How Losing My Job In The Dotcom Crash Led Me To Build A Profitable Recruiting Company
I’m Kurt Wilkin. I’m co-founder of HireBetter, having given up the CEO title a few years ago. I’m also a Managing Partner of Bee Cave Capital, which invests in entrepreneurial companies during their angel or “series A” investment rounds. I firmly believe that entrepreneurs need two things in order to build great companies – capital and talent. And I get to serve entrepreneurs with their two greatest needs through HireBetter and Bee Cave Capital.
HireBetter is the only recruiting firm in the country with a hyper-focus on Dynamic Disruptors: entrepreneurs who are driven, collaborative and expansive thinkers. We serve as strategic talent partners, providing retained executive search, project-based consulting, holistic Strategic Talent Planning, and our new and most popular offering, Recruiting as a Service (RaaS).
We are best known for our unique and strategic approach to helping Dynamic Disruptors grow from scrappy startups to scaling, professionally-run companies. Our RaaS offering is our flagship product because it allows my HireBetter team to execute a Talent Roadmap we co-create with clients.
We’ve been named the #1 Executive Recruiting firm in Austin for many years and recently were recognized as one of the top recruiting firms in the country by Forbes Magazine, on their annual list of preeminent firms. And I was recently honored and humbled to learn that my debut book, Who’s Your Mike? A no-bullshit guide to the people you’ll meet on your entrepreneurial journey, based on my almost 30 years working with entrepreneurs, was named a USA Today bestseller and an Amazon bestseller.
What's your backstory and how did you come up with the idea?
Before I became an entrepreneur and founded and exited several successful ventures, I began my career as an accountant at Ernst & Young. I was very fortunate! To be honest, I wasn’t exactly the most decorated student at the University of Arkansas business school (I like to tell people, “I was only a couple of points shy of a 4.0-grade point average!”) and I didn’t have an MBA. But I leveraged my network for an opportunity and also passed the CPA exam, which gave EY the confidence that I could do the job. They took a chance on me.
Working as an auditor for a “Big Four” public accounting firm taught me some valuable lessons. First and foremost, I’m a crappy accountant! My job at EY also gave me access to clients’ C-suites, which opened my eyes to the types of challenges facing entrepreneurial leaders.
While I didn’t love number-crunching and pure audit work, I did love asking questions, listening, and connecting leaders with people smarter than me to solve their problems. But what became most apparent to me during my four years at EY was I needed MORE. There was an entrepreneur inside of me who wanted out!
I often look back on my time with EY, wondering what might have been if I had ignored my inner entrepreneur and remained an accountant. One thing I know for sure—I eventually would have been uncovered as a shitty accountant! I ultimately left public accounting for a job promising dot-com riches in 1999.
But it was the dotcom crash in 2000 that left me out of a job and practically forced me to follow my entrepreneurial dream. I’m one of the lucky ones. Sure, there were a lot of bumps, bruises, and mistakes along the way, but the entrepreneur in me ultimately won out.
After the dotcom crash and before HireBetter, I founded and led The Controller Group (TCG), a finance and accounting consulting firm that we grew to $20 million and successfully exited to Tatum in just a few years. From the outside looking in, it was a great success story, a great case study for entrepreneurism in America. But for those of us living it at the time – and who saw the sausage being made – what the hell were we thinking?!?!
I had lost my job in the dotcom crash, I had a relatively new wife and a brand-new baby – failure was not an option. My idea was to offer audit preparation services to mid-market companies and their audit firms – helping ensure a smooth and efficient audit process. Most people thought I was crazy. Brett Lawson (who ultimately became my equal business partner) thought I was a genius (either that or he needed a sponsor for his work visa from the UK!). We had a decent business going, but it wasn’t until the Sarbanes-Oxley Act was passed – the Congressional Act passed in the wake of the Enron scandal, which required public companies to pass an audit of their internal controls – that our small business became a veritable rocket ship.
Sure, there were a lot of bumps, bruises, and mistakes along the way, but the entrepreneur in me ultimately won out.
During TCG’s rapid growth and successful run, I realized firsthand the importance of a talented team working towards the same goals. And conversely, I saw many clients who didn’t have great people, they were in the wrong roles or they simply weren’t working together. The seeds of HireBetter were sown. I worked with recruiters to try and solve our needs and those of our clients – to no avail. “Contingent” recruiters are the main ones you see in the middle market and they are anything but strategic. They simply clogged my desk with mismatched resumes and blew up my phone line with sales pitches and a false sense of urgency for their candidates. I realized then that the recruiting industry is fundamentally broken.
In 2011, after leaving Tatum, I purchased HireBetter, which, at the time, was a small hourly-based recruiting firm, and set about evolving the business model. Mind you, I didn’t have much experience in the recruiting industry, but I did know that the contingent recruiting model was (and is) broken because it pits recruiters against their clients.
So HireBetter became a retained recruiting firm, which is virtually unheard of for lower-middle market companies. But I believe it’s the right model because it allows HireBetter to partner with our clients. From 2011 to 2015, HireBetter grew 50% each year by building a strong brand and providing top-notch client service, but something was missing. The recruiting process ran like a well-oiled machine and clients were happy, but the company wasn’t profitable. HireBetter was great at helping other entrepreneurs scale their businesses, but we didn’t have a plan for scaling our own!
For our clients, we recognized the need to deeply understand their businesses to help them determine what they actually need, versus what they think they need.
From experience, throwing bodies at a problem rarely works, it is an expensive lesson to learn and may set you back years. We’ve seen this play out with clients and peers for years. We even developed Strategic Talent Planning™, which is our way of taking our clients’ strategic plans and financial forecasts and building a Talent Roadmap that is aligned with their plans. This is easier for me to point out to clients than to see in my own situation!
In our case, part of the solution was brought in an operating partner (or “Integrator” in EOS parlance) to pair with my “Visionary” talents. A new Chief Operating Officer removed inefficiencies and excess costs and reduced the number of employees by streamlining processes. I later brought Cisco Sacasa in as President (ultimately promoting him to CEO) – building upon our foundation the systems, processes, infrastructure, and team needed to truly scale the organization.
I’ll talk about designing and building HireBetter’s strategic approach and our Recruiting as a Service in the next sections.
Take us through the process of designing, and prototyping your first product.
As I mentioned above, I believe the recruiting industry is broken – and most entrepreneurs agree with me (check out my e-book The Recruiting industry is Broken for more information). I also fundamentally believe that people will ultimately make or break your entrepreneurial endeavor. Therefore, after acquiring HireBetter, I had to dig into why, if people are so vital to the success of your business, is the recruiting industry so broken.
We’ve spent a lot of time researching, living, and iterating why most entrepreneurial companies struggle with hiring. It really comes down to 3 or 4 key reasons but one of the biggest, and most overlooked and misunderstood is that most tend to be very reactive when they hire (versus taking a more strategic approach). They have a burning need in accounting or marketing, or “leadership” and boom, they start looking, talk to friends and hire the first decent-looking candidate they find. This process is cut even shorter if the candidate came through a friend of a friend or board member, investor, etc.
Describe the process of launching the business.
Our clients appreciate our expertise in working with entrepreneurial, growth-minded companies (typically $10 to $200 million in revenue) and our strategic approach. We ask good questions and listen intently, then we ask deeper questions to get to the bottom of their challenges and opportunities.
In order to address the reactive tendencies of our niche, we built a unique product offering, Strategic Talent Planning™, which aligns talent with your strategic plan, financial forecast, and hopes and dreams, by creating a longer-term talent roadmap.
Our powerful scoping exercise helps to clarify what your organization truly needs versus what you think you need. This is achieved through a unique discovery process that leverages our work across hundreds of entrepreneurial clients in similar situations.
As a result of the time and professionalism we put into each search, we engage with our clients differently than most search firms operating in this niche. We desire to partner with our clients, ensuring they make the best hire possible and not just the best hire that happens to come through their job posting or a recruiting firm. But educating our target market, a market that has been "sold to” by “contingent” recruiters for years, hasn’t been easy.
We are “retained” by our clients to run a full and exhaustive search. We ask for a portion of the total fee to paid to be paid upon engagement—and thereafter, as we hit project milestones.
Our competition (“contingent” recruiters) tells you not to pay them anything until they produce a candidate that is hired. Payment is “contingent” upon you hiring someone. Sounds great on its face. But what most people don’t appreciate is that that model is built on speed and inefficiencies in your hiring process, and the ability for their recruiters to “sell” you on their candidate. For a bunch more information about the contingent recruiting model, check out my e-book: The Recruiting Industry is Broken.
Our team is so well-versed in working with entrepreneurial companies that we help you see around the corner and recognize challenges before they become obvious. Our experience in this unique niche means our recruiting team has developed an expertise to not only find, identify, and recruit talented candidates with the resume and experience to help you grow your company, but they also have the soft skills and the “it factor” that allows them to work and thrive in an entrepreneurial environment that can be fairly “fluid” (if not chaotic!).
But my team would not be afforded the luxury of having these thoughtful conversations and leveraging our experience if they were subjected to the same it’s-all-about-speed challenges that contingent recruiters find themselves in.
Since launch, what has worked to attract and retain customers?
I sure learned / re-learned a lot of lessons the hard way with HireBetter. Most of our business used to come through my network and through referrals from clients. But it’s hard to scale a business when you don’t have a system or process for driving sales or referrals. It’s taken us years to realize that no other salesperson, no matter how talented, can sell in the same manner as the founder. The future state sales structure should include all the things that a founder may find “unnecessary” but are necessary if you want to grow beyond the founder. Things like systems, processes, case studies, marketing collateral, etc. Sure, I’m pretty savvy and able to sell air – but most salespeople you hire off the street can’t. If they were able to sell air, they’d probably be a founder somewhere else!
Following is an excerpt from my book that touches on some of the raw challenges I’ve had along my journey with HireBetter:
Honestly, I thought it was going to be easy when we bought HireBetter in 2011, I assumed we’d simply cut and paste TCG to replicate our success. Boy was I wrong—and humbled! It wasn’t that easy. Sure, I was new to recruiting but I was confident clients would flock to our fresh approach. Didn’t everyone know the traditional recruiting model was broken? I figured our only challenge would be managing growth.
We did grow—that was true—even as we reinvented ourselves and evolved our business model, our differentiators, and our brand. We worked our tails off and had all of the operational challenges and late nights you’d expect to find in a startup. It wasn’t supposed to be this hard this time around!
It was tough but fun. We grew tremendously—well north of 50 percent for a few years. But I didn’t think we were growing fast enough. I made investments to “scale” the company. Unfortunately, my investments weren’t effective. They were expensive and we were just pissing away cash.
Whenever we got busy, the team got overloaded. My managers would say, “Kurt, the team is strapped, we need more people.” I’d respond flippantly, “then go get more people—we’re scaling the business!” But we weren’t scaling, we were throwing bodies at problems. We not only didn’t have the operational discipline or experience to build the systems needed to scale, but we also didn’t have the team to effectively challenge me when I wanted to make bad bets. And in fairness to my team at the time, I usually didn’t listen when they did voice those concerns to me.
How are you doing today and what does the future look like?
Building a kickass company is not without risks and shouldn’t be attempted by the faint at heart
Over the years we’ve figured a lot of things out. We’ve reinvented ourselves to be a true Strategic Talent Partner to Dynamic Disruptors: entrepreneurs who are driven, collaborative and expansive thinkers seeking to scale their organizations. I brought on an operating partner in 2019 and I stepped aside as CEO in 2020 – promoting Cisco. That wasn’t a misprint. I knew Cisco would be a better CEO than me, and I wanted to be unshackled from the day-to-day and all that the CEO title entails. I wanted to focus on the things that fuel me. I sure didn’t need the CEO title to feed my ego.
We are profitable, we’ve clarified our mission and vision and we’re laser-focused on our unique, highly challenged but highly rewarding niche (side note: entrepreneurs are some of the most beautiful people in the world, but they can also be a pain in the ass to work with—and yes, I’m looking in the mirror when I say that!).
We’ve also got two major yet somewhat related initiatives going on as this article is written. First of all, we’re building a Recruiting as a Service (RaaS) platform that will allow us to go deeper with our clients and engage in a manner that is much less transactional than most recruiting models (including our retained search practice). And secondly, we’re acquiring a firm that has built a world-class “sourcing” function that will be the foundation for RaaS and will expedite the building of that practice.
Building a kickass company is not without risks and shouldn’t be attempted by the faint at heart. We’re all in – building an amazing company to serve the greatest need (talent) of entrepreneurs everywhere.
Through starting the business, have you learned anything particularly helpful or advantageous?
Man, I’ve already highlighted many of the challenges in the preceding paragraphs. Building a company is hard – and not for the faint at heart. It can be so rewarding but very challenging.
In 2020, we were approached by CEO Coaching International to be their recruiting partner – serving many of the talent needs of their 300+ clients. That relationship opened up our eyes to the beauty of a strategic partner program done right. Two years down the road we partner with a number of executive coaching firms, recruiters, consultants, and advisors, helping them solve their clients’ ever-evolving talent challenges. Those relationships we’ve built have been a huge key to our ongoing success.
What platform/tools do you use for your business?
We’ve built some amazing, best-in-class, proprietary systems over the years. We’re a professional service firm so most of the Shopify or social media systems don’t apply as much to us, but we do utilize the hell of Dropbox, HubSpot and LinkedIn to drive awareness and opportunities for our sales team.
What have been the most influential books, podcasts, or other resources?
As a “visionary” entrepreneur, I can’t say enough good things about the concepts outlined in Rocket Fuel by Mark Winters and Gino Wickman. The first three chapters changed my life and gave me the license to be myself – a visionary entrepreneur as outlined in the book. I also loved the hell out of Built to Sell by John Warrillow which is told in story fashion and describes how to build a business that’s built on more than just the heroic efforts of the founder.
Advice for other entrepreneurs who want to get started or are just starting out?
I’ve got a few tips that served me well – and I pray they do the same for you. First of all, there’s a lot of credence to the concept of “it’s not what you know, it’s who you know.” Start building a network now—before you need it. And when you’re networking with others, don’t make it about “me, me, me”. Look for ways to serve them. Before I shake their hand and say goodbye, I always ask “what can I do for you?”. It changes the conversation from an asks to a give. I’ve introduced newcomers to Austin to youth baseball leagues and churches and I’ve introduced friends to their next CEO or investor. The universe seems to pay me back in spades.
Second of all – you’re going to be afraid. I used fear as a motivator when I started TCG. With a new wife and newborn son, failure wasn’t an option. And when I wrote my book, Who’s Your Mike? I didn’t even tell my own family I was writing a book until I was a year in for fear I would chicken out and quit. You’re not alone. This is hard. Find a mentor, and a supportive network, and get your ass moving toward changing the world!
Are you looking to hire for certain positions right now?
We’re always looking for great recruiters! As a talent partner who does things differently, we need to attract a recruiting team that doesn’t do what everyone else does. We could also use some amazing writers and content producers. If you have #love in your heart, #grit in your bones, and live a life of #integrity, drop me a line at [email protected].
Where can we go to learn more?
- Website: hirebetter, whosyourmike
- LinkedIn: Company, Personal LinkedIn
- YouTube
If you have any questions or comments, drop a comment below!
[1] Check out chapters 11 and 12 in Who’s Your Mike? for my full HireBetter story, These chapters highlight not just the glory stories of success but also the gory stories of failure. I learn best through the stories of others – and the bigger the shit show, the better I learn. I hope you learn a lot from my shit show.
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