Lessons Learned While Building the Business Hireology to Inc 500 Fastest Growing Company. Entrepreneur MBA Podcast 3.18
Summary: In today’s podcast episode, Stephen Halasnik and his Guest Adam Robinson from Hireology, an Inc 500 fastest growing company, discuss their top lessons learned when building a business. These lessons will help you grow and expand your business while avoiding mistakes along the way.
What is Hireology and How Did It Start
Hireology is a $35 million company on the Inc 500 fastest growing list that provides software and tools that can help small businesses source, select, verify and hire the best people. The software as a service is a talent technology platform that helps businesses build a great team more productively and with better results.
Before Adam Robinson (the owner) started Hireology Adam had prior experience with building a business similar to Hierology but that business used more paper-based technology. Adam’s biggest challenge was showing clients how their hiring could be done electronically in a new field called Recruitment Process Outsourcing (or the RPO business). Adam saw that what he needed was to build a hiring system that could make hiring people easier, faster, and better.
The idea of starting Hireology started with a failed first business in 2008 when Adam experienced his first recession causing him to lose 70% of his yearly revenue. Adam’s first company was a “paper-based” company that did some of what Hireology does now, but Adam knew there needed to be a better way of helping his clients. It took Adam a year and a half to stabilize his paper-based business before he was able to sell it and move onto his new business idea. Eventually, Adam started to think of a more automated way for helping companies hire the right people and he started to focus on certain industries.
How to Pivot a Business
This was the first lesson Adam learned while maintaining a business. He realized that business owner leadership is based on learned experiences. He had to experience leading a business that doesn’t actually work out which happened to Adam’s first company. Based on these learned failed experiences and the right business execution, he became a successful entrepreneur. Execution in business is a problem that a lot of entrepreneurs go through when first building a business but Adam was very confident in his execution.
For Adam, pursuing a career in entrepreneurship is about seeing opportunities in markets you understand. There is always an expectation of success even with the risk being super high, the risk is generally in the execution of the business. Many entrepreneurs fail by having a product in search of a problem to solve when building a business that really limits successfully leading a business. He had to take execution risks when there is a big market opportunity with that product.
He determined that there has to be demand for the product you are selling for there to be any success; some type of business strategy should be incorporated towards selling your product. For a service business, he determined it is hard to raise money because he had to hire people every time he sold something when building a business.
He also learned to take very calculated risks where there is demand without worrying about the execution. Confidence is the key when it comes to your execution in leading a business.
When to Give Up on a Business
Revenue and the number of people working for him started plummeting when building his business, that was his cue to pursue other opportunities. Adam got advised that there is always an opportunity cost to continue what you are doing. That’s why for his own business he determined there should be a time in the future where he should have a goal of where he wants to be when it comes to growth. If that goal was not reached, it should be time to move on. Which is exactly what he ended up doing.
Adam mentioned how sometimes you are so into building a business you currently have you keep 100 percent of your focus on it and don’t look for opportunities that could be more beneficial in the long run. He also points out that small business owners do not have other personnel that can run the operation so they can have that time to pursue other opportunities.
Working on the Business
As Adam got more experience building a business, he learned that you should work on the business instead of in the business. For example, instead of making pizzas in a pizza business, pizza makers are hired to make the pizza. People working on the business should be managing the finances, costs, and capital which is a different skill set entirely.
He also learned that giving other people responsibilities really helps out his business a lot instead of just handling everything on his own. There was a question that Adam brought up that was a quote from Entrepreneur’s Dilemma for business leaders that asked if you want to be rich or want to be a king. Being the king means your financial returns are going to be significantly limited. He learned that he had to share the power and give it to other people by hiring the right staff for being rich when building a business.
Hiring the Right People
Business strategy is very important when it comes to a business. According to Adam, the only competitive differentiation between businesses is the people working in the business. The value system in the people is what truly makes every company unique. When building a business, there need to be strong core values shared and reinforced by the staff. These core values need to be what everyone stands by in the business. Interviewing also needs to be a top priority because the right people should be hired from the start.
Even with the best market, Adam states there cannot be any success with an underwhelming team when building a business. He would rather have a better team than market any day of the week. There is no recovery from a team with underperformers. Business culture is very important, Adam learned to spend 30 percent of his time on culture and people moving forward.
Adam emphasized the importance of culture when building a business. Culture has to be bigger than the founder and has to get through all the layers of management. If the culture is not right from day one and the business keeps growing, there will be problems with the company. When business culture starts to break down, the culture won’t scale, so the business cannot function. Hiring the right people means these individuals understand what the mission, culture, and business principles are for the company. Building a business right starts with people knowing what the business mission statement is.
Market Demand into Cash
Adam lives with the business motto when building his business. The business motto is how quickly market demand turns into cash. There are four things that he kept under control when building a business: prices, the cost to deliver, how fast you pay your vendors, and how quickly you get paid. Eventually, he developed two jobs when it comes to business owner leadership. The first being the talent scout and people manager. He looked for talented people who have enough skills to work for the business and they are all managed by him. The second being the business motto which again is how quickly he turned the market demand into cash.
When building a business, he learned cash flow is different for different types of services. There are services where you chase cash flow like a law firm and there are services where you have positive cash flow by selling items that produce immediate cash flow. Grocery businesses are always stuffed with cash because of the items they sell upfront, they have a lot of cash flow.
When starting Hireology Adam determined that upfront costs, sending invoices, and chasing payments weren’t the way he wanted to run his business. So, he started building a business without chasing payments and wanted upfront payments with monthly advances as well. Chasing receivables was something he didn’t want to do again with any business he wants to pursue. With his own business, he controlled the cost and price as well as paying his vendors later. He also controlled his own credit policy with money paid upfront.
How to Overcome Adversity
If adversity hits when building your business, what matters is how you handle that adversity and the steps you take afterward. It is ok to realize that building a business isn’t for you. It is also fine to say it didn’t work out the way you thought it would. Many people, including Adam, have experienced failure when trying to build a business and it is something everyone can eventually overcome if you work hard. And just because you had success running one business doesn’t guarantee you’ll have success building another one.
About The Guest Adam Robinson, Hireology
Adam Robinson is Co-Founder and CEO of Hireology, where he’s a mission to help business leaders succeed by building exceptional teams and workplace culture. He’s a nationally recognized keynote speaker, author of The Best Team Wins: Build Your Business Through Predictive Hiring, and a columnist for Inc. magazine. Adam is a three-time finalist for EY Entrepreneur of the Year (2017, 2018, 2019), and Adam Robinson a “Top 25 HR Industry Game Changer” by Workforce magazine. Under his leadership, Hireology was ranked #94 on the Inc. 500 list of America’s fastest-growing private companies in 2016 and has been on the Inc. 5000 list each of the last five years. Hireology has twice been recognized nationally as a “Top 50 Best Workplace” by Inc. Magazine and a “Top Hireology Culture” by Entrepreneur magazine.
Adam graduated from the University of Illinois at Urbana-Champaign and received his MBA from DePaul University. He’s a member of YPO Chicago and the Economic Club of Chicago and lives with his family in Chicago, Illinois.
About The Host Stephen Halasnik, Financing Solutions
Stephen Halasnik is the host of the popular, The Entrepreneur MBA Podcast. The Entrepreneur MBA podcast’s purpose is to help small businesses get over the $10 million per year in revenue mark. Mr. Halasnik is the Co-founder and Managing Partner of Financing Solutions. Financing Solutions is a leading provider of Lines of Credit to small businesses and nonprofits
Mr. Halasnik is a graduate of Rutgers University and has an Executive Masters from the MIT Birthing of Giants Entrepreneurship program. Mr. Halasnik has started and built 6 companies over 25+ years with 2 of those businesses making the Inc 500/5000 fastest-growing list. Mr. Halasnik is a best-selling Amazon author on business and regularly tweets about his ideas about growing a business. You can also find Mr. Halasnik on youtube talking about Entrepreneurship.
Mr. Halasnik loves small business. He lives in New Jersey with his best friend, his wife Gina. Mr. Halasnik’s number one purpose is raising his two boys, Michael and Maxwell, to be good men.
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