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(February 18, 2000) When Monster launched its SuperBowl campaign, driving traffic north, it simultaneously launched an upgrade to its interface and back end system. Any smart advertising person would tell you that the best time to launch an upgrade is during the blitz. We're sure that many marketing people would agree. Experienced web product developers, however, would run and hide in terror. Customers, of course, would complain if it wasn't executed well. The excursion into the new offering was a disaster from all that we hear. To date, we've received about 150 notes from frustrated customers. Some, we forwarded on to Monster (no response). Most, we acknowledged briefly and then waited. Giving Monster the benefit of the doubt, we assumed that they'd hop right on the problem. We assumed that bad timing and traffic growth would conspire to produce a quick fix. You know what they say about assuming...it makes an ass out of Uma Thurman. These days, the torrent of complaints have slowed to thoughtful notes like this snippet: ....first an update on Monster...their service is still not completely back to the level we enjoyed prior to the SuperBowl...we still get daily searching glitches and some of their agent/email systems are still erratic. And, they've induced some new problems...some of the candidate/applicants are struggling to learn how to use the profile/submission form...we get incomplete info or "confidential" info so that we are not able to contact possibly workable people. Oh well....if they screw up their proposed recruiter interface in a couple months like they have this....we're rapidly researching alternatives to be prepared.Something has changed. These days, customers depend on their vendors to provide candidates. That's significantly different from a couple of years ago when customers were excited to get a supplemental supply. The industry has matured to the point that it is the dominant recruitment advertising method and is rapidly becoming the dominant recruiting method. We've migrated from toy to tool. We supply critical data to customers who depend on it. That implies a requirement for much more professional management. Really understanding the web and its dynamics is at the heart of what makes a competent manager in the business. A capable player balances traffic development and product development like Yin and Yang. The rhythm should go: develop, test, release, debug, wait, wait some more, build the traffic. Unlike the traditional software business, the web demands product development and sales/marketing that are complementary cycles. Its no accident that the high flying big time successes release upgrades in August and build traffic in January. As in the traditional software industry, screwups result in losing customers who never come back. Good management would suggest that Monster ought to address the problem publicly, talk about the systemic changes that will prevent a recurrence and hang the scapegoats in a public square. That's how the big boys do it. - John Sumser © TwoColorHat. All Rights Reserved. Synchronicity (February 17, 2000) Interesting. On the same day, Forrester Research and Kevin Wheeler (a popular consultant who was once the Recruiting guy at Schwab) both published broadly distributed visions of the future of our industry. They predicted the same thing...the emergence of a universe of "Career Networks" consisting of learning resources, profiling databases and matching capabilities. Somehow, these new entities will consolidate the marketplace and make life easier for everyone by reducing the number of sites a recruiter or job hunter has to visit.
In Forrester's new universe: At the heart of the career network lies three essential components: a profile database, a jobs database, and a matching engine. Because career networks will offer a wide range of career- and even non-career-related services, these large sites will aggregate not just a resume database but a profile database consisting of detailed information about users gleaned from online behavior. Aggregating jobs from numerous sources, the jobs database will store data on companies and job demand, as well as the types of positions filled online. Finally, the database engine will not only match candidates with jobs but also will learn preferences, saving time for job seekers and recruiters
Mr. Wheeler envisions: Where does this all end up? Probably in the emergence of a new service called a career network. At its heart are three elements: a profile database, a job database, and a matching engine of some sort. The profile database will collect the usual resume information, although in the best cases, this will be a minimum set of critical information so that a recruiter or hiring manager can decide whether or not to move forward with a candidate. This profiler will also gather information about how the candidate used the web site. It will collect information on what other places the candidate browsed and perhaps will be intelligent enough to recommend specific sites TO a candidate.Synchronicity is the term that Carl Jung, the famous German Psychoanalyst, used to refer to a pattern of random events with obvious connections. Man, this is some kind of synchronicity. At this point in our morning, assuming that the coffee threshold has been reached, there's a fork in the road. Do we take the high road (a look at the future) or the low road (a tutorial on the highly successful PR tactic of writing press releases that are predigested stories)? Typically, the future is an incremental (if somewhat unpredictable) extension of historical circumstances. That's why early cars looked so much like carriages. It's why today's computers still resemble television sets. Radical moves forward are more likely to involve the reuse of old ideas than the creation of entirely new entities. We take the overlapping forecasts to mean, somehow, in a labor shortage (where competition is high and results are scarce), that normal people are going to use the net to make life easier for Recruiters. And, somehow, that in an environment where Recruiting budgets are exploding, the competition for dollars is going to diminish and the vendors are going to collaborate in order to deliver an homogenous experience. It's an understandable fantasy. It's certainly what the current crop of customers want to hear. There's always good money to be made telling people what they want to hear. Unfortunately, predicting discontinuous change is usually a way of peddling hope that never arrives. Our take? Complex markets make great opportunities for middlemen. We clearly see the emergence of new and very powerful advertising agencies. On the candidate end, we imagine ever increasing efforts to remove the workload require to become a candidate. It's a sellers' market, and candidates are the sellers. Creating attractive value in a time of scarcity is the recruiter's responsibility, not the market's. It's a good time to start an outsourcing firm that is accountable for results and compensated at a percentage of the transaction. - John Sumser © TwoColorHat. All Rights Reserved. Look At The Market (February 16, 2000) There is a direct correlation between web investment and stock price performance in staffing company stocks. That is the simplest way to explain the market performance difference between CDI (close to a 52 week low, market cap $384M), Korn-Ferry (headed towards a 52 week high, market cap $1.25B) and TopJobs On The Web (accelerating rapidly, market cap $162M). The traditional, franchise-based, staffing firm is dying on the vine. The high investment bricks and mortar play is successful. The (coming from out of nowhere) pure Internet player is producing the most volatile forward momentum. The market is starting to understand the real differences between these players that we know so well. The recent (and spectacular) movement by TobJobs, against a backdrop of tightened valuations demonstrates the power that can be achieved by a focused team. While the market seems to be punishing HotJobs for a mediocre Superbowl ad (off by 40% in a month, Market cap $767M), it is being kinder to TMP - Monster (off 25% in the same month, market cap $6.3B). The Monster ad was as bland as HotJobs' but there's a more substantial 'bricks and clicks' component to the TMP business). Finally, Romac (now traded as KFRC) is off by about 33%. Nonetheless, an aggressive dot com strategy and hyperdrive advertising density has doubled their market cap to $572M in the past 90 days. It is becoming very clear that creating the appearance of a deep and abiding commitment to an aggressive, high investment web-play is the key to stock price performance in the Traditional staffing sector. Although acquisitions fuel the current performance of the other winners in the sector, the ultimate question will boil down to a clearly articulated strategy for the integration of the web into the daily operations of the core firms. From an investment perspective, Monster's recent policy and pricing moves to prevent the automated collection of data from their website poses a huge stock-price risk. With eBay involved in a restraint of trade investigation on the same subject, Monster's reluctance to let its customers use legitimate tools has the potential to open the doors to serious downside. Were we in their shoes, we'd try to spin the question as a clear segmentation of their market. We doubt that protection of data from the customers who pay for it will stand up in a court test. Here's a useful background piece. That's really how the next phase of investing will go. Once the winners have been separated from the losers (it's as simple as who has paid the ante), stock performance will go through a phase of technical adjustment as the rules of engagement sort themselves out. As the biggest, Monster will be first through the chute. Shrewd investors will come to terms with the fact that the market leader has to pay the legal expenses for an entire industry. - John Sumser © TwoColorHat. All Rights Reserved. Sticker Shock (From the Vault) (February 15, 2000) It seems like each passing year adds another zero to the price of entering the Electronic Recruiting Marketplace. The competition for market position, the wake up calls for old school recruiters, the cost of acquiring increasingly scarce candidates, the expense of sales force development and the core price of creating a brand in a cluttered space conspire to drive the entry point ever higher. Roughly, it cost $1 Million two years ago, $10 Million last year and $100 Million today. We can remember when an investment of $100 Thousand seemed like the maneuver of a market leader. Four years ago, we gasped with awe when a client closed $750 Thousand in venture capital financing. The recent $70 Million funding of BrassRing will ultimately be remembered as a footnote as the numbers continue to grow. Meanwhile, the cost of the core technology shouldn't be changing very much. After all, it isn't that significantly improved over the industry's first five years. The real cost changes are in marketing, customer service and corporate infrastructure. (We know you're giggling about the idea that customer service is on an uptick.) At the core of interbiznet.com (our company) is a simple concept. We do not recommend ideas, tactics or vendors we have not tried. We try to run our operation as a laboratory that experiments with products and services before reviewing them. We are devoted to understanding the complexities of the Electronic Recruiting Marketplace, its structure, vendors, services, future and trends. We have found that having "dirty fingernails" is essential to understanding how our readers and clients should navigate the space. We experiment with Recruiting Techniques, Web Technologies, Marketing Tactics and all of the other aspects of our industry. We believe that our job is to try to experience and understand the market in advance of our customers. Along with our clients, growth has pushed us increasingly towards outsourcing of key functions. It's a jungle out there. In a recent test RFQ (Request For Quotation), we received a range of quotes from $25 Thousand to $1 Million for a fairly simple bit of technology. Although you'd expect that our experience was somewhat biased, we found it interesting that the low bids were executed quickly and politely while the high bids took nearly 150 days. Thankfully, we have lots of internal experience in managing subcontractors, evaluating proposals and dealing with squirrely vendors. Our consistent emphasis on doing it ourselves has given us a baseline of experience from which we can judge the abilities and risks associated with a range of vendors. For example, one vendor included an interesting offer in his proposal. For $8,000, his firm would enroll us as an associate at Amazon.com so that we could make some money selling books. Unfortunately (for him), we had taken the 30 minutes required to join the bookselling program. We read the proposal as an estimate that included an hourly rate of $16,000 for some tasks. Please take our heartfelt advice, rooted in our experience. Don't make a purchasing decision until you have at least some hands on experience (no, not a manager with experience, you with experience). Building a simple web page is an easy task. By investing a weekend's worth of time learning HTML and the rudiments of web design, you will enable yourself to reality check the wildly vacillating claims of potential vendors.
- John Sumser, © TwoColorHat. All Rights Reserved. (February 14, 2000) The need to know more about the underlying technology of the net just went up. After last week's confusing reports on so called 'denial of service attacks', it looks like we'll need to dig deeper to understand the issues. If you recall, there was a lot of fuss about 'hackers' using 'zombie' computers to shut down big sites. It's an easy trick. We're betting that the vandals behind the outages are not 'hackers'. They are probably not even high end rebellious geeks. Most likely? Plain old vandals. Shutting down a website by overloading the server with data is no more complex than hitting the enter key lots of times while a website is loading. That's all a denial of service attack boils down to. Using a bunch of computers with a automated form of the 'enter' key, you can overload any server. You can overload any highway by placing too many cars on it. The parallel is real and it's as easy to figure out. So why all of the fuss and what do you do? First of all, watch the responses. The opportunists will emerge quickly. Certainly the emphasis will be on preserving the stability of commerce, not struggling to come to grips with the price of individual freedom. Our new world is a bit scary and still a bit primitive. Every time there is a hint of risk, the paranoid (particularly those with products for paranoids) come rushing out of the woodwork to lead the parade. This time is no different. We have teenage children. That means that we are subject to vandalism at a higher rate than at other times in our lives. Halloween brings a cascade of shaving cream and toilet paper. A few high school football games brought similar results. The first week of summer has been a trial for a couple of years now. We haven't hired security guards. We have made a few of the little creeps clean up after themselves. We don't leave much that can be broken in the front yard. So, here's the clue. Spend for site security in proportion to your risk. What would it cost to be out of business for a day? Half of that is a good investment in security. Talk to your insurance agent about financial coverage. Oh, the real security issues have yet to emerge. We bet they focus on the handling and reselling of personal data, not web site management. - John Sumser © TwoColorHat. All Rights Reserved.
© 2013 interbiznet. interbiznetAll Rights Reserved. Materials written by John Sumser © TwoColorHat. All Rights Reserved. Mill Valley, CA 94941 415.377.2255 (V) 415.380.8245 (F) Send comments to colleen@interbiznet.com |
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