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It is better
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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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Company Sleuth
(October 29, 1999) Gathering competitive intelligence is one of the great things you can do with the web. As great recruiters know, psyching out the target before you begin to "research" specific candidates is a huge time saver. Anyone who intends to make a reliable profit in this space needs to be following, at some level, the comings and goings of companies with competing products and services.

Company Sleuth is a singularly remarkable tool for this purpose. Designed as a research tool for stock traders, the operation provides an amazing array of useful information about companies. While publicly traded operations have lots of data, the site is great for mining information about lesser known entities as well.

Data available through CompanySleuth includes: Stock Info, some job postings, all of the domain names registered to the company, activity on a variety of message boards, usenet postings, trademarks, patents and so on. While the data can be incomplete, it's a great starting place.

For instance, it's clear that CDI is preparing to launch a service called "I Want One Too". They have registered an astonishing number of domain names that are variations on the theme. Webhire, on the other hand, is the proud owner of the domain name "Halfassed.net". We love the fact that HotJobs has registered Monsterbored.com, .net and .org. We like the concept behind Headhunter.net's "Hireadigm.com".

Amongst the silliness are some real insights onto the planned moves of the competition.

The key to branding, positioning and solid marketing is a clear understanding of your place in the universe. By keeping regular track of the competition and its effects on your positioning, agile movement through the changes on the playing field becomes feasible.

- John Sumser, © TwoColorHat. All Rights Reserved.

Generation II

(October 28, 1999) Slowly, slowly, it's coming. Given the swollen valuations and spare capacity in customer budgets, we're hoping to see the emergence of real next generation systems over the coming 18 months. As the distinctions between services diminish, the need for differentiation grows.

Part of the problem is a seeming inability for major partnerships to grow and flourish in the industry. As operations like RecruitUSA take the customer mantle (by providing ad distribution and single invoice billing), the job boards are left to distinguish themselves in a tightening noose. Increasingly, a database and a matching system are not enough to enable one to see differing brand identities. While we see the potential for hundreds of horizontal and vertical relationships, they never seem to gain traction.

Part of the problem is price point. While an average $150/posting price tag makes a useful sales tool, it builds businesses that can not afford the kind of research that allows them to break out of the box. Without a real breakthrough, we're doomed to a perpetual reinvention of the unemployment office.

At the same time, a part of the problem is an extraordinary overemphasis on technology. At its simplest, a conventional job board is a simple to execute application (that's why there are so many of them). However, it seems like the core entrepreneurs are busy refining technical nuances at the expense of a real approach to market positioning.

Additionally, brand segmentation, a relatively well understood discipline, seems to be lost on the industry's major players. Instead of building the capacity within their organizations (see the week's earlier articles), agencies from outside the industry (with no sense of our customers and products) are producing cute but ineffective campaigns that bravely echo Microsoft's intentionally bland campaigns. Microsoft needs to be bland, scrappy companies need to be clear.

We think the shocker will be when players who aren't currently visible move in with networks and traffic that shame the current round of industry leaders. We're often reminded of the early days of the Personal Computer industry. The clear leaders were a company called Ashton-Tate and Lotus. By the end of the second generation the companies had lost their edge. By the end of the fourth generation, they were gone. In those days, no one had ever heard f any of the current market leaders. (At that time, Microsoft was still a footnote!).

The first generation of PC software was exciting to those of us who used it. In spite of its clunkiness, it was better than anything that had come before. Unfortunately, market leadership ruined the success of the market leaders. That irony has been played out over and over in a broad range of industries and settings.

The Gen II systems will not feel huge. It is very important to understand that NBEW (see yesterday) was extremely profitable and influential with a core audience of 30,000 (not millions). Recruiting, in our opinion, happens on that scale. With a clear focused audience, personalization is possible in extraordinary ways. We're betting on the emergence of operations that can deliver an intelligent personalization product at a price point that will sustain small, focused niche audiences. While we haven't seen it yet, we know it's out there.

- John Sumser, © TwoColorHat. All Rights Reserved.


(October 27, 1999) Say "So Long" to The National Business Employment Weekly. The icon for a generation of mid-level executive job hunters is going to its grave with dignity, killed off while still profitable. If reincarnation were a business principle, NBEW would be entitled to a better life in its next life. Over the years, the weekly periodical has added a great deal of value to the lives of its subscribers.

Cannibalization of existing business is the bugaboo that scares most old school executives away from the web. Somehow, the idea that existing business will migrate to the web once a realistic endeavor is fielded terrifies the conventional mind. Many web strategies (particularly in the newspapers and third party staffing firms) are rooted in a prohibition against cannibalizing existing business.

The NBEW story is yet another demonstration of the powerful leadership influence accruing to the DowJones organization. Rather than laying off the team who regularly delivered the weekly, careers.wsj.com is busily absorbing the staff and customer base. In this story, everyone gets a better, more challenging job out of the deal.

Historically, the NBEW subscriber base peaked at about 36,000. The largest issue (10 years ago) contained 108 pages of advertising. But, the subscribers turned over every six weeks on average. So, the staff spent its life repeating six week cycles. According to Tony Lee (onetime editor of NBEW and now the leader of careers.wsj.com), "Every six weeks, we had to rewrite the article on how to create a resume." The turnover in subscribers required constant reinvention of the wheel.

For players whose websites naturally anticipate a turnover in visitors, the concept of constantly rewriting the same piece is likely to be exceedingly strange. It's hard, from a web perspective, to remember that articles didn't always last infinitely. In an era of disposable news delivered on dead trees, archives could only be found in a library. Older and valuable articles could only be acquired through the mail or at a public institution. Once a set of readers found their jobs, the next set had to be trained in the same things.

Imagine how liberating it is to be leaving the NBEW behind. Journalists, once sentenced to a purgatory of constant repetition, have been freed to constantly create new material. We expect that, by absorbing the old team, careers.wsj.com is about to experience a renaissance in content generation. The same principle applies to their sales team (who will also be absorbed into the web effort).

The headline could have read "Institution Eaten By Its Children; Exciting Growth To Follow".

We've blathered on about Tony Lee's extraordinary vision and execution in earlier columns. We think it suffices to say that lesser executives might have worked hard to prevent the death of an institution like NBEW. It takes a solid business mind and the backing of an insightful institution to see that greater good can be accomplished by simply walking away from a dying entity before its failure becomes an embarrassment. We applaud Tony's vision and his company's willingness to see the change as an opportunity. We nominate them as the poster children for the "Death With Dignity For Outmoded Operations" campaign.

- John Sumser, © TwoColorHat. All Rights Reserved.

10 Reasons To Buy Online Advertising

(October 26, 1999) We're starting to see a flood of materials about the various upcoming advertising campaigns for online Employment services. Over the next year, we can count about $400 Million in planned advertising expenditures in our industry alone. Most of it, from what we can tell, is focused on non-web venues. Lots of television, newspaper, magazine, radio and billboard ads will sprout up to grab your attention. This isn't Recruitment advertising. It's advertising to get candidates to read Recruitment advertising, an astonishing new category.

Major advertising agencies (usually with no meaningful experience in the business) are raking in huge bucks for what are best described as marginal campaigns. Have you seen the murder scene ads from computerjobs.com? A chalk outline of a body against a black background includes the tagline: Your Job Skills Shouldn't Have An Expiration Date. Sure, it looks cool, but what does it say about the company? Sure, we want a T-shirt with the chalk body as a logo but what's the message? We think it says "You're dead, use us." Yuck!

The inspiration probably came from Monster's cute but worn "I wannabe forced into early retirement" campaign. We never hear the company name but are always entertained by the ad. We've always wondered why Monster doesn't register "wannabe.com" (still unused as of this morning) as the destination for the project. Like most online ads, they are paying to educate the world, not to build their brand.

We're surprised by the fact that online services haven't figured out how to effectively use online advertising. In spite of the fact that the campaigns are mostly copycat entries, it's silly that the companies aren't demonstrating their faith in the medium that they are selling. We think that extensive TV ads tell paying customers the exact wrong thing.

That's not to say that getting online advertising right is easy. It's just that we're astonished by the fact that the very same people who would never outsource their technical development are so quick to outsource their advertising to operations without a shred of a clue. To echo the early Clinton campaigns, "It's the marketing, dummy."

Figuring out how to do effective online advertising takes executive time and attention. It involves different value points and requires different propositions than traditional media. Compelling catch phrases are harder to develop because results are infinitely more measurable. Since their are no real experts on the subject, you have to do it yourself.

It's harder than technical development (lots, really). The answers are less clear and the level of constant improvement is higher. It isn't hard to understand why ad agencies claim that traditional advertising works better (it's all that they know). It's impossible to understand why online companies buy the reasoning. The only sound justification for using traditional media that we know of is the on pioneered by HOT Jobs....we want to reach our investors.

Advertising online is the most cost effective way to build brand awareness. The more your message is seen the better the results. From our publishing team comes the following ten reasons for using online ads.

  1. Familiarity breeds Confidence!
  2. Repetition works! That's why people do it again and again and again.
  3. Candidate scarcity demands highly personalized marketing.
  4. Opt-in Advertising. Candidate chooses to come to you.
  5. Dot-com Ads on radio & TV are driving more people online. Let someone else pay that high freight.
  6. Precision Targeting
  7. Instant, measurable connection.
  8. Adaptability. Quick turn around on custom tailored marketing campaign.
  9. Quick feedback loop provides additional customization opportunities.
  10. If You Have An On Line Business You Sure Ought To Act Like You Believe In It

- John Sumser, © TwoColorHat. All Rights Reserved.

Narrow View

(October 25, 1999) It's a time honored standard. The "silk-slipper" search firms don't poach each others' executives. While there is a lot of movement at the individual Recruiter level, ranking administrators have been out of bounds, at least until recently. Last week, Heidrick and Struggles announced that it had hired James R. Quandt. Quandt, as you may know, was most recently the COO at Futurestep (Korn-Ferry's web play). Looks like the gloves are off.

In the same press blitz, Heidrick let it be known that LeadersOnline (LOL) has accumulated at sales backlog of nearly $6 Million. It's an astonishing (and nearly unexplainable) level of business development. While it's clear that the Heidrick team is showing a new round of market aggressiveness, the performance is astonishing. In a world rooted in nuance, this sort of naked competitiveness is a rare thing.

We have always viewed LOL and Futurestep as the best offerings from the executive search industry (as opposed to the dismal BrilliantPeople from MRI). We think that they are the brightest students in the remedial class. They both qualify for a "Best Trailer In The Trailer Park" award.

An therein lies the problem.

While we are certain that competition within the remedial class (or the Trailer Park) is very intense, it will never be enough to win an Ivy League scholarship (or get the Trailer into Architectural Digest). The extremely unfortunate thing about the intra-silk slipper competition is that it clearly exposes the limits of their view of the marketplace. All of that political upset is wasted on the fact that internal players have a maladaptive concept at the root of their endeavors. Poaching each others' teams will simply solidify the terrifying market disadvantage.

We are beginning to doubt that the old school firms will ever grasp the fact that the game has changed. Far from commodities in need of administrative processing, candidates have become the real value in the search business. This view is so far from the traditional search firm's mindset that it constitutes a reversal of basic operating philosophies.

Now that LOL has acquired the operational talent to do it, we're betting that they will build a disappointment generator like Futurestep. We had hoped that they would wake up to the fact that LOL is a bad name. Instead, it looks like they will treat their name as if it were their destiny.

- John Sumser, © TwoColorHat. All Rights Reserved.

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