Recruitlocator Revenue & Valuation (2018)

hello everyone my guest today is adrian russo he's a talent acquisition professional who leverages a software development background to help organizations find talent he's co-founder and developer of recruit locator a sas based open web resume search tool he led technical recruiting at various organizations including the national institutes of health discovery communications and department of defense he's featured in the upcoming amazon prime docu film the art of recruiting adrian are you ready to take us to the top i'm all set so you're an actor too huh yeah apparently so yeah as i said not many times you find a developer who's also an actor those usually don't go together yeah nice it's got some i got some things coming out on amazon prime so it's really interesting that's great is you see that it's basically a distribution channel for the software product yeah it was a great opportunity i was contacted by chris lava the uh executive producer of top recruiter and now it was just an interesting opportunity to present itself to be able to talk about the product and um you know some some methodologies behind recruiting yeah okay so tell me about the product what's the company do and is it really a pure place ass company yeah it really is a pure sas company as far as a from the product perspective so you know i went out on my own for for recruiting and it started out we developed this tool um to give us you know an edge on everyone else our secret sauce you know we would use it in demos to say hey you know we're different we can find your talent and this is how we do it and the answer we got when we went out to speak to these um you know these business owners was yeah that's great we'll use your services but what about the product well at the time this was just a dashboard um this excuse me a desktop tool and so we quickly refactored it uh to a sas product so we can allow our customers to leverage it as well mm-hmm so what do they pay for this to what do they pay to get out access to it yeah it's really easy so we have um we have a free meal model where um you know people could sign up for free and try the tool uh with a limited number of searches they get um you know five searches a day and then for uh for a year we charge 250. okay two so one price point super simple easy quick easy we want to make it as simple as possible for people to use and sign up so what do they get for 250 bucks for the year yeah so for 250 dollars what we do is we have um we have six search services and basically what happens is this this tool allows people to find talent from everywhere but job boards so if you want to if you want to find talent on job boards and resume databases there's plenty of tools for that there's not a lot of tools to find talent from the open web and so what we do is we have it in a few different areas we have open web resumes which is again everywhere but job boards um we have linkedin search which actually provides a more robust search than linkedin we actually have a video out there where we beat you know linkedin recruiter search results by number and relevancy uh we have a clear job board or cleared a clear job search where you find only clear talent from the open web what does that mean i don't know what clear talent means oh sorry so clear talent is um you know talent that requires clearances whether you know whether it's a clearance top secret yeah so top seed you know only talent that has uh you know a clearance yeah and then lastly um we have another service that takes resumes from linkedin profiles so it's really easy to use you type your location into the search tool um you type in a keyword or keywords or job titles and this comes back with results and so what year did you launch the company in i'm sorry what year did you launch the company in we launched in uh 2016. 2016 okay so two years ago and then what have you scaled to today in terms of total customers on the platform so uh we just we just relaunched our sas product and we just started um taking on customers like three or four or a few uh we have 300 right now okay that's okay that's pretty i mean you're you're underselling it but 300 is pretty strong for a relaunch when do you relaunch we relaunched in july july and walk me through the strategy there why why'd you have to relaunch yeah so we had um it migrated um all platforms so we were using um you know different different platforms to manage our networking we migrated off of that and when we did that um we relaunched the tool we made it faster we made the results more relevant we increased the number of results and then we were completely revamped the ui um you know these are all things that we you know we had some feedback from beta tests uh we did a beta test with omnicom media group uh this is the feedback we got so basically we just took that feedback in listen to our customers and um you know relaunched the product okay got it so 300 customers 250 a year it's about 21 bucks a month so that means you're doing kind of about six thousand seven thousand bucks a month now today on the new products is that right yeah and go back go back a year prior to that it would have been nothing right because you relaunched it it would have been yeah nothing we we spent we spent about spent about eight eight or nine months just going through and you know working um working through some challenges i mean as you can imagine when um you know when you're when you're working with a product like this one of the challenges you have is being able to constantly get results from the web without getting um you know 503 responses and you know things like that so we had to work through that um we were able to figure that part out and then we had to kind of refine some different things you know it's interesting we thought one of the one of the features that would be great was to be able to drop a pin on a map and search you know within uh you know distance vector from that pin uh we thought it was awesome we spent a lot of time on it we thought people would love it turns out it was the one feature everyone hated so um we went through and refactored that and a couple other things and um yeah that's that's where we're at today to get your first 300 customers here i mean what was the number one growth channel you used yeah i would say the number one growth channel would be uh social media and more specifically twitter and facebook okay um you know if you look at if you look at facebook right now the um the the cost per click cost per impression is really low um so it gives you a wide reach i say and it gives you the most bang for your buck so what would you i mean make that real for us i mean so like what what would you spend on facebook to get a click would you say you know it we'd what we found is we'd we'd spend maybe 15 20 hours per post um we accelerated our posts in um you know based on the impressions that we would receive so posts that received a lot of impressions we would just accelerate you know small increments 15 you know 15 20 and we'd find that we'd get five six seven thousand uh impressions okay and how many clicks um so i'm sorry i said impressions clicks that should be clicks and then you get 7 000 clicks from a 15 spend yeah that's not uncommon that's not uncommon on facebook you know it's a really i mean that's i look i run a lot of facebook ads i mean you can tweak with quality of clicks which is a big deal depending on where you're targeting but 7 000 clicks for 15 bucks i i don't know that i've seen that before assuming they're quality clicks yeah you know they're not all quality because i was getting into the conversion data the conversion data is sometimes low um you know we might get from from those 7 000 clicks um you know we might get you know 10 15 people who would sign up so it's really low and then we look at that and even with that amount we might get you know five or six users who are you know using it actively um and how many new customers maybe like one or two you know we don't always get customers um based on that if we had if we could spend 15 20 to get a customer um we'd be we'd be making a whole lot more right now we'd have a lot more customers well so going back to my original question though so what's what's been the number one customer requisition channel yeah i mean i still think social media you know twitter twitter's another one we um we did twitter for business um you know we found that that works well um and then a lot of it's just networking but adrian sorry can you can you break this so i i wanted to break down facebook to try and tie the loop back here but you said ultimately ultimately it didn't drive customers so i'm i want you to do the same with twitter because i'm sure there's some learnings here are you actually getting customers from twitter yeah we're getting some customers um you know like i said the acquisition has been slow we've only had you know 300 since since july um so that's not a really it's not really a great deal um so you know like what we're seeing uh what we're seeing is we get a lot of people who will who will sign up it's the conversion that's been the challenge um but you know we haven't put a lot of money into this yet uh we haven't really done a robust you know really robust marketing campaign are you casual positive at this point we are yeah that's good okay so you have time it's not like you're taking time bomb or anything no so we haven't accepted any funding um you're bootstrapped yeah completely agree completely we're profitable um we were profitable in year two uh so 2016 2017 we are and 2018 we've grown even more so how many are definitely we have you know we also do consulting so adrian how many are on the team today uh we have three people right now myself um joanne burt who's one of our partners and um joseph de la pena who's one of the other developers all up there in maryland uh no joseph is joseph actually uh is in is in japan um and joanna's in maryland okay got it so so three remote i was gonna say doing six grand a month it'd be hard to be profitable you know paying three full-time salaries what you're saying is the way you make up for that as you sell some consulting on the side we do consulting that's where um you know right now our majority of the revenue comes from there you know this is a new product we launched um so we have like i said we haven't put a lot of money into advertising yet we don't have a lot of customers and that's how we bootstrap this product you know that's how we're you know taking investments and other things yeah so so i mean how do you get to a million bucks in recurring revenue yeah that's that's a good question um so so really i think you know what we have to do is keep investing uh in the product we have to grow the team i think you know if you have uh if you have a sas product you need to really keep growing your your dev team that's where that's where the money is going to come from why do you say that there are tons of good products with massive dev teams that go bankrupt because no one knows about them or they don't or they don't fit or they it's not a monthly recurring product yeah so i think when you have a product like ours it requires a lot of work there's a lot of work that goes into it you know obviously all solutions you know have a lot of work but particularly whenever you have you know challenges from a networking perspective you know you constantly have to update your product you have to come up with you know new ways um especially now to get around things like you know captcha and redirects things like that so you constantly have to evolve and i think for this type of product um you know that's where that's where it's at now as far as as far as other companies are concerned well i'm sorry adrian sorry sorry so are people i mean are people are people paying right now they're saying oh i thought you had this feature you don't end churning and that's why you want to grow the dev team to fill those holes no the reason the reason why i want to grow the dev team is we have other things on our product roadmap that we want to that we want to incorporate into the product yeah but why focus on that stuff if people are currently not churning on the current thing and you have 300 signed up why would you not just double down you need distribution channels for this thing if people are sticking yeah no that's that's that's a fair point um you know the reason being you know we take a lot of customer feedback um and what they're looking for and i think you know it's it's the direction the direction that the industry is going um people are looking for integrated solutions right now is there churn i'm sorry do you have churn no no okay then what sorry i don't mean to keep cutting you off but you keep saying your product's not good enough and you keep saying you have no churn if your project wasn't good enough and you didn't have the integrations people needed people would be churning so i didn't say it wasn't good enough what i what i said was i want to focus on um i want to focus on building out our capabilities and new features uh we have an annual subscription model right so we haven't you know it's been since july so we're not gonna we're not gonna have any turn because people you know people have signed up for a year and sometimes people sometimes people will email and ask for a refund we haven't had that okay great so so that's what happened no no so it's basically too early to really look at churn and you're basically saying you want to make sure it stays low when all the renewals come up next july by adding integrations and things like that that's that's where we're going to see that's where we could see issues with churn um you know i i don't anticipate it's a very low price point if you look at it in the in the recruiting industry you know these a lot of these people are working at agencies you know if you find one candidate from our product you know you can you can play your placement fee could be 25 000 you know our products 250 a year so if you look at that low price point doesn't mean low churn it's actually the opposite smb turns typically way higher than enterprise churn with higher price points sure and that's something we'll have to take a look at but i think you know but i think as far as we're concerned you know the whole market's going to you know integrated solutions they want you know recruiters want an integrated solution with their ats they want they want their they want to be able to have whatever their sourcing product is whether it's ours or something else they want to have that into an ats so we want to incorporate this and make it api based so all the results can be you know natively dumped into their ats and you know go into their existing campus what is ats applicant tracking system so basically where recruiters go to um you know recruiters go to store their candidates and you know it's basically a their internal resume database yeah so so again if i asked you the growth i mean you said add more developers basically but if you weren't allowed to hire more developers and you couldn't write one more line of code you have a product with 300 customers so it's working for these people how do you like double or triple that customer base sure i mean obviously i think you put money into marketing and i think you also put money into content distribution in the content distribution um you know like a hubs you know something like we were approached by you know a group of people to you know basically start uh basically you know launch almost a model like like a hubspot basically where you're driving content to your site to get people on the product so ultimately we will we will be adding content to our site and making it you know almost like a knowledge database we're going to be adding that in the future we want to get as many people to the platform and to the site as possible and i think when you add that along with you know a freemium tier i think people try the product they they'll like the product and they'll use it oh i thought you said you're having troubles with conversions though right now well on social media that was the question you asked was specific to what we think our number one source was social media so i think when we drive drive people by driving content i think that'll change you know we're very we're very early very very early right but adrian sorry i want to be clear i mean the the content you're on facebook that you're putting 15 or 20 bucks behind that's content right it's not content on a site though if you look at if you look at what like a hubspot or squidoo does it's different you're driving content you're you're driving you're publishing content and driving traffic to your page based on your content we want to do all of this on recruit locator on our recruit locator site as opposed to other people's sites and then you could always you could always add marketing marketing tools and features to be able to track where what people are doing on your site where they're coming from and then adjust based off of that but ultimately people people also want to see content so that's in that's in our road map as well alrighty adrian let's uh let's wrap up here with the famous five number one what's your favorite business book oh great question um the tipping point i would say the tipping point by malcolm gladwell number two is there a ceo you're following or studying um mark betting off number three how many hours of sleep to get everything oh sorry number uh number three what billing tool do you guys use what what billing tool do you use um billing tool uh we're just doing it we're doing mango invoices oh my gosh you're doing manual you're doing manual emblazoners for 250 bucks no no no sorry um no for oh for on our platform we're using stripe for our consulting we're just building manual got it stripe yeah yeah for the sas platform using stripe right all right number four how many hours i'll sleep to get every night four and adrian that's not healthy yeah i know developing and recruiting is tough all right and how are you and what's your situation married single kids uh married with one child and how old are you i'm 36 36 last question what do you wish your 20 year old self knew to get started in uh in programming because you know that's really where technology is going you know with with everything now um i think you have to have a technical background for almost every job at least some kind of technical background so i wish i got into programming sooner guys get started on programming sooner i found a recruit locator kind of an hr recruiting tool back in 2016 relaunched it just last july now 300 customers paying 21 bucks a month or 250 bucks for the year so they're doing about six thousand seven thousand bucks per month today focused on scaling with things like content and additional product integrations cash flow positive because they're building this on the back of a consulting business a team of three in remote locations kind of maryland and japan bootstrapped which i love too early to talk about economics but adrian thank you for taking us to the top thanks appreciate it