How HirePort Reached $192K Revenue and 30 Customers with a Recruiter Marketplace (Interview with CEO Bram Medema)

Introduction and HirePort Overview

Nathan Latka

00:00Hey, folks. My guest today is Bram Medema. He's the CEO at HirePort, a platform that brings back speed, scale, and simplicity to external recruitment. He's an industrial engineer, former VC and private equity investor, and serial startup founder, Now living in Amsterdam with his wife, Tanja, and two year old Marcus. All right, Bram, you ready to take us to the top?

Bram Medema

00:18>> Absolutely, Nathan.

Who Is Paying for HirePort and How

Nathan Latka

00:19Okay, let's jump in here. So who's paying for HirePort today and how are they using you?

Bram Medema

00:24>> Yes, it's a mix of companies, I would say. It's startups, scale ups, and also smaller corporates today. The model is very simple. It's 100% no cure, no pay. That's what most companies know in the external recruitment business. So decided to offer them something they understand already. On top of that, there will be layers with SaaS solutions. So there's additional services that have a monthly subscription.

SaaS Pricing and ATS Integration Tiers

Nathan Latka

00:48So let's talk about the SaaS first. What are people paying per month? What's the fee they're paying per month? Will they get?

Bram Medema

00:54>> Yeah, it depends on the kind of integrations that they want. We have applicant tracking system integrations today for mid sized companies and smaller startups that would be about €99 a month. For larger companies that would, for example, use Workday or SAP SuccessFactors, those are applicant tracking systems for enterprises. They would pay around €500 a month.

Nathan Latka

01:19So the SaaS fee is dependent on the level of integrations they want, whether it's a startup tool or an enterprise tool?

Bram Medema

01:26>> 100%, that's it.

Nathan Latka

01:27I see. Okay, very cool. And if you split down your total revenue, what percent would you say is coming from SaaS versus other, or just call it other revenue?

Bram Medema

01:37>> Yeah. Currently it's a small percentage from SaaS. It's about 10%. But we expect that to grow really rapidly. The biggest part of the recurring business is actual placements taking place on the platform.

Nathan Latka

01:52Now let's talk about that, the success. How do you charge when you successfully place a candidate?

Placement Fee Model and Recruiter Economics

Bram Medema

01:58>> Yeah, there's a fixed fee that we charge. So when there's, for example, a senior engineer that's placed at one of our companies in the platform, there's a fee that's around €16,000 and a small part of that lands with us, transaction fee, and most of that fee goes to the actual recruiter who made that placement. The recruiters are the heroes on our platform. I think today, maybe there's not a lot of people who really love the external

02:24>> recruiters anymore. We do, we filter out the best ones and we give them a podium to be able to deliver at the best companies in Europe

Nathan Latka

02:32So 16 thousand euros, right? About 20,000 USD, what percent of that 20,000 success fee will the recruiter typically get?

Bram Medema

02:41>> Over 80%.

Nathan Latka

02:42Eight zero or one eight?

Bram Medema

02:44>> Eight zero. 80.

Nathan Latka

02:45Wow.

02:46Okay. So I mean, we're talking like 16,000, something like that. So is the rest of the other 20% goes directly to you?

Bram Medema

02:52>> Yeah. The other percentage goes to us. That's what we live from. So that's the most important revenue driver right now, which is supported by the SaaS subscriptions.

Nathan Latka

03:02I see. Interesting model. So basically every candidate you place, you're going to make 4,000 USD or something like €3,000 per placement?

Bram Medema

03:11>> Yeah, that's amazing.

Company History and Agency Origins

Nathan Latka

03:14Give me some sort of history here. When did you launch the business? What year?

Bram Medema

03:18>> Yeah, we launched it 2020, really a few months after COVID hit. So this is something that we always wanted to do. I've been active in many industries, but I rolled into recruitment by accident years ago. We had our own agency, so we have four years or five actually, years of experience in this business, but we always operated in a model that didn't scale. So, it was high quality what we did, but you just had to put

03:44>> more people on a payroll to scale. And it doesn't work anymore, you know? These days you see in the platform economy that people need an exponential solution to the problems, not a linear one. So we decided to bundle all the forces of all these small independent players that are there everywhere and put it all together, give them a platform to be able to deliver to the most interesting companies. You have something that scales instantly.

Nathan Latka

04:09Oh, 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

04:33your 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

04:57get 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

05:19not built off random data. Again, you guys hear these interviews on YouTube. All these datas are built from real time valuation data points founders 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

05:45going 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. Alright. We're gonna go back to the YouTube video here in a second, but if

06:07you 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 the

06:33interview. So what you're saying is you had troubles recruiting at your agency and you said there needs to be a solution for this and then you're your own itch effectively.

Bram Medema

06:42>> Exactly. The amount of people on your payroll just limits how scalable your solution is. And most companies would call us and say, Listen, I need a team of 10 engineers and I need them within two months. That is not something that any agency can easily do. There's only something that you can do when you bundle all the forces of a lot of players and you instantly make that available.

Nathan Latka

07:02Talk to me a bit about the agency. So what was the agency doing?

Bram Medema

07:07>> Yeah, the agency was helping companies find tech talent for permanent employment.

Nathan Latka

07:12Oh, it was also doing recruiting. Okay, so you weren't recruiting for yourself, but you were having problems recruiting for other people in an agency model.

Bram Medema

07:18>> Yes, exactly. Exactly that. And then we run into this ceiling that made us see that the only way to do this is to use technology to unlock all that power and take away all the pains. So

Nathan Latka

07:33when did you launch the agency?

Bram Medema

07:35>> The agency we launched in 2016.

Nathan Latka

07:402016, okay. And up right until 2019, so the year before you launched HirePort, how much total revenue did the agency do? How big did you were able to grow it?

Bram Medema

07:50>> There was a number of millions of euros.

Nathan Latka

07:53Okay. Millions. And I guess translate that to number of candidates placed in 2019 via the agency.

Bram Medema

08:00>> In 'nineteen, that's a good one.

Nathan Latka

08:03Or your best year. How many did you place in your best year?

Bram Medema

08:05>> Yeah, I think it would look at about 70 placements a year.

Nathan Latka

08:0970 placements, okay.

08:12Were you And So if you're doing millions of euros of revenue off 70 placements, you're not making only 4 ks per placement. You were really a traditional recruiter back then charging big placement fees.

Bram Medema

08:22>> Yes. You would get the full placement fee, but you would also have the people on the payroll and all those extra costs of course.

Nathan Latka

08:28Oh, I see. Interesting. Okay. So you then pivot in 2019 into 2020 to HirePort. Do you shut down the agency completely or do you transfer all the talent over?

Bram Medema

08:37>> No, we shut it down.

08:39>> We shut it down.

Nathan Latka

08:40Why not sell it? I mean, you're doing 3,000,000 or 4,000,000 in revenue. Why not go try and sell it?

Bram Medema

08:45>> Yeah. Think that the most interesting thing to sell is the client relationships. Actually some of those clients we brought with us to the new platform. So you always have this cold start problem, let's say, to get things running, right? And this really helped us to straight away have a number of paying customers that wanted to join, that believed in what we wanted to achieve. And we also already had a network with other recruiters at other agencies.

09:08>> So we had kind of a good starting point and that really helped us get things going.

Nathan Latka

09:13And then I guess help me understand traction today at HirePort. So last month, how many candidates did you place?

Bram Medema

09:21>> I think what's more interesting right now is to look at the annual recurring revenue under the level that we're at. A number of placements every month. I think we're now at about, let's say €600,000 annual recurring revenue that we're achieving. And how are

Nathan Latka

09:39you calculating that? Are you taking last month's revenue times 12?

Bram Medema

09:43>> No, in this case, I'm taking this month's expected revenue times 12 because we already have placements in the books and we see that more is coming.

Nathan Latka

09:53Okay, let's be more specific. Both of those though are projection, right? You're guessing how much you're going do this month and then you're multiplying by 12. Those are both huge assumptions. Want give you credit for what you've already done. So last month, what was total revenue run rate?

Bram Medema

10:04>> Yeah.

10:07>> Let's see, last month was 16 ks.

Nathan Latka

10:10Okay, one six. So is that coming from four placements where you earned four ks per placement or is that really like three placements where it's four ks, so 12 ks there and then the other four ks of revenue is coming from SaaS fees?

Bram Medema

10:23>> Yeah, no, this is four placements and going up and the SaaS part is really, really small at this point in time.

Nathan Latka

10:29Okay, got it.

Bram Medema

10:31>> So don't have any, I mean,

Traction: Revenue, Placements, and Customers

Nathan Latka

10:32how many customers, I guess, do you have paying an actual, like a SaaS fee? One or two or you're still pre launch on that?

Bram Medema

10:39>> No, we have one or two, actually, have one, let's say signed contract, one coming up. So this is an integration applicant tracking system of Greenhouse, and we have a number of other applicant tracking systems like Recruitee is very popular here. We have people running on Homerun, Workday, SAP SuccessFactors. These are ATS systems that we developed the API connections with right now.

Nathan Latka

11:03Got it. And those four placements that you placed last month, was that all into one company or how many unique companies did you place those in?

Bram Medema

11:11>> Those were four companies.

Nathan Latka

11:13Four separate. Okay, interesting.

11:15What are the measurements you care about? Is it number of placements per month or per year? Is it number of unique companies that hire at least one person through your platform? Is it number of recruiters that make a dollar through the marketplace? What is it?

Bram Medema

11:26>> Yeah, I think the most important things for us is the amount of interesting jobs that are on the platform and the amount of highly skilled recruiters that are on the platform. Those two you want to match. With the current infrastructure and team that we have, we can do 10 times, 15 times the revenue that we do right now. It's super scalable. So once you have a company on the platform, we now have companies like, GrandVision is

11:52>> a client of ours. They have one role, very happy with what we did. They want another role, they expand. So it's a super scalable model in that sense.

Recruiter Quality, Activity, and Marketplace Health

Nathan Latka

12:01How many recruiters are on the platform today?

Bram Medema

12:04>> Right now, it's 104 recruiters on the platform. And that is growing hand in hand with companies.

Nathan Latka

12:11How do you define on the platform? You know, getting a million recruiters, but if no one's actually hiring anybody, right, that doesn't do you any good. So how do you define on the platform?

Bram Medema

12:20>> Yeah, that means that we have screened someone for an hour and they came through that screening with a positive outcome. They've been given access and they can actually see what is happening on HirePort. That is the potential power on the recruiter side. Then also we measure, of course, how large the percentages of people that are active, that log in every week and check out the vacancies and actually propose people. Those are different metrics. It's very high

12:46>> actually. So right now, let's say amount of recruiters that are active from those 104 is over 60. And the amount of recruiters proposing is around 30%. And that is already with the size that we are today, which is is relatively small as 30 companies that are on the platform right now with on average two to three vacancies. So between, let's say seventy and one hundred vacancies, jobs. But that could scale really quick.

Nathan Latka

13:14Okay, got it. So 30 companies with an average of two vacancies, 104 recruiters trying to help those 30 companies, that's the marketplace model. How many of the 104 recruiters have placed at least one candidate successfully?

Bram Medema

13:29>> That'd be around 10.

Nathan Latka

13:3210. Yeah. So serious power laws here, obviously, right? You've got your top 10 recruiters doing most of the business.

Bram Medema

13:38>> Yeah. There are definitely recruiters that have made several placements indeed. And yeah, that is an interesting metric to see.

Nathan Latka

13:46And how many since launch, how many total candidates have you placed to date?

Funding History and Pre-Seed Round

Bram Medema

13:54>> I think it would be

13:57>> close to 20.

Nathan Latka

14:0020. I mean, that's the money metric, right? That's the ultimate success thing. You want that number to get up into the hundreds and thousands and millions eventually, hopefully.

Bram Medema

14:06>> Absolutely. But that's going up really quickly. You look at our growth right now, it's between 30% and 50% quarter on quarter.

Nathan Latka

14:15If you keep doing this, those numbers per month will go up massively. Well, yeah, but it's really easy to go from one candidate place to two and call it 100% growth.

14:27You know that as a VC private equity guy. Come on. You've seen pitch decks where founders try and throw you for 10. It's 300% growth, but they went from $1 to $3 you know?

2022 Focus and European Expansion Plans

Bram Medema

14:38>> Yeah.

Nathan Latka

14:39Okay, fair enough. Fair enough. And just to be clear, so $16,000 sort of in monthly recurring revenue, or monthly rev, not recurring really, but monthly revenue last month. Where were you exactly a year ago? Were you totally pre revenue?

Bram Medema

14:51>> Pre revenue.

Nathan Latka

14:52Okay, got it. So you spent 2020 and then almost all of 2021 really building?

Bram Medema

14:56>> A 100%. We're building, building, and also on the supply side, making sure you have the right recruits on the platform, make sure you activate them on the company side as well. That's where most of the work is. And then once you have the trust, once the engine has started, which I think is fair to say, we solve this cold start problem for The Netherlands. That's the stepping stone for Europe. And then that's the stepping stone for

15:16>> The US. That's where we are right now. The focus for 2022 is really expanding the business in The Netherlands, more placements, more learnings, stronger supply side, stronger demand side, interested companies. And then 2023, we will go abroad to Europe. I'm also preparing a funding round in the next months to make that possible.

Nathan Latka

15:39Are you bootstrapped to date?

Bram Medema

15:41>> No, we have investors. So we did a lot of the investments ourselves up to the moment the platform was actually ready. Then we brought on a number of investors, informals, and also a venture capital fund. We raised $500,000.

Nathan Latka

15:55In what year?

Bram Medema

15:56>> September last year.

Nathan Latka

15:58500,000 September last And then how much did you guys put in personally, I guess prelaunch when you jumped in?

Bram Medema

16:04>> That's a bit hard to say. I mean, not necessarily purely cash, but we had very low income, all kinds of stuff like that. So we had all the clients that we brought in from the previous company, which we funded. So in terms of value, substantial value.

Nathan Latka

16:20But how much cash? I mean, like, literally, I always like to know, you drain your savings to launch the startup or are you playing it safe and keeping a cushion? No,

Bram Medema

16:29>> no, I'm all in, but that also has to do with, let's say the funding of everything up to the moment we launched HirePort that came from our pockets actually. But HirePort was a new venture that we then started.

Co-Founders, Team, and Equity Split

Nathan Latka

16:43And who is we? How many co founders?

Bram Medema

16:46>> Three. So there's Alexander, there's Remco and myself, and now there's six of us in total.

Nathan Latka

16:52And did you guys split the three co founders split equity evenly at the start or no?

Bram Medema

16:55>> We did.

Nathan Latka

16:56Okay. So 33% each, which is nice and diplomatic. Then it sounds like you're at six full time today. When you did that $500,000 pre seed round back in 2020, most pre seeds you're seeing sort of maybe a five cap, something like that. Were you sort of selling 10 to 20% of the business in that range?

Bram Medema

17:11>> Yeah, we were aiming for about that, but let's say closer to 20%.

Nathan Latka

17:16Okay, got it. You sold about 20% so that you're talking like maybe a 2.5 post money valuation, right?

Bram Medema

17:21>> That's about right.

Nathan Latka

17:23Okay. And what are you targeting now in this current round?

Bram Medema

17:27>> We are going to raise €2,000,000.

Nathan Latka

17:30Okay. And do you know what you're targeting in terms of valuation? You don't want to sell more than X percent?

Current Fundraise and Valuation Targets

Bram Medema

17:35>> No, no, no. But there's so many factors that are important to us. Think the most important factor is to get VCs on board that open doors, that have a portfolio of companies that we can plug the solution in. Think all those factors are much more important than only the valuation. Of course, we're looking at a healthy model, right? You still have the ability to steer the company together with the lead investor and current lead investor, but

18:00>> we're looking at the ranges. It's something that we need to discover.

Famous Five: Books, Tools, and Habits

Nathan Latka

18:04Yep, very cool. All right, let's wrap up here, Bram, with the famous five. Number one, last book that you read.

Bram Medema

18:09>> Yeah. Last book that I read, that is my favorite book. I keep rereading it. It's Nelson Mandela in his own words.

Nathan Latka

18:17Number two, is there a CEO you're following or studying?

Bram Medema

18:21>> I like Elon Musk, a very complicated person, very inspiring person, but I love the way he approaches old problems and new problems and solves it in a completely new way.

Nathan Latka

18:32Number three, what's your favorite online tool for building HirePort?

Bram Medema

18:36>> Salesforce, love it.

Nathan Latka

18:38Number four, how many hours of sleep do get every night?

Bram Medema

18:41>> I try to get eight, but my little boy has different plans sometimes, so between seven and eight.

Nathan Latka

18:47All right. So what, married one kid?

Bram Medema

18:50>> Yes, married one kid and it's the perfect team for now.

Nathan Latka

18:53That's awesome. And how old are you, Bram?

Bram Medema

18:55>> I am 40 years old. Last month I turned 40.

Nathan Latka

18:5840 years old, congrats. And last question.

Bram Medema

18:59>> Thanks.

Nathan Latka

19:00Something you wish you knew back when you were 20 years old.

Bram Medema

19:03>> To wish myself?

Nathan Latka

19:08Yep.

Bram Medema

19:10>> Good question.

Advice to Younger Self and Closing

Bram Medema

19:13>> I wish to keep on taking a lot of risk. High risk, high reward. I think that's one of the most important lessons.

Nathan Latka

19:21Guys, HirePort. Started off as an agency in 2016, grew to about $3,000,000 in revenue before going, You know what? We need to build software for this. Shut down the $3,000,000 agency, launched HirePort.io, three co founders, 33% each. They're now scaling six people. They placed four candidates last month. They make on average 20 ks per place candidate, but they're building a marketplace. Recruiters on their platform actually take about 16,000 of that 20 ks fee and HirePort only

19:47keeps about 4 ks. So they're allowing over 104 recruiters to build livelihoods on the platform and the marketplace serving 30 customers they have onboarded with about two job openings each. Marketplace is healthy, they're scaling 500 ks raised on the pre seed round at two point five post looking to raise 2,000,000 today. We'll see where Bram takes it next. Bram, thanks for taking us to the top.

Bram Medema

20:05>> Thank you so much, Nathan.

Nathan Latka

20:08One more thing before you go. We have a brand new show every Thursday at 1PM Central. It's called Shark Tank for SaaS. We call it deal or bust. One founder comes on, three hungry buyers, they try and do a deal live and the founder shares back end dashboards, their expenses, their revenue, ARPU, CAC, LTV, you name it, they share it and the buyers try and make a deal live. It is fun to watch every Thursday 1PM

20:34Central. Additionally, remember these recorded Founder interviews go live. We release them here on YouTube every day at 2PM Central. Make sure you don't miss any of that, make sure you click the subscribe button below here on YouTube, the big red button and then click the little bell notification to make sure you get notifications when we do go live. I wouldn't want you to miss breaking news in the SaaS world, whether it's an acquisition, a big fundraise,

20:56a big sale, a big profitability statement or something else. I don't want you to miss it. Additionally, if you want to take this conversation deeper and further, we have by far the largest private Slack community for B2B SaaS founders. You want to get in there. We've probably talked about your tool if you're running a company or your firm if you're investing. You can go in there and quickly search and see what people are saying. Sign up

21:18for that at nathanlatka.com slack. In the meantime, I'm hanging out with you here on YouTube. I'll be in the comments for the next thirty minutes. Feel free to let me know what you thought about this episode and if you enjoyed it, click the thumbs up. We get a lot of haters that are mad at how aggressive I am on these shows, but I do it so that we can all learn. We have to counter those people.

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