A company is only as good as its employees. But many organizations are still recruiting prospective employees using an inefficient and outdated manner, according to Jerome Ternynck, founder and CEO of SmartRecruiters. To compete in the war for talent, it’s the tool of choice for such modern enterprises as VISA, Skechers, Equinox, Alcoa, and CERN.
Recruiting isn’t an administrative function, he says: “It’s much more of a sales and marketing function, where you’re really looking to invest in people and get the best talent available.”
Moving Past the Past
Ternynck had been working with recruiting software for over a decade and realized that these applicant tracking systems were not solving the issues that companies needed to solve. Tracking was a bureaucratic process that had little to anything to do with actually acquiring top-level talent.
Moving from Paris to San Francisco in 2010, Ternynck gathered $1m in seed investments for his startup, SmartRecruiters. That money went toward building a beta version of his platform.
Platform Before Monetization
In 2011, Ternynck sought the counsel of Mayfield. In concert with Partner Rajeev Batra, he started putting together a game plan for a new way to approach recruitment.
“Hiring quality personnel is considered to be a top priority for many CEOs,” Ternynck says. “But we could see immediately that the process wasn’t being solved properly with the technology currently being used.”
With that in mind, Ternynck and his team launched SmartRecruiters in the summer of 2011 as a free app for people to create jobs, to find candidates, and to hire them.
Within six to nine months Ternynck had solid evidence that there was interest in his platform and people were using it regularly. By early 2012 SmartRecruiters started to pick up steam and display good traction.
“Yes, there was interest in our platform and people were using it,” Ternynck says, “but we didn’t know how to monetize our efforts. We were not sure whether the economics would work.”
Series A = 200 Years of Development
In February of 2012, Ternynck and his group raised their first round of venture capital financing.
“The Series A, led by Mayfield, was really a true partnership to try and build the software and the model to address the opportunity in the market,” Ternynck says.
Ternynck knew the stakes were high. The team at SmartRecruiters was working hard to replace an existing software platform being used by major players such as SAP, Oracle, and Workday.
“We were approaching companies and saying, ‘Hey, you’re currently using Oracle globally. Why not give us a chance to give you everything they offer and more,’” Ternynck says.
It was an ambitious plan. “We understood that if you were going to build an alternative to an established industry, you weren’t building a small tool for a small market,” he says. “You were actually building a talent acquisition platform of the future. And that undertaking was going to take some time and investment.”
The goal, says Ternynck, was to carve out an attractable market and produce a service that was bigger and better than anything currently being used.
“I was very fortunate, as an entrepreneur, to find investors who had faith in this particular market, and faith in us to build the right platform. Keep in mind that our success was built in four years with 50 developers,” Ternynck says. “That’s the equivalent of 200 years of development. Mayfield really invested in a vision — a vision that there was a better way to hire. A vision that we could make hiring easier.”
“Jerome Ternynck was a product-obsessed entrepreneur with deep domain expertise when we met in 2012. His dual focus on making hiring easy and helping people find the right job was unique. We embraced his audacious vision for ‘ending unemployment’ and today SmartRecruiters has grown into the leading hiring success platform.”
– Rajeev Batra, Mayfield
Time to Charge
SmartRecruiters continued to upgrade its software into the beginning of 2014. That’s when the second round of financing began. Series B financing embraces all kinds of investments, public and private.
“We raised our Series B round on the basis of our extended traction and our confidence that the platform was ready to start monetizing,” Ternynck says. “We went out and sold it to as many companies as we could.”
These Series B investors came on board during a time when SmartRecruiters already had a few thousand companies using its software. Says Ternynck: “We were seeing a lot of volume on the platform and we thought it was time to start charging for the software.”
SmartRecruiters launched its first paid product in May of 2014. The company picked up 700 new customers in the next two years. Says Ternynck, “It really went high in the enterprise market.”
“We understood that if you were going to build an alternative to an established industry, you weren’t building a small tool for a small market.”
– Jerome Ternynck
The Transformative Effect of Series C
“By July of 2016 we had heavy growth, good revenue, good repeatability, and good successes with our first customers,” Ternynck says. That’s when they raised their Series C financing.
“Series C investors are people who want you to scale,” Ternynck explains. “They were not taking a market risk; they already knew there was a market. They weren’t taking a technology risk either because they knew there was proven technology being used. They were only taking an execution risk. In other words, they were interested in how we were going to build our machine and scale our company across all segments of the marketplace.”
There’s a transformative effect when you reach Series C financing, says Ternynck. “It means that you have a proven repeatability in your sales process and in your integration process.”
“From the very beginning, I wanted to make hiring a quality business, and I wanted to give people a job they loved,” says Ternynck. “That hasn’t changed.”
What’s changed, however, is how to effectively reach that goal. In tandem with Mayfield (and in particular Batra), SmartRecruiters was able to change the landscape of the recruitment industry. Its Talent Acquisition Suite has full end-to-end functionality for finding, engaging, and hiring. It provides experiences for all three groups that are critical for hiring success: candidates, hiring managers, and recruiters. And, built on a modern enterprise-grade platform, it has integrations to more than 250 partners and HR systems.
Recruiting talent is a sophisticated undertaking. Ternynck knew that the recruitment industry needed a paradigm nudge. “Things are different today,” he says, “Not only do businesses want to acquire the best talent available, but they want to become industry leaders as well.”
In order to achieve that goal, companies need three things: ideas, money, and people. “Nowadays there are ideas and money everywhere,” Ternynck says. “But talent is hard to find.” Thankfully, SmartRecruiters has made that process a little bit easier.