#GROWTHSTORY How Workable Has Defied the Odds and Built an Eight-Figure ARR Business
When the maker of recruiting software Workable was founded in Greece in the midst of a debt crisis, few people thought it stood a chance. But what started with two laptops and a kitchen table in Athens has today become a fast-growing global business that is scaling to $20 million ARR and beyond.
Here is a look into how a startup on the European periphery became a recruiting game-changer for over 6,000 companies, including Basecamp, Help Scout, and Zapier.
Early traction: winning customers in a hand-to-hand combat
How did co-founders Nikos Moraitakis and Spyros Magiatis come up with the idea for Workable?
Truth be told, there wasn’t a big “aha” moment or a burning problem they wanted to solve. Coming off their previous jobs in a sales-driven environment, they knew they wanted to start a software company with a product-first culture.
Workable co-founders: Nikos Moraitakis and Spyros Magiatis
As they looked around the enterprise software space and reflected on their own professional experiences, they recognized an opportunity in the area of recruitment. It had been largely neglected over the years and was full of archaic software geared towards large companies. So, they decided to build a product that would redefine the hiring experience for SMBs and high-growth tech companies.
A smart strategy to accelerate traction in a space where founders don’t have direct prior experience is to hire someone into a growth role who has the same profile as an end user. That’s what Workable did when they hired Rob Long, who was previously a tech recruiter with marketing experience, as their VP of Product Marketing.
Rob’s mandate, while working remotely in London, was to build the initial base of customers among tech startups, who were likely to become early adopters of the product, and learn more about their needs to inform product development efforts.
This was primarily a one-on-one sales effort to meet people, build relationships, and gain ability to tap into their network with referrals and introductions.
Another great source of early leads for Workable proved to be Talent Hackers events that the company ran in London, Philadelphia, New York, and Boston for in-house recruiters in tech on how to hire more effectively in a highly competitive market.
Finding a scalable business model
Being focused squarely on the SMB market, the company had to create a business model that would support the economics in that channel at scale.
Targeting capital efficiency
Many SaaS companies sacrifice margins early on and take on funding to quickly gain scale and go upmarket where profits are eventually generated. Operating with a different mindset, Workable needed to build a business that was capital-efficient from the start.
This meant containing operating costs and conservatively calibrating acquisition spending against customer revenues over a one-year period. Even though LTV was likely going to be higher, the company didn’t feel that its growth would be sustainable if it were funded on the expectation of returns over a longer horizon.
Building a self-service product
A key to profitably scaling with a low price-point product is making it self-service, which is why Workable’s development efforts focused on building a product with a simple interface and workflow which provides frictionless and highly intuitive adoption.
Throughout the development process the company had to balance its vision for what the future of recruitment software will look like with what people are willing to pay for in today’s market. Nikos Moraitakis, Workable’s CEO summed it up best:
I was disappointed to find out that customers don’t buy visions and frankly they don’t give a damn about your revolutionary ideas. They buy things that work today, meaning features and immediate results. So you must take small steps along the path customers carve for you if you want to be relevant. But you can’t let them lead you completely, you still need to see far ahead and nudge everything towards a destination that exists only in your head. This is a hard, schizophrenic, mind-bending design process. One of the hardest things in my life today is the constant choice between being far-sighted for one thing and near-sighted for the other.
Moving from freemium to free trial
Workable started with a free plan but soon dropped it in favor of a 15-day free trial. Why did it do it? The company found that direct and indirect costs of maintaining a second-class version of its product far outweighed the benefits it was getting.
Nikos Moraitakis shared in detail their reasoning behind this decision, including this observation:
There’s a world of difference between “free” and “very affordable”. It forces an honest decision. Will I really get value out of this product, enough to justify paying for it? If someone is not getting $19 worth of value out of Workable, then we’re not solving a real problem they have.
Today, the company’s entry-level plan starts at $50 per job per month. It’s a pay-as-you-go model that allows customers to pause using the service when they are not hiring. Its other plans are geared towards companies that are hiring in volume.
Building an online demand generation engine through content
The sales-driven model worked very well for Workable early on, but it was not a cost-effective solution at scale for the SMB market they were targeting. The company made the right decision to focus on content marketing early on as its main acquisition channel, and it remains the most important contributor of leads to date.
Workable’s content strategy was to get in front of hiring decision makers before they would embark on a search process. In a departure from the typical approach, Workable chose not to emphasize blog articles from the start and instead invested in reference-type content.
Over time, the company’s content team has created an HR resource treasure trove for small business owners and tech founders with interview question kits for hundreds of positions, job description templates, email templates, sample company policies, and recruiting e-books that drive over one million monthly visitors to the site.
Traffic grew slowly at first, but the beauty of evergreen content is that, when SEO-optimized, it drives traffic that builds on top of itself over time. As John Short, Workable’s VP of Demand Generation, points out:
Great content takes time to grow and compounds. Content has momentum, just like a recurring revenue business does. It’s no wonder they are often a good match for each other when deciding on a strategy for growth.
In the early days, Workable’s content strategy was more of a gut approach, but since then the company built in-house tools for analyzing how specific pieces and topics of content perform. These tools allow the company to test different content, track cohorts, and double down on what’s working.
Content Cohort Analysis for Focused Optimization
The company also leverages Quora to showcase its thought leadership. This content repurposing strategy has proven to be highly effective for Workable, and Quora answers now drive more leads than the company’s on-site content.
Growth beyond content
The company is augmenting its content strategy with other low-cost initiatives that help move the needle over time.
Going after referrals
Strong customer support that ensures that users have a positive experience and get value from the product is a great growth tactic.
Workable built strong customer success DNA from the very beginning, and later decided to build a referral feature to amplify the word-of-mouth effect it was getting.
As Rob Long attests, with the referral feature the company fell into a well-documented trap of not making it visible enough:
You can’t simply build a nice refer-a-friend feature and expect it to be a great success without a really strong plan for how to promote it to your existing and new users. We perhaps took for granted that our users would want to refer people through the app since they were already doing it casually to friends and colleagues.
Getting wins through SEO
Recruiting software space is crowded, and the PPC cost of highly competitive keywords, such as “applicant tracking system”, is being bid up by better-funded companies targeting the enterprise market.
Workable decided to piggyback on the high search results ranking of software review sites, such as Capterra and Software Advice, to get found by potential customers. It proactively asked its satisfied customers to become the company’s brand ambassadors and review the product, driving up its ranking and providing potential users with a strong social proof.
Face-to-face community building
For many businesses, an engaged community of users proves to be both a defensive moat and an effective growth strategy. In 2017, Workable launched its first event series with the plans to visit customers in 12 cities around the world to say thank you, hear their biggest recruiting challenges, answer questions, and communicate product updates and future vision for Workable.
Building growth into the product
Built-in features that expose the product to people who are not paying for it is a free growth tactic that Workable successfully exploits.
- Powered by Workable tag at the bottom of the job description creates awareness of the product with the candidates.
- In-house HR managers are able to invite external recruiters to submit their candidates, introducing them to the tool.
- Workable’s app is by design highly collaborative and having other team members join the account builds greater exposure for the product.
Moving upmarket in pursuit of better economics
Workable started with the clear intention to do an SMB play and avoid going upmarket. Yet, it seems to be taking this common route to find the margins and the cash flow predictability that are valued by investors. It now counts the likes of Porsche, IBM, and Ryanair among its enterprise customers.
The company is building out its sales team to target the enterprise segment and offers product customization that takes it away from the self-service model.
Key takeaways from Workable’s growth journey
- The story of Workable is yet another proof that a global tech business can take root anywhere if the team nails the product and the growth strategy.
- In the early growth phase, it pays to go with one big user acquisition channel that plays to your strengths and performs well in order to generate high growth.
- Venture funding helps accelerate growth but imposes high demands on returns, often forcing founders to change their initial vision and strategy.
What’s next for Workable?
With a product that helps collaboratively manage the end-to-end recruiting process, Workable is redefining the hiring experience for small and mid-size businesses and is now touching the enterprise market.
With so many players looking to grab a share of the multibillion recruiting software market, a shakeout is inevitable. By remaining innovative on both product and marketing fronts, Workable will be able to maintain its leadership position and realize its vision for reinventing the way companies source talent.
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