2006-08-26
Job Boards and Strategy
Mike Arrington's "Crunchjobs":http://crunchjobs.com is doomed to failure due to it's own success, and although "it's winning praise":http://www.nik.com.au/archives/2006/08/16/crunchboard-most-effective-recruitment-source/ as being really good .. it isn't going to last.
why?
It doesn't have any secret sauce, and network effects it depends on can't happen, and as it gets more successful others will come in and compete.
In b-school we learn that any idea needs some kind of protection so competitors can't imitate it. This can be in the form of patents, hard to reverse engineer processes, lower costs, or even exclusive deals with key-suppliers.
1. Any patents to be gotten for a job listing board have been done. There is nothing revolutionary about putting a job listing onto a search service.
2. It takes about 1-2 weeks to create a job board.. scalability may be an issue later on when you get 300-400,000 views a day.. but this is not a new problem to solve.
3. Lower costs is important. can you run a job site for less than anyone else? this is important when competition forces you to drive your prices down, and you have to live on razor thin margins. Having extremely low costs can deter others from entering the market, as they won't be able to make their cost of capital on the deal. (profit isn't enough.. you have to be making more profit on the money than you would in a alternative investment.. say sticking it in a bank)
4. Sweetheart deals with Key suppliers. This is a key factor. It isn't the same as network effects (which I'll go into later). Take "37Signals":http://37signals.com/ for example.. they are 'the' people to go to for RoR. so when they open a RoR job board you know that most people will use that. They supply the framework, and as such can use that position to give their job board an unfair advantage over other potential Rails job boards (unfair in the business sense... every business aims to get a unfair advantage over their competitors). So I'm thinking 37Signals's job board can survive just on this, and can continue to charge whatever it likes..
The other thing b-schools teach you about is network effects. The more people who use a service, the more others will use it. Digg and eBay are examples of this. Are job boards an example of this? you bet. they used to be perfect examples of this. Job suppliers would try and find the one with the most reach and advertise on this.. we see it in most markets.
but in the web2.0 version of job boards this isn't the case.
1. There is no network effect yet.. none have been around for long enough. all of them are busy convincing people to list with them.
2. No Unique audience. While one might be slightly more popular than the other, most of the 'key influencers' they target read both. With RSS-readers it is simple to subscribe to their feeds and even see them listed side by side. RSS is their enemy in this case. The cost of subscribing to a new job-posting feed is about zero for most people. I can easily scan through 10 job feeds.
3. Aggregators are making the source irrelevant.. "Indeed.com":http://indeed.com and "EdgeIO":http://edgeio.com. A job supplier could even submit their RSS feed directly to these companies if they choose, bypassing the middleman.
So .. why I think "CrunchJobs":http://crunchjobs.com and "GigaJobs":http://jobs.gigaom.com/ are not going to last.
* Both serve exactly the same business savy audience.
* Both are perfect imitators of each other. There is no differentiation to speak of
* Neither have a network effect
* None have any real influence with the job suppliers which could serve to limit the influence of their competitors
* Even if they do merge, there is nothing stopping a 3rd entrant in the market. Any web2.0 blog with more than 10,000 regular visitors a day could open a board.
So.. my recommendation is for them to differentiate, and get something which others can't copy easily.
FWIW "GypsyJobs":http://gypsyjobs.com which is a job board dedicated to "Django":http://djangoproject.com positions is no different than the boards I'm describing. Which is why it doesn't charge a fee to list.