Hello! Who are you and what business have you started?
My name is Jacob Fiore and I started a recruiting business to help high-growth startups find the best talent. This was originally a side project when I was working full-time investing at a mutual fund company. After six months of working I was able to go full time and haven’t looked back.
There are a lot of generalists in recruiting. What can help you stand out is focusing on specific roles. For example, our focus has been on software engineering. 95% of our business has come from investing software engineers in venture capital-backed startups. We work with innovative technology companies that have raised nearly $1 billion in venture capital.
What is your story and how did you develop the idea?
My father was an entrepreneur in the toy industry. He was a leading player in the claw arcade game. So growing up, it was common to think that people start companies. This gave me an entrepreneurial itch that would never waver. It was difficult for me to work for others. I wasn’t encouraged until I had some ownership to build something bigger than myself.
Fast forward to my early 20s when I was working in the investment industry. I wanted to start a side hustle, but I needed an idea. My roommates and I had a whiteboard in the basement and I started thinking about what I wanted in life. It all came down to 3 things. 1) I wanted an industry that would allow for unlimited financial gain. 2) Geographically agnostic 3) I make my own schedule.
From there I was going to pick some ideas that fit the mold. I had a family member who had acquired some talents in the past and he taught me some of the basics of the industry. It turns out to be incredibly easy and there is little to learn.
It was a low barrier to entry, both in terms of knowledge and capital. This also meant there was more competition. It’s not hard to be mildly successful here in any service industry. You must have A+ customer service and you are better than 90% of your competition. So that was the goal.
Start a side business. I highly suggest keeping a job while experimenting with side hustles. Make sure they fall under the things you want in life.
The next step was to find a name, pay $100 for an LLC, and get a free logo online. Browse our networks to find first clients and introduce them to people we meet on LinkedIn. To the race.
Take us through your first candidate placement process
Recruiting is all about the network you have. The great thing is that there is basically zero cost. You find companies looking to hire for positions and then see them on LinkedIn.
When I found companies to recruit for specific positions, I found a basic contract for online contingent direct placement. Both you and the company agree on a certain “finder’s fee” if they want to hire people referred by you. This must be signed by the companies you work for in order to be paid. There are other terms like warranty period, net payment terms etc.
Now is the time to find candidates to interview for these positions. You can find these people on LinkedIn. Create direct messages and start poaching some employees from industry competitors. In this case, candidates just needed to sell software, so it was a larger pool to choose from.
The mistake I made in the beginning was reaching out to people I knew immediately to fill the position. Most likely, they will not be the candidate to be hired. But what you have to do, and what eventually landed me my first position, is ask people for referrals. This does two things.
1) You indirectly ask them if they are interested in the job
2) People who know you want to help.
I ended up getting a referral from a high school friend. He knew a software vendor who was very accommodating. And of course I gave him a referral bonus to encourage him for more help in the future.
Describe the process of starting a business.
The first step is to find a place to recruit. It could be accounting, finance, IT, marketing, sales, etc. You don’t have to have experience in these functions, but it can only help. I had zero software engineering experience, but that’s where I’ve helped the most people.
Once I had a niche, I created an LLC with my business name and logo. From there it was time to build the website. I recommend using products that are sold: Webflow, Typedream, Wix, etc. This makes it very easy to create a website with fast content.
Since there was no overhead, I used money from my full-time job to pay for what I needed, which wasn’t much.
From there, I just networked, shared my website with people, and asked them about pain points in the hiring process. I was able to gain the trust of some initial companies and started working for them.
It was easiest to start as a contingent recruiter. This is because you only get paid if you bring value to the company. It is a production model. They don’t pay you until they agree to hire someone you bring to them. This creates a low barrier to entry and allows you to get up and running relatively quickly.
Since launch, what has worked for customer acquisition and retention?
One of the things that attracts clients is our focus on doubling referrals from other software engineers. Finding qualified candidates can be difficult. So we started offering some pretty crazy referral bonuses that no other recruiting company was doing.
We’re talking $8k if someone they referred gets hired. It’s a no-brainer for software engineers to refer their top friends. That got the word out. Soon 50% of our placements were from referrals.
We didn’t have to do much work and still paid 70% of the placement fee. it was worth it. Everyone wins and people like our brand because we give stuff away.
So we started building referral links and building a backend database for anyone who wanted a referral link. And almost everyone was open to it because no one was paying us the type of referral bonuses.
This is what our registration page looked like. Very simple.
On the client side, keeping up to date with business news, particularly sections about companies’ latest funding or scaling plans, helps find clients to reach out to. From here it’s a numbers game. Invest in some technology that allows you to increase email. emails and LinkedIn access and quickly find hiring companies.
I haven’t done much SEO or social media marketing. Simply because you need to proactively contact specific individuals. This is a B2B service, so it’s more about who you know and delivering results from there. I’m sure SEO or marketing can only help. It’s just not what I focused on.
It’s a numbers game. The more people you can refer who are hiring, the more positions you can help hire. I find that quality and targeted distribution go a long way in this area. Too many people fall short by keeping their spread generic. Any differentiator you can have will increase sales in the long run.
The way I went is creating a list of companies that are hiring. This can be found on job boards, recent company funding, company expansion news, and more. Then link with LinkedIn to find the right people. This would be the VP of People, Head of Talent, General Manager, COO, CEO, etc.
Create messages that are direct and to the point, ending with a simple question. They will appreciate it and will probably let you know yes or no if they need help.
How are you doing today and what does the future look like?
It is beneficial as soon as you make your first placement because it is an online service business. I had a 1st year gross income of $302,100. Year 2: $233,200
The fluctuations are based on market trends and the roll is driven by recruitment.
(You get paid when they agree to hire your candidates, so it’s entirely up to the hiring manager.)
Most of my business has come from 2 companies that have grown their headcount in their software engineering teams by 57% year over year. They were both VC-backed companies.
Fast forward to today and you’ll see that the recruiting market, especially for tech, has hit a huge wall. This is only for now, and I predict the market will continue to trend upward in the next year or two.
Recruiting will always be a necessary area. Companies win based on talent. Every CEO knows this and is willing to invest heavily in this function.
Have you learned anything particularly useful or beneficial about starting a business?
I tried to build a technology product to automate recruiting and made a lot of mistakes. Hired several contract developers who took advantage of my non-technical background to get paid. If you are not a technical expert and do not know exactly what to build, I suggest contacting a technical co-founder who is paid with equity, not contractors.
I suggest investing in what you know will work rather than testing the waters with R&D with skills you don’t have. So if you create a scalable process through candidate sourcing and interviewing, double that, not a technical product. Leave it to the developers and partner with them from an equity perspective OR raise money for the idea so it doesn’t come out of your income.
What platform/tools do you use for your business?
LinkedIn Recruiter is a must when looking for candidates. I don’t like the platform but it’s the #1 place to recruit so you have to bite the bullet. Some email collection and automation tools. I use Interseller and they make it very easy to create and access processes. It was bought by Greenhouse and the customer service seems decent.
Many LinkedIn automation tools send connection requests with a tag. This could be in lieu of getting a LinkedIn recruiter spot, plus you gain followers/connections. I found this somewhat helpful in expanding my network. Some of the downsides to this are that you can’t get super granular and you end up contacting people who aren’t your target customer.
What have been the most influential books, podcasts, or other resources?
Ravikant’s Nautical Almanac is the best business book I have come across. There is a free pdf online and it is a must.
Tips for other entrepreneurs who want to start or are just starting out.
Write down what you want in life. For me, it was geographically agnostic with unlimited earning potential and a flexible telecommuting schedule. I found it with recruiting. Some other careers and projects give you the same result.
Start a side business. I highly suggest keeping a job while experimenting with side hustles. Make sure they fall under the things you want in life. Pick one or two and dive deep. Too many side projects means none of them will come out full time.
Where can we go to learn more?
If you have any questions or comments, leave a comment below.
– Jacob Fiore, Devrize founder
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