SaaS Interviews with CEOs, Startups, Founders
EP 578: Ripple Recruiting Passes 8,000 Ivy League Resumes With 15 Employers Paying $300/mo For Access with Ripple CEO Andrew Myers
22 Feb 2017
Chapter 1: What is the main topic discussed in this episode?
This is The Top, where I interview entrepreneurs who are number one or number two in their industry in terms of revenue or customer base. You'll learn how much revenue they're making, what their marketing funnel looks like, and how many customers they have. I'm now at $20,000 per top. Five and six million. He is hell-bent on global domination. We just broke our 100,000-unit soul mark.
And I'm your host, Nathan Latka. Okay, Top Tribe, this week's winner of the $100 is Rich Jones. Okay, Rich Jones, he is stuck in corporate. He wants to break free. He's binging on the show. For your chance to win 100 bucks every Monday morning, simply subscribe to the podcast right now on iTunes and then text the word Nathan to 33444 to prove that you did it.
Chapter 2: What is Ripple Recruiting and how does it generate revenue?
Top Tribe, you know I don't have a lot of time to waste. That's why I use FreshBooks to send out invoices and make sure I'm collecting my money. To get your free month, go to nathanlatka.com forward slash FreshBooks and enter the top in the How Did You Hear About Us section. Nathan Latka here. This is episode 578.
Coming up tomorrow morning, you'll learn from Drew Canole, the CEO of Organifi, which did $25 million in 2016 sales, over 150,000 customers for this physical product.
Chapter 3: What subscription packages does Ripple Recruiting offer to employers?
And the million dollar product is an Indian sourced material or mineral called ashwagandha. It's really a fascinating story. His goal this year, 100 million. Nathan Latke here. Good morning, folks. Our guest today is Andrew Myers. He grew up in Denver, Colorado, and then recently left Yale before the start of his senior year to pursue Ripple Recruiting. That's his company full-time.
He now serves as CEO of the fast-growing 12-person startup. We're going to dig into it today. Andrew, are you ready to take us to the top?
Yeah, absolutely, Nathan. Thanks for having me.
Well, I'm glad you jumped on, man. So tell us first, what is Ripple Recruiting and how do you generate revenue?
Definitely, yeah. So at our core, what we do is we allow employers to create their dream applicant pools without ever setting foot on a college campus. And so basically... What we do is we have students go in, answer all the questions that employers would want to know ahead of time.
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Chapter 4: How did Andrew and his partner fund Ripple Recruiting in the early stages?
So what do they want to do with their lives? Where are they interested in working? And then employers can actually go on and instead of having to send a whole team out to campus, they can filter for the qualities they want most and then build relationships with students over email at a fraction of the cost of the traditional model.
It's hard to get college students to pay for anything besides beer. And so our whole revenue model is on the employer side. So they buy one of three annual subscription packages.
So nothing to students?
Nothing to students. Totally free for students, which is a big part of the pitch.
So is this more of a marketplace play or a SaaS play business model wise?
It's both a marketplace play and a SaaS play. So half of what we do is really building a vibrant ecosystem and a really strong marketplace. And then we have a powerful SaaS platform that enables all of that.
Okay. So let's, so let's talk about kind of the SAS aspect of this first on average, what are these employees paying you per month or employers?
So our sort of three subscription packages vary. So the light package on a monthly basis is $95 and then the premium is $795. So I might say our average contract size is about $300 a month right now.
Okay. And what are those, why would somebody pay, why would an employer pay on the low end and why would they pay on the high end? What are the things that drive them up kind of the value chain?
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Chapter 5: What strategies is Ripple Recruiting using to engage students and employers?
And so an employer every two weeks will get an email in their inbox with, you know, the five to 10 students that are the best possible fit for their company. And so it'll really bring students to life that'll go beyond GPA. And so students really get an advocate for them. And then employers, you know, basically have us do all the work for them, essentially.
And then on the lighter end, you know, it's really for smaller companies. There's also less unlocks. And so there's sort of more limited access to the database. And it doesn't come with that powerful Ripple Scout feature and then some of the diversity filters we have as well.
This sounds a lot like a kind of a LinkedIn and what LinkedIn's doing. If Reid Hoffman came to you in your email inbox, you wake up tomorrow morning, you hit refresh and he says, the subject line says potentially acquiring and the content says, Andrew saw the business. We'd love to buy you for 10 million bucks. Do you sell?
I think absolutely not at this point.
Chapter 6: How many Ivy League students are currently using Ripple Recruiting?
I think I really believe we can build a system that's way more, I mean, it's already way more powerful than what LinkedIn has. And I think there's so much demand on the student side of things for a company that really is focused on college students and really has their interests at heart. So,
I mean, obviously $10 million sounds like a lot of money, but I think this company can go way beyond that.
How old are you now, Andrew?
Right now I'm 23 years old.
Have you, have you exited before or it was like this, your first, this, your first kind of business?
No, absolutely. We're a Eric Cohen, my co-founder and I are both first time founders.
You guys just split it 50, 50. Yes. Wow, that's interesting. So what if you guys both disagree on something?
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Chapter 7: What are the challenges of recruiting college students?
How do you get through it?
You know, I think the beauty of so many of our decisions is that we do disagree with each other a lot. And I think the sort of big expression we have at the company is strong opinions loosely held. And so... I think almost all our best decisions come from rigorous argument between Eric and myself.
And the bottom line is both of us will often end up abandoning our original position and kind of let logic win out. But I think too often, it's easy to get invested in your original idea having to be right. And I think what we really care about is the logical process and getting to the right conclusion rather than starting out in the right place.
What year did you launch the business in?
So we launched the business. So we basically had the concept and started working on the SaaS platform in October of 2015. And then our Yale launch was April of 2016. Okay.
And this is always an embarrassing number, but 2015, what was total revenue first year?
So to total revenue, you know, we weren't focused on revenue at all. It was all sort of free trials. So even at this point, you know, the big focus is we're definitely starting to see that early revenue come in. But the big focus is user engagement with the platform rather than revenue.
I think we'll monetize, you know, the reason I'm asking you this question is because there are a lot of students coming out of college that have to cover basic costs and they figure out ingenious ways to drive early revenue while they're building something bigger. That's really what I'm asking.
Definitely. So I think our ingenious way of getting early revenue was to max out our credit cards and rely on Yale for funding. And so I think it's great when students figure out something really early on, but I think it's easy to get distracted by revenue when what really matters is the quality of your marketplace and ecosystem.
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Chapter 8: What are Andrew's plans for future funding and expansion?
We probably, uh, by the end we're close to, you know, $45,000 in debt total.
These are just like cash. You call up the credit card, you have a, you do cash advances, then you just pay down the interest over time on the credit cards.
Not even cash advances. I mean, we would just sort of put every expense on our credit card and we'd link it to Venmo so we could pay a lot of our early marketing reps using Venmo. Interesting. Okay. And then you've raised capital. How much have you raised?
So we raised a $700,000 seed round, which Kevin Ryan, who founded MongoDB and Guilt and has done a lot in the tech space in New York, actually led. And then we're just getting ready. Probably in two or three weeks, we'll start going out for that Series A round.
So let me ask you a question. Did he push back when he was looking at, first off, was he the only one putting the $700,000 or was there a syndicate?
No, we had quite a syndicate. It was a real mix of guys in both the hedge fund space and the HR space as well. Kevin led, right? Kevin led the round, though, yes.
When he was doing due diligence, he had no issue with the 50-50 split. Are there any clauses where if you guys come to a complete standstill, there's a way to move the company forward? Like with a super much or anything like that?
Yeah, yeah. No, I think at an early stage, you want both founders bought into a huge extent. And I think the way Eric and I work, we really see it as both of our companies. And I think in a way, a lot of what he bet on was the dynamic between us and us being able to figure it out together.
And he's definitely a great resource if we're trying to talk through a decision we maybe disagree on or sort of want a really expert opinion on. But I think that by and large, he's had a lot of confidence in our ability to navigate it and figure it out.
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