Referagig revenue, CEO Scott Weiss, team size, customer count, churn, and more in 2022.

hello everyone my guest today is scott weiss he is the founder and of referral gig and president of makina partners a technology recruiting from both companies are based in seattle washington scott you're ready to take it to the top i sure am all right so which one are you spending more time on the recruiting firm or referral gig well i'll tell you a little bit about my recruiting background which kind of informed the product that is referring so i'll talk a little bit about both let me so let me get your background let me get the company first and then we'll build into your background so tell us what referrer gig does and what's the business model how do you make money okay so prefer a gig is essentially a candidate referral engine for companies that want to continue to develop out their employee referral programs so most people in talent acquisition know that referrals are usually the best source of hire so our technology allows companies to kind of turbo charge those efforts and streamline the way that they uh source out their referrals from employees manage them and make that their number one source of hire okay so just to be clear this is like they'll they'll say hey guys there's a thousand dollar bonus if you if you refer a friend we hire them they steal this for six months you'll essentially help employees track their referred candidates and see if hires get made and see when they get payouts exactly so you know employee referral programs have existed as long as companies have hired people but up until about maybe 10 years ago eight years ago it was more just kind of conceptual you know we have a referral program here's what we'll pay you you'd have managers reminding their staff and as social networks have grown in popularity and employees have expanded their networks through linkedin most commonly um it's it became apparent that there was an opportunity to build out a dedicated application for that purpose and we are one of a handful of vendors in that kind of niche space right now yep so what's your pricing model i assume it's sas what are they what do people pay you on average yeah so on average per month it'll go anywhere from 200 a month for a real small business up to you know a thousand fifteen hundred dollars a month for a larger size company uh there's some integration work that has to go on behind the scenes uh we kind of live as a layer on top of the company's applicant tracking system so generally we'll price out an initial kind of scope of work around the integration and the setup and then we roll into a monthly licensing model okay but just be clear your your average you'd say is about 200 bucks a month when it's on just the pure sas side now i'd say it's a little bit higher than that we offer a lower price point for the smaller businesses that maybe don't even run an applicant tracking system maybe they've got no that makes sense i totally get the product i'm just trying to get your current average as well so it's maybe like 400 bucks 500 bucks yeah that's i would say that's a good number okay interesting and then put this on a timeline for us when did you launch the company well i started it i kind of spun it out of my recruiting company about five years ago kind of had the idea that i wanted to diversify and there seemed like an opportunity here to uh kind of productize this thing i had in my mind um so about five years ago what i did as a non-engineer non-technical person is kind of uh scoped out what i wanted out of the product um hired uh some folks through one of these online freelancer marketplaces to build me a you know minimum viable product i got that out uh found a customer who at that time was a quite large customer they kind of looked at what i had and said we can use this uh but are you willing to make some customizations and so i said sure you know if you're willing to pay me yes um so from there i kind of relied on freelancers to support that customer and it was a very challenging way to do a startup and uh got to a point where i said look i'm i'm just throwing money at freelancers i don't really have a way to build and how much scott how much did you put into the company yourself uh all said and done probably we got it started i was probably about thirty or forty thousand dollars in of my own money and have you bootstrapped since then or have you raised capital no capital raised so what i did was i made a decision that the only way that i could scale this was to uh you know find a co-founder and i got very lucky that someone i had known for a few years it's a very talented software engineer was himself looking for a project outside of his regular engineering gig and so about two and a half years ago him and i partnered up and uh he came on board 50 50. we completely rebuilt the product from the ground up and having him has made it you know something that we can actually start to grow are you two the only ones in the cap table uh doing myself with uh freelancers i just i wouldn't recommend it to anybody maybe to get started and scott got something are you and your co-founder are the only two on the cap table today yeah it's just the two of us okay right straight and how many customers have you scaled to today right now we're still very small um we're about five or six paying customers uh we've got a pipeline uh but i wanna make it very clear to your listeners that um we are doing this as a kind of a side thing um i've still got my recruiting firm that's my primary source of income and my co-founder has his regular gig uh doing engineering for uh a company so what incentive is there for you guys to see this thing succeed though you have safety nets why does this have to suck it doesn't have to succeed so it's not exactly so it's sort of this double-edged sword right where we enjoy working on it because there's no real pressure uh for the two of us it's something that allows us to collaborate together be creative uh generate some additional money and we're taking a very uh sort of organic kind of long long road approach to it as opposed to the scale quick scale fast uh scott this just be clear this is really slow i mean this is between 2013 to today you're now doing about 2 000 a month in five customers i mean i get the whole slow growth thing but that's like a different level yeah i mean it's it's it's i would call it a side hustle more than anything else right now and um this is a conversation him and i have had many many times which is you know do you have to go all in for it to succeed and i guess ultimately the answer to that is it depends on what your goals are yeah look it's human nature where if your agency is making you something comfortable let's say you're making personally 200 grand a year from your agency and he has a full-time job as a developer making 200 grand a year you just have if you're comfortable there you have zero incentive to see this thing work so sometimes when people know that about themselves they have to remove that incentive to see the startup work even if short-term it means less revenue but long term it's going to be more freedom yeah and i think what people tend to focus on is what they hear and read about in the media in terms of what a startup has to be and most people's idea of a startup is bootstrap it go out and raise money turbocharge the thing build it up look for an exit and certainly that's a desirable outcome but there are lots of other types of startups that exist where you know you could build a product and put two thousand three thousand dollars cash in your pocket and it's something that you just do for fun um now on the flip side of that technology is constantly changing so when you look at the companies that are in our space that have raised money um they're innovating at a much faster rate than us we do lose customers of them because in many cases we can't keep up with their uh development cycles so uh it's a reward ratio but in our case uh there's really no other option we're not ready to go out and try to convince uh angels or vcs to give us money we both don't want to walk away from what we have right now so it's allowing us to kind of see this thing through and see where you don't want to go and you don't want to go all in well it's not that we don't want to go all in there just hasn't been a business case to do it um we're still trying to understand what the market opportunity looks like uh where but you know scott because there are literally there are hundreds of millions of dollars going into the space right now i mean you know for a fact that timing is right and timing is half of a business but you're still choosing not to go all in and by the way all in i don't mean raising capital by the way yeah so all in for me would be like an all-in for my partner would be he gives up his job i stopped focusing on my you know recruiting business and uh and now we're just sitting in an office together trying to scramble to figure out how do we go get 10 20 30 50 customers uh with just the two of us and i don't think that's a in our mind i don't know if that's something that's as attractive i mean him and i are both at a later stage of our life you know we're not in our 20s...