Thursday, April 07, 2005
Jobster vs LinkedIn vs HR
Jobster just launched - it's a referral based service targeted at 'passive' job seekers (ie, those who already have a job). It's kind of like the inverse of LinkedIn jobs - in this case, employers mail job specs onto their 'trusted networks', viral effects happen, people are recommended. So push vs pull.
I like Jobster - I think it's an innovative, fresh approach to an industry in dire need of revolution, and so a fair bet to make. But I do have a couple of concerns.
Some quick thoughts:
1) This space has seen almost a decade of failed models (and serious investment). No dominant design has emerged. Risk and return: the value of the arbitrage in this space, by increasing the efficiency of HR and eliminating headhunters, or increasing the efficiency of hiring, and eliminating HR, is massive. But so, as we've seen, is the risk.
2) Most of the models meant to disintermediate HR (or headhunters) have ended up as complements to, rather than as substitutes, for them.
3) It looks like Jobster targets HR, not decision-makers. My intuition is that gains will flow from connecting job-seekers directly to decision-makers. But I could be wrong, and Jobster could be learning from point 2.
4) I think, in general, the market gap that X vs HR solutions target is misidentified. It's not contacts that HR lacks - those are important for high-end, not mass-market, jobs - it's technical skills: they don't depth of knowledge in the fields they're recruiting for.
So the reason for HR's inefficiency is that it often doesn't have the right knowledge to make accurate hiring decisions. Will giving HR more contacts eliminate this knowledge gap? I doubt it, because it recreates the same old real-world incentive not to acquire knowledge (ie, by handing it off to others) that broke HR in the first place.
Which leads to my main concern about Jobster. Jobster, like LinkedIn, addresses the contacts issue via referrals from 'trusted' contacts. But in Jobster's model, competition for referrals could feed (and I tried to find a nicer term for this) HR spam wars. Of course, this depends on Jobster's referrals effectiveness rate, which depends on network size, etc...
Update: So I got a nice email from the Jobster guys, who point out that their solution is not spamworthy. They've clearly thought hard about this issue, and it looks like what they've got under wraps is gonna be pretty cool.
So, to revise what I wrote earlier - the key question in this space, IMHO, is who will begin to actually plug the gap in the market by creating incentives (and slashing costs) for HR to acquire specialized knowledge. This is when the dominant design will emerge, and I think it will be more an implicit market than a network - because markets allocate resources more intelligently more cheaply.
In fact, the way to do this might be to do the inverse of most of the current models - let job-seekers build detailed contact and verified knowledge profiles, which HR can then leverage to slash the costs discussed above. This is an implicit auction for access to HR - which creates incentives for HR to become more efficient, because the transparency of the auction will reveal inefficiency. It wouldn't be a stretch for Jobster to extend it's architecture this way...