The Exchanges

Q Interesting. And what is, that's obviously, you know, knowing how to price and what to tie your, your utility value to is a tricky thing to figure out sometimes. How did you come to that kind of being your equation?

A Uh, yeah, that, that's the question. You know, we started our business in 2010 and we were a job slotting model. So you could buy a one job opening subscription to Hierology and it'd be the platform for what you need on demand. So we were selling to the market we had access to, which is small businesses that didn't have a lot of resources or anyone selling to them. Right. And so we've grown from there. Now what we find is, uh, as we've expanded the platform and the breadth, uh, our value prop is really based on, uh, servicing the number of employees that you have. Uh, so if you're trying to maintain head count of 50 employees, that means you're running a certain size career site. You're running a certain number of job ads and marketing spend. You're running a certain number of interviews, tests, assessments, drug, and background screens, and we price based on, uh, your revenue, uh, or sorry, your employee footprint, and that drives our revenue and pricing.

AI assessment note: “we started our business in 2010 and we were a job slotting model”

Q Awesome. All right. Very cool. Team size. We talked about that. Um, most of these folks, are they on the people running these franchisees? Are you working with very bureaucratic kind of organizations? Are your salespeople complaining about the sales cycles and times, or are these entrepreneurs that just brought into franchise and they're ready to go?

A Yeah. More of the latter and why, you know, why we like these markets. I mean, it's, it's just close to how I'm wired as an individual. You know, we want to sell to owners whose names on the sign or whose personal balance sheet is invested in the business because if they see value, they buy as opposed to corporate where the decisions to buy or not to buy are often based on factors that have nothing to do with value delivery and it takes forever and it's a lot longer and it's a lot more crowded. And so what we see, You know, the, the, the folks who were compared to in our industry sell to the top 50,000 employers in the U S but there's seven million employers in the U S nobody's talking to. And that's the market we want to be in.

AI assessment note: “More of the latter and why, you know, why we like these markets.”

Q Okay, and tell us a little bit of the background there. Did you leave corporate? Why'd you get into it?

A I had a business before Hireology that was outsourced recruiting, so recruitment outsourcing, RPO. We provided recruiting services for mid-market technology and professional services firms, and what I learned in that business was our, our customers were It became hard to make money in that business. So I had created an interviewing system we gave to our customers. Uh, they started asking me if they could buy it cause they really liked it. And I said, no, no, no for years. And I had an opportunity to sell that business, which I did. And the idea was always in my head. I want to productize, you know, something similar to, to what we did with our customers where we gave them the interviewing guides. So that's exactly what I did. And that's where Hireology came from.

AI assessment note: “I want to productize, you know, something similar... that's where Hireology came from.”

Q And what will be the main growth driver of that? How will you get there?

A It's going to be new products. So we, you know, we are, we think hard about how we configure our product bundle. Um, we want to go in with an, you know, we'll call an essentials package. And upsell over time. So we, you know, what we've learned over the years is even if we have the opportunity to sell a customer, everything we probably shouldn't because they're, they're going to churn if they're paying for stuff they don't use or see the value. And, and so there's a lot of excitement at the front end. We're generally the first HR tech in the door, so we can sell them more than they need, or we can sell them everything they think they want to buy. We've been very good at pulling the deal sizes down and upselling over time, which is a trade-off, but it pays for itself and churn. And revenue expansion. You know, you've got a much more, uh, sustainable business.

AI assessment note: “It's going to be new products. So we, you know, we are, we think hard”

Q fascinating to me, um, Adam, how many sound companies there are in this exact space. Like we had, we had the ICMS folk, you know, Colin was on recently, you know, he's cranking, you know, well north of a hundred million, obviously bootstrap, just killing it, moved into a new office. You got gusto, you got Zenefits was just on. How is there so much space for all of you?

A Well, a problem, by the way, I mean, and ICMS is just a world-class organization, and Colin's killing it. I mean, it's just, you know, you know, you're gonna look, aspire to be as well-run, a hundred million dollar business as that one, but the, uh, It's a universal problem, and it's a persistent problem. Companies are really bad at the people's side of their business, and, and, uh, as the economy expands, the workforce expands, the problem expands, the number of companies created, uh, will always have this, this, this issue. Big companies have this problem. Small companies have this problem. Problem's never going away. Uh, and so it's all businesses with employees have this issue. That's a big market. I mean, it is, it is, uh, tens of billions of dollars of opportunity just in the United States.

AI assessment note: “It's a universal problem, and it's a persistent problem... That's a big market.”

Q Okay, so 1600 likes, right, engagements, 913 comments, hundreds of thousands of impressions. How do you turn this kind of marketing to cold, hard, RB and B, ARR, cash?

A So, That post was incredible. Um, you know, I think that Strangely, like, the reason, if you look at my stuff, hardly any of it is sales content. You know, maybe one out of every 10 posts I'll put some, like, hard CTA at the bottom of it. Uh, but I don't, I don't know why, but, like, just putting this stuff out, and I do understand what I write, who the audience is that it's activating, so to speak, and try to keep a good mix there, but, like, I think most of the magic is just this visit my website link You know, they see me writing interesting stuff. They see me telling this, like, unbelievably brutally honestly transparent, you know, stuff about the journey, and they're just like, what's this guy do? You know, and then they keep seeing posts. I'm sure after you click that, visit my website, LinkedIn and the algorithm keep serving you more of the stuff. Um, so I can't say that I know why I'm doing it, but, like, it's just working so well that I, like, continue to do that. And I do think that it's, it's the way of the, it's like, People don't want to be sold to on social media. I really don't think so. I think the beauty of organic content is that you are bringing people along on this journey, and, like, you are building community around these ideas, and you are forming relationships with people through commenting, and that just, the reach is so large, the audience keeps growin…

AI assessment note: “audience keeps growing, and that begets website traffic that converts.”

Q Yeah, that makes a lot of sense. Um, where, where is the spend most effective for you to the extent you can share?

A Uh, when we can get in front of prospects, that's the most effective. So we're, you know, we do a lot of old school. Uh, it is thought leadership publishing. I've, I've published a book. We crank a lot. It's called the best team wins, build your business through predictive hiring, uh, which is really had a huge impact on our business. And yeah, I mean, it, it, you know, we're showing up, uh, instead of being, uh, you know, paying to speak, we're being paid to speak. It really makes a difference. We're seen as a thought leader in our markets. We really get to know our industries and our verticals. And so, uh, it's really, it's, it's made a difference. So when we can show up and there's 400 people in a room that could all buy from us, you know, even go out with 40 or 50 customers, that's a good use of time.

AI assessment note: “when we can get in front of prospects, that's the most effective.”

Q Oh, good. That's good growth. How do you, how do you kind of forecast what growth targets you want to hit? Like, how do you know that you want to go for 27 after doing a 17 year?

A Oh, we look at our addressable market, and you know, we really, we look at what's possible, and then we look at what's the, what's our maximum efficiency to get at our maximum growth rate. So we don't want to blow it out, have our, our acquisition costs go off the charts, have our LTV to CAC ratio crater. It's just, it's just not worth it. So we're trying to build the best business we can build, which is Uh, the right amount of, of hyper growth, right? There is, there's a point, uh, you know, beyond which it's just not worth getting that incremental customer because you have to pay too much. Uh, it's just inefficient. So we, you know, I think, you know, we're proud of our capital efficiency and the way we approach this.

AI assessment note: “we look at what's our maximum efficiency to get at our maximum growth rate.”

Q a 10% conversion rate from free to paid? We're gonna jump into it. Alright? Give him a round of applause again if you're excited for those three bullet points. Alright? It's gonna be good. Let's jump into the P&L first, right? P&L first. So this is from 2023, where you learned a bunch of lessons. Why did you go so aggressive, and then what did you learn and pull back?

A So really the reason I went so aggressive is because I was sharing an office with Dave Roger de Moser and the Jasper AI team, and for, for two years before they started that company, and we were all stuck at like two, three million ARR. They were out of money. They created their, they're literally their final step up to the plate. They're just like, this is it. We're going to try one more thing. Zero to fifty million ARR with like an island of six people in 12 months. And then they went and raised a bunch of money, and they hired a bunch of people. And the craziest thing, when you're sitting on the other side of an office from somebody who is stuck in the exact same place, you're like, well, I can do that too. So I tried to do it too. Thank God I didn't raise money.

AI assessment note: “So really the reason I went so aggressive is because I was sharing an office”

Q Okay. Um, scaled nicely. So, so first hundred customers came from your last company, which is great. How many customers are you adding per month, uh, these days?

A So it's kind of like a, a tale of two businesses. There was what we did to get it off the ground, and there's what we did, what we're doing now. So the first, I would characterize the first year as, uh, The Facebook year, my wife and I did these like outrageous and funny Facebook selfie videos. Then they were like, the ads were paying back in a day. Um, they were giving us unbelievable reach. It was working incredibly well, but nine months in we're like, this is the wrong type of customer turns through the roof. Um, even though the ads, even those quick payback and allowed us to grow really quickly, we noticed that our top 10 customers had huge revenue expansion. They were paying us between five and 30,000 dollars a month. We need to focus everything on them. So end of the year, last year, uh, beginning of this year, we did a pivot, stopped running ads. Um, it's entirely an outbound sales model and we're bringing on people between like, you know, two and 10,000 dollars a month now that is just a totally different, like the number of customers that we're adding is much lower, but like we added 50 K MRR in the last 30 days. You know what I mean?

AI assessment note: “number of customers that we're adding is much lower, but like we added 50 K”

Q Wow, 18. Okay, got it. So, talk me through the first, that's the starter story. How did you get your first hundred customers?

A So, I had, as you, as you read in the bio, I had an email marketing company that I started called Roble email marketing. Uh, that's a very difficult space, incredibly challenging, but we had a really nice lifestyle business. And in attempting to niche, I discovered this identity resolution space, which is like basically identifying anonymous web traffic. And then without the person actually filling out a form, we'll pass you a plain text email address, add it to your list so you can market to them. And whereas you would get like three to An unbelievable email list growth tool. It was a feature in Robley. Everybody loved the feature. Nobody was actually switching to the platform. So, so we thought, Hey, if they're, if they're like downloading these files and uploading them in their email marketing app, and they're enduring that horrible experience and like, give us a 10 out of 10 on the NPS report. We need to spin this out, connect it to everything and launch the product on its own.

AI assessment note: “It was a feature in Robley. Everybody loved the feature.”

Q Alright, let's keep fast forwarding, getting into, I call it lawsuit marketing, and really it's a bigger question about transparency and telling authentic stories, even in public forums. So, I imagine, you know, you get this cease and desist that everyone sees on the right from, well, you tell the story. Who'd you get the cease and desist from?

A So, just, twenty-twenty-three was, was hard for retention.com. The e-commerce space in general was going through a difficult time. Uh, I thought we were gonna get revenue expansion. We were getting a ton of contraction and, like, cancellation and stuff. And these guys, we were using their tool to sort of compare it to what our B to B might be. And these guys come in and they're like, it's six months before the contract expires. They're like, we're gonna triple your price and hang up the phone. And it's just, I was so upset about that. Like, just being beaten down to nothing, right, from, from this market we serve. So I was like, you know what? Fuck these guys. Like, and I kind of just put this shitpost out that sort of described what they did, and then I think just as an old playbook, if somebody does something like that to you, you send them a cease and desist, and they apologize, they say whatever, but like, we're kind of living in a different world today, and I have a different view about this stuff. I mean, I just immediately saw that, and I was like, oh my gosh, my lawyer will let me post this. This is the single greatest PR opportunity for a company that is three weeks old. That has ever existed in the history of the world. Because I'll go from a LinkedIn guy to every single Sixth Sense customer knowing exactly what we do at RBDB.

AI assessment note: “every single Sixth Sense customer knowing exactly what we do at RBDB.”