Ripple Recruiting Revenue & Funding (2024)

hello everyone my guest today is andrew meyers originally from denver he studied history and was private kappa at yale before dropping out his senior year to pursue ripple match he listens to clients runs sales and is obsessed with helping students and companies find the right match again helping students find their dream job andrew are you ready to take us to the top yeah excited for it all right so look you were on about a year ago actually it was more than a year ago it was january 19 2017 at that point you had about 15 customers you were you were just starting to make money 4 500 bucks a month in revenue 300 rpoo again you had a team of about 12 people i think up there in new york city you've since rebranded tell us what the company does and give us an update on where you're at today yeah absolutely so i think when we first talked it was in the really early days for us uh you know right out of our dorm room at yale and uh yeah it's been a you know pretty incredible journey since then you know i think that revenue total uh has has definitely surged and uh yeah you know our whole mission as a company is connecting employers with the right candidates and candidates with the right job and i think the way that recruiting has traditionally worked is employers pick you know a set sample of two three four campuses and they'll you know post up there you know do an information session whatever it might be the challenge is that you're recruiting from a really really limited subset of students and you're not actively able to win over the best candidates on each campus which is terrible for diversity terrible for winning over the very best candidates possible and so what we do is basically automate that entire recruiting process and make it possible as an employer to sort of pinpoint and find those best candidates regardless of where they went to school are you finding that you're hyper focused on essentially the hr recruiting space but specifically for students in the companies is giving you an advantage over larger market players like in indeed.com or isims or these other guys completely yeah i i think we think of ourselves as the most sort of candidate centric company possible and i think it's really only possible to do that when you're deeply in touch with the sort of anxieties and motivations that are going on in you know a 21 22 year old's mind and so that's a lot of where we channel our energy and kind of how we focus our candidate experience it reminds me of like a proctor and gamble you know their most valuable customers right out of college when parents stop paying for your toothpaste and then the brand and the student then picks a brand that ultimately they might use for life like tied or things like that so you're you're getting these customers early right when they enter the job market have you seen anyone do multiple jobs with you they do one right out of school then they leave then they come back and use you again or no completely so we haven't opened the process up as much for that second job just since it's you know two years in but the vision in the long run is to basically move candidates through every stage of that job process and so what's amazing to see as we kind of look at our customer success data and see the experiences the candidates are getting on the platform we have a really strong likelihood of being able to match those candidates in their next job and because we have an effective experience when they're first looking we sort of earn the right to collect more and more data as they go through that process which then makes our matches better and better as you think about that first career transition and kind of move farther out into a career and what's the revenue model i know when we first spoke again 18 months ago you were kind of still experimenting was this going to be like a percentage of first year salary thing or a sas model and do you charge the student or do you charge the company and you were still kind of figuring that out what's the revenue model today yeah i i vividly remember chatting about that on your show so we've transitioned to pretty much an entirely annual subscription model so about 80 of our revenue is driven through annual subscriptions and that's the company is paying yeah we'll always be free for students so the company pays and walk me through like what that average sale looks like are they buying a set number of placements and what's it what's it sound like yeah so basically what we sell is unlimited hiring across a set number of roles and uh from a sort of average contract perspective and we're looking at about an average contract size of 25 30k our packages typically start at about 20k for corporate customers so that's kind of how we do pricing and again that's unlimited hiring that's unlimited hiring for a given number of roles so those packages will you know go up into you know enormous kind of six-figure contracts depending on what it can a client's actually looking for but it kind of starts at a base level of twenty thousand dollars or so and and if you have multiple companies paying for the same kinds of roles how will you handle a competitive situation where two of your customers want the same student yeah we're somewhat selective about not bringing on employers that are direct competitors for each other and part of the pitch is that it's a little bit of a competitive advantage in that process um the way that we handle it on the candidate side in the short term is if a candidate is really far along in the process with a company that's directly competitive and looks like they're a fit there we won't match them with that other opportunity but it's a little bit of that blend and balance and just making sure that we're kind of hitting that hitting that balance right across the board and so is this kind of a human-powered back end one of your people is looking at this and saying ah don't they're already talking with the competitor don't automatically match them software with these new guys or is it really no it's all code driven so it's actually kind of incredible um you know when we integrate with a client's applicant tracking system we're able to see where candidates are moving in the platform that feeds directly back into our machine learning model and our matching model in general and so in the early days we definitely had a human being there just to make sure nothing was going haywire and occasionally occasionally you'd see like a crazy match or something like that but at this stage it's you know really pretty purely algorithmically driven and the human element really only comes in when we're trying to understand our employer's preferences and just making sure they're getting awesome awesome customer service and what have you scaled to today in terms of total customers paying you yeah so we have about 75 paying customers so our models changed a lot towards focusing on these larger annual contracts and just also i think the focus is really really excellent brand so we really want to be the place where the best jobs are the best candidates are and that's really how we've kind of centralized our focus yep and then look you said you know average starting is around that 20 grand per year if you've got 75 customers i mean can i kind of back in and assume you're doing about 100 grand 120 grand a month right now yeah that's a pretty pretty accurate package that's really healthy grow up a growth up from 4 500 about 18 months ago right yeah it's been uh it's been pretty crazy to watch that surge so it's been uh it's been great when did you realize that that was the model i mean was there a clear moment where you said ah that test just worked we've got to triple down there i think what we realized is that we wanted to align value as much as possible and so if you have a placement fee you know attached to a candidate which a lot of competitors in the space have traditionally and recruiting agencies do you're kind of incentivizing at the end of the cycle oh if i can find this candidate you know from a cheaper source i won't do that and so originally it actually came from wanting to be as aligned with our candidates as possible but what we realized is having that kind of push forward allowed recruiters that were loving it to just use it over and over and over again and i think early on in a startup the focus has really been maximizing value rather than maximizing revenue and so it was consistent with that but then it also ended up clicking from a revenue perspective and you'd raised i think previously about 700 grand last time we spoke i think you have some some news here so what have you raised to date yeah so uh you know just announcing another three million dollar funding round to our first institutional capital uh to date um and uh yeah bullpen and accomplice uh led the round uh together so really excited to have uh duncan davidson and tj mahoney on board and uh providing some great support there as well i assume with those guys it was a priced equity round not a not a debt round yeah it was a price equity rate yeah yeah that's great and did you uh i mean what was that model like did you go specifically like friends you knew or did you launch a big kind of competitive process how many months did it take yeah so it was a relatively smooth process uh this time around you know met tj relatively early on in the process i think kind of on our first trip and just really hit it off with him you know i think he's got a great track record as a founder and i think just really got how big we wanted to go in terms of vision and so he ended up giving us a term sheet pretty quickly and then brought bullpen uh into the round from there so ended up you know sort of getting to pick between a couple uh a few great vcs and we're really happy with how it worked out that's great you launched in 2015 so you have a couple cycles i guess now of annual renewals do you have a general idea of what churn looks like or retention yeah so so far since we watched uh you know we basically watched our what i call a ripple match today which is you know really a full automated recruiting process and we actually haven't turned a customer yet on that new product but it's annual subscriptions and only a few have come up for renewal so that's a little bit of an unfair uh unfair statistic but i actually plan to hold that this year we're seeing really really awesome results from our customers and a lot of our our revenue growth has been driven by referrals so it's been really cool to kind of see the reaction on the customer end so just to be clear all the ones that have gone up for renewal have renewed has anyone asked for like a lower plan or how you have any downgrades or no no downgrades so far but you know on this on this new plan it's it's still new but yeah 100 so far that's great let's move away from the economics and talk more about again just like what you're trying to do in the world right so place students into jobs what's that number today how many students have you successfully placed into jobs yes so the way that our process works probably the single like biggest thing we measure because if we integrate with an applicant tracking system we can track full numbers of hires but in terms of uh this sort of statistic where we actually hand it off into a company's process it's really that first round interview and so we've been basically averaging about a thousand first-round interview connections a month this coming year so working back into it i mean we're seeing probably between i don't want to say like 100 150 candidates get jobs each month on the platform so pretty substantial and a lot of those candidates you know really sort of think top tier software engineering really awesome diverse candidate so it tends to be a pretty powerful funnel for a lot of these companies so just just to be clear too you've based all your pricing and everything around just that first interaction you're not making you kind of guarantees around hiring or anything like that and then it's on the company to manage their own process in terms of taking those leads you're sending them and figuring out which ones to actually quote close and give a job offer to exactly yeah we don't we don't get guarantee hires in our pricing although at the end of the day that's something we sort of pride ourselves on and i think the gold standard is ultimately that's how success is measured a lot of the time so we have to be the best there do they tell you that the cohort of the leads you're giving them have a higher kind of job offer rate than other methods they're using yeah so i i think two of the most remarkable statistics we're seeing right now is 60 of the candidates that we connect with companies end up getting a first-round interview so if you think about like a human recruiter they've been doing this their entire life you know google alone employs a thousand internal sources and we are matching at a more effective rate than the average human recruiter and it's you know all tech driven so that's been really powerful and i think a lot of why those early results have been good i think the other sort of exciting statistic is yeah if you're hiring off of a job board um you know you're often looking at a pretty pretty abysmal acceptance rate in terms of actually going through the process and for us about one in every 28 candidates we match gets hired which tends to be you know really really superior to the average job board so that's been an exciting kind of i guess badge for us there yeah that is great with no churn it's hard for you to kind of get a rational ltv model in your head because you could argue it's infinity currently so instead of that let me ask you differently how are you adding new customers and what does that cac look like yeah so in terms of how we add new customers uh it's twofold uh we rely a lot on our current customers for referrals we also have an outbound sales model um you know pretty classic structure uh with both the bdrs and account executives um you know working there kind of building out our early pods there and moving a little bit away from that sort of founder-led excitement of the of the early days and uh yeah it's um it's been pretty straightforward so i mean our customer acquisition cost right now has only been about half of the annual value of the customers we're bringing on um and so a lot of them to work there and yeah i guess ltv you could argue as infinite obviously is never infinite but i really think that for us you know what we're doing is creating really really deep partnerships with these early customers and our goal be to you know be working with them on you know implementing how these candidates if they stick are doing five ten years from now and feeding all that data back into the system so these are really long-term relationships yeah so just be clear if you've got cac at about fifty percent of that first-year acv that's i think about 10 grand that you're willing to spend on these guys and then get payback period they're pretty healthy exactly yeah they got it and most of that is that 10 grand cac is mostly spent you'd say on the sales people's salaries commissions and all that are you doing direct paid stuff yeah exactly yeah okay very good up to me on the team what's the team look like today yeah so you know we're growing incredibly quickly i have 12 uh full-time at the moment um and we'll probably double in size roughly over the coming year so uh yeah it's kind of going through uh that all-out hiring phase a lot of interviewing in the in the office so for anyone who's uh listening to this podcast uh we've got a bunch of openings up on our job page if you're an amazing software engineer or you want to be a part of what we're building on sales definitely check it out you were at 12 folks also last year now that's not a knock on you because i know a lot of people brag about growth and they and they communicate that in terms of our team has tripled but really you've tripled expenses right so what's happened in the past year do you have some people churn are you trying to restructure the team a little bit or what goes through your head there yeah so i think in those early days um you know the whole focus was how do you build out this marketplace right and it was an incredibly kind of dynamic uh challenge to get the candidate acquisition inside of that launched and really pinpointing and bringing on the top candidates on each campus um i think what we've realized is there hasn't been you know a ton of change our our team's pretty similar but as we started to branch into the employer side and we've just gotten more efficient and more effective i think we're able to do more with less and so uh yeah we've we've managed to kind of flip it pretty quickly and i think uh i think in general it's just been an efficient hiring model there yeah i think look back 18 months ago when you have 4 500 bucks in revenue and 12 employees your revenue per employee obviously is is fairly low they will cost 300 bucks a month right now when you look at revenue per employee significantly higher and a great metric to look at in terms of how you're spending capital so that's probably maybe a healthier way to think about it um definitely i think we i think we were profitable in in the first quarter and compared to pretty fast burn rate with those 12 in the early days so it's paid off and i think that that worked but yeah it's it's uh it's better to be on this side of it for sure yeah no that is great where do you hope the three the three million takes you where what do you want to get to in terms of ar by the end of this year yeah so in in in terms of targets i i think are while important is almost a byproduct of the stuff that we're looking at you know the most closely which is really our interview rates and i think we're we're basically realizing that a year out from now we're going to be in a position where we can theoretically 10x the interviews happening on our platform the plan on student acquisition is to quadruple our candidate base with a huge focus on really really getting the best candidates on a huge range of campuses and what's cool with this sort of marketplace effect is that interaction density just increases so much when you've got this balance kind of mounting on each side of the marketplace and so that's really the target that we're kind of laser focused on right now you went into detail last call about how you have student ambassadors and that's how you get the you know you have a marketplace right you gotta get both sides and your marketplace on the student side you solve that by having ambassadors that's still the model yeah that's been a really powerful model for us um you know we we do a few different things on the candidate acquisition front but yeah we still have a huge uh presence on all of these campuses and partnering with these different clubs and organizations both on a campus level and on a national level has been a huge part of our success and growth on the candidate side andrew good stuff let's wrap up here with the famous five number one what's your favorite business book favorite business book i think i didn't even have an answer for you this time i i just read an impossible to inevitable uh which is jason lemkin's book on uh on b2b sas sales and i thought it was excellent so that's probably the one on the top of my mind right now number two is there a ceo you're following or studying right now um i think in terms of uh ceos that kind of interests me the most i think i'm always looking uh looking sort of right above me i think it's always helpful to have role models who kind of you know hit that next level of growth so there's you know a number of entrepreneurs in new york that i've really gotten to know and i find really useful from a mentorship perspective anyone in particular that the audience could look up and go study as well um that's god that's an interesting question i i i know we had uh i know we played catan with uh with patrick ambron uh the other night but i think he does a great job and uh i brand yourself but i definitely give him a shout out i'm still i'm still salty over i'm still salty over that game the fact that a newbie you you you play a ton i play it's on a newbie came in at a one but he's a great guy and sparks doing big things as well that was it too that was totally frustrating again number three what's your favorite online tool for building the business you know i think just works does a great job they're really blowing up another shot to a spark capital investment but they're uh they're really blowing up in new york right now and i think they do a great job uh when it comes to hr benefits all that stuff so we're really happy with them number four how many hours of sleep are you getting every night no not a ton at this stage you gotta we got a lot of work to do so uh i've already tried to shoot to get at least you know try to get to six that's not that's not bad and what situation i i assume still single married kids what's your situation yeah i i i didn't know it didn't have a girlfriend but not been uh nothing that's all in on the business yeah you focused right now and how old are you andrew i'm 24. 24. last question four years ago what do you wish you knew i i think that things are never as good or as bad as they seem right like it's it's a long journey and i think each moment you know has its ups has its downs but it's it's sort of staying the course and i think i really admire that consistency i think it was probably a little more excitable in the early days guys there you have it never as good or as bad as it seems coming from andrew founded ripple match back in 2015 really got things cranking about a year ago he came on the show was doing about 4 500 bucks a month in revenue 18 months ago now today doing 125 grand a month across 75 companies paying them for job interviews and he's lining up about a thousand first-round interview connections per month that's what he cares about that's what they're scaling they raised 3.7 million bucks in capital uh too early to talk about churn they haven't turned anybody spending about 10 000 bucks on acquiring these business uh or these companies uh to start using their platform they get paid back in under six months with their team of 12 in new york andrew thanks for taking us to the top yeah thanks nathan have a good one