StarZero All shows Try the podcast clipper →

Sep 15, 2016 · 27m · top-founders

EP 418: Executive Recruiter Made $1.1M 2015, Super High Profit Margin with Matt Schwartz of MJSearch.com

Matt Schwartz · 13m spoken Nathan Latka · 11m spoken
0:00 / 0:00

gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions

In this episode of The Top, host Nathan Latka interviews Matt Schwartz, founder of MJS Executive Search, who reveals how he scaled an independent boutique search firm to $1.1 million in revenue with over $600,000 in net profit. Schwartz breaks down his milestone-based 30% retained fee model, high-impact placements for clients like PepsiCo, and his use of virtual assistants and the Profit First financial framework.

How this conversation actually went

Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Nathan holds 45% of the talking time here. How this is scored →

Nathan as informed peer 4.7 Guest teaching 3.7 Guest disagreement 1.2 Nathan pushing back 2.7
05100:0010:0020:000:50–6:41 · Nathan as informed peer 4/10 Nathan's Send Later Acquisition and Toptal Partnership Nathan opens by challenging the value proposition of executive search firms, asking why anyone would pay 30% to 60% of a salary. Matt effectively educates Nathan on transformational searches and walks through his bespoke recruitment strategy for PepsiCo.6:41–11:16 · Nathan as informed peer 5/10 Retained Search Compensation Model and Milestone Invoicing Nathan drills down into the retained search fee structure, clarifying the milestone payments and the financial calculus behind leaving a major search firm to start a solo boutique.11:16–13:49 · Nathan as informed peer 5/10 Lean Operations, Virtual Assistants, and High Profit Margins The host and guest bond over shared operational tools like Less Doing and virtual assistants, exploring how lean overhead produces $600k bottom-line profit on $1.1M in revenue.13:51–17:38 · Nathan as informed peer 5/10 Implementing Profit First Financial Management Methodology Matt educates Nathan on the Profit First cash allocation methodology, detailing specific percentage buckets. Nathan pushes back on what to do with retained capital versus reinvesting in his own software businesses.17:38–21:22 · Nathan as informed peer 4/10 Business Metrics and Functional Specialization Strategy Nathan gathers data on contract values and concurrent client load, while Matt explains his strategy of functional specialization over industry specialization.21:22–26:17 · Nathan as informed peer 5/10 The Famous Five Rapid Fire Questions with Matt Schwartz During the Famous Five, Nathan asserts that Gary Vaynerchuk is killing himself with extreme hustle, but Matt politely pushes back by explaining Gary hires a personal health manager.0:50–6:41 · Guest teaching 5/10 Nathan's Send Later Acquisition and Toptal Partnership Nathan opens by challenging the value proposition of executive search firms, asking why anyone would pay 30% to 60% of a salary. Matt effectively educates Nathan on transformational searches and walks through his bespoke recruitment strategy for PepsiCo.6:41–11:16 · Guest teaching 3/10 Retained Search Compensation Model and Milestone Invoicing Nathan drills down into the retained search fee structure, clarifying the milestone payments and the financial calculus behind leaving a major search firm to start a solo boutique.11:16–13:49 · Guest teaching 2/10 Lean Operations, Virtual Assistants, and High Profit Margins The host and guest bond over shared operational tools like Less Doing and virtual assistants, exploring how lean overhead produces $600k bottom-line profit on $1.1M in revenue.13:51–17:38 · Guest teaching 6/10 Implementing Profit First Financial Management Methodology Matt educates Nathan on the Profit First cash allocation methodology, detailing specific percentage buckets. Nathan pushes back on what to do with retained capital versus reinvesting in his own software businesses.17:38–21:22 · Guest teaching 3/10 Business Metrics and Functional Specialization Strategy Nathan gathers data on contract values and concurrent client load, while Matt explains his strategy of functional specialization over industry specialization.21:22–26:17 · Guest teaching 3/10 The Famous Five Rapid Fire Questions with Matt Schwartz During the Famous Five, Nathan asserts that Gary Vaynerchuk is killing himself with extreme hustle, but Matt politely pushes back by explaining Gary hires a personal health manager.0:50–6:41 · Guest disagreement 1/10 Nathan's Send Later Acquisition and Toptal Partnership Nathan opens by challenging the value proposition of executive search firms, asking why anyone would pay 30% to 60% of a salary. Matt effectively educates Nathan on transformational searches and walks through his bespoke recruitment strategy for PepsiCo.6:41–11:16 · Guest disagreement 1/10 Retained Search Compensation Model and Milestone Invoicing Nathan drills down into the retained search fee structure, clarifying the milestone payments and the financial calculus behind leaving a major search firm to start a solo boutique.11:16–13:49 · Guest disagreement 0/10 Lean Operations, Virtual Assistants, and High Profit Margins The host and guest bond over shared operational tools like Less Doing and virtual assistants, exploring how lean overhead produces $600k bottom-line profit on $1.1M in revenue.13:51–17:38 · Guest disagreement 1/10 Implementing Profit First Financial Management Methodology Matt educates Nathan on the Profit First cash allocation methodology, detailing specific percentage buckets. Nathan pushes back on what to do with retained capital versus reinvesting in his own software businesses.17:38–21:22 · Guest disagreement 1/10 Business Metrics and Functional Specialization Strategy Nathan gathers data on contract values and concurrent client load, while Matt explains his strategy of functional specialization over industry specialization.21:22–26:17 · Guest disagreement 3/10 The Famous Five Rapid Fire Questions with Matt Schwartz During the Famous Five, Nathan asserts that Gary Vaynerchuk is killing himself with extreme hustle, but Matt politely pushes back by explaining Gary hires a personal health manager.0:50–6:41 · Nathan pushing back 4/10 Nathan's Send Later Acquisition and Toptal Partnership Nathan opens by challenging the value proposition of executive search firms, asking why anyone would pay 30% to 60% of a salary. Matt effectively educates Nathan on transformational searches and walks through his bespoke recruitment strategy for PepsiCo.6:41–11:16 · Nathan pushing back 2/10 Retained Search Compensation Model and Milestone Invoicing Nathan drills down into the retained search fee structure, clarifying the milestone payments and the financial calculus behind leaving a major search firm to start a solo boutique.11:16–13:49 · Nathan pushing back 2/10 Lean Operations, Virtual Assistants, and High Profit Margins The host and guest bond over shared operational tools like Less Doing and virtual assistants, exploring how lean overhead produces $600k bottom-line profit on $1.1M in revenue.13:51–17:38 · Nathan pushing back 3/10 Implementing Profit First Financial Management Methodology Matt educates Nathan on the Profit First cash allocation methodology, detailing specific percentage buckets. Nathan pushes back on what to do with retained capital versus reinvesting in his own software businesses.17:38–21:22 · Nathan pushing back 1/10 Business Metrics and Functional Specialization Strategy Nathan gathers data on contract values and concurrent client load, while Matt explains his strategy of functional specialization over industry specialization.21:22–26:17 · Nathan pushing back 4/10 The Famous Five Rapid Fire Questions with Matt Schwartz During the Famous Five, Nathan asserts that Gary Vaynerchuk is killing himself with extreme hustle, but Matt politely pushes back by explaining Gary hires a personal health manager.

speaking balance: gold is Nathan, purple is the guest (3 minute bins)

0:00 · Nathan 87.5% · guest 12.5%0:00 · Nathan 87.5% · guest 12.5%3:00 · Nathan 8.2% · guest 91.8%3:00 · Nathan 8.2% · guest 91.8%6:00 · Nathan 31.5% · guest 68.5%6:00 · Nathan 31.5% · guest 68.5%9:00 · Nathan 16% · guest 84%9:00 · Nathan 16% · guest 84%12:00 · Nathan 48.9% · guest 51.1%12:00 · Nathan 48.9% · guest 51.1%15:00 · Nathan 31.7% · guest 68.3%15:00 · Nathan 31.7% · guest 68.3%18:00 · Nathan 69% · guest 31%18:00 · Nathan 69% · guest 31%21:00 · Nathan 47.2% · guest 52.8%21:00 · Nathan 47.2% · guest 52.8%24:00 · Nathan 56.1% · guest 43.9%24:00 · Nathan 56.1% · guest 43.9%27:00 · Nathan 100% · guest 0%27:00 · Nathan 100% · guest 0%
Sharpest disagreement ▶ 22:27 Matt defends Gary Vaynerchuk's lifestyle

When Nathan claims Gary Vee is aging drastically and destroying his health, Matt rejects the characterization by revealing Gary employs a full-time health CEO.

 Hardest push from Nathan ▶ 2:21 Nathan challenges retained recruiter fees

Nathan bluntly questions why any company would pay executive search firms huge placement percentages, forcing Matt to justify his business model.

 Biggest teaching moment ▶ 14:05 Matt breaks down Profit First accounting

Matt explains the granular mechanics of bank-balance allocation across tax, opex, owner's pay, and profit buckets to a curious host.

 Nathan holds their own ▶ 16:20 Nathan defends reinvesting capital into his own ventures

Nathan articulates his capital allocation philosophy, pointing out that investing in his own software businesses yields far higher returns than passive funds or retained cash.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
Nathan's Send Later Acquisition and Toptal Partnership 4514 Nathan opens by challenging the value proposition of executive search firms, asking why anyone would pay 30% to 60% of a salary. Matt effectively educates Nathan on transformational searches and walks through his bespoke recruitment strategy for PepsiCo.
Retained Search Compensation Model and Milestone Invoicing 5312 Nathan drills down into the retained search fee structure, clarifying the milestone payments and the financial calculus behind leaving a major search firm to start a solo boutique.
Lean Operations, Virtual Assistants, and High Profit Margins 5202 The host and guest bond over shared operational tools like Less Doing and virtual assistants, exploring how lean overhead produces $600k bottom-line profit on $1.1M in revenue.
Implementing Profit First Financial Management Methodology 5613 Matt educates Nathan on the Profit First cash allocation methodology, detailing specific percentage buckets. Nathan pushes back on what to do with retained capital versus reinvesting in his own software businesses.
Business Metrics and Functional Specialization Strategy 4311 Nathan gathers data on contract values and concurrent client load, while Matt explains his strategy of functional specialization over industry specialization.
The Famous Five Rapid Fire Questions with Matt Schwartz 5334 During the Famous Five, Nathan asserts that Gary Vaynerchuk is killing himself with extreme hustle, but Matt politely pushes back by explaining Gary hires a personal health manager.

Statements from this episode (10)

Assertion Not publicly verifiable
Schwartz placed Bonin Bough and Shiv Singh into digital leadership at PepsiCo
“We had placed their first head of global social media, Banin Bao, who you probably know back in 2008, and then Shiv Singh, their first head of global digital strategy and development,”
Matt Schwartz Sep 15, 2016 ▶ 3:56
Assertion Supported
Schwartz recruited an Xbox Kinect creator to build PepsiCo vending machines
“And we actually, our first placement in that division was one of the creators of Xbox Connect at Microsoft to lead vending machines at PepsiCo.”
Matt Schwartz Sep 15, 2016 ▶ 5:09
Disclosure
Schwartz: MJS charges 30% of first-year total target compensation
“We charge 30% of the first year's total compensation, so that's base plus estimated target bonus.”
Matt Schwartz Sep 15, 2016 ▶ 6:46
Assertion Not checkable as stated
Schwartz kept only $100K of $750K in fees at Heidrick & Struggles
“The search work that I was executing, about 750,000 dollars in search fees, and I was making around a 100,000 dollars, so.”
Matt Schwartz Sep 15, 2016 ▶ 10:15
Assertion Not checkable as stated
MJS Executive Search Generated $1.1M in Revenue in 2015
“1.1.”
Matt Schwartz Sep 15, 2016 ▶ 11:02
Assertion Not checkable as stated
Schwartz: MJS Executive Search netted over $600K profit in 2015
“Over 600,000.”
Matt Schwartz Sep 15, 2016 ▶ 13:21
Disclosure
Schwartz allocates revenue: 35% OpEx, 20% pay, 30% taxes, 15% profit
“When a check comes in, I have a formula in which I break up the money into different buckets. 35% goes to operating expense, 20% goes directly to owner's pay, 30% goes to taxes, and 15% goes directly to the profit bucket.”
Matt Schwartz Sep 15, 2016 ▶ 14:47
Disclosure
Schwartz: MJS Search average contract value hit $109,000
“So over the last three years, it's ranged from 85,000 all the way up to 109,000 last year.”
Matt Schwartz Sep 15, 2016 ▶ 17:46
Insight
Schwartz: Boutique search firms should specialize by function, not industry
“We're majors in, in the function first. And then we focus on the industry second.”
Matt Schwartz Sep 15, 2016 ▶ 18:55
Assertion Supported
Schwartz: Gary Vaynerchuk employs a dedicated trainer to travel with him
“He talked about having a CEO for his body. Literally. He has a guy who follows him around, make sure he's eating right, trains him personally.”
Matt Schwartz Sep 15, 2016 ▶ 22:32
Made with StarZero

Turn any episode into a week of clips.

This entire site, over 2,600 episodes transcribed, diarized, checked and made playable, runs on the StarZero media pipeline. Drop in your own episode and the podcast clipper finds the moments worth sharing, cuts them, captions them, and reframes them for every feed.

Try the podcast clipper Learn more