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How SaaS Startup Recruiterbox Grew $5 Mn In Revenues By Making Hiring Painless

How SaaS Startup Recruiterbox Grew $5 Mn In Revenues By Making Hiring Painless

“It would be wrong of me to claim a succinct, sexy-sounding story that this happened, that happened and that’s how Recruiterbox came into being. Actually, it was a bit of an accident,” begins Raj Sheth, one of the three co-founders of SaaS-based job applicant tracking system Recruiterbox.

The accident he refers to was more of a stumbling upon the product idea by the other two co-founders, Raghuveer Kancherla and Girish Redekar, both graduates of IIT Chennai, who were experimenting with two-three products between mid-2008 and 2010. By the end of 2010, they had left their jobs and were in Bengaluru. It was while experimenting with earlier products that they figured out Recruiterbox – on account of a request from a couple of people who said managing resumes on email is a pain. What added to it was the fact that, while working on their other idea, where they wanted to crawl job openings, they had a similar insight. They realised that many small companies just gave an email address on their career space to send resumes but were not using software to manage all these resumes.

Managing those resumes from an email was a pain – and that’s what prompted the duo to write a very early version of Recruiterbox: which was just a place to manage candidates. They were showing version 1.0 to a couple of people in Bengaluru,when Raj met them.

Raj, who had moved back from the US, had himself experimented with two startups – one was a classified portal like Olx and another was a real-time engine for jewellery like Blue Nile in the US. Both of them had failed and Raj was itching to meet a few other tech founders working on a challenging idea. A chance meeting occurred with Raghu and Girish, and after two-three hours of discussion, he was on-board as the third founder.

The trio had their vision clear – they only wanted to sell it as a SaaS product as opposed to license sales.

Says Raj, “We wanted to scale this online and make the product something like people can come on the homepage, sign up and choose without any hand holding. Back in 2011, it was different from many of the home grown products and, in its true definition, it was all SaaS.”

So Saas-y it was, that, for the first two years – the startup did not even have a proper sales team. Raj did most of the selling in the first two years – almost 700 demos, focussing purely on the US market. A focus that has paid off as 70% of its current clientele now comprises US companies alone.

Helping Make Hiring Decisions Faster, Together: In One Place

Recruiterbox’s proposition is to help a client and its team to get through a pile of resumes faster and easier. And this is how it does so: Suppose a company has to hire its next coder. The usual process is to place an opening online, which then goes to n number of websites and, in response, gets 300-400 resumes online as attachments. Imagine getting these resumes through an email box where one has to open each email and each attachment, look at the resume, and then reply or schedule an appointment or issue a rejection. This process becomes one big mess if one is trying to do it all through an email box.

And that’s where Recruiterbox or an applicant tracking system (which is industry speak for this product) comes in handy.

Recruiterbox (RB) will help you in screening, interviewing, and make hiring decisions faster together in one place. What one simply has to do is go to RB and make an account. Then one can select the job opening, add a job description, and input the interviewers and stages. For instance, Employee X (head of HR) does phone screening, Employee Y (manager of relevant department) takes the first interview and so on. So one can input their emails and assign them these tasks.

As the system is integrated with every job site, RB sends the job in one click to anywhere online. So one doesn’t have to go to individual portals/job boards one by one. Now, when candidates come in, they can apply through the form on RB. This form can also be customised by the company. Once applications have poured in, one can filter based on qualifications, screen, reject, and schedule an interview right from the same place – making it super easy to filter who to interview.

Adds Raj, “Effectively, we are your system of record for all your recruitments. Maybe for a 5-10 person company, we are not needed, but if you are a 30-40 person firm growing consistently, it is impossible to hire without an applicant tracking system. Because, we help you centralise and manage your candidates in one place.”

A Church In Illinois Is A Client Among 2,400 Customers

Ever since Recruiterbox acquired its first customer in 2011, it has grown without VC money to 2,400 paying customers till date. Subscription prices start from $250 a month for three to seven recruiters after the end of the 14-day free trial period. Two years before, the startup had also offered a free plan but has been discontinued, thence. So, now, if a company wants to use the software, it has to pay after up 14 days.

The majority of its clients are outside India – about 70% in the US, another 20% in Europe and English speaking countries such as Canada and Australia, and 10% in the rest of the world, which includes Latin America, Asia, and India.

Reveals Raj, “So, in India, our penetration is barely 5% or about 80 or so clients. This is because we are still focussing on a single market (US) and I would still consider us quite small.”

He further adds, “Our clients are mostly mid-range enterprises. So our sweet spot is companies between 30 and 1,000 employees. Also, we are completely sector agnostic – we have everybody as clients – from technology companies to tech startups to restaurant chains to schools to a church in Illinois to a bar!”

Yes, you heard it right. Christ Community Church, which was hiring 13 people for its various initiatives, also chose to rely on the startup’s expertise! Interestingly, even for the Executive Pastor post.

No wonder, its ARR has risen steadily to grow to about $5 Mn. Along the way, the 51-member firm (35 people in Bangalore and 16 people in US) has managed to grab noteworthy names like Couchsurfing, Olark, Wolfram, and Lonely Planet as its customers.

But has the startup deliberately chosen to stay bootstrapped?

“No,’’ says Raj and opines. “Let’s just say we held on to our independence. We want to solve bigger problems in hiring. So, staying independent gives us the freedom to experiment. Now when you take institutional funds, you have to be very sure that you have to bet on such and such thing only. Secondly, the VC would want a certain pace of growth and we would have to sell to larger clients, have more modules. But, till now, we are still experimenting with what that direction is.”

Hence, while Recruiterbox is open to raising money, the founders want those reasons to be clear enough if and when they choose to walk down that path. Till then, the startup will continue its bootstrapped journey, celebrating the big and small milestones that come along.

And there have been quite some.

From First 10 Customers To The First Million

Raj remembers that the first big kick was acquiring 10 online paying customers in one month.

“It told us that there was something here. That was the first step and we were excited thinking that in the next month also we will get 10 customers. And we did,” he reveals.

However, what was most exciting was the first customer that discovered the product randomly, used it for the 14-day trial period, and then just put their credit card in – without Recruiterbox even pitching the product to him.

And from then on,the first 10 to the first 100 customers was yet another milestone. “It was special because that’s when we got our first salary! We were almost broke by that time and I had been sleeping at a friend’s place. So when we hit 100 customers, all three of us drew our first pay of INR 25K each. Girish and I moved into a flat together. With that milestone, we knew that we were in it, and it will go forward from here.”

Then, in 2013 another exciting development took place. Recruiterbox ranked on the first page of Google search for recruiting software, which doubled its growth rate from what it was before that. In 2014, the startup breached the $1 Mn mark in revenues – one of the most coveted goals of any Saas startup.

Gunning For The Next 5K Customers

While there are lots of recruiting softwares available in the market (Raj reveals there are over a hundred of them), what helped Recruiterbox stand out was that it just focussed on one problem and solved it well.

Most of the software HR departments use and train themselves on, are found to be complicated to use by other people. As per Raj, most of them are designed for processes and compliance, whereas Recruiterbox has been designed for productivity. Hence, hiring managers need not even train themselves on it –they can easily open a candidate’s profile on the phone.

“Our focus is so much on user experience that the whole company can use it for hiring.  Bigger and older tools are designed such that HR needs a few days training to learn them,” he says. Some of its formidable competitors include Greenhouse, Jobwise, JobScore, and BambooHR, among the hundreds of other recruiting startups.

Going forward, the startup’s aim is to get to 5K paying companies as soon as possible. And the company has already started laying the groundwork for this. A new website was launched last month, along with a new product pricing. And a host of new product features to help people optimise their processes are planned for this year, as the team sharpens focus on accelerating its growth rate by the end of this year.

Selling SaaS From India But Not For India

Just like other SaaS startups, starting as a nobody is a big challenge when one sets out to sell SaaS from India. Explains Raj,

“There are some categories of SaaS softwares where you  don’t really care about the brand as long as the tool is great. But, when you are selling to HR departments and they have never heard of you, neither are you visible at conferences, nor advisors or freelancers have hired you, then that becomes a challenge. Thus, selling SaaS early on, when we were small and remotely to another market, was a challenge.”

So was being resource constrained-much like other SaaS startups. But what helped around that hurdle was cracking SEO. He says, “We wouldn’t even be where we are today if we hadn’t cracked SEO. Today, when you type Recruiterbox in Google, we are in the top three organic results and not the adverts on the top. That has carried us a long way.”

That allowed people to discover them – again a slow process – as the startup did not have money to for advertising, or go to conferences, or do aggressive business development or sales.

Then again, sitting in India and trying to sell to another market, means time zones become yet another challenge. However, now with a US based team, sales, marketing, and customer support for its biggest markets has been taken care of.

But India still remains a non-priority for the startup, as of now.

The reason being Raj believes that, in India, it is still the enterprise market that rules the roost. He says, “All my Indian customers are other technology companies or other SaaS companies. In India, the market is a little limited. Like, I can’t go to a real estate company in India with my product unless the sales model is very different.  In India, only the enterprise market exits. This medium market does not exist.”

He adds that in enterprises, they are using the biggest softwares and the sales culture is very tailored. So, a sales rep goes to the office physically, there are demos, then there’s a whole negotiation cycle. In contrast, Recruiterbox is are a very low touch thing. “So if we were selling a much more expensive software then we will try and engage with them. But right now, I don’t think India is a SaaS market for us.”

Hence the startup is aiming to go to 10K companies in the US market alone in the coming years.

Why The First 10 Hires Dictate Your Culture

After being around the business for as long as the RB team has, they have some important lessons for SaaS startups aiming to go global.

One of them is being very clear about what problem you want to solve. Says Raj, “Don’t try to force an arbitrary solution down people’s throats. The solution might change, you might have to tweak it but be clear about the problem.”

Also, one has to care very deeply about the idea one is picking. The reason being it takes many many years, a lot of time and effort – and there is no one, quick, turnaround year. So, the approach of ‘If it doesn’t work I will see if want to be in it or not’ doesn’t work.  Or as Raj puts it, “It is important to have an affinity to enjoy what you are going to do regardless of when the result comes.”

But the most important one, given that he is a founder of a startup that specialises in recruiting and has also penned a book on hiring called Prepare, has to be on hiring.

Says Raj conclusively, “Pay a lot of attention to hiring the first 10 people or the first leaders of the company.  Because that dictates your culture – how you are going to work and how people are going to think. I would be very careful and not rush into it that just because I need somebody, I will hire anyone.”

After all, hiring matters.


[This article is part of Inc42’s SaaS series where we will be covering different aspects of SaaS in India and abroad.]

Author

Shweta Modgil

Inc42 Staff

Passion for writing and interest in the start-up space brings Shweta to Inc.42. She has prior experience as a Research Analyst in the venture capital/ private equity space and the auto industry. Fiction writing is her other forte and her first book titled One Hundred Days published by Tara Press debuted in 2014.

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