How Clipdrop.io Launched a One-Way Video Interview Platform with 10 Paying Customers Bootstrapped from Day One (Interview with CEO Jonnathan Koch)

Introduction and Overview of Jonnathan's Three Companies

Nathan Latka

00:00Hey, folks. My guest today is Jonnathan Koch. He's a founding member of Talent Genie and Talent Scraper along with clipdrop.io. His latest venture aims to turn the one way video interview software industry on its head by exploring multiple ways to use video in the talent acquisition space. Jonnathan, you ready to take

00:14us to the top?

Jonnathan Koch

00:15>> Absolutely.

Which Company Has the Most Revenue

Nathan Latka

00:16Alright. So just to be clear, you've got three companies, which one has the most revenue? Is it Clipdrop?

Jonnathan Koch

00:22>> At the moment, no. Clipdrop is probably the most promising project that we worked on. Talent Genie is probably the one with the greatest revenue at this point in time globally.

Talent Genie: Applicant Tracking System and Business Model

Nathan Latka

00:31So what is Talent Genie? How do you make money there?

Jonnathan Koch

00:33>> Well, Talent Genie is an applicant tracking system. It's a system designed basically to track your recruitment process. We integrated two and a half thousand job boards around the world. So Monster, for instance, would be a job board and effectively integrating to the likes of social media like LinkedIn, Pinterest, Twitter, etc, all for talent acquisition purposes to attract talent. And then we use AI to try and process the applications as they're coming in and effectively screen the

01:01>> candidates as they're coming in.

Nathan Latka

01:03And what's the business model over there? Is it SaaS or typical recruitment fee or what?

Jonnathan Koch

01:07>> It's a SaaS model, but the go to market strategy is slightly different to a traditional SaaS model. It's more sort of like a one on one communication that leads to client attraction as opposed to clients coming to find you, which is the traditional SaaS model from what we've experienced. But yeah, it's a good business. I think that it's got some decent clients globally. I think about 1,500 clients globally now, which is obviously

Nathan Latka

01:42Sorry, how many globally?

Jonnathan Koch

01:44>> About 1,500 companies globally using it.

Nathan Latka

01:47Oh, wow. And what do they pay you per month on average to use the tool for their ATS?

Jonnathan Koch

01:52>> It will depend on what's being done. So it's customizable. So, I mean, we could build a whole lot of different components into it to basically cater for a need, whatever the need might be. Effectively, you know, it could be as low as, let's say, you know, $50 to $100 and as high as $200 a user depending on what needs to be done.

Nathan Latka

02:14Well, is a user is not a customer though, right? A customer could have a lot of users.

Jonnathan Koch

02:19>> No, it's a user. It's a seat. A seat or a user.

Nathan Latka

02:21So you have 1,500, not customers. Have 1,500 seats on your platform.

Jonnathan Koch

02:25>> Yeah. Currently, yeah.

Nathan Latka

02:26Across how many brands or companies?

Jonnathan Koch

02:30>> There's probably a total of about 400 different companies using it at the moment.

Nathan Latka

02:35I see, I see. Okay. So we can take 1,500 seats there times 100 per month, you're doing $150,000 a month over there in revenue?

Jonnathan Koch

02:42>> Yeah. Well, it depends. In some cases, if you look at at the I mean, so I'm based in South Africa. In the South African context, South African market is a very small chunk of what we actually control. On a global basis, I think the business probably turns over about $5,000,000.

Nathan Latka

02:57Okay, got it. So it's now a 5,000,000 run rate today, which means it does about 500,000 a month in revenue?

Jonnathan Koch

03:03>> More or less about $400,000 a month in revenue. It all depends on where you're looking. The reason we got into involved with Clipdrop is because we believe that it's far more promising.

Nathan Latka

03:16Yes, so tell me about that. I mean, I was sitting on a business that I assume it's challenging is growing doing 5,000,000 a year in revenue, wouldn't, I certainly wouldn't distract myself with something new, I'd try and keep growing it. Why was now the right time to focus on Clipdrop?

Jonnathan Koch

03:29>> Well, we think that that it's it's one component of the talent acquisition space that's been ignored. And and effectively, where where you do find one way video interviewing type models or automated video interviewing type tools that are out in the market, we

03:48>> think that they are underutilized to a large degree and price point is one of the reasons why they are underutilized. We also think that there is a massive opportunity to utilize video for multiple things all within that same space. So we found seven different uses for video in the recruitment or talent acquisition space, which includes the acquisition or the marketing of candidates or both.

Nathan Latka

04:19Oh, what's going on there, YouTube? Good to see you guys. Now imagine this, you love watching these interviews with SaaS founders, but imagine if we took all of the valuation data out from over 2,807 interviews I've done manually, Saves you a lot of time. Well, we've done this. We've built it into the beautiful interface inside of Founderpath. Check this out. I'll show you how you can access this in a second, but you log in, you connect

04:43your Stripe account, you see your valuation real time. You can see what it changed over the past eighty eight days and even set goals for valuation this year. Now the secret evaluation is there's many different ways to value a SaaS business. So the reason you're gonna see three or four different valuations inside of your Founderpath dashboard, this is all free by the way, is because depending on who's doing the buying of your SaaS company, you're gonna

05:07get a different valuation. A VC is gonna pay a different valuation, Private equity firm is different. If you're gonna do a minority sale, that's different. And if you sell the whole business, that's a different valuation. You can see all those when I hover over here. Right? So the teal is what a VC would pay. Yellow is what private equity And red is if you sold the whole thing outright. Now what's cool about this is this is

05:29not built off random data. Again, you guys hear these interviews on YouTube. All these datas are built from real time valuation data points founder share with us on the show. So traction 1,200,000 seed round 3.7 raise. They sold 22% of their business. Go in here and filter by the event. Maybe you only wanna see companies that have sold the whole business. Well, here are a bunch that have been acquired the valuation and the multiple. Maybe you're

05:55going out right now and you're raising your seed round. We'll go in here and look at all this recent seed deals that went down, what they raised, what valuation they raised at, and what percent that they sold. There's never been a larger dataset of SaaS valuations than what you can get now inside of Founderpath. And we're thrilled to bring it to you. All right, we're gonna go back to the YouTube video here in a second, but

06:17if you wanna check this tool out, if you wanna jump in and sign up, you can check it out for free to get your valuation at this link, this link, founderpath.com/products/valuations. Or if you go to founderpath.com and hover over products, click on get your valuation here, and go ahead and sign up to give it a whirl. Again, all that valuation data live right inside the platform. I hope to see you there. Alright. Let's jump back into

Clipdrop Pricing and Early Paying Customers

Nathan Latka

06:43the interview. You mentioned price. How much are is Clipdrop pre revenue or do you have couple paying customers already?

Jonnathan Koch

06:50>> We've got a few customers, not many. When I say not many, had our beta testing coming to an end at the end of this month. A few of those clients have already switched over and started paying.

Nathan Latka

07:01How much per month?

Jonnathan Koch

07:03>> Roughly about anywhere from 100 to about $500 a month depending on the number of seats. So $120 a month for a single seat. See the model is slightly different to the traditional model. Are a subscription based service, you could have as many vacancies as you like on the platform, whereas other services are charging per vacancy. And of course, it comes with a whole lot of additional components as well. For instance, you can launch a blog or

07:36>> vlog and we integrate directly into social media platforms. You can direct people directly through to interviews or you can reach out to them. So you can do a direct reach out using video. So you can imagine the power of

07:52>> the two of us sitting here trying to have a discussion over LinkedIn via text and the next thing someone sends a video message via text or via the

Pricing Model: Storage vs. Per Vacancy vs. Per Hire

Nathan Latka

08:00But Jonnathan, you mentioned this pricing is unlimited applicants, but isn't the core value of your platform if it works, I'm hiring more people and shouldn't that be what you charge against if that's the core value?

Jonnathan Koch

08:10>> Well, we've actually kept it with the number of gigs of space that you could actually use. Think about Dropbox. So we give you about twenty odd hours of recording time per user.

Nathan Latka

08:22Why do you think that's a better value metric though than number of candidates hired?

Jonnathan Koch

08:26>> From a SaaS perspective, we get paid every month.

Nathan Latka

08:30Well, yeah, but that's the point though, right? You wanna serve your customers first and if SaaS is the best way to do that, then great, but you don't wanna force a business model on your customers. So for your customers, why do they care more about storage than they do hiring people?

Jonnathan Koch

08:43>> Well, the reality of the matter is that when you're looking at the recruitment industry side, just to give you some background, I've been in the industry for about twenty two years. Volumes do fluctuate, but we are basically charging the same price that someone a competitor might charge for a single vacancy. Now, if you're working anywhere from five to 10 vacancies a month, it makes a lot more sense to use a product like ours at the same

09:05>> price as a single vacancy. And, you know, just we understand what you're getting at, where you're saying that, well, you've got a whole lot of additional recruitment needs that are available. Sure, you can buy additional space from us, but we've got a very, very, simple streamlined model that just makes a lot of sense for the end user. They're getting greater value for, a lower price point, as it goes on with a better quality system as well.

Nathan Latka

09:33Yeah. Mean, but just for context, like we've had Colin Sims on with iCIMS, we've had K1 and Pete Lampson, JazzHR who've bought many companies in this space. I'm pretty darn familiar with this space. I don't I mean, you could have someone that's paying you for storage, but it's terrible at hiring. They never hire anyone. Right? But they're paying you a crap ton for storage because they turn through so many candidates. Is and that's what I'm

09:53trying to understand. Why have you made a decision that it's better to price against storage than the true, like, value thing of an ATS, which is the candidate was successfully hired?

Jonnathan Koch

10:02>> How

10:05>> do you measure that if you are an ATS? I mean, do ATSs actually charge for a hire? No, they don't. They charge that. It's a platform. They are an intermediary between the person that's actually doing the hiring and the person on the other end that or the job board or the social media platform. It's a management system.

10:26So why not number of applicants tracked?

10:30>> Well, you know, it doesn't matter where we look, you know, and I've had the opportunity to look at a lot of different systems. There are not many systems that actually charge for the number of applicants that are actually being tracked. Generally speaking, when you look at an ATS, for instance, they'll be looking at seats, some of them might cap it at a certain number of vacancies that you can run through the system. You know, we just

10:57>> don't, we believe in the volumes gap, we believe in adding as much value as we possibly can, but still to be fair to the business. And we believe that we're being fair to our own business and our business model by not stretching it to a point where it gets abused.

Nathan Latka

11:11Yeah. I mean, flip side of all this is if you're going to let people do unlimited tracking of applicants, you also effectively cut off your ability to ever reach 140 or 150% net dollar retention because you have no way to expand customers unless they're really aggressively driving up what you're pricing against, which is amount of data stored on the platform.

Clipdrop Beta Conversion and Current Customer Count

Jonnathan Koch

11:31>> Absolutely. And that's on Clipdrop side. On the Talent Genie side, of course, you know, you can only have one user access or a new single sign on to prevent that from being abused.

Nathan Latka

11:40Yeah. Yeah. Okay. Very cool. Well, so Clipdrop has a beta customer wrapping up now. How many paid customers are on the platform today?

Jonnathan Koch

11:45>> We currently have about 10 that are being converted from the beta customers so far.

Nathan Latka

11:49Oh, wow. Okay. So 10 times $240 ARPU, that would be two seats. I mean, you're doing like $23,000 a month already.

Jonnathan Koch

11:55>> Yeah. About.

Nathan Latka

11:56Yeah. That's great. And how are how is the org across you and Talent Genie? How are you splitting your energy and resources across this the new exciting baby versus the legacy Genie that's paying for everything?

Jonnathan Koch

12:08>> Yeah. So it's a good question. I do feel sometimes like I've got a bit of a split personality at times, but I wear two different hats. But I do have a strong support team and they've been they've been stepping in and really, really give me a lot of support.

Nathan Latka

12:23How many full time are on the team?

Jonnathan Koch

12:25>> For Clipdrop or Talent Genie?

Nathan Latka

12:28Give me both.

Team Split Between Clipdrop and Talent Genie

Jonnathan Koch

12:29>> Okay, so there's roughly about 11 people currently full time focusing specifically on Talent Genie. We've got three on the Clipdrop side. We've already started to look at employing someone to take over some of the responsibilities around Talent Genie. We're looking currently at exploring additional headcount in the Clipdrop space. There's a lot of interest at the moment in Clipdrop.

12:57>> We have some large white label organizations that traditionally have boarding customers by the source of software from payroll type software across the board. They're wanting to let white label the product, but there's also a number of governing bodies in different parts of the world that are looking at actually promoting the tech. So we think we're in a fairly good space as far as that's concerned.

Bootstrapped Origins and Funding from Talent Genie

Nathan Latka

13:20Have you bootstrap Clipdrop today or did you raise outside capital?

Jonnathan Koch

13:23>> Bootstrapped from from the beginning.

Nathan Latka

13:25I love that. So how much of Talent Genie dollars have you funneled into Clipdrop already?

Jonnathan Koch

13:31>> That's a good question. I can't actually answer you. It's been a labor of love for a while. So, you know, every now and again when additional work needs to be done, you don't even think twice.

Nathan Latka

13:42Did you write the first line of code for Clipdrop inside of Talent Genie?

Jonnathan Koch

13:45>> I beg your pardon?

Nathan Latka

13:46When did you write the first line of code for Clipdrop, like inside of Talent Genie?

Jonnathan Koch

13:51>> Wouldn't I wouldn't I write it?

Nathan Latka

13:54Did you write the first line of code?

Jonnathan Koch

13:56>> Line. I said, sorry, man.

Nathan Latka

13:57About two years ago.

Two Years of Development and Seven Video Use Cases

Jonnathan Koch

13:59Okay.

13:59>> We actually came up with a very basic idea. We just wanted to provide another automated or one way video interviewing platform. And then we took a step back and we said, now that we have it, we have the same thing that everyone else has got. Is that cool or not? And we realized that it could be cooler. So we sat down and said, what would be cool is, you we take a little bit further, we do

14:24>> X, Y and Z and eventually two years later, we had created seven different uses for the same application.

Famous Five: Books, CEOs, Tools, and Life Lessons

Nathan Latka

14:31Mhmm. Mhmm. I love that. Okay. Very cool. So you're scaling Clipdrop now. We'll see what happens. Let's, on that note, wrap up here, Jonnathan, with the famous five. Number one, favorite business book?

Jonnathan Koch

14:41>> The Richest Man in Babylon.

Nathan Latka

14:43Number two, is there a CEO you're following or studying?

Jonnathan Koch

14:46>> There's a guy called Brian Joffe, a company called Bidvest. He kind of started off bootstrapping his business and I believe it's currently worth about $5,000,000,000. Very, very interesting guy. He plays mainly in the Southern Hemisphere, but I love his work. He's just been he's been brilliant at what he's done.

Nathan Latka

15:08Number three, what's your favorite online tool for building Clipdrop?

Jonnathan Koch

15:14>> To be honest with you,

15:20>> I can't really tell you which one is the favorite. I know when I sit down with my development team, they all seem to be throwing different tools at me all the time. But I wouldn't be able to recommend anything at this point in time. I'd need to speak to a few of them to find out which ones they would actually settle.

Nathan Latka

15:35No problem.

15:36>> Number four, how many hours of sleep do you get every night?

Jonnathan Koch

15:39>> I try and get anywhere between six and eight hours a night.

Nathan Latka

15:43Fair enough.

15:44>> And situation, married, single kids?

Jonnathan Koch

15:46>> Divorced with two kids, teenagers.

Nathan Latka

15:50Two kiddos, okay, how old are you?

Jonnathan Koch

15:52>> I'm 46.

Nathan Latka

15:5346, last question, something you wish you knew when you were 20.

Jonnathan Koch

15:57>> That I knew what I know now.

Nathan Latka

15:59And just something you oh, no, you can't say that, something you wish you knew, give me something specific.

Jonnathan Koch

16:05>> Something I knew, I really wish I knew a lot more about tech and what was coming and I really wish at an early age that someone actually said to me, learn to code. Think if I'd done that at an early stage, I think a lot of the things that I aspire to achieve would have been achieved a lot sooner.

Nathan Latka

16:26Guys, his main business Talent Genie has broke $4,000,000 in revenue with 11 full time employees. And he said, know what, I want to spin out and build another software tool. They've launched Clipdrop. Which is effectively an applicant tracking system on steroids, but allow you to do video and use video in different ways during that process. They charge based off storage, have beta customers now signing up doing 3,000 a month in revenue as they look to keep scaling

16:48it totally bootstrapped, which we love. Jonnathan, thanks for taking us to the top.

Jonnathan Koch

16:52>> Thank you very much.

Nathan Latka

16:53Cheers.

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