Building a $3 million business in two years with Rory Maddocks.

I think I've seen a number of different kinds of recruiters be successful. In the US in particular, it's very candidate-driven, it's very process-driven, it's very offering value consistently. I've found in the US is people that are very diligent, very organized, very consistent, people that can deliver a product consistently. You need 12 good months to have a good year, so it's about someone that can turn up and kind of repeatedly do it.

Welcome back to another episode of the Recruitment Mentors Podcast. I'm your host, Hishem Azzouz, and on this week's episode I was joined by Rory Maddox. He's one of co-founders of a business called Talisman Advisory Partners. They're based in LA, and this is where Rory's been building his recruitment career since 2015, although he started in recruitment in 2012. Over the last 2 years, you've been building a business with your business partner called Talisman Advisory Partners, but you've been in the recruitment industry for over a decade now. By end of year 1, we're at 15 people, $1.2 million net fee income. Year 2, got to 43 people, 3.5 million net fee income. So in this conversation, we break down how they've approached growth in the last 2 years. What's really cool about this story is Rory partnered with someone who had never worked in recruitment before. We went into a lot of detail on the operations and the infrastructure that Rory and his business partner has been building and has invested in from very early on to facilitate scale, and they've approached the go-to-market strategy in a really interesting way, which I'm really excited for all of you to learn from in this conversation. You started it with Andy, who's got a different background. What do you think he maybe made you see or made you do differently at the start that maybe you wouldn't have done if it was with another recruitment person, do you think?

Yeah, I, I, I think a lot, really, particularly around the kind of—

Enjoy this week's episode. Rory, welcome to the podcast.

Thanks for having me, mate.

As I was just saying, uh, lucky really, back from the States. Obviously we got introduced to each other, was anticipating doing it remotely, but back here sorting some visa passport things, and then you're gonna get back to— do you call it home now? LA, is that home?

I think so, mate. Yeah, I've been there 9 years. I don't have any plans to move back, so I guess it's home. Yeah.

So how do you fit Saragossa.

And we got the business there now, right? So that's, that's our HQ.

So how do you now feel? Just curious, like, how do you now feel about the UK when you come back to that?

I love it, you know. I still miss it. Obviously my family and friends are over here, um, so I, I try and come back 2, 3 times a year. I'm from a place called Medway in Kent and I love it there when I go back. So I usually try and come back for at least a couple of weeks, you know, with the, the time difference and the jet lag and all that. So, uh, yeah, it's great.

Love it. So let me just give everyone some immediate context then in terms of like the journey that you're on. I think today what I'm really excited to dig into is your recruitment entrepreneurial journey. So, uh, over the last 2 years you've been building a business with your business partner called Talisman Advisory Partners, but you've been in the recruitment industry for over a decade now before you started Um, uh, TAP, you were, you know, at two different businesses, one for just over 6 years, I think, you know, have a track record of being, you know, top performer, top of all these things. But what we're really interested in talking about today, so in terms of the last two years, so you started this business with Rory, whose background isn't recruitment, which I think is quite important, which we'll go into.

Yeah, I'm Rory, he's Andrew.

Yeah, sorry. Yeah, so your business partner Andrew.

Yeah.

Um, so yeah, you've got the 10+ years of recruitment And he's like M&A consultancy, or not? Was it mergers and acquisitions was like his background?

Yeah, his background started off as a chartered accountant, moved into investment banking, was an M&A advisory guy.

Yeah, cool. So always wanted to grow this business from the very start. You started it in July 2021, um, by end of year 1 we're at 15 people, £1.2 million net fee income. Year 2, which obviously we just, uh, Uh, got to 43 people, around 40 recruiters, around 6 people in the— I put infrastructure, we're going to get more into that— and around $3.5 million net fee income. Most of it has been perm, but last month launched contract. Is that right? And then there's a few other product lines as well that I know that we mentioned. And then your market, um, you might have to help me out here. So how— like, ESG sustainability, or is that wrong?

No, that, that's, that's right. That's one of our teams.

That's one of the teams.

Yeah.

But you've got the whole life cycle.

Yeah, so we do clean energy and sustainability. Clean energy is obviously renewable energy power production, you know, across a few different asset classes— solar, wind, hydro, geothermal. And then sustainability is the other side of the coin. It's using less energy, using less waste, being greener basically. So it's all part of the same world, but yeah, a few different teams.

And then just as we're talking about that, would you mind just talking about the smart thing you've done about— that's your— they're your markets. That's your industry, but then you've set your team up specifically to serve every part of the journey of a, like, a sustainability business. If they were going through X, they'd need this, this, this, this. Would you mind just breaking that down? Because I think then that would be the perfect context.

Yeah, definitely. So we've got 9 teams. So ESG sustainability is one. The other 8 are in renewable energy. And if you think about building like a solar power plant, right, you're going to go through different phases as you go through that lifecycle. So at the start, you're going to need to do the origination development like a property developer, but for power plants. So we've got a team that recruits those folks. Then after that, there's a bunch of contracts. You need lawyers. We have a team that recruits those lawyers. Then you need investing. So we have an investments team. Then you need accountants to balance the books. We have an accounting team, 4 different engineering teams, a construction team, and asset management team. The idea being we can go to a solar client and say, hey, we do everything you do, soup to nuts, but we do it with very specialized teams the whole way through your value chain, which is great for them. They get one company that they can partner with. One message to the market, all that kind of stuff. But it's great for us because we've got 8 different teams that can penetrate the same client, and then we proliferate around the rest of our teams.

Yeah, client spend, absolutely love that. So let's start with the, the million-dollar question then. Sure, you thought more and more about this if you've been hiring for your business. So common characteristics and traits that you believe make up highly successful recruiters in today's market?

Yeah, I mean, I, I think I've seen a number of different kinds of recruiters be successful in the US in particular. It's very candidate-driven, it's very process-driven, it's very offering value consistently. So I, I found in the US is people that are very diligent, very organized, very consistent, people that can deliver a product consistently, less sort of salesy in relation, relational, than maybe the, the UK market. Um, but, but, you know, you've got to be a good communicator, you've got to be concise with how you, how you talk and you deliver messages. You've got to be a kind of problem solver, and you've got to be able to see an opportunity and go, okay, that's worth investing my time in and that isn't. Um, and then you've got to be consistent because anyone can put a good month together, but you know, you need, you need 12 good months to have a good year. So it's about someone that can turn up and kind of repeatedly do it.

Interesting. Um, where I wanted to, to start this then, obviously, look, 2, 2 years, I'm sure it feels like a lot longer than that. Yeah, but let's just cast us back to the start then. Really curious to understand, like, what was the go-to-market strategy? Like, you've worked, you know, you worked at two recruitment businesses before, one for, you know, a really substantial amount of time. So what was like yours and your business partner's initial go-to-market strategy? How was you going to be different? How was you, you know, going to stand out, um, you know, from the other recruitment companies? I know the US is not as competitive to the UK, but still why would you not want to be different? What was going to be your value proposition? Talk to us a bit about what that go-to-market strategy initially looked like at the start.

Yeah, I, I think the, the initial go-to-market strategy was let, let's form two teams that make the most sense versus our network and our connections and our experience within renewable energy, and then we'll build out those other teams like the building blocks around it, right? So the idea being that we're very client-centric, so let's penetrate some clients here and then let's land and expand and service all of their roles with different teams. So we started an engineering-focused team in power generation and a project finance-based team. Andy's experience lent very well to him kind of sitting and having a peer-to-peer discussion with project finance and M&A folks. I was, when I was a biller back in the day, it was engineering, so I dusted off the old cobwebs and went for that basically. Our go-to-market strategy was always going to be that we're a functionally aligned clean energy recruitment business, that we have all of these teams as I just mentioned. So we knew that on day one, that's where we wanted to get to. And then on top of that, we wanted to offer a holistic service. So talent consultancy, contingent search, either retain— sorry, retained or contingent search, contract, and then HR as a service, which is a new product line that we've, that we've incorporated. And, and kind of be able to go in soup to nuts and say, we don't just take on all your roles, but we can help right across the board with a lot of this talent advisory stuff, kind of pitch at that level. We, we saw a kind of gap in the market for kind of a higher-level advisory type service that you might get from a Korn Ferry or something like that, and actually being able to deliver good candidates, which is what contingent search firms do, like Spencer Ogden, Piper Maddox, and that kind of stuff. They're obviously our competitors in the space, and we thought we could occupy that kind of middle ground, which is like the engine room of a contingent search that is always speaking to candidates and always providing great candidates, but like the service levels and the kind of thoughtfulness of, of those kind of you know, higher-end search firms.

So, so you're— what are your different product lines again, did you say? Because I think this is also really interesting for people. So you're different— did you have these products from the start then, or like they were the ones that you thought about? They came over time?

Yeah, they came over time. So initially it was like— in the US you call it search and staffing, which is permanent contract, right? So initially it was, it was search contingent and retained, and we tried to push for as much retained as possible at the start because we didn't have the bandwidth to, to be effective on contingent search. Um, so we started that and then we moved into like staffing or contract. Um, and then a couple of months ago we started HR as a service, which is— that's the kind of, I suppose, the more interesting, exciting one because not many people do that. Yeah, you know, it's quite difficult to do, which was the why we did it. We wanted a point of difference that was, uh, you know, not just a me-too business that you actually had to, yeah, you know, build an infrastructure for.

And what At the start then, what was more difficult than maybe you anticipated? Because like, you always had a track record of being successful as a biller. That's different to being a recruitment owner. So what, what did you— what challenge did you run into personally that maybe you least expected, do you think, at the start?

I think at the start in particular, we found it harder to hire than we thought. So, you know, we started the business like during the kind of back to work from COVID which was great from a like billing perspective. We were a bit too early in our ramp to really take advantage of it. Yeah, but the problem was that every, uh, every recruiter that was any good was billing loads of money. So they were going, well, I don't want to leave and you're two lads in a room with a PowerPoint presentation, so, you know, maybe not.

Yeah.

Um, so we then had to hire a bunch of people that didn't have recruitment experience because we found it really hard to take from the recruitment market at that time. Um, so then we kind of had to develop all our L&D processes and train people up because initially, you know, we were like, oh, we'll, we'll pick off some big hitters and they'll build teams for us. And it didn't really work that way. Yeah, we had to, we had to hire, you know, a couple of grads, but mainly like second jobbers, people that were in like sales for like car rental company or whatever it was. It was, um, so that was the challenge, was talent at the start for sure.

What do you think? It was just the market, or do you think you could have, you know, pitched your business in a better way? Was it— do you think it was very market dependent, do you think?

I think it was a bad time for the market, but I think, you know, looking inward at us, I think we didn't know how to position ourselves effectively. Like, we had a load of different ideas and we had like a 30-page PowerPoint and we were just going like, what do you think of all this? And they were going, uh, what? Um, and I think we just looked like we were a bit too ambitious. And, you know, we were talking, you know, we had this graph up that kind of went to like $150 million or whatever it was. I can't remember what it was. And they were probably looking at us like, come on, mate. Yeah, you know. So I think in, in, in hindsight, maybe we could have made it a bit more tangible. We could have streamlined our proposition to people a bit more. Um, but you know, it's kind of worked out because it meant that we had to build processes and systems and stuff earlier.

You do things.

Yeah.

Okay, interesting. And then with your business partner, then I'm sure there's been different moments like this, but what do you think Particularly at the start, what do you think Andy's helped you do that maybe if you were doing the business with another recruitment person like you, which is very typical, you know, you could have done it with someone that, you know, was maybe one of your first hires in your team, good relationship, both really good billers, they start their own recruitment business, but you started it with Andy who's got a different background. What do you think he, uh, maybe made you see or made you do differently at the start that maybe you wouldn't have done if it was with another recruitment person, do you think?

Yeah, I, I think a lot really, particularly around the kind of, um, the funding, the infrastructure, the operational performance of the business. Um, you know, Andy had always kind of pitched into me that, you know, he, he knew what good looked like for businesses. He knew how to build businesses from, from a back end, and, you know, he needed a front, front office guy. And it didn't necessarily have to be in recruitment, but, you know, obviously recruitment's a good market to be building a business in. Um, so, you know, I was kind of bought into that from the start. I think that, you know, if I was going to do it, it'd be better to do it with someone that had a complementary skill set to me and not, you know, just two big billers, for example, or two team leaders or office leaders or whatever. Um, and yeah, you know, the— I think the state of our business in terms of its infrastructure is, is way beyond where I think most people would imagine a two-year business to be. You know, our processes, our systems, our commissions, our accounting, our you know, marketing, all of this kind of stuff. And I think he's, he's played a pivotal role in all of that, and, and particularly understanding the funding. Um, not necessarily that you have to borrow a lot of money, but when you know how funding works, you can have a lot more confidence in growing, um, and you can have a lot more confidence in spending. And one guy, one thing M&A guys do is, is they believe in spending money, right? Which is actually really, I think, good mindset to have when you launch a business, is don't sit on your money. Don't spend your money on a car or a watch. Like, you know, you need to be reinvesting that money because it will make money for you, you know, the following year and the year after that. So we got, you know, really aggressive around spending money on growth from the start, and I think having him gave me that kind of confidence to do that.

Okay, so let— okay, so let's break this down a bit then. Let's just— let's just zoom in on like year one basically, because I think that'll be helpful with people, and then we can talk about what else you've got in place in year 2. So year 1, I think you shared with me, there's about 15 of you. When was— let's just talk about the— yeah, like what you're just talking about there in terms of what Andy has added, because I think this will be really helpful for people. I shared with you, I think when we prepared for this, you know, a huge percentage of the UK recruitment industry are nowhere near where you are in terms of just like headcount, and a lot of them are, you know, sub-10 people. And The common insight that I've taken from that, from the interviews that I've had and speaking and interviewing people that help and consult people like yourself, is oftentimes because, you know, people that start these businesses are like, uh, typical people like yourself who, you know, being successful recruiters, they're now starting a business and it's just more about how am I going to get to a million? Well, I'll get 10 recruiters to do 100 grand each, rather than thinking about the infrastructure and how we can, you know, implement processes and these things to help us get there more quickly. So I think the infrastructure and the processes part and all of that is like really helpful for people because I think that's often where sometimes people, you know, don't know where to start, don't know what good looks like. So in that first year, when did you guys make like the first— like what was the first like non-sales hire? Was any of that 15 non-salespeople? Were they all salespeople?

Yeah, I mean, the, the, the first thing we did was me and Andy stopped billing very quickly.

Really?

Yeah. So, um, 3 or 4 months.

Really?

Yeah. So we did it. We did like a couple of quickfire deals, mainly with people that I knew, and was like, give us a couple of retainers kind of thing.

Um, sort of that.

Yeah, sort of. So come on, we're starving here. Um, and then we quickly were like, look, this is taking all our time up, right? We need to be growing the business, you know. And if that means we take a haircut on what we, we're taking out of the business and we, you know, we live on ramen for a couple years, then fine. But we've got to spend our time growing the business. So initially it was me and Andy moving away from billing, and then we hired like a utility player marketing/ops person.

Um, at what stage? Uh, in 6 months, 8 months?

Yeah, a little bit before that, 4 or 5 months. Okay, 4 or 5 months.

Utility player being— I haven't really heard that. What does that mean?

Just like, you know, do a bit of everything. So operations? Yeah, her, her major focus was marketing.

Okay.

Um, that was her background, but we had her doing some operations and a bit of TA Um, so why did you think marketing was the right first hire on that then? Because, you know, because we were trying to hire so aggressively and because we didn't have much of a business, you know, we wanted, we wanted a nice website, we wanted nice print materials, we wanted, you know, um, our LinkedIn to look really engaging, and we wanted to give the impression of a big viable company, right? And, and having that kind of like marketing presence that looked really slick and professional I think was a big sales pitch for us in those meetings.

Okay, that makes sense. 3, 4 months taking a step away, what, like, firstly, what, what was you doing with your time then?

Um, so I was really, really focusing on internal talent acquisition.

Really?

Yeah, like, I basically became an internal TA. I felt like, yeah, I was managing the few people we had, obviously, and then, um, I was just really, really focused around hiring people for the business. You know, like, the way, the way that we're driving in the first few years is like a real heavy focus on headcount growth and top-line revenue. Right? So to your point about this business owner that wants to get to a million, and he goes, okay, I need everyone doing $100 grand or whatever, um, I would, I would take more just philosophically the view of, okay, let's load up the business, let's get to a million really quickly, and then drive profitability if you're worried about your profit per head, right? So, um, so we just, we, we just went on a big hiring spree, um, spent a lot of time doing TA I was still obviously on like client calls and, and doing some, doing some support there and kind of coaching and developing and building out a learning and development syllabus and, you know, all of that kind of stuff.

Okay. And then what about Andy then? What was he doing?

So he was, he was handling the— I mean, we basically split the business in terms of we've got professional services, or what we call professional services, which is some of our teams that kind of a bit more suit and tie, and then engineering construction the, the engineers and the folks. And I kind of sit over that, he kind of sits over that other half. So we kind of went 50/50 on a lot of that, but he was also, you know, doing a lot of the financing stuff, obviously doing all the commissions and accounting. And, and now we're building out a team that does that, so he gets to get off those tools a little bit. But, um, okay. But yeah, just, just, you know, that, that kind of stuff. It's amazing how when you're growing a business, even a recruitment business, I think a lot of people make the mistake of thinking a recruitment business is just like a recruitment team, right? I'm a team leader, I've got reports, that's a business. There's so much more that goes into it when you're doing it effectively and when you're trying to scale that, you know, you need to be, you need to be spending time doing that.

You said at the start the internal hiring was, you know, difficult. What, what made it easier then? If you're spending a lot of your time doing that, I'm assuming you got better at it. What did you get better at besides the perception is reality we look better, like anything else that you obviously clearly had to get better at on the internal hiring side?

Yeah, I think we really refined our messaging about what we're doing and how we're doing it. Like, I mean, I've pitched in Talisman about 50,000 times. I'm sat there in interviews thinking, Jesus, I'm just on repeat here. Um, you know, so we got really clear about our message to the market, and then we, um, Yeah, I mean, obviously when you're— when you can track back to success and you can say, hey, um, we said we were going to be at 15 and we said we were going to be at 40 and now we're saying we're going to be at 75 and then we're going to be at 125, people start believing you, right? When they see you getting it done. Um, and then, you know, you can, you can prove, you know, you can point to people and say, well, this person's been in this and we've got this many clients that we've won and all that kind of stuff. Um, so I think that, that made a big difference. And then like me personally doing it, you know, like if you think about it and you're a founder of the business, like the most important thing you have is building your team at the start. So the founder for me should be doing that. You should be the first person they're speaking to, particularly recruiters, because they've got egos as well. Like a big biller is not going to want to speak to a TA. He might want to speak to the owner of the company. Um, so I think, I think, yeah, I think that and just trial and error.

Did you hire in ones and twos, or did you try and hire like, you know, 3 people starting at the same time, or how did you approach that?

Yeah, well, we don't hire like big grad batches, right? We're not doing like 10 to 20, but we try and do a minimum 2, but ideally around 4. So we're hiring 4 to 6 a month at the moment, roughly. And, you know, it might be a 2 and a 4, or it might be a 6 and one day if we can, or whatever. Um, yeah, like when you hire in with people, there's economies of scale. In terms of just like, you're not wasting, you know, double the amount of time training them up. You can get them in the classroom together. There's that peer-to-peer learning they have, there's that competition, there's that camaraderie, there's all that kind of stuff, right? So, um, so yeah, I mean, we've just hired actually a, an L&D person as an infrastructure hire. So that, like, we're really excited about that. Yeah, 10 years at, um, one of the best energy recruitment businesses building their L&D platform. So he's going to be an exciting hire for us. Um, But it was, yeah, it was, it was me and Andy doing coaching and stuff.

So I understand that, you know, the business path that you took and the, and the, uh, objective was, yeah, top line growth, headcount growth. But still, you know, you've got to be smart with money, look at the right things. So what, what were like the important dashboards that you and Andy looked at? So when you are, you know, doubling down on hiring, growth Okay, maybe not as focused on profitability per head, but still you've got to be looking at certain metrics and data to be like, yeah, that person probably is on track to like not be on— yeah, not, not isn't where we want them to be. Like, what were the important dashboards that you look like into— looked at in terms of— was it like, okay, if no, if they haven't done their first deal in this period of time, then we need to be really thinking about where's this person going, what are they doing? What were the important dashboards on that? Because you've still got to manage cash flow and be smart with that, right?

Yeah, totally. Well, we, we have, we have like revenue targets for each, each consultant, uh, you know, we have like billing targets and, um, you know, we have— if you're a certain, you know, amount below that target, then there's performance management measures that happen at different milestones. Um, so that typical stuff. And obviously before that, there's a KPI ramp that you look at, right?

What are those key dashboards then? Because I think that'd be interesting for people.

Yeah, I mean, look, I think we, we call them the holy, the holy trinity.

Uh, give it to us.

Yeah, there you go, there you go, dropping some knowledge. No, I mean, they're the standard stuff. It's, it's CV submits, jobs or vacancies, and first-round interviews. Like, as long as those are looking healthy, then everything should be fine.

What does healthy look like?

Healthy for me in the US looks like 8, 4, uh, and 2. So 8 CV subs, 4 first-round interviews, 2 vacancies a week. Okay, um, if they're not working, then there's micro productivity below that that you can get into. And then there's activity, right, which is the start of the funnel. Like, the funnel goes activity, productivity, pipeline, performance. So your activity is your, your emails, your phone calls, you know, that kind of stuff, right? Which we don't look at unless there's a problem with the productivity, to be honest. We're not like a micromanaging business. Then there's a productivity, and it can be as much as, you know, meetings and contacts added to the system and whatever else. There's the really meaningful productivity, which is that. Then there's your, your pipeline. And, you know, we have a pipeline that calculates, okay, we're going to give this much value to first-round interviews, this much to second, this much to offers, and then it will spit out a number for you. I'm sure a lot of people operate like that. And then, and then you kind of have performance. Um, but internally as a business, you've got to understand some things right around your finances. You've got to understand your cash burn every month. You've got to understand, you know, your salaries and your commissions percentage. And okay, well, what run rate are we operating at every month? Is it Okay, a million dollars a month. Well, if it's a million dollars a month, then you want to have at least 3 months in the bank. So you need 3 million in the bank, right? Um, and if not, you've got to sort out some financing options to sort that out. Um, so we're, you know, again, Andy's background, chartered accountant, like before he got into M&A, like he's, he's on top of this in a way that gives us a lot of confidence. I could imagine if it was like 2 recruitment billers, you know, you get a bit nervy when like a few hundred thousand every month starts coming out in salaries and stuff like that.

You know, anything that you think, uh, Andy's done on like the incentive commission side, out of interest, because he might have looked at that a bit differently, because you can very easily be like, oh well, it's always been like this, like we have tiers, 40% after this, whatever. Have you approached that? Has that been a bit different with his background or not?

Yeah, I think, I think there's, there's going to be some interesting stuff in terms of like LTIPs coming out, uh, long-term incentive plans. Um, but which, which we're kind of, which we're kind of working on in the background. I think in terms of, um, salaries and commissions, not really. We haven't really reinvented the wheel with that. Um, you know, it's— yeah, I, I, I think it's about giving people a good— the, the incentivization piece is about giving people a commission structure, right, that is, that is good and against market, particularly as you're growing. You've got to be better than market in terms of overall comp. But also one that rewards the right level of performance, right? You don't just want to be like paying great commissions to people that aren't making you money, obviously, right? So, you know, we're unashamedly a performance culture with a performance-related commission structure. Not like crazy, it's not like if you're not billing a million dollars you're not earning good money with us, but, you know, rewards the people that are, you know, medium to good as opposed to just, you know, um, just straight away. Yeah.

Have you found, uh, hiring American people that they care about salary more than commission, certain benefits? Interesting.

Yeah, um, I think, you know, we've got two offices. We've got an office in LA and we've got an office in Mexico City. Uh, we're opening up in New York in October, and LA and New York aren't cheap, right? So, so salaries do matter, and they matter for a very valid reason. You've got to pay your rent. You can't wait for commissions to pay your rent. Um, so salaries are much higher in LA. Um, so, uh, so yeah, people are worried about salaries, rightly so, because the cost of living is so high in the US at the moment. Um, but then, you know, different people are motivated in different ways. You know, some people are like really, really base-focused, and then some people are overall total comp-focused. So you kind of find your people, right? Like, you find whatever your comp structure works for, that's who you're going to ultimately attract.

This podcast is proudly partnered with Vincere, the all-in-one recruitment agency software that over 20,000 recruiters trust daily. We're also partnered with the award-winning 1UP Sales, the sales and motivation platform that enables you to maximize the potential of your teams. We love partnering with both of these organizations because they share our mission in helping you get the most out of your people, and your business. You can get exclusive offers because you listen to this podcast and get up to 10% off the usage price forever. Use the link in the show notes to get your hands on that. Let's get back to the episode. So would you mind just sharing, because you mentioned it a bit there, but just to wrap up like year one, I guess you were talking a lot around there in terms of like, yeah, you know, burning X amount a month runway you know, me asking you around, okay, you've really doubled down on headcount growth, top-line growth, you still got to manage your cash flow, what the metrics you look at. Talk to us about the, the funding piece then, because I thought this was interesting, as I was saying to you, because, you know, I've done a lot of these conversations now. He was probably the, the first person, um, to say to me that, yeah, we was really intentional about funding, um, and getting funding for the reasons which I'll let you explain. But Talk to us a bit about that. And one, your perception— first one, obviously sharing like, okay, if I'm a recruitment business owner listening right now, what you believe are, you know, some of the avenues and options that recruitment business owners have and that might not be aware of. And then two, why you think, you know, that's a smart thing to do.

Yeah, totally. So, so the conversation that we had was basically that we, um, we established lines of credit.

Yeah.

Even though we haven't really had to use them but we've loaned money to build a credit score basically with these lenders. So there's 3 main avenues you can go down, right? So the first one is it's like a personal loan that involves your business. So let's say you're with Wells Fargo or you've got an Amex account, they're going to loan you an amount of money. It's not going to be a huge amount, but depending on, you know, your credit and all this kind of stuff, they're going to lend you money. The positive thing about that is it's going to be, um, it's going to be a lower interest rate. Maybe that's going to be 8%, something like that. So Amex might lend you 100 grand at 8%, which is good if you borrow that, pay it back, and then they'll give you more credit as long as you're a good payer, right? But it's never going to be massive because it's a personal loan. The other option that you have is going to your business account bank and lending from them, and that will be better rates, but they're going to loan you a bit more than the personal loan, but not that much. Uh, and then the other option is that you go to like a credit facility, one that takes on riskier things, and they're going to loan you money, but it's going to be 20%, right? Um, and then the last option is, is kind of invoice factoring, which is probably the most attractive option, particularly if you're a bigger business with a lot of invoices out and all that kind of stuff. But the key thing about borrowing is like And people that live in the US will know this because it's the same with your personal credit. Like, you can be rich, but if you don't use a credit card, like, you, you can't get cars on lease and stuff, right? So it's a bit of a game that you have to get familiar with. Um, or what I would recommend to people is borrow some money even if you don't need it, because you should need it because you're investing in your business. And even if it's at a 20% return, uh, interest, interest, then, you know, like, if you can't put $1 million in your business and return $1.2 million in 12 months then the platform's not strong enough anyway. So borrowing money in that situation should, should, should, should be something you consider anyway. But importantly, you'll start to build up more. So initially you borrow $80,000, you pay that back, then they go, hey, we'll lend you $150,000, you pay that back, and then you're building up. And then maybe you'll find yourself in a position where you're 5, 6 years in, you've got a really strong platform, and you're like, we just need to put fuel on this. And then you can go to these lenders and they'll lend you a million dollars that you actually need for real growth. So you start building up that relationship with them. Um, and invoice factoring is a really interesting one as well. You know, they're gonna— as long as— as the, the thing with like invoice factoring is you've got to actually be like a pretty decent business already for them to, to engage with you because they're going to get forensic in terms of what does your business look like, do people pay you back, who are your clients.

That's leveraging like how much money you're like payment— you're like how much your history of being paid, how much you're money-making to then be like, we'll lend you this because we know that about your business, right? Is that wrong?

Well, yeah, that's, that's more like when you go to, to a bank or credit stuff. The invoice factoring is like all of that, but then it's like, we will, we will lend you money or we will pay you money for your invoices. So if you've got a million dollars worth of receivables, they'll usually do up to like 90%.

So they'll say, right, so they'll just pay you that because they assume, yeah, you're gonna get paid.

Yeah, they'll take on rather than waiting, they'll take on that for like, you know, 1 to 2%.

Right, got you. Yeah, it's interesting because, um, yeah, that's like— I really like the mindset there of— again, I just feel like this is the— there's just a different mindset that you have on how you're approaching growing this business. Because like you said, it's like you're doing these things now because if you keep going in the right trajectory, there will be that moment where, you know, you and Andy look at each other and go, right, like, we feel really confident that if we can just put more resources in this part and that part that we can go from, you know, $20 million a year to $35 million a year. But because you've had that track record of asking for money, paying it back, you're going to be able to get in those rooms and go, hey, look, we need $5 million so we can get here. And you might have already dealt with them 3, 4 times up until that point.

Yeah, exactly. And I think a lot of people, um, take on investors too early or sell parts of their company too early, like I would really strongly advise against that because like money is, um, money is really expensive when you start, and then if you have any success, it's comparatively quite cheap. So if you're selling part of your company to an amount that might sound like a lot to you at the start, like $250 grand, and they, they want to take, you know, 25%, they've, they valued your business at a million dollars and you're like, you know, 4 people, uh, you might think that's great. But then all of a sudden in your third year you're, you know, probably doing more than that a quarter, right? So you're just like, all right, I'm just giving away 25% of the business. So if you can borrow debt and not equity, borrow money, don't sell off your company, and then you can bring in an equity partner when you've got something really, you know, meaningful, like when you're 100 people and you bring in an equity partner and they take you to 300 people, and you do what, you know, the Fadens and a lot of those other successful businesses have done.

So second year then, what was like the mindset? So obviously you went from 15 to 43, like over-doubled, um, net fee income, invested a lot more in the infrastructure. So why don't we just paint a picture of like the business today then, and then we can work backwards. So when we caught up, it might have changed now. You said you had around 40 recruiters or 40 salespeople and then 6 people in infrastructure. Would you mind just sharing the, the up-to-date makeup then? Of like the infrastructure compared to salespeople?

Yeah, so, so we're, uh, we're at this— we're at about— we're at 6 still on the infrastructure, but we've just hired 2 more people. So in a couple of weeks they'll be joining, that will take us up to 8. And I think we're at about 42 recruiters. I mean, when we caught up, it was only a couple of weeks ago, wasn't it?

Yeah.

Um, but we've got, we've got, you know, we've got some really exciting senior hires in the locker. Like, we're about to hire someone to, to lead New York, and then we've got a couple of other people um, that are a bit more experienced joining as well. Like, every year we can, we can attract like more senior talent to the business, which is exciting. Um, so yeah, it's kind of, it's kind of there, you know. Our really high-level numbers in terms of what our targets were, to give, to give you a bit of context, was 1, 3, uh, 6, 10, 15 in terms of million.

Yeah, yeah.

Uh, and you know, we kind of did more than that, 1 and 2. And I think, you know, we've already started to have a pretty good quarter this quarter, so I think we're tracking to, to beat that third year goal as well.

So what people make up the infrastructure? That'd be interesting. You've just hired an L&D person, which you're really excited about. What else we've got in there?

So we just hired— we, we started this, this HR as a service. Okay, thing, right? So, um, we hired like a kind of senior HR consultant, HR business partner type stuff, not internally for us but for our clients. Um, and then we've got a couple of operational people there. We've, we've hired a, uh, finance manager who's going to take on responsibilities around commissions and, and that kind of stuff. Um, we've got a couple of operational folks as well now. Um, we're looking at hiring a marketing, marketing team. Yeah, we've got a marketing person. Yeah, yeah, marketing person. Noah Fish, shout out.

Uh, he's marketing, finance, L&D, Operations, what does that mean? What are they getting their hands in?

So operations, yeah, operations is, is a mix of stuff. Like, we're, we're about to implement a new CRM. That's, that's a lot of heavy lifting. Um, you know, we've got 2 offices, we're about to launch another office. There's heavy lifting around there. Yeah, yeah, community pieces, that kind of stuff.

Um, okay, HR person. What else we've got in there then?

So we've got HR, finance, marketing, operations, training. Training, L&D. Um, we've got another— we've got a TA.

Oh yeah, I was gonna say, yeah, that makes sense.

Uh, and we're hiring another TA because we've got a TA that sits in Mexico City. We're hiring one in LA.

So you're not in that anymore?

No, I'm not. I even know I still— I still dabble into it. I'm still, I'm still the first person you speak to, but, um, I've been doing less, less in-mouse and connections.

Yeah. So that, so that's the, that team. Interesting. How— curious then, how have you set up the, the recruiters in terms of like, what does, what does the all chart look like? That might be interesting in terms of like, we've got, you know, out of the 4, around 41, 42, you've got 3 team leads. What does that look like, those sort of ratios and leaders to recruiters?

Yeah, so, um, the, the layout will be, you know, recruiters, team leaders, divisional leads. Like, there's nothing too crazy about that. Um, not every one of our teams has an emerged team leader yet, so we don't have 9 team leaders. We have I'd say I think we have 6 or 7 team leaders and then other people that are kind of emerging through that. And then obviously we'll launch other teams. We don't have any divisional leads yet, though we've just hired— the guy in New York will be a divisional lead, so we'll start that. I, I see like, you know, at scale, um, what one point of difference that we're not unique in, but a lot of people do like regional leadership. We're not really about that. I don't think we'll ever have like a head of LA right, and ahead of Mexico and ahead of New York and ahead of Miami or wherever else we are, ahead of Texas. Because, um, I, I did that. I was ahead of LA and then ahead of West Coast when we started hiring remotes as well. And you just end up doing a lot of like operational work, which is important, but like it's not actually what you're good at doing. Like, you're good at like developing talent and breaking clients with, with your consultants and market strategy, and, and you're like, you know, organizing a happy hour, or you're, you know, doing all this kind of stuff. So So we'll have like operational, uh, divisional leads where it's kind of like, you know, this person is the national head of, um, deal professionals and this person is the national head of engineering and has staff across the offices. It'll be more split like that.

So what do you, what do you now do? What's your time filled up with?

I, a lot of one-on-ones, like, like, wait, what? To be honest, way too many one-on-ones.

Like recruiters?

Yeah, like I have probably 25 one-on-ones recurring every week, which is just too many. Not that they're all necessarily direct my reports. Because just at this early stage of the business, I just want to make sure that everybody's getting, um, the right kind of training. And even if it's like there's a team leader in between us, I just want to make sure that, you know, everybody's getting the, the proper DNA and they, they really get it and that they're, that they're on the right tracks and everyone's set up for success. I'm, I'm scaling that back now. You know, look, I'm, I'm a big believer that you only want like 5 or 6 reports. And, and that you need to waterfall down through that. So, um, so that's where we're kind of transitioning to. Um, and then other things is like there's cross-functional things, right? Like, so meeting with the marketing department and what they're doing, or the CRM stuff takes a lot of time. I interview a load of people, as I say. Um, so I'm doing, you know, 10 to 15 hours of interviews maybe a week. Um, and that's, that's, that's the bulk of it, honestly. Doing one-on-ones and interviewing is the bulk of what I do. And then you know, dealing cross-functionally with stuff that comes up that we like.

We're doing a new website build, or we're doing reactive stuff, and get involved often, your perspective.

Yeah.

How, like, how has Rory had to continue? Because I feel like, was you doing a lot of this stuff when you worked for the previous company?

Yeah.

Oh, you was already?

Yeah, I was. I mean, I was, you know, a lot of people now are, you know, starting recruitment companies early and stuff, which is, is, is okay, but you know, I, I kind of went through the corporate ranks, to be honest, like, and, and by the time I'd set up Talisman, I was already, um, managing a really big, um, business unit. I think our people had like 80 headcount, um, already had like, you know, a legal team— not a recruitment team, but like a legal team for our contracts— and our marketing team and our TA team reporting into me and that kind of stuff. So a lot of that stuff I was already doing, particularly what I do A lot of the new stuff, Andy does a lot actually, you know, the new stuff that comes with when you set up your own business as opposed to being a senior person in a, you know, front office senior person.

So talk to us about obviously being really intentional with the HR as a service. Why have you done that?

Just to get really sticky with our clients and to add, you know, to add an elevated level of value to them. As well, because a lot of these companies, um, they, they kind of— they're a bit overwhelmed when they start up. So the HR as a service is really effective for startup businesses, um, and it's taking them on that growth journey. And like, it's, it's basically saying like, okay, we can send you loads of resumes, but you're not going to be able to hire them, you're not going to onboard them properly, you're not going to be able to performance manage them, you're not going to be able to scale enough. If we put in the people strategy for you and give you the actual infrastructure, like put in your, put in your ATS system, you know, put in your insurances and your payroll and all your this kind of stuff, it allows them to scale much quicker, right? But for us, it also allows us to be really sticky with them because they're obviously then going to give us all their search, right? Um, so, so it just kind of works that way. And then from, from a business perspective, it's recurring revenue. Subscription model, which is good for investors, right? When you're sitting across from private equity, they want to hear a narrative, they want to hear a story. You know, just like you asked me, what's your point of difference, right? You know, it's not unique, but it's rarefied. Like, not many people offer those 3 services well. And then you say, well, okay, who offers them well in clean energy? Like, no one probably at the moment in the US. So then all of a sudden you've got a compelling story, right? Um, whilst also having— it's solid business, it's good business. So we're in our infancy with that. We've—

how far into that?

We, we've got like one established client and we've got like 2 or 3 more real viable pitches. We're only, you know, 3 months into doing it.

Yeah, yeah, sure.

Um, what gave—

what was like— what were the markers for you and Andy to be like, yeah, this is something that we— this is— this needs to be another product line?

We, we'd like— we'd always talked about doing it, right? So it was part of day one was, um, let's get, let's get a business big enough so that we can service it. Because you don't just want to like take it all on and then just like, you know, mess it all up for your client, right? So you, you have to build a good enough infrastructure. Let's get enough cash that we can do it, um, and then let's get enough brand positioning that we're going to actually be able to win some stuff, um. And so it was always going to be like a year 3 thing. It got brought forward a couple of months because there was, um, there were some great opportunities around it and we were doing better than we thought. Uh, so, so we kind of brought that forward and, and now we're really investing in it. Now we've got a couple of hires. There's a team of 3 people now just focusing on that. Um, we're going to make—

you're going to deliver. So you sell, you sell that service to a customer and all the people that sort out the payroll, did these things would be on your payroll?

Yeah, all the people that handle it. So like, as in, like, you know, we're not going to replace like paychecks or ADP, or I don't know what the UK equivalents are unfortunately, but like we're still using them. But like imagine all your HR administrative people that work for your business, um, and it— what it does is it means it gives them a cost-effective solution to do that and ramp up really quickly whilst giving them actually a better level of service because they're plugging into a bigger HR department that we have. Um, so yeah, we're just kind of— we're, we're, we're, we're offering that. And, um, it's, you know, so far so good. We're still building it out, to be, to be completely honest. But I think in like, you know, I think it's going to be like a really core part of our business in the next couple of years.

Yeah, it's super interesting. How have you— that's, that's a different sell, right? Have you found—

yeah, yeah, it's a different sell. I mean, it's, it's With a lot of these things, and it's the same thing I tell people about retainers and executive search and value-added services, it's like if you pitch a bigger solution, it's just a more interesting conversation anyway. You just look big, bigger and better to the people you're pitching it to, right? If you're going, okay, so talk to me about where your business is at, where you want to take it, what's your internal infrastructure to do that, what are your pain points around hiring, what are the challenges that you're finding? Okay, cool. How are you finding onboarding with these people? How are you finding the payrolling and the insurances? Like, have you got workers' comp in Maine that you need to go and do a project there? All of these kind of challenges that they do, that's the kind of thing that's going to like, you know, prick up the ears of a CEO of a startup because that's a real challenging point for them. And even if they don't go down that option, you've had a much higher level conversation with them. So then when you start talking about retainer or you start talking about typical search or staffing, you're a more interesting conversation for them to kind of take off from. Um, but yeah, look, there's a certain use case for it, right? Like, you're not going to go up to Shell or Nike and go like, hey, do you want us to take over your HR services? They're like, well, we've got that covered, thanks. Um, but there's a lot of companies, particularly in clean energy, particularly in tech, that, um, they've got a founder who's, who's really good at, you know, the product or the service that they offer, but doesn't— isn't quite business savvy. Doesn't really know, you know, well how to do, to do all of that. And then on top of that, it's actually also like a cost-effective thing to outsource it. There's this movement in the US, and again, I don't know if it's in the UK as well, it probably is. It's called like Businesses Without Walls.

Okay.

And it's kind of like you don't hire lawyers, but you have this kind of like legal company that operate as you in a context. You don't hire accountants, but you've got accountants that have your email as well. And right, it's kind of like you just outsourcing a lot of this stuff and you just really focus on business. So it's, it's kind of riding that crest of that wave as well a little bit, and people are, I think, pretty excited about doing that. And then if you think about how these startups are funded, a lot of them are funded through VC and private equity. So those private equity and VC companies really like the idea of getting some professionals to take care of that, right? So you can also pitch it at that level, pitch to the private equity firm, and they go, we, we've got a couple of startups that, that could be helpful for.

No, honestly, it does make a lot of sense. Um, really interested how you get on with that. I guess as you— as we round this out then, like, what, you know, spoken a lot about the, the obviously the, the last 2 years, what, um, what are you and Andy really doubling down on now going into year 3 then? So you mentioned New York there, but what are the things you're going into year 3 like really remaining laser focused on that you feel like you have to, you know, execute or Yeah, what are you gonna, um, yeah, what are the really top 1, 2, 3 priorities that you have to execute that's gonna enable you to again hit the initial, um, goals that you guys put on in terms of 1, 3, and like 6, I think you said?

Yeah, um, huge focus again for us in headcount growth, 30 to 40 more hires this year net. Um, huge focus on staffing contract for us. Um, I think, I think that's going to be a really exciting build-up for us. This HR as a service thing that we're mentioning. Um, and then, uh, and then really focusing on, on getting, um, that leadership tier for us really firing and good to go on, on kind of growth and, and making sure that we, we've got the structure this year to really take it to the next level. Because a lot of companies, a lot of companies struggle around the 50 mark. Yeah, you know, they struggle to take it to the 150, 200, and I think that's because they don't look inwards enough. They don't invest on infrastructure. And, you know, like, we've got quite a— we've got quite a lot of infrastructure given the size of our business, but that's because we're thinking it's going to help you. And yeah, yeah, we're thinking about getting to 200 people. We're not thinking about how much money can we make this year, you know.

What's your philosophy on keeping people? Because what, what's your attrition been like?

Yeah, our attrition has been really good. Um, it's been probably too good. And what I mean by that is we've, uh, we've, we've, we've, we've we, we haven't been good at, uh, you know, maybe, maybe getting people that are underperforming out of the business soon enough. And that sounds a bit harsh, but look, that's business.

Yeah, that's how it is.

But the great, the great thing about recruitment, mate, is that, um, and sales in general, is that everything's aligned. Like, if you're, if you're firing someone from the business because they're no good, like, that's, that's good for them. What, you know what I mean? Why, why are you in a sales job where you, you're not earning any commission? Go do something else, mate.

Um, so, but, but what's the— because yes, net 40, 50 headcount, but you've got to fucking keep people. That's going to make your life a lot easier. Yeah, you know what I mean? Because you don't want to just be on the treadmill of— which a lot of recruitment companies end up on, or you become too bloated with people that aren't that great. So what's the philosophy on that? Because I'm sure that's also top of mind.

Yeah, look, I mean, our philosophy is we want to be considered like a best-in-class business. Yeah, and that sounds like an obvious thing, but a lot of companies aren't geared up to be that. A lot of companies want to be you know, they want to be Tesco's or they want to be McDonald's. They want to be every, every man, every person kind of thing. Like, we want to be like a premium brand that offers a really high level of service to our candidate and clients. We can't do that if, you know, you've got a bunch of people that aren't very good at their job or a bunch of people that aren't really committed to their job. So like, our philosophy at the start is like, hey, this is a platform for people that want to be successful, that want to be good. Like, we're fast growing, that means there's really exciting opportunities for you, but like, take the bull by the horns. And like, if you don't fancy it, no problem. Um, so our philosophy has been let's invest in people as much as we can, let's give them an L&D ramp, let's put them in some teams where they can be effective, let's give them good market strategy, then let's really encourage them. Let's treat them like grown-ups, like we're not hovering over you, but you're— as a result of us not hovering over you, uh, you know, you're— there's, there's an expectation around your performance, and you know, you're ultimately responsible for that.

And then just to, just to run this out, I just want to make it clear for people because we had our live podcast event the other week and one of the guests was really again talking about the same way where they're just really— the way that they talked about their business was they're really proud and passionate about the platform that they can offer people. Um, and yeah, like really spoke about the training, the upskilling, taking that seriously, and it was like the platform, the platform. So when you, when you say that, you might have already mentioned it and, and spoken about it, but just for people to understand when you say, yeah, me, me and Andy are really committed to building a great platform for people. Like, what are the core elements of that platform? I know you were just probably just outlining there, but just for people to understand what you believe, what you see as those core elements as a platform, as a recruitment business that you can offer to people, what makes up that platform.

Yeah, I think, you know, at Talisman, we're, uh, like, we're, we're passionate about both the renewable energy industry and also the staffing industry. Like, we, we actually genuinely think It's much maligned, doesn't get the credit it deserves. It's a bit better in the US. I know it gets a rough, rough ride over here in the UK. Like, we're really passionate about creating a place where people can have great jobs because we think recruitment, and particularly recruitment in the clean energy industry, provides great jobs. So for us, that means giving people good training, not just training around, you know, this is how you influence someone, or this is the recruitment process, this is a sales process, but training around developing them as business people so that they understand market strategy, they understand market forces, they understand how to run their areas of the business. And as the team leaders get big enough, they understand how to manage a P&L, and they've got exposure to everything that we're doing in the back. Like, we're open about that. Like, we, we want to be really transparent about our business. Um, and then we want to keep growing the business because— for a number of different reasons, but in terms of the people reason, because if your business is growing and not stagnating, opportunity exists for your staff. So whether that's a new service line, whether that's, hey, HR as a service is really exciting. You're, you know, you're a great professional, but sales isn't really for you. You'd be much better in kind of like a consulting type role. Have a look at this. Whether it's moving them from contract to perm or perm to contract, whether that's opening up new geographies, whether that's opening up new markets, new technologies, or just the myriad of internal roles that happen when you're growing really quickly, right? And then just the typical path of consultant to team leader, that happens a lot more when you're growing quickly, right? So We, we're a big believer in like the career journey, you know, that we don't want people to stagnate. We want people to think, I started here and I left 6 years later doing a different role, and I did 3 or 4 different roles, and I really grew as a professional, and now I'm leaving. I'm, I'm a real badass, like well-rounded in a number of different things. Um, we call it like our AIR model, right? Attraction, incentivization, and retention. It's like, and we've got each of those has a subheading of, right, how we attracting people, how do we incentivize people to stay— sorry, how do we incentivize people to join, how do we incentivize people to perform, and how do we retain them? And a big part of the retention is, is like the career journey that you take people on, you know.

I love that. Really excited to see, you know, where you end up in another year or so. But, um, really enjoyed it. Thanks for coming on the pod.

Thanks, mate. Thanks for having me.