Smart SaaS

Company:           SmartRecruiters

Started:               September 2010

Located:             Headquarters in San Francisco, California

Geography:        Global

Market:                Social Recruiting

Products:         SmartRecruiters provides free, SaaS-based social recruiting software that makes hiring easy. Companies use SmartRecruiters to post jobs and promote them on social networks, track applicants and collaborate within hiring teams.

Key Customers:   PhotoBucket, Production Resources Group (PRG), TheOnline401(k), Chicago Meat Authority, Satmetrix, Advanced Liquid Logic, David Suzuki Foundation, Tadeschi Food Shops, North Shore Pediatric, and Eriksen Translations

Website:              SmartRecruiters

Blog:                    SmartRecruiters Blog

Twitter:                @SmartRecruiters

Recent News:

SmartRecruiters Career Tab – Facebook Recruiting: Turn Fans into Hires

Got Jobs? Campaign Empowers Businesses to Create One Million U.S. Jobs

Mayfield Leads $5M Series A in SmartRecruiters

I asked Jerome Ternynck, founder and CEO at SmartRecruiters, a few questions about his business and view of the SaaS market in 2012 and beyond.

Did you start out as a Software-as-a-Service company?

Yes, we started out as a free SaaS product.

 At my previous company, MrTed, we also offered a SaaS product and I really came to believe that SaaS is the best way to deliver software to a mass market.  We wanted to make sure that SmartRecruiters was a true SaaS business, using a platform with a single code base and releasing new product every week.  The company is very focused on our customer’s needs to hire new employees, and we want to take technology complexity out of the mix, including not having to sell our recruiting service through the IT department.

Why do your customers use SmartRecruiters?

The first reason, as I mentioned, is that we take the complexity out of hiring people.  We provide a very easy, fast and simple application to source candidates and manage the overall recruiting process. Our customers can get started in minutes, and we offer a free social application that enables HR professionals to make recruiting a positive, collaborative process with hiring managers and candidates.

We want our customers to be able to get up and running in just a few minutes.  Then we want them to jump right into the process without even thinking about recruiting. They can post their first job to one or many of the pre-integrated job boards, like LinkedIn, Careerbuilder or Monster, and to their favorite social networks (or even their company’s Facebook page). Next, they can review candidates, share them with colleagues, conduct interviews and make an offers.  We want to make the recruiting process really easy.

Our social recruitment app connects seamlessly to recruiting services such as job boards, assessment providers, background screening services, database companies and even recruitment outsourcers to make the overall hiring process more efficient by consolidating these related recruiting services, all in one place.

We are designing SmartRecruiters to be only one-click away from the services you need for hiring. You pay for the services you want right inside of our application.  Our software is always free, and we only make our money through a revenue-sharing arrangement with our service providers. Think of SmartRecruiters like iTunes for recruiting and the services are the music that you buy through the product.  We serve up quality services at your fingertips and make the buying process very convenient. Our philosophy is that you won’t pay extra for our partner services – we pass them along at market rates and are sometimes able to provide more competitive pricing based on our concentrated buying power.

We are managing an application platform that is used to hire a large number of candidates, and we can help our customers make smarter recruiting decisions because we expose aggregate recruiting intelligence captured in this platform. Depending on the type of hire, they can rate which job boards work better, and we provide user reviews and ratings of services too. Our products provide capabilities that are designed to make our customer’s recruiting process more effective, such as SEO optimized landing pages and customized URL’s specifically designed to drive traffic for each respective job posting.

What do you see as the key trends emerging in the SaaS industry?

A big trend I see is the consumerization of enterprise software. It is becoming more focused on specific tasks, like recruiting, and is moving away from being a tightly integrated solution, like Salesforce.com or Apple’s vertically integrated model.

The SaaS business model is moving to a consumer model, which is moving towards a free software model.  Perpetual licensing is disappearing and even the monthly subscription fee is moving towards free.  Remember when email used to be a paid service, and now it’s free?

Freemium is another trend.  If you take out the sales and marketing costs, and also build a great product, it is possible to monetize the business differently. The freemium model is similar to the Open Source model. A freemium business needs to interact with its customers more frequently, maintain a lower Customer Acquisition Costs (CAC) ratio and grow a large user community.  It is possible to monetize a large community of customers by providing quality extension services, for example, job board posting in our case, because these services add value and make the overall process more effective.

The overall Recruiting Software market is more than $1 billion a year compared to the Recruiting Services market, which is over $400 billion a year.  There are great opportunities to disrupt both markets with SaaS-based solutions.  There are other examples of this freemium trend, such as Wave Accounting, a financial software company.  When you consider that the incremental cost of servicing a customer after they purchase a SaaS product with a truly scalable multi-tenant platform is close to zero, this makes a freemium approach to these types of traditional markets very disruptive. Consider that SmartRecruiters has been able to build a community of 15,000 customers with no real marketing or sales, and now our SMB customer base is larger than Taleo.

The last trend is that software today is really being designed for the end user, not just a small business.  Traditional software had been designed to be role-based, but the end user was a long way from the IT administrators, who ultimately controlled and allowed changes to the product.  This controlled approach to business software encouraged end-users to look for solutions that work for their specific needs, can be shared easily with colleagues, and enable them to form their own teams, as well as spread functionality around inside of their companies without any IT assistance.   New capabilities are now being built for end users without any complex administrative controls. Examples of this include mobile career sites or social feeds like you see in Yammer or Workday.

What is your market outlook for 2012?

We are very aligned to the view expressed by Marc Andreesen, founder of Andreesen Horowitz, in his recent Wall Street Journal article, “Why Software Is Eating the World.” Software is now beginning to really disrupt entire industries, like recruiting.

This is really exciting because smart software products, like SmartRecruiters, are going to have a very good  run over the next decade, especially as they relate to consumerization, mobile, and new business models.