SaaS Interviews with CEOs, Startups, Founders
1574 Why This CIO Believe Indonesia Next Growth Opportunity for Team Insurance and Benefits
15 Nov 2019
Chapter 1: What is UrbanHire and what services does it provide?
founded back in 2016, really helping with job placement. Start off as a SaaS model, have 3,600 users, about 168 are paying, call it a grand or around that per year. So they're doing about 70 grand per month right now. That's up from 25 grand a month just a year ago.
So good growth, but they're shutting down this model, even though it's got 80% retention and 20% revenue churn per year and really pivoting to cater to Indonesian CEOs and companies really as a super insurance actual broker with a large tech component. Hello, everyone. My guest today is Nathan Kamstra. He's the co-founder and CIO of a company called UrbanHire.com.
Nathan, are you ready to take us to the top? I am. All right, man. Tell us what the company does and what the revenue model is. Is it a pure play SaaS company?
Yeah. So UrbanHire at the moment is a recruitment site focused on funnel recruitment. So rather than finding individual people matching to company needs. They'll find a lot of people and funnel them down into something that's a little bit more manageable for bulk hiring.
Okay. And give me, give me a use case where someone would be bulk hiring versus like high touch, you know, super curated.
Yeah. So bank tellers, for instance, you know, you know, you're going to have a certain amount of attrition at a bank and you want to make sure that you've got enough people like human resources to to actually keep that covered. And so you will probably have goals, you know, X amount per year, and you'll just keep that in play all year round as you go through that typical amount of attrition.
Okay, so when you look at like your average customer paying you, I mean, how many jobs are they hiring through your system per year, would you say?
You know, it varies, but I think a good example is, you know, around 100.
Okay, so it's pretty high volume. And what are they, and again, what's the revenue model? So how are they paying for this? You know, typical kind of recruiter as you're paying a percent of first year salary, some people are now doing SaaS. What's your model?
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Chapter 2: How is UrbanHire's revenue model structured?
We have three, 3,600 clients on the system. Not all of those are paying clients.
How many are paying?
So we've got 168, I think paying clients. Okay. But in order for us to get, um, you know, attraction as well as bring on people, We open the system. There's an aspect of the system that is free and available to anyone to use.
OK, well, I mean, talk to me about what I know you have many different cohorts. I don't want to talk about every customer cohort. I mean, would you say it's fair to say kind of the average customer maybe pays you a grand per year for these 100 hires or where would you say is?
I mean, it definitely there's a huge curve.
I totally get that.
Okay. Um, so I, I think the brand is probably a good, a good use, but you know, that that's the model as it is. I, what I really like to talk about those where we're going and why I'm actually part of the group now.
I want, by the way, I want to talk about where you're going, but we first have to establish where you currently are. Right. So that's what I'm trying to do in the first five minutes here.
So so just to be clear, if someone's going to if someone listening right now, you know, someone who runs a bank, you know, a company or someone that runs a restaurant has high turnover, wants to use you and they're going to end up making 100 hires over the next 12 months. You're saying they're probably going to pay about a grand to make those 100 hires over the next year.
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Chapter 3: What challenges does UrbanHire face in the recruitment industry?
Got it. So you're, you know, we've got about 35, 40 days left kind of in the year. So you're assuming that you're going to get, I mean, if you're at 70 today, you're assuming you're going to double over the next 40 days.
Yeah. We're on track to, um, to, to close business. So it's, it's a cyclical business. Um, you know, we've got, clients that come in during cycles. And you'll see that the revenue growth, if you look at the chart, it drops off at certain parts of the year and then goes back up at others.
When you look at, okay, so to avoid that seasonality, if we just look at year by year growth, if you're at 70 grand today per month, where were you a year ago in November, 2017?
A year ago, I think it was less than 25,000.
Okay, good. So good growth. Okay, good. So this is helpful to understand kind of where the company is today. Again, 168 customers last year, about 25 grand per month. And now today, about 70 grand per month, hoping to double that over the next 45, 50 days because you closed a lot of business in the last quarter, it sounds like. Ben, put this on a timeline for us.
When did you guys launch the company?
They launched it in 2016.
Okay, you said they launched it. So when did you join?
I joined this year to take the company in a new direction.
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Chapter 4: What is the significance of the Indonesian market for UrbanHire?
building HRIS platforms. So U.S.-based large-scale to global large-scale HRIS platforms that included broking benefits administration, just basic HRMS. And so I left Aon last year and really did some soul-searching to see where I wanted to go next, what I wanted to do. And ultimately I had a lot of things in my last job.
I was asked to really think beyond our current revenue models and find out how we could even disrupt some of the revenue models that we had traditionally relied on for a very long time. And, you know, because companies at this point, you know, companies as large as Aon, they're in a buy mode. They're not going to build something.
I was a little bit concerned that if I went back into the industry in the large scale company, that I wasn't going to be able to achieve some of the software goals that ultimately I wanted to achieve, some of the changes to the broking industry and the HRS industry. So what I did is focus on finding a platform which had a baseline and was in the HR tech field that could then be converted into
Um, but you know what my, what my big vision is. So I met Benson and he had the same. Benson's the CEO. Benson is the CEO. And, um, so we, you know, we talked over about eight months and I came out, I assessed the platform. And so we came to a conclusion that from the platform we've got, we can now build this into a, uh,
a really large scale but focused on indonesia at the moment hrs platform that would be benefits delivery with a um you know it'd be a sas model but at the same time there's a huge potential for broken revenue out of that model as well okay all your 70 grand per month today is sas revenue though correct correct yeah okay and and i mean how sticky is this so what does churn look like today
Well, it's difficult because we sign up clients for a year at a time.
Yeah, so then you say, okay, how many renew at the end of the year? If only one renews out of 100, you have 99% churn.
Yeah, I mean, it's very high right now.
How high?
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Chapter 5: How does UrbanHire plan to pivot from recruitment to insurance brokerage?
Yes. No, he would be an insurance broker.
He would actually be the broker.
He would actually be the broker.
Yeah, yeah, yeah. Interesting. So you're essentially going to be an insurance broker with a small tech component.
Well, yes, exactly. I mean, I don't think of it
small but very low but yeah well and so why go into this space i mean you look at companies like gusto uh you know they have a massive lead in this space maybe they're not in indonesia yet but i mean you also then look at just the recruiting side you have indeed isims i mean these huge companies um why go why pivot from you know just a uh kind of a job placement model to the insurance broker model why do you think you'll be able to build a billion dollar company there versus where you're at today well i think for a couple reasons one is that asia is
as not well represented in terms of configuration. So the thing about these platforms is they're highly, they're very much dictated by local regulation. And therefore, every company's gonna have its own special needs, its own special configurations, and its own implementation skills. So Indonesia has not been represented in this platform space yet.
So Gusto doesn't serve as Indonesian companies?
No. And why not? Well, one, because the insurance market has not, because there's two approaches you can take. And what I've decided that we should do is focus on the markets that's about to be mature and then go after the other markets as opposed to what most people have done, which is focus on the more mature markets and then try to go into the other regions when it makes sense.
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Chapter 6: What are the growth metrics for UrbanHire over the past year?
Thanks a lot.