Scaled to 80. Cut to 30. Per-Head Revenue Doubled. Part 1

Benjamin Mena [00:00:00]:
Are you still trying to grow your recruiting desk or business on your own? Join the Elite Recruiter Community and connect with recruiters who know your challenges. Members get unlimited access to replays from the AI Recruiting Summit, Finish the year strong and all our past events plus biweekly roundtables where we dive into sourcing, business development and mindset. You'll also tap into our Billers Club for accountability and a split space to partner on roles. Join the number one growth environment for recruiters. For just $49 per month, you'll be part of a tight knit group that pushes you to grow and you can cancel anytime. Visit the link in the show notes and click Join now to get started and start mastering your craft today. Coming up on this episode of the Elite Recruiter Podcast, you said during our pregame call and this might piss a few people off. In recruitment there really isn't any intellectual property.

Benjamin Mena [00:00:46]:
There is no IP other than relationships. What does that actually mean? If you rely on cold email, you're dead. Yeah, explain that.

Benjamin Mena [00:00:58]:
So welcome to the Elite Recruiter Podcast with your host Benjamin Mena where we focus on what it takes to win in the recruiting game. We cover it all from sales, marketing, mindset, money, leadership and placements.

Benjamin Mena [00:01:18]:
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Benjamin Mena [00:02:28]:
Get started with Atlas today and unlock your exclusive listener offer@reruitwithatlas.com I am so excited about this episode of the Elite Recruiter Podcast because here's the thing first of all, I love space. I grew up on the Space coast, so I, like. I feel like I have to fight myself. I'm not having a space conversation, making sure that this is a recruiting conversation for you guys. But here's the thing. This guest scaled up his team to 80 people and then woke up and he realized, shit, I think I did something wrong. And then skilled it back down to 30. And here is the absolute crazy thing.

Benjamin Mena [00:03:05]:
The revenue almost stayed the same. Net revenue per head doubled. What the hell is going on? And that's why I'm excited to have him here on the podcast. So welcome to the podcast, Tom.

Tom Kelly [00:03:15]:
Hello. Thanks very much for having me.

Benjamin Mena [00:03:17]:
All right, I gotta ask this later. Who do you think is better? And you can't answer now, later. UK recruiters or US recruiters?

Tom Kelly [00:03:28]:
The classic question. Yeah, yeah. I mean, I might be biased, but, yeah, I'm happy to answer that one a little bit later on.

Benjamin Mena [00:03:33]:
So let's just go ahead and dive right in. So you guys scaled from four founders to 80 recruiters in a matter of. What was it, three years?

Tom Kelly [00:03:42]:
Yeah. Fully bootstrapped as well.

Benjamin Mena [00:03:44]:
And then you deliberately decided to cut it back down to 30, and in doing that, you double the revenue per head. Yeah, but here's the thing. Like most agencies and most firm owners are chasing that number that. The headcount number. Why the hell did you decide to go the other direction?

Tom Kelly [00:03:59]:
Yeah, so there were a number of reasons why. First of all, we were following the market. So in 2021, the space industry investment peaked. And so for us, it was absolutely crazy. However, despite that, we could kind of see that they were starting to have some cracks. And when you scale up that quick, you fall into the trap of hiring for hiring sake. And it's ironic because we're obviously a staffing firm, but the key thing was we found ourselves in, like, a web of, like, we had a big management team, we had tons of advisors, and we basically ended up not really achieving what we wanted to. And I felt like we lost touch with the people and we lost touch with the mission.

Tom Kelly [00:04:40]:
So when we looked at it, it was like, right, okay, we're doing well. The company is very healthy. However, for us to get back to who we should be and to what we should be doing, we need to start to cut this back. And so, and this is fair play to the founders, because there's four of us and we all own the business. But we made the decision that I would take the reins, and it's because we, you know, four founders, fantastic. It works really, really well. You know, we have no ego as, as a major thing between us. And so we do.

Tom Kelly [00:05:09]:
Everyone always stays in check. However, four people trying to run a business doesn't actually work. And so we decided that we would flip it around and that I would take over. And I think that was when the clarity came in, like really looking at it and not being necessarily working in the business, but working on the business. And the minute I did that flip, I could see and I was like, right, okay, we've got a big contract team, but the book isn't where it needs to be. We've got these products that we've invested into, but I think we should set up an executive search firm. And so I had all of these ideas and so came the game of chess as a bootstrap company where you start to remove things until it breaks and then you rebuild it. And then we made some strategic investments such as the search firm.

Tom Kelly [00:05:50]:
So it's been a very iterative, interesting process. And as we go back into growth stage now, it's like, let's not fall into the same trap again.

Benjamin Mena [00:05:58]:
So most of your team is actually based in the uk, right?

Tom Kelly [00:06:02]:
Yeah, pretty much, yeah. So most of the delivery is done from the uk. Our top biller, we moved over to the US in January and all of the operations is also run from the uk. And then there's myself in the us. All the clients are, Jack are the founder, Ryan is the top biller that's moved over. And then we've got our executive search firm that's based here as well, which is run by a guy called Steve Finder. And I've done some digging and that is actually his name.

Benjamin Mena [00:06:30]:
I was going to ask you on that.

Tom Kelly [00:06:31]:
I was like, wait, hold on a sec. It's legit. Is though. Yeah, I know, I know, it's just absolutely hilarious. But yeah, I mean, he's great. He ran TA for Elon Musk, he ran TA for Tim Cook at Apple, and we were kind of dating for a number of years and then we decided to build the firm together. Anyway, he's based over in Orange county, his EA is based in North Carolina. And then we're about to make a bunch more hires here in St.

Tom Kelly [00:06:53]:
Pete, Florida. But yeah, the, the, it's primarily a UK operations business operating inside of the US market, which is what we've done for the last eight years.

Benjamin Mena [00:07:03]:
Okay, I got to ask you because like that's what, a five hour time zone difference? Like how, how are you guys operating or with most of the team over in the UK, 95% of the business in the US, like, how does that even work out?

Tom Kelly [00:07:17]:
So the UK team work us hours and we got lots of families in the company. I have a family. For me, family is the most important thing. And so going all the way back to when we first set up the company, we recognized that the old school being chained to your desk 7:30am, 7:30pm, or the KPIs, you know, goes back to your UK versus US question. But we can come back to that. But ultimately that level of structure wasn't necessary when we were starting the company back in 2018. And so when you have that level of flexibility and you get really good people with families who want to do well, you can actually build the hours around them. So lots of our team don't start work till midday, then they'll work until sort of 4 or 5pm they then they'll have family time.

Tom Kelly [00:08:02]:
So they'll have dinner with the family, they'll put the kids in bed and then log back on sometimes between 8 and 11pm and it works perfectly. The only times it gets a bit dicey is when, say you've got a West coast client who wants to talk in the evening. So sometimes the team in the UK and I had to do my fair share, need to take a call at like midnight or like 1am and you aren't sleeping after that because you're all buzzed up. But it is very, you know, with calendly and just making sure that you're organized and that you lead with the calendar. It's quite rare that you need to do calls that late in the night, but again, you have to be super organized, otherwise it doesn't work.

Benjamin Mena [00:08:35]:
So you said something during the pregame call that kind of like just caught me. You said that if you rely on cold email, you're dead. Yeah, explain that.

Tom Kelly [00:08:47]:
So email for me has been dead for a while. I'm not sure about you, but my email, it's almost unusable because of the level of outreach and it really started to accelerate, I would say, about 18 months ago. Now we're right in the thick of it. And it's interesting because if you're just going to sit there and rely on purely specking out candidates at scale or cold emailing, I don't think it works. I think that, you know, the hit rate is so low and for recruiters, especially with what's happening now with LinkedIn, with the same sort of wall of kind of spam and AI, if you don't double down on your relationships and you aren't able to text your clients and you don't know what your client's doing at the weekend, then you're going to fail. Because the way that the world is going, and I think it will reset, but just the wall of noise that's about to wash through from all these outreach tools, you know, from LinkedIn, the email is the first to go. So if you're sat there just emailing, I think you're going to be in trouble very, very soon. And so for us, it's all about texting.

Tom Kelly [00:09:52]:
You know, I literally bought a house in the US over text. I couldn't believe it. Everybody here texts. So if you aren't texting in the US market, you're already way behind. And so that's what I meant by that particular comment. But it's a much bigger subject. I actually think the way people look for jobs is going to completely change in the next few years. I think LinkedIn, everyone uses LinkedIn, okay, you have to, you know, you have to be in the game.

Tom Kelly [00:10:16]:
But I think they're going to have a job on their hands to police a lot of the AI and the outreach. And, you know, for those of us that have been using AI for a long time, you can spot it a mile off. For your average person, not quite yet, but they will do. And then suddenly it's going to turn everybody off. And so the channels I think in which people search for jobs and the way in which they engage with content as it relates to jobs is going to transform in the next few years. And so it's. Yeah, like I said, it's a huge subject, but I think for me, email only in trouble.

Benjamin Mena [00:10:47]:
I got two comments on that. First of all, I just realized that I bought my house via text message also.

Tom Kelly [00:10:52]:
Yeah, yeah.

Benjamin Mena [00:10:53]:
Secondly, when it comes to, like, you talking about email being dead as outreach tool for business, you also told me the pregame that you guys have so much business that you guys are like overwhelmed and actually need to hire.

Tom Kelly [00:11:07]:
Oh, yeah. We are absolutely stacked at the moment and we're making smart hires. You know, we're not rushing into it, which means that we've had to say no to a lot of business. And I think the reason for this and why there is that link there is that we've always refrained from doing cold outreach email campaigns. And because we were kind of first into the market, you know, we had the new space and I'll explain how the space industry works shortly, but because we had the specific part of the market to ourselves for a long time. And we built the value prop off of face to face and off of really understanding the leaders in the industry. We've never needed to do the cold email and because we've been bootstrapped, we never needed to scale. We've never had investors who have said, right, right, you have to get to this milestone.

Tom Kelly [00:11:49]:
So we've never been desperate. And so because of that, when we've seen some new entrants that have come into the market and they have been emailing hard, we've got a lot of the clients saying, okay look, we had a look at these guys, they were just going to come back to you guys because you just don't spam us. You know, we don't do any, any outreach at scale. Now is that a smart thing? I think so. However, for us it's just created more of a tangible relationship with the clients. They can rely on us. We're not going to spam them, we're actually very busy so we're not going to be all over them as well. And I think it's kind of swung back into our favor.

Tom Kelly [00:12:22]:
And when you combine record breaking investment into the space industry with that kind of feel of our brand, I think that's why we're so busy.

Benjamin Mena [00:12:29]:
I want to take a few steps back and for the listeners like real quick, who the hell is Tom? So a quick 30 second introduction.

Tom Kelly [00:12:37]:
Yeah. So obviously born and raised in the UK, I've been obsessed with careers since I was a kid. Not necessarily space, but careers. And the idea of the right person getting the right job and changing their lives has always been very close to me. I've seen it happen with my own family and so I studied music. I was in a band, I used to have my lips, long hair, thought I'd like. I legitimately thought I was going to make it in this band. It didn't happen.

Tom Kelly [00:13:04]:
So then I went to university and then as as many do, I kind of fell into recruitment. I saw an advert and it said unlimited commission. Do you feel like you'd never reach your potential? And I was like, hell yeah, you know, it sounds like me. So, so when. And I got a job in S3 large footsie registered international recruitment business. It was perfect for me. You know, so much structure, very intense management. In at 7:30, don't leave until 8, work Saturdays doubled down so built build a lot for those guys into the millions.

Tom Kelly [00:13:35]:
And then it got to a point where I stumbled across the space industry and I was tasked with Managing a team who were doing aerospace. They weren't particularly inspired by it. Stumbling across the space industry. I wow. Met with Innovate uk, met with the European Space Agency, looked at the investment and then as you're doing recruitment, start speaking to candidates. And I saw as highly paid, nice people, all of which were working on project basis. And I was like, this is looking good. So I presented it to them and they didn't buy it.

Tom Kelly [00:14:03]:
And so that was the beginning of the end for me.

Benjamin Mena [00:14:07]:
Okay, so yeah, you took this idea to your company and you're like, hey guys, look, this is a freaking awesome opportunity. And, and real quick, pause right there. You, what is your company now? What's the name of your company for those listening?

Tom Kelly [00:14:20]:
E V O N A. So Evona. Evona. Okay.

Benjamin Mena [00:14:24]:
And you guys are based in the UK and also the us that's right back to what we were talking about. So you're literally like, hey, company, here's an awesome opportunity. You pitched it. You're like, I will. Did you even say that you were going to go build it?

Tom Kelly [00:14:37]:
Yeah, yeah.

Benjamin Mena [00:14:38]:
And what did they tell you when you brought that up to them?

Tom Kelly [00:14:41]:
I think the comment was something like, it's amazing what enthusiasm can do because at that point I built a contract book up to about 20k a week. But that was off of two rookies because I was doing the aerospace thing and I was trying the space thing. And so they just didn't get it. And people in the office used to make comments. Lots of people are my friends. They would attest to this. I remember saying to them, I was like, look, I was like, I'm going to go set up my own space, you know, and I did. And so that was absolutely the catalyst.

Tom Kelly [00:15:14]:
And then I looked around and I found the other three founders and we bonded.

Benjamin Mena [00:15:19]:
All right, let's talk about that in a second. I want to hear about this founder story. But I'm so stuck in the fact that they're like, hey, here's a brand new opportunity. Here's everything laid out, here's somebody that's excited. Fuck off, go start your own company. I mean, they didn't say that, but like, has any of those people that had those conversations with you earlier back then hit you up and said like, man, I was wrong or you're doing amazing?

Tom Kelly [00:15:41]:
No. However, we still have a lot of respect for a lot of the senior guys at S3, and so we did stay in touch with them and a few of them, they did some advisory work for us, you know, no hard feelings. Or, you know, anything like that at all. I think they were astonished and I think when it actually came down to it, they were like, yeah, we missed a trick there. And it's fascinating because this is the value prop of the space industry. This is what we saw. People don't get it. People think you have to be a genius to work in it.

Tom Kelly [00:16:09]:
People think that it's a mystical, tiny sector and trust me, it's not. And I can run for the numbers, but it's fast. And they fell into that trap. They were like, okay, Tom, you seem very enthusiastic. Okay, these numbers look interesting, but let's go and do the public sector instead. Let's go and place some load of people into the nhs.

Benjamin Mena [00:16:31]:
Maybe I just live in a bubble, but if you find somebody that's excited, willing to work hard, has already proved themselves and sees an opportunity, lay the red carpet out. So if you have a recruiter and you're listening, that's doing exactly what he's doing. If you don't do something, you're going to lose them anyways. How did you meet your founders? Let's talk about that.

Tom Kelly [00:16:50]:
Yeah. So we actually all worked in the same office, so we were a large part of the management team. So as you can imagine, our manager wasn't thrilled when we let him know that we were leaving. But I'd always been friends with Jack. Rich and Ryan had always been friends and worked together. And I obviously knew those guys very, very well. They worked on, like, slightly well, they worked on other teams, but we kind of got together and I think Jack was on a meeting with Rich and they spoke to each other and said, look, we're thinking about maybe setting up. You know, it's very, you know, you have to be very careful back then because inside These companies, like S3, I don't want to use the word culture, they have a very intoxicating culture, let's put it that way.

Tom Kelly [00:17:31]:
And so you feel very kind of concerned to talk about going to start your own company. Anyway, so those two are on a meeting. They said, right, we should connect. And the four of us got together. I think this was in October of 2017. We went for dinner and, you know, when it just flows like, you know, nobody's talking over each other, everyone's got respect for each other. We all shared our views on what was broken in, recruitment and what needed fixing, and we all had the exact same view on that. And then we went back to my place and we got the magic chart out.

Tom Kelly [00:18:02]:
It's obviously back in the day you know, still got the pictures of this. In fact, I'm starting to get the newspapers now, actually. You know, I mean, you start. And we just started just to. Just to scope out and just build what, what. What we wanted to do one day. And it was like a fantasy, really. And it's amazing that we've surpassed every goal that we set, and we've also stuck to exactly what we said that we would do.

Tom Kelly [00:18:20]:
So that we met and then we decided to break away. We all went on a vacation together. The minute that we broke away, our first placement was actually a chef in a restaurant in Bristol. It was the best feeling we ever had. You know, we logged into job site, we found a chef, placed them in there, but we charged him like £2,000 or something like that. And it was, you know, it's an amazing feeling inside of your own company. But it just goes to show, you know, you have, you can have these plans, you know, like, we've done about 40 million now in fees, in dollars, and like, and when you. When you imagine where we've got to now, and I think back to then, like, if anyone's listening to this and they've got that fantasy of the company that they want to go set up, you just got to believe in yourself and just do it.

Tom Kelly [00:18:59]:
And I don't want to sound super corny, but it is true. Yeah. Working with the right founders and having the right people next to you is imperative is the most important thing.

Benjamin Mena [00:19:09]:
So I've seen. And, like, one of the things about, like, relationships is, like, if it's great, it's great. If it's bad, it's a marriage that's probably harder to get out of than a divorce with your actual spouse. You just said it just completely flowed with you guys and it just, like, clicked.

Tom Kelly [00:19:25]:
Yeah, it really did. And I think it comes down to mutual respect, and I think it comes down to everyone being able to offer something slightly different. You know, we weren't like, for, like, recruiters. I was a manager of a contract team. Ryan was a manager of a different team on contract. But. But we, you know, we're in completely different markets. Our management style was completely different, and we respected each other for that.

Tom Kelly [00:19:47]:
Rich was the top biller in the office on engineering, and Jack was a client relationship manager. So, you know, when we pulled all of that together, we just had respect. And I think that's really, really, really the key. And we've always tried to stay super humble. You know, no ego was written on our wall. It was written everywhere. It's what we lived and died by. And so in doing that, it never really gets out of hand.

Tom Kelly [00:20:10]:
Of course, we've had some disagreements, you know, of course we have. Mainly about people, actually. But as long as you've got that respect for each other and you understand that you're doing it for the right reasons, it's fine. None of us are greedy. None of us are just driven by money. I think a lot of these traits are very important when it comes to business partners. All of us have families. You know, all of us care a lot about our families.

Tom Kelly [00:20:31]:
You know, we value friendship. We value trying to do the right things, obviously, a business. So it's very difficult for that to happen all the time. However. Yeah, I think it is a bit like a marriage. Like you say, don't jump in too fast. You know, we planned this for, like, nine months before we did it, so, you know, we were absolutely certain that this was the right team.

Benjamin Mena [00:20:51]:
We're going to talk in a second about you guys building, but I want to take you back to this one moment. You guys said that you put everything on a whiteboard. The vision, the fantasy. On a whiteboard.

Tom Kelly [00:21:01]:
Yeah.

Benjamin Mena [00:21:02]:
What did that whiteboard say? Knowing that you guys have now crossed over $40 million in fees?

Tom Kelly [00:21:09]:
No KPIs. It said no fixed working hours, no fixed working location. Brand first make sure that we invest in the brand. I think it's something that a lot of people miss and making sure that we give back. So stem outreach, just making sure that it's a place where, when people work there, there's more of a purpose than just making money and making sure that that's what drives people. That was what was on the whiteboard. And as well, you know, I was in the space industry. The other guys were not.

Tom Kelly [00:21:40]:
And so initially, you know, it wasn't immediately space. Space came in about. About two or three months after we started the business. But I wanted the guys to see it for themselves, you know, feel it, you know. So I took them over to Oxford, where there's a cluster. I got them to meet the space companies, and they were like, right, now we fully see it. And that's when we went all in. But on the whiteboard.

Tom Kelly [00:22:00]:
Yeah, it was those key things.

Benjamin Mena [00:22:02]:
Talk about casting a vision. That became a reality.

Tom Kelly [00:22:05]:
Absolutely. Yeah. Yeah. It's crazy.

Benjamin Mena [00:22:08]:
You guys got rocking and rolling, got set up before COVID and before everything started going crazy with the investments. What did your team look like pre Covid?

Tom Kelly [00:22:17]:
Okay. Yeah. So higher. Number one was a guy called Charlie Hopkins. Not with us anymore. But a lot of love for the guy. He took a huge chance on us. Experienced space recruiter came in, did a fantastic role for us.

Tom Kelly [00:22:33]:
He was absolutely awesome. He now works internal, I believe, and evtol business. Second hire was ahead of marketing. So this I cannot tell you. Everybody told me, you're crazy, don't do it. And I was like. I was like, no. I was like, you guys don't understand, like, step number one, the most important thing that you can do when you start your recruitment company is you have to go and talk to the decision makers inside of the vertical which you're going to operate.

Tom Kelly [00:23:00]:
And you have to understand their pain points. You have to truly, genuinely get it and feel it. And so when we did that and we understood what the pain points were, it wasn't what we thought. Recruitment for them was not working. Recruitment was too transactional. Their business is very emotional and. And they had a severe lack of candidates because nobody understood the space industry. So there's your value prop.

Tom Kelly [00:23:21]:
We needed to get people at scale to understand the space industry. And in order to do that, we needed an experienced marketing person. And so I've always seen it as marketing and sales and the same thing. Back then, it wasn't really seen that way, but I was like, wait a minute. If we get the brand right and if we get it so that we have a pull towards our company, the it means that we don't need to spam anymore. Because back in the day, all we did was eshot. You know, you hit like 10,000 people. I think once I actually sent out an ESHOT to 5,000 people saying, I've got an engineer around the corner that's interested in your company.

Tom Kelly [00:23:54]:
Just that. Do you know what I mean? And so I wanted to go and create the antithesis of that, you know, I just wanted to just do the opposite. Anyway, so head of marketing was high number two. Then we bought in Chloe, who's still with us now. Then we brought in Jake, who's also still with us now. And then we started to hire some more recruiters. And this was kind of the pre Covid team, I think. Pre Covid, we were up to about 20 people.

Tom Kelly [00:24:20]:
I think it was maybe, maybe 16, 17. But yeah, we scaled it that way. So marketing first. Trust me, everyone's face was like, what are you guys doing? You're crazy. Why not hiring billers? And you're like, well, because we're the billers. But we need somebody to represent the brand. Like, one foot in front. Like, you only get one Shot in an industry as niche as this, Especially once you get to know the US market.

Tom Kelly [00:24:43]:
Like the US market, they're going to give you their trust. Very different to the UK market. Complete opposite. But if you mess up, you're dead. And so you have to get the brand right to get the messaging right. The communication here in the US is so much better. And so, yeah, that was the first thing that we did, which was a bit on the controversial side.

Benjamin Mena [00:25:02]:
I love that you guys invested in a marketing person because I can't tell you how many companies I've spoken with over the years that they think about marketing after the 40th hire.

Tom Kelly [00:25:12]:
Crazy. Crazy. Yeah, absolutely crazy.

Benjamin Mena [00:25:16]:
So did you know that space was going to blow up during COVID That you're shaking your head yes. You knew that was going to happen?

Tom Kelly [00:25:23]:
Yeah, yeah. Because when I was at S3 and I went to go speak to Innovate UK specifically, there's a guy there called Tim, just really thankful because he gave me a lot of his time. He ran me through the industry and he said, right, he goes, VC investment has continued to rise. If you're a billionaire now on a golf course, you aren't in the in crowd unless you've invested into a space company. I was like, okay, that sounds interesting. Then he ran me through the fact that it had been recession proof, so it never dipped. And so you, you know, if you think about it logically, when something's in space, it doesn't actually matter what's happening here on Earth. The satellites don't get Covid.

Tom Kelly [00:26:05]:
And in actual fact, the ability to utilize the technology for mapping, et cetera, that's only going to increase. So it is recession proof by nature. And so when Covid came, we were like, great, perfect. Because now, you know, there's more harbor up there, people are at home, people are going to be working more. So actually it just spiraled at that point. I mean, we traveled in size in Covid. It went nuts for us. Our revenues also trebled.

Tom Kelly [00:26:31]:
But I think a lot of that was, you know, if you go back to the whiteboard, at the start we said, no, no fixed working place, no fixed working time. So for us, we just flipped the switch. I'm like, right, everyone worked from home. And whilst everyone else was flapping around and concerned and like trying to set up all this governance, I just jumped into pain at the time because that was, you know, you know, you know, you know, that was the tool. And I just built out like, right, this is what it looks like. You to work In Covid. And that's what we did and it, and it went nuts for us. So yeah, the industry, give or take, has been fairly recession proof so far.

Tom Kelly [00:27:04]:
And that's why I knew it was going to continue.

Benjamin Mena [00:27:07]:
So during COVID you guys tripled your revenue but also tripled your headcount.

Tom Kelly [00:27:11]:
Yeah.

Benjamin Mena [00:27:11]:
And before we go into that, for those listening, like you saw this before it started happening, you started seeing the writing on the wall. For somebody listening, it was just like, how do I go find something like this years before it becomes a thing? Like, what advice would you give them?

Tom Kelly [00:27:27]:
Okay, first of all, you need to look at the investment trends. That's number one. Make sure that you understand that. And number two, is the technology something that is going to advance us as a nation or is the technology something that's in the here and now? Step number three is that you've got to be genuinely passionate about it. In recruitment, if you don't love the market that you're in, I don't think you can truly excel. I think people get so far, but it's not scalable because therefore people are doing it for the fees and not for the love. And therefore you can't really get that at scale. You'll only get so many people that are purely motivated by money.

Tom Kelly [00:28:08]:
And then the next bit is to just watch and see, is it on an upward curve? Are the VCs on it? That's the most important thing. And then the second part of it is, is there a strong underlying investment from the government? And that's the thing that Space has as well. It has Space Force, it has NASA, it has obviously the dod, but it also has the venture investment that's gone nuts. So when you put those two things together, that's when you've got the perfect market.

Benjamin Mena [00:28:40]:
Love that. Switching back over to you guys just absolutely blowing up, going bonkers, bonanza, crazy. Explosive growth. The growth was so good and so crazy that you guys took the entire company to Monaco.

Tom Kelly [00:28:56]:
Oh yeah, yeah, yeah. Thanks for raising that one. This is the drawback, I think of being a first time founder, you know, especially for guys, I guess, you know, we, you know, we'd never paid ourselves anything crazy. We never paid ourselves a dividend. We put every single bit that we made straight back into the business. And so we have this opportunity with this incentive. We thought, well, it's just been record breaking month after month after month. So we said, right, that's it, we're going to take the whole company to Monaco.

Tom Kelly [00:29:26]:
Even new people, even people that had Just joined and we were so stupid. One of the other founders, I won't say which one, but we were buying some chicken nuggets. They were €5 a nugget, and they were burnt. So you're spraying them with sun cream? Yeah, I think we spent like a thousand on chicken nuggets. So it just, just. I think it's something, you know, I have kids, and I would imagine when they're teenagers, it's the same sort of thing. You've just got to get out your system and you've just got to just make those silly, silly, silly mistakes. So in hindsight, we should not have done it.

Tom Kelly [00:30:00]:
The cost of the trip was astronomical, and so now incentives are, you know, are much more under control. And. But it was a good time. It's a great story to tell. There's way too many stories for this. But yeah, yeah, yeah. A crazy, crazy, crazy time. And then we went to Dubai and we did it all again, actually.

Tom Kelly [00:30:16]:
So we didn't quite learn our lesson there. But that wasn't there in the coffin. That was the point where we said, right, that's. That. That is actually enough.

Benjamin Mena [00:30:21]:
Now, these are incredible trips. Like, if you're a recruiter, like, hey, we're going to Monaco. Like, my salad in Monaco, I think cost me $42, but that's another point. But you're going to like Monaco. You're like, this is the life inside. When you guys were making this decision, what were you guys actually celebrating? Was it hitting the numbers or is it, like, trying to show the world what you guys made?

Tom Kelly [00:30:44]:
It's a really good question. I think deep down, you know, we all love people. That's why we do this job. And for us, it was an opportunity to take people on a trip that they'd never been on before and they probably would never go on again. And I think for us, we got an enormous amount of, like, pride, endorphins from taking all these people there. And everyone's loving it. And I was like, it's the best company ever. You know, we're not doing any bd.

Tom Kelly [00:31:10]:
And, you know, we've got all these jobs that are coming in, and it's great. We've got all this flexibility, and we can't believe how good it is. And, you know, for us, it was always just trying to take that to the next level. Monaco was the point where, on top of everything that I've just said, it was like, right, you're also going to come on this trip. And I think it was more to. To give the people that experience, I don't think it was to show off or anything like that, or to try to show off to the clients. In fact, we didn't really want the clients to know, of course, because, you know, what does that say? However? Yeah, I think it was more just a genuine love for the people. For me and the guys, that was really, if I, you know, if I truly think about it and truly listen to myself, that was the driving factor.

Tom Kelly [00:31:54]:
You know, we also took our partners there as well, you know, and I think for us it was a chance to say, look, we've actually made something of this. You know, we've actually arrived. And, you know, I think it was after our biggest ever month. I think we did like a million in revenue in one month. And so there were a lot of things that were happening at once. But this is just before the wheels came off. So, you know, perhaps it was a sign.

Benjamin Mena [00:32:15]:
I love that you guys with all that, and we'll talk about the wheels coming off in a second, but I love that you guys also focus on bringing your partners. Because I remember I worked at a very large recruiting company that had a cult like world too. And the partners, nobody wanted their partners to come.

Tom Kelly [00:32:31]:
No, I'm not a fan of that. I think the days of just going and, you know, you go away for a weekend and all you do is drink. I don't really drink that much, you know, I'm not a huge fan of it. I think those days were over. I think it's more about fitness now, health and focus. And so, you know, we've never wanted to be that company. I remember the first company dinner that we ever did actually in Bristol. This was when we were about maybe six, seven people.

Tom Kelly [00:32:57]:
We invited the partners and I think for me and the guys, we recognize very early that to come work in a company like ours is a huge commitment. It's very intense, it's very fast paced. It's so demanding. And so if we're going to get people into that because they have to mirror our clients, that you have to be top tier. If you aren't one of the best, then you can't work inside of our business. When you do that with the level of commitment, it's really important that the partners are bought in as well. Otherwise there's a ticking time bomb. And so because we only hire experienced people as well, we've got to show like this is a good place to be.

Tom Kelly [00:33:31]:
Like we're trustworthy guys. These people got families and they're going to come work for us and we're bootstrapped. And so right from the start, it was just important that that was a part of the culture. You know, admittedly after that, sometimes we lost that a little bit. You know, this is what I said. I think running a business for eight years, there are moments where you lose yourself a little bit and you need to bring it back. But yeah, that's always been the focus right from the start.

Benjamin Mena [00:33:53]:
I just had to, for the listeners, I just had to point that out because I believe that is so important, because the home team is super important with all that team. But let's talk about that. Like walk me through the peak 80 people, 2020ish. What did the business actually look like at that point? And what was the moment that you

Tom Kelly [00:34:09]:
were just like, well, shit, it looked like a hot mess. That's what it looked like. Okay, so let's run through it. So we had five account managers. Their job was just to make sure that the accounts ticked over. I think at the time we were doing about a million a year with ISI, about a million a year with YorkSpace. We did about 500k with astronomy. You know, lots of those companies now, for those that are informed, have since gone through an ipo.

Tom Kelly [00:34:37]:
But anyway, so we had the account managers that looked after them. Then we had a team of people that were just filling jobs. We had about 30 people. So we didn't want them to do BD, we just wanted them to fill jobs. Higher experienced people and just getting to fill jobs. That was always the focus from the start because we have a client approach. So we go into a client and we want to fill all of their jobs. We don't have the specialisms that lots of companies do.

Tom Kelly [00:34:59]:
So we have that. Then we have the contract team. I think that was five people. We had two RPOs, so one inside of ISI, one inside randomly of a local company called Haboo, who actually doing a fulfillment center to be. To be a competitor to Amazon. But they went with us because of the space, you know, we were filling. We were in place in astronauts. So to fill those jobs for us is super straightforward.

Tom Kelly [00:35:21]:
So it was interesting because they looked at a space recruitment company and were like, we need you guys, even though they weren't even in space. Anyway, so we had a couple of RPO teams. Then we had a finance manager, a finance coordinator, a legal person, a HR person, head of operations, an ea. What else? We had some contracts managers. So it's because at that point we said, right, we're going to go to 300 people. And so we decided that we would invest heavily into the infrastructure ahead of time. In fact, we even paid LinkedIn a fortune because we decided that we would double down because we wanted to go up to 300 people. And so once we surpassed 100 people, we'd be making a huge saving.

Tom Kelly [00:36:03]:
So again, major mistake, you know, so this is what I mean. When you go, when you go, right, let's get to 300 people. I think that's the mistake that a lot of other recruitment founders are going to make. They're probably making that mistake right now. They leading with heads, especially when a client, because you get to a certain size, every founder out there, when the company gets to 20 or 30 people, is going to experience this. The client's going to want some of your recruiters full time. Just go, brilliant rpo. Okay, well, that's recurring.

Tom Kelly [00:36:31]:
So let's charge them. I don't know, 15,000, 20,000, whatever you want to charge the client. It's fantastic margins. But the problem is, is that they finish and they will finish. And so we had a team of like 11 people out on an RPO, which then ended. Then, obviously, when those people come out of the rpo, the hands are out saying, you know, okay, well, what jobs am I going to fill? And so I think there was all these things that kind of came together at once that we could see. We were like, shit, like, the wheels are about to come off this thing unless we do something about it. So there's so many lessons in there, you know, for the founders.

Benjamin Mena [00:37:03]:
I mean, and when you guys woke up, like, you guys went from 80 to 30, like, that isn't a rounding error. That is like a deliberate, like, holy crap. Like, walk me, walk me through how you guys unfortunately made those decisions.

Tom Kelly [00:37:18]:
Yeah, I will say it was horrible. I'll give an example of just how bad it was. So we decided that I was moving to the U.S. the business was fine, but myself and the guys have always been cautious whenever it comes to spending but ensuring that the team are paid. So that's what comes first. But never, ever, ever had happened. So myself and the guys didn't pay ourselves for six months because we just wanted to make sure that we had enough cash in the business in that period of time. I moved over to the US So I moved over here without being paid.

Tom Kelly [00:37:46]:
And this isn't the sob story, but it's just to give you a flavor. I hadn't been paid for six months. I moved over here super stressed. And then it came around to having to let a lot of people go. And if you work in recruitment and you become a founder, you obviously love people, otherwise you wouldn't do this job. That means that everyone can put, you know, a face on and going, oh, I don't care. You know, it's running a business. It eats you up big time to have to let people go, especially good people.

Tom Kelly [00:38:14]:
And we had some really good people that unfortunately we did have to cut ties with. You know, there's a few names that even now, you know, I'd love to have them back. But ultimately it was like, right, what's the first thing to go? Okay, well, we looked at contract. Contract was running about 20k a week, so bringing about 80k a month. But there wasn't really a strategy there. It wasn't really moving forwards. So that was unfortunately the first team to go. Because obviously, you know, you're looking at a business and you want to think about, okay, what's the most efficient way for us to keep the revenue and to cut out the cost.

Tom Kelly [00:38:44]:
And, you know, we were paying big salaries for some of the contract guys. A few of them are very, very, very good. When I talk about people that I would love to have back, you know, absolutely is a few of those. So first thing to go was contracts. Then we looked at the rest of the perm team and we said, okay, who here is going to make it and who isn't? And so we decided to unfortunately let a lot of those people go. Then it came to operations. If we whittle it all the way down to today, it's just me, head of operations, Tash, who's incredible. She started out as an ea.

Tom Kelly [00:39:16]:
Now she runs all of operations, one in marketing and one who runs contracts. And before that we had a team of about 12 people. So next it was the finance manager, because we just wanted one in finance. And so it was very iterative, slow process of just ensuring that nothing broke, but also just slowly removing, you know, I removed all the advisors who has done a great job for us. But if each one is going to cost you 2 to 3,000amonth, again, it's just a huge amount. So we just, we just slowly, just cut everything back until we got down to a proper core crew.

Benjamin Mena [00:39:53]:
With all those cuts, what did it do to the company?

Tom Kelly [00:39:56]:
Culturally, a lot of panic, for sure. People are very worried about their jobs, for sure. And no matter how well you explain it, ultimately if you're having to let people go, people are very concerned. You know, then there's that thing of look, you know, the company was just charging forward, you know, just relentless, just unbelievable. Then suddenly there's this bad news that these people are going, okay, well if they're going, does that mean that I'm going to be going? And you can have as many reassuring conversations as you can. But then I think what happened as well to a lot of people in the recruitment industry after 2021, which was like a great year for everybody, then suddenly everyone was like, shit, now we need people to do BD because ultimately we're stuck. So then you've got the retraining issue and the refocus issue of going well actually everyone here has got to pull their weight. And so this is when you work out who's in and who isn't in.

Tom Kelly [00:40:50]:
And you know, that's when I think stars are born, is when the back's against the wall. And when it gets very, very difficult, we have some people that just went, no, I'm, I'm not having that. No, I'm going to double down and I'm going to help and I'm here to do whatever it takes. And I think, you know, those, those are the people that are here now. Those are the people that are now flourishing because they went through that very, very difficult time, you know, so, so yeah, I think, I think it creates uncertainty for sure. I think it's very, very difficult to reassure those people.

Benjamin Mena [00:41:19]:
If you guys, and this is just a scenario, if you guys held on to your big team for a longer period of time, would the company have crashed?

Tom Kelly [00:41:33]:
I think it would have been close. Yeah, it would have definitely been close. I think we, we definitely overspent in a lot of areas and I think we learned a lot from that. I think we over tooled, you know, I mentioned about LinkedIn, you know, silly, silly, silly decisions. We also cash wise did start to eat into it, but I think, I think one of the main turning points for me and a big recommendation for anybody else who's going to go set up a recruitment company now or has one and wants to grow it. I'm not professing to have all the answers. You know, we aren't the finished article ourselves. However, there are a few things that we definitely learned.

Tom Kelly [00:42:10]:
One is obviously marketing, which you've covered. The second one is you need to go and get the best fractional or full time CFO that you can find. That is the game changer. It transforms. Like you as an entrepreneurial founder, you need that person who's more intelligent than you. He's been there, he's made the mistakes, preferably worked in a big company into a small company. And I think that was the point for me where I started to see it properly. And so it also helps with a lot of the decisions.

Tom Kelly [00:42:36]:
So had the whole team have stayed, would the company have gone under? It would have been very close. Very close. Like, we could sustain that team now if we wanted to, but this is why we're half the size with the same revenue. Because you work out there, actually don't need all of those people. So you could do it. We just wouldn't be making any money.

Benjamin Mena [00:42:54]:
Was this around the time where you guys, the four founders, decided that one person needs a lead?

Tom Kelly [00:42:59]:
Yeah, yeah, exactly that. Yeah, yeah.

Benjamin Mena [00:43:02]:
I mean, it's one of those things like, this is your baby. This is all for you guys. This is your baby. Like, how did that conversation actually go?

Tom Kelly [00:43:08]:
So we had a meeting with all of our advisors at the time. This is just before we decided to let a lot of them go. We sat down and we looked at it and they were like, look, they were like, there's got to be one person who's leading this. It's confusing for the team. You know, you're about to go through a period of change. You have to have one voice. You can't have four voices that run a business. Because what happens is the team treat us a bit like mum and dad.

Tom Kelly [00:43:31]:
You know, if we don't get the answer from mum, then you go to dad. If you don't get answer dad, then you go to mum. And so that. That was going to be a major problem. Now, I will say again, this goes back to the no ego thing. I cannot praise guys enough for just going, yeah, sure, absolutely. And it must be very difficult for them to be able to be pointed in a direction from another founder who we started the business with together. But to their credit, it's exactly what they do.

Tom Kelly [00:43:55]:
They turn on 100%, they're fully on board, they embed all of the messaging and that is credit to them as individuals. You know, without that, you know, with four founders, like, I can imagine that it gets so nasty, honestly. So I do feel very blessed, you know, that they have that.

Benjamin Mena [00:44:12]:
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Benjamin Mena [00:45:39]:
thanks for listening to this episode of the Elite Recruiter podcast with Benjamin Mena. If you enjoyed, hit subscribe and leave a rating.