How Shuvel CEO Anil Kasibhatla grew Shuvel 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...