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The Hard Way
(August 26, 1999) We've been puzzling out the performance differences between the current set of public offerings in our business. It boils down to focused hard work, aggressive marketing investments and ambitious objective setting. Even the weakest current performance in the public offerings stands head and shoulders above the lame, low rent tactics we discussed in yesterday's article.

Take Hot Jobs, for instance.

We know that going public, being acquired or taking a large cash infusion is a disorienting process. Even the best management teams flounder under the weight of new partners and priorities. (We've seen some firms go from being last year's darlings to this year's dogs under the weight of new money.) While the IPO trickled into existence at a lowball price, HotJobs seems to have been reenergized by the experience.

The stock has steadily moved forward, more than doubling initial investor's stakes.

A recent, extremely independent survey places HotJobs in the top 6 most recognized brands on the Internet. Richard Johnson, CEO and founder, has been known to giggle madly every time he sees a website offering "hot jobs". He figures that they are doing his advertising pro bono.

Coupled with a major, heart wrenching gamble on a superbowl ad and a stream of solid print, web and television advertising, HotJobs has managed to create a real brand. The survey says that the name is much more recognizable than Monster (A fact easily explained by the lack of a clear relationship between the Monster name and its service offering). When HotJobs reports on its branding success, it is a byproduct of hard work and investment, not a cheap imitation.

Meanwhile, HotJobs continues to roll out new products, relationships and services. In a spate of recent announcements, it looks like the company is going to follow CareerBuilder's network development model. Softshoe, the company's recruiting backend, has extraordinary support from its installed base. WorkWorld, the job fair offering, is moving into the San Jose market and clearly targeting the long held Virtual Job Fair (Westech) franchise.

Solid entrepreneurship is a hard value to maintain once large volumes of "OPM" (Other People's Money) enter your organization. At it's root, being an entrepreneur means minimizing risk. It doesn't mean risk avoidance, however. Calculated risk, with a clear understanding of the opportunity and the downside, are the essence of high growth companies whose stock prices reflect increasing shareholder value. The successful entrepreneur takes risks that seem huge to outside observers. That's because the entrepreneur has successfully identified a window that can be exploited.

So far, HotJobs has executed this task successfully.

As we look at the other public companies, what we see is similar cultures with a little bit too much risk avoidance. It doesn't seem to be a permanent condition, however. The market looks like it can handle a large number of brands in a number of niches. The trick is to make meaningful investments of time, energy and focus with short decision loops. The mistake, as we saw yesterday, is to try to get the glory without the work.

- John Sumser, © TwoColorHat. All Rights Reserved.

The Easy Way

(August 26, 1999) Sometimes we go for the jugular. The only way to respond to silly, irresponsible corporate adaptation is with a sharp instrument. It's an easy response. In cases like MRI's mismanagement of the trust of its branch offices, we're swift and severe. MRI seems to intentionally misunderstand the web and fails to provide a responsible investment in the future of its business.

We expect MRI (and the rest of the old school staffing companies) to be downgraded in the same way that the major retailers were yesterday. (They were punished by the analysts for failing to integrate the net into their strategies!) As a result, they have even less equity to invest in Internet projects. It's a death spiral for some players.

Other cases are sadder and require a more thoughtful look.

We received a very odd press release yesterday. Titled "EARTHWEB'S DICE.COM RANKED #1 IN INFORMATION TECHNOLOGY JOBS BY DYNAMIC LOGIC", the press release described an odd study. Commissioned by Earthweb, Dice's parent company, the study counted and compared some of the job listings on nine job boards. Through the use of constrained definitions and limited geographic applicability, the study was able to position Dice as the largest database of jobs online. You can almost hear the nervousness of the survey company in their disclaimer:

These are not national totals. These are aggregate totals across 4 geographic areas (SF, Boston, Austin, NY) and only cover the job titles we are searching (CTO, Software Engineer, Application Programmer, Web Developer, Database Administrator).
Conveniently forgotten? Seattle, San Diego, Dallas, Minneapolis, Denver, DC, Philadelphia, Atlanta, Research Triangle, Webmaster, Java Programmer, C++ Programmer, UNIX Systems Administrator, Database Analyst, CareerSite, InfoWorks (The Works), Jobs.com, CareerPath, careers.wsj.com, ComputerWorld, Yahoo! and so on. The study, as presented, suggests that if you look at Dice on the right day, at the right time and in the right way, it's the biggest database of jobs online.

And, if you hold your finger in the right place in front of your face, it appears to be bigger than the sun.

For all intents and purposes, Dice was the original player in our industry. With humble beginnings in the bedroom of the founders, the service was always clear about its mission: help sophisticated technical freelancers find their next gig. By focusing clearly on benefits for the job hunter and working exclusively with third party firms the company was able to help define our business. Slow to adopt the web (the core business was a dialup bulletin board), Dice overcame its initial reluctance well enough to be acquired last December for $35 Million (an awe inspiring number at the time).

In recent months, Dice has shifted its focus away from its roots. The decade long prohibition against corporate recruiters was lifted this year in what can only be described as a desperate move for revenue. This study is simply another attempt to generate PR for a failing entity. After all, who really cares about the number of job listings? Volume, in many cases, is a symptom of bad quality control.

We're sad to see Dice engaging in low rent publicity tactics. Like the staffing industry it is emulating, there's an identity crisis underneath the bluster. While the rest of the players have owned up to the new requirements for investment in branding, Dice has remained on the sidelines. Like the staffing industry, Dice appears to believe that a press release will plug the leak in a sinking boat. It's too bad.

We're expecting to see a flurry of similar surveys and press releases: Bob's Jobs Rated Number One In IT in Podunk; ITAlaska.com ranked #1 in Boise and so on. Meanwhile, the serious players are investing heavily in candidate acquisition, account development, content acquisition and features improvements.

- John Sumser, © TwoColorHat. All Rights Reserved.

Clear Crystal Ball

(August 25, 1999) When the Monster Talent Auction launched in early July, we suggested that the biggest customers might well be contract agencies (or a new form of employee representative). This week, Manpower, Inc. became Monster.com's largest customer ever (high six figures) in a deal that includes job ads and utilization of the Talent auction. While some in the staffing industry are blindly treating Monster as the enemy, Manpower has had the good sense to see the opportunity and seize it.

It's a good move for Manpower in a tough time. One dollar invested in staffing company stocks six months ago is worth approximately $0.93 today.

We've been looking forward to the emergence of career specific websites that include relevant content. American Recruitment Companies appears to be the first to market with a full court press. Planned launches include Geekseek.com, Salesseek.com and so on. While their hype is intense ("undeniably alters the face of Internet Recruiting"), the idea has some merit.

Meanwhile, CareerEngine is building a modest amount of momentum in the same space:

CareerEngine is the leading network of category specific career destination sites. Its 20 individual sites are interactive "virtual communities" that offer a personal approach to online career search.

It's worth noting that the overhyped "virtual communities" appears to mean "resume database".

- John Sumser, © TwoColorHat. All Rights Reserved.

Unemployment Rates and Demographics (From The Archives)

(August 24, 1999) We've been digging through the unemployment and census statistics for a client. Even though we know this stuff, seeing it again in detail is a continual source of refreshing reminder. Did you know that:
  • The unemployment rate for holders of college degrees (bachelors and above) is 1.8%!
  • Less than 25% of Americans have a four year (or more) college education?
  • Unemployment for those with High School Diplomas (or less) is over 8%.
  • The fastest growing occupations (in numbers) do not require a college degree.

    Unemployment numbers (the percentages) are more complicated than a body count. They make all sorts of wild assumptions (the kind of stuff that keeps government statisticians happy and busy). But, let's walk through some "back of the envelope" thinking about those numbers.

    Roughly, there are 120 Million people in the American workforce. (The others are too young, too old are not working right now.) If 25% have a minimum of a four year college diploma (that's high by a couple of points), there a 30 Million college graduates in the economy. If the unemployment rate translated directly into the number of people who are out of work (and it doesn't quite), here would be slightly more than 500,000 bodies in play. You might well ask additional questions about the mix of training in this group and so on. We know that there's a large pocket (say 50,000) who have PhDs and are trying to get one of the non-existent college professorships.

    So, 450,000 people are available immediately to fill the more than 2.5 Million discrete job postings. (There are over 35 Million listings but duplication is the current name of the game.) That's the numerical essence of the shortage we've been talking about. The other 2 Million openings are going to be solved in one of three ways:

  • The person who takes the job will be recruited from a competitor.
  • The job will go unfilled.
  • A less than perfect fit will be acquired and given additional training.

    As we survey the landscape, it seems that the "job board" business is overly focused on the impossible problem (filling jobs for college graduates) while the easy one goes unresolved. By leaps and bounds, the economy is built on people who don't have college degrees. And, there are plenty of people available to fill at least some of the openings.

    Meanwhile, the Recruiting profession is cluttered with misconceptions about the "ethics" of competitive hiring practice. As we discussed last week, an odd distinction (it's a carryover from an earlier time) that separates directly employed recruiters in HR departments from the subcontractors who serve them. There are really no ethics involved. If you have an opening that requires a college diploma, there is (at the very best) a one in five (20%) chance that you will find someone who is available to take the job. 80% of those placements will have to come from one of the three options we outlined earlier.

    - John Sumser, © TwoColorHat. All Rights Reserved.

    Top 100

    (August 23, 1999) After a great deal of work (and a lot of design assistance from Datamain), we've formally launched the 1999 Top 100 Website.

    - John Sumser, © TwoColorHat. All Rights Reserved.

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