Hit by Covid in New York: Pulsd CEO Mareza Larizadeh (Part 2)

Sramana Mitra: How did you reach those people?

Mareza Larizadeh: Andy and Mark served on my board for a few years. I met them at Stanford business school.

Sramana Mitra: They were teachers?

Mareza Larizadeh: They were lecturers there. 

Sramana Mitra: You had a million in seed and grew the users to 60,000 to 70,000 job seekers and a hundred companies recruiting on the platform. What was the business model? Were the companies paying per job posting? Paying a subscription fee?

Mareza Larizadeh: We didn’t have a business model at the time. We were pre-revenue when we raised our venture round. 

Sramana Mitra: Was there a hypothesis on revenue? 

Mareza Larizadeh: Not really. What we wanted to create was a platform that had a lot of high quality candidates and we thought we would charge companies to access these candidates. That’s how the business went. The revenue started coming in after we raised our venture round. With the great recession in late 2008-2009, we had to change that model. 

Sramana Mitra: How much did you raise in the venture round?

Mareza Larizadeh: About $5 million. 

Sramana Mitra: Was that Benchmark?

Mareza Larizadeh: That was Shafta. 

Sramana Mitra: How long after that did you start monetizing?

Mareza Larizadeh: Around late 2007 as things were getting shaky in 2008 we started monetizing. We started charging recruiters to access the platform.

There were various models, but the most common was a product where we would ask candidates what their minimum requirements would be to move to an organization. We would match those candidates with open positions with mostly investment firms in New York.

We also had media companies and tech companies in Los Angeles, but it was mostly investment firms centered in New York. The model was we would get paid anywhere from 10 to 20% of first year compensation on anyone who closed on a job offer. 

Sramana Mitra: Were you based out of New York at this point?

Mareza Larizadeh: We had an office in New York. I was based out of Palo Alto, but I spent 30 to 40% of my time in New York. 

Sramana Mitra: How did this business model scale from a monetization point of view?

Mareza Larizadeh: It was scaling great and we were very surprised. We didn’t think that there would be companies out there that would pay us anywhere from $10,000 to $50,000 per hire. We had a side product where you could do your own work as well.

We would sell access to our database on a subscriber per recruiter and that was priced at $15,000 a year for unlimited use. That was ramping up nicely, then the walls fell apart in late 2008-2009. At that time the business model did not scale and we had to turn it on its head and start charging consumers to access opportunities. 

This segment is part 2 in the series : Hit by Covid in New York: Pulsd CEO Mareza Larizadeh
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