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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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Intention Engine
(October 15, 1999) We're drowning in buzzwords. Recently we overheard someone discussing "the value delivery component of an inverted business model in the ASP space". She went on to "articulate her role...I deliver complex value propositions to emerging technology providers that help them streamline their supply execution processes." Life was easier when these kinds of people were simply called "efficiency experts".

The current "holy grail" in the retail Internet world is called an "intention engine" or an "intention platform". This new discovery, the apparent successor to the decreasingly used "portal" is a tool that helps you find what you want. The really good ones, the hope goes, will help both sides of a transaction find what each other wants.

We wonder if they've ever seen a job board.

Our industry is oft maligned and much misunderstood. We giggle aloud when Internet experts say things like: "Think of them (Hot Jobs) as the NASDAQ for employers and employees." That's rich. We mean no slight to the Hot Jobs crowd but NASDAQ?

That said, most of the major players in our space focus clearly on discovering and brokering the intentions of two parties in search of each other. It's conducted with amazing sophistication when compared to other forms of Ecommerce.

While we have a long way to go, it's interesting to discover that the holy grail for the rest of the Internet industry is a mundane component of our niche. - John Sumser, © TwoColorHat. All Rights Reserved.

Fertilize First, Farm Later

(October 14, 1999) The economics of the web are somehow counterintuitive. In spite of the dramatic hoopla associated with a few high visibility net stocks, the fundamental rule is that you have to invest before you take your payoff.

This really isn't a new idea. As long as there have been salespeople, at least a few members of our species have understood that relationships are built on trust and loyalty. You give before you get. You give what they want before you get what you want.

In a different time, this was known as "having manners".

In the digital world, sales and marketing are a deeply personal responsibility. While it is socially acceptable to denigrate the efforts of marketing and sales people, in many ways they hold the keys to functioning communications processes. The biggest development problem, we think, is not technical. It involves teaching people the things that make great sales people great.

The ancient adage goes "it is better to give than to receive". The updated version is "What goes around comes around". These are not empty platitudes, they are directions for operating a web recruiting business.

Recruiting, throughout its history has been a reactive profession rooted in seizing immediate opportunities. While those tactics were effective in an era of overabundant employees, they are dysfunctional in today's environment. While we expect to see ever more frenzied "sharecropping" in the near term, the Recruiters who survive the early years of the shortage will be prudent operators who invest heavily in their networks.

- John Sumser, © TwoColorHat. All Rights Reserved.


(October 13, 1999) It works. Using some form of pretense to distinguish your job postings from the rest of the pile is a smart strategy.
An unusual job announcement posted on Vault.com's Job Board has generated some serious interest from employees searching for jobs in Silicon Alley.

The employer, a New York-based Internet company (name withheld at its request), listed itself in the posting as: "LOSER B2B STARTUP WITH NO CLUE LOOKING FOR OTHER LOSERS WITH NO CLUE." It went on to describe itself as a job fit for, "MAJOR LOSERS with no investment banking, no corporate development, no good MBAs for various Biz Dev positions."

Despite its unorthodox nature (or perhaps because of it), the job posting has generated hundreds of responses from potential employees and other interested parties surfing Vault.com, a leading career web site. Among those responding to the ad since its posting last week are investment bankers, lawyers, execs at Fortune 500 companies, and even one venture capitalist.

The employer who posted the ad saw it as a way to stand out from the crowd of Internet companies hungry for talent in today's tight labor market. He chose to post it at Vault.com because of its vast audience of young professionals. Says a company spokesman for the employer, Adrian Cristino: "A friend at Morgan Stanley suggested we take a look at Vault.com, and we were in heaven. Our target audience under one roof! We decided to postpone headhunting services and try our luck with Vault.com for a while as an experiment."

The experiment was a success. Cristino adds, "By describing our company as the worst possible startup one could ever imagine, we were able to position ourselves in clear contrast to other recruiters. Most readers got the joke and we got their resumes."

The full ad is viewable this week by visiting http://www.Vault.com. Vault.com's Job Board contains over 170,000 job postings -- one of the largest job databases on the Internet. Companies posting jobs at Vault.com include: Lucent Technologies, Sony, GE and Sun Microsystems.

Every bit as clever is the fact that Vault.com realized the value of the story. By making one of their customers successful and the publicizing it, they've demonstrated mastery of online PR. Building a successful web Recruiting venture involves clearly taking charge of the media buzz about your company. We know a number of companies who could take lessons from Vault.

- John Sumser, © TwoColorHat. All Rights Reserved.

Ecommerce vs Ecruiting

(October 12, 1999) Investors are starting to take our industry very seriously. Armed with visions of the sorts of Ecommerce that have turned your desktop computer into a vending machine, they often wonder about the differences between Ecruiting and other forms of online businesses. Today's piece is designed to illuminate ten significant ways that Ecruiting isn't like other Ecommerce.

  1. Shortages. Most Ecommerce environments assume that the supply of goods, material or services is infinite. Inventory management, when practiced, is an ordering discipline, not a supply management discipline. At the root of any growth in Electronic Recruiting is not technology but labor shortage. The demographics indicate sustained labor shortages for many generations. Economic growth has outpaced the labor supply.
  2. Customization. All recruitment transactions involve nitty gritty customization. "This employee in that workforce" is a decision with enormous investment, cultural and risk aspects. The fit, never perfect in times of abundance, is increasingly brokered. Since the transaction always involves detailed customization, the industry leads the technology instead of the more normal Ecommerce circumstance (customization in search of a product).
  3. Regionality. We imagine an employment marketplace with at least 3 dimensions (it's more like 7 but understanding a 3 dimensional marketplace is tough enough to grasp). The market begins as a web-like environment and is radically decentralized as an historical artifact. The dimensions of the marketplace are: Geographical/Professional Region, Industry and Customer size. We imagine a market that can sustain at least 20,000 profitable nodes (250 MSAs times 4 types of customer times 20 industries). As an example, an operation that recruits mechanics for small businesses in Oklahoma City is unlikely to be a viable competitor with a company who recruits IT professionals across Lucent Divisions in Northern New Jersey.
  4. Internet Penetration / Demographics. The employment question is extremely complex because it ranges across demographics (everyone works). The tools and techniques required to fill retail management slots are different from those that work in IT projectization, from those required for different kinds of nursing and so on. Success in the marketplace depends on having adequate momentum to establish a working market in a particular arena. That means that market timing is a real (and sophisticated) issue.
  5. Non-Standard Inventory. Since customization is the norm, the essentials of current Ecommerce initiatives tend to fail. There is no standard definition for most of the variables (i.e. a civil engineer at Campbell's Soup performs an extremely dis-similar function to one at Boeing. The very language used to describe the two jobs reads identically but means radically different things). In other words, there is no ISBN (International Standard Book Number) in employment.
  6. Supply Dislocation. In current and future employment marketplaces, the question will always be "Now that I can define what I want, what constitutes an acceptable substitute". So, rather than exact matching of needs and capabilities, the conclusion of an employment transaction always involves a great deal of approximation.
  7. Radical Changes In The Management of The Market. The labor shortage has the net effect of shifting the power in the traditional employment equation. Employees are now the buyers and employers the sellers. Five years ago the situation was reversed. Prior to five years ago, no human being had ever experienced a permanent labor shortage. Therefore, the attitudes, techniques, opinions, ethics and skills of "Recruiters" are under extraordinary pressure. It's not fundamentally a technical problem though it may have a partial technical solution. It's a market problem with an interesting aspect...A technology has emerged that can be used as a training ground for a new kind of recruiter.
  8. Market Penetration. There appears to be a five year cycle for the full adoption of new recruiting techniques and market mechanisms. Job Boards took five years to mature from a footnote to the predominant recruiting method. Talent Auctions will take the same amount of maturation. Both buyers and sellers have to adjust to the new mechanism. Employees (the buyers) adjust more rapidly than Companies (the sellers) so the early days of market adoption provide real windfalls for early adopters.
  9. Industry Incentives. The most observable players in the space are media companies (newspaper empires), ad agencies (who used to own the market), search firms (Heidrick and Struggles, CDI), HR Software Companies, contract firms (mostly technical), job boards, HR Departments, temporary agencies and so on. Each group brings a historical bias, investment capability and culturally driven decision making cycles. The market is entered based on a pain threshold for the most part. Many of the players are adopting the pricing and market models of the others as they enter the arena.
  10. Market Awareness. Few of the players are able to see beyond their own noses. Though we've sketched a broad view of an extremely distributed, shortage driven, very nichey marketplace (perfect for the web, don't you think), each individual player tends to see a more monolithic landscape. Often, successful growth and profitability are the victims of a weak understanding of the market. This lack of market clarity can be directly attributed to pre-shortage market behavior. It simply wasn't necessary to have a focused understanding of the market until recently.

- John Sumser, © TwoColorHat. All Rights Reserved.

Sticker Shock

(October 11, 1999) It seems like each passing year adds another zero to the price of entering the Electronic Recruiting Marketplace. The competition for market position, the wake up calls for old school recruiters, the cost of acquiring increasingly scarce candidates, the expense of sales force development and the core price of creating a brand in a cluttered space conspire to drive the entry point ever higher. Roughly, it cost $1 Million two years ago, $10 Million last year and $100 Million today. We can remember when an investment of $100 Thousand seemed like the maneuver of a market leader. Four years ago, we gasped with awe when a client closed $750 Thousand in venture capital financing. The recent $70 Million funding of BrassRing will ultimately be remembered as a footnote as the numbers continue to grow.

Meanwhile, the cost of the core technology shouldn't be changing very much. After all, it isn't that significantly improved over the industry's first five years. The real cost changes are in marketing, customer service and corporate infrastructure. (We know you're giggling about the idea that customer service is on an uptick.)

At the core of interbiznet.com (our company) is a simple concept. We do not recommend ideas, tactics or vendors we have not tried. We try to run our operation as a laboratory that experiments with products and services before reviewing them. We are devoted to understanding the complexities of the Electronic Recruiting Marketplace, its structure, vendors, services, future and trends. We have found that having "dirty fingernails" is essential to understanding how our readers and clients should navigate the space. We experiment with Recruiting Techniques, Web Technologies, Marketing Tactics and all of the other aspects of our industry. We believe that our job is to try to experience and understand the market in advance of our customers.

Along with our clients, growth has pushed us increasingly towards outsourcing of key functions. It's a jungle out there. In a recent test RFQ (Request For Quotation), we received a range of quotes from $25 Thousand to $1 Million for a fairly simple bit of technology. Although you'd expect that our experience was somewhat biased, we found it interesting that the low bids were executed quickly and politely while the high bids took nearly 150 days.

Thankfully, we have lots of internal experience in managing subcontractors, evaluating proposals and dealing with squirrely vendors. Our consistent emphasis on doing it ourselves has given us a baseline of experience from which we can judge the abilities and risks associated with a range of vendors.

For example, one vendor included an interesting offer in his proposal. For $8,000, his firm would enroll us as an associate at Amazon.com so that we could make some money selling books. Unfortunately (for him), we had taken the 30 minutes required to join the bookselling program. We read the proposal as an estimate that included an hourly rate of $16,000 for some tasks.

Please take our heartfelt advice, rooted in our experience.

Don't make a purchasing decision until you have at least some hands on experience (no, not a manager with experience, you with experience). Building a simple web page is an easy task. By investing a weekend's worth of time learning HTML and the rudiments of web design, you will enable yourself to reality check the wildly vacillating claims of potential vendors.

- John Sumser, © TwoColorHat. All Rights Reserved.

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