Note: The blog has been reproduced from an interview with RippleHire CEO Sudarsan Ravi in Feb, 2022. Edited transcript.

About RippleHire

Founded in 2012, RippleHire is a pioneer in the employee referral software category and today is a full-suite recruitment platform used by 800,000 users across 35 countries.

ICP: Helping HR hire & retain talent

RippleHire primarily serves the talent acquisition and recruitment fraternity. We help them hire quality talent that joins and stays.

Presently recruiters are faced with high levels of attrition. People are leaving as quickly as positions are getting filled. Recruiters are trying to manage a leaky bucket.

Recruiters bring top-quality talent to organizations and, essentially, are silent warriors. Through hires they either contribute to revenue or help reduce cost. That is why RippleHire looks at recruiters as superheroes.

The product: Running with the biggies

The Employee Referral product is RippleHire’s first flagship product. It's a category creator. It helps organizations leverage the power of their 1000-plus employees to act as ambassadors and bring in quality talent. Referrals have better joining ratios of about 12-20%and tend to have great retention.

Our second product is our Talent Acquisition Cloud. In this segment, we compete with the biggies like Oracle, SAP and Kenexa. This is essentially a full-blown suite that helps organisations manage several stakeholders - the hiring manager, the candidate, the employee, the recruiter, the vendor, the leadership, and enables driving a premium experience.

Revenue model

If I look at the revenue streams - the split between the revenue from the referral product and the talent acquisition cloud - it started as a 100:0. Then it went to 80:20, today we are at about 50:50.

On the referral side, we have a license-plus success model. The recruiters sign up with us, pay us a licence fee and get their true value when the number of joiners increases. We charge a success fee as we deliver more joiners. We continue moving the needle north as usually the licence fee is paid off very quickly. We are always ROI positive for an organization on our referral product.

On the talent acquisition cloud, we straightaway charge a licence fee. Sometimes clients have a support resource that comes in. We do charge for customizations but those are not our primary revenue stream. Our focus is largely on the product and product licensing is how we make money. Customers love how it helps them build a brand creatively, bring collaboration and have data driven recruiting instantly.

Early traction

Before RippleHire, I was part of the PeopleSoft Practice at Deloitte. I quit in 2011 to co-found Giftopia, an employee engagement startup launched in the pre-ecommerce era, that did not take off.

After that I went back to the drawing board. I thought back to my time at Deloitte when we’d built a practice of 150 people from just 35, largely through referrals. I asked myself a simple question. Is it too much to expect one employee to give you one candidate in one year? I realized that it's not, but most companies are just not there. That question was the genesis of RippleHire.

I went back and initiated multiple customer conversations while building RippleHire. The recruiting market is a huge landscape and anybody and everybody is a potential user. In the first year we had the likes of Adobe, McAfee, Capgemini as some of our earliest believers and we are fortunate that those are the folks that actually helped lay the foundation.

Down the line several large enterprises like Mphasis, LTI, Mindtree, several Indian conglomerates like the Aditya Birla Group, several Tata companies, HDFC Life, contributed to RippleHire’s growth.

Differentiation: Deep ICP knowledge

I used to run the PeopleSoft practice at Deloitte in my previous avatar. That actually exposed me to the ERP (Enterprise Resource Management) and HRMS (Human Resource Management Software) world.

Large companies just don't get problems with products for this community at all. We come with a deep understanding of the space.

The reality is we sat tight and listened. And that’s where we compete with the large players. Our customers have obviously given us a lot of feedback and spent a lot of time educating us on their problems. And since we have listened to them and built products in conjunction with them, it's essentially a product shaped by the recruitment fraternity, for the recruitment fraternity.

When you look at product managers sitting in Germany or the US, are they recruiting the same globally? No. Germany and the US have different recruiting patterns. In India alone, insurance has a very different hiring pattern compared to BPO, IT companies or even engineering RnD companies. Depending on the organization, the industry, even within the same geography, recruiting is very different and the pain points are different.

Another major pain point is that recruiters are not present at all the platforms where prospective employees are present. There is always a chance of missing out on the right people to hire.

Big brands and reputed organizations have an additional challenge - getting way too many profiles who want to join them. Their challenge is to sort out the absolute best.

We don't need a billion-dollar RnD budget when our customer tells us exactly what their problem is. Then you can solve it and your product gets deeper and deeper with time. Obviously, just like the biggies, we're very good in compliance. We've been certified for six years now.

So, it's fairly straightforward for us - to compete against the best and win deals against the best.

Narrowing ICP focus to enterprise

After five years and a growth rate of 30-40%, I was not satisfied with the near break-even figure that RippleHire had achieved.

It felt like we were on a river rafting in a boat; we were paddling super-fast but we were going round. I really felt I needed help because we listened to people and built a product but we were not growing fast enough. That's how I joined the Upekkha fraternity. And I'm so glad that I did.

I learnt at Upekkha that it is easy to be influenced by the media in terms of the pace of a unicorn and fat, flashy titles. A lot of VC companies or VC-backed companies who do marketing for them make it look cool. I was also initially influenced by that.

We also learned to not be something for everyone. The biggest problem you have as a recruitment product is that you can serve anybody and everybody. So that meant that everyone, from a large enterprise to a startup, reached out to us.

I realized we can be a product for everybody. And, this made no sense. Because if you have to build a category-defining company, you largely need to focus on specific segments. So, we changed our focus from serving anybody and everybody to largely focusing on enterprises.

Positioning & pricing: ‘Customer conversations helped drive value’

The thing that I did right was I went to my customers and asked, ‘can you help me understand why you bought from me?’ This actually helped us understand and rectify our pitching. We found out that the only reason we got our early customers was that they saw a promising product and knew how to position it internally. But we realised that our messaging was completely off.

We also realized that we were leaving a lot of value on the table. The number of hires we were delivering for customers and the value they were getting in terms of dollars in a year was humongous. Additionally, we figured that we had no connection in terms of our pricing and the value we were delivering.

Our customer has seen value because of the ROI we deliver. Now, despite us increasing prices, we were able to comfortably deliver ROI within three to six months.

Our previous pricing was a flat fee. So another thing we did was to come up with a license and success fee model. Thereby, as we add more value to enterprises, we're able to capture a small fraction of that value.

Although our pricing has changed over the years and some may find us pricey in comparison to our previous rate, when these people reach out to their friends in the fraternity they tell them we are totally worth it because the product pays off for itself. At the end of the year, they will be saving more money on their budget.

Being customer-centric and listening to our customers were our biggest strengths. We realized that unconsciously, we were doing some levels of customer success. Now we have customer support, customer onboarding and customer success, which came out of the Upekkha program.

As long as founders listen and apply Upekkha’s Value SaaS frameworks, the revenue flywheel is bound to accelerate. From a Value SaaS standpoint, our journey has been to apply the program learnings and sustainable practices back into our organization.

We are still growing. As a company that has built a product, we deliver value to a customer. At the same time, as an organization we are also looked upon as a product. So, we needed to scale without compromising success. When a customer trusts us with their money, we want to make sure that every single one of them is successful. So, Upekkha, played a very big role in us setting the right levers for that.

Sales: Shortening sales cycle by 30%

Being customer-centric also helped RippleHire cut its sales process shorter by 30%.

We managed a shorter sales cycle as a result of two things:

First, we started communicating about problems that really mattered to the customers. The fact that we changed the communication of our problem value made a big difference in reducing our sales cycle.

The second part of this was pricing. When we structured our pricing on a success-based model, we suddenly become a lot more affordable for enterprises.

Land & Expand with customer insight

We spotted fragmentation in recruiting tools within organisations, from applications to interviews to offer roll-out. This led to productivity loss and bad candidate experience. To fill this gap we built ATS (Application Tracking System).

Application Tracking System is a central repository that saves resumes and applications and automates the entire hiring process. ATS facilitates managing every stage of the recruiting process.

The moment you make a marketing product automated and effortless for a recruiter, the recruiter just has to focus on getting leads. By taking away all the escalations and the annoyances, we're actually able to help them be more productive and deliver a premium candidate experience. We help them improve lives of candidates which is far more joyous than dealing with system hassles.

The Value SaaS learnings were fully integrated into RippleHire’s working model. Once our users landed with the RippleHire referral product, and saw depth and success, it gave them an opportunity to expand out to be an ATS for their customers.

Value SaaS is ingrained in our fabric and our DNA. So, we are naturally geared to deliver value to our customers. But does that mean we scale only a little every time? Not really. We're also growing north of 100%. The worst we did in the last four years was during COVID when our growth hit a 60% mark. We are still scaling responsibly.

Our organization grows as a function of our customer base. Our customers use word-of-mouth to recommend us to other customers. We grow as people leave one organization and go to another, see success, and vouch for us. This is incredibly powerful and the foundation is very strong.

We still have some problems like hiring more people faster. But our mission is driven towards hiring the right fit.

In our 9 years of industry experience, we're impacting someone’s life through a hire every 11 minutes. We have users from 176 countries visit RippleHire and have helped hire in 6,000 plus locations in India. We are fortunate to serve people in the remotest locations because our customers are taking us there. This is largely happening because we're delivering value. Value SaaS to me personally is about building business in the right way with the right spirit in the right manner.

Every founder dreams of achieving capital-efficiency. Realizing this dream is an uphill task, especially for startups. Incorporating principles of Value SaaS can help companies accelerate the capital efficiency flywheel.

Compiled and edited by Minakhee Mishra

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