Bootstrapped and massively profitable, ZipRecruiter steps out of the shadows to reveal its true might
How do you hide a massively profitable, $50-plus million dollar revenue business with hockey stick growth and more than 130 employees in plain sight?
Judging by ZipRecruiter’s absolute dearth of coverage in mainstream tech or business press, the answer is to occupy a classically unsexy category and bootstrap your way to success. The final key may be to not care one bit about the lack of attention and simply keep your eyes on the prize.
“We’ve been of the mindset that we want to make sure we’re not talking about what we were going to do, but what we had done,” says Ian Siegel, co-founder and CEO of the four year old Santa Monica-based recruiting platform. “We didn’t need press to grow, and we're not raising money, despite plenty of inbound interest. We’re happy with where we are now, so we’re a little more open to sharing that success.”
Siegel has seen high growth-startups before. He was a senior developer or product manager at CitySearch, Ticketmaster, Stamps.com, Rent.com, Pictage, and MyLife before founding ZipRecruiter in 2010. Those roles gave him the financial flexibility to bankroll this project himself, along with his co-founders and fellow Rent.com alumni, Will Redd (CTO), Joe Edmonds, and Ward Poulos. The task of scaling multiple high-growth technology teams also gave the ZipRecruiter founders an intimate understanding of the pain points in sourcing and vetting high volumes of well-qualified job candidates.
On the surface, ZipRecruiter is a job distribution engine that allows employers to post a job to more than 50 online job boards and social networks with a single submission. On the backend, the platform allows these employers to then collect, screen, and track high volumes of employee applicants in an efficient and effective manner. Hundreds of thousands of job seekers have also signed up to receive free daily emails directly from the company featuring targeted job openings based on their location, resume, and interests.
“We’re the largest vendor of job boards in the US. But job distribution is simply the hook that gets them to try us. What companies really pay us for is delivering candidates – they don’t care about the source,” Siegel says. “We’re in the business of selling haystacks, not needles. We’re not creating the demand, it’s already there. We’re just a pipeline and toolset for accessing that demand and managing it once you do.”
ZipRecruiter is on pace to distribute 3.5 million job listings this year, a figure that will represent 250 percent growth over last year's total of just 1 million. Clients pay the company a monthly SaaS license based on the number of concurrent listings posted. Employers can also pay a premium for featured placement on the company’s job-seeker emails. ZipRecruiter has high tens of thousands of subscribers, Siegel says, a figure that with 7,000 new business added each month, he expects to reach six-figures well before year-end.
“3.5 million listings may sound like a big number, but 6 million businesses across the US will post at least one job this year,” Siegel says. “There are 1 million businesses that have more than 100 employees, thousands of which have more than 10,000 employees. There’s still so much green field in front of us.”
Not surprisingly, given its growth trajectory, ZipRecruiter’s own headcount has grown 300 percent in the last year. It’s moved or expanded offices three times over that period, repeatedly designing and outgrowing what Siegel refers to as “dream offices that we thought we’d be in for a long time.” It’s a classic good problem to have, but a problem nonetheless.
It can be hard to wrap one’s mind around just how to classify ZipRecruiter. Is it a job board or marketplace like Monster.com or Craigslist? Not really, but you’d forgive many small businesses for thinking of it as such. These job boards themselves are ZipRecruiter clients too, and think of the service more like an “Applicant Tracking System (ATS),” the kind of software platform large employers use to manage inbound applications. It’s at the intersection of these solutions that the company’s magic happens.
“Lots of people have seen the parts, but few appreciate the whole,” Siegel says. “We’re not a job board. We’re more like Hubspot, in that it’s not a social network, it's a platform to manage multiple social networks. We’re powering SMBs with Fortune 500 caliber recruiting tools, part of which is a tool for managing multiple job boards.”
ZipRecruiter works with all manner of employers, but you’re most likely to find those seeking employees that frequent job boards. That means it’s a lot of hourly or low-skill roles.
“We’re so large now that we are completely reflective of the types of job postings on job boards,” Siegel says. “Our classic profile is a growing small businesses with 10 to 100 employees with ongoing hiring needs. But we get the occasional giant or highly specialized role as well.”
Recruiting is a highly competitive space. And once it became clear within the industry that ZipRecruiter had in fact built a better mousetrap, there’s been no shortage of copycats looking to ape its model.
“Multiple companies have tried to knock off our service,” Siegel says. “But it’s easy to offer the same marketing language. It’s hard to deliver so many jobs. It takes a lot more than just creating integrations. We do so much but fine tuning. You have to decide how much money to dedicate in sponsorship and where, as well as how to develop algorithms to match selectively.”
He adds, “I think one of our biggest advantages starting out was that we’re not from the recruiting space. We never thought of this as building a job board or an ATS. We just asked ourselves, what would have been really useful when we were building our SMBs? The answer was an affordable way to get as many qualified candidates as possible and vet them efficiently. So that’s what we’ve built.”
ZipRecruiter’s growth has dramatically exceeded Siegel’s admittedly ambitious growth aspirations for the year. After 3.5 years of fine-tuning the product and the message, it appears the company has finally nailed both. The company recently quadrupled its marketing spend across TV, radio, direct mail, and digital ads.
“The end game for us is winning,” Siegel says. “We have really tapped into something that the market resonates with. It’s rare to have an opportunity where we’re clearly the market leader and there’s no strong competition. We’re having so much fun that we’re going to continue doing it. We’re not thinking about liquidity events.”