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July 03, 2007

The only thing that matters in online recruiting

In the course of my consulting work, I meet with a lot of companies in the online recruiting industry at various stages of growth. Some have just a seed of an idea. Others have already built some technologies. And still others have a concept and some funding to play with.

Time and again, I'm reminded that there's really only one thing that matters for an online recruiting vendor, just one thing that is virtually guaranteed to grow your revenue and attract customers. The answer? Candidates. If you have the candidates that the employers need, the employers will follow. In the job board space, Monster figured this out before anyone else (go big on consumer advertising and support it with a great technology infrastructure to handle the traffic). In the social networking space, LinkedIn figured this out first (create a great user experience for your members that grows virally and the employers will follow). 

Whether you're an employer looking at a new technology vendor (other than infrastructure technologies like an ATS or, to an extent, a CRM) or you're a VC firm looking at funding a company in the red hot online recruiting space, I would suggest looking pretty hard at a company's candidate acquisition plans before looking at their technologies or their business model. As in LinkedIn's case, one may beget the other, but that's an exception more than the norm.

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Comments

Your referring to the old "chicken and the egg" paradox! So what do you think of itzbig, jobfox, etc etc in terms of their ability to build communities (or databases) of candidates as quickly as they
sell the service to employers? What do you really think about this paradox?

I think itzbig and jobfox both know this better than anyone. The other upstarts I'm not so sure about.

It seems in the internet world success/usage is gauged by "coolness." So, what about Craig's list?

By your logic, this site would be an utter failure. His plan seemed to be create a very plain/boring site, don't hire too many people, forget about any marketing plans, and see what happens.

Ala peanut butter sandwich... success.

Maybe companies/VC's should look at the people doing the selling/creating rather than how well they document their ideas or how much they paid a marketing company to make cool toys and coffee cups with their name on it.

Was it Yoda or Fonzie that said, "Their is no recipe for cool. You are, or you are not." I can't remember. :(

You don't always have to spend money to acquire traffic. LinkedIn is a good example of spending almost no $$ to acquire traffic - it's all been viral.

Craig's List acquired traffic by building a community around things other than jobs, which allows them to monetize the jobs portion of their site without charging their users. I actually think that's quite brilliant and something I would have funded in a heartbeat.

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