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Interview with Robin Richards, CareerArc

Our interview this morning is with Robin Richards, the CEO of Los Angeles-based CareerArc (www.careerarc.com). Richards--a serial entrepreneur who has been involved in a number of technology companies here, including NTI Group (sold to Blackboard), Internships.com, MP3.com, and Vivendi Universal Net USA, where he was also CEO. Richards also has been an active angel investor in local startups.

What is CareerArc?

Robin Richards: A number of years ago, we took a look at the landscape and said, what is it that's missing? I think, to be a great entrepreneur, you have to look at what is missing in the category that you will be playing in the industry, and figure what you can deploy with a little bit of strategy and technology to bring a better service and price. What we saw with CareerArc, was there was already a tremendous amount of investment in the middle of the market, with all of these different services and products that went into taking care of an employee when they were hired until they were let go. So we look at the front end, where social was new at the time, and what we were seeing was that social was becoming a wonderful search engine for jobs, through Twitter, Facebook, and LinkedIn, where people were using those services to uncover opportunities. People were not just going to Google, they were looking all over the place. We saw that the ability to embed links at the front end of recruiting had created an opportunity to do recruitment marketing, where we could both enhance a company's brand, and at the same time, bring them the ability to find passive candidates who might be searching on their social media of choice, looking up jobs.What we found, was because we could embed videos and content for our clients, we could also understand how job seekers were using that content, were interacting with the content, whether they were liking it, watching it, or forwarding it, and all kinds of other things that you can do on social that you can't do with a flat job posting.

We found that there were really interesting interactions, and that people were understanding a company so much better than just a job description, and were able to understand if the company would be a cultural fit even before they applied. We also saw that it was easy for job seekers to cross over to Glassdoor and see what employees had said. We realized that, if we could create a platform that could grab jobs and distribute those jobs into social networks and other network of value, we could really be at the forefront of recruitment market, helping to amplify brands, and constantly put new opportunities and new products into those platforms, and bring software-as-a-service to a market that had been very transactional. We could still deliver applicants and deliver passive job seekers to a company, but we could also delivery applicants that already understood what the cultur of the company was, and be able to measure the kind of footprint people were making on a social network. Now we have a thousand large companies into it, and if you name a big company, they're a customers of ours, from Starbucks to NASA. That's been very effective.

Explain what you mean about branding in the employment area?

Robin Richards: Brand amplification and brand protection are critical to companies, in helping them attract and retain employees. There are tons of studies that we've done that show when a brand is not good, that employment brand, it impacts your entire brand and the people you can get to come work for your company, and the people you can get to stay. The other reason the candidate experience is important, is you might have 200 people apply for a job online, and there will be 199 people who get a decline. By definition, they liked you and thought they were a good fit for you before their applied. However, until now, no one addressed the candidate experience when you did not hire them. Our platform not only distributes your jobs, but helps with your brand online, and helps candidates move forward to see if they have a great fit with the company. Even if you don't hire someone, we make sure you say thanks for taking a look at us, and make everyone who applied feel like they are a silver medalist. How we do that, is we're building a content community, and saying, here's all this content we want to give to you, and consulting we can provide, to help you and your family get back on your feet at last. Essentially, we've taken a portion of our outplacement content, and put it on the front end, and said—this is complimentary for you. We've watched brand amplification go crazy on Glassdoor when you do that at a company.

Talk more about that outplacement content?

Robin Richards: We found that in career transition services, the vast majority of people were being left out. It was because they were important enough, in the eyes of the employer, to deserve these benefits. They gave the company their sweat and tears, but the company just didn't care, or just couldn't afford it.When they said they couldn't afford it, it's because it was the old model of real estate, saying, show up at 9am and we'll do an interview, at 1pm we'll show you how to access a database, at 1:30 we'll talk about resumes. What we found, if people wanted help finding a job right away, and didn't want to be trained in how to look for a job. They wanted to get help getting their resume out there. We had already built a tool for employers to help push their jobs to qualified employees. We took that front end, that database of 600,000 open positions, and matched them to the employee using outplacement services or transitioning employees. The minute a customer hired us to deal with their transitioning employees, the first thing we could do is say—hey, it's not all bad, there are over 150 companies looking for someone just like you in your area. That got the despair out, and the hope in, and we then provided them with a curriculum, online, which lets them learn at their own pace, with adult learning principles. We also are going to see how we can get you a great resume, and help, and give you all the tools you need to know to get a new job. We found candidates that use this are very engaged, and are getting a job in ten weeks, as opposed to the 24 to 25 weeks that is the national average when you get laid off. We find we've created that velocity that allows people to get back to work. The second thing in how we make sure people get back to work, is we're sending them jobs right away, from the to of the pile. As you probably know, if you have an open job at a company, more often than not, even though a couple of hundred of people might send their resumes into the ATS, only the first 50 people will really get looked at. If you're not quick you're not there. So, by pushing these job opportunities quickly to people, through a text, or email, as they occur, they have the opportunity to take their resume and quickly go to the top of the pile. We also take advantage of all the information human resources has provided us, and look, we know that someone else you know works at this company, or maybe knows someone who used to work at that company, and can vouch for them. Statistically, you are 10x more likely to get hired through a referral by an employee than a non-referral. The final piece is online coaching, which allows people, 7 days a week, to click and talk to a professional development coach, and help them go through questions, answer things like what should by resume look like. All of this has fundamentally changed the efficiency of the market, with prices anywhere from fifty to seventy-five percent lower.

You've had prior success, and you've been an angel investors in companies here. What made you decide to get back in the driver's seat and run a company again?

Robin Richards: My wife has always asked me—why do you keep doing this? It's like a boxer, where boxing is in your blood. I love this, and I love to be the field general. I love watching people develop their careers, and I love breaking into markets. It's an exciting endeavor for me, running small companies and getting them big. You can't find that entrepreneurial juice or high anywhere else. I think, for the rest of my days, I will constantly get involved in what I find to be really interesting startups that can use this skill set I have, to drive them forward. As you get older, you have better and better teams you can drag along with you, and who like to come with you, so the speed at which you can ramp up a company is enhanced. I've learned a lot, and my partner Paul has through our companies, and as a result, a lot of mistakes you make as an entrepreneur, we're not going to make. That provides a lot of efficiency in how we deploy capital, and simply just makes it work better.

What do you need to be make a startup successful?

Robin Richards: At the end of the day, you have to have people that know what you're doing. You've got to know best practices in demand generation. You've got to have great sales enablement. You have to run a tight financial ship, so you know what you can and cannot spend. Your finance has to be world class. You have to fly low to the ground, and know what's required. You have to hire great sales people, but you have to have great sales opportunities. They're nothing better for a sales professional, where it's a land grab and expansion opportunity, where you are attacking the market with a lower price and higher quality product, as long as they believe in management, and see you're not going to run out of money, that you are in a marketplace that can use the product. If you can't see it, it's hard to convince others to see it. So, when you look at the outplacement market, and literally there are only a handful of people, and a couple of bigs ones, all doing it the same way with in-person meet-and-greet, and they charge you $3000, $4000, or $5000 for six months or $700 for a weekend seminar, we find we can beat that for their lowest price, the efficiency can be great, and it's kind of an execution risk only, not a market risk.

Why is it, with such an established market like this, you're even able to gain any foothold?

Robin Richards: It's hard to believe it, but twenty years later, there are still industries, and many parts and pockets of industries which have not adopted the technology of social networks, and the use of the Internet to leverage the content and services they have. It's very, very difficult for large outplacement firms to compete with this offering. We're going to have to fight it out, as they do a great job, but their cost structure is disadvantageous to both the buyer and themselves. They're going to lose, because their cost structure is just so difficult. They have these 5- 10- and 15-year leases on property, which they require to have manned by people. They could bite the bullet all at once and go digital, but their whole marketing proposition has been you need to meet someone in person, that they are more efficient than talking to someone via Skype or letting people do things remotely online. They have to argue against their present, in order to preserve their business model from the past, even if they don't believe it.

You've been successful with a number of other startups—what made you decide that this industry was the one with the best opportunity?

Robin Richards: The first part of a startup, is picking a market. In real estate, it's location-location-location. In business, it's timing-timing-timing. You need to pick a market, where the timing of what you're offering is relevant now, or will be very quickly. If you're wrong about that, you can be really good and still lose. However, if you're right about timing, you can be very efficient with your early capital, and get to the size where, even if you have to wait for hypergrowth, you've gotten the three percent, early-adopter, or at least your fair share of the early adopters, so you can withstand the time lag between that and the rest of the market. You can't get there, if you weren't good at picking your timing. That's what I've found, and which is the greatest opportunity and the greatest dangers. It's timing, timing, timing. As you know, on the Internet, momentum is everything in the technology business.

What's next for CareerArc?

Robin Richards: We started with the enterprise in the beginning, and loved it, but I think the opportunity now is in the middle market, where they are now understanding the value of their brand, and the impact that brand can have on their ability to attract and retain great employees. I think people are starting to understand now that everyone has a voice today. The old model was you'd only take care of your executives, however, democratization has arrived because of social networks. You have to embrace it, or it will eat you and it will hurt you. You have to watch every one of your employees, and value them the same on their way out, and while they're working for you, because they all have a voice box that is much bigger as you go down your triangle. The CEO is at the top of the triangle, and as you go down the triangle that is the organization, there's more people down at the bottom than on top. You have to realize that the voice of the people, the rank and file, is very dramatic today. If you're not paying attention, you're going to get hurt, especially if you're only worrying about your VPs and the executives at the top of the company. You better worry about what the rank and file says about your company, because they can damage you much more significantly than the top of the triangle, which used to be the worry.

Thanks, and good luck!