Sramana: How do you compare to SuccessFactors?
Jerome Ternynck: They are a lower version of Taleo that ventured into recruiting in 2009. They have the same principles. This is a market that I know very well because I have been in it so long.
Sramana: What is the sales cycle like? It sounds like you have a good opportunity to win away customers from Taleo and SuccessFactors, which is nice because they are qualified customers. What are the requirements surrounding your sales cycle?
Jerome Ternynck: We have a bottom up approach. Anyone in any organization that needs to hire can go to SmartRecruiters.com and start hiring immediately. That user can create their job, advertise it, and share it with colleagues. Candidates apply and find it very easy to share candidate information with other members of their team. We end up getting five or six users in an organization just from that one person signing up.
Other people then create other jobs. At some point, the head of HR will take a look at the app that the various hiring managers are using in the company. Since it is a better system, they will want to know how to migrate and upgrade. However, they will want more than the free version. They will want to consolidate and manage all of their recruiting.
They will end up purchasing the professional version that has the functionality that an HR manager would expect. At that point, I can give them a free trial. They can see the additional benefits and it really becomes an easy upgrade path. They will already have had a lot of people in their company using it.
We hired our first sales people in February to support that pro version. Since we have 70,000 organizations sign up with SmartRecruiters, we have a good understanding of who is using us. If we do a good job with the product, then we have a great opportunity to help organizations transition from an outdated tracking model to a more modern approach, which is candidate-centric. We make hiring managers a part of the recruiting process. It really makes everything much better.
Sramana: If you have 100 people from the same organization using this for free, how do you handle the data when you do a corporate deal? Do you have separate databases?
Jerome Ternynck: All of the people are in the same organization.
Sramana: So if one person starts an account and invites others, it still goes to the same organizational account?
Jerome Ternynck: Yes. We can turn that into a corporate deal. That is the process that we started at the beginning of the year. We have already tested it on several accounts before launching the pro version.
Sramana: What is the business model of the pro version?
Jerome Ternynck: The pro business model is a standard SaaS model. We charge based on the company size. We start at $10 per employee per month.
Sramana: Will you still do commissions on third party services?
Jerome Ternynck: We continue to do that. As a pro customer, one of the reasons you like the proposition is that you see you can manage all of your suppliers on the same platform. You can buy new services in the store or you can connect existing contracts.