When Harris Osserman founded Talk Hiring, he wanted to help low-level workers seeking career advancement and make a little cash on the side. He didn’t realize just how profitable this sector could be or that B2B demand for such a tool was at an all-time high.
With ever-increasing automation in the workforce, Harris feared for the swaths of workers whose livelihoods might soon be wiped out. Eager to help, he created an automated job interview tool that helped people – even those without advanced tech literacy – land better jobs.
Talk Hiring needed some tempering to fit its niche. Harris spent over a year going to career fairs and volunteering with career centers begging people to try his app, using the feedback to make it more useful.
In six years, Harris had built his business, made it profitable, and begun expanding into other sectors of the B2B career readiness industry. But after having a child and moving to Atlanta, he decided to sell Talk Hiring on Acquire.com for an all-cash deal to a buyer who could continue his mission.
Here’s how Harris built a great SaaS for an underserved niche and what he’d do differently if he had to prepare for acquisition again.
Don’t Work for Apple, Build the Next Apple
Like many tech aficionados growing up in the late 2000s, Harris spent his formative years admiring Steve Jobs. He imagined himself working on the latest paradigm-shifting technology like the iPhone. Cool hardware was what everyone was talking about back then so he decided to major in electrical engineering at Duke University in North Carolina.
While at Duke, Harris joined a live-in incubator called Incube where he and seventeen other business-minded young adults lived and worked on building startups.
Surrounded by dedicated students turning ideas into sellable products, Harris realized his passion had changed. He no longer wanted to be an engineer for a company like Apple and build other businesses on the side. Instead, he wanted to build the next Apple.
His first startup was a rideshare service (pre-Uber) called Koala Cab. After Uber and Lyft effectively put cabs and rideshare competitors in many places out of business, Harris moved on to traditional programming roles at other startups, yet he never quite found a long-term fit.
Harris wasn’t satisfied with propelling other founders’ startups towards success. He wanted to find success on his own and help change the world while doing it. More and more, he felt his niche should be in the career development industry.
SaaS-ifying Volunteer Work?
Developing code to automate various processes for his day job, Harris was never fully comfortable with the idea that his work rendered others’ jobs obsolete.
To ease his conscience, Harris volunteered at The Hope Program, a nonprofit dedicated to employment and financial stability for low-income earners. Here, Harris regularly helped job seekers with their applications, resumes, and interview skills.
It was during this period Harris decided his next startup, Talk Hiring, was going to join the cause.
Talk Hiring’s first iteration was a little different than today’s. “We were trying to build a voice-based job application, a way for people to talk about themselves instead of writing about themselves to apply for a job,” Harris says. After attempting to sell it to employers at job fairs, he realized the product he’d built wasn’t quite aligned with his goals.
But businesses didn’t want a new style of application. Instead, he found career readiness companies were more interested in Talk Hiring as an interview preparation aid.
“One December break I just reconfigured it into a mock interviewing tool to see if it would resonate more. And it just felt a lot more natural and aligned.”
Give Freely and It Will Come Back to You
Fine-tuning Talk Hiring’s market fit was a group effort. Harris’s strategy? Mandatory feedback.
“We started by giving away Talk Hiring as a free beta,” he says, “As a condition of using this thing for free, you had to meet with me every week.”
To get prospective users interested in the first place, Harris employed what he calls guerilla warfare. He spent tedious hours going to job fairs, sending cold emails, asking for personal introductions, and using contacts like those at The Hope Program as a springboard into other, similar organizations.
Eventually his efforts paid off, and the scope of interested users expanded beyond what Harris had ever envisioned. When asked when he felt he’d found product-market fit, he said, “I posted the link to the tool in some Facebook groups and then out of the blue we started getting a bunch of high schools and high school teachers rolling it out in their schools. One school district in Atlanta rolled it out for students at each of their seven high schools and even asked to acquire the app. That’s when I knew.”
But now that Harris knew he had traction, he wasn’t ready to sell yet. He split his product into two distinct business lines. His primary product was an automated mock interview tool that they sold to schools, governments, and job training programs. The secondary product focused on job searching and earning incentives. Both catered to the underserved market of career readiness organizations, institutions, and government programs that foster career mobility.
Making Time for the Important Things in Life
Like many first-time fathers, Harris felt a fundamental shift in his priorities when his son was born. Before his child was even two weeks old, an outage occurred at Talk Hiring that had him working around the clock for days. Harris realized it was too stressful trying to keep both babies alive at the same time. On top of it all, he and his family had recently moved to Atlanta, Georgia and were ready for a change of pace. It was time to sell.
Harris had once before tried to sell his business, but he’d priced it too high to garner much serious interest. This time he sought the guidance of Acquire.com.
Harris worked with one of Acquire.com’s consultants, Emily Noonan, who developed a host of strategies that would eventually help close the sale.
“We met every week in the beginning to figure out how to write up the public-facing blurb to not give too much away but make it intriguing enough,” Harris says about working with Emily. “There’s also a point when you’re in an acquisition process where you have a bunch of people interested but no one’s going to jump until someone else jumps or there’s some deadline. She helped me figure out how to get over that hump, how to set a deadline, and how to push everyone to the deadline.”
With Emily’s help coupled with the Acquire.com’s SaaS-focused buyer pool, Harris soon had seven interested buyers courting Talk Hiring for acquisition.
Emily helped Harris through each step, including selecting the winning bid, structuring and gathering documents for due diligence, preparing to transition technology and human resources, and strategically editing the letter of intent to better manage his own risk.
It wasn’t all smooth sailing. The deal almost fell apart before the finish line because the buyer had to raise some capital and then the terms on the capital changed.
“Loans are not fun,” Harris says. “But I knew that going in – it’s just yet another risk going into it.”
Harris’s work with Emily eventually led him to an individual with an enticing set of characteristics: likely to close, likely to take Talk Hiring in the direction Harris preferred, and unlikely to have a company board interfere in the acquisition process.
Now in the midst of offboarding after a successfully signed deal, Harris can rest easy knowing his mission to aid job seekers in the US is still running strong.
Remember to Structure Your Startup for Acquisition
People seeking to acquire a business tend to prefer safe, profitable options. To appeal to these buyers, Harris has three lessons he learned for structuring startups to appear less risky.
First, Harris says, is the three-year rule. “If you want to build a startup or company to sell it, it seems like three years is the magical number where people are confident that this business isn’t going to go away anytime soon.”
Next is to minimize your customer and distribution concentration risks. In essence, Harris thinks founders should try to appeal to a variety of customers and provide consistent and somewhat equal support – don’t put all your eggs in one customer’s basket. Make sure your customer traffic comes from multiple sources as well. This ensures losing a major customer or marketing source isn’t a lethal blow to your startup.
Lastly, when building your startup, consider keeping each revenue stream under a different business entity. Harris found out the hard way when courting buyers trying to buy Talk Hiring with SBA loans.
“The SBA always wants to see clear tax filings for businesses its funds are used to purchase,” says Harris. “We had multiple product lines under the same corporate entity, and therefore we were filing taxes every year as a combination of all of our product lines. Because of this, our buyers had to go after different kinds of business financing, which definitely made it tougher to sell.”
Harris’s story shows us this: with the right passion and a willingness to adapt to market needs, anyone can take Harris’ advice to heart and turn their bright idea into a successful startup that’s structured to sell from the start.