Before we give you the whole story, The Chad & Cheese Podcast's dynamic segment #FiringSquad is a weekly podcast where the hosts act as judge, jury—and occasional executioner—for a recruitment product or service start-up pitch.
They focus on the tech they use to enhance results for their clients, gleefully punching holes in their carefully constructed dreams.
In this case, Sean had to pitch Recruit CRM. Aggressively questioned by two HR warriors, find out if he actually received a major applause at the end of the episode or was it just all empty racket!
Tune in to the episode here–
Joel: Oh yeah. What's up everybody? It's time for another Firing Squad. It's your favorite podcast, the Chad and Cheese podcast. This is your co-host Joel Cheeseman, joined as always by Chad Sowash. And today our latest victim is recruitcrm.io. We welcome Sean Mallapurkar, I said that wrong I'm sure.
Sean: No, you did it right.
Joel: CEO of the company, Sean, welcome to the Firing Squad. Give us the correct pronunciation and I'm just going to call you Sean for the rest of the show.
Sean: Yeah, so my real given name is Shoanak Mallapurkar.
Joel: That's fancy
Chad: That's pretty fancy. That's pretty fancy. It's much fancier than Joel Cheeseman or Chad Sowash. Excellent. Well, Sean, give us a little background about you. Who is Sean? You like long walks on the beach? What do you do?
Joel: Give us some background.
Sean: Yeah, I'll go back pretty early. I was born in Mumbai in India. Dad, was in the Indian army in the anti-terrorist squad. So growing up, we lived pretty close to the border a lot. Moved, switched 10 schools throughout high school. I did robotics in like 9th and 10th grade and was on the Indian National Robot Olympics team because we were national champions.
Chad: Oh, nice.
Sean: Played a lot of squash. I was on the under 17 and under 19, Asia Squash Federation ranking list.
Joel: Is robotics pretty popular with the ladies? That's what I want to know.
Sean: No, fuck. No, fuck. No.
Chad: Yeah. You went from robotics to HR, talent acquisition, and staffing, right?
Sean: So HR was always in our life. So growing up from the time I was five till I was a teenager, dad was the India country manager for a company called Randstad.
Chad: I've heard of them.
Joel: Yes. Yeah.
Sean: Cool. And then he ran the India business for a payroll company called ADP. And then that's sort of how we got into the ATS business. So my dad and I co-founded Recruit CRM five years ago, and not just his bribe to get me back to India.
Joel: And you're an Indiana/Stanford grad.
Sean: No that was a summer program in high school.
Joel: So you're an Indiana grad.
Sean: Yes. Indiana grad.
Joel: Okay. Well, we like that. We like that. Chad, tell him what he's won by being on the firing squad today.
Chad: Oh, Sean, you will have two minutes to pitch Recruit CRM. At the end of two minutes, you will hear that bell, and then Joel and I will hit you with rapid-fire Q and A. If your answers are droning and you're getting boring, Joel's going to hit you with the crickets, which means tighten up your damn game.
Joel: Move along, move along.
Chad: At the end of Q and A you will receive one of these three ratings from Joel and myself, big applause. I'm feeling a little horny. That's right. We might have a unicorn in the making. Golf clap. It's cute like, a miniature horse, and going to need a lot of changes to be able to gallup with the unicorns. Last, but never leaves the firing squad. You certainly won't be joining the unicorn herd with this Philly call Sarah McLaughlin because this horse needs a new home or just to be put to sleep. Are you ready?
Sean: Yes, I am.
Joel: All right, Sean, in three...two.
Sean: So, hey guys, Recruit CRM is an ATS and CRM system, which is basically an applicant tracking system and a customer relationship management system for recruitment agencies. We've been around a little over five years. We serve 800 customers in 78 countries and we're sort of the highest-rated recruitment agency ATS on Gartner, Capterra, G2, Software Advice, and every other major software review website out there with over 150 reviews. And this is sort of because of our amazing customer service. Our average response time is like 73 seconds across like a thousand plus chats that come in every month. And more importantly, our product does everything a recruitment agency needs. The smallest customers we have are small agencies with a couple of folks, the biggest heads over 150.
Sean: We've sort of just signed up Hays for their Europe operations. Hays is one of the largest recruitment firms on the planet. And one of the reasons they picked us is because we're sort of an all-in-one shop. We help you do reporting. We help you record calls with candidates and clients and store them on the platform. We help you record your emails, and the emails your other colleagues are sending out. We help you visualize your sales pipeline and recruitment pipelines on Kanban boards. So you can sort of see cards of how candidates are going through different stages or deals are moving through different stages. And then for free with the click of a button, we help you send those Kanban boards to your clients. So they, without having to pay for anything can click on a link, move candidates across stages in the recruitment process and like give you live feedback.
Sean: So we're all in one recruitment agency software system, like an operating system for recruitment agencies. We've grown from zero to over $3 million in annual recurring revenue with zero funding making over a million bucks a year, this year in free cash flow. And that's us, that's our story.
Joel: All right, Sean, you have 800 customers.
Joel: You're making money And your domain is recruitcrm.io. Can you not gather up enough funds to buy the.com? Like what's going on with that?
Chad: It's available.
Sean: We probably could. It's just that like all, all our SEO credit and stuff is built now on the io domain. Because when we, when we did go to buy it, this was like five bucks and we just bought it and the other one was already owned by somebody else. And we didn't want to waste time, like trying to get like a dealer.
Joel: 301 redirects. We can work on that. Recruit CRM. Do you think that name sort of hinders your growth into other things? Do you worry about being pigeonholed by only being a CRM?
Sean: We only ever wanted to be a CRM, right? So long-term strategy is sort of not just to be an ATS and CRM system but extended within the staffing domain to let people do contract work or management, timesheets, and so on, which is sort of part of Recruit CRM and then go back and do like building a second product, which would probably be a payroll product or something that plugs in.
Joel: You're fine being in the box is what you're saying. You're fine being in that box. Got it.
Chad: Yeah. Jumping back to that real quick CRM and ATS are probably the most boring relic terms in this, in this industry today. We have so many more technologies that are achieving unicorn status, and they're trying to actually separate themselves from being a quote-unquote CRM or ATS.
Chad: Do you see yourself actually pivoting away and trying to get away from the.
Chad: So you just, the boring in relic terms to you are something that you want to embrace moving forward.
Joel: He likes the box, Chad.
Sean: Let me explain this. Right. There's a lot of that unbundling on the non-agency side, right? We work exclusively with recruitment agencies, with the exception of a couple of companies, like Volkswagen that use us to recruit self-driving car engineers for Lamborghini and Porsche, and so on. But in general, we work with recruitment agencies and they need a system of record, which is basically one main system that they go to work and spend three hours a day on. Our average user spends three hours a day on Recruit CRM. So we're not like one of their tools in their tool kit. We are the main like mothership and then everything else, like sort of plugs into us through APIs or Zapier.
Chad: Right. So you're the core platform, the system of record. So being the boring piece, everybody needs boring is what you're saying.
Sean: Yeah, exactly.
Chad: Okay. So give me some ideas. How many employees do you guys have?
Sean: We have 53 today. We'll be hiring 42 over the next few months.
Chad: Nice. Where are they all located? Are they across the globe? Are they remote? Are they in a single location? Where we at?
Sean: They're all remote, but right now they're all remote just across India because of the cost advantage here. But of the 42-43 hires we're making in the next three months, we're making a bunch in Latin America because we have a lot of customers there and we need, you know, Spanish, native Spanish, and Portuguese speaking folks. And also folks that don't have to work like in India. We have folks that work night shifts to cover north America and Latin America customer base. So now we want people that just work their regular days in Argentina to serve that market.
Chad: Okay. So taking a look at your 2021 growth, it looked like you had growth in many different countries. So are you currently saying that it's an obstacle trying to run everything right now out of India, which is why you need to expand or give me some idea over the last couple of years?
Sean: Sure, sure, sure, sure. Sure. So over the last two years, we've grown about like 900ish percent. So like if we're at like $3.8 to 3.3 million, now we were at like $300 grand, 24 months ago. And in the last two weeks, we've always been global, so like less than 1% of our revenue comes from India. So our first customer was in the UK, these are all people that have found us online. It's all inbound. We haven't really gone out and like called people and asked them to buy our stuff. The reason we are going international into hiring folks is more for finding native Spanish, French, and German speakers because some of our clients use our system because our system is available in three languages, but we don't have humans that can do onboarding and training and sales in three languages or four languages.So we're able to manage everything from India, just fine because on the support side, we have people working 24 hours across different shifts.
Joel: Gotcha. I don't have to tell you that this is a crowded space.
Sean: It is.
Joel: Obviously Bullhorn, PC Recruiter, a few sort of well-known longstanding companies. When you guys get an inbound lead, cause you just said you don't do any sales and marketing. Unless I heard that incorrectly, we can cover that in a second. But so when you get an inbound call, what is the answer to, how are you guys different? We're using Bullhorn now, we're looking at changing. What can you guys do that they can't? What is that differentiator?
Sean: About 25% of those 800 customers have moved to us from Bullhorn. I have three Bullhorn data migrations going on this week. So...we...at a very high level, right, if you try to raise a support ticket, even like just support, right? If you right, tried to raise a support ticket on Bullhorn, you're going to have to try to find where that place is. Where you need help from. Versus if you guys go to my website right now and go to the chat bot and ask a question, you'll get a response within the next two minutes. And that people give a shit about that. People give a shit about like, you know, especially two people agencies is they're like, hey, how do I parse the candidate? They want a human or something to help them immediately. So I think that is a big differentiator. Speed.
Joel: Okay. Little white-glove service.
Sean: That's one. The second thing is our product doesn't look like windows 95.
Chad: What's the matter with Windows 95 aka Bullhorn?
Sean: Yeah. It's ugly as shit, which is, which is why Bullhorn has tried to buy us a couple of times, just so you know. So we've had the PE fund that owns them, like Inside Partners, reach out to us and ask us if we'd like to be part of a larger platform in their language. That's what they call buying companies being part of a hundred platforms. And we were not interested. So...
Joel: So service your site looks better. There's gotta be more than that.
Sean: No, it literally is.
Joel: Is it pricing?
Chad: Dude, look at the pricing, the pricing is cheap though. You take a look at it. I'm not saying that's bad, but I mean, to be able to gain market share off of Bullhorn. Bullhorn is a more costly product than yours is.
Joel: That's gotta be a differentiator.
Sean: Yeah, well Bullhorn's 20 to twenty-five percent more expensive.
Sean: So, that probably does make a difference to a lot of folks. And then another thing that people really get frustrated about is like, it's very clunky, right? Because it's old, it's harder to navigate. It's harder to do trainings on. So we literally have like three training webinars running every day in 3-4 different time zones. It's like a TV show. So you can like literally click into a chatbot and say, register in live you're on a zoom call with somebody from our team. We'll help you like customize your system, not just tell you where its buttons are, but also help you set up automation or workflows for free.
Joel: So you guys haven't raised any money.
Joel: You've been around since 2017.
Joel: Are you looking to raise money at some point? Are you quite happy with the road that you're on? No, no interest whatsoever?
Joel: And it looks like you have, is your co-founder your dad or someone? Yes, Ajay?
Joel: What's the relationship there?
Sean: In terms of how
Joel: Is he funding it?
Sean: No, he wrote the initial a hundred thousand dollars, but we didn't need money after that. So we're just making money now.
Joel: That's impressive.
Chad: But the go-to-market on that, then a hundred thousand dollars to be able to start an ATS slash CRM, any type of technology whatsoever.
Chad: It's not a lot of cash, which is, which is awesome and good for you. You've bootstrapped it and you're not looking to take money. So when you take a look at all of the other platforms that are out there, whether they're Bullhorn or direct competitors, or not sure there's a lot of noise because of all the funding that's happening. And that is pretty much feeling like the rocket ships.
Chad: To be able to blast off. How do you see from a go-to-market standpoint, overtaking behemoths like Bullhorn?
Sean: Sure, sure. So, so you need one...to understand like how we built this, right? So we didn't like go out and like build out a super expensive team to get started. So I was sort of the product manager, myself, data, and a bunch of domain expertise. And we went to India and we went to tier two, tier three colleges and basically hired folks fresh out of college. Like back then at like five years ago, when we just started out at like people literally making like four or five, $600 a month, right. As software developers and they weren't great back then some of them were let go or moved on. And then we have a couple of remaining who've become great developers over time and their consults like 10 X.
Sean: But we were basically able to like build out a four or five person engineering team spending like $4 or 5,000 bucks a month and 10 months in, by the time we'd spent our first $50 grand, we had our first dollar of revenue. And six months after that, it was making like $8-9,000 bucks a month, which was paying the bills. And then as we scaled MRR, which is monthly recurring revenue from there, we just hired more people and just kept going. The good part was when we got to about 50,000 in subscriptions. We didn't do any ads or anything of that sort. We just did a little bit of SEO and wrote a couple of blogs. And like, you know, we had people come to our website and say they wanted a demo. And then we showed them the product. And then we told them what the price was. They swipe their card and it worked.
Chad: So are you going to stay on that line of marketing and focus on SEO, not doing a lot of events.
Sean: Now we don't just do that. We were spending about $80,000 a month on LinkedIn and Google search ads now. Okay. That's not, that's not super little anymore, but that's from cash flows. It's not this isn't money some investors gave us...this is money our customers are giving us sort of the past few years. But the thing is the CAC on that is like super, super good, because like we spend 80. If, if I spend like say $90 grand or $95 grand in sales and marketing this month, that'll generate close to $300,000 in net, new ARR off, which about 30% is annual subscriptions anyway. So I just make my money back in like six weeks.
Joel: You are the mothership for a lot of companies and you have a ton of features. I just want to dig in a little bit to each one and get sort of your take on what you do. So sourcing, you provide sourcing. Is that sort of a Seek Out competitor or Hire Easy? I mean.
Sean: No, we don't compete with platforms like HireEZ or Seek Out. We do have like a Chrome extension or if you go on LinkedIn or if you're in Germany, you go on Xing or Indeed or something, you can go to a candidate or a potential client and click on the extension and it'll scan that profile and tell you if that person's already in your database or not, or, and if they are in your database, you can have notes and stuff like that. But we also, through Zapier, we integrate with tools like with Lusha and a bunch of other data enrichment slash sourcing tools, like one of HireEZ's competitors, which is SourceWell. They've sort of built a native integration with us.
Sean: So like if someone comes to us and they're like, hey, I want a hardcore sourcing tool. We like to push them to that tool, which integrates with us natively.
Joel: Gotcha. So resume parsing, do you guys do that yourself? Or do you partner with like TextKernel?
Sean: Well, we do it ourselves, but we do also have some customers who bought like DaXtra and extras built-in integration with us.
Joel: Gotcha. And you have a pretty deep integration in terms of email, but I didn't see anything around SMS or messaging. Is that something that you guys are going to stay away from?
Sean: No, we already have it.
Joel: So tell me about that.
Sean: It's powered by Twilio. So we've basically used Twilio's APIs to power phone calls, recording, and text messaging.
Joel: Okay. And then lastly, as being a platform, I didn't say marketplace, maybe there is, I didn't see the SMS either. Are you guys looking to be a marketplace and have people build onto your platform? Are there any plans?
Sean: Not yet, but cause right now the goal is sort of pretty like boxed out. We're growing 200% year over year, just serving permanent recruitment and contract recruitment firms. We want to start focusing more on the middle and back-office piece, which is helping them manage timesheets, timesheet approvals from clients, you know, actual payroll calculations, which, you know, people have to do out if they have a thousand contractors if it's a contract staffing firm.
Joel: So what kind of timeline are we looking at to be able to do some of those things? Like a year or six months?
Sean: No, no. Six months. So we've already started talking to some of our customers who use us just for the ATS fit, but also have a contracting business and want to move that to us as well, cause they're doing that in Excel now. And so we're talking to them, but probably, and that's what a lot of this engineering, the 40 people we're hiring, most of them are engineers. We're going to start building in Q3 and beta it in Q4, which is the November, December sort of timeframe.
Joel: And will the marketplace be free?
Sean: At this point, we don't even have like a thought about like what the marketplace will be. So, so right now I don't have an answer for that.
Chad: So a couple of other pieces of core tech, you say that you have a background screening, is that through a partnership, or is that something that you guys actually did?
Sean: It would be through Zapier. I don't think we write anywhere that we do background screening ourselves.
Chad: It's on the website. It says you have background screening? But yes, go ahead and continue.
Sean: If you, if you want to do background screening or verification, you would basically find either using our API or an existing, like background verification tool, like Checkr or something, and you'd plug it in using Zapier. So that whenever a candidate moves to a specific stage, you would trigger an API call because there's a different background verification tools in different regions. Right. So in Germany, it's not the same tool as used in the United States.
Chad: Right. Same thing with interview scheduling.
Sean: Yeah. You could do that within Recruit CRM because we integrate with your calendar.
Chad: Okay. So that's more of a Google, Gmail.
Sean: Google and Outlook calendar.
Chad: Okay. So let's talk about retention. You talk about growth, 200% growth that's awesome. Let's talk about what, what does retention look like for the last year?
Sean: Sure. Net revenue retention is 119% after 13 months or 12 months is by.
Chad: Okay. So you have a 19% increase in wallet share.
Sean: Correct on the same cohort of customers.
Chad: Gotcha. Gotcha. So what about growth going back to growth? 200% growth. Is that happening on the basic or the team or the enterprise level? Where are you seeing the most growth?
Sean: Yeah, so we see the most growth in terms of new sales. About 70-75% of new sales are on their team plan, but a lot of the expansion is basically people switching from the team to business like three, four, or five months after coming in.
Chad: Gotcha. Gotcha. So when you, when you're targeting new clients, is it just as easy as going out and doing Intel to see who's using Bullhorn and then just targeting them? Or how are you actually? How are you targeting new clients?
Sean: Yeah, we just like, and again, right, we just, on the SEO side, have our marketing team write blogs and content. And like, so we have articles on like, you know, how to build a remote recruitment agency and so on. So people can, people trying to build and scale recruitment agencies and firms can find us.
Sean: But in terms of like paid, we're mostly just doing LinkedIn ads to people that work or own recruitment agencies that have between one to 10 people or people that own or work in recruitment agencies that have between 10 and 50 people. That's mostly all the marketing we do. And then on Google search, we bid on certain keywords, like recruitment agency software, recruitment or headhunting ATS, and stuff like that.
Chad: Okay. So where's your focus? Is it SMB because there's a shit ton of them or are you really focusing heavily on enterprise?
Sean: So the core focus is on SMB, like, cause our average customers like five users ish, right, with us. But like some enterprises just happened to come. So like, with this same inbound channel we ended up getting Hays. Right. And Hays is like 25,000 recruiters across the world sort of recruitment firm. Right. But, like we didn't like we didn't go outbound and pitch them. Right. They found us and they did a demo. They liked it. They told their boss about it, that the boss did a demo. Then the boss called his head of Europe who did a demo and he liked it. So it's still pretty much, you know, bottoms up where versus us targeting accounts and going after them.
Chad: Okay. Are you guys seeing this as a lifestyle type of organization, a lifestyle company, it grows as fast as it grows and that's how fast it grows.
Sean: No. We've always had revenue goals and we've hit our revenue targets more or less within a month of like what the target timeframe was. So we're a little over $3 million. Now we want to be at $10 mill by the end of 2023, which is like 24 months from now. And we want to do this while making 25-30% free cash flow, which we are making at this point. So it's not like we have to expand margins, we just need to retain margins as we scale. And then we just want to keep rolling that and expand the product across the staffing lifecycle so in 6, 7, 8 years get to $100 million, do an IPO, but own 91% when you do an IPO.
Joel: I love this guy's transparency.
Chad: Fucking love it dude.
Joel: So I was going to ask it a different way and say, how the hell did you say no to Bullhorn? What is the goal? And the goal is, is to make this shit an IPO.
Sean: Yeah. Yeah. And then the goal is to become a billionaire. Right. And, you can either, you can either become a billionaire by being a genius, like Zuckerberg or Elon, and like raising a shitload of money and owning 10% or building a hundred billion-dollar company. Now I don't know if I can build a hundred billion-dollar company, maybe. I don't know. But like I know for sure that if I keep doing this shit over the next eight, 10 years, I can go from being a 27-year-old to a 37 or 38-year-old that has a company and owns 90% of it. And it's worth like $1,200,000,000 or billions or something.
Joel: Very cool. And are you, are you fine sticking in the staffing? Like, are you ex, are you going to expand to?
Sean: We will only do staffing, right? We don't ever want to get out of this space.
Joel: And there's enough money in that to build that kind of company?
Sean: Yeah. Because like, think about it, if you do payroll ADP, which my dad was the CEO of, for their India business ADP as a hundred billion dollar market cap. So if you can do payroll and we do it well, and we do it for staffing companies, which sort of manage more than half of the contractors in sort of in the US we can build a company where tens of billions of dollars, if you truly become number one. But the goal is, hey, how can we get into this market and become one of the top sort of three companies in this segment in 10- 12 years. And as long as that can happen, that could be a billion to $10 billion outcome.
Joel: Hey man. Don't lose that confidence, man. Don't lose that confidence. Are you ready to face the firing squad?
Sean: Go for it.
Joel: Alright. Chad. Get him.
Chad: All right. Ooh, Sean. I got to say that first and foremost, and I'm sure you've seen this. You guys have been able to be patient, which is awesome. But SMB is generally a bitch when it comes to trying to hit those thousand points of light that are actually out there, right? It's you have to fish with a net. You see the ZipRecruiters of the world or the Indeeds of the world who are trying to somewhat pivot to some extent or grow into the SMB market. Well, they have to spend shit tons of cash to do so. Their shareholders are obviously not as patient as you guys are. So it's great that you have great patience. First off, I got to say, I know you love it.
Chad: I hate the name because it paints you into a corner, but you know what? It doesn't fucking matter. If you're actually getting the pointed leads, you're seeing 200% growth year over year, last year, 19% wallet share growth in current clients. And to be quite frank, I love the balls and the no-bullshit attitude and saying, look, Bullhorn sucks. We're better. We're cheaper. Come take a look at us. I love that. And I believe we don't have enough of that in our industry, which is one of the reasons why you're getting fucking big applause from me.
Sean: Awesome. And about the scale thing, right? Bullhorn does about 350 million in ARR, which is annual recurring revenue, and Bullhorn's worth over $2 billion bucks. So if they could sort of do it and we can like keep flipping them over the next 10 years.
Chad: Even, even more genius.
Joel: Don't get too cocky at my friend. I still have to give you my grades. So, so my I'm only angry that we're just now learning about you and knowing you because you are just a dude. I appreciate the transparency. I appreciate the confidence.
Sean: Fuck yeah.
Joel: I appreciate the bootstrap nature of your business. I appreciate how you're so sort of cavalier about the marketing. Like we put up a couple of blogs, you know, people came to the door like it's so cavalier because so many companies in our space are like banging their head against the wall about how to market and get people on the phone. And you guys just sit back and get calls apparently. So I certainly appreciate that, but I think your marketing is smart. I think, you know, pay-per-click, people are obviously looking for alternatives to the Big Mac and you were sitting there as in and out burger and ready to take that business. So I certainly applaud that. The vision I think is fantastic.
Joel: I'm always shocked when we talk to new ATS' and new companies where there are established players and the initial thought is to say like, why the fuck would you do that? But your perfect case scenario of why you do that. Because a lot of these big players are failing their clients and you can be there in a business that's proven and take up the crumbs and hopefully make those crumbs into a big billion-dollar cake according to your comments. I'll also add that you sort of painted over the reviews of some of these sites, but, I went out because you marketed it. And I was sort of semi-expecting like, oh, I bet there's some, there are some seeded reviews, maybe some shenanigans going here.
Joel: But every review I saw was thoughtful, and was five stars for the most part. I mean, you killed on the reviews. So you're clearly making your customers happy. You haven't taken a bunch of money so you have a ton of flexibility. You have a huge global opportunity and you have big players already hoping to give you money and buy the company.
Chad: Love it.
Joel: So I can't find a reason to hate the company. I don't love the name, but fuck it, whatever, a big applause for me as well, man, I, this is a real, this has been really fun and keep doing what you're doing.
Sean: Thanks. Appreciate it guys. Thanks a bunch, it was awesome being here.
Joel: Not a problem.
Joel: So for our listeners who aren't on Google or aren't reading blogs on corporate websites, like they want to buy your shit. Where do you send them?
Sean: Just go to a recruitcrm.io. And you can either do a free trial or ask for a demo. 30% of people that buy us, don't ever talk to us.
Joel: Yeah. Or just dig in your pocket for some spare change and you can probably able to afford it. Chad, another firing squad in the can.
Chad: Love it.
Joel: Sean. Thanks for joining us.
Chad and Cheese: We out, we out!