Two weeks ago, the team at KODA threw in the towel. With their goodbye, the Gen Y business connection site joined a long list of promising startups with sweeping ambitions to change the way that people find jobs that ultimately failed.
Except for the runaway success of soon-to-IPO LinkedIn (and arguably Indeed & SimplyHired), there have not been any huge startup success stories since the job board explosion of the late 90s. And even those successes have been more about efficiency then radical change.
There has been no lack of aspiring entrepreneurs in the recruiting space, especially in the last few years, as the startup scene has heated up. So why do we not have more success stories? More change?
Before his current incarnation as a Venture Capitalist at First Round Capital, Charlie O’Donnell spent two years as the entrepreneur behind Path 101, a startup that attempted to be a “guidance resource for your career indecision.” Today, when aspiring entrepreneurs approach Charlie for his advice on launching a startup in the recruiting space, he advises them to run, because in his words, human capital is a “bad neighborhood.” Aspiring entrepreneurs should read Charlie’s post carefully, because it presents some good reasons why they should choose greener pastures.
I’ve been observing the recruiting space for over a decade, and like Charlie, I get approached by lots of startups looking for advice. The best advice I can give — don’t make the same mistakes as the guy before you. Most startups make the same mistakes over and over again.
It’s Easy to Spot the Problems in Recruiting — but Much Harder to Fix Them
Everyone knows that recruiting is inefficient. It’s slow. It has been done in much the same way for decades. In other words, a classic target for disruption.
In fact, it’s so easy to see that hundreds of startups have tried — and failed — at most of the “obvious” ideas in the space.
Job Matching? Dozens of well-funded startups have tried. Better Applicant Tracking System? Even more. Online/Social Employee Referrals? A graveyard.
For startups in the recruiting space, it’s not enough to identify the pain points. Everyone has known most of them for decades. You need to know the exact reason why your approach will succeed where others have failed. Even more importantly, you need to be able to effectively articulate that reason to your potential customers.
Hire a Sales Force
HR is a stereotypically conservative department inside most companies, and they are now your customers. You can either spend your time trying to:
- change the culture of an entire profession,
- ignore it because your idea is just that powerful, or you can
- acknowledge that the conservatism exists and treat it as just one more obstacle to overcome as you conquer the world.
There’s a strong engineering- and product-centric culture in the startup community. That’s powerful, because it creates innovative products that can become the foundations of great companies.
But in many cases it also comes with a “build it and they will come” ethos. In a market of consumers or early adopters, that may make sense. But I cannot think of a single major recruiting success story that was achieved without a very large sales force. If you can, let me know.
However many salespeople you think you’ll need, take that number and double it. Then double it again.
Immerse Yourself in the Recruiting World
As an entrepreneur, you probably have immersed yourself in startup culture. TechCrunch. Venture Capital. Pivots. Hacker News. Angels. Deadpools. Mashable. The startup ecosystem is infinitely more exciting than the HR ecosystem.
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Understand that all of this is foreign to your new customers.
When you launch your product on TechCrunch, it may help you get your next round of funding. It may land you at your next hot startup.
It will not open doors to the vast majority of your potential customers.
As of the day that you found your company in the recruiting world, you need to immerse yourself in the peculiar culture of the people that are now your customers. You need to understand where they get their information, and their day-to-day challenges. Their frustrations. How their bosses evaluate their successes and failures.
But if you are serious about making your recruiting company succeed, make sure it is visible in a place where your future customers will see it. And the vast majority of your future customers are not immersed in startup culture.
Oh, and read this.
And Now for the Good News
Nobody is more aware of or more frustrated with the lack of innovation in the recruiting space then those who have made it their profession. There is a hunger among recruiters for new ideas and fresh approaches. In fact, sometimes it seems that in order to get talked about in the profession, all something needs to do is be labelled “NEW!!!”
Your challenge is in translating that hunger for the new into action. The profession has seen many companies making many promises come and go. I hope that this helps you become one that sticks around.