Job Search Startup Aims to be More Than a Sign of the Times
A senior bank loan officer recently told me that lending was on track to improve for small businesses, but things were tight enough that "a plumber looking to open a dance studio" would probably have a hard time bringing home the financing for a new pas de deux. Banks are still looking for start-ups that are going into somewhat familiar territory -- like a plumber leaving a firm to start his own plumbing business.
That's one reason why most start-ups these days are founded by people who have already been garnering knowledge in a particular field and who have either been laid off from a larger firm or just want to try and make a go of it on their own.
A good example of the current economic phenomenon, is BusinessElite. Two human resources professionals this week are launching an online job-matching service looking to place seasoned professionals at established companies or startups in the tech, telecom and media industries.
Company CEO Glenn Fox and President Tom Lokar were both involved in executive recruitment at America Online and left the company in late October when the online firm was going through a huge round of layoffs.
"With our experience in online recruiting, we found that the current posting-and-paying model didn't resonate for employees once they got more senior in their careers," said Fox, who also gained experience as a founding member of Microsoft's executive recruitment team. "Search firms tend to be very costly and we thought there must be a better way to use technology to get a better, faster, cheaper alternative."
The founders of the Ashburn, Va.-firm hope that BusinessElite can help roll up a highly fragmented market segment, said Fox, who added that the executive search field is a $14 billion industry with more than 15,000 of these search firms in the United States.
Neither co-founder is a technology whiz, they confess, but they built the company's tech platform with outside help, that's based on matching and assessment algorithms the co-founders developed.
"I'm fascinated by technology and I had all of the desire and none of the talent" to create it, but "we had the vision," said Fox.
It's no secret that the economy is poor, Lokar said the timing is right for their service. "We're less expensive [than a Korn/Ferry type of search firm], and there's a lot of layoffs going on right now," he said.
It costs $350 for recruiters to activate a search within the invitation-only BusinessElite list of job seekers, and then a $1,500 charge to the recruiter when an individual responds to the recruiter.
Many high-level searches conducted by well-known recruitment firms can cost into the hundreds of thousands of dollars, according to Lokar.
"Things are not as dire as it's being presented across the board. We hear about layoffs and it]s discouraging, but people forget that even at AOL -- the epicenter of corporate layoffs -- we still hired 1,600 to 2,000 people a year," said Fox. "Companies are retrenching."
By Sharon McLoone |
March 11, 2009; 12:00 PM ET
Profiles in Entrepreneurship
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