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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

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

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  • Distribution

    (February 05, 1999) How do you tell that the Internet is still a small town? One way is by tracing down the current theory that job ads (still cutely referred to as postings) need to be distributed widely to be effective. The theory resembles the notion that a good recruiting campaign would have advertising in all Newspapers. The wide distribution of job ads is like hunting quail with a shotgun. You might actually hit the quail but nothing will be left. Over the past couple of years it has become a part of the Online Recruiter's toolkit, not because it's smart but because you have to hit everything in sight when you don't have a targeting device.

    Enter the targeting and distribution services. From the scrappy and influential CareerCast to Restrac's solid investments in Junglee, the automaters propose to solve the problem with single point data collection systems. On the other side of the equation, pure distributors (who really got their start with Net-Temps' pioneering work) are beginning to emerge. Essentially, they tackle the targeting question first. The current crop of players range from Resumix (who still seem to believe that registration is a good sales tool) to the increasingly potent IIRC (who have cobbled together an interesting network of job boards) to CareerBuilder's "network" to every third-party Recruiter's favorite entry point RON.

    Sadly, almost all of these players, exclusive of their angle on the problem, seem to view the challenges as data distribution rather than the delivery of customer results. It's obvious that if you want to recruit cows, the best place to do it is in a barnyard. But, no matter how many pieces of paper you tack on to the cow bulletin board, you won't recruit many cows. They can't read, you know. Yes, you have to have access to the barnyard. But you'll do better at attracting cows if you tempt them with cow food. You have to know what they like to eat and what they want to be when they grow up. While job "postings" for cow jobs certainly won't do much good in the chicken-house, nothing says that they'll do better in the cow-barn.

    Don't get us wrong. Learning how to get ineffective ideas into the cow-barn is a part of learning to use the medium. But, once you're inside, the question becomes on of advertising effectiveness, not distribution effectiveness. Given the acute (and permanent) labor shortages, the best thing a recruiter can learn how to do is become a great advertiser. Distribution and targeting are inconsequential components if your hunting with the wrong rifle or ammunition.

    That said, advertising is undergoing a sea change. Broadcast techniques (the essence of job postings and classified ads in general) are being rapidly replaced by style, relationship based, tailored delivery techniques. More and more, advertising delivers customized information to a precise individual about a tailored product. The interesting irony is that this approach is the essence of great 1980's style recruiting. There is an extremely attractive opening for a company that executes an intelligent recruiting application. It would deliver this kind of one to one advertising. That would make it very different from today's systems which focus on aspects of the administrative end of the problem.

    - John Sumser, © TwoColorHat. All Rights Reserved.

    What's It Worth?

    (February 04, 1999) We got to thinking about market valuations following yesterday's acquisition of DICE. Over the day we talked to a wide range of players about their understanding of the deal and its implications. From new entrants and veterans alike, we heard the same thing..."I wonder how Mr. X feels. He sold YYY Job board for a fraction just a year ago."

    For all of the Mr.. Xs, we're sure that they feel just great. Last years pittance was the year before's massive price. The real question, however, is what is a job board really worth? We're betting that Lloyd Linn (the Mr. X of DICE) will have to deal with rapidly escalating values for job boards as his earlier progenitors have had to.

    For Earthweb (DICE's new parent), the acquisition will look like a bargain a year from now. Why? Think about the value that a job board is likely to contribute to the larger entity (and the relative margins). In the current newspaper industry, classified employment advertising produces 30% of the revenue and more than 100% of the net profit. Although the workers in classified advertising are accorded extremely low status in Newspaper organizations, they create the lion's share of stockholder value. It's the well kept secret of the newspaper business.

    If online job boards make a similar contribution to larger online services (and, after all, the technology is simple and the sale is straight forward), then, we'd expect the valuations to float towards 30% of the market cap of the buyer. It's not a case of valuation based on financial performance. Rather, the valuation is a function of the real worth to the buyer.

    This sort of thinking, sure to be ridiculed in a number of quarters (particularly buyers), would suggest that DICE is worth nearly $150M to Earthweb. While we don't expect to see Job Boards trading at 250 times earnings, the difference between tangible value and ultimate worth to the buyer is going to cause an updraft. It won't surprise us to see a wave of Job Board purchases. After all, if the product is worth more (to you) than you have to pay for it, it is, by definition, a bargain.

    We offer this little idea with more than our normal share of caveats. We certainly don't have all of the answers. But, if the idea resonates with even a few purchasers, the market in Job Boards for sale is about to really take off. After all, what would help Yahoo!'s move into the market better than ownership of Career Mosaic? A well heeled (fresh from an IPO) AltaVista could do worse than replacing its current offerings with TMP's product line. And so on.

    - John Sumser, © TwoColorHat. All Rights Reserved.


    (February 03, 1999) Earthweb(EWBX), the recent Wall Street darling, flush with the cash from its IPO, has purchased DICE. EarthWeb provides a broad range of services for IT professionals including tutorials, books, training, videos, software and a modest sense of "community". The purchase, which valued DICE at 5 times sales (50 times earnings?), demonstrates the way we think change will arrive in the industry. The alliances will not be about industry consolidation. Rather, they will be changes in ownership that increase the ability of the ultimate service to mine relevant data (see yesterday's column).

    The merged "DiceWeb" has the potential to broaden its view of recruiting to something larger than the databasing of job listings. Years ago, before there was an internet, there was a DICE. The service has an extremely high level of loyalty in its core audience...high end IT contractors. The new union will force the DICE team to really broaden its reach and vision. The pairing makes sense if it is seen as a platform for future development.

    Watch the stock react.

    Recruiting With Heart. You just gotta love the folks at 4Work. More than any other Recruiting operation, they wear their hearts on their sleeves. For years now, they have relentlessly pursued the idea of changing work and recruiting while making a profit. Always integrating their principles and actions into consistent behavior, the team, led by Kevin Johansen, has tried valiantly to link passion about livelihood with our industry.

    Recently, they launched a new service called 4LaborsofLove (4LOL) that is attempting to make the process of acquiring volunteers easier and more effective. Free to volunteers and the non-profits who need them, the service is an attempt to bring order where chaos reigns. The idea is that if you build a large enough pool, non-profits will be able to find volunteers whose skills meet the organization's needs. It's an idea worth some celebration.

    In other areas, 4Work continues to pursue its idiosyncratic vision with a vengeance. Johansen's editorial vision is regularly expressed in the quirky "Rethinking Work". Nowhere else in our business can you find such an eclectic array of resources and perspectives. We think, regardless of agreement or disagreement with the expressed opinions, that this is a solid model for development of candidate loyalty over time. A firm editorial point of view gives visitors something extremely human to rely on.

    The only problem with 4LOL is its name. Across the internet, LOL is an acronym for "Laughing Out Loud". While earnest volunteers may not notice the implication, it could become a growth inhibitor.

    Take a look at Job Options (the artist formerly known as ESpan) demographic profiles. While the data is used to grind the latest JobOptions axe (a resume privacy feature), it also sets a public reporting standard. More than many, the JobOptions team has tackled EEO style concerns consistently over time. The data shows significant increases in minority participation (approaching parity), gender balance (still skewed) and attempts to quantify the way that "passive" candidates use the system.

    The short article surrounding the data describes a subset of non-active candidates who have a resume in their top drawer and are floating it without "actively seeking work". The behavior reminds us of people who run personal ads but are "just looking".

    Disclaimers in mind, we expect that paying customers will want to see at least this much data from their job boards. JobOptions has performed a solid service by establishing a starting point.

    - John Sumser, © TwoColorHat. All Rights Reserved.

    Data Mining

    (February 02, 1999) It's Groundhog Day. Early reports from the East Coast indicate that Punxsutawney Phil did not see his shadow this morning. It will be an early Spring, according to the legend.

    The whole concept of Groundhog Day is interesting from a forecasting perspective. If things are clear (Phil can see his shadow), the change will come later. When things are murky (like today, when Phil couldn't see his shadow), the change comes more quickly.

    The tradition is at least as old as the Roman celebration of Candlemas Day. It is an ancient antidote for the human tendency to translate today's clarity into the belief that tomorrow will be as clear. Groundhog day is our only celebration of humility. The underlying message is "be sure to keep your assumptions in check."

    Underneath the frivolity is an important message. If things look clear, go back inside. If they seem murky, the end is near. The tradition of Groundhog Day was a way of letting people know that a warm bright day in early February was not a signal of the end of winter. If Phil sees his shadow, don't start wearing shorts. Groundhog Day is a warning that your senses are not always good predictors.

    We've begun an investigation of industrial strength data mining tools. Data Mining is the Art and Science of discovering patterns and clusters of information in huge piles of data. Also called knowledge discovery, Data Mining is in its infancy. One of the most interesting current projects is a tool that forecasts stock market performance by analyzing text news sources and financial data.

    The underlying assumption in Data Mining is that you can learn a great deal from the disparate information you already have in your hands. The developing technology finds statistical relationships and patterns in apparently unrelated data. The use of Data Mining to discover useful information in web statistics and logs is in its infancy. Several experimental implementations attempt to identify clusters of information in web visitors by combining information about the last page visited, cookies, forms and on-site behaviors.

    When we look at current recruiting techniques, we see four basic approaches:

    1. Automated Applications with Resume Databases (most job boards and recruiting sites);
    2. Refined Usage of Search Engines and Web Databases (as taught in our seminars);
    3. Backend Integration (like Best Recruiter, Restrac, Resumix and Personic); and
    4. Candidate Pool Development (our current favorites - Tax Search Inc, Matrix Resources, Knowledge Universe, Fast Company and the Washington Post's Integration strategy.)
    The first three approaches mimic non-web Recruiting and are tentative steps that offer web efficiencies to existing processes. They take known procedures and automate them. Like Punxsutawney Phil on a clear day, they offer easy to understand ways of using the web.

    Candidate Pool Development focuses on building a network based on the constant delivery of value to web visitors who might become job candidates some day. In a massive, generational labor shortage, these passive candidates are the real long term play in Web Recruiting. Mining the data generated by their repeated visits to a website will become a central feature of Online Recruiting.

    The first three approaches can certainly benefit from sifting massive quantities of data. However, only long term, value generating relationships can create real predictive data about the likelihood that a passive candidate will become available. It's a murkier approach that defies the senses.

    But then again, so is the notion that a bright sunny day forecasts a longer winter.

    - John Sumser, © TwoColorHat. All Rights Reserved.

    Integration and Transformation

    (February 01, 1999) Talking about using the web is like dancing about architecture. While it is possible to describe the immediate effects of net technology on the workplace, nothing is better than actually using the tools. Many of the insights are simply unbelievable until they are experienced.

    Last week, we took the entire business on the road. From hotel rooms, with laptops and phone lines, business was conducted just as if it were in our offices. Regular business processes were executed seamlessly without regard for time zone or location. Relationships that might have required ten or twelve specialists in another time happened on traveling desktops through file transfers, word processing revision managers and other bits and pieces of technology.

    Things have already changed. The pace at which the unimaginable is becoming the possible increases each day. This poses significant problems for those who would develop standards and middleware.

    Video is coming rapidly. Within two years, the bandwidth will be readily available and the cameras will be reasonable. Testing (see HotJobs) will be standard fare in job "postings". The mining and acquisition of relationships with extremely passive candidates will be commonplace. We're in trouble if the industry standardizers focus on solving yesterday's problems.

    - John Sumser, © TwoColorHat. All Rights Reserved.

    Customized Onsite Consulting

    (Early Winter, 1999) Over the past four years we have had a large number of requests for Onsite Consulting. We are continually looking for new and improved ways to help with your Recruiting needs. We are now offering personal one-on-one Consulting in "Advanced Searching Techniques".

    We've recently added Nicky Gordon to our staff. Nicki is a seasoned recruiting research professional and an acclaimed trainer with extensive hands-on experience solving sourcing problems with the Internet. She will be delivering these customized training programs in which:

    • We will explain how to make a clean move to web recruiting as the principal source of prospective candidates
    • You will receive the tools needed to search the Internet effectively including A CD with over 30 Software Tools to get you started.
    • You get the full benefit of our "Advanced Searching And Sourcing Seminar" without having to leave the office.
    • You gain the knowledge needed to use Spiders and Robots, advanced Search Engine Techniques, Candidate Pool Access and the development of Just-In-Time Sourcing techniques. We'll teach you the skills and tools used by visionary recruiters.
    • You will get a detailed course of action; we will walk you through the steps involved in going from Job Order to Placement.
    • All Examples are done Online specifically tailored for your operation.
    Book your On-site consulting today. The fee for each One-Day Onsite Consulting is $2,500 plus Expenses. We are offering a discount to previous Seminar Attendees, our way of saying Thank You for your continued business. We would like to help set the techniques you've learned into action. Please contact us for more information.

    Contacting Us
    Call, fax, write, email. We'd love to talk about your project.

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