Building a High-Growth Startup From Brazil: Revelo CEO Lachlan de Crespigny (Part 2)

Sramana Mitra: What was your hypothesis on how you were going to generate cash flow?

Lachlan de Crespigny: We were shocked to discover this industry where offline recruiters would do tasks that we knew could be automated quickly and they charged very large amounts of money for it. We need to sell something high-ticket, because I’m not going to be able to make a lot of sales every month to get started.

We charged as a recruiter does and we’d automate away all the work so that a platform can do the work of a hundred recruiters. That was the first business model. That got us through to a decent amount of cash flow that proved that there was demand. It funded some software developers and got us through the first stages of funding.

Sramana Mitra: How long did it take you before you got your first client?

Lachlan de Crespigny: I remember the name of the candidate filed was named Paolo. I remember exactly how much it was. My co-founder emailed me saying that the money is in the bank. It was a really big moment. It took us three months in total. The model back then was, we’d call the developer options. We would organize about 20 candidates to be on the platform and then find about 20 companies that would be interested in hiring them.

We built up enough buzz over these three months. We set up everyone on the platform on what they thought was a working internet site. In reality, only the front end worked, and I and my partner were working like crazy monkeys behind the scene trying to make everything look like it was automated.

Sramana Mitra: In that pool of 20 developers and 20 companies, who was paying what?

Lachlan de Crespigny: The companies were paying when they hired a candidate from the platform. They would pay a success fee.

Sramana Mitra: What denomination was that?

Lachlan de Crespigny: We charged roughly the equivalent of one month’s salary for the candidate. Salaries back then were different. That very first payment that we got is about $500 today. It seems ridiculous today that I got so excited about that, but it was a big moment.

Sramana Mitra: From the first pool, did all the developers get hired?

Lachlan de Crespigny: About 25% of the developers were hired. We got really good feedback from both sides. The candidates felt that they had a good experience. A large amount of the companies that used it wrote to us and said, “When is the next batch of candidates online?” Everything we had done, we could teach a computer to do. It was scalable.

Sramana Mitra: When did you do the next one? How long did it take you to automate the backend?

Lachlan de Crespigny: The next one took us another three months. That was the one I was most nervous about. For the first one we thought we just got lucky. The first week of the second launch organized 60 interviews on the platform and it was mostly automated. I remember I stayed awake all night. That was when I thought that we’ve got a business model. We’re selling something that people want.

Sramana Mitra: In the first edition, you made about $2,500. How much did you make in the second one?

Lachlan de Crespigny: The first ended up at about $5,000. The second one was about $10,000 to $15,000.

Sramana Mitra: Money starts to come in and you have some validation that the model is appealing to both sides of the marketplace.

Lachlan de Crespigny: Right.

This segment is part 2 in the series : Building a High-Growth Startup From Brazil: Revelo CEO Lachlan de Crespigny
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