Robin Richards is the CEO and founder of CareerArc which is an HR technology company helping business leaders recruit and transition the modern workforce. The company has raised over $30 million. Prior to this Robin Richards founded 6 other companies that he sold for over $600 million.
In this episode you will learn:
- How he justified paying so much for domain names
- Why you must understand how customers buy, not just what they want
- His new company which is thriving in the wake of COVID-19
- Robin’s top advice for starting your own venture
For a winning deck, take a look at the pitch deck template created by Silicon Valley legend, Peter Thiel (see it here) that I recently covered. Thiel was the first angel investor in Facebook with a $500K check that turned into more than $1 billion in cash.
Moreover, I also provided a commentary on a pitch deck from an Uber competitor that has raised over $400 million (see it here).
Remember to unlock for free the pitch deck template that is being used by founders around the world to raise millions below.
ACCESS THE PITCH DECK TEMPLATE
About Robin Richards:
Robin Richards is the CEO and founder of CareerArc. Robin Richards is a proven successful entrepreneur and visionary strategist and a co-founder of CareerArc. Robin Richards sets the corporate goals and leads the development of business and market strategies.
Robin Richards was also the founding president and chief operating officer as well as a director of MP3.com, Inc., the Internet’s first and preeminent digital music provider that had the largest IPO for an independent Internet company at that time. Robin Richards was the lead negotiator in the sale of MP3.com to Vivendi Universal.
Previous to MP3.com, Robin Richards served as managing director of Tickets.com, Inc., an Internet ticketing service company that was sold to Advantix.
Connect with Robin Richards:
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FULL TRANSCRIPTION OF THE INTERVIEW:
Alejandro: Alrighty. Hello everyone, and welcome to the DealMakers show. Today we have a founder that has done it so many times that I think you’ll get dizzy with the amount of times that he has done the full cycle with companies—build, scale, exited, and you name it. So without further ado, I’d like to welcome our guest today, and I think that you guys are really going to enjoy speaking with him. Robin Richards, welcome to the show.
Robin Richards: Oh, my goodness! The DealMakers show! I’m mesmerized by being in your presence here, and I appreciate your having me. Thank you.
Alejandro: The dealmaker himself. So, Robin, born and raised in Detroit. So, how was life in Detroit?
Robin Richards: Life in Detroit was wonderful. I was raised in the late 50s and early 60s. As a young person there and lower-middle-class household, Union father, and Detroit was okay. It was okay. It was a simpler time. Not like we have today, as you know.
Alejandro: It’s amazing, the way that you were raised and brought up and how you had that entrepreneurial mentality early on. You literally had to build stuff and think about stuff to pay for whatever you wanted. How was that?
Robin Richards: Every community has various demographics and various amounts of success. You can’t help by looking around. You can either look around and say, “I can’t believe that guy has that nice car and that big house. What kind of a jerk is he?” Or, you can say, “Wow! She’s something special. I wonder how she got where she is,” or “he got where he is?” And then, invent your life and your destiny. I chose to look up to success and believe in success and believe that why them and not me? What happened is, at a very early age, I started asking kids in school that I knew had more than the rest of us, “What does your father do for a living? Does your mother work? Did they go to college? Tell me about your family.” I made a lot of friends, and I learned a couple of things back in the day. I learned, at least in my area, that many of the people that had more had gone to college. Many of the people that had more, their parents had been together for a very long time. Many of the people that had more, their father’s owned businesses, and this was back in the day when it primarily fathers. Today, it’s mothers and fathers that own businesses. So I said to myself, “Okay. Nobody in my family ever went to college. Nobody’s ever done anything except work for somebody by the hour. So here’s what I’m going to do. I’m going to make sure that I get good enough grades to go to college, and I’m going to own my own business, and I am going to be very selective on who I associate with. If I do all of those things, maybe one day, I can have the kind of life that person in that house has. That’s how I came about it.
Alejandro: Very cool. Then, obviously, you were the first one in the family to go to college, and then you decided to move to California. Why did you want to go to California?
Robin Richards: I was an athlete as a kid, and one of the ways I got to know all of the various demographics at the school was, I was born into one, and by being a good athlete, everybody was fairly welcoming of you. What happened was, I got friendly with some of the kids whose parents did very well. As I got older and older and got into high school, it started becoming clear to me that I could understand their businesses. Then I went off to college, and about my second year of college a number of young men and women who I knew their parents pulled me aside when they’d come up, and they’d say, “When you’re out of college, you can come work for us.” I kept hearing that. I went home one day, and I said, “That means I’m going to work for my friends because that’s the natural evolution of a family business. I can’t do that. I don’t want to be the person that doesn’t achieve the maximum.” I said, “If I start anew, maybe I can invent my own life.” So I moved to California, and I said, “This is ground zero for my life. I will do what I have to do to build a business. I’ve now graduated from college. I need to find a special partner, and I need to conduct my life this way.” So that’s what I did. My first business was a telemarketing business when telemarketing was not a thing back in 1986.
Alejandro: And also starting in a broom closet.
Robin Richards: Yeah. We started at 6565 Sunset Blvd. A wonderful landlord, Stanley Fold. I came to him, and I said, “Please, I can’t afford an office. Could you rent me a closet?” He said, “Kid, I can’t rent you a closet.” I said, “Of course you can. Please.” He said, “You know what? Why do you want a closet?” I said, “I’ll take the whole floor in three years.” He laughed, and he said, “God bless you, kid. I’ll rent you a closet.” I said, “I really would like a contract and an option on the whole floor.” He goes, “You’re serious, aren’t you?” In two years, we had the whole floor. In five years, we had three floors.
Alejandro: Wow! And you took it to 3,000 people. It’s amazing, the ride. What a wild ride.
Robin Richards: It was supply and demand. It made a lot of sense. Salespeople were spending too much time creating appointments. By taking that off of their plate and doing the appointments for them and using. We were the first people on PCs and databases. We were able to make salespeople much more productive, and today, they call it an SDR, sales development rep. It’s the primary thing people come and do when they get out of college is set appointments for sales forces and create leads. We did that real early, and it was a lot of fun, and I learned through a lot of mistakes how to manage. I learned the best lesson of all, which was to get the smartest people you possibly can and get out of their way, give them the strategy, and follow-up with the lead.
Alejandro: I love it. Your background and what you’ve done is so remarkable that I think we would need not just one episode, but probably like ten to really cover it and get all the juice from that. But what I’d like to do is touch, just like we’re doing now, what you did with Lexi International. I really like the lesson that you were able to share on how to not get in the way and hire smarter people than you. But perhaps touch on the other six companies that you’ve built as well. Give an overview and what you guys were doing and how you got started. But then also, what was that one lesson? I know that the next one, you were not part of the founding team, but you were part of getting the company to the finish line, and that was Tickets.com. How did you land on Tickets.com?
Robin Richards: Tickets.com, the first VC firm for the internet, was Idealab. Bill Gross was its genius owner, and we haven’t heard the end of Bill Gross. He’s doing some amazing things. He said to me, “Hey, Robin, why don’t you take a look at this list of companies and decide if there’s one of them you’d like to go work for. It’s just a list: plumbers.com, tickets.com, this.com.” I said, “You know, I understand tickets, Bill. Maybe I could go work there.” He said, “Man, that is just a great management team we have there. They’re only losing x-amount a month. Why don’t you go in and see what you can do, and I’ll give you x-percent of the company?” I said, “Great.” So, I went in. We rearranged from a ticketing company to an event and venue database company. They had some phenomenal executives there. We convinced them to move to an event and venue database company. It started really growing up fast. We very quickly got Advantix to buy the company. It was a short but successful exit. The thing I learned there is that the speed of pivot is the difference when things aren’t working in winning and losing when you’re a little company. You have to have the decisiveness to pivot when the pivot is called for, and not stand in there forever doing the same thing, beating your head against the wall, that may be working moderate. I became a big fan of pivots from tickets.com.
Alejandro: Very cool. This was a transaction that was right around the same size as Lexi International.
Robin Richards: Yeah. Right about that.
Alejandro: Some 30-something million. Your next company mp3.com. This was quite a ride, so tell us about mp3.com.
Robin Richards: mp3.com was world-changing. Toward the very end of my time at tickets.com, a young man walked into my office. He was brilliant. He was quirky, and he said, “I want to show you something.” I said, “What is it?” He goes, “What if I could show you sound and play a CD on your computer?” I said, “There’s no sound on a computer.” He goes, “They’re all wired for sound.” Lickety-split, the guy pulls out a CD, and the next thing I know, he’s wired up the back of a computer with some speakers, and the next thing I know, I see all the songs in text on the screen, and he said, “Pick one and play one.” I clicked on it, and it started playing, and I felt like I saw fire in a bottle.”
Robin Richards: I said to the young man, “Let me ask you a question. Do you have any money?” He said, “No.” I said, “Do you have any income?” He said, “Ah, I think I sold something, but I don’t have a bank account or anything.” I said, “Okay. What would you like from me?” He said, “I’d like you to be the president.” I said, “What do you know about being a CEO?” He goes, “I know that I’ve invented something, and it’s very, very, very important, and I know you’re going to see it.” I said, “You’re right. I see it. I’ll be your president.” We negotiated a good deal. I said, “I’ve got to bring a team. I brought a lot of my team from tickets.com. We went down to San Diego, where we could find engineers because there were a lot of medical people down there. We opened it up. About sixteen days later, Sequoia gave us 20 million bucks. From there, six months later, we went public in what was the largest IPO of a technology company at the time in history.
Robin Richards: As you know, content owners were very unhappy with the digital arrival. It was a very contentious thing, mp3 in the music companies. When a worldwide group that’s that big and that strong is coming after you, it’s a very, very hard thing to stay the course. We stayed the course. We never lost any people. It was an amazing and difficult ride. We alternately ended up fighting the dragon and selling the company for 370 million dollars. Everybody in the company did a great job, and many of these people went on to be very successful entrepreneurs in their own right. It was one of the most extraordinary experiences I’ve ever had.
Alejandro: That’s amazing. What was the one lesson that you took away from this experience with mp3.com?
Robin Richards: That you can will your way through the rapids. If you have enough will, and you never give up, and you’re realistic and authentic with your own self, the system is set up for perseverance to be victorious.
Alejandro: Wow! That’s very profound, Robin. And this led you to NTI. What were you doing at NTI? This was your next company.
Robin Richards: The NTI company was probably my most favorite company because it was the first company I ever had that we started it, the market adopted it, it rose, rose, rose, rose, and then it was sold. It didn’t have a lot of difficult problems. Granted, I came from difficult problems, and the company needed two companies before. But this one, they were operational and executional in nature, so the problem seemed smaller to us. The market was very receptive, and what happened was is that Columbine and the hurricanes in Florida really set our opportunity into motion, and everybody realized they needed a mass notification, time-sensitive system to communicate with their constituents. We decided not to use this for corporations, but we decided to use if for K-12, universities, and municipalities only because we knew it would be used properly there, and ultimately, like now, you can see it in corporations using it as you get bothered every second. But, in the beginning, and throughout the company, we never went to corporations. We only used it for the public good. It was a phenomenal company. We exited in four years. Some of the smartest people I’ve ever worked with were part of that company. But that company taught me something that was extraordinarily valuable, and that is that when opportunity knocks, you have to lean into it and come out of your comfort zone to scale. You can’t just keep trying to do, when this opportunity visits you, the same things at just adding people. You have to change your view and say, “How can I mass scale? What can I do to scale where I feel out of control enough, but in control enough to take advantage of this and take a company from 50 employees to 200 employees overnight? That takes a belief, and it takes a group of men and women that have an ethical background and a work ethic to go along with that says, “You know what? Let’s go as fast as we possibly can, opening up everything we can, and we will circle back around to figure out how to smooth out the wrinkles that we obviously are going to create in going too fast, but it will be the only way that we can mass-scale quickly. We saw that with Facebook in a different way, and Twitter and these guys have all learned to grow in an uncomfortable way and then come back around and massage it into perfection. That’s the thing that people when they get this kind of opportunity, they’ve got to get out of their comfort zone and grow at levels they didn’t believe they could.
Alejandro: That’s amazing, and the outcome was fantastic. You sold it for 270 million. Correct?
Robin Richards: 201 million in NTI.
Alejandro: Okay. Very, very nice. Then the fifth company, internships.com. Tell us about this one.
Robin Richards: Internships.com came about after I sold NTI to Blackboard, another phenomenal company. Michael Chasen, their CEO, saw that. I came home, and my daughter’s friends said to me, “Mr. Richards, can we get an internship with you again this year?” I said, “You know, I’m kind of unemployed right now, looking for something new to do. Sorry.” I said, “Why don’t you go onto internships.com?” They said, “There’s no such thing, Mr. Richards.” Well, I identified the human being that owned internships.com within 48 hours.
Alejandro: I love it!
Robin Richards: We started negotiating, and we paid an awful lot of money for it, $800,000 to be exact.
Robin Richards: I felt that the URL was so self-explanatory and the search mechanism that everybody would go, “I need an internship,” and we would show up very cheaply and very quickly at the top of the search charts that it was a must-have. We have a wonderful, wonderful private equity firm that’s been backing me for years that also backed that. We got started on internships.com, and very quickly, we realized that the internet allowed us to bypass career centers because if I had to go to 4,000 or 5,000 colleges, it would take me forever to get to scale. So we decided that we would go to consumers, using the internet at the college level and then circle back around with the career centers later as opposed to making the career centers the pacing factor. Before you knew it, we had over 5 million, close to 6 million students coming to internships.com to get advice and to find internships.
Alejandro: Wow! That’s remarkable. What ended up happening with internships.com?
Robin Richards: Internships.com got sold to, again, another fantastic company. When we sold it to them, they were about 400 million of enterprise value. Now, they’re probably 4 billion—called Chegg, a public company with Dan Rosensweig, a phenomenal CEO, maybe one of the best in Silicon Valley, actually. We sold that company. That’s not a disclosed sale under contract, so I can’t tell you how much, but I’m sure he’s very happy, and we’re very happy with the outcome.
Alejandro: Amazing. So what was your big lesson from that?
Robin Richards: Internships.com was a reverse lesson for me. It was that good ideas with high demand don’t always have a pay source. Everybody wanted an internship. Every company wanted interns, but there wasn’t a good pay source. Nobody considered that a valuable enough entity if you will, meaning the intern, that they would pay us enough to aggregate the marketplace to be a billion-dollar company. So, it had to be an add-on to another company. What I learned is, you can have a great idea, but if there’s no readily-available pay source, revenue source for it, it doesn’t matter how much the supply and demand are in sync. You need that third leg, which is if somebody is willing to pay a price that you can have a decent margin on. That was what internships.com is and has been ever since. Nobody wants to own the farm team of American workers. Everybody wants to own the farm team in major lead baseball, but nobody wants to own the farm team of American workers, and that’s what an internships marketplace is. Chegg and Dan Rosensweig saw that. He’s a sports fan, and he recognized that if he could own the marketplace or the farm club for American workers, he would have something that would be very valuable to his Chegg platform, and he bought it.
Alejandro: Got it. Really amazing lesson, Robin. What was the sixth company, the next one?
Robin Richards: The next one was CareerArc. These kind of blended together because we still had some software from internships.com, and we were the first to do social recruiting. We used the social network to find students. That’s how we got so big so fast. We said, “Wow! If that works with students, why wouldn’t it work with the general market? Can we take this technology and reinvent ourselves into a new company, which we did with CareerArc. CareerArc became a general-market company that recruited on a SaaS basis. We changed the business model from a per-person purchase or a per-person “How many jobs do I want to advertise?” to going with a platform to corporations and saying, “We’re going to give you an entire platform to help your recruiting process. This platform is going to be social-first, but it’s going to give you a lot of other—and since it’s SaaS, it’s constantly going to be updated.” We now have over 1,000 companies that buy SaaS recruiting of our social-recruiting platform. We call it Recruitment Marketing Platform now. It’s 1,000 of the largest companies in America. It’s a company we’re very proud of. Of course, we’ve been hit pretty hard. Nobody is hiring right now, but we’ll be all right, and we’ll come out the other end. We have good financial management, again, back to making sure you have the right people in the key positions that know how to do the hard things to keep you successful. CareerArc has done that. Although the pandemic has taken a big hit to our business, we’ll come out the other side okay. CareerArc is a wonderful company. Then we added onto that, the other side, which was an interesting outplacement company because it was my belief that outplacement was really not democratized, and it was only for the fancy people. With social media, everybody had a very large voice, and why are we only taking care of managers and above? Why aren’t we taking care of 100% of the Americans that need this help, not only the fancy people that need this help? It turned out to be very simple. The market had too high a cost to take a $40,000 to $70,000 person and give them outplacement services. Career transition services. So we said, “What if we put it online, did virtual coaching seven days a week, on-demand, and changed the whole model so that we could democratize it and there is no reason for any company in the world not to give transitioning an employee a severance that included career transition services on our platform? That company is growing gangbusters, and you can well imagine, right now, with the pandemic, it’s actually doing even doing better.
Alejandro: 100%. What’s the name of this one?
Robin Richards: This is Career Transition Services. It’s under the CareerArc brand.
Alejandro: Got it, and for CareerArc, which you own this one too, you guys have raised 30 million dollars. Correct?
Robin Richards: Well, we raised 30 million dollars on our 2nd. We raised 20 million dollars a number of years ago to get started.
Alejandro: Got it. Robin, with these two that come in one, I would say, two-for-one, what has been your lesson so far?
Robin Richards: I think the lesson here, and we pivoted, so we learned from the lesson—the lesson here is the market is always right. As a result, if you want a business model and outplacement that says it’s going to be SaaS, all-you-can-eat because it makes all the sense in the world, but the market and the buyers don’t know how to navigate internally in their company to buy how you’re selling, even if it’s a better value. So you have to understand procurement as part of your business model. We never really took procurement into consideration when building our business models and our revenue models. What this taught me was procurement is a very important thing to understand, not what companies want, but how companies buy. If you can understand how they buy and at the same time trying to give them what they want, it will be a lot smoother than only giving them what they want without concern for how they buy.
Alejandro: Very interesting. We’ve talked about a lot of lessons here, and I’d like to narrow it down even more, and this is going to come with this question that I typically ask the folks that come on the show, and that is, Robin, if you had the opportunity—unbelievable, all these different experiences companies that you’ve started and exited. If you had the opportunity to go back in time and have a chat with your younger self—that younger Robin that just had moved to California and was looking at starting something. If you the opportunity to go back in time and speak with that younger Robin and give that younger Robin one piece of advice before launching a business, what would that be, and why, knowing what you know now?
Robin Richards: I think the piece of advice that I would give myself today is, I looked long and hard for the smartest, most experienced, best cultural fit executives I could find so that I had smarter people around me. What I didn’t take that down to was far enough into the organization until I was later in my career that the lowest person on your work chart should be the smartest person you can find at that price for that job. I think a lot of times, people don’t realize the value of every piece part of an organization, and that you should apply the same thinking to hiring managers and executives that you apply to the rank and file.
Alejandro: Wow. That’s very profound, Robin. For the folks that are listening, what is the best way for them to reach out and say hi?
Robin Richards: email@example.com
Alejandro: Fantastic. Well, Robin, it has been an absolute pleasure and an honor to have you on the DealMakers show today.
Robin Richards: Oh, my goodness! Thank you so much. I’ve been listening to you for a while, and keep up the great work. I’m honored you had me on. Thank you so much.
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