We Niched Down In The Recruitment Space And Are Generating $20K/Month In Revenue

Jacob Fiore

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Published: May 14th, 2023

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Jacob Fiore

Founder, Devrize

$20K

revenue/mo

Founders

Employees

Devrize

devrize.com

from Denver, CO, USA

started April 2021

$20,000

revenue/mo

Founders

Employees

Discover what tools Jacob recommends to grow your business!

ActiveCampaign

sms

Twilio

financing

Brex

social media

Twitter

accounting tool-icon

Xero

productivity tool-icon

Google Suite tool-icon

Slack

Airtable

Discover what books Jacob recommends to grow your business!

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Hello! Who are you, and what business did you start?

My name is Jacob Fiore, and I started a recruiting business to help high-growth startups find the best talent. This was initially a side project while I was working full-time in investments for a mutual fund company. After six months as a side hustle, I was able to go full-time and haven’t looked back.

There are a lot of generalists in recruiting. What can help set you apart is focusing on specific roles. For instance, our focus has been software engineering. 95% of our business has come from placing software engineers into venture capital-backed startups. We work with companies creating innovative technology with around $1B raised in venture funding.

What's your backstory, and how did you develop the idea?

My dad was an entrepreneur in the toy industry. He was a leading player in the claw arcade game. So growing up, it was customary to think people started companies. This gave me an itch for entrepreneurship that would never waver. It was hard for me to work for others. I wasn’t incentivized unless I had some ownership to build something bigger than myself.

Fast forward to my early 20s, when I worked 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 began brainstorming about what I wanted in life. It all came down to 3 things: 1) I wanted an industry that allowed endless financial gain. 2) Geographically agnostic 3) I make my schedule.

From there, I was about to pick some ideas that fit the mold. I had a family member who previously made some talent acquisition, and he taught me some industry basics. It turns out it’s incredibly easy, and there’s little to learn.

It was a low barrier to entry, both knowledge and capital-wise. This also meant there was more competition. With any service industry, it’s not hard to be mildly successful here. You need to have A+customer service, and you’re better than 90% of your competition. So that was the aim.

Start a side business. I highly suggest keeping a job as you experiment with a side hustle. Make sure they fall under the things you want in life.

The next step was to figure out a name, pay $100 for an LLC, and get a free logo online. Browse through our networks to find the first customers and introduce them to people we meet on LinkedIn. Off to the races.

Take us through the process of placing your first candidate

Recruiting is all about the network you have. What’s great about it is that there’s essentially zero overhead cost. You find companies looking to hire for positions and then see them on LinkedIn.

Once I found companies to recruit specific positions for, I found a basic contract online for contingent direct placement recruiting. Both you and the company agree on a certain “finder’s fee” if they are to hire the people you refer. This needs to be signed by the companies you are doing work for so you can get paid. There are other terms, such as guarantee period, net payment terms, etc.

Now it’s time to find candidates to interview for these positions. You can find these people on LinkedIn. Create some straight-to-the-point messaging and start poaching some employees from competitors in the industry. In this case, the candidates just needed software sales, so it was a bigger pool to choose from.

The mistake I made initially was reaching out to people I immediately knew to fill the position. They most likely won’t be the candidate that gets hired. But what you should do, and what ended up filling my first position, is ask people for referrals. This does two things:

1) You are asking them indirectly if they are interested in a job

2) People that know you want to help out.

In the end, I got a referral from a friend from high school. He knew a software salesperson who was a great fit. And, of course, I gave him a referral bonus to incentivize him for more help in the future.

Describe the process of launching the business.

The first step is figuring out a niche to recruit for. It could be accounting, finance, IT, marketing, sales, etc. You don’t necessarily have to have any experience in those functions, but it can only help. I had zero software engineering experience, yet that is where I have helped the most people.

Once I had a niche down, I created an LLC with my business name and a logo. From there, it was time to build a website. I highly recommend using an off-the-shelf product: Webflow, Typedream, Wix, etc. This makes it super easy to make a website with content quickly.

Since there was no overhead, I used money from my full-time job to pay for whatever was necessary, which wasn’t much.

From there, I just networked, shared my website with people, and asked them about pain points in their hiring process. I was able to win the trust of some initial companies and start 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’s a production model. They don’t pay you unless they agree to hire someone you bring them. This creates a low barrier to entry and allows you to get to work relatively quickly.

Since launch, what has worked to attract and retain customers?

One of the things that attracted customers is our focus on doubling down on referrals from other software engineers. Finding qualified candidates can be challenging. So we started offering pretty crazy referral bonuses that no other recruiting firm was doing.

We are talking $8k if someone they referred gets hired. It’s a no-brainer for software engineers to refer their high-quality friends. It 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 things away.

So we started to create referral links and set up a back-end database of everyone who wanted a referral link. And pretty much everyone was open to it because no one else was paying us the kind of referral bonuses.

This is what our sign-up page looked like. Very simple.

On the client side, keeping up-to-date with business news, specifically sections about recent funding or scaling plans of companies, helps find the customers to reach out to. It’s a numbers game from here. Invest in some tech that enables you to scale emails and LinkedIn outreach and find hiring companies quickly.

I haven’t done much SEO or social media marketing. Simply because you need to be actively reaching out to 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 reach out to that are hiring, the more positions you can help hire for. I find that quality and targeted outreach goes a long way in this industry. Too many people fall short by keeping their outreach generic. Any differentiator you can have will increase sales in the long run.

The way I went about it is creating a list of companies that are hiring. This can be found in job boards, recent company funding, news about companies scaling, etc. Then cross reference that list with LinkedIn to find the right people. This would be VP of People, Head of Talent, CTO, COO, CEO, etc.

Craft messages that are straight and to the point with a simple question at the end. They will appreciate it and likely let you know yes or no if they need help.

How are you doing today, and what does the future look like?

It is profitable as soon as you make your first placement since it’s an online service business. I made a gross revenue of Year 1: $302,100. Year 2: $233,200

The fluctuation is based on market trends and the rollercoaster contingent on recruiting.

(You get paid when they agree to hire your candidates, so it’s entirely reliant on the hiring manager).

The majority of my business came from 2 companies that increased their headcount 57% YoY on their software engineering teams. Both of them were VC-backed companies.

Fast forward to today, and you will see the recruiting market, specifically for tech, has hit a massive wall. This is only for now, and I foresee the market hitting an uptrend in the next year or two.

Recruiting will always be a necessary field. Companies win based on talent. Every CEO knows this and is willing to invest heavily in this function.

Through starting the business, have you learned anything particularly helpful or advantageous?

I tried to create a tech product to automate recruiting and made many mistakes. Hired a couple of contract developers that took advantage of my non-technical background for a payday. If you aren’t technical and don’t know precisely what to build, I suggest connecting with a technical cofounder who is paid with equity rather than contractors.

I suggest investing in what you know will work instead of testing the waters with R&D with skills that you don’t have. So if you create a scalable process with sourcing and interviewing candidates, double down on that rather than a technical product. Leave that to the developers and partner with them from an equity perspective OR raise money for the idea so it’s not coming out of your revenue.

What platform/tools do you use for your business?

LinkedIn recruiter is a must-have when sourcing candidates. I don’t like the platform, but it’s the #1 place for recruiting, so you have to bite the bullet. Some email collection and automation tools. I use Interseller, and they make it super easy to create processes and outreach. It was bought by Greenhouse, and the customer service seems decent.

Plenty of LinkedIn automation tools send connection requests with a note. This can be in place of getting a LinkedIn recruiter seat, plus you gain followers/connections. I found this somewhat helpful in broadening my network. Some cons with this are you can’t get super granular and end up connecting with people that aren’t your target client.

What have been the most influential books, podcasts, or other resources?

Almanack of Naval Ravikant is the best business book I’ve come across. There’s a free pdf online, and it’s a must-have.

Advice for other entrepreneurs who want to get started or are just starting out?

Write down things you want in life. For me, it was geographically agnostic, with unlimited earning potential and a flexible remote work schedule. I found that with recruiting. Some other careers and projects give you that same outcome.

Start a side business. I highly suggest keeping a job as you experiment with a side hustle. Make sure they fall under the things you want in life. Pick one or two and dive deep. Too many side projects mean none of them will take off full-time.

Where can we go to learn more?

Website

If you have any questions or comments, drop a comment below!