Firing Squad: RecruitCRM's Sean Mallapurkar
Who doesn't love a good David vs. Goliath story? That's why we invited RecruitCRM to come onto Firing Squad. This cocky startup run by Sean Mallapurkar thinks it can actually put a dent in Bullhorn's armor and grab a big piece of the staffing CRM business worldwide. Is there bark bigger than their bite, or should Bullhorn and the like be shaking in their boots? Gotta listen to find out.
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Shark Tank Intro (1s):
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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.
No, you did it right.
CEO of the company, Sean, welcome to firing squad. Give us the correct pronunciation and I'm just going to call you Sean for the rest of the show.
Yeah, so my real given name is Shoanak Mallapurkar
Chad (1m 1s):
That's pretty fancy. That's pretty fancy. It's a much more fancy 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 (1m 17s):
Give us some backhand undergrad.
Sean (1m 19s):
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 was on the Indian national robot Olympics team because we were national champions.
Chad (1m 45s):
Sean (1m 45s):
Played a lot of squash. I was on the under 17 and under 19, Asia Squash Federation ranking list.
Joel (1m 52s):
Is robotics pretty popular with the ladies? That's what I want to know.
Sean (1m 56s):
No, fuck. No, fuck. No.
Chad (1m 59s):
Yeah. I know he went from robotics to HR and talent acquisition and staffing, right? Yeah. Yeah.
Sean (2m 6s):
So HR was always in our life. So growing up from the time I was five till I was a teenager, dad was a India country manager for a company called Randstad.
Chad (2m 16s):
I've heard of them.
Joel (2m 17s):
Yes. Little company. Yeah.
Sean (2m 19s):
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 I, and my dad co-founded with troop CRM five years ago and not just his bribe to get me back to India.
Joel (2m 33s):
And you're an Indiana/Stanford grad.
Sean (2m 37s):
No that was a summer program in high school.
Joel (2m 39s):
So you're in Indiana grad.
Sean (2m 41s):
Yes. And Indiana grad.
Joel (2m 42s):
Okay. Well, we like that. We like that. Chad, tell him what he's won by being on firing squad today.
Chad (2m 49s):
Oh, Sean, you will have two minutes to pitch recruitcrm.io. 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 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 (3m 7s):
Move along, move along.
Chad (3m 8s):
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
Sean (3m 43s):
Yes, I am.
Joel (3m 43s):
All right, Sean, in three two.
Sean (3m 48s):
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 (4m 33s):
We've sort of just signed up Hayes for their Europe operations. Hayes is one of the largest recruitment firms on the planet. And some of the reasons they pick 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, 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 (5m 19s):
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 (5m 39s):
All right, Sean, you have 800 customers.
Sean (5m 44s):
Joel (5m 45s):
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 (5m 55s):
Sean (5m 55s):
We probably could. It's just that like all, all our SEO credit stuff is built now on the IO. 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 (6m 12s):
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 (6m 26s):
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, time sheets 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 (6m 46s):
You're fine being in the box is what you're saying. You're fine being in that box. Got it.
Sean (6m 53s):
Chad (6m 53s):
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.
Sean (7m 15s):
Chad (7m 15s):
Do you see yourself actually pivoting away and trying to get away from the.
Sean (7m 21s):
Chad (7m 21s):
So you just, the boring in relic terms to you are something that you want to embrace moving forward,
Joel (7m 28s):
He likes the box, Chad.
Sean (7m 29s):
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 (8m 7s):
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 (8m 16s):
Chad (8m 17s):
Okay. So give me some ideas. How many employees do you guys have?
Sean (8m 22s):
We have 53 today. We'll be hiring 42 over the next few months.
Chad (8m 26s):
Nice. Where are they all located? Are they across the globe? Are they remote? Are they in a single location? Where we at?
Sean (8m 33s):
They're all remote, but right now they're all remote just across India because of the cost advantage here. But off 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 (9m 5s):
Okay. So taking a look at 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 (9m 22s):
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.
Sean (10m 11s):
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 (10m 17s):
Gotcha. I don't have to tell you that this is a crowded space.
Sean (10m 25s):
Joel (10m 26s):
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 (10m 48s):
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 person 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.
Sean (11m 27s):
Joel (11m 28s):
Okay. Little white glove service.
Sean (11m 32s):
That's one. The second thing is our product doesn't look like windows 95.
Chad (11m 41s):
What's the matter with Windows 95 aka Bullhorn?
Joel (11m 42s):
Sean (11m 43s):
Yeah. It's ugly as shit, which is, which is why Wilderness tried to buy us a couple of times, just so you know. So we've had the PE fund that owns done, 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.
Joel (12m 3s):
So service your site looks better. There's gotta be more than that.
Sean (12m 6s):
No, it literally it is.
Joel (12m 10s):
Is it pricing?
Chad (12m 11s):
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 (12m 25s):
That's gotta be a different.
Sean (12m 27s):
Yeah, well Bullhorn's 20 to twenty-five percent more expensive.
Joel (12m 30s):
Sean (12m 31s):
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 on 3-4 different time zones. It's like a TV show. So you can like literally click into a chat bot 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 it's buttons is, but also help you set up automations or workflows for free.
Joel (13m 12s):
So you guys haven't raised any money.
Sean (13m 14s):
Joel (13m 14s):
You've been around since 2017.
Sean (13m 15s):
Joel (13m 16s):
Are you looking to raise money at some point? Are you quite happy with the road that you're on? No, no interest whatsoever?
Sean (13m 24s):
Joel (13m 25s):
And it looks like you have, is your co-founder your dad or someone? Yes, AJ?
Sean (13m 30s):
Joel (13m 30s):
What's the relationship there?
Sean (13m 31s):
In terms of how
Joel (13m 32s):
Is he funding it?
Sean (13m 34s):
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 (13m 40s):
Chad (13m 40s):
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.
Joel (13m 49s):
Chad (13m 49s):
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 the rocket ships.
Joel (14m 13s):
Chad (14m 13s):
To be able to blast off. How do you see from a go to market standpoint, overtaking a behemoths like Bullhorn?
Sean (14m 20s):
Sure, sure. So, so you need one of 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 (15m 1s):
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 Toby got to about two 50,000 in subscriptions. We didn't do any ads or anything of that sort. We just did a little bit of SEO, wrote a couple 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.
Sean (15m 43s):
They swipe their card and it worked.
Chad (15m 46s):
So are you going to stay on that line of marketing and focusing on SEO, not doing a lot of events.
Sean (15m 52s):
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 investor gave us this is money or customers are giving us sort of the past few years. Gotcha. 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 (16m 25s):
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 (16m 41s):
No, we don't compete with platforms like Hire Easy 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 seeing.com 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 Lucia and a bunch of other data enrichment slash sourcing tools, like one of Hire Easy's competitors, which is source fail. They've sort of built a native integration with us.
Joel (17m 19s):
Sean (17m 19s):
So like if someone comes to us and they're like, Hey, I want a hardcore sourcing tool. We like push them to that tool, which integrates with us natively.
Joel (17m 29s):
Gotcha. So resume parsing, do you guys do that yourself? Or you partner with like TextKernel?
Sean (17m 34s):
Well, we do it ourselves, but we do also have some customers who bought like DaXtra and extras built in integration with us.
Joel (17m 42s):
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 (17m 50s):
No, we already have it.
Joel (17m 52s):
So tell me about that.
Sean (17m 55s):
It's powered by Toolio. So we've basically used Toolio's APIs to power phone calling, recording, and text messaging.
Joel (18m 2s):
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 (18m 18s):
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 time sheets, time sheet 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 (18m 42s):
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 (18m 49s):
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 November, December sort of timeframe.
Joel (19m 14s):
And will the marketplace be free?
Sean (19m 18s):
At this point we don't even have like a thought on like what the marketplace will be. So, so right now I don't have an answer for that.
Joel (19m 28s):