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    A Small Town View

    (December 20, 2001) Earlier this year, we grilled Kent Harris (a former recruiter at Amazon) in an article called "Goes Around, Comes Back Fixed". Apparently, we were a bit premature and will have to re-title the piece "Goes Around, Comes Around". According to the Seattle Insider, the company, Other Resources, has been busily bouncing paychecks and inflating its accomplishments. The article points out that the 200 customers Mr. Harris claimed when we spoke to him were actually sales leads and not customers at all. 

    Mr. Harris had no comment.

    We think the Seattle news article was punishment enough. Harris attempted to start a company with large ambitions and limited finances. His reach exceeded his grasp. Although his workforce is certainly entitled to feel violated, startups are a blessing and a curse. 

    The interesting thing that this experience points out is that even seemingly capital-free enterprises have significant capital requirements. Generally, Recruiting (and Human Capital Management in general) are perceived to be low investment enterprises. The truth is that whether you are building an HR system for your company or starting an enterprise in the space, the capital requirements are significant. Even the simplest Recruiting shop requires tools and processes that are not apparent at startup. Significant components of the failure plaguing the staffing industry involve the willingness of those companies to step up to the underlying requirements for money.

    The other question raised by the story is whether or not the business model proposed by Other Resources is, in fact, viable. Essentially, the company proposed delivering a qualified short list of candidates. The job boards (and other sources) deliver a flow of unchecked candidates while the staffing industry provides a very narrowed list. The midground is unserved and will ultimately be a winner (Monster is currently offering such a service). It is clear to us, in spite of the failure of Other Resources that there is a clear need for a company that solves the difference between job board output and the development of a list of real candidates.

    - John Sumser © TwoColorHat. All Rights Reserved.

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         Materials written
         by John Sumser
         © TwoColorHat.
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