Vested Capital
Vested Capital

Episode 5 · 1 year ago

(EP5): Chris Bakke Founder Of Interviewed Acquired By Indeed For $40-$50Mil, Early Zillow, RentJuice, Currently Laskie.com

ABOUT THIS EPISODE

Chris Bakke is currently founder of Laskie.com, a startup focused on becoming the Upwork for enterprise hiring.

Previously he was co-founder of Interviewed, which was acquired by Indeed for 'mid 8 figures' after just two and a half years.

Prior to this he worked as COO for 42Floors (acquired by Knotel) and RentJuice, which was acquired by Zillow, where Chris also worked for several years.

Chris in this interview explains his part in all these companies, first starting as an early employee in the real estate tech space, which led to his first exit, gaining shares in Zillow (he explains what he did with the shares during the episode).

After a couple of years at Zillow, Chris left to work for another real estate tech firm 42Floors, rising to become COO, and again enjoying an exit when Knotel bought the company.

Chris was then 'pushed' to become a founder himself, after his co-founders won a hackathon and several angel investors where throwing startup capital at them to back their recruitment testing tech idea.

This led to an amazing two and a half years where thanks to a lot of a hustle and a 'beachhead' client acquisition strategy, Chris and his co-founders grew Interviewed to $2.5Mil in annual run rate, and then the incredible sale to Indeed for almost $50 Million.

One of the mains reasons I wanted to speak to Chris was to hear how several of the companies he worked for or co-founded were able to sell for such high multiples. He calls these 'strategic buys' and explains why this was possible in the interview.

Enjoy the discussion.

Yaro

Podcast: https://www.yaro.blog/pod/
Blog: https://www.yaro.blog/

Hello, this is yarrow, host of the bested capital podcast. To show about how people make money, build capital and then put their capital to work, I interview start up founders who've enjoyed big exits, much like my guest on today's episode. Angel investors, venture capitalist, Crypto and Stock Traders, real estate investors and leaders in Tech. These are all my favorite topics and in fact I'm pretty much doing almost all those things myself, so obviously coming from a place of real passion about this topic and my guest today for episode number five invested capital, Chris Baki, is a fantastic example of a start up founder who's had multiple exits and built up some incredible capital made a lot of money by just being a great founder. He got his start in company called rent juice. He was one of the early employees in that company, which was in the real estate tech space. That was acquired by Zillo, which you probably know. That was sort of early days for Zillo, so Chris was a part of that company as it grew and then listed on the stock chains. Chris actually made some early six figures with the that acquisition and his shares and Zillo. He'll talk a little bit about that, so you can what he did with that money. Then we move on to the next company that Chris starred to work for, forty two floors, which was acquired by no tell. And then we dived into the real story here, which is the company called interview, which Chris was co founder of, and that company was acquired by indeed in two thousand and seventeen after only being operating for two years. And Amazingly enough, and this is really why I want to get Chris onto the podcast indeed, and also rent use, the the first company was a part of. Both these companies sold for very large multiples of what they were actually doing in terms of revenue at the time. So with, for example, interviewed, that company was doing about two and a half million in annual run rate. Yet it was acquired by, indeed for, he said, roughly mid eight figures, which means somewhere around the forty to fifty million dollar mark. And Rent uice was acquired also for about forty five million dollars and it was only doing, according to Chris, about half a million a year in run rate. So these are very large multiples of what a company is doing in annual revenue and probably even less in profit to get these mid eight figure deals. That's very unusual and I was just very curious. How is that possible, and Chris does a great job to explain what leads to a strategic buyer like that paying these higher multiples. It really involves the right stakeholders being involved, and when I say stakeholders I mean both the investors and the clients. Sometimes an investor is a client, sometimes an investor as a client and investor and then becomes the acquire of the companies. are going to hear all of that and all that kind of came together from Chris in this really exciting interview and we also talk a little bit about what Chris did with all the money he made from the sales. So if you go all the way to the end, we talked what he did with his capital. Great interview for where anyone who's interested in how to grow a tech startup. Chris operate in two spaces in the real estate area, real estate tech, and then in the HR recruitment text space, which is where his current start up, last keycom operates in as well. So he's still in that recruitment space. I love this. I know you will too. Before I hit play on this interview, I just want to once again mention my company, in box donecom, which actually tied in really well to today's interview, because we talked a lot about hiring, which is what Chris did with his company interviewed and what continues to happen with indeed, and funny enough, my own company, inbox done. We had some of the same practices in place when we hired or when we hire people to manage your email for you, which is actually what the company does. where an email management company. We provide a human being who will take over managing, organizing and replying to your emails for you. So if you're a busy founder, professional entrepreneur, management executive, someone who has too much email and you want to break free from that, let someone else handle ninety nine percent of your email, including applying to your messages, and building a real system to handle that for you, so you can focus on what's important in your life, in your business, and get to work on what really matters to you. We are the solution. It's Inbox DONECOM. Okay, let's begin today's interview. Here we go. Okay, so I'm here with Chris backy today for what I hope will be a really interesting interview, because this Chris has got such a good background in terms of starting companies and selling. We're getting acquired very quickly. It's one of the things I noticed about your company's Chris. You seem to scale fast exit start another one. So love to hear all those stories. I'm just going to read off the ones in your linkedin profile so I can get them all right. You're currently the founder and CEO of last Kiecom, which we would love to talk about. You were the cofounder interviewed, which was acquired by indeed in two thousand and seventeen. That's the one. I read a little bit of an Ama on Indie hackers about how you sold that and you getting like a mid eight figure deals. Amazing. CEO of forty two...

...floors, you worked for Zillo for a while and rent juice, which was required by Zelos. I'm assuming that's how you start to work for them, and I believe referent juice was your first company. That was also sold for a midate figure deal, if they have I'm correct. Yep, Yep. Was An employee at that one and then founder at interviewed, and now ask you okay. So there's so much there. I'd actually love to go through this in chronological order because I think it'll build on each other. So do you might have to go back in time and talk about Chris. Even before school, were you entrepreneurial in any kind of way? Yeah, a little bit. Grew up in Colorado, so was always shoveling snow and stuff for neighbors and moatain lawns and that kind of stuff. Definitely, I always starting little side businesses. I put a plastic tarp down the side of my Parents Hill and would charge neighborhood kids like twenty five cents to slide down. I would put the garden hose up there. In retrospect I was probably using like forty dollars of water to make like three dollars per day or in the summer. But you know, my parents didn't seem to mind. So a little stuff like that here and they're growing up. And then I think as I got older, actually I approaching kind of high school college, had less of a desire maybe to to actually start something. Kind of always assumed that I would be an employee at a big company and that was and that was fine with me. Then it wasn't really tell like right when I was graduating college that I sort of got the bug to dive into a start up and I figured sort of the best way to dive in would be to, you know, apply and kind of work for somebody who was a great entrepreneur and join as an early employee, learned first and then eventually, five or ten or fifteen years down the road, kind of start my own thing. That's sort of what happened. Okay, so at university, did you study something related to business or something else? No, political science. was very eager to get out of college. Didn't really particularly enjoy it. kind of coming in thought maybe I wanted to be a lawyer, so studied, you know, prelaw political science and then kind of rushed through that degree. Didn't change it because I had already done some pre law classes. So powered through in like two and a half years, which wasn't you know, that I was particularly intelligent. I don't think it was just I took a ton of classes like over the summer and whatnot. So I did like, you know, just fine and did kind of the bare minimum to get through and get the degree and then, yeah, I think very quickly into that experience. I saw all the other kids around me who were actually wanting to be lawyers. I think, you know, I realized exactly how much boring reading being a lawyer actually is and, you know, became very uninteresting to me quite quickly. But I really at that point didn't quite know what I wanted to do. I think I was I was leading more towards something real estate. I was interning with a couple kind of real estate private equity companies throughout throughout college, over the summer when I was taking summer classes, and so that life seemed a lot more appealing than being on sort of the law side of a real estate can we times now this like, were we looking like one of thecom bubbles was around? I was around you, in terms of the the economy at the time. Yeah, so this was I guess started college in Two Thousand and seven. This is kind of like during it was like my first year of college. Everything was great, and then the last kind of year and a half, two years of my final two years of college, Two Thousand and eight, two thousand and nine, and so was working for Private Equity Company in college that was buying mostly commercial real estate and commercial mortgages in Los Angeles for like somewhere between like seven and thirty cents on the dollar from where they were priced in two thousand and seven, and so that whole world was quite fascinating and it was clearly, you know, they were there were crazy deals to be had if you if you had the relationships to get, you know, mortgages and get loans and have, you know, capital kind of in the wings. And so worked for a company that had about two billion dollars under management as an intern and then actually joined them very briefly out of college before that first startup, and just kind of almost like family office money, and so that was very interesting and I was interested in like being the person who is running the family office as like the the kind of soul lp but I think I was also interested a little bit in like the operations of real estate, and that's specifically why then in two thousand and ten, kind of coming out of college after three years, I joined rent juice, and rent juice was a residential real estate, you know, software company, and so that was sort of how that all, I guess, aligned and at the time to two thousand and ten was particularly interesting and happy to get into it. But what you generally see, at least in the US with real estate professionals, is you see this massive number of people getting licensed in two thousand and five, thousand and six, two thousand and seven, all of those people who got broker's licenses or agent licenses in the US stopped practicing in two thousand and e two thousand and nine, and then this whole new flood of people's coming out in two thousand and ten, who necessary, who didn't necessarily get burned by late two thousand seven, thousand and two thousand and nine, and all of a sudden in two thousand and twenty and eleven, things are amazing again. Everybody wants to be buying real estate. People want to be selling real estate. Certainly not true throughout the country. I mean there's still markets ten years ago in two thousand and eleven that were that were very hard hit parts of you know, Arizona and Nevada, Forda and whatnot. But in a lot of the markets that first started rent juice was operating in, you saw just this flood of people kind of coming into property management...

...and into mortgage careers and certainly into kind of the sales side of real estate as well. Tell me more about Rento. So what exactly did they do and why did you choose to join them? As with many early jobs, early careers, it was is just all quite lock after working for just a few months. I don't even remember how long it was, but I think full time. I worked for like six to twelve months after college at this kind of family office in Los Angeles doing real estate private equity, and working there as an intern was quite different from working full time. Actually quite hated the experience of being, you know, like the the low man on the totem pole and just having to do all the all the sort of shit work for very, very little pay and watching sort of the VP's and the president and all the the family that was sort of this lp get extremely wealthy in that period and I just saw like ahead of me. It was like I always imagine that this was the dream. I loved real estate, I came to love, I think, the private equity and investing side of real estate and all of a sudden I was like twenty one, I guess at the time, had graduated from college and was like, you know, do I really want to stay in this role? Like looking at the sixty year old guy who was like in a VP title at this, you know company, going, okay, I have to work here for forty years to like work my way up to be, you know, making real money, and that's obviously not true everywhere. But I think with this like isolated vision of what this company was, had a like friend of a friend who was also in real estate in Los Angeles. He introduced me to a good college friend of his who was in Boston at the time and had just kind of moved out to San Francisco. Had started a company while he was at Harvard Business School, pick around two thousand and nine, kind of turned it into a company, I think lake tw thousand nine, two thousand and ten, and then moved out to the bay area and was hiring. Had raised kind of a seed round and was like guess, on pace to raise a series a and so joined as a sort of a business tire there. So it was sort of through a connection in real estate. I didn't have any experience. I never had a desire to be a software developer or a product person. I didn't really know what technology was, but I figured hey, like, you know, part of being a analyst at a small Real Estate Private Equity Company is that you do have to go gather information, you have to talk to a lot of people, you're constantly on the phone, you're sending lots of emails, you're out in person, sort of, you know, shaking hands, and so if I could do that, then presumably I could do it everywhere. So just decided to like jump into this kind of early sales role and really sharpen that skill of software sales. Essentially, see, our rent use was a it was ultimately a crm for the residential real estate industry. So all these people that are flooding into the real estate industry and getting licensed, it was very hard, I think, in two thousand and eleven, to actually track all of your different deals. So if you're an agent or a broker in Miami, in New York, Chicago, Miami, any one of these kind of major markets where things were rebounding quite quickly, what we saw was a ton of real estate brokers and agents that were primarily doing for sale stuff. In two thousand and five, Tho six, two thousand and seven, we're now shifting over to rentals, and so this crm and this company got really good at the rental side of real estate selling, mostly the property managers and agents who are managing rentals on the side. It was a very kind of cheap, affordable solution, mostly selling to individuals versus to kind of large companies. And then that company grew. I was there for I guess about a year and a half, two years we were acquired in two thousand and twelve for forty five million dollars by Zillo and then I joined Zillo as kind of leading business development there right around the time of their IPO. Our whole team sort of joined in. Many of that team actually still, almost ten years later, still there, ironically. But yeah, it was. It was a great place to work. Zello taught me a lot about sort of how a extremely fast growing company did things. was a very different company than than it is today. Much smaller, obviously. I think when we joined there were three to four hundred people. I would guess there's something like six to tenzero people. They're kind of total between all of the the main employees in the contractors and stuff as alone now. So very different time. But learned a lot and and incredible leadership there from a team perspective. So from the rent juice experience and and the Zillo experience, which included the acquisition. Will you early enough rent juice that you were given some kind of like shares, and I know you were coming from this experience with the like the family office, where you saw other people getting rich. But after a very long career, was the rent uice experience kind of meeting the need to increase how much money and how much capital you were making, or was that really just a stepping stone to the next thing that came along? Yeah, yeah, it was interesting. It was like it was. It was a ton of money for me at the time, but I don't even remember exactly exactly what it was. Because we had shares. Yeah, because because I had because I had shares. I think everybody had some sort of very meaningful all the way down to very minor staking the company. I think by the time we were acquired it was something like thirty one people. Was the company size or head count size of a Brunch UES. So everybody had shares and I was sort of in this interesting middle pack where, you know, the...

...founders got extremely rich. I wasn't a founder and I was also on the sales sides. I think the engineers also made like significant money. But I was really enough on the sales side. And then the stock price did did well enough that it continued to go up. I think the effective price there were actually two stock splits it Zillo, so the effective stock price was like you have seven dollars per share. It's something like a hundred and ten dollars per share today of Zillo. And so if you had actually held on too that, you've done you know very well to do half of it. So okay, funny story. I don't even remember what the amount was, but made something like, you know, couple hundred thousand dollars in equity. While out between the acquisition and from working at Zillo, I sold like a hundred thousand of it very quickly. Took that into five small down payments for like hundred, two, hundred and fifty thousand homes in North Texas. Sort of decided that, okay, we had sold software to property managers and landlords. I wanted to now start sort of building my real estate portfolio the cash full in those properties, buying properties in two thousand and eleven, two thousand and twelve in North Texas. The ashfual opportunity was phenomenal. The appreciation was terrible, you know, especially relative to Zillos stock, you know, going up something like fifteen aps or whatever over over that same time period. But, you know, was glad I did it. Sort of dipped my toe into into real estate investing and then ultimately joined forty two floors as an early employee again. Eventually became CEO of that company and that company was acquired by no tell in I think two thousand and two thousand and eighteen, but I joined in two thousand and thirteen and that was the commercial real estate version of Zillo, sort of helping people find and navigate, finding off the space, finding retail space, things like that. Okay, and I'm guessing as the CEOO you were also fairly large shareholder by the time that was acquired to yeah, exactly. So started off in a very vague as an early business hire. I think my title was just like business operations for a long time. Ultimately sort of took over a lot of the financial aspect, sales aspects and operational aspects of forty two floors and that company had sort of a crazy venture story where the founders had raised something like twenty so I think it was like twenty to twenty two million dollars prerevenue, which at this was happening in like two thousand and twenty and thirteen. So it was it was company that liked are doing that all the time, but the at that time it was relatively unheard of for a company to have raised so much. And then, I think when I was hired and several other people were hired onto the growth side, in the product side and you know marketing side and things like that, it was really hey, we have this incredible leadership at this company that was able to successfully like create this vision for what the commercial real estate version of Zillo actually is. Now we need execute. So how do we find customers? Who are our customers? Are we selling to agents? Are we selling to tenants? Are we selling to landlords? How do we monetize and so all of that was sort of figured out over, you know, roughly two years and you know, very fun experience. And then after after sort of working there, receiving significant equity but ultimately not being like the person in charge, as you know, a nonfounder, decided I really had the itch after I think something like six years, five or six years combined, working in these early real estate tech companies and in two thousand and fifteen and then started interviewed for the first time as a founder. Yeah, so you ready came into interviewed with a lot of experience, I mean to exits. Working at Zillo, a massive company, you would have seen everything from start up phase to IPO phase and beyond. And besides seeing those companies grow, you would have seen yourself evolved to I'm sure in your skill set what you were getting good at. You rose to CEO within a company. So you're obviously not just a sales gal. You must be in operations guy as well. When you were about to then start for the first time your own company with interviewed, how did you make that decision of what market to go after, given everything you had done up to that point, and what was your strength at that time? Yeah, so that the sort of, you know, easy revisionist history, so to speak. Right is, though, is that? Oh, you know, I was working in this Real Estate Tech Company and we came up with this idea that was in ultimately sort of the talent and HR and recruiting tech space, which was an assessment company. And sort of the history was about a year before we started the company, our CGEO, had tasked myself and one other person who became my cofounder, he was the sort of head of growth at the company, to figure out why we were having so many problems as we were sort of blitz scaling this company. We went from I think, like eight or ten people to sixty or seventy people and like a year and so as we were scaling rapidly, we were very effective, highly effective, I think, at hiring and retaining really high quality engineers. Along the same time frame, we had churned through and like made so many miss hires along like customer support, sales, marketing, basically all non technical roles, and sort of what it came down to was a we had...

...engineers and engineering managers who were trained in technical interviewing and technical hiring, but we were also starting to use things like, you know, I think, hacker rank and whatnot that were coming out of that that period, which are these short to mid length, you know, technical screens so that we could actually do a skills test before somebody was hired. And that really didn't exist for the most part for non technical like everything still today for most jobs, but certainly then in two thousand and fourteen, we were hiring customer service people based on Hey, do we get along with you? Do you sort of pass the airport test? You know, if we were stranded in an airport together, would we get along for six hours with a layover or something like that? But it was it was a very flimsy way of hiring. How do you test with that? I mean it's a soft test, right, okay, like it's basically do we get along with each other? And that's like a terrible way to hire. But I think that the reality is, especially for a lot of young companies with young managers young founders, that is just the the sort of de facto way of hiring, which is, you know, hire your friends, and a lot of times that works really well. You'd get outside of that core circle of friends where you actually know their strengths and weaknesses and in two hours you're sort of like hey, what, I get along with this person? The answer maybe yes, and you build this like very deep, robust, awesome culture. But then nobody actually knows how to do their job because you've just hired like fun people to work with versus like hard workers or workers that are actually skilled at proth marketing or a customer support or whatever it may be. And obviously some of those skills are learned and can be developed and sharpened, but that's an expensive training if you're hiring fifty or sixty people in a year that really don't necessarily have the skills. And so we were turning through a lot of people. We decided to figure out how we could hire better people and we started developing these basically like work samples in house where when a salesperson would come in, part of their top of funnel interview process was to go I would send them a google sheet and they would have to respond to three actual like customers who are interested in purchasing, you know, the forty, two fours platform, and so we would see their written communication skills. We would see can they actually write a cold email? Can they respond to a customer for customer support? We would give them actual zendsk tickets of angry customers or happy customers and see how they would respond. And so we created all of these like situational interviews for every role and all the sudden hiring started getting a lot better. But internally these were expensive to maintain because I was having to come up with every single one for every role. I would have to like manually send a link, but have to like then share that shared Google document with a bunch of other people on the team. And so we kind of thought, Hey, like we should productize this. And so the two people that became my cofounders were both technical and excellent engineers, Daniel and Darren, and the two of them entered a hackathon in early two thousand and fifteen. We were all still working at forty two fours. They ended up winning this hackathon. Or we sort of built the MVP of like what a work sample or case study based hiring solution or product would look like. And so the reality as we got forced into it, like I don't think we, any of us, would have actually created this company. The problem was we won this hackathon and it was from scion banister, who later was at founders, Fan, Jason Calkanis, this pretty like stellar lineup of investors, and they all pulled their money and gave us a hundred and twenty fivezero dollars for winning as like an investment, and they said great, like this company is awesome, you guys are going to make it. We also want to invest additional money. Where should we wire the funds and it was like we don't even have a company, we don't have a bank account. So we had like an extremely hard decision to make that weekend, which was we had won a hackathon. It was in this sort of like talent hr tech hiring space. We had four or five legits kind of silicon value BC's who wanted to invest additional money. Totally about three hundred thousand dollars work and we wire. We don't have a company, we don't have a bank account. Should we create a company? And so it was a spur of the minute decision. I was actually probably quite burnt out of real estate tech at that point as well and in the back of my mind for many months I was saying I do want to become a founder. I have no idea what the idea is. So some founders, I think, go through these multimonth, multi year customer development journeys to figure out what they actually want to work on. This happened very quickly, very accidentally, and I remember that Monday or whatever, the three of US quit our jobs. We left. We luckily had the blessing of Jason, who was the CEO of that company, to like come on as an advisor and help us, and he invested some money and invest a lot of time in us. So it all worked out. But I do remember the feeling of like, Oh shit, I just left this like very hot, extremely well funded start up. Is like a twenty five year old being there Celo to go basically make like no money with three hundred thousand dollars in the bank. Now we have to go hire engineers, now we have to go like figure out how do we actually like develop this into a product, and that was sort of the beginning of interview and awesome. I'm actually a part of Jason Syndicate, so I see a lot of Jason and he's a very persuasive guy. I can imagine, you know, would have been exciting to want to work with him as an advisor Invest St Yeah, yeah, he was. It was very excited. I mean it was at launch, so his like festival was the Hackathon and yeah, he and a bunch of his friends we the first, you know, three or five checks into interviewed. Okay, so I...

...love to talk more about interview then. Is it two sides of this, because you grew this fast. I remember Reading Your Ama. So it's like you went from, it sounds like, this hackathon to exiting in two years time with the sale of the company, to indeed for an, if I'm correct me. If I'm wrong, you said mid eight figures. You were sort of saying around the fifty million dollar mark in the AMA. That's fast. That's a big number. Now what I loved about that number, though, and I'm very curious about this, as you said, you know, it was doing like two and a half million rs to a million a year. So to sell at that multiple is incredible. But before you answer that, because I'd love to talk about that, I do want to know how do you grow a company in two years, and especially because you said it was founder led sales, it seems to be something that you've become a bit of a specialist at. Can you make me take us forward? So you've accepted the investment from Jason and his friends. You've got three hundred thousand in the bank. You've got to technical cofounders, by the sounds of things, so you've got a Beta version of this platform for kind of doing a testing process before you hire people. You you're obviously the sales maybe founder, CEOS CEO. You kind of doing a lot of different things, but you're not the tech guy. Basically, what do you do next? Like how do you, day one, start growing this business? Because you need clients, I assume right. So what do you do? Yeah, we can dive into each of those things. I'll start with the clients. I mean the clients was another I mean it's just pure hustle in the beginning. So we have this idea, like I remember all I think we did this Hackathon, call it like March Eleven and twelve. We sort of left our startup on like march thirteen and then, like you know, Monday in March fourteen, let's call like seventy two hours later, after we said, like you know, we're just doing this as a fun Hackathon, we're like sitting in my cofounder Daniels, house in the East Bay and San Francisco going like you know, kind of like literally, what do we do? and Luckily I ended up having to cofounders who are not only technical, but they had also built and sold startups themselves before, and so it wasn't brand new, and I would say that that's like a subtle thing that I would highly recommend if it's your first time as a founder, doesn't always work out and I think it actually probably it's just a lot of lucked but the fact that they were both a little bit older, had had a lot more experienced sort of in and around startups and had actually been founders prior to being early employees of a forty two flours was very helpful and so it wasn't quite as sort of what do we do next? Maybe at the time for them, but for me I think it was like hey, guys, what are we what are we doing here? And ultimately we thought, okay, you know, we're taking a bet that we're not the only company that has this problem. We can't be the only company that that really sucks a nontechnical hiring and so actually we sort of developed at forty two flours we had had this relationship with a company called task us that was based in Los Angeles. They are going public soon actually, but at the time it was a sort of small customer service as a service, like they were taking call centers and scaling them in mostly Manila in the Philippines at that point, but eventually expanded to India and San Antonio and Mexico, sort of all over the world. And so big companies were starting to adopt this to do day to entry outsourced customer support, content moderation, and so we built a very quick relationship with the founders. We had used them at forty two flours, and so we're sort of like, hey, we were previously a customer of you guys. We took a bet on you guys when you were early. How about you take a bet on us. You're hiring all of these remote customer service people all over the world. What is your screening process look like? And why don't you pay US just a couple hundred dollars a month? I don't know what you actually get for that, but like sign a contract. I think it was for five hundred a month, and we will just like help you figure this out. We, you know, made up pricing as we go. That would ended up being obviously orders of magnitude too low for an operation of tiring and screening thousands of people. But it didn't matter if it was our first logo, and we sort of developed this framework actually very quickly, which was logo learning and let us like. Lettuce is sort of cash money. Logo is do we get the logo from the customer and can we use that logo to then sell to other customers by saying, Hey, we have this company task us that's using us. Will other outsource customer support companies and by the solution, and they did. We really went vertical by vertical, starting with call centers and started going down this rabbit hole of if we get one big outsourced Call Center Customer Sport Company, There's thousands of these companies out there. We can get five more and once we get five of those, let's find like another into a company. So it was just a ton of cold emailing, was a ton of hustling, it was a ton of tapping our existing connections and yeah, it was it was all sort of founder led. Sales up to I think a little over two million in are are. So for eighteen months it was myself out there selling, sending again a lot of cold emails. I think we had it. We had a slight advantage being based in the bay area. We had a big concentration of bay area based companies at the time. We're quite small. I remember pitching door dash when they were like seven or eight people. They we landed them as a customer. We were at Uber's...

...offices when they were fairly massive. But not quite what they are today. In early two thousand and fifteen, we were at lifts offices when they were about three years old. We sold the CANVA like thinking about these companies. We were just like it. We locked out because we picked a product that the money scales as that as that company naturally grows. Like if you're paying per candidate that you're sending through an assessment, it's very easy to land Canava or lift or whatever. When they're fifty or a hundred people, it's very unlikely that they just like strip out that solution. At the point there three or ten thousand people, and so we accidentally again got lucky for you know, seventh time. As I've said, I don't think it was scale. It was just like we were around all these other companies and we were using their products, they were using in our products, and so it was very like on the ground sort of in person demos of this product and getting it in the hands of early customers. That's an amazing list of companies that were early like that are now every one of them, I think, is a billion dollar plus company. Tech me through a process of so you're in the door office or Ubero, Kamba whenever do you just do almost like a madman style presentation of your your software and and what it does, and also how did you charge for what you do? Yeah, so I think the answer is yes. I mean we had a we built, had a sales deck, we had a product. We focused on getting to demoable wire frames very quickly. So the product didn't necessarily work. The first five customers were definitely taking it bat on the on the fact that we could make it work. And ultimately what the vision was was taking every candidate that you're sourcing from all of these different job boards and running them through, interviewed to do, you know, an assessment, and then we would take those results and instead of just seeing a person in their resume, we would enrich that with like all this additional data. How are they're written English skills or verbal English skills or, you know, written proficiency or conscientiousness and all these sort of like soft skill things as well, and so we had this like range of assessments and work samples that was, you know, mostly very realistic and we were we did like an integration with grammarly, I think, to do like spell checking and word count speed, which is super important French level customer sport, and so we would enrich the resume of all this extra data that you could get on a candidate when they apply. And so that was like the vision that we were sellings. We would go into their conference room. I remember pitching Insto Cart, pitching doordas pitch knew, but it was all sort of the same. It was showing this demo of like picking a roll off of their site and saying you, at Uber are hiring for lots customer support. Maybe at Dort ash you're hiring lots of drivers or lots of delivery people. Pick the number one role that we think their talent team is going to have a huge problem with today. And really the pitch was, you know, into recruiters. How do you make a recruiters job easier? Like no recruiter actually wants to be sitting down and going through, you know, a thousand resumes per day, and so if you can give them data, if you can give them signals on who's going to make a better, not even a better higher, but a better interview, so that you can be handpicking the top ten or twenty percent of candidates versus just like reading their resume and then trying to infer, without ever hearing them on the phone, without ever seeing something that they've written, whether they would be good on the phone with customers or good at resolving customer support tickets. And so that was the type of day to like you could go through and we were doing these like very short, sort of thirty second like video interviews. So it could have been an introduction, it could have been like a sample called to a customer, but giving you additional data points on what this person would be like to work with was sort of what the demo was and that was, you know, ultimately sort of what we were pitching. And unless you's charge for the first five or ten, maybe even fifteen customers, I think it was a flat monthly rate that probably got us to a hundred thousand dollars and revenue, I would say, at the first ten to fifteen customers, all charging them between one hundred dollars and two thous per month. Two thousand was sort of an outlier, probably mostly in the like three hundred to seven hundred fifty dollar a month range. And there was no like rhyme or reason. It was sort of like we think we can get companies to pay this out of their talent budget. As we grew, we started growing into companies that we're doing extremely high volume hiring. So I think we secured lift is a customer first, but then we were going to Uber, who at the time was significantly larger than than lift. This is like two thousand and sixteen maybe. And pitching uber we pitched bell. So Ball in Canada was one of our big customers. Tell US internationals when over a customers. IBM was a big customer, fidelity investments was a big customers. So as we started pitching publicly traded companies or companies that had over ten or in some cases over a hundred thousand employees, we just said, okay, our cost is basically the same whether you're running a hundred candidates through a hundred thousand candidates through. But the value to a company increases significantly based on the amount of candidates that you're actually running through this sort of simulation of this assessment. And so we started charging per candidate and then we eventually landed on a base fee. So there was a minimum threshold that you had to spend, which I think for a large company, was probably something like two to tenzero dollars per month as sort of a base software fee,...

...and then for every candidate that you would run through, which was some companies was, you know, tens of thousands of candidates per month, we would charge you a small amount and that small amount, I think, ranged from maybe a couple cents per candidate at the low end up to like a dollar or two dollars at the high end, kind of depending on the volume. And so we got to two million dollars with a fairly small customer count. I think we were at about sixty customers when we hit two million are are and then from there we were focusing on just bigger and bigger deals. So just to clarify, is it a hundred percent SASS, like it's all the deal, or is there a human component, because I'm thinking you can ask questions to a typing test, but you said this some video recordings. Is that just the case of them logging to the software and recording the videos? There's no human side of what you did? Right, it was just video capture. It's a good question though, because, interestingly, right before we were required, we actually started building out a small team who would actually be sort of human Qa people or human interviewers who would then watch the short video clip again, I think, averaging about thirty seconds, and give it a score, so depending on what the client actually wanted to infer from that video so that their recruiting team didn't have to watch, you know, tens of thousands of these, I think, for an additional like two to five dollars per candidate, this team would like watch the video, the short video interview would read the Work Samples, would actually read the results and give like, I don't remember if it was a thumbs up, thumbs down or percentile score, but they would give some sort of like score or feedback. So then the company wouldn't have to have their talent acquisition people watching all these videos. And so that was an add on service. We only ever hired a couple people for that team and I think we have this idea to start augmenting that service by several dollars per candidate maybe three to six months before the acquisition. So it was it was a sort of a promising part of the business that just never really took off because of timing. It's funny hearing you say all this right now because, well, a I've just posted a job to indeed the company that inquired you guys, and I took the box to have some of these pre test done before the credidits get to me. So that is clearly your responsible for that at and be happening to I run a company called in box done them a cofounder of it. We provide basically email customer service agencies. We do over, we do your email for you replied your messages and that company was born from me being a customer needing my email outsource. But part of the hiring process for what we do is very similar to what you talking about. Like we ask people to imagine these are some of the emails. You had to reply to them. We test, yeah, you're you're writing speed. So all these kind of pre qualifications, because if we've got a hundred applicants, maybe one of them makes it through to the end to get hired. And we started doing that for not another company. I had a coaching business maybe six, seven, eight years ago. We brought it in with in box done, and it is so important when you're getting waves and waves of applicants which ultimately are kind of low quality. So the provides like a barrier that people have to jump over before they even get to the next kind of phase. But you turn that into software, which I think is that's the real genius part of this. Clus. I think it's fair to say the fact that you were and maybe this is my next question for you if you can tell me a bit about the founder led sales aspect of this before we talk about the acquisition. It sounds like you kind of had a beachhead strategy with marketing where you said you would get like one client in this industry. We're doing this for them, they love us. We could do it for you. It helps with your hiring process. Their social proof, because this company, probably your competitor, trusts us, and then that gets you at least into the door where you can do that presentation you talked about, and then you do that for each company within an industry and then you can maybe get another beach had like once you got lift, you can get over and once you get you know door, you can get another delivery food company and so on. So maybe I've answered the question for you. Is that basically what grew you to a sort of a two million a year run rate just kind of beach had more facetoface meetings and presentations and, like you said before, really hammering the outreach with emails to get that started. Is there anything else that kind of is there a secret sauce behind the scenes that really really helped you to scale to that size now? I think that's exactly right. I mean, I think the thing, the thing that I would add is other call center companies, out of their outsourcing companies, would care a lot that we had one, and then three and then five and then ten other BPO or other outsourced or other sort of like call center customers. Maybe even at two years in having IDM as as a customer was impressive to them. But it was like they were much more interested in, you know, task us, the small company that nobody outside of that industry has heard of, because it's like, okay, everybody knows that task us is super fast growing, you know, zooming. Now they ended up going from I think a thousand agents to like fifty thousand agents and seven years time or something like that. So crazy growth, but everybody in the industry...

...knew them. And then, similarly, a lot of old school sort of blue chip tech companies were super interested in the fact that we had IDM and I think maybe the way we got IDM was getting dropbox or something. So it was this like leap frog to get bigger and bigger clients, almost all within four verticals. So we focused very heavily on outsourcing and BPO kind of early stage technology, which then grew into blue chip technology, financial services and telecom. So if you look back at almost all of our customers, there are almost almost for verticals. And then it was sort of accidental again, but when I hired my first two sales reps eighteen months to twenty four months into the company, about six months before acquisition, we just said like how do we want to chop up the world? I think from a sales perspective you can divide it by by country or by region. If you're only focusing in Canada and or or the US or North America. You could focus by you know, geography or by East West Coast, whatever may be. But we just focused by you know, company vertical, and so I was going after early stage tech, one of our early sales reps was going after, you know, financial services, one of them was going after telecom, and so you also get really good at speaking that language and selling into those roles and sort of saying, you know, I know all of your competitors were working with them and you can sort of increase the price, you know, as you go. Okay, and it makes a lot of sense. So kind of rounding out towards the end of the interview, Chris, I've got a no. So you managed to sell interview to indeed for like amuniate figures, roughly fifty million dollar price tag. Yep, with only a two point five million annual run rates. That's a much bigger multiple. Most companies which are assass aimed to like a three to five to six times usually profit margin actually for multiple. So a two and a half million to a company, maybe ten million as a stretch goal would be possible, because some of see this, that's not a hundred percent margins. So more likely to sell for like seven eight million dollars. But you're talking forty fifty million dollars. So there's something special going on there. Can you maybe tell us why you were able to sell for that much, but also just take us through even why you decide to sell and how the acquisition happened? Yeah, so the piece that I had sort of skipped over was the the funding piece. So at the point that we sold. We were we were lightly profitable. We were pretty small team, but we had we had taken on about two million dollars totals. That first three hundred thousand as an investment from from Jason Callicanis and science banister and a couple of the other kind of early angel judges. Two months into the company we applied to y combinator, we got in, we went through after why? combinated, we raised about one point six, one point seven, and of that capital, again, we were quite strategic in deciding to raise from strategic investors, and so the majority of the capital came from three companies who were deeply invested in, you know, future of work, HR tech, talent tech, whatever you want to call it. Businesses indeed invested as an entity through their HR tech fund, which was sort of a early stage investment vehicle that they hope had only done two other checks out of sort of in the history of indeed that's we were the third company that they had backed. We also raised from work day ventures, which was kind of a similar early stage, like probably fifty million dollar fund. I think work day had been public for a while by this point and so big public you know, ats Twenty Billion Dollar Market Cap Company, putting fifty million dollars to work in early stage very, you know, not meaningful of the time for them, but having indeed as a logo on our cap table not only any think, helped us hire really high quality people, but it also, you know, selling into talent teams when in those early days when, you know, we only had two or four customers, but saying we're backed by indeed and we're backed by work day and we're backed by Apollo, which was the other big one that was investing a lot of early stage education tech, hr tech, things like that. And so they, those three combined were about fifty percent of the capital that we had raised. And then we also went after a bunch of sort of future of work founders and angels and advisors and got them to put really small, you know, five or ten or twenty thousand dollar checks into the company. And so we had actually built the relationship with indeed first as an investor. After two years they became a customer where, similar to your experience posting jobs on indeed, you know there's there's ultimately a spam problem, call it right when you're posting a job, and so you post a job, you get hundreds of applicants. How do you now sort these applicants? What do you do next? The the fact of things always been go to the resume, and so we sort of built that relationship as a customer. And then, indeed, is one of these companies that you know, ultimately, you know their thesis, at least at that point. It may have changed, but they really like to build or they like to buy. They do not like necessarily the long term partner option. There are some exceptions to that. But if you look at recruit as a parent company of indeed this you know, sixty billion dollar market Cap Japanese conglomerate that owns. Indeed, now they also own glass store, they own RESUMECOM, they're sort of rolling up the HR tech industry. Yeah, and so that was that was just a big evolution from, you know, investor to...

...partner customer to like Hey, this kind of makes sense for all of us. Incidentally, that also, I think, helps with your your exit or with your, you know, valuation, because at the time, we didn't know it at the time, but at the time we were in this perfect storm of, I think, where you want to be as a company. We were profitable, so we didn't need to raise any more money and I think you know, indeed knew that. Venture capitalists knew that. We also had the optionality of growing very fast where we could raise venture if we wanted to. And so at the point that we were required, we were sort of in the middle of raising a series A. and then the third option is we can sell, and I think the decision for us to sell was ultimately non technical assessments. Is actually a quite small market and so it's there's maybe a hundred million dollars a spend in the US. We had very quickly gotten it to like two or three million dollars in air are which meant that, like you know, a captured call like three percent of the market relatively quickly, and there were certainly room to grow there. But I think the fastest way to grow was with a partner that already had. I think at the time of our acquisition, for context, we were running about a million candidates a year through interviewed. Indeed was seeing two hundred million candidates a month apply to, you know, their job board. So the orders of magnitude that you get, you know, annually on those differences and sort of like candidate run rates. was that indeed was like the perfect partner to like take this business to the next level, integrated into their systems and sort of scale it, and we loved working with the team on the investment side. We loved working with the product team sort of as a partner, and then, you know, the corporate development team. I think it made a lot of sense for us to link up so that they just approach you and a deal got done. Basically, Yep. So we had options on the tables kind of remain profitable, raise the series a or sell to indeed, or there was a there's actually another partner who I think kind of legally we can't discuss, but they were another big player in the HR tex space, and I think that combination of everybody wants to have the best steal on the table. I think that's how you go from a three or five or six x return on you know, revenue, let's say, for a SASS business, to a, you know, ten or twenty five x. The craziest example of this actually is, you know, rent geus, the first company that I worked out. I think our are are at the point we were required for forty five million. was like five hundred thousand dollars a year. So that is like a strategic bet at you know, eight or ninety x revenue, whatever it is, on that company and on integrating that software within a now like massive company. And I think it happens. You know, doesn't happen all the time, but certainly you see companies get bought pre revenue for a lot of money. You See, you do see these like, you know, ten or twenty or thirty x multiples every now and again. Yeah, I mean it's rare by the sounds of things, like I see so many companies. Yeah, that just, you know, exit for a couple of million when they were already doing like half a million. But yeah, it's great to hear behind the scenes. Now, I know you've only got another three or four minutes. I'd love to know about last year, your current company, which you are focused on. He maybe the connect the dots. So you have this exit. You're obviously leaving interviewed. Your must be leaving a fairly wealthy man. You already a wealthy man from a couple of other exits, property investing and so on. What makes you want to start another start up with last ye and what is it? Yeah, so, post acquisition I worked at indeed for three years. You know, incredible experience, working first on assassins and then on enterprise product and my two cofounders were also there and one of them really have the desire to go start like a mortgage sort of property tech business, and so he left after three years and is now running a company called steadily. And then my other cofounder, Daniel, and I loved working together. We wanted to do another company together and we decided that, you know, we know talent really well. It's very hard for companies to work with freelancers today and work with contractors, and so we wanted to build a platform for companies to do this scale. So you have companies like fiber and up work and things that have grown, I think on sort of like the the micro services layer, like helping you do these like very short term tasks. We want to help enterprises do the same thing. So help enterprises find the right you know, freelancers, find the right contractors, find the right agencies, departner with okay, so it's more like like the Pew to peer kind of matching. You're the connecting the DOTS, but you're big you're going for enterprise, looking for an enterprise level employee or even a team. Exactly rightastic. Okay. Well, I mean last key for laskiecom is that company. I actually had a dig around because I've been doing some hiring and it's why I went with indeed and so on. So it's amazing how much HR tech is out there. So it's fantastic you're in that. Maybe last two minutes here, Chris, before you go. As I said, you've exited. You made a lot of money. I think it's safe to say your biggest gains and all of this has been exiting companies. Each time you've walked away with some big capital. What you do with all this money, though, like, now that we're well and truly past those early stages, are you an investor? Did you buy toys? Is it sitting in Cryptocurre and see what's your what's your strategy? All of the above. Yeah, I'll the above. I just put it all in Dogecoin and out ride. Now I as we do, but bit of that. Now...

I try to be very ambitious in work and I think it is a massive leap of faith to create a company no matter you know, certainly you know, your first company or two, when you have very little or nothing, as a much bigger leap of faith. But you know, professionally I'm investing a hundred percent of my time effectively in last key, and so with investment stuff, I like to keep it boring. Real estate funds, you know, multifamily, small amount of Crypto, a lot of indexing into the stock market and then just a lot of individual touch companies that I like, you know, putting money into from an angel perspective. Okay, nice, all right. So I'm as an angel to you. MUST have some websites out there regarding what you do there. Do you want to share everything, or maybe one place if people want to learn about you besides, obviously, last key? I'll put that in the show notes. Yeah, just follow me on twitter. It's probably the best way. Chris Jay Bachi, the akkae is my name and that's also my twitter handle. That's how I connected with you for this interview too. So yeah, appreciate the time, Chris. Keep up the great work. I love following these these amazing exits and sharing with Amas and twitter and everything, and hopefully you can connect soon. Thanks for your time. All right. Thanks. So much. Thanks for having me. Thanks for listening to that episode with Chris Spoky from a laskiecom and all the other companies that he was involved with. What an amazing start up story. I really learn a lot from that and I hope you did too. Just a reminder, if you have not done so already, please share this episode of vested capital, it's episode number five, with anyone you think who would benefit from hearing Chris's story and, of course, becoming a subscriber to get all the latest episodes from me and the back catalog. So if you know any entrepreneurs, any investors, anyone who's really interested in growing their own net worth and their capital, they will love this episode and all episodes of vest the capital. So share the link. The best way to do that. You can send them straight to my podcast. Just look for Yarrow Dot blog. You can google that. Why are Oh, that'll get you to my blog and there's a podcast page there with all the subscription options available. Or, if you're ready, listening to this inside whatever podcast APP player you use, whether it's apple, Amazon, Google, spotify or any of the other ones, make sure you hit the subscribe button and hit the share button to that's a great way to share with some other people posted on your social media. I really appreciate that. You help me reach more people who will benefit from this show, and thus I am able to continue and do more great interviews like that. It's a really symbiotic relationship. You listen, you get benefit, I record more episodes and the virtuous cycle continues. Okay, I'm going to stop talking now. My name is yarrow. I look forward to speaking to you on the next episode of vested capital.

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