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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


The Electronic Recruiting News is a Free Daily Newsletter For Recruiters, HR Managers, Advertising Agencies and Clasified Advertising Operations

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The Change

(May 26, 2000) Although we live in the heart of the West Coast Liberal Complex, few would easily accuse us of having many observable liberal tendencies. Profound belief in the importance of personal accountability, the value of fiscal responsibility, the healing power of profitability, a physical aversion to overhead, a distaste for big taxes, a love affair with self-directed learning and working and a bias towards freedom of choice in almost all circumstances place us directly in the conservative camp. We believe that expanding personal freedom and the power of the American ideals of self-determination are at the roots of the powerful explosion of choice in our economy.

We simply can't understand why people in the workplace continue to engage in the weird, ineffective behaviors associated with discrimination based on race, religion, dress or lifestyle choice.

Even in California, where you'd think that the labor shortage and exploding economy should have driven a stake through the heart of the vampire, subtle discrimination persists at the expense of profitability and organizational effectiveness. We're so far into the 21st Century that we hardly notice that Caucasian males are the minority in the company. Our little operation, though never designed as such, is a living example of the power of unintentional diversity.

As a result, we hear stories of the continuing struggle for workplace acceptance that the team hears from their peers. It's amazing that in this time and place racial, ethnic and lifestyle discrimination are part of the fabric of things. With 10% of the desks in America unfilled, we're hoping that Economic prosperity will serve as a gateway to a future in which skin color, gender, religion and lifestyle cease to matter. A blended workforce seems so natural that we have a hard time remembering the other way.

For the first fifteen years of our career, we climbed the ladder (quickly) in an all-white male corporate hierarchy. It seemed normal to never meet a powerful woman, a successful African American or never see a gay person. The homogenous environment produced an artificial sense of security and certainty. It was like eating a diet of white bread.

These days, the things we take for granted are very different. It isn't about being conservative or liberal. It's about getting the job done by the best team possible. The larger we can keep our view of the world, the less likely we are to misunderstand it.

As the labor shortage persists, we know that companies that erect and maintain employment barriers will fail. It's not about legislated head count, it's about making a profit effectively while getting to have a weekend day off. Thank goodness that the times are conspiring to fix this problem.

- John Sumser © TwoColorHat. All Rights Reserved.

The Market

(May 25, 2000) We expect to see a few changes in the near term. With the recent acquisition of Resumix by the aggressive team at HotJobs, it's becoming clearer that most old school software providers are best understood as mines for customer lists. For some time now, we've been suggesting that Applicant Tracking Systems are rapidly becoming giveaways. They'll function in the market like a sort of upscale key-chain, tee-shirt or baseball hat.

After all of the fuss, Webhire's stock price is plumbing new lows. Unfortunately for them, there are more than a few characters who cheer with each incremental drop in price. It has something to do with partnerships and customer relationships gone south over the years.

We'll be happy to see the dust settle.

The history of our industry has been plagued by institutional memory of the incredibly bad job the large Applicant Tracking companies did in the migration from main-frame to client-server. Everyone involved botched the delivery and made money on the subsequent flow of customer service requirements. That old school software model, bill the customer for your mistakes, is a central reason for some of the early delay in our Industry's growth profile. Sprinkle in a dose of bad relationship management; add a dollop of crossing the line with marketing hype and swirl in strong arm sales techniques. You've got a recipe for bad karma, sour mojo and low trust in the customer base.

Really, no single company was extremely worse than the others. It's more like a bad case of short term decision making infected a whole range of companies. Each of the Applicant Tracking players dug their own graves and are now moving to accept a form of market justice.

The timing is particularly ironic.

Just as the market is ready to really harness the potential of tools that sift through huge piles of data with elegance, the economics are shifting to reward intelligent data filtering in a very potent way. Swamped by low quality resumes (a symptom of the labor shortage, not the Internet) customers are crying out for tools that help them distinguish between less than ideal candidates. Too bad that the applicant tracking folks didn't understand the shift in the market.

Now that the incumbents are marginalized, we expect a near term flowering in the features of back end processors. You can expect an uptick in the claims from companies who believe that everything will be better when all candidates fill out their profiles. More likely, the value of scientifically valid assessment tools will be seen in the near term and clamped on to a range of candidate aggregation products. While we can't imagine a successful profiling standard, we can easily imagine a transportable assessment package.

Finally, a big pile of debris is being cleared from a small segment of the playing field. Once the stock market has given these now marginal players a final push, we'll be ready to move forward to the next level of the game. It's about time.

- John Sumser © TwoColorHat. All Rights Reserved.

Wrong End Of The Rainbow

(May 24, 2000) With lots of Irish in our family history, we're fond of Gaelic mythology and practitioners of the national sport. Our favorite legends have to do with fortune shining brightly on a common person. A little bit of luck combined with greed and persistence goes a long way, according to the folklore. Consider Leprechauns:
They are known to aid humans and perform small labors for them. Sometimes they ask humans for supplies and furniture, for which in return they give objects which bring luck and fortune. Leprechauns are called fairy cobblers, for they make shoes for elves (but always one shoe, never a pair). They are seen quite often by humans and are described as merry little fellows gaily dressed in old-fashioned clothes; green, with a red cap, leather apron, and buckled shoes.

When they finish their daily tasks, leprechauns like to organize wild feast, during which time they are referred to as cluricauns. These (often drunk) cluricauns can then be seen riding in moonlight on the back of a dog or a sheep.

According to popular belief, a leprechaun possesses a treasure (usually a pot of gold) which a human may obtain if he succeeds in capturing one, which is extremely difficult. Even after capture, a person may not take his eyes off of him for an instant, for then he will vanish.

From The Encyclopedia Mythica

The Leprechaun legend reminds us of a lot of the so-called entrepreneurial behavior we see around the marketplace. Many fortunes have been lost (recently) because the human took his eyes off the little creature just as the gold was within reach. From VC backed managers to trench level recruiters, the temptation to celebrate victory in advance is often of the first symptom of deflation of the balloon. As the legend indicates, success requires more concentration, not less.

Knowing that there is a pot of gold at one end of the rainbow does not guarantee that you are headed for the right end. Buying a lottery ticket is not a guarantee that you will win. Getting funded is not a guarantee of market success (just the opposite, in fact). Getting a candidate to agree to take the job doesn't mean that she will show up for work.

The devil is in the details.

Over the next couple of months, we expect to see a number of changes in strategy in major players around the industry. As the glow from over-valuation clears up and businesses are left to grow from the fundamentals, we'll get to see just who can keep their eyes on the Leprechaun.

- John Sumser © TwoColorHat. All Rights Reserved.

Hero 15: Ray Marcy, Gettin' It

(May 23, 2000) Unlike the rest of our heroes, we've never met Ray Marcy, we've only seen the traces of his work. The CEO of the staffing company formerly known as Interim (now Spherion) has been trying to figure out how to move his massive company online for years now. Marcy demonstrated his commitment publicly and early with the initial (rumored at $5M in 1998 ... the largest advertising buy of the time) sponsorship of Worklife's development of the AltaVista Career Portal.

It's no small question.

Interim, like most staffing and search companies is better understood as a federation of branch offices than as a monolithic corporation. With a great deal of autonomy at the daily operating level, the CEOs of these staffing firms are best understood as "cat-herders". Marcy, through repeated experiments inside and outside of the company, is profoundly involved in the search for the company's future on the web. We think he's hit a home run with his latest moves.

Recently, we've been exposed to managers who think that the discovery of the future is a question of buzzword manipulation. It's a luxury afforded older, established and modestly cash-poor enterprises. The idea is that, somehow, the world will change if you can just string the right buzzwords in the right order in a strategic presentation. Our favorite recent buzzword is e-learning. The term is used to refer to the industry that is supposed to emerge by moving educational institutions online.


The astonishing thing about the population changes our culture is undergoing is that they invert the question of who pays for education. For years now, we've been watching with interest as more and more companies dip their toes into the idea that they are going to shoulder education costs. From the training required to transform non-English speakers into workers to the full college scholarships that are about to be the marketing tool of big companies, the cost burden has shifted. As a result, while there may be an interesting project or two involving the migration of offline content on to the web, education will become a corporate cost center. There will be no e-learning industry.

Marcy is smart enough to figure this out. CareerZone, the company's latest web endeavor, offers over 200 courses in extremely white collar areas (from finance to management). The tagline "there are over 20,000,000 jobs on the internet but only one CareerZone" is strong enough to propel the service into the mainstream. Backed by Spherion's traditional media investments, we're looking at a sure winner. We're betting that Marcy's well timed investment will spawn the rapid evolution of education as a component of job boards.

It takes serious thought to understand the market dynamics of a permanently scarce labor pool. Our hats are off to Ray Marcy who gets it.

- John Sumser © TwoColorHat. All Rights Reserved.

Hero 14: Oliver Ryan, Thought Leader

(May 22, 2000) Generally speaking, the newspaper industry attracts very few Harvard MBAs. 150 year old businesses innovate at a pace that most Ivy League folks find astonishingly slow. It's not the case that the newspapers don't often win in the game of managing new technology. Rather, as the custodians of large capital bases, they make decisions using a method that is best described as "patient and thoughtful". Rambunctious young MBAs, eager to prove their worth, find the atmosphere cloying most of the time.

Like many problems, the newspapers' adaptation to the web is a problem that will give ground slowly. After years of deep experimentation, we're entering a new round. The emerging trend is that the newspapers will treat their web operations as stand alone business units rather than extensions of the existing business. The trend has its roots in the subtle distinctions drawn between print and online editions of the Wall Street Journal. The formation of BrassRing last summer was the second clear example. Finally, Knight-Ridder has recently organized all of its web properties into a freestanding business unit called

The trend positions web sites as additional business units rather than outlets for "repurposed content". The web units are independent profit centers that leverage existing brands rather than distribution outlets for preexisting material. It's reasonably close to the way that the newspapers manage their portfolio of related companies. In other words, add web sites to the list that includes other newspapers, radio stations and television properties. Although the approach seems obvious, it took us a while to figure it out.

Oliver Ryan is the General Manager (or something close) of (a.k.a. After a long year of investigating and vetting the Recruitment marketplace, he has come to the conclusion that community newspapers offer the opportunity to enfold the community in the news process. He believes that the Recruitment cashflow can be generated from that community in powerful and permanent ways. His notional worldview causes him to directly confront the fact that all of the currently available approaches to building an online Recruiting solution are inherently primitive and rooted in the automation of the last generation's approach. We always find it interesting to listen to Oliver's requirements and are amazed that no vendor has come close to addressing them.

Known to jump out of airplanes, visit Burning Man and run with LA punk bands, Oliver is definitely not a prototypical Harvard MBA. A constantly reconciling set of paradoxes, he is at once a classic hard working technocrat in a large bureaucracy, the epitome of Silicon Valley entrepreneurial vision and a fellow who loves the edge. A New Yorker by birth, he's been transplanted to the corridor between Palo Alto and San Jose. He aspires to move the newspapers forward while respecting their history. His perspective, that newspapers can contribute more completely to their communities is widely held by industry executives. He is the volunteer who is trying to figure out where the rubber meets the road.

Meanwhile, the technology community is busy refining the old way of doing things.

Oliver's heroism is the quiet kind. He constantly revisits his objectives while patiently re-explaining that what he's after is not a faster or more comprehensive way of doing the old stuff. He wants to incite the vendor community to build something new and different. More than most, he understands that the web opens the door to a future operated by social networks and that from those networks, the labor supply emerges. Patient and determined, we're betting that his evolving vision will emerge as "the way things get done."

We need more like him in the business.

- John Sumser © TwoColorHat. All Rights Reserved.

© 2013 interbiznet.
All Rights Reserved.

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

Mill Valley, CA 94941
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