By Amanda Gome
Who wouldn’t like to double revenue in a year? NGA.net’s online recruitment and job services tools have taken Mike Giuffrida in the right direction. He explains how he kept up with the industry’s changing needs.
Back in 1997, Mike Giuffrida, then 28, saw the potential of e-recruitment software to recruit and manage people. NGA.net was the first company to offer online searchable resume database technology in Australia. It hasn’t been easy. He had to cope with falling out with his business partner and a major client.
But now Giuffrida is 39 and the company is reaching mid-size status ($8 million revenue.) He shares his tips and lessons with Amanda Gome and explains his great idea for a new business opportunity in the SME space.
He is happy to answer your questions. Email to This e-mail address is being protected from spambots. You need JavaScript enabled to view it
Amanda Gome: Why did you start the business? What niche did you see?
Mike Giuffrida: I was a mechanical engineer and went through university with Will Spensely. We started by helping graduate engineers enter the workforce and looked at technology to help that transaction. So we came up with software that helped graduates go on the internet, register and create resumes online. We then expanded that to create tools that searched for them online and tools to track them. Our latest product has been JobOffice, a tracking system that manages sourcing, recruiting and scheduling all recruitment needs.
What was the next step to your growth?
Our first customers were early adopters. We worked with customers to develop broader applications that were internet based. We started with one product that started with a simple implementation and turned that into modules. We also expanded into all industry sectors, not just engineering.
Your first big break?
In 1999 the Federal Government changed the way they recruited graduates. We began working with a consortium of 10 government departments. It’s a big part of the business today. We also got corporate customers like Ford at the same time.
When was your biggest growth leap, and how did you achieve it?
In the last 12 months, we went from $4.9 million to $8 million. One thing we did to contribute to the jump was expand the services side of the business. As a software company you tend to get focused on technology. Then customers said to us ‘we need services to help us get the most out of the software’. As you build the business you don’t tend to charge for services, but then you realise that these skills are valuable and clients will pay. So we set up a structure to deliver services better. That has helped us nearly double revenue.
Do you export?
A number of our customers are global, but we will be much more internationally focused in the next 12 months.
How did you get new customers in the last year?
Word-of-mouth and through our sales team. We have seven people.
How do you find new sales staff?
It’s very difficult to find. It’s a real challenge because ours is a new industry. We have a referral program and reward people who do refer. We use traditional job boards, recruiting agencies and networks. We tap into all channels.
How have you protected your IP?
We made inquiries in 1998 about patenting our technology but drew the conclusion it wasn’t going to protect us as we use technology to improve existing business processes.
Our contracts all have IP clauses in them so that all IP we bring to the table belongs to us. When we look at global players, they don’t have patented technology.
What was your biggest mistake?
In 2000 we compromised our vision. We were working with Fairfax and shifted focus to deliver solutions that Fairfax was giving to their customers. We shifted our R&D to fit the practices of recruitment agencies and the product developed in the wrong direction and our customers weren’t happy. It cost us a bit.
Did you sack Fairfax?
Putting a media and a software company together was not a good fit. We parted ways.
Didn’t they take an equity investment?
Yes. Fairfax owns 30% of the business.
So how do you have a falling out with a major corporate that owns 30% of the business? What happens?
They had made an investment and they are entitled to a return if things continue to go as well as they are now. It was around the time the internet bubble was bursting and we all recognised that we had had a red hot go for a few years and we needed to change direction. Web companies in the media space got much more focused and we all recognised that. So Fairfax no longer sits on our board, they just have their investment.
How much did they pay for their 30% share?
Millions.
Your former business partner Will Spensley died. He was your age and you had known him since university. How did that affect your business?
He died in September 2003. He had left the company before he become ill.
Why did he leave?
We were joint managing directors doing everything at the start, which didn’t matter then. But people start to look for leadership and if there is no cohesive direction, things can come apart. We had never sat down and said someone has to be the CEO. We had a couple of people from Fairfax on our board and the board made the decision. They chose me and he left and decided to move on.
Was he bitter, and was it hard for you?
Yes to both.
What should you have done in retrospect?
We might have had the conversation sooner and set up an organisation chart at the start, but of course you think you’ll worry about that later.
What is new in your industry?
The shift has occurred from employing and inducting them to finding and keeping them. Customers are saying they need more help from us to manage staff.
Also the old ‘post and pray’ no longer works. You have got to be proactive when you recruit. People are using new ways such as integrating into social networking sites and using communities to attract people. They are using sites like LinkedIn. Over time you build your groups and then you have the opportunity to broadcast to them the type of opportunities you are looking for and people may offer to facilitate an introduction. It’s about being part of a community and establishing trust and use it to tap into other people’s networks.
The small and medium businesses are not well serviced in this area. There is not a lot of technology available. You for example sell to large businesses.
Yes. If your print ad or job board doesn’t work the next choice for SMEs is very limited. Agencies are too expensive.
You might find SMEs heading to LinkedIn and establish a referral network. Another way is to communicate to Gen-Ys through blogs. There are opportunities there.
How is technology adapting to trends in your space?
Handhelds are going to become mobile laptops. How can web-based applications be delivered through mobile devices? We need to be able to reach people on the road, get to them before anyone else.
Which companies are attracting the most Gen-Ys?
Social awareness is very important. They want to work for companies that have a good reputation including the way they engage with environmental issues. Authenticity is very important. They also have to have a sense of career development. The average tenure for this generation is decreasing so you need to show then a career path.
Does this leave smaller companies at a disadvantage?
No. A lot of talent is gravitating towards smaller businesses because they can clearly see they are adding value and contributing rather than being part of a large corporate where they are not sure what they are contributing.
What is your revenue target for this financial year 08-09?
Close to $12 million. We have 55 staff and a platform for international growth. It will also be organic growth. We have a lot of recurring revenue and every year we add new name accounts and services onto the business we already have.
You are now moving into medium sized company status which can be difficult.
Yes. You can get caught in no mans land. But we have got a strong board and mentors and a blue print for growth.
Read more on:
