How Targetrecruit CEO Jonathan Ross grew to $4.8M revenue and 300 customers in 2018.

hello everyone my guest today is Reena Gupta she's a serial entrepreneur and philanthropist interestingly dove into entrepreneurship when most women take a career break after her first child was born she's now doing that Kavya a tool called mom relaunch we jump into shows to began with a staffing company called Avaya then we've gone to a company called target recruit the most innovative talent management platform built on the Salesforce platform that modernizes the recruiting cycle at organizations from front to back office all right now are you ready to take us to the top yes I am ready thanks a lot Nathan all right so where are you spending more of your time mom relaunch or Target recruit currently I'm spending sort of equal time in both the companies when I started mom relaunch I thought it will take its own time to grow but the way the we are getting the support and initiatives it says kicked off at a very fast pace and I'm still trying to juggle the time between the two companies so what what are the business models on each of them is mom relaunch just information a membership site and what's target recruit so let me give you a little background of how it all comes together so you will understand what why and how I'm doing this do that I want to do that first but I want to get into that but first just tell us the current business model and then work backwards and tell us the story absolutely so the target recruit is a subscription-based applicant tracking system and vendor management system which is based on salesforce.com and we the business model is we have a per user license caused as well as some services and what about mom relaunch okay so mom relaunch business model is to do the placement and consulting projects by utilizing the talent pool that we trained on a launch pad that's the business model plus we have lot more things to offer in terms of mom relaunch but just focusing on the model the business model that's what we are okay so mom relaunch in a way you're kind of teaching your training moms too and then maybe the moms go use target recruit to find our next job target recruit will be the system that we run mom relaunch on just from the first technology point of view but think of mom relaunch as a services company that goes to clients and say do you need and our focus is an IT and HR for now so do you need do you need Salesforce developer do you need a Java developer do you need a business analyst we provide them and they can hire full-time part-time they can give us the whole project to work on they can give us and hire them as a consulting just on a contract basis and its target recruit your baby you're the founder you joined later on no it's my it's my baby it's your second baby right you have one one real baby and then target or playwright I have two real baby two real babies and four companies okay so target recruit when did you launch the company give us more the backstory here sure so target recruit was officially launched on app exchange which is the target which is the salesforce.com marketplace and we launched target recruit in 2008 okay a heck of a year to launch a company what where were you personally at that time personally I was still running my other company which is called Avaya a navantia I started as an IT consulting I was an independent consultant and then I turned into an IT staffing then in one of the projects I came across salesforce.com immediately fell in love with the platform decided to specialize in it so we started providing as a niche consulting partner for salesforce.com and then have you bootstrapped target recruiter if you decided to race no my company's a bootstrap coach she's in California and she's bootstrap folks I celebrate this is amazing all right good so so you're totally bootstrapped I love that and give us a sense real quick of kind of team size and and what you where you see the product going over the next year so about target recruit it's about 50 to 55 people on and off in that size we have people in I would say multiple countries now we have some developers in Belarus we have our sales marketing developers in India we have people in us some all across whenever we whenever and wherever we find talent that's a good answer and can you give us just a quick story about a customer that's paying target recruiting specifically how they're using it besides mom relaunch yeah absolutely so target recruit is started primarily with my background was in staffing company I understand that that industry well so we built a software the philosophy was a CRM based applicant tracking system that was a pretty innovative thing at that in 2008 and with Salesforce platform of flexibility and customization and integration it was one of the best time for us to launch the product so we went into the market with focus on staffing industries and just focus on the we call it in a industry as the front office solution and then we started adding the back-office and timesheet accounting scheduling be specialized in healthcare we specialized and just recently released a workforce management version of target recruit so we started with staffing industry so small medium large staffing industries are our clients and her name one of those client if you don't me asking you real quick what are these clients on average I mean give me a general sense the size of what they're paying per month are we talking ten bucks a month or 10 grand a month or more our target recruit is per user license about $99 per user per month okay any average logo that signs up has how many users I would say between 25 to 75 is a midsize if it is a small company it's about five to ten licenses okay so she's all gonna say 20 people at 99 bucks a month so the average customer maybe pays you two grand a month is that fair for the smaller size if it is mid-sized then it is seventy-five an average okay so maybe five users an average so depend on the client size okay but what I'm trying to do is get a sense of your average customers is about 20 people I mean is that a good average or no I would say more like 30 35 okay it's a good good number yeah that's good and then 99 that's per month not per year right yeah month oh okay good okay so again can you tell us a company right now that's that's using target recruit yeah if you do you need the customer names yeah yeah is there well just share a customer name that that you're comfortable sharing or that's giving you approval to share I want to hear an actual story not just kind of marketing yeah so I would say one of our I always like to use this customer because we grew with this customer and this is our MedPro staffing this is fro staffing Metro staffing there in Florida one of the one of our I would say the customer who really knows how to work with a company as a vendor as a partner and the in fact I always go back and say that we are in health care because of Metro staffing they helped us build products that are specifically for healthcare industry they helped us even architect the they were we were working with us so a customer like that is the reason why companies like us survive so I love to talk about them and they've been with you back since 2008 huh almost that time I would say 10 2010 but it's it's one of the it's one of my favorite stories to talk about is like every every customer you can go and learn from them but they're very few customers that understand how it makes to work work like a partner and what have you scaled to today in terms of total customers paying you I would say how close to about 300 is the right number and then of course that goes up and down and we started to carve out our expertise also scaling to larger clients and not only there's some big clients sure yeah I mean but I mean if I do the math on that 300 customers if each of those logos on average have 30 seats a pop paying 99 bucks a month I mean that puts you at like 890 grand a month in revenue is that generally accurate I would say it's an average so let's keep it like a number that fluctuates up and down because there's some customers we pay significantly low for getting the license and then there are some services and all those things but it's on about ballpark I would say it's pretty close if you look into those if we had charged full full price drops there yeah yeah but you hon so I want to make sure I get I get an accurate representation of kind of where you get credit here so I mean are you it mean is it way south of 800 grand a month are you like 200 grand a month or way north or what just to me a big range yeah I I'll have to look into that but I would prefer I think it's not around $800 a month I would say close to four five is much okay could you get so closer to 400 or 500 bucks a month in the reasoning behind that which is totally is maybe early customers are on bulk deals you give more discounted prices under 99 bucks a month yes okay very good and what do you grow at I look by the way I asked this question because people always assume bootstrap companies are flat to declining they can never grow your every year what are you growing at year every year I would say it's more about 3035 percent that Rene that's beautiful for a bootstrap company yeah I you know I always go back and say it's bootstrap but we try to run it as a completely like in a more like a startup mode so every time we are like looking and chasing where to cut the expenses we are took at the generate the revenue and all those things yeah well look at a 30 percent growth rate that means back into about 12 months ago or 13 months ago in December of 2016 you were probably you know somewhere around 300 grand a month in revenue now you're up around 405 so I mean that's obviously a really healthy growth rate how are you internally thinking about growing the team in hiring are you scaling sales right now our marketing our engineering well I always proud to say that our product is pretty good not that because it's my baby but I always take pride in saying that how much we have been able to develop around the product with the limited resources that we have one thing we have not done very well is the sales and marketing so we always try to learn from companies who are doing and things and certainly you're on the Salesforce AppExchange you better understand sales and marketing I understand sales of marketing is just some of the things that we have not executed properly in terms of hiring the team the the you know sometimes it's always a balance between what you're trying to spend your money grow the product or sell it you salesforce appexchange is an amazing world it just I call it as it spoils entrepreneurs like us because they send us so many leads inbound leads to us and they literally say here's the customer work with them right it makes it makes them more sticky on the Salesforce platform so I get it how many people currently on your 50 person team are dedicated just sales are onboarding I would say about I have a very small sales team and that too we have been doing a lot of sales from offshore in India that can take only to a certain limit we have tried hiding something how many looks so currently around our only sales on census we have four okay four could go to that it's fairly small compared to the 50 total so what mostly our engineering and support implementation which means that we have to say over fifty percent is an implementation okay alright because what happens is when you onboard the Klan that's the easiest part but making sure that they are successful they have they are getting what they are getting is the most important thing to do tell me about churned well interestingly churn in the SMB is not something to be very proud of because there are lot of companies they come and go and that good hits the churn for our company as well I would say the in the mid to large we are close to over 80% in attrition our retention basically yeah minutes annually yeah and on the smaller size on the smaller I would say we are close to 50 50 60 I mean again there are certain clients I don't know if it's the right statement to make but there are certain clients we definitely don't want to work with because of the things that they want everything they don't want to pay and all those things so is there certain clients on the SMB size we decide to let go and certain clients that we never want to let go yeah now if I do I mean if you run the math on that 80 percent annual retention so it's 20 percent churn or about one point six percent churn per month I mean you would assume then that on average customer would say with you for call it 50 60 month or be worth about 150 to 200 grand to you is that generally correct in terms of how you think about lifetime value well I don't know how to answer that question because I have not thought it from that point of view but we just look into how many years a customer is with us how many months and all and I'll be very honest we don't we have not calculated the metric called lifetime value of the customer yeah we don't have to because your bootstraps you can do your own thing right that's the beauty of it let me let me ask you a different question you have a sales team I imagine you spend something on sales and marketing what are you how quickly do you like to get your money back so in other words with your CAC and how quickly to get that money back well if you ask like like to immediately does it happen immediately no what are you a today no I think I told you that our marketing and things is very I call it very reactive because of the way we grew in app exchange so we we are we are very thin on budget on marketing and sales there are very few specific events that we do so I mean I think you think you're attacked back then definitely under three months no I wouldn't say that I mean it depends on where we have invested so if you go to a trade show and you have 15 such opportunities of closing business if some of them might close in three months or make close in 12 months or maybe never chose it so it's it's a pretty typical way of the ROI what I look for it is first thing is did I cover my expenses for this event or something that we have done Renee just just speaker what I'm looking at is not like sales psyche or do you cover your expenses it's how long does it take you once customer starts paying to cover the expenses associated getting that customer so I'm just trying to figure out if you know if they're paying you three grand per month on average did you spend 30 grand to acquire them so you have a 10 month payback period well you know customer by customer we have not done in those kind of analysis but the way we look at it marketing cost is if I have spent 20 grand in an in a certain marketing event how many customers we got from that marketing event and did it covered 20 grand outed it gave us 100 grand yeah that's how that's how we look at it so um I would say that cycle varies a lot depending if you go to Dreamforce you can get get that return very quickly so what did you spend over the past twelve months just on anything paid conferences marketing Facebook Ads Google Ads things like that just out of curiosity I think if you look into it one of our biggest expenses Salesforce event when it cost what it's pretty healthy I'm close to fifty cages for one one event so it's it's very expensive very good hey let's wrap up here real quick so you're sitting on a company doing four or five hundred grand month in revenue it's a healthy company it's growing why take the time why get distracted why do launch mom why go launch mom relaunch why no good so yeah it's a you know first of all I said entrepreneurs have some kind of bug in them then they can't keep quiet that but beyond that I it's my passion I think if you look into it the time I started my company was when my child was born I needed to do something but it was not easy to think about what to do to keep your family as well as do something that your interest to you mom relaunch kind of been in my mind since I started my own company my first employee was a stay-at-home mom who I trained her to do some of my job and then brought her back into the my business to help and then started consulting so that model of bringing a mom who is talented enough training her to do this skill with the skills both soft and hard skills it is the right way to work and get them into this into the workforce now all I have been doing in my companies and I we call it like their Lord of women and I my company who are like in a high position some management positions and they have they're all rock star moms is what they call our I call them and all they need is a little bit more flexibility in terms of how they can work their productivity is pretty high and that all this thing has been being proven over and over again in my company and I just wanted to expand this model so other companies can take benefit of it very good I'm not even a mom and I'm sold so Renee look we're out of time I want to wrap up here quickly with the famous five okay one-word answers here first thing what's the last business book that you read so I'm reading this book called when I don't know if it is who's the author its Daniel pink oh yeah when buy win by Daniel pink is a good one number two is their CEO you're following or studying right now well I like Melinda Gates a lot she's great doing a lot of good number three what's your favorite online tool for building a business besides your own salesforce.com and QuickBooks Salesforce very good number for how many hours of sleep to get every night that's a good question I but I read about five hours a night that's pretty good in a situation how many said we don't have a kiddo or a married single or you have kids more than more than two or just two just two kids mattered okay good and and how did you want me asking how old you are I'm in my 40s okay good she's 40 she's 40 years old all right last question Renee what he was your 20 year old self knew what I wish my 20 years myself 20 year no is I think time management management thinking there you have it from renamed time management is a key which makes sense she's running like four companies unbelievable bootstrapped in California is also a mom up to launch target recruit is her SAS company back in 2008 when she again birth their first child the company is now doing really really well helping mostly sales and HR tech folks recruit especially recruit mom she's now serving 300 customers doing about 400 500 Rand a month in revenue growing 30% year over year totally bootstrapped with her team of 50 between California and India also joined and launched mom relaunch to sit on top of that platform to help moms get educated and get great jobs Renee thank you so much for taking us to the top thank you