Last year I wrote about a company called Purple Squirrel, which had just received funding to the tune of $2.7 million. I found its business model, which generates revenue from job seekers hoping to connect with insiders at highly desirable employers, a bit challenged.
“How the service works goes a little something like this: Job seekers can buy time with current employees, currently representing a variety of companies, including Facebook, Amazon, and Netflix” I wrote. “The current employees are called ‘Advocates.’ Thirty minutes with a Facebook marketing pro will cost you $30, for instance. Purple Squirrel takes 20 percent of that fee. The company says many Advocates donate the money to charity. How much an Advocate charges is market based and decided upon by the Advocate.”
I had a hard time imagining companies being comfortable with employees profiting on the back of the corporate brand, and I had a hard time stomaching a business that essentially preyed on desperate job seekers. Still do.
A year later, along comes The Lobby, which essentially does the same thing, but focuses exclusively (at least for now) on the Wall Street crowd. Quietly updated last week via Crunchbase, the company has raised a seed round from Y Combinator of $120,000. You may remember Y Combinator from its investment last year to help former convicts find employment.
The New York City-based startup was founded last year by CEO Deepak Chhugani. In addition to Y Combinator, the company says it is also back by Kairos Society, Tacklebox Accelerator, and WeWork Labs. It describes itself as a marketplace where job candidates buy affordable 1-on-1 calls with entry-level investment bankers at top firms in exchange for personalized hiring advice and the chance to earn a referral.
The Lobby touts having insiders at firms like Barclays, Goldman Sachs, Citi, Credit Suisse, and others. After answering pre-screening questions and submitting a resume, job seekers are shown a list of company insiders with whom they can select. From there, a call is scheduled with someone who the company says has been vetted and trained. Referrals are voluntary, and insiders are hand-picked by The Lobby. There’s not even a link on the site to become an insider.
Job seekers buy a 30-minute conversation as part of the process, but there’s nothing on the site that indicates pricing. There’s also nothing that indicates insiders are paid, but I have a hard time believing investment bankers are spending time on the phone with the unemployed because of charity. Unlike Purple Squirrel, there’s also nothing on The Lobby that indicates a willingness to work with companies, so I’ll assume payments go directly to the employees, hush-hush style.
“These models make sense on paper to people that have no experience recruiting at scale,” posted industry veteran George LaRocque on Facebook. “We rarely, if ever, see them get any real traction. Maybe there is something about their approach that isn’t mentioned on their website. Let’s hope.”
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Why it’s so hard to hire and get hired
The whole business of making job seekers pay to find work has never set well with me. It all feels so predatory. Desperate for a job? Pay us and we’ll get you in front of the best employers on the planet. Remember TheLadders and paying to access $100K jobs? Or even the old Headhunter.net, which made job seekers pay to get their resume at the top of the search results for employers?
I’m sure it works for a fortunate few, who probably would’ve found work regardless. “If The Lobby had existed when I was in school, I would have spent $50 a week instead of wasting my time with online job applications and career fairs,” says one anonymous customer on the company’s web site. Buyer beware, I say.