SaaS Interviews with CEOs, Startups, Founders
1222 Workable CEO on Saying "No" to Acquisition Offers, $20m+ in ARR
28 Nov 2018
Chapter 1: What inspired Nikos to create Workable?
Try not to plan things so much, says the creator of a planning tool for your recruiting needs. Launched the company back in 2012, bootstrapped it. He just realized when he was working at a telecom previous to this, he couldn't scale and hire, and sorry, and scale hiring effectively. So he went out, built this tool in 2012,
now has over 6,000 customers paying, call it two-ish grand per year, or said differently, they've just passed 20 million bucks in ARR. That's up from 14 million about a year ago. So healthy growth rate. They've got 102% net revenue retention annually. Tucked into that is 15% gross revenue churn annually, but it's not like a typical business.
30% of his new business every month is actually from past customers who stopped hiring because the system works so well, right? That's obviously what it does. His team is 170 people based between Boston and Athens. Super healthy payback period. They spend 500 bucks to acquire a customer that pays two grand a year. So two month payback period, four grand LTV at a minimum. Healthy business.
This is the Top Entrepreneurs Podcast where founders share how they started their companies and got filthy rich or crash and burn. Each episode features revenue numbers, customer counts, and other insider information that creates business news headlines. We went from a couple of hundred thousand dollars to 2.7 million.
Chapter 2: How has Workable achieved significant growth in revenue?
I had no money when I started the company.
It was $160 million, which is the size of many IPOs.
We're a bit strapped. We have like 22,000 customers. With over 5 million downloads in a very short amount of time, major outlets like Inc. are calling us the fastest growing business show on iTunes. I'm your host, Nathan Latka, and here's today's episode. Hello, everyone. My guest today is Nikos Moratakis.
He is the founder and CEO of a company called Workable, makers of the popular recruiting software used by 6,000 companies in 80 countries. He led the company from its inception in 2012 to a fast-growing organization with 185 employees in US, Europe, raising $40 million of venture financing from many of the top European investors.
He's also appeared as a speaker on the Nantucket Conference, SASTR and SASTOC, and has been interviewed in popular podcasts and media like Forbes and the New York Times. He holds a computer science degree from Imperial College in London and lives with his wife and two children in Boston, Massachusetts. Nikos, are you ready to take us to the top?
Absolutely. It's a pleasure to be here with you.
All right, you're in a hot space. Did Glassdoor sell? Was it overvalued or undervalued? $1.2 billion.
Oh, I think... I think they're going to be worth a lot more than that.
Okay, good. So you think it was a good buy. It's HR tech, which you're playing in. Tell us more about the company and what you do.
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Chapter 3: What is the customer acquisition strategy for Workable?
I think we are In nearly 100 countries right now, 6,000 customers and adding something like 400 or 500 every month.
Just to be clear, those are paying customers, not users or something.
Yes.
And you're adding 400 to 500 per month? Yes. That's great. So give me more of the backstory here. So you launched the company what year?
We started in 2012. So we've been at it for five and a half years right now.
And what drove you to this idea?
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Chapter 4: How does Workable handle customer churn?
I mean, what were you doing at the time?
Before this, I was working in a fast-growing company doing software for telcos, completely different from Workable. What links the two is that we had to hire a lot of people really fast. If you're a manager in a company that grows really fast, you get to hire a lot. So I basically had to deal with a lot of parochial options in terms of software.
You're talking about you had to hire a lot at the telco.
Yes. So I used a lot of the stuff that's out there and to be honest with you, most of it is pretty old, not very good. So we decided to do something slightly better ourselves.
Why didn't it indeed work?
Well, Indeed is a job site and it helps you find candidates, but it doesn't help you manage the process, run your career pages, manage your interviews, manage your feedback. So recruiting, there's a lot beyond just getting candidates.
And most employers, precisely because they get most of the candidates online through Indeed, through social media, they need to have a digital way of managing the process itself.
So you don't compete with Indeed. There are many people that use Indeed and you.
Exactly. It's extremely common. Indeed was one of our closest partners. And many companies use job sites like Indeed to get the candidates, but then software like Workable, both to easily interface with something like Indeed, but also to manage the rest of the process all the way to the offer letter.
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Chapter 5: What role does SEO play in Workable's success?
And generally speaking, how many hires does that get for them or how many hires are they managing?
Companies that make a few dozen hires a year.
Okay. Fair enough. Good. So a few dozen hires a year.
There's many small companies with like 50 or 60 people who may be paying just a few hundred bucks a year.
Yep. Yep. Good.
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Chapter 6: How does Nikos measure the company's financial health?
But, but a good kind of middle is call it maybe 2000 bucks a year to hire a dozen or two dozen employees.
Yes.
Okay. Now those numbers get big quick. If I take a, well, the 2000, you said that's annually or monthly?
This is annually.
Or a couple thousand. Yeah, a couple thousand is annually. Got it. Okay, good. So, I mean, have you guys broken? I mean, you take $6,000 and you multiply it by that annual number. I mean, have you guys passed the million dollar a month in revenue yet?
Oh, yeah, absolutely.
Okay, good. Do you mind sharing where you're at today?
The company's making somewhere like a little bit over $20 million a year. Sorry, how much? A little over 20 million a year.
A little over 20. Okay. 20 million a year. Good. That's healthy. And I want to understand kind of how you got your first thousand customers. Was it through a partnership like Indeed?
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Chapter 7: What factors contribute to Workable's high net revenue retention?
Tell me the story. How'd you get your first customer?
I, It's the honest truth. We got to 10 million revenue without having a sales team. We just had the software out there and people were coming and buying it on their own online.
How are they finding it? Is it an SEO play?
A great degree of it is an SEO play. We have the most popular HR website in the world right now. Our resources section on our site has thousands of you know, guides and job descriptions and interview questions. And we do about 23 million unique visitors a year on our content.
So a lot of people come to us because they're looking for an interview question or templates to do their offer letters or whatever. And then they discover the software and then they post the jobs and then they discover how easy it is to manage. The differentiating factor of Workable is its self-service nature. You can go in there and you can get the job done in a few minutes.
In a few minutes, you'll be up and running. And now we have a sales team mostly dedicated to bigger customers, but we got all the way to 10 million revenue without having a single sales person.
What's your team size today?
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Chapter 8: Why does Nikos refuse acquisition offers despite substantial revenue?
Right now, we're about 170 people in Boston and Athens.
Boston and Athens. Okay. I'll come back to that in a second. But take me back to this SEO play. So how did you decide on kind of your first week of launching this tool? You put out in the wild, no one's viewing it. You say, let's go SEO. How do you pick which word to kind of optimize for first? Do you remember the first word you optimized for?
It was not a matter of words. It was the insight there was what do people need to do when they're interested in hiring? So you want to hire a project manager. The first thing you're going to do is you're going to look for a job description that you can modify.
So you would look at this and go, the current search volume on Google Trends for template job description for product manager.
We have every job description you can imagine. We have thousands of them. Interesting. And right now, in the beginning, we said, let's find the 100 most popular jobs out there. or you're going to look for interview questions.
I'm doing it right. By the way, I'm doing this right now. I just typed template job description for product manager. And you've got hiring.monster comes up, resources.workable.com. That's you. So walk me through, I mean, the first SEO term, I just looked it up. You're ranked there at the top. Indeed's paying for it, right? There's a lot of job descriptions you can rank for.
I mean, how do you kind of decide and why is it so critical to your strategy?
We said, what do people look for when hiring? Job descriptions, offer letters, interview questions. And we started making some content around that. And honestly, we just made some content. We didn't SEO optimize it. We put it out there.
You just typed it like a blog post.
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