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Disrupting Cloud-Based Recruiting: SmartRecruiters CEO Jerome Ternynck (Part 6)

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. >>>

Thought Leaders in Online Education: Peter Hirst, Executive Director of Executive Education, MIT Sloan School of Management (Part 7)

Sramana Mitra: They’re used to texting non-stop. One form of social interaction could be just having an instant messenger and they’re doing their group study that way. There’s one other thought that comes to my mind in relation to the media industries parallel that we touched upon earlier. There is this whole thing happening in the online media world right now that has come to be known as content marketing. Media companies are imploding left and right. >>>

Bootstrapping a Fun Social Business: Paint Nite CEO Dan Hermann (Part 5)

Sramana Mitra: All the online ticket processing happens through your central website?

Dan Hermann: Yes.

Sramana Mitra: Is this self-financed?

Dan Hermann: That’s one of the really great things about this business. We’re completely self-financed. Our financing engine is based on the fact that people purchase a ticket for a future event, but they don’t attend the event for quite some time – typically anywhere between 28 days to 2 months. That gives us a certain amount of cash that we leverage to grow the business. >>>

Disrupting Cloud-based Recruiting: SmartRecruiters CEO Jerome Ternynck (Part 5)

Sramana: When did you reach the $5 million mark?

Jerome Ternynck: We passed that mark some time ago. From a revenue standpoint, it hasn’t been our focus in that we really want to build a tool that people love using.

Sramana: If you are a venture funded company, you must focus on revenue.

Jerome Ternynck: The focus should be on where you want to go. It would have been very easy for us to take our money, hire account people, and pass the $10 million mark a lot earlier. We didn’t do that. We didn’t hire a single sales person or marketeer until we raised our Series B. That is the price to pay to build an organization that is not relying on sales for a revenue, but relies on the product instead. >>>

Thought Leaders in Online Education: Peter Hirst, Executive Director of Executive Education, MIT Sloan School of Management (Part 6)

Sramana Mitra: It starts to get very tricky because we also have weekly roundtables, which are live sessions where people are gathering from all over the world. They are networking. It’s like a class. There’s instructors and students. There’s networking and relationship-building. All of that phenomenon can, to a degree at least, be simulated online. In fact, now we’re doing it across global boundaries, which you cannot do in physical settings.

Peter Hirst: That, in fact, is what we’re doing in these avatar-based virtual classrooms. We’re really creating an emotionally-engaging environment where people can get together in that way. I have been talking to some of the other folks at MITx and edX. >>>

Bootstrapping a Fun Social Business: Paint Nite CEO Dan Hermann (Part 4)

Sramana Mitra: How many people showed up?

Dan Hermann: We essentially got our friends and family to attend. We were gauging their reactions. Both of us wanted to dip our toes into the business. We had intentionally chosen a business that we thought we could try without having to spend a ton of money. The other thing that we did was we remained relatively hands-off in terms of running the events so we could gauge whether or not it could scale. Rather than teaching the events ourselves and overseeing every detail, we were actively trying to find local artists to run the events without a whole lot of training.

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Disrupting Cloud-Based Recruiting: SmartRecruiters CEO Jerome Ternynck (Part 4)

Sramana: Up to the point that you launched the professional version, how were you generating revenue?

Jerome Ternynck: One of the advantages of SmartRecruiters is that in the workspace we have a store where customers can spend their recruiting budget. In that store you can buy services such as advertising job postings which can include posting jobs on Monster or LinkedIn. You can buy assessment services such as skills tests, personality tests and background checks. You can hire external recruiters as well. We have a marketplace within the free application. We monetize those transactions through revenue sharing.

Sramana: Is it an affiliate model?

Jerome Ternynck: No because the customer pays us directly. We are like iTunes for recruiting. You buy all of your recruiting services from our store. That is our first level of revenue. >>>

Thought Leaders in Online Education: Peter Hirst, Executive Director of Executive Education, MIT Sloan School of Management (Part 5)

Sramana Mitra: That’s a big value proposition that is still part of society. When we were in university and college, there were certain social relationships that formed that ended up being valuable social relationships. A lot of people’s closest friendships get formed earlier in life and a lot of it is college friendships. These are not easy to quantify. >>>