational recruiting which is a new trend that's happening in the market and is it a sas model or is it you know ten percent of first year salary kind of kind of set up it's a sas model so companies are paying typically 12 months in advance uh for subscription of the service uh and then there's an optional integration fee so a lot of the companies use the software also to onboard new candidates uh so it can be for different types of software they have it can be checklists of things that they want to occur um so there can be custom integrations on top of the sas like subscription part but that's completely optional for the companies and something that more of the larger enterprises are going for and why would somebody pay a little verse a lot more in other words are they buying like a bulk number of placements per year or what drives the pricing economics no so we uh we have a tier based pricing model and it's based on the number of employees that the company has so it's not based on the number of users they have and in fact we actually want to encourage the company to add as many users as they can uh and not like not be diminished or having to pay a higher price if they add more users to the platform got it okay good so it's okay how does that work though for i mean i imagine you have more costs if you obviously place more jobs how do you keep pricing i mean what what allows you to drive pricing up higher yeah so you dropped a little bit out there when that during that question i'm just saying if you don't if you don't drive expansion revenue based off number of new placements what does drive expansion revenue that seems to be like the core utility value of your product so the the number of employees that the company has employed is what drives up the the price of the of the of the software and the reason why it's also you think about why is the price higher et cetera there's a number of things like one of them is that the software helps the companies uh hire through referrals so basically whenever you build a job you can add rewards to it you can incentivize all of the employees within the company to reach out uh into their social networks so basically the more um people you have working for you the more people you have optional to source candidates so that's one of the art the other is that we we have really a great support team we put a lot of effort into the support making sure that the customer is really happy um and so the effort is a little bit higher on our end at the if the company is larger got it okay makes sense but but someone could have a thousand person team they use your tool and it doesn't lead to any new recruits for whatever reason you're still going to price based off team size not number of new recruits yeah yeah we do a baseline says the company and we do have clients that have thousands of employees that are using the system they have different departments and they do use in a different way but overall it's a great offering in comparison to whatever else is out there and are you selling one time to like the you know hr lead or are you selling into these individual departments kind of an atlanta expand approach it really depends on the size of the company how we do it we have clients ranging from smaller startups into larger enterprises and the sales process and how you do that really depends on how they're structured who's making that buying decision and what happens there you also have companies that have a really different types of turnovers so like in the hospitality tourism types of companies they typically have a higher turnover or seasonal turnover um and and the hiring process is different there from companies that maybe have you know people stay there for 10 years and don't don't move the job afterwards and and i don't want to go down every customer code i'm sure you have many and you break them up but on average what would you say when these customers is paying you per month yeah so typically our price again the pricing is based on number employees so it's clients are typically paying somewhere between uh a hundred to three thousand dollars a month for services got it okay good i mean that's that's a pretty big range are you more enterprise at three thousand a month or more more s b at 100 a month yeah the 100 is more like the the smaller startups that are using it for their highers but most clients are closer to the maybe 500 uh to 5 000 employee range so that's our target market but we've gotten a lot of interest from smaller startups that just raised funding uh growing fast they'd love to use slack love to use workplace and they really want to integrate perfectly with that so we've gotten a lot of like inbound leads for that kind of stuff although our focus has been more on the 500 5k i'm just trying to get out so a more accurate average might be closer to 3 000 than 100 bucks a month yes that's your focus going forward is more enterprise the smb stuff is just coming on no touch and you're you're handling that as it comes on yeah yeah okay very good give me more the back story here when did you launch the company so company's about two years old uh with our kind of reaching out of beta in october last year and since then we've been growing pretty fast okay and what's pretty fast as i said going going just to be clear going from a dollar to two dollars is 100 growth many would call that very fast who are doing currently 100 million in revenue so it doesn't mean much when you say growing fast yeah yeah i mean on the i in instead of disclosing the the customer amounts that we have we're at about 30 growth rate per month right now okay again it doesn't it doesn't yeah i always wonder why founders especially ones that are young say that because it doesn't mean much again if you're going from a dollar to two dollars it means much more when you know these ceos come on doing 100 million in revenue and say hey we've figured out a way to stabilize around 30 to 40 year over year growth so um we'll move on past that uh i just i want to call that out because i have to obviously be fair that way walk me through your first few customers that you got how did you get them did you come from an agency and you brought them on where'd you get them yeah um the first customer that we got on board was just through our networks we just used referrals we looked at companies that we knew that were growing you know kind of you know some kids just begging them to try the software just to you know help us build it out and once that started out we got some great feedback we were able to iterate uh once that happens we had some word of mouth happening and then we tried a few different strategies so currently there's like three things that we do if i find clients in the b2b space one of them is just uh with outbound leads that we look at sources of what's a good trigger mechanism for us to reach other companies and there are a few in the hiring space that we've we've tried out that's worked you know in a in a decent manner the the other two is uh we used uh resellers a lot so we've actually uh gone out found resellers that have a great network and then we've used them to to find candidates that are a good source like to find leads that that kind of fit the criteria and they have their own kind of network scenarios that they operate why do they take time to help you though you must incentivize them somehow yeah they're incentivized to help us either as uh so it's a little bit different it's an incentive model as a percentage of the revenues that we make like a traditional kind of value-added reseller model yeah okay very good and do you by the way do you limit that or is it in perpetuity in other words if someone's if they bring you someone that pays you every month do you pay them in perpetuity or just for the first year or just for the first month or what we have a structure and all the revenues that they bring in from the clients uh it typically works on a 12-month basis like all the revenue they bring in all that period but there's different types of structures that we have depending on what kind of like a reseller partner we're working with yeah i know i asked that question a lot of the sas ceos will do on a you know a kickback like that in perpetuity which essentially locks your margins into much lower margins than what you'd see versus if you just do it for 12 months at least you have some margin gains after the first 12 months pass right yeah um interesting okay good and then um walk me through team size today how many of you guys are there and where are you based yeah so our our team is is relatively lean right now we're five people full time but then we have a few entities that are working with us in some of the integrations as backup and these are just kind of really high scalable ones but like five people working full-time just on the product core part of it okay um we have the the resellers worldwide uh which are now a few dozen um so it's a it's a decent sized team but uh yeah where is your team where is your team based we have offices in iceland and in boston okay good so iceland and boston good and i are you from iceland i am yes okay good is there any strategic value to having people over there like lower cost of capital or some specialized skill i think the one of the main values of having growing the company's iceland is that the company the country is generally uh heterogeneous so when you have new things you're testing them out it's really easy to do experiments and get a good feeling if what you're doing is working or not um and one of the previous companies that was well was with what's called uh maniga still it's a one of europe's fintech white label leaders um and they did the exact thing there so when we grew that company out we had a great experience what we've done in iceland that we were able to replicate some of those things in different places in europe i see very good okay so five folks iceland boston and have you bootstrapped this thing or race capital uh it's bootstrapped and and and self-funded by the by the team uh we've had some investors that have shown interest in coming on board we've gotten like some some small injunction from angels that we were uh interested about taking on but we decided not to do it and we're still bootstrapped and uh we don't really require the funding for our growth parts that's great i love that i love it so casual positive today then you have to be yeah unless unless you're putting more money in yourself every month yeah no it's completely customizable that's great and what have you scaled to two years and how many customers are you serving uh we don't disclose the number of clients that we have is that because it's really low uh no we just don't disclose it it's just a policy that we have we discussed it a number of times like what what are the kind of stuff that we want to put out there uh and currently uh we decided there's a team that we don't put those numbers out officially yeah everyone discusses this so it's a viable lesson so instead of revealing the number walk me through the thought process you obviously said it's strategic to put it out for this reason and someone else said it's not strategic for this reason and then not strategics one so walk me through the thought process yeah there's a number of things i think you know as a company you're always thinking about what is the type of value that when you're bringing to when you're kind of talking about your company and marketing and etc and i think our focus has wanted to be to talk about the service that we provide the problems that we're solving those sorts of things rather than putting the focus exactly on the types of number of clients that we have revenues so people can basically put in a spreadsheet and try to figure out where we are how big we are and use that numbers uh against for whatever reason so that's one of the like the arguments kind of back and forth on these things obviously it's great if you can come out and you can say we have 10 000 clients why would that be why would that be great sorry why would that be great to mention the number of clients that you have yeah why would it be great to come out and say we have 10 here you know we have 10 000 customers blah blah blah i think for a lot of people um in the buying process they're often looking for validation that the the what they're looking at is something that other people have bought before it might be in the same verticals that they're in uh yeah this is human nature by the way right group think yeah i think that i think that's probably a big thing so if you see the science somewhere saying with a number one thing whatever people tend to be excited about it well that's a little more vague than actually naming it like saying how many customers right so you don't have that validation right does that concern you uh we're official about being live in more than six countries right now but it doesn't matter if no one's using it right there's no one that's gonna if someone's gonna pay you a thirty or fifty or sixty thousand dollar annual fee they're gonna we're gonna wanna know that other people are already doing it how do you overcome that how do you overcome if you choose not to disclose customer numbers how do you overcome that objection i think it's uh one of the part when people ask about the specific numbers we're open about talking about specific clients showing what we're doing with different types of clients offering customer testimonials that kind of stuff offering them in calls for clients if they want to do that so it's not necessarily about disclosing the number i didn't have private talk with companies that we're talking with it's a little bit different but when you're doing it like officially in some like marketing you know thing online so i think there's two different sides of when you're doing it if you want to disclose it or not got it makes good sense okay so you're currently obviously five people you know selling these things between anywhere between a hundred bucks up to three thousand bucks per month um walk me through acquiring customers you mentioned some you know you value added re-channel uh reseller channels the kickbacks there do you do any direct paid stuff and if so how do you how do you interpret things like cac and payback period yeah i mean for us we kind of have the typical um kind of cac lifetime value formulas that we have we want our the cost that it costs to take a fine on to be at least times three in the lifetime value that we get back we prefer that to happen over a 12-month period but of course if it can happen over three years kind of like the benchmark uh we only launched like out of beta and wait wait hold on sorry if your payback period is three years you have serious cash gap issues that you you wouldn't survive doing that you know the lifetimes of the customer acquisition cost that we're looking at we're looking at that we want to get at least the time three out of the whole whole lifetime period oh i see so 36 month ltv is what you assume exactly yeah yeah so i mean that's the benchmark but again we launched the product the official one in october last year we're growing pretty fast right now so it's difficult to say some of the things our churn is really low we have less than a one percent churn in total well what hold on that can be a lot of that can mean a lot of things does that gross logo churn or net logo churn or revenue churn uh customer customer uh customers stop using the service journey the number of clients journeying so it's a low budget it's a logo churn yeah and is that monthly or annually uh that's monthly monthly okay good and is that growth or gross or net uh not so what's this yeah so it's not like the number of clients that i've quit in total monthly right now it's less than one percent yeah yeah i want i want to understand as if that's gross or not so in a given month if you add 100 customers and lose 50 you'd be net positive 50 but if you did on a gross basis you just look at the 50 lost relative to your entire entire base so the question is are you adding back in that given month the new signups or is that just a gross number uh no it's the net part it is the net okay good so gross is probably higher obviously higher than one percent yeah okay um uh got it and when people do leave why do they choose to leave um there's been actually some interesting reasons um like not that's bad for the company like one of the reasons that's paid that a company was had a merger like it was it was required and they just you know the company that acquired them had a different tool set so there's um so there wasn't a need for them to use it anymore there's still dialogues if the new company that they're acquired with we should take it on but we count that as churn uh another reason is like it's a startup they finished all their hires they didn't see any growth coming up so they didn't feel like they would need it for a longer period so that's the kind of reasons that's been there um but uh we haven't really had any like we're unhappy with the service we want to quit um you know there's nothing that's indicated that we need to do better on those parts that's come along so far at least not in the quantity that we've taken it seriously yep very good christian let's wrap up here with the famous five number one what's your favorite business book um my favorite business book probably right now is the tool of titans i just like the whole overview of things that they put in there and a lot of kind of great book sources that they have to focus to send out number two is there a ceo you're following or studying right now a ton of them uh i'm gonna name one yeah yeah i think david council from drift is a big one right now yeah up there in boston as well number three what's your favorite online tool for building a business besides drift uh great question um i'd say intercom facebook messenger there's a lot of cool stuff happening with those right now as well number four how many hours of sleep to get every night uh seven seven okay and what's your situation married single kiddos uh married and got a six-year-old as well oh good good and how old are you uh 33 33 last question why do you wish your 20 year old self knew uh that's a great question uh start building a startup as early as you can and learn from the mistakes and do it again guys there you have it start a company faster from christian again launch this thing in iceland now is a team of five people really focused on helping your current team members right recruit and bring on new folks right really really make the onboarding a process frictionless also set up incentive and reward structures for referrals and things of that nature bootstrapped which i love again has new customers coming on paying anywhere between 100 bucks a month all the way up to 3000 bucks a month usually on annual uh contracts one percent customer logo churn that's a net monthly number willing to spend up to 12 months of cac in order to get the customer so 12 month payback period assuming a minimum lifetime value of about 36 months founded in 2016. christian thank you for taking us to the top thank you for the good time have a good one