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It is better
to not be on
the web than
to be on and
not know why

John Sumser

is more
it seems.
John Gall

It's better to
do a few things
really well than
than to do
a lot of things
If you can't
make the necessary
commitments of
time and energy
to your
scale back
your plan.
John Sumser

© 2013 interbiznet.
All Rights Reserved.

Materials written
by John Sumser
© TwoColorHat.
All Rights Reserved.

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Wages and Inflation (From the Vault)
(March 17, 2000) Tight labor markets are old news. Their permanence is a dawning certainty. Why isn't inflation coursing through the economy? Don't higher wages drive price increases?

The answer is staggeringly simple. Prices drive inflation, not wages. If the costs of labor have an effect on price increases, it is secondary. Inflation is a measure of the increasing price of things, not the wages paid to produce them. There is not an inherent relationship between the two.

Since the inflation spirals of the 1980s, companies have gotten really good at managing costs. If an element of the cost of a good or service goes up, management makes the necessary investments required to keep pricing at the same (or lower) level. While tight labor markets put pressure on corporate profits, there is very little pricing flexibility in the market. Companies can not simply raise prices because their costs are going up. Global competition, the Internet (where things are 13% cheaper than other sources), relatively stable commodity prices and continuing productivity improvements take care of the inflationary pressures.

Rather than price pressure, tight labor markets cause profit pressure.

Profit pressure causes a profound internal examination of how money is sent and whether it is spent wisely. In other words, the marketplace isn't accepting price increases. Though the position can not be sustained permanently, as long as there is a chance that a competitor can realize productivity improvements, prices won't increase. Inflation will be deferred until we've seen a couple years of bad profit performance across the board.

In intelligent companies, it always comes around to simple questions. "Is our money being spent in the smartest possible way?" "What is the smartest way to perform function X?" "Is Function X really a 'core competency' of our company, should it be?" "Are we pursuing the right objectives?" "What business are we really in?" "Can someone else do this better?"

These days, the same sort of profit pressure driven rigor is starting to be applied to Recruiting. The question has changed from "How can we do this administrative chore less expensively?" to "Are we doing the right things?"; "What are the right things to do?"; and "What is our long range strategy?" The pressure from increasing costs is working its magic.

- John Sumser, © TwoColorHat. All Rights Reserved.

Senior Recruiters

(March 16, 2000) We were talking with one of our favorite Silicon Valley players the other day. A veteran of the Apple interface design and evangelism teams, she is a highly sought networker in Silicon Valley. Her bubbling enthusiasm and natural charisma belies the fact that she has produced extraordinary results on some of the great innovative teams of our era. Our conversation covered something like "the psychology of technology". We were trying, as a group, to get a clearer handle on the natural overlap of two very different subjects.

In Electronic Recruiting, we use the word "networking" in very context sensitive ways. The network can be the internet; the local (behind the firewall) lan; the exchange (by sneaker net) of files and information in a more physical way; the weird stuff that happens in professional association meetings; the relationships between groups of affiliated people; the political structure of families; communities or corporations; collections of related data sources (websites, TV channels, radio stations) or the interactions of extended relationships over time. It's a broad range of possibility placed under a small roof.

We are beginning to think of networks as collections of nodes (human, technical or a combination). The essence of a network is that information flows between and among the nodes depending on a variety of variables. In purely technical networks, data is exchanged. The more human-ness that is added to the process, the more that the data becomes information, insight or wisdom. Our discussion covered a very interesting question. "How do you get technical networks to generate a more predictable flow of information, insight and wisdom?".

She spoke fondly of her mother who continues to hope that our friend will land a secure job in a big company. The life of a productive member of the Silicon Valley elite is somewhat nomadic and more insecure that it appears on the surface. Her mother feeds her a constant stream of information about possible opportunities, good companies to work for and so on. A dutiful daughter, she digests the input and finds pleasure in letting mom give attention and concern. These days, it happens by email.

In traditional human networks (as in the technical ones), information tends to flow from some sources more than others. Membership in a network doesn't seem to depend on meeting a high rate of delivery (although there may be a minimum.) Great Executive Recruiters have long understood the need to define, map and exploit highly observable networks (Yale Fraternities and so on). Our conversation touched on more mundane (but much more potent) networks. We imagined the "" recruiting service that organized moms into a distribution network for good opportunities for their children. It's not all that far-fetched.

While the techies dominate the space with ever increasing complexity to find matches in a dwindling labor supply, we know of no operation that builds its business by identifying key nodes in human networks and wiring them together. This sort of bionic recruiting network is liable to emerge from the predictable failure of many of the present technical plays. While current job board and Electronic Recruiting operations exploit human networks to a degree, none of them do it with planning and precision. There's no question that many mothers could do a better job of creating the right traffic (on a very small scale).

Who knows? The best nugget from our conversation was an interesting measure of the quality of results from a particular service. Does it meet the "Mom-test"? In other words, the next time you run a database search, ask yourself if your mother could have found a better candidate. - John Sumser © TwoColorHat. All Rights Reserved.

Free Posting Tool

(March 15, 2000) Beware the ides of March (today). The shifting of market position is often a subtle game driven by the execution of what, in hindsight, looks obvious. We suggest that you take a solid look at the emerging offerings from CareerSite and reconsider your view of who's who.

Giving away free job postings is a time honored strategy for market share acquisition. Sometimes it works, most of the time it fails. While FlipDog's recent entry sheds some doubt on the viability of the strategy, the CareerSite implementation gives away so much value in one offering that it really is an order of magnitude different. Using CareerSite's free Recruiter's Desktop, a recruiter can deliver job postings from a single point to Yahoo, AltaVista and America's Job Bank (free sites). The service also allows account holders to post their listings to HotJobs, CareerEngine, CareerMosaic, CareerWeb, CareerMag,,, JobOptions, or CareerCity. Plans to roll out many additional free sites and other account driven job boards are well underway.

While the technology (post once, distribute many) is key to the offerings position, it's really all about marketing and mind-share acquisition. Make no mistake about it. You can spend a great deal of money to acquire the services that CareerSite has begun to give away at no charge.

Their belief is that by continuously delivering value first they will build long term relationships that can be converted into real business down the road. We think they're right.

Increasingly, companies who see themselves as technology providers are stuck in a bind. While a CareerSite can assume that technology investment is a sunk cost (gone to the marketing budget), tech companies will keep trying to generate large revenue streams from small investments. The movement into free posting services pits CareerSite directly against the emerging middlemen who broker data from one site to another.

While it remains unclear how the battle for customers will evolve, we can assure you that CareerSite's bold moves will ramp up their customer base rapidly. Then, they have to figure out how to convert the freebies into cash flow.

- John Sumser © TwoColorHat. All Rights Reserved.

Dog Flippin' Cool

(March 14, 2000) Okay, we don't understand the business model. Highlighted Job Offerings, Banner Ads and Spotlight Postings added up to a dismal market prospect for They weren't able to go public until they began billing their customers for services received. The folks at the newly launched FlipDog face the same challenge.

Their plan to develop traffic and competitive value is also veiled in mystery.

But they have a helluva play with branding, interface design and technology. We believe that the team at Whizbang Labs (the parent of FlipDog) has hit a resounding home run that will shake up the expectations of job hunters, employers and market analysts alike. Out of the box and forward looking, the company's positioning and delivery distinctly raises the bar for the rest of the players at the national level. The site at goes a long way towards setting a design standard for non-regional job services. While we don't think that the long term money is in global recruiting, the Flipdog approach makes it really easy to traverse the ground between 'everything in the universe' (global) and 'stuff I care about' (regional). Any player who wants to stay in the game will be forced to copy or improve upon FlipDog's deliciously helpful job wizard.

We were certain that no one could effectively deliver an intelligent graphical map of the United States as an interface. But, the Job Wizard at FlipDog really adds new wrinkles to the concept. On one page, the user clicks a state, a city and an occupation. At each click, the number of jobs available is rapidly displayed on the page. It's a fantastic implementation of a concept that we thought had a wooden stake driven through its heart.

The name FlipDog (we're still trying to find something sarcastic to say about it) seems to hit the sweet spot. The hip component of our team gets it in a way that radically improves upon the unimaginative derivations of CareerBordello, JobWhatchamacallit, HirExpectations, Recruit-o-matic, ResumesRUs or DigiTalent. It's memorable, out of the box and easy to build as a brand.

On the technology level, FlipDog is a demonstration of the core Whizbang Labs tool set. According to their site, the tool:

  • Crawls the Web, searching for and identifying new domains
  • Classifies pages in each domain, identifying those that contain the user defined target data
  • Captures the target data, extracting it from the pages it has found and classified, whether that target data is embedded in the text or stored behind forms
  • Compiles the extracted data, storing it in a relational database where it can then be searched, sorted, filtered, and otherwise manipulated with traditional RDBMS tools, either directly or through a public or private portal
In other words, FlipDog is another entrant in the Job Aggregation and distribution business.

Although the demonstrated techniques need a few small refinements, it's an interesting introduction to the market. We bet that the company will quickly hear from Webhire (any solution to Junglee's problems would be a welcome respite). Certainly, the two or three other technology players in the space will sit up and take notice.

Technology, interface and branding aside, the candidate acquisition market is all about acquiring candidates inexpensively and selling them for more to a bank of customers. While FlipDog gets three central issues in a way that makes us gasp, it's useful to remember that the market leader has a bad name, crummy technology and a mediocre interface. What they have is a strong marketing arm and a fantastic sales engine. These are the problems that face FlipDog as it matures. It wins the beauty contest, hands down. Now comes the 'can you make money?' question.

- John Sumser © TwoColorHat. All Rights Reserved.

It's Here (Final Encore)

(March 13, 2000) After a long, painful birthing process, the 2000 Electronic Recruiting Index is shipping. Careful readers might have noticed the changed link at the top of this page. The Executive Summary, describing the contents of the book, is available for download.

This year's book builds on the material contained in the 1999 ERI; there is little in the way of overlap (although we did update the market volume and growth statistics). While the 1999 ERI focused on the internal mechanics of operating an employment website (or the employment section of a corporate website), the 2000 ERI takes a larger view of the marketplace, evaluating customer and vendor types, the range of available functionality, stock market performance and 250 company reviews (including an assessment of their contribution to an 'end to end' solution').

We refined last year's vendor survey to focus the results on business level characteristics of 50 Job Boards. Covering Customer Satisfaction, Brand Awareness, Sales Force Effectiveness, Acquisition Desirability, Short and Long Term Growth Prospects, the consolidated results of 3,000 recruiters' responses are included with an eye towards IPO prospects.

The key items in the study include:

  • A detailed analysis of 29 different categories of participants in the markets, from hiring managers to candidates and all of the intermediaries in between.
  • A comprehensive description of all of the functions required to execute an end to end solution.
  • A thorough review of all 62 Publicly traded companies with an interest in the Electronic Recruiting Market including comparative stock performance and the correlation between web investment and price.
  • A detailed analysis of the web offerings of over 250 companies providing products and services in the electronic Recruiting Market. Each company analysis includes a "functional map" that allows the design and integration of an end to end solution from a variety of vendors.
  • The results of a survey of over 3,000 professional Recruiters. The survey covers brand awareness, customer satisfaction and acquisition desirability for 50 key players in the electronic Recruiting Industry.
  • A generic white paper describing the strategy considerations for a staffing firm that desires to preserve or expand its market share in the next five years.
  • A guide to valuing the Resumes in a Resume Database.
  • Forecasts and predictions for the Industry's next five years
  • Detailed market valuation, segmentation and sales volume assessments and forecasts.
  • Evaluations of 250 current vendors including a description of their functional contribution to an end to end solution.
The Executive Summary is intended to give a flavor of the depth and focus of the 2000 ERI.

- John Sumser © TwoColorHat. All Rights Reserved.

© 2013 interbiznet.
All Rights Reserved.

Materials written
by John Sumser
© TwoColorHat.
All Rights Reserved.

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