005: Louis Song— Scaling your Recruitment Business to Success
Are you struggling with scale? Louis Song, the co-founder of Proven Recruiting shares how to successfully scale your staffing business as well as how he and his partner created sustainable business growth with a positive culture by making strategic investments.
How fear prompted Louis to start his Proven Recruiting business. (1:05)
What does Jujitsu have to do with it? (2:01)
How can you scale your business in order to make it successful? (3:31)
Why is it important to have a solid system of management and leaders in place in order to successfully scale your business? (4:30)
What are small steps to growing your business that competitors often overlook? (6:39)
Louis discusses specific training techniques he uses in his business and how he learns from his clients. (6:55)
Louis offers his approach to the challenge of staff “buy in.”
Why is it important to be “people-centered” rather than “profit-centered” while running a recruitment business? (9:18)
What does “culture” mean to Louis and how can you create a motivated culture in your business? (12:54)
Location and scaling your recruiting business and how location can impact success. (14:22)
Branding, cold calls, and social media? Louis discusses what his approach is. (15:50)
Personal characteristics that Louis believes all aspiring CEOs of recruiting businesses should have. (17:50)
Why a good business partner can help your business grow. (18:35)
What are some challenges Louis faced while running his recruitment business and how did he overcome them? (19:23)
How does Louis define success? (22:33)
Louis offers advice to his younger self and others starting a business. (23:14)
If you are interested in listening to more recruitment business stories or wish to share your recruitment business journey, subscribe for free to The JourneyUp in your favorite app and listen to other informative and inspirational episodes! Feel free to contact me, David Alonso, with questions and comments.
David Alonso: Hey everybody, this is David Alonso. And on this episode of The Journey Up, I met with Louis Song, who is the Co-Founder of Proven Recruiting. I had a great time doing this podcast where not only did Louis walking into his business, but he also introduced me to another passion of his: Jujitsu. Now this video podcast is also available on Instagram at the JourneyUP. Now what struck me about Louis throughout was his openness. He really spoke about his business life passionately. He also spoke about the good times, but as importantly also spoke about the bad times of being a CEO, which I really appreciated. There's also some really great advice along the way that he gives about how to build the right type of culture in your business and some tips and tricks along the way. The audio for this podcast isn't the best for the first minute or so, so please bear with it. And let's now head over to hear more about the JourneyUP with Louis Song. Tell me about how you started the business.
Louis Song: You know, when I think about the business, I think a lot of people think that there was like some grand idea or in some pretty business plan that we put together. But, you know, ultimately, uh, I think it was honestly my fear. You know, fear of what my life will turn out to be like stayed in the corporate environment and answering to The Man and saying, "yes sir, yes sir" and continuing that path. And there was one day where I saw one of the corporate vice presidents and he was just the beaten down guy. He just wasn't happy and he just constantly was just saying yes to everything and I saw my future and I thought, Ooh Shit, I don't want to be this guy. And ultimately that was part of the reason why I started to create something where I liked going to work.
Louis Song: I liked being able to wake up and live with my decision and and being in the corporate environment, it just, I couldn't do that. And so, you know, frankly, it's part of the reason my starting to do to do Jujitsu is because, there was a point in time when I was actually doing stand up Kung Fu and that kind of stuff and I was driving by primal Jujitsu when it was back on there in Mira Mesa and I kept seeing the sign like I wonder what would happen if I got to the ground or somebody tackled me and on top of me afraid and, and you know, a lot of my things in life, my success in life, my journey in life, it's really been about being afraid of something and said, "you know what, I don't want to be afraid of let me attack.
David Alonso: So, it looks like we are getting ready, to get some guys to come in ...do you want to get warmed up?
Louis Song: Yeah, I'm looking forward to you rolling with us.
David Alonso: I'm not sure about that. Alright, let's do it.
David Alonso: So we are now back from the Jujitsu Academy we are at the office of Proven Recruiting, I'm here with Louis. Thank you so much. That was a real experience to say the least.
Louis Song: Glad you made it.
David Alonso: I've never felt that sort of pain. So, I'm feeling more comfortable about where we are today. So, I see your office and there's some really excited guys in the office. One of the things that I've really have sort of noticed in the staffing space is that so many of these firms, they just can't over like the five or 10 employees. So you guys are scaled. I mean, what makes a difference when somebody can scale to, you know, to 50 to a 100 to even 250 people. So how does that work and what advice can you give to these people?
Louis Song: I'll tell you when we get to the 200 but you know, just getting even the 50 I think it's sometimes a miracle, but I think the early on idea was that Ingram and I weren't going to be doing the business itself where we weren't going to be doing the business of recruiting and account management and sales. You took the first 18 months of actually not getting paid, not paying ourselves. And we invested that into hiring people to do the recruiting, to do the sales, to do the account management. You know, for, for those guys out there that are still working a desk, if they can't get off the desk, I don't see how they're ever going to grow the business. And that's, that's the biggest challenge that I see.
David Alonso: So, you've done this completely organically, no VC, no investment money,
Louis Song: No, just me and Ingram.
David Alonso: Incredible, incredible. And you know, your growth here. So at what point do you think like guys like yourself need to be surrounded with people who've got more experience? Right? You know, obviously when you start an off, you'd probably bring in a senior recruiter or some grads, when do you need to put in that management structure to help you scale?
Louis Song: We actually grew really quickly for our first six years and grew to almost $20 million nine offices, including one in, I think your hometown, London, and Washington DC as well. And it ultimately came crashing down back to two offices because we didn't have the management in place. It was just me in Ingram and then everyone else. And so from those lessons we hired some other people. We put some managers and directors in place and that's allowed us to grow sustainably. Uh, and, and now we've got a leadership track for it for our junior people. And I think that's when you've got to start looking at if you really want to grow sustainably, you gotta have other people leading as well. And that was the mistake that we made in the first time.
David Alonso: Okay. That makes complete sense. Okay, so you've got a quote where you mentioned to me before, you know, it's not the big movements that you do in life, it's all the little small steps that you take to get there. Can you kind of elaborate on what your, what your, what you meant by that? I thought was fascinating.
Louis Song: Well, you know, just like we were at Jujitsu earlier today, and I think I was sitting on top of your chest at some point.
David Alonso: I remember that.
Louis Song: And you know, there's, there's little things that you can do, maybe not to move your opponents, move your competitors, but little things where you move your body and move your, your elbows and the way you breathe. And I think there's little things that you do every day in business and, and, and it's how you treat people. What's the trading that you do? It's, you know, the types of customers that you go after. It's the type of industries that you, you're, you're into. And all those things make a little bit of difference instead of like, okay, we're gonna make this big grand thing to open a brand new office. Or are those things, you know, but are you doing the little things in terms of training? Are you doing a little things in terms of returning phone calls and, and all the things that happen on a day by day basis that honestly a lot of times are invisible to your competitors, to everyone else.
David Alonso: Yeah. I mean, one of the things that's really impressed me, Oh, you know, speaking off camera is that the amount of effort and time you put into a training plan for your guys? You know, I think that's the thing that really sets you aside. Can you give us some ideas, you know, just share a little bit about what you do on a daily, weekly basis for these guys as far as development. Let's talk about that first.
Louis Song: Yeah. Um, you know, it's, it's probably one of the things that that does set us apart when people ask us what's, what's different, what's better about Proven Recruiting? And I would tell you that almost every single day that there's training going on, we don't do one on Mondays because that's the start of the week. And so we have our first job order meaning for every single team. But on Tuesdays we have sales training at eight o'clock, on Wednesdays we do next level exchange training where people watch videos the night before and then we discuss them at eight o'clock on Thursdays we do roleplays. So we role play every situation from tell me what's different about Proven Recruiting, the candidate declines an offer and picks the counter offer. How do we deal with that situation? We role play it through that . On Friday we have probably one of the more unique things, which is a book club and we're currently reading The Culture Code, previous books that included Grit, Take the Stairs by Rory Dayton as well as um, Start with Why by Simon Sinek. So there's a lot of different things that we cover and that's just the little bit of the training that we do. There are lunch and learns that we do every other week, uh, covering finance and accounting and then technology subjects. And then we also do offsite training at UCSE connect as well. Um, so that's just a, a little bit of the stuff that we do.
David Alonso: Do you do anything to kind of prepare your guys for like actually dealing with clients? I mean, there's obviously role pays that you do. Do you have any sort of engagement with clients that come?
Louis Song: Sure, Last week for example, we had the head of talent acquisition. Come in from Shipt who's one of our biggest clients right now. She came in and did training with us from eight o'clock until nine 30 last Tuesday. And basically she acted as if, and she was, she is a customer and we had four or five different groups come in and basically go through the process of doing a client meeting and Ingrid, myself and some of the other leaders and directors, we sat back and we watched how these guys prepared what they said, how they structured the meeting with the follow-up was, and from that we learned that there's a lot of stuff that we're not doing right and, and that's on, that's on me and Ingram, that's, that's on us for not doing the right training for not setting the right expectations on how we should be conducting our client meetings. And so, you know, that kind of stuff is stuff that we do on our, on a regular consistent basis for our, some of our lunch and learns. For example, we've had clients come in to teach us about their company, their technology, and then it gets our recruiters bought into how to recruit for them as well.
David Alonso: And do you feel like, you know, you obviously got all this development for these, for your staff, you know, is this a hundred percent buy in, you know, did you find that some people just, you know, the book club ...they might not be so keen or do you feel that when you're hiring these guys, you're, you're, you're, you're hiring a certain type of personality to fit the business?
Louis Song: You know, um, it's a hard one because not everyone's going to buy in the same way. I think there's, my wife and I actually were talking about this last night because one of her friends is having issues with keeping staff in this millennial era. Okay. And the challenge I think is you've got to be able to connect what we do at an individual level with the employee. Why are they here? One of the, one of the first questions I ask in the first five minutes of our onboarding session is what are you going to do with the cash? Okay. You know, you're not, is it, is it to help your mom? Is it to, you know, go back to school? Is it the pay off student debts? Is it the pay off your credit card is to save money to buy a house because ultimately I can show you the, the activity that you do is connected directly to how you're going to ultimately buy a house, pay off, pay off student loans, whatever it might be. Maybe it's to help animals in the world, right?
David Alonso: But why did you do that though? Do you get a sense that, you know, these guys are coming in, they want it, they want to learn hundred grand, right? Everyone thinks is easy, but are they really willing to actually realize what they've got?
Louis Song: It's not about, in my mind, it's not about the hundred grand. It's what you do with a hundred grand. What's the significance of that money? Everybody wants to do something with the money. And so some people maybe want, they want just a big $100,000 in their checking account. But others, I think there's, there's something that people want to do with it and I need to know what that they know because when it gets hard, when they're sitting here going, this job sucks. I hate doing this. You know, I don't love recruiting. And I think that's something that most people get wrong is I don't love recruiting. I love what recruiting has done for me. I love what it's provided to me, but I don't love recruiting. People kind of suck sometimes and you know, lying, cheating, stealing, whatever, you know. But that's humanity. And so you got to remember what these kids are here for, what our employees are here for. And it's not to make us richer. It's to help them to achieve whatever goals they have in their lives. The flip side of that is I do also think that, you know, we have to connect it to a higher purpose, purpose beyond profit. And so you know, we get an opportunity in the recruiting business to help people every single day with a new job and you know whether that job is a better commute or more money or better software, a better culture. We get to do that and sometimes we forget because it's all about closing the deal and making money.
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David Alonso: So let's talk about the team. Okay, let's talk about two things. Let's talk about what you feel culture is. Okay. What makes a culture, I can see the guys and they are all committed. So you know, everyone bands the word culture around. So it, so what does that mean to you? And also, um, you know, when you, when you are recruiting these people, you know, what are the main characters that you look for?
Louis Song: I'll refer back to the book club that we just, we recently talked about and currently rereading culture code. And one of the fundamental things that talks about in terms of culture is the culture of safety. And you know, whether you call it safety or trust, but I think that's the foundation that you've got to start with and trusting your employees, trusting your people to do the right things. And if, and if they don't have that trust in us, they don't go out and be creative. They don't go out and challenge the status quo. And I think that's honestly a fundamental difference between us and let's say the larger company, maybe not the guys downstairs or somewhere else. I'm sorry, the second part of your question was, I mean, how'd you kind of sell your vision to these guys? Well, I honestly don't sell the vision as much as it is.
Louis Song: I asked them about what they want to achieve. I go back to, you know, I, I, I talked to them about what do they want to achieve, what is the thing that they want to do with their careers? And then we talk about how what we do can help them achieve their goals within the context of their lives. And so it goes back to them as opposed to, well, can you help us make us a $30 million company here? Can you help us do $6 million and, you know, eat it. And it's like they don't care. Employees don't care about how much the company makes unless, unless they're owners.
David Alonso: So, so you've got guys in Dallas, La and here. So is there any difference between like hiring or, you know, growth plans just because of the types of people that you can attract and what's the labor market like in San Diego versus Dallas?
Louis Song: You know, I'm in San Diego, the, it's, it's a, it's a, an amazing place to live, but you know, we're, we're really with only two fortune 500 companies here in San Diego with Qualcomm and, and Sempra. And so beyond that, there's, you know, some great companies here, but they're not the fortune 500 and so there's a limited number of amount of opportunity from a business standpoint. Whereas in Dallas, you've got at least 50 fortune 500 companies and you've got a lot of opportunity to, you know, and, and there's a lot of competition, but there's a lot of corporate headquarters there. And so there's a lot more opportunity from a business standpoint to go after those companies. And so in, in Dallas you've got, you know, from a tax standpoint, from a business friendly state, you know, there's, it's a great place to work and to do business, but it was also 108 degrees that last week.
David Alonso: That's right. So it's pretty hot here today.
Louis Song: It's hot here, but you know what? We can, we can drive five minutes ...10 minutes from now and get to the ocean. You can drive for, I dunno, 10 hours and not get to the ocean when you're in Dallas. So, you know, there's tradeoffs. And so, you know, you've got one of the hottest markets in Dallas, whereas in la you've got a very different market where our other offices where there's, it's very disjointed because of the fact that there's so much traffic and people aren't, you know, you could be five minutes away but an hour away. And so you can't work the same way you do as in San Diego as you do in Dallas. And people are much more, uh, sensitive to commute in, in, in LA than they are here in San Diego or Dallas.
David Alonso: Okay. I get it. So let's, let's switch gears a little bit. I'm, I'm curious to ask a couple of questions just around, you know, how your sales guys actually ramp up or you know, if you're looking to scale a recruitment business or you're looking at taking like SDRs and hitting the phone and cold calls, is that even work nowadays or you know, how much of an impact do you think social media branding, creating content, how far does that get you to the next stage of the business cycle?
Louis Song: Well, again, I mean we're, we're, we're going to be basically about 20 million this year, 50 employees, nearly 200 consultants. You know, our, our goal is to get to, let's call it 200 people over the next three to five years in terms of core employees, 500 consultants out over the next three to five years.
David Alonso: And do you see that growth mainly in the Dallas area. Where do you think, you know,
Louis Song: I think this, most of it's going to be in Dallas and Los Angeles. San Diego is the core of the business right now. It's 80% of the business, let's say, you know, 18 out of the 20 million right now, or maybe not that high, but it's still a significant part of the business. But the growth really is in those other cities rather than in San Diego. And, and honestly, it's about the people. If we can get the right person and people, number one, we need the right leadership in scene in LA and in Dallas. Once we have that, we can fill in with the others, but we've got to have the right leadership from a management standpoint and then the right leadership from a sales standpoint to get the right clients on board. I think it all goes from there.
David Alonso: So today it was a great learning curve. Right? I saw you in your real place at home. I can see how passionate you are. One of the things I do think you've got is longevity, right? To be a black belt is obviously a huge commitment to get there. But you know, our fascinates want to ask, you know, to become a CEO and to stay in this business for so long. Right. It's a tough, it's a tough job. A lot of downsides to that as you grow. But What do you think the main characteristics, if someone wanted to start staffing firm tomorrow or any business, what do you think the core values they need to have, give them some tips and tricks about what they need to get there.
Louis Song: I mean, number one, I think, you know, I've had people ask about getting into a business that they know nothing about. I think that's one of the biggest mistakes of like going to start a Subway restaurant when you've never worked at a Subway restaurant. Um, I worked at another firm, K Force for 11 years before starting this firm and I met my business partner there and I worked with him for 10 years before we started and came off on our own. And you know, I think that was true of the most important things that I could've done is learn the business. Number two, get the right business partner. I think without either one of those two things I would have failed miserably on my own.
David Alonso: Interesting. So, you think always have a partner. So if you, if you had another business, would you do it alone or would you know always want to partner?
Louis Song: I always want a partner. I mean, you know, there are times when when Ingram, and I disagree, I think shit, I could've done this on my own, but then there are others when I'm like thank God and most of the time it's thank God I've got a business partner and I think it's like a marriage. You know, it's like raising ... raising kids, right? Sometimes you're like, I can't stand the way my spouse is. But other times like thank God I've got this partner with me because they're pushing me and holding me up when times are tough.
David Alonso: And on that note I can see, you know, super successful right now. I can see that, you know, this place is buzzing when I walked through the door and see how passionate people are. You know, you mentioned before that you had nine offices, I think one in London. So you know, it hasn't always been perfect or I can see there's been some issues. Do you happen to share some of those sort of darker times and some of the stuff that you really had to dig deep to...?
Louis Song: Sure. I mean, you know, those other offices there were opened by a number of, those were open by friends, former coworkers at K Force. And you know, unfortunately we had to make some really hard decisions to close some of those offices or almost all of those offices because the cash wasn't coming in the door. And then it became,
David Alonso: ….and is that billings or is that just typically bad debt? I mean, is it cash? Is Cash for walls? What was the reason for that,
Louis Song: I mean it was, it was a combination of, you know, one client went south and another company wasn't paying on time and then all of a sudden we're losing $100,000 a month. And you know, again, it's just me and Ingram. So we're having the float at now we're all of a sudden having to go to our own home equity lines of credit were writing a hundred thousand dollar check at $200,000 check. And we're looking at our, oh my God, we're now squeezing tight. Like, oh, we're going to make this tough, you know, and we're gonna have to, we're closing offices, we're having to lay people off. And that was no fun at all.
David Alonso: Um, when they see success, they think it's easy. Right. It's really tough times. That obviously happened through those times.
Louis Song: Yeah. And you know, I, I wish it had been different. I wish, you know, I blame myself... Ourselves for not being ready to have as many offices as we did. We didn't have the processes in place, we didn't have the systems in place, you know, to be able to open up those offices. And frankly, I didn't have the commitment in place. I had two young kids, I wanted to be home. I didn't want to go travel to each of those offices to be there to supervise and to see how things were going. And so, so things went awry and we weren't there.
David Alonso: Even more reasons to have good people around you.
Louis Song: Yeah.
David Alonso: And what's your viewpoint on like, you know, a grown up business with big logos versus you know, less clients, bigger logos versus loads of SMB clients that you know, you can kind of depend on for regular business? I mean, I think ultimately kind of both for, I mean, what would be your ideal?
Louis Song: For us it's, it's a little bit of both. Yeah. I think the, the big companies can provide a lot of revenue, but you know, we've got a situation now where one of our, our biggest client actually from a revenue standpoint is late by three weeks. Okay. And so are our AR with them, our accounts receivable with them has ballooned from $300,000 to over half a million dollars. And so they tell, they're telling us they're going to pay us on the 31st but you know what? We're sweating, we're sweating because it's what if, what did they decide? Because their fiscal year ends at the end of July. Okay. So you guys might be able to figure out who it is yet, but what did they decide? You know what, we're going to wait another three weeks and we're going to add another hundred 50,000 and all of a sudden becomes closer to $700,000. Our line of credit is somewhere in the neighborhood of $2 million. And then that's for all of our clients. And so, you know, it's like, oh my God, what do we do? We're going to have to tap our line of credit again. And that's, that's, you know, that's makes my stomach churn.
David Alonso: Yeah, absolutely. Well, thanks for sharing that. It's amazing. So, you know, I'm always keen to kind of understand like the man behind the business and so forth, but you know, when people say what success looks like, is it, you know, is it just great revenue? Is it a mixture of personal life balance? You know, if you're going to sort of fast for the next two years, you know, what is success actually to you? What does it mean?
Louis Song: You know, that's always, I think an individual question. Um, you know, some people define success by financial wealth. Um, you know, I, I personally think it's I'm able to do what I want to do when I want to do it. And you know, both as a company and as an individual, I don't have any debt and you know, I can focus on helping, you know, the way that I like to put it is elevate life through meaningful work. And I can help people every day, both internally in the next eternally elevate life through meaningful work. And it's a core part of how I define success. Helping everyone else get better.
David Alonso: And if you could look back now, you know, a younger Louis, right? Start in his career, what would you tell him?
Louis Song: Breathe. Yeah. Dude.
David Alonso: Do Jujitsu 10 years earlier?
Louis Song: No, I think about this question to before and I'm, my biggest advice to my younger self would be breathe and relax. Don't be so hard on yourself. Keep working as hard as you're working. Keep doing what you're doing. But breathe, relax. Don't, don't be so anxiety ridden and worried about what the future's going to hold. Keep working your ass off. Keep learning, keep trying, keep making the and keep doing it. But relax and knowing that it's going to be okay.
David Alonso: Well, Louis, look, thank you so much for today. It's been a real pleasure to get to know you more as a man of your next book we write tomorrow. Um, I've really enjoyed getting to know you. Show me the a Jujitsu Academy. It was amazing. Thank you so much. I really appreciate everything you've done to that. Thank you.