Jobster CEO, Jason Goldberg told GigaOM that 2006 revenues would be north of $20 million. The rumors say that Jobster has 145 employees. Let's do some simple math. $20 million divided by 145 employees equals ~ $138,000 in revenue per employee. There are many technology companies that break even at that level of revenue per employee. Mature (and profitable) technology companies typically have more than $200,000 in revenue per employee.
However, Jobster is not a mature technology company. It is a very new company (~ 3 years old) that has grown very quickly (expecting growth of more than 30% for Q406 over Q306). It would seem unlikely that they would need dramatic cuts (the rumors indicate that potentially half of the staff would be cut) to reach profitability with even flat revenues in 2007.
However, I would expect that they plan to continue to grow in 2007 and will, on net, add staff. Jobster may still have job cuts or slow down the rate of hiring in certain areas. It depends on where they think the growth will come from and the adequacy of staffing. It may be overstaffed in some areas that are not contributing to growth and understaffed in others based on expected growth. Jason says it himself in a blog posting about why Jobster cares about profitability; "... you cannot do everything all at once. at least not well. that requires tough choices".
So, what is really going on here? Did Jobster grow staff too quickly and now has to cut back to achieve profitability or did Jobster examine its market opportunities and decide to realign its staffing (including some job cuts) to go after the best ones? I do not know. I am sure we will find out soon enough.
Often there is a desire in the media (and the blogosphere) to break a story, especially a negative story. It attracts readers. Negative stories do have a place. There are certainly times when it is important to get a negative story out because it is in the public interest. We publish research at Gartner that sometimes is viewed as negative by technology providers (I know it is hard to believe).
However, gossip and rumors almost invariably lead to negative stories. Bertrand Russell is quoted as saying "No one gossips about people's secret virtues". It is easy to speculate based on gossip, rumor, and innuendo. However, that speculation is based on information that is often wrong, incomplete, and/or misleading. Maybe the Jobster rumors will turn out to be true. Maybe they won't. Whatever the case, we should all be careful of conclusions drawn from rumors.
I was thinking about Nicholas Carr's post about the $10 IT budget. I had previously bemoaned the lack of HR applications in his vision. I was thinking about it today though and it occurred to me, it could be pretty interesting to see what an ad-supported talent management application suite from Google might look like. Imagine if you will...
E-Recruitment: Of course, there would be the obligatory integration with Google Base for job posting. However, how about candidate self-service that included integration with YouTube for video resumes? I could see ads that would include books and services to help candidates create a better cover letter and resume. However, the ads for similar jobs at my competitors might not come off so well. Recruiters would be able to see ads from job boards and other sources of talent based on the job to be posted.
Employee Performance Management: How about when a manager is writing a review, in addition to language suggestion tools, ads for books for being a better manager pop up. For executives, it may be ads for coaches that can help hone those people development skills. For employees, it could suggest career planning books and services. Can you imagine a better time to purchase "Who Moved My Cheese?" or "What Color is Your Parachute?".
Learning: There are all kinds of learning and developmental opportunities on the internet. It should not be too hard to imagine the advertising possibilities here.
Compensation Management: I could see ads for non-monetary reward options (when the merit increase and bonus pools are going to be too small). For big bonuses, retailers may want to get a chance at that action.
The one area I am having some trouble with is Succession Management. I cannot think of good advertising alternatives there. I am sure that you can suggest some good ideas here.
Now, I wrote this to be a little funny (you can be the judge of how funny). On a more serious note though, I do not think the concept of ad-funded enterprise applications is totally ludicrous. I could even see the idea of sponsored applications being possible (if you can sponsor a sports arena, why not take sponsorships for enterprise applications that are going to get a lot of eyeballs - Open Enrollment brought to you by Aetna, Caremark, whoever.). If there is one thing Web 1.0/2.0 should teach us is that alternative business models can be feasible. What do you think? Am I crazy?
One of the annual Gartner special reports is the Cool Vendors Special Report. So, what is a Cool Vendor? The official definition is "lesser-known, emerging vendors that may have been or are ignored by organizations or the media due to their small size and relative immaturity, but from whom innovation or transformative IT may derive". The Cool Vendors Special Report is scheduled to publish in March 2007. For those interested, here is the "Cool Vendors in HCM, 2006" (subscription required) that I wrote last year.
I have been making my list (and checking it twice) of vendors to include for the 2007 report. Before I give away my list, I want to hear from you. Who do you think are the cool vendors in the HCM space?
On an aside, I am writing this post using Microsoft Live Writer. So far it looks like a pretty good offline blogging tool.
Update: I do not like the lack of Technorati tags in Live Writer.
2006 has been an interesting year for me with the blog. I started blogging late in 2005. At that time, I wanted to create a HCM Vendor Guide. The CRM team at Gartner has annually create a CRM Vendor Guide. It is one of the most read pieces of research. I thought it would be great to do the same. I quickly found that it was going to be a lot of effort to do it. Also, I realized it was hard to keep it current on a once year publishing schedule. That is when I had the brainstorm. Why not create something that is more of a living document? I thought that a blog could be the perfect vehicle for this because it allowed to create a chronological record of the research, categorize it (more in-depth than what we have on gartner.com), search it, and allow people to comment on it. So, I spent a lot of time initially posting what I felt was interesting Gartner research on HCM. This was my approach through mid-May 2006. As I went along, I found that I was posting very infrequently. Not because there was not interesting research, but because the scope of the blog was so limited.
At that point, I did the only intelligent thing I could, I went on vacation with my wife for two weeks in Hawaii (it was our 15th anniversary). It was a great trip. Towards the end of the trip I decided that if I was going to spend time blogging, I should make a real effort at it and expand the scope. The guiding principle was still to highlight interesting Gartner HCM research. However, I also added additional guiding principles including participating in the conversation about HCM (and more) in the blogosphere and providing the story behind the research. I think have been partially successful. Readership has steadily grown in the second half of 2006 which is great.
So, where am I going with this preamble? I am starting to think about where to take the blog in 2007. I am interested in what you would like to see in the blog. Please comment on this post and let me know what you think (if you do not want the public to see your idea certainly feel free to e-mail me, but I would like to see more of a dialogue on it). Thanks for reading in 2006. Have a very Happy Holiday season (and no this is not my last post of the year)!
I have been having a lot of calls over the last few months with different investment firms. Some are VCs. Some are investment banking firms. All of them are interested in opportunities and different vendors in the HCM world. One of the companies I spoke with today asked me what would happen to the growth of the talent management application market if the economy started to cool (which he believed was starting to happen). I had to think about it for a second and, unfortunately, I think it would have a chilling effect (pun intended). As important as I think talent management is, I think most companies would view it as discretionary spending if belt-tightening is required.
Why is that my natural reaction? I guess I am skeptical about the view of HR by the rest of the business. I am also skeptical about the business case for many talent management initiatives. It is hard to cost-justify. I also think too many projects focus on the automation of talent management processes and not enough on how talent management can impact business performance and outcomes. If the economy does slow down and you have not linked your talent management initiatives to specific needs of the business, expect the budget to go away. It is that simple. Also, vendors that focus purely on automating talent management and not on how to effectively leverage talent management to improve business performance will be at risk.
You know what is a lot easier to cost-justify: BPO. Food for thought.