How Shuvel CEO Anil Kasibhatla grew to $4.9M revenue and 11 customers in 2020.

hello everyone my guest today is anil casablada he is building a company called param solutions based out of ashburn virginia they specialize in human capital solutions and are passionate about helping their customers save on recruiting costs all right and now you're ready to take us to the top absolutely absolutely all right so save on recruiting costs is this a sas tech platform or is it a high touch consulting business it's more of a high test consulting but what we've done is we've taken some of the principles of the sas product space right and try to sort of use that within the parliaments of recruiting and human capital acquisition okay so walk me through that what do people pay you on average per month to use the tool or you so basically it's not um okay so how do you structure it nathan is essentially it's per requisition cost right so if a client depends on how many requisitions they have it's a flat fee that just pays a thousand bucks for each requisition okay but we sort of tear it out into three different uh you know there are three different tiers within the platform the three rex goes into 3k right from three to six golden six and then we have uh folks who have six plus requirements going in the 10k so that's how it structures all right what do you what's the word six plus what uh six plus requisitions right what is it what is it what is an acquisition yeah requisition is basically a job a job wreck right okay why don't you just say six jobs isn't that easier for dumb people like me to understand yeah sure you know i think we're just so used to talking in the recruiting parlance so that's right that's just such like a big confusing scary word when you could just say jobs six jobs there goes so if i'm listening right now and i'm a software company and i want to hire six people i could use you to help me go find those six people mm-hmm absolutely absolutely and what do i pay you for that it's basically a thousand thousand bucks per uh per search yeah per job per completed higher or per the just the search but completely higher okay okay so if i work with you and you bring me back 20 potential hires and i hire none of them you get paid nothing no that's not how it works okay if i if you give me 20 jobs right and i'm gonna charge you a thousand thousand dollars per job per month okay and i'm going to promise you it's a sla based requisition model right so typically what happens is let's say you want to hire five oracle dbs let's make it more granular okay so if you want to have five oracle dbas you i'm going to charge you a thousand dollars per oracle dba per month right it's all sla driven so we guarantee that you're going to be getting three qualified resumes per uh per requisition again per job right so what if what if it never leads to a higher so so basically if you end up hiring any of them right you don't owe us any fee on top of the thousand dollars okay now let's say if you don't have uh you know if i show you three candidates right you end up not hiring even a single candidate right so we start taking a hit on on the sla right so we give you a discount from thousand dollars we drop it down 10 every month the the the job is open right so the skin in the game is on our end we make sure that every time you give us a job requisition or a job in your in in your case you're gonna go ahead and fill it for a thousand bucks but neil no it's not your skin in the game if i pay you a thousand bucks that first month and it doesn't lead to me making a higher i've just lost a thousand dollars i don't get back and what you're saying is well no next month we'll only charge you 900 bucks correct but then what if nothing in the second month then i lost almost two grand no no so this is how it works okay so if you compare our model nathan with any standard recruiting model what happens is if you are using a contingency firm right now in the industry they charge you 20 percent flat fee on any search right let's say they also run the course they go 30 60 90 days at the end of 90 days you have to hire from them guess what you owe them twenty thousand dollars right because it's a 100k and 20 fee if we take 90 days to fill your requisition you're only paying us 3000 bucks that's not what i that's not the example i'm giving the example i'm giving is what if i pay you your fee and i never hire somebody that that's by the way the reason these recruiters get paid 20 or 30 percent is because they're really good they right they only get paid usually when the higher actually happens well that's the same thing that doesn't it then it may sound a little bit far-fetched but literally what's happening is a lot of you know we're trying to sort of really democratize the whole process okay yeah you know it so if you look at the different steps that recruiters take to find your candidates these days right you know the very first step is you know there's a sourcing there is screening there is sending a you know a candidate for a job interview right prepping them making sure that you know the interview logistics are all taking place right and make sure that you onboard you know you even even start socialized offers etc right so our model does exactly what a typical hunting firm does the only difference is at the end of the game right you don't owe us 20 grand 30 grand and 40 grand per searches i mean just imagine i'll give you a perfect example the sweet spot that we have right now in the dc market is companies that are you know typically hiring between anywhere from five folks to maybe 10 to 15 people a full calendar year right if you take firms like that and if you say hey i'm going to charge you 20 grand for every requirement that you have you're talking about 300 000 dollars for the company uh just just in headlining fees okay so it's going to be able to make that if the company makes the higher correct correct in our case that's what i'm saying in our case see nathan here's our beauty right in our case let's say uh first of all i'll give you some stats okay anil i don't know i don't want stats i just want to understand this one question i pay you guys regardless if i hire or not it is a sunk cost it is a fixed expense no matter if i hire or not that is the difference between you and a typical recruiter what you're saying is the recruiter is more expensive i know i understand i'm agreeing with you but what i'm saying is your model is if i don't hire from you you will give me a discount the next month but i still lost the money i paid you last month correct but see nathan how do you want to say if you look at it myopically like that from a month-to-month basis then you would say hey listen you know if i'm not winning the first month then second month although you're gonna give me a discount you're already charging me right okay but what i'm saying is look at look at it from the threshold of the end of the cycle what happens okay typically in it these days the average time too hard is 66 days business days right so you know if you take that those statistics and add up you know you'll see a tremendous arrow in in our business model by the way every question you're asking them is extremely valid and a lot of clients have exactly the same difference when they start talking to us right that's why yeah exactly i mean your questions are very valid by the way okay and see it takes folks to actually try to get into the model understand how we service them understand the quality of applicants we are sending etc right so it's a paradigm shift there are companies by the way we're already doing this under the charter of rpo and stuff like that right so like you know name well you know the whole bunch of them i'm sorry i can't remember them at the top of my mind right now there are firms there is a company in seattle and chicago there are companies already sort of morphing into this model right uh yeah and you know essentially what's happening for a whole lot of them is you know they're trying to say okay you know we'll start the model as a pure play recruiting model and then we'll service you based on technology in the back end technologies come in it's going to come in and you're going to sort of help elevate some of the pains that typical recruiters have right so that's the one see in our case right it's it's done firstly we're not making this huge claims that ai is doing the heavy lifting and you know we'll find you somebody because we have a fantastic algorithm and you know so it's not that so our thing is hey it's human and human capital right we have real recruiters who are going through the ringers who are here every day trying to mine and find those purple skills if you will for the candidates and essentially if you take a head-on you know if you take our stats and what's happening in the recruiting industry again nathan i may sound a little biased but we have enough to prove right now that this is actually scaling for us right and how many inspections how many companies right now are paying you to do them recruiting for them so right now we have 11 clients okay okay and six of them are actually on the rash platform and the recording as a service platform okay now by the way remember our company started in 2010 and we already have a staffing division so we have been doing the staffing work like every other software recruiting vendor in the industry right which is basically time and material et cetera right so that's a different piece of the puzzle okay the rash model itself started because we've been having a lot of conversations with our clients especially nathan the dc market is a little different okay sorry hold on just to take a sentence just to step back the six of the 11 that are on an old model what are those six paying you per month the six of them are they are in the new model not the old model okay so then there's five on the old model the five that are on the old model what are they paying per month they they're all staffing they're all staffing so that depends on you know the bill rate of each individual candidate that we place it depends on the account it depends on that's 20 to 30 percent of the yeah if if you help them hire someone you get 20 or 30 percent of first year salary no it's not it's not on salary at all it is on a bill rate it's an extension of a bill rate it's staffing it's not headlining okay we don't people listening when you say staffing they're not going to know what that means you're in the world so explain what that means to us the five customers what are they paying per month okay so the the okay out of the 11 clients six of them on the last platform the five of them usually give us a bill rate okay and they say hey i need a java developer for six months right they say hey the build rate is 100 bucks an hour right so in that case that's why i can't give you an exact number how it works if the client gives us a number to live with we take that number we go to the market we find candidates right and we we sort of you know we cushion up making sure that okay if the client is giving us hundred bucks we bring in a consultant let's say 80 bucks so so 20 bucks is a sort of gross margin right so that's how that model works why don't people just go use top towel for something like that well top tail is it's an international organization it's outside of the us confines right we are talking about serving american clients here in north america number one nathan and second thing is a lot of our clients are actually government systems integrators okay that means we cannot have h1 people we can't have green card we cannot have any of those labor categories we only have to hire u.s citizens and citizens that are actually cleared okay yeah they have public trust credence they go through secret cleanings i mean there's a whole other process right right got it so that's okay so those are the six those are the six old on the old model the five on the new model how much are they paying you on average per month so so right now i have one customers paying us three grand i have six four customers who are paying a six grand our one customer is paying us 10 grand okay seven thousand dollars per month in revenue and how many people are on the team uh we have about total 11 folks right now uh we have let's see again i want to give you that exact numbers okay so we have six uh sorry we have 17 folks 10 are in india and five are in the us and two are consultants yeah very cool how many are engineers uh we have uh my business partner himself is an engineer okay uh his name is srikant kurkano and he's actually one of our leading uh consultants on a government project right along with him i have three other folks one is a front-end developer one does graphics work for us another one is a backend engineer so we have four engineers totally in the company well why is the graphics person the graphics person's not an engineer yeah well we have been also doing a lot of inbound recruiting we started that in january of 2020 so we're actually helping our clients uh do a lot of digital marketing right yeah sorry and you know why does that have anything to do with a graphic person being an engineer you have three engineers right now right right right so when i say graphic it's a you are your experience oh i see i see they're designing though they're not writing code yeah they're like product or onboarding i see okay so 17 people uh three developers uh you're leading this with your partner you launched back in 2011 you said or 2010. um how many jobs did you help land last year in 2019 in last year we filmed 76 jobs wow that's a lot okay 76 jobs across how many companies uh that was about in those 11 11 accounts that we have wow okay that's a lot of 76 is a lot of hires well actually nathan billy not we worked on probably about 140 plus record acquisitions just in 2019. okay so 140 you worked on 76 were successful correct correct we filled 76 positions how many just i'm curious how kobe's impacted you how many jobs do you think you'll fill this year i mean by the way that's a great question um fortunately i don't want to jinx it as of today we have had only one account uh go away i mean they are not gone away completely uh it's just that again in the government space you go after rfps and stuff like that but you're trying to get some new work in right so they're waiting on an rfp to be blessed by the government so that one account has actually gone away temporarily but all the out of all those six accounts i have five of them alive right now so how many jobs have you placed so far this year in 2020 i'll tell you just i think we've already done 37 if i'm not mistaken okay 37 hires across the 11 companies correct got it interesting very cool um so how does somebody like you view sort of these new like these tools like topped i mean you have a niche because they have to be us citizens they're government jobs but a lot of people like you have been replaced by top tal upwork fiverr i mean there's hundreds of these freelance marketplaces these days how do you view them so nathan again you know the thing is uh although they seem to be like competing with us they're not really competing with um you know with the kind of skill sets that we are going after right we just told me java i've hired a top i've hired a java developer on top down many times absolutely i mean see java is just a you know example that i gave you right so for example we're doing a whole lot of recruiting in cyber security space in reverse engineering okay so if you're thinking of finding somebody who can hack i mean do a lot of reverse engineering stuff do malware analysis right cyber threat analysis computer network difference i mean these are very highly specialized skills again you can you can first of all you're not allowed to go and outsource that right second of all that talent is sitting in skiffs all over the united states so they it takes a certain amount of uh you know talent and skill et cetera to mind the candidates and have a discussion with them and bring them to the table right that's what's your secret for getting that conversation going is it a linkedin message or a phone call or what's the first touch point yeah yeah we have we have multiple things that we use and linkedin obviously is one of the tools right and we have grown our own proprietary database system over the past seven and a half eight years we have over 400 000 records in that in that system right uh over 95 percent of the records that we have in our system actually have clearances right so if you think the value that we bring to the table not only the dmv market by the way dm is dc maryland and virginia right a whole lot of this government systems integrators have positions across the us right alabama is a hotbed florida is a hardware texas is a hotbed in fact right now we are recruiting in san antonio at the lackland air force base right so so it's all over right i mean essentially say nathan part of why we started thinking about sort of structuring the rash as how it does right now is because the time it takes to get these kind of folks uh you know sort of delivered to these clients is sort of a different animal really right right have you each dropped the company or did you have you raised sorry no it's completely self-funded by me and my business partner we haven't gone to the capitol markets we haven't raised any funding at all any plans to raise no definitely not very cool all right neil let's wrap up here with the famous i have to actually ask you first cause i grew up in loudoun county uh and like right near ashbury i grew up right near oatlands plantation so take 15 south towards aldi uh if you're in ashburn um and i also went to virginia tech i studied architecture so i have to ask you because i'm a die-hard i'm a die-hard football fan of what used to be called the redskins which are now called the washington the washington football team are you a skins fan or no i'm not i'm a new england babiest friend oh get out of here all right we gotta we're editing this interview now all right number one what's your favorite business book uh business book man i can't um i don't know there's so many that i've read i can't think of anything right away okay number two is there a ceo you're following or studying i've been um sort of following elon musk on and off for the most part number three what's your favorite online tool for building param um we have recently discovered a tool called coda c-o-d-a at skoda dot io right c-o-d-a oh coda yes they'd raise 70 60 million dollars pre-revenue and i said i hope you're planning on turning on pricing soon well we're still paying them peanuts to be honest yeah but we're getting a lot out of that too we love that how many hours of sleep do you get every night um well the eight to ten okay and what's your situation in your married single kids uh i i'm married i have two kids in fact my younger one is going to take oh very what is she or he's studying he's going to be going to the pamplin school of business very good i was i was architecture and pamplin so i i i i i love you you were bio yeah i did your bio asset oh you read my but what were you what'd you study uh i studied mis management information systems yeah okay okay let's see this is perfect you're doing what you should be doing all right and neil how old are you i am 54 years old 54. so we almost graduated the same year uh just just differences made the new highly successful i'm not no i don't i don't know about that all right 54 last question neil what do you wish your 20 year old self knew um that it takes a lot of perseverance right it takes a lot of patience it takes a whole lot of learning every day to be successful in business and you've got to be very humble and you've got to you know really take uh everything that comes at you and eventually turn it into into success and profit guys param solutions with anneal again they launched it back in 2010 they've got 11 customers uh that pay something like a couple of grand per month so they're doing call 35 to 40 000 a month right now on sales they've totally bootstrapped which we love cobid really hasn't impacted them but 17 people full time three engineers plus a new plus some graphic designers and consultants but again scaling nicely as it looks continue to help folks place and get very talented people in jobs not just any job these are usually government jobs they're based in northern virginia so neil thanks for taking us to the top hey thanks a lot i appreciate the time