I may have too strong a contrary gene, but I just don’t get this deal for Taleo.
Why now?
I don’t know the real story at Vurv. I know they were nowhere near the delusion of a pure mind play like Jobster; Vurv had a real product to market in pitched battles against direct competitors, bringing real value to the effort. The costs of getting there and the strategy embarked on by Vurv had put them into a position where action was required. I read that Vurv was looking at three options: sell, IPO, or borrow, as there were capital needs related to gaining share in talent management, to say the least. Since IPO and borrowing are hard money angles as of today’s newspapers, it appears that the options were not optional: one could assume a negative burn at the time of the sale. The low cash content and TTM top line revenue multiple of around 6 also says Taleo was in the driver’s seat and free cashflow was not bountiful. Yet a 20% dilution for TLEO shareholders is not a light snack. The shares have not re-priced either way around the move, so the shareholders are taking a wait and see attitude as of now.
Analysts, on the other hand, may see the same thing many of us do:
a substantial amount of execution risk
leading to a downgrade of TLEO.
There are some reasons that I do get it. The combined sales team will no doubt be highly improved – the financial value of good salesperson is often not understood- creating expert salespeople in highly technical niche markets is a large cost of doing business.
Taleo gets to make a usual suspect in lost deals go away, and that will pump sales a little bit (but the void will fill right back up). Taleo bought a lot of customers, but what did they buy? Where in which lifecycle of which product are they ? Satisfaction/Credibility in each case? Migration Costs? Retention rates? There is already talk about Vurv recruiting platform going away….First Advantage did the same thing to the late Projectix- when putting its end-users out of their misery.
If you see it as a pure vulture play it may make some sense; SaaS firms are good generators of cash because it takes time and costs money to switch applications. I would expect a steep decline of new Vurv orders(!) against the risk that the current client base becomes a prey source of ROI for Taleo. How the consumed customers fare in a merger is not usually a measure much dwelled on, but it should be a polled measure used as a payout metric on deals like this- the better the customers do, the LESS they should cost the buyer.
I always perceived that Vurv, formerly Recruitmax, formerly Vurv wanted to be something they were not. No doubt ambition is important (see my mirror for results of too little), but overweening ambition can lead to a lack of focus on mastery of the current challenges and discounting risks, eventually undermining both performance and the trust of markets, customers, and stakeholders.
I have no idea what the investors, founders, and employees were paid on the deal. Many of those folks have over a decade of hard work into the ability of Vurv to make the deal in the first place, so I hope that they were paid and paid well. My gut says that if the second and third rows at Vurv, formerly Recruitmax, formerly Vurv were well paid, it would be a good sign that the deal was not marginal from Vurv, formerly Recruitmax, formerly Vurv’s standpoint, and that the new combination will start in a positive way personally for the people doing the real work tommorow.
The main problem for them (and us) as I see it is the race between so called Talent Management Systems and the total separation of data assets and user interfaces by sophisticated (read as high-end, high margin) information users, like the larger corporate customers Taleo targets. That simply means that when customers are looking for functionality, their end-users can select from a large set of tools, so long as the tool inputs and outputs using webservices (XML) in a reasonable way. The TM vendors themselves are doing their share of driving this change because they are bumping right up to ERP and HRIS system functionality. The master records have to live somewhere in larger firms- the odds of that place being a full boat TM system, in my view, are not overwhelming: thus one of the main benefits of using a single vendor for application services is liquidating daily. All of these TM cheerleaders are betting on a yet to be proven premise. This is not to mention the major organizational changes needed to put disparte groups of decsion makers into alignment- or that being healthy or possible.
On the other hand, if you are smaller or less sophisticated end-user, you need a tight, focused, deliverable, scalable and inexpensive application + data solution. SMB in other words.
Vurv, formerly Recruitmax, formerly Vurv was a strong player among SMB for awhile and they know how to make that market jingle. I think Taleo will likely find both Business Edition and the many custom permutations of Vurv pretty sticky among both sets of current customers, so they will be looking at phased migration, at best, if they don’t want giant change costs.
A good way to estimate what is going to happen is to take a look at what has happened in the past; How have Vurv or Taleo retired solutions in the past? How did the change go? Were the customers treated well? Did the new solution work as well or better than the old solution? If I were a Vurv, formerly Recruitmax, formerly Vurv customer, I would be shopping right now, just in case.
For us, this is great news for now. Taleo had its own concerns and now has something else to occupy it for the next year or three.
We have a feeling that most of Taleo’s customer growth is for Business Edition, which implies lower margins and lower total profits than enterprise sales of large custom systems, as well as being ‘only’ a recruiting solution right now. The combined entity is going to have some large costs to deal with; not only change costs and operating costs, but for the big bet on Talent Management.
I don’t know if they could survive for long in their current form if they are going to be doing most of their real business in the SMB space. If they do, that’s bad for us but only if they do it right- by developing killer software at tiny prices for SMB end-users and delivering it with full service. Oh yea, against expert competitors with all the time in the world to draw a direct bead on their weaknesses in any given functional domain. These are hard waters to navigate: not fun and not really Talent Management centric. TLEO shareholders look like a patient lot- so there may remain robust capital raising potential, which is not good for competitors.
That’s why the best part for us is that the their targeted opportunity is directly away from our market: large firms seeking full boat TM systems vs. SMB and some large firms seeking tactical recruiting tools.
Those of us conducting background checks in the state of New York are familiar with the infamous Office of Court Administration (OCA). It was established in 2003 as a way to consolidate court records and make it “easier” to research criminal cases. And oh yeah, they established an access fee of $52.00 per search to all users.
At the same time it was established, 14 different jurisdictions in New York including the most populated areas in the state closed their courthouses for research and mandated that public records be searched through the OCA. This created a significant cost increase to those who hire a lot of people in this area. The $52.00 just covered access to the records. There was still a fee to the Consumer Reporting Agency (background screening company) for getting the information. To this date, many employers consider this fee to be cost prohibitive. Some employers won’t perform criminal record searches when an applicant has lived in the affected areas. Approximately, 10% of all counties across the country charge some type of fee for accessing these records. The norm is anywhere from $5 to $10. For comparison sake, the OCA charges more than double the next highest fee in the country.
If the $52.00 wasn’t bad enough, the OCA increased the fee to $55.00 effective May 1, 2008. Okay, a $3.00 increase doesn’t seem like much, but this just adds insult to injury. Especially when you look at today’s economy and see the affect it is having on all employers. This information is part of public information. I can understand how courts might need to charge a nominal fee to adequately staff themselves to accommodate demand. However, this fee is already outrageous and leaves many deciding whether to even perform background checks. That’s bad for employers. The other possibility for those outside of New York is deciding not to hire those in these affected areas because the background check costs too much. That wouldn’t be good for anyone.
I’ve always appreciated Robert Reich’s viewpoints and find him a refreshing voice on several topics - education, business and politics. My favorite quote from Reich is, “The market for talent - the sellers of it, the buyers of it - is the most vital market in the modern economy.” Following are some excerpts from an interview with Robert Reich by Freakonomics co-author Steven Dubner that appeared in today’s NYT. You can read the full interview here.
Q: How accurate is the B.L.S. data and what could or should be done to make it as sound and accurate as possible?
A: The Bureau of Labor Statistics is the crown jewel of data gathering and analysis in the federal government. It needs more money to do its job properly — to upgrade and expand its surveys, for example. (ok, there may be a bit of bias here my note)
Q: As a fellow Grinnell 2002 graduate I’d like to know: Is a liberal arts education a worthwhile investment? Does it have value in today’s labor market, or is it an outdated concept? Is America’s higher education producing the workforce that will be needed to compete with China and India in the future? What needs to change and why? What does the U.S. do right when it comes to education?
A: The purpose of a liberal arts education isn’t just to make more money (four-year college grads have lifetime earnings that are about twice that of the typical high-school grad without any college) but also to be able to have a fuller life and be a more engaged and responsible citizen. So yes, without a doubt, it’s a worthwhile investment.
As to whether we’re producing the workforce needed to compete with China and India, the answer is yes — at least up until now. U.S. colleges and universities are still the best in the world, and continue to attract students from all over the world. But we can’t be complacent. Public and private universities need more and better funding, and students need more affordable access to them.
Q: What steps, if any, can the U.S. take to consider staying on par with China — in terms of economic growth capital, G.D.P., etc?
A: China is still playing catch-up with the United States and other advanced nations. It’s relatively easy to chalk up fast growth when you’re not the technological leader. All you need to do is follow the leader!
But that’s no reason for complacency on our part. If we want to stay in the lead, we’ve got to invest far more than we now do in basic research and development (green technologies, for example), as well as education (starting with early childhood). And don’t forget infrastructure: our roads, bridges, and pipes are falling apart. All these public investments are at least as important to our future growth as private investment, but we’ve been skimping on them.
Q: Do you believe in redistribution of wealth via taxation?
A: I don’t believe in redistribution of wealth for the sake of redistributing wealth. But I am concerned about how we can afford to pay for what we as a nation need to do — not just recruiting talented teachers to our classrooms and providing better access to health insurance for all our people, but also paying for national defense and homeland security and all the other things this nation needs.
Remember, almost all the economic gains of the last decade have gone to the people at the top. And they pay a relatively small percent of their income compared to what the people at the top used to pay. The marginal income tax on the highest earners was 93 percent under Dwight Eisenhower. It dropped to a little over 70 percent under John F. Kennedy. Now it’s 35 percent. It’s 15 percent if you’re lucky enough to be a private-equity fund manager or anyone else who can shift their income into capital gains.
Q: What incentives can government or society provide to individuals to encourage actions that benefit those individuals and society in the long-term?
A: History suggests that societies become more conscious of their long-term needs after they’ve experienced deep stress — wars, economic depressions, plagues. Perhaps these upheavals give societies broader perspectives on themselves — on where they’ve been and where they may be heading, as well as the ties that bind their members to one another — and thereby encourage them to invest in and make plans for generations as yet unborn.
To take the most recent example from modern American history, the Cold War prompted America to invest in its long-term infrastructure (the National Defense Highway Act), train a whole generation of scientists and engineers (the National Defense Education Act), and rebuild war-torn Japan and Europe.
Q: What do you believe would really happen, if in a growing economy (such as the one we had under President Clinton), we left the rate be, and allowed the economy to grow large enough for say, 99 percent employment?
A: We’d have inflation.
When I took office in 1993, most economists assumed that unemployment couldn’t get below six percent without igniting accelerating inflation. Alan Greenspan understood that globalization, technological change, intensifying domestic competition, and the decline of unions all created a different economy — one in which unemployment could get to four percent, even below four percent, without causing inflation to accelerate. But I don’t think unemployment can fall to one percent without having an inflationary impact.
Q: I’d be interested to know your thoughts on the feminisation of poverty and the male-female wage differential. How much of that is due to career choice?
A: Rough estimate: About 50 percent of the differential has to do with different career choices made by women and men. Twenty-five percent involves greater time women spend on care-taking of children and elderly relatives. The other 25 percent is due to bias and prejudice in the labor market.
Q: Mr. Reich, What does the U.S. have to do in order to raise the value of the dollar against world currencies?
A: Theoretically, the Treasury (along with the finance ministries of other major economic powers) could temporarily raise the value of the dollar by buying dollars.
But this would only work temporarily. The fundamental problem is that the dollar, as our international I.O.U., is now encumbered by so much debt (public and private) that global investors and traders worry about its future value. So they’re diversifying their dollar holdings into yen, euro, and other currencies.
Even more worrying, the dollar is losing its footing as the international reserve currency in which global deals are made. Here again, buyers and sellers (including oil producers) are starting to hedge their bets by diversifying out of dollars. I doubt there will be a run on the dollar — nobody wants that, and, as I said, major finance ministries can prevent it from happening — but I don’t see how the dollar can avoid a gradual decline.
Ok, some good news and some not so good news but its Friday so go kick back, have your beverage of choice to shake off the week and think about innovating for the future!
Richard Florida’s work on mapping talent and cities is quite interesting. I heard Richard several years ago shortly after “Rise of The Creative Class” came out and was intrigued. At the time I was living in Cincinnati - loved my job but was less than happy with where I lived. Recently, I had the chance to hear him discuss his new book Who’s Your City during a presentation at Google and was even more impressed. And, btw, now I live in Portland and LOVE where I live. Portland is a great example of a city with lots of creative talent but a bit lacking in jobs - yes, this is the structural talent dilemma. Richard Florida really gets this and regardless of what aspect of Talent you intersect with I think you’ll find his research fascinating.
Below are a couple of graphs that in combination tell us quite a bit about the distribution of creative talent.
The first graph looks at the distribution of creative types by city - pretty straight forward.
The second graph maps talent according to personality types. The most interesting category here is “open to experience”. These would be people who are curious, more comfortable with risk and possess a desire for continuous learning and newness.
So, why is this important? As “place” has become increasingly important to people - #1 according to Florida, it will be increasingly important for companies to get comfortable with distributed talent networks. Location….location….location! As in business, now, so in life. Quality of life has become a priority and each of us defines this differently - but we also share in how we look at where we live as a major definer of what that looks like. Florida’s research is being used by cities to better understand which businesses to attract given its talent clusters - desire to attract or retain. It is quite important for companies to understand where certain types of talent clusters tend to form and grow as they look at business decisions that are uniquely dependent on human capital. Chances are, however, that not every company can be, will be, or move to where the talent is. The choices are either spend a lot more trying to get the talent needed, spend a lot more on developing the talent you have, or celebrate what makes the talent you desire successful and work with them wherever they may be.
Note: According to Florida, the Creative Class is about 1/3 of working Americans (according to 2002 stats) and includes science, engineering, architecture, education, arts, music, creative professionals - biz, finance, law, and healthcare. Overall, the Creative Class is defined as “people who engage in complex problem solving that involves a great deal of independent judgment….”
Recently I made a career decision. For a ‘boomer’ a fairly major decision. I have been in the search/recruitment technology business for 30 years. Since 1995 I have been on the technology side working to make sense and add value from the Internet and emerging technologies. And made some headway. On the other hand many of the solutions I envisioned have not come to pass. Technology was not quite there, the audience of buyers were not quite ready and the ups and downs of the economy over the past 8 years had an effect.
Through it all many like me have spoken loudly and vigorously about what needs to be changed or not about the recruitment industry. And we continue to speak…some ideas and suggestions are new and many are the same ideas and initiatives we heard in the late 90s. All good and through Joel, recruitingblogs, Penelope and others we get passionate voices carrying our industry forward.
My post today is personal. I have decided to hang up my technology bent for a while to go work my recruiting chops - executive search to be specific. When I made my decision I relived highlights in my career and many of the top 10 were specific recruiting experiences I have had the priviledge to complete. For instance, many don’t know that I recruited two executives away from National Semiconductor in the early 90’s, one in the Bay and one in Mayalasia. K. Wheeler and I discovered years later over beers in Sydney harbour he was the VP of HR for National at the time and was not happy at the time about the losses. My clients, Dell and Sun were so I bought Kevin another beer and we laughed at the incredible shrinking world. There are many others and as I relive each I discover I miss making the search happen. Many of you know what I speak of and missing the search just reminds me that though we grow tired of our work, our service at times, recruiting is still one of the greatest vocations on the planet.
I will have more to say. But based on my first two weeks back in the search trenches, I realize there is still much to learn. And I am clearly seeing opportunities to apply my experiences to the search industry and the technologies used to support. More to come…
Two items this week. First is the Recruiting Roadshow coming to Cleveland- we are proud to sponsor the event and host it at our facility on April 29. Joel will be speaking, along with John Sumser, Don Ramer, and Jason Morris. The RR’s are free and they include a light breakfast and buffet lunch. If you can make it, it should be well worth your time to experience the event. Please register ASAP- as we are limited to 120 people.
Second item is an interesting paradox I encountered reading my favorite newspaper of record. Last weeks NYT included two separate articles about college admissions; one discussed the unbelievable competition among applicants for the very top schools, and the other discussed the unbelievable competition among top (but not the very top) schools for applicants.
Eye popping stats: more than 3300 applicants to Harvard this year were first in their high school classes. Over 6000 applicants had perfect (yes perfect) SAT scores. Harvard rejected approx. 93% of its applicants.
I touched on this topic when I blogged about ebay- the irrational value that a 100% feedback rating gives to a seller compared to 99.5%- there may be no meaningful difference, yet the former can charge more for their wares. Likewise, if you are Harvard (or Yale, Princeton, Stanford and perhaps a few others) you can be absurdly selective, while just one slight tier below you would have to scramble for applicants by offering gourmet dining halls and other perks.
This says something about employment branding I’m sure. If you are Microsoft, Google, Cisco (perhaps GE but maybe not after Friday’s earnings call) you can afford nutty levels of perfection in your candidates. If you are one step off the elite, it would seem that you have to work as hard as anyone else in the economy.
And yet the outcomes seem to be similar- even if you select the very cream of the crop, it would seem that a mass of ‘lesser’ (but still high quality) candidates will (or would) do just as well in the real economy. How does that impact YOUR recruiting in the real world ?
I began writing a post on social networking the end of January – can’t believe it is already March! Due to a variety of events I’m just getting back to writing and what I quickly discovered is that this is a very different post than I would have shared in January and I think it has a lot to do with the continued advancements of social media. So, its quite appropriate to see that the subject has influenced the writer and I hope that I can share this learning experience with you as well.
We are in the midst of a significant communication transformation. The momentum being generated through the fingertips of individuals seems to have taken off exponentially in the past few months. February metrics from Compete offer an exciting view into growth across several networks. Accounting for the high levels of growth already experienced last year when Facebook expanded its user base and subsequently opened its platform up to developers, and LinkedIn became even more ubiquitous this rate of growth is quite significant. Then came Twitter and the future of communications, networks and relationships became a whole lot more interesting. I’ll get into more detail on Twitter in the next post, which won’t take as long as this one…promise!
Clearly the impact of Social is just beginning to be felt and the potential is just beginning to be understood – yet, it is already profound. We are only at the edge of what the social media wave will bring. The potential for sweeping change is enormous and we will certainly see the future impacted and unfolding before our eyes. While I will address the impact on talent acquisition and employment branding specifically, I do think its important to understand what’s driving the social media tidal wave.
Is it:
• Advancements in technology?
• Growth in all things 2.0: online participation – content creation and collaboration?
• The hunger of immediacy – news and information?
• A growing need and desire for connectedness?
• Living, and for some thriving, in the age of transparency?
• The allure of community and relationships to produce social value – the new currency?
• Globalization and a flat world?
Yes - all of these and more are true. But how did we get here?
We are experiencing a unique moment in time and have the good fortune to be witness to the transformation of language and communication. Michael Rogers’ article What Evolutionary Psychology Says About Social Networking offers a point of view through the work of Robin Dunbar – an anthropologist and author of Gossip, Grooming and the Evolution of Language. By looking at the evolution of language (beginning with picking and grooming as a means of socializing) the desire and need to communicate with increasingly larger numbers of individuals has served as the catalyst - moving us from grooming to language and, well, now to social networks. What’s so interesting to me about Dunbar’s research/view is that it potentially explains a lot about what we can anticipate about the future, behavior, and which technologies are more likely to flourish – like Twitter. People increasingly see value generated through connections, are increasingly more curious about the world they live in, want to feel more engaged and want to make a contribution to the future – their own and society in general. Social media capitalizes on one of the greatest strengths of the Internet – ease of entry and elimination of intermediaries. Now, with social network platforms and the momentum building through web 2.0 technologies the ability to experience the value proposition is quicker – at least for individuals. For companies, the opportunity is there but it requires a greater investment of time, understanding, commitment and authenticity to build meaningful relationships and communities. The only network consistently associated with recruiting success is LinkedIn – and, the debate is still out on whether this is truly a social network. As an example, although LinkedIn has Groups that companies can establish, when compared to Facebook and Ning the tools simply aren’t there yet. Once a group is established on LinkedIn members can directly contact each other but the group admin has no embedded tools to manage communications with the group. As a side note, Linkedin has shared that this is coming and we will see the addition of the “Answers” feature for groups this fall.
There are several questions to consider for companies determining how far to pursue a social media strategy:
Is social media right for your company? If, yes then answer why! Understand the environment and community expectations to help define your approach and establish measures of success. If no – well that’s ok. Just because you can doesn’t always mean you should! Better to find out before taking the dive because it could be more detrimental to your brand in the end.
Who’s your audience? Where are they? What do they want?
What will community growth, retention and migration look like? Will we see increased migration away from general sites like Facebook and Myspace to niche sites as these communities morph and as advertising becomes more intrusive? Users of both of these sites have seen their worlds invaded by the masses as well as advertisers. This view into the MySpace community sheds some light on the feelings.
Will niche rule? Where does Ning fit into the future? If Niche rules Ning provides a great platform but there is still a need for a more manageable interface across networks, even within Ning, from both the User and company perspectives.
What is sustainable? How many different discrete networks can individuals personally manage? How many can companies effectively manage? The array of sites creates a very complex and messy look at what any User and/or company is facing. Take a look at this graph by Doug McLure (thanks to Charlene Li of Forrester for the reference).
How will new technologies facilitate growth and retention and when will they be here? How quickly will we see new technologies emerge that support increased efficiencies in managing networked communities and establishing trust and engagement. One projection, from Charlene Li, is that it will take until 2013 to see truly open platforms.
Chase or be chased? What will your community building strategy look like? What is the role third-party? Is this the primary approach or can you drive traffic to your own website and host a proprietary community? Most likely, it will be a multi-channel approach. Think about the decisions that had to be made around corporate employment sites and third-party job boards. There are similarities to the decisions to be made around social media and companies can influence what this looks like. That’s not to dismiss the importance of being on sites like Facebook but this is not a complete social strategy and its still to be proven how effective a platform this will be for a recruitment presence.
These questions are not meant to deter pursuing a social media strategy as a critical channel for talent acquisition. They are meant to guide thinking and decision making. Social is a critical channel and should must be pursued. Any company that pursues emerging talent and is not leveraging social media tools is already behind the curve. Whether you support Obama or not his call to the American people to get involved and be part of the solution of crafting our future is quite powerful and very timely. I believe that we will see this spread into other aspects of life and that companies of all sizes should begin thinking about how they will manage transparency and connections on a larger scale.
Crafting a strategy to pursue a position in the world of social media requires time, and some monetary spend – but mostly time. Its more important though to understand community expectations when pursuing a social media strategy. Establishing trust is critical and second most important is transparency. Trust needs to be established and then builds over time through authenticity and value creation. Whether it be with existing or potential employees ultimately what companies want to do is break through the noise, get noticed, engage and differentiate their brand identity. To a large degree this is not much different than the web advances companies experienced in the late 90’s/early 00’s and the decisions around building an online employment brand. The most significant difference, besides the resulting technical advances, adoption and size of the online population, is that it is no longer as easy to put a website together and create an employment brand without first establishing an integrated strategy with your marketing department. Why? Most importantly is that things are more inherently connected today. Additionally, the very nature of social networks will quickly expose brand inconsistencies and spin, and the result will be quite detrimental to your overall efforts.
So, what are the steps to building an effective social media strategy for talent acquisition:
Understand the medium. Transparency and authenticity rule so its important to understand fit with your company’s culture. Value exchange is the currency for retention – how will you engage your community and how will you be engaged to build a community and then retain who you attract?
Identify your audience. Who are you trying to engage? Where do they live online and what do they value when it comes to investing in relationships. Great video on audience and building community by Jake McKee of The Conversation Group reflecting on his time at LEGO.
Create integration not fragmentation. To effectively engage talent you’ll need to incorporate various aspects of your company brand. Work with your marketing department to develop an integrated approach that leverages multiple touchpoints. A shared approach is more important than ever to create brand continuity and alignment. Nothing should be siloed and everything should be interconnected via bi-directional linking. Even within the constructs of your employment brand establish integration across channels – add links in job descriptions, on the career site, on network sites. This may seem obvious but I’m not seeing much evidence of it in practice.
Engagement. How will you engage your community? What does the frequency of communication look like? The content? What is your intention to leverage your community and reward them for contributing value back to your company? The result is that you also have the opportunity to expand who is seen as potential talent and how the idea of “employment” broadens to simultaneously fuel innovation around new ideas and products. If you’ve heard me present on sourcing you know I admire the website Innocentive and believe this is a model for companies to consider managing on their own. Another good example of engaging talent is L’Oreal’s estrat game. And, watch the LEGO video!
Resources. Pursuing a social media strategy requires resources to manage the community you’re engaging with. Who will do this and what is their bandwidth. I believe that we will see the creation of a Social Relationship Strategist position. In recruitment this could fall under a Sourcing Strategist who manages all aspects of the online employment brand. For now, the challenge is to allocate workload so someone in the recruitment function has the bandwidth – and the passion, to manage your network(s).
Manage your reputation. If someone’s not intentionally managing your company’s reputation someone else is. So, if the thought of transparency and risk is scary realize that its happening with or without you so you may as well get in on the conversation. This is a prime opportunity for recruitment/talent management to add value back into the company. Chance are that besides you no one else besides marketing really gets the evolution and power of social – the exception here is early adopters in media, tech and maybe consulting.
Integration with your ATS. Assuming you use some type of applicant tracking system it’s important to identify an effective and efficient way of reconciling prospects to reduce redundancy in candidate actions/communications. CRM is one tool to consider but even this won’t do it all. It would be nice to believe the ATS vendors are on top of this and if you know of one that is I’d like to hear from you.
Perhaps the most difficult first step is deciding to start small and take the time to immerse yourself and incrementally build out your strategy. Momentum is building through fingertips on the keyboard and people are ready to engage. Now, give them a reason to engage with your company.
Sorry I haven’t posted in a while (to some of you, that might be a blessing). Over the last several months we have been developing a concept called employeescreen University. This free site is dedicated to educating the marketplace on how to conduct an effective background check and to empower individuals with the information they need to develop a program for their organization. There’s just too much misinformation of what constitutes a thorough, accurate and effective background check and this resource is available free of charge to all who are interested.
Special thanks go out to the Big Cheez for his help along the way. He has been a great sounding board and has provided supportive counsel along the way. Please check out the site when you get a chance.
Born to break the Law(s), I have to disagree with at least three and I suggest that the sample from which the rules were derived is not representative of the universe of SaaS providers.
First the rule about no on-premise solutions; that’s going to kill a lot of deals because SaaS is a delivery model, not a business model. If firms already possess quality Internet application infrastructure, database licensing and admin, and advanced BI capabilities, why would they pay margin to SaaS firms ? Why accept integration and extensibility compromises to boot ? Furthermore, having to code, test, version control, and deploy your application tends to enhance your own abilities as a SaaS vendor in terms of CPU/storage/bandwidth resource use, disaster recovery, documentation, and general internal TCO.
Because you are offering on-premise solutions does not automatically mean multiple code-bases; if the design and business model is effective, it’s economical to maintain reasonable backward compatibility and support for recent versions of installed apps. Multi-tenant can actually mean a wide range of choices in solution design- if you don’t want to lop off a third of your market, you better believe that hybrid vendors may have an advantage over time as the reality of fixed and marginal cost infrastructure cases is realized.
Second, as clearly seen by the comments, the law limiting at one data center is probably more a function of sample distortion of the vendors involved- smaller, younger vendors obviously will start with one, but customers, geography, and redundancy needs may indicate two or more in short order. If the application/ solution architecture is not easily amendable to multiple data centers, just how good is it?
Third, the rule about 1M a month in MRR before hitting Asia or Europe is just silly. If the phone rings, and the person on the other end wants to buy, you sell them a subscription. Who cares where they are sitting? If your localization strategy for the app is strong, you may even be able to offer local languages with little increase in your cost basis.
The sample used to derive these rules to me clearly demonstrates the low(ish) barriers to entry for new SaaS firms- all you needs is some code, some servers, a phone, some adwords, and off you go. The big ERP and leading vertical app players did and do have a vested in interest in their old delivery models and channels, but don’t think that as they get into the game for real that the standards won’t rise for all the players- highly robust web services, highly scalable infrastructure, and complex integration tools will become requirements to sell into larger and even medium businesses in a few years. Likewise salesforces, consulting, and technical service people will need to be trained to higher levels and that will cost more. The cost curve for SaaS is unusual- very flat for a few customers, steep as you gain volume, and then flatter when you are pretty big, then steep again when you are huge. Certainly not the old industrial model of lower unit costs with higher volume.
These 10 rules are reflective of a gold rush, and it’s real enough, but as always, the wild landscape will be tamed and the rules for everyday life in the territories will look a little different; and probably a lot more like the civilization left behind than it may appear to people digging like crazy.
my note)
