Today we have with us, Co-Founder of revolutionary recruitment platform Recruitee, Perry Oostdam who will be sharing his experiences as an entrepreneur, his stories of struggle, launching his own startup and sustaining in the competitive market to build and grow his team.
I know you will have heard this question many times and may hear even hear it many more times – but I hope it never gets old for you: how did you come up with the idea for Recruitee? Please include (if any) personal experiences where you saw the need for a platform like Recruitee.
Pawel and I started the company GeoRun in 2012. It was lots of fun and we made loads of cool campaigns. But after two years, we found that GeoRun wasn’t scalable enough for our ambitions. We wanted to work on an international software company.
We sat down- virtually, as we were working remotely at that point- and wrote down our own “commandments of an ideal scalable business” and started on our SaaS journey. After looking at dozens of concepts, Pawel mentioned he worked on an applicant tracking system (ATS) during his studies- when doing freelance programming work. This concept checked all the boxes: international, scalable, clear market-entry, pain points to solve, and fun to work on! We bootstrapped the business and decided to stop GeoRun in 2015 to fully focus on Recruitee.
You have owned two companies Recruitee and GeoRun, with the same co-Founder Paweł Smoczyk. GeoRun is older than Recruitee. At what stage of GeoRun, you decided to start a new company and what were the risks you assessed?
GeoRun was doing fine in 2014. We had run some awesome mobile campaigns for Samsung, de Bijenkorf, and ING bank. But the sales cycle for these kinds of activation campaigns typically varied between 8 and 12 months. By the end of 2014, we felt the need to test a different model (see above) and ended up in software-as-a-service (SaaS)– the holy grail in internet business models!
Recruiting software is a competitive space, with large players as well as many modern startups. What gap did you see in the market that led you to found Recruitee?
It all starts with a great user experience. Not only in terms of customer support but also in terms of the product interface. We looked at most of our potential competitors and found that the current ATSs were a pain to use (visually) and not very user-friendly. We’ve seen horrible interfaces, very little innovation, and very little focus on inbound-driven company growth.
Luckily, our assumptions were validated when we launched Recruitee and we’ve seen exponential growth from day one. In a market that can be classified as a “red ocean,” we’ve grown from a few beta users to over 2,000 customers across 60 countries within three years!
Most importantly, we’ve done this without financial steroids- no massive funding rounds. Instead, we’ve bootstrapped our whole business! Today, we’re working on leading the “next wave” of ATSs. This is something we’d like to call applicant prediction software. Our industry is currently in the midst of an exciting time, with so many opportunities to truly optimize the hiring process. Think predictive hiring and ad recommendations. We’ll soon see new offerings popping up in the ATS space and we’re determined to take the lead in this race towards a better hiring process.
How has the mission and vision of Recruitee evolved over the past couple of years? Customer experiences, investor preferences, network balance, and success can change the mission and vision. Did you ever feel, “this is not why I created Recruitee?”
Oh boy, did our vision change. We started with the idea of “build and execute.” Essentially we were building and selling whatever our customers asked for. We soon discovered that, to attract the best talent and expand a valuable network of stakeholders, we needed a clear vision and company direction.
We were lucky enough to see a monthly growth rate of over 8% month over month but we struggled to define a clear company goal. In a way, I believe we still have not determined a clear company goal. Instead, we focus on the resources at hand and aim to stay flexible while growing our business.
This model, called effectuation in the academic environment, suits our DNA. We love building new products and features and adapting to an ever-changing recruiting software market. Instead of working towards a fixed end game(like most of our funded competitors who have set their destiny by taking up massive funding rounds), it’s our vision to scale Recruitee into a recruiting-tech SaaS machine –with a range of recruiting solutions that help companies attract the best talent.
Recruitee is the product which received fastest seed funding after appearing in Product Hunt. How did you fund-raise and does it become easier when you have some traction behind the product? How is the fundraising experience from seed funding to Series C Round?
True, the time between being on ProductHunt and getting seed funding was a matter of weeks. But as our company grew and gained traction, different questions popped up. We very much appreciate the flexibility and respect of our early investors, but when the opportunity came along: decided to buy back the seeds shares as founders.
With this, our company became fully independent again– without external investors. Only Aik Devenijens remained with a small percentage. We’d advise startup founders to think about the advantages of funding: it can be a shortcut to scale your business. But consider the possible downsides as well: losing decision authority and with that –possible execution speed.
As mentioned before, we looked at the core of our Recruitee DNA and preferred to benefit from investors for as long as possible.
What advice would you give to first-time SaaS founders about thinking through product-market fit, and how to position their product in a competitive market?
Grow your business on cash flow. Ask your first client –often true ambassadors that believe in your offering- to pre-finance a year plan. Ask your suppliers to split invoices. And split those split invoices again. Ask your landlord to lower the rent for the first year, and offer to increase it upon a revenue milestone. You’ll be surprised how helpful stakeholders can be, once you tell them about your bootstrapped startup with big ambitions.
When entering a market, think lean. Test often. First-time founders often ask “how do I get my first 100 customers?” During a Rockstart Answers session, I asked the very same question to an audience of 50+ founders/investors. The answer is often simpler than anticipated. And it doesn’t always cost a lot… the answer? Keep calling until you have them!
How do you think of cash burn vs. growth for an enterprise software startup in the current environment?
I’m Dutch. For us, that means begin humble and keep both feet on the ground. I’ve never understood the philosophy of buying something before you’ve earned it. We hire new staff when our monthly revenue increase allows us to do so. We change offices when we hit a cash-flow milestone. The same follows for marketing spend, sales budget, and other operational costs. Everything is connected to the Monthly Recurring Revenue Increase (MRRi) and measured on a basis of cost divided by revenue.
In other words, we know exactly what the earn-back period is of each individual cost element. Does this mean we exclude external funding? No. Certain periods mean accepting the cost of advance of profit. But luckily we’re not facing this scenario right now.
Can you share any avoidable mistakes you’ve made as a first time SaaS founder and CEO over the last few years?
We’ve made our fair share of mistakes! For example, we forgot to check IP rights on our fresh company name in 2014. And as you might guess… within two weeks we had a (not so nice) letter from a lawyer urging us to stop using that name. Luckily, we were able to sell the domain name and start with a new (quite similar!) name within a few weeks– thankfully, before our first business cards were printed. 😉
Aside from the usual early errors like hiring mistakes, budget forecasting inaccuracies, and stakeholder management issues, we’ve also had tons of learning when it comes to picking an office and arranging a smooth movement! The new office, which we moved into just one week ago, took us 8 months from start to finish. Turns out, the office space market in Amsterdam is even more heated than the housing market! Glad that’s over with.
How would you advise our entrepreneurs to keep their customers or prospects engaged? Can you suggest some good tools that can enhance these activities?
The best advice I can give is to stay close to your customers. Listen to their needs, and keep asking “why”– even when they sometimes don’t know the answer. But together, great innovations come alive. And nothing is more satisfactory for a customer than seeing a passionate team working on solving their needs.
Staying organized makes your life simpler. How do you keep yourself organized? Any tools you want to refer to our readers?
We’ve recently moved from Asana to Jira to keep our development workflow clean and transparent. Personally, I’m still a big fan of Trello. As a remote team, we work with tons of tools to keep each other updated, like Hubspot (our sales CRM), Intercom (for our customer chat/analytics), Mixpanel (for segmenting user analytics), ChartMogul (for analyzing MRR metrics and cohorts), and Recruitee (for hiring the best people! ;P).
Last words: Starting a venture is easy, but surviving is difficult. For those planning to start something new: how can you hang in there and make it a success?
Count your victories. Scaling a company, growing a team from two to 50 and going from ten to 2,000 customers in two years… its hard work. Our adviser Aik captured our experience quite nicely: scaling a company feels like going from one fire to the next. And every time you douse one fire and move on to the next, your company grows faster. But don’t concentrate too hard on the problems. Remember to celebrate the small victories with your team. Help them remember what they are a part of.