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It is better
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John Sumser

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John Gall

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The Big Mo (from our vault)

(June 30, 2000) It's always a deep privilege to get to witness the passion that fuels the inside of really entrepreneurial companies. People who pursue a dream each day have a special sort of charge about their private affairs. The distinctions between the work, the passion, the family and the product, rather than being balanced are tightly integrated into a seamless view of reality. The company is the product; the product is the family; the family is the work; and, the work is the passion.

While passion doesn't guarantee entrepreneurial success, it appears to be a prerequisite. But, as any sensible player will tell you, passion is, at its best, a way to console yourself about the shortfall in your paycheck. Real success involves seeing well beyond the confines of an idiosyncratic sense of the future and into the soul of the market.

It also requires a serious investment beyond a self-serving sales pitch.

Early start companies in our space had a nice and understandable challenge. In order to make the Electronic Recruiting marketplace emerge, they had to educate customers. In those days, candidates outnumbered advertisers by an order of magnitude. The job was easy...get a customer to use the system and results would take care of themselves. The real advantage the first movers held was the leverage implicit in the market.

With over 30,000 competing vendors of various sizes and offerings, the game is very different today.

Earlier this week, we mentioned attending the first ever Chief Technical Officer Conference, hosted by Hire.com in Austin. Leveraging their relationship with FastCompany, the team at Hire.com managed to integrate a market need with their company's explosively growing business. The conference successfully placed Hire.com in a thought leadership role in the industry.

The Hire.com product line does not pretend to offer a full spectrum solution for CTOs. Rather, it solves one problem brilliantly. In order to successfully pull off the conference, Hire.com had to invite a series of people who had larger, sometimes contradictory views of the way the world works. By combining these two issues into a single conference, the company managed to seriously amplify its market momentum.

In order for any company to make a permanent mark, it has to be a part of something larger. More than any competitor we know of, Hire.com takes the challenge seriously. From deep community involvement (they have invested in saving a key Austin landmark...Willie Nelson's old Opera house) to important non-profit work, the company manifests a profound and reliable commitment to its local roots. On a larger scale, the CTO conference represented a profound move to give back to the larger market.

We are seriously impressed.

Investing in a network involves a kind of courageous risk taking approach that is not for the faint of heart. But then, the faint of heart rarely achieve real market momentum. When you invest in a network, the return on your investment can not be calculated in a straight line business fashion. The risk is that someone else will benefit from your investment. By delivering a relatively hype free CTO conference, the folks at Hire.com demonstrated that they understand their broad responsibilities to the marketplace and are willing to take the risks involved in meeting them.

This is the way that real winners play the game. We were privileged to be a part of the process. The rest of the market should look closely.

- John Sumser © TwoColorHat. All Rights Reserved.

Aloha!

(June 29, 2000) "You can't buy loyalty." So spoke the grizzled manager in the condo next to ours on the Pacific Beach. "Service like that depends on a shared sense of opportunity (or survival) based on interdependence." We were discussing the ease (or lack of ease) that managers have running retention programs when the workforce is bound to a small island.

We'd been shopping together in a local grocery store and were amazed by the fact that several adult workers had gone out of their way to walk us to our car and load the groceries into the trunk. It was an amazing experience that we've had occasionally in the South and never in California or the Northeast. They seemed genuinely pleased to have the opportunity to help a customer. If only we could operate a software company help desk with that attitude, we fantasized, we'd be rich!

So we asked.

We stopped in to the one computer store. "How hard would it be to open a technical support center here on the island?" "Well," came the reply "It would have to be more fun than surfing or fishing and you'd have to provide the training." "And then," we asked? "Unemployment is about 4%, so you'd have to woo the workers from the grocery stores."

"That sounds easy, we could pay lots of money."

"You Silicon Valley types are all alike", he said, "On the island, everyone works for family or friends. Money is very secondary because this is such a great place to be broke." He went on, "I get this kind of question alot. You mainlanders get very excited when you encounter good service. We give it because our livelihoods depend on getting you to come back. Then, you think you can find a clever way to buy it. It's not for sale."

It turns out that even the most menial jobs on the island have very low turnover. Everyone remembers the last economic downturn with some fear that it will happen again.

The point of the story is simple. Retention is a very localized problem that varies by region, profession, economy and a number of other variables. It's beginning to seem (to us) that it has less to do with the company than it has to do with the job and its social context.

- John Sumser © TwoColorHat. All Rights Reserved.

Celebrate Diversity, Create Opportunity

(June 28, 2000) Recently we experienced the San Francisco Pride Parade for the very first time. It is an event that is both outrageous and inspiring, sobering and silly, and a great party to boot. A diverse mixture of humanity, celebrating, supporting, or just stopping to stare, and all respectful. Not one arrest was reported. (Hear that New York City?) As a Bay Area native, it seems amazing to not have ever been to this event before. Another example of taking for granted what's in our own front yard.

We are not the only one who's been missing out on something.

Second in California only to the Rose Bowl Parade (according to last year's statistics). Between 750,000 to 1 Million people in attendance this year. Live broadcast of the parade on local network television, making the event available to the entire Bay Area (approximately 7 Million) and beyond . Politicians and celebrities participating, major corporations providing sponsorship.

Do you see what we're getting at here?

From where we are sitting, the Pride Parade is a glaring example of missed opportunity. We were not aware of the presence of any recruiters at the event. Why? The San Francisco Civic Center Plaza was lined with the booths of sponsors, vendors, and a diverse group of organizations. What a perfect venue for recruiters to attract candidates. Is there a better time to discover quality "passive candidates" than at such as massive gathering? We think not.

A company could bring awareness to the positions it was looking to fill. A job board could generate interest and traffic to its site with a bank of computers networked to their website. A recruiting firm could bring attention to the companies that it represents. Sponsoring a float or providing blanket sponsorship to the event would be advertising dollars well spent, as well as being indicative of a company's support of the community.

The current labor shortage being what it is, recruiters who intend to survive and profit need to radically rethink the manner in which they attract candidates. The era of Guerrilla Recruiting is at hand, where innovation and inspiration will define the winners and losers in our field. Instead of following the predictable low-yield formulas of the past, Guerrilla Recruiters will use slash and burn techniques to cull quality candidates. Generating high yield in short time frames, these recruiters will move on when their successful techniques are adopted by the timid. From time to time we will take a look at those that answer the call, take the risks, and generate results.

We expect to see recruiters participating, perhaps even sponsoring, the next Pride Parade in San Francisco. A year to prepare yourself and your clients.

Revolutions have succeeded in far less time.

- Ingmars Lindbergs

Angami Systems

(June 27, 2000) We've been watching Peoplescape out of the corner of our eyes for many years now. It was our bet that the company was designed to succeed in ways that few other Electronic Recruiting plays have had the stomach for. Patience and growth based on experience were the hallmarks of the initial concept. Rather than assuming that they understood the market, the company builds web applications as they make sense.

Not only is the approach smart, conservative, a likely long term winner and differentiated, it's a brainchild of Christian and Timbers, the Cleveland based Executive Search Firm. The resulting business is proof that old school companies can make it in this space.

And, the model creates a laboratory in which ideas can be tested in real market conditions. That makes it close to our hearts. We've always believed that pragmatic market-sensitive development is central to the future of adaptive web recruiting.

So, it's little surprise that a powerhouse service line has emerged from the Peoplescape Experiment.

Angami Systems (we're not so sure about the name, is it origami for the retentive set?) is a powerhouse employee referral system application. As we've been saying, web enabled referral systems will be the decision of the moment in this fall's annual HR budget dance. That puts an executive search backed enterprise at the head of the queue in a generational nuance. It's a first.

While we believe that Angami Systems will evolve into standard recognizable brand, the real news is that there is a way for stodgy, older companies to break out of their conservative assumptions.

(June 26, 2000) With 8 Million in the can and a growth rate of 14,000 (on average) per day, Monster should have 10,000,000 resumes in their hands by year's end. It's an unprecedented achievement (though you could argue that CDI or Adecco has accomplished the same feat without the centralization). With advertising that solicits the under 10 and over 65 crowds, it would be tempting to paint them as an unstoppable juggernaut. Certainly the patterned acquisitions of TMP (Monster's parent) when coupled with the recently announced Applicant Tracking company purchase, lend themselves to wild flights of imagination.

For no more than 40 Million dollars, they could run those resumes through the amazing BrassRingSystems data factory and have something truly impressive. With data on 2.5% of the population (7% of the workforce) plugged into a mine-able relational database, they ought to be able to build a candidate centric universe that allows them to drastically cut their candidate acquisition costs. By mapping candidate flows against company names, they could put Vault and WetFeet out of business with reporting based on hard data. With web based referrer log data as a supplement, they ought to be able to map attrition against interest by company at a regional level. We'll bet that the right structure would expose the real inner workings of regional migration. It would be a no brainer to articulate, at the intersection of region and profession, career patterns that transcend the theory of careers as we know them.

They have the data and the money.

But, the challenge of moving from an undiscriminated brand to a certifier of quality is tough. While we marvel at the accomplishments, we know, all too well, that generals always refight the last war. Mind shifts are rarer than genius in corporate development. The end of this year poses a particularly challenging set of obstacles for Monster.

Since TMP management experience is very highly prized in this phase of the economy, attrition will be a key factor in the company's ability to adapt to its next growth phase. Stewardship and nitty gritty value delivery are completely different from brand development. The trick will involve maintaining acquisition rates while learning to target precise subsets in response to customer demand.

It looks like Monster will be the first in line for Phase III of the Electronic Recruiting era. The shift is from source to control point. We're going to watch the post-blimp race results closely.

- John Sumser

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