Breaking into a sector dominated by one major player can be a severe challenge for start-ups. A quick glance at the example of Google demonstrates the power of entrenched habits of satisfied consumers, to the point where the company name becomes a verb.
Even a rival with huge clout, such as Microsoft, hasn’t been able to break Google’s stranglehold on search engines.
The online job market in Australia is the Google example in microcosm. Seek hasn’t quite become the byword for searching for jobs online, but the website commands around three-quarters of the market and even a vaunted link-up between Monster and News Ltd’s CareerOne in 2008 hasn’t radically altered the landscape.
However, a select band of start-ups has made headway into the online recruitment space and are taking on the giants of the sector. We spoke to a few to gauge how small and nimble start-ups can outmanoeuvre their larger counterparts.
Teachers.on.net is a start-up that’s not only managed to occupy a niche that has confounded Seek, but also to survive the dotcom crash.
Founded in March 1999 with just $15,000 investment capital, Teachers.on.net started as a resume database for teachers.
Founder Simon Maguire brought Petrah Harslett on board in the first month of the business and, with another partner, attempted to make headway in the nascent online recruitment space.
Teachers.on.net realised that it could provide a specialist recruitment model that Seek lacked. Schools needed to find teachers for certain subject areas and needed to check child protection credentials – neither of which could be found on the generalist job sources.
The business began to target schools for paid listings as well as teachers but, as Harslett recalls, the start-up phase was tough.
“I started selling subscriptions to the site but it was a tough gig as we had no traffic or other advertisers,” she says. “At the time, the internet was a very new thing and not everyone was connected to it. We’d send a request out in the mail and get a typewritten response. It’s incredible, but that was the climate at the time.”
The company, with just 200 schools signed up, then manage to ride through the dotcom crash, mainly due to its low overheads and lack of debt.
However, the breakthrough didn’t come until several school networks had signed up and gradual acceptance of the internet as a recruitment tool began to set in.
“We got our first Catholic education board and now have 75% of Catholic schools with us, but we had to leverage every little victory,” says Harslett. “It took a tremendous amount of work – I remember that it took two years to get an appointment with the Sydney Catholic education board.”
“There were times that we maybe thought ‘this is too hard, the schools won’t change’ but we knew eventually things would change. I worked for nothing for a long time, but I love the buzz of working for myself and not having to take ideas to a committee.”
Competitors quickly realised the niche that Teachers.on.net had to themselves and attempted, on three occasions, to harvest the site’s content and then call the schools to try and move them across.
Threats of legal retaliation soon put paid to the copycats and Teachers.on.net has gone from strength to strength, with a network of 4,000 schools.
“If you see a viable idea, stick to it and go for it,” Harslett advises. “You get rewards that you don’t in a regular job. I help create this thing and it’s ours, not anyone else’s.”
For Michael Fraser, entrepreneurship wasn’t anything new, having started up several businesses. But it wasn’t until he saw the opportunity in online job boards that he began to enjoy his work. Perhaps appropriately, the Brisbane start-up is called LoveYourWork.tv.
“I saw a real opportunity for it in my last company when it couldn’t find staff,” he explains. “There wasn’t a database that I could use to find staff. There needed to be a big database of jobs that was simple and held your hand.”
Fraser, via a chance call to a hosting company, found a developer to build the site, starting up the business at the developer’s house. Fraser then contacted employers directly and found that there was a demand for his simple, database model.
“A lot of them said that they used Seek but they had problems with it because it wasn’t flexible,” he says. “Quite a few clients were looking for a new solution and we are looking to provide that by appealing to generation Y.”
“It’s a simple to use interface, without clutter. Everyone out there has copied Seek, with six search boxes. (But) the main market is Gen Y and they feel they don’t get to see the jobs quickly enough.”
Fraser says that he’s received 10 offers from investors for the site since he started up six months ago. He plans to strike a deal to promote the site through a network at some point and certainly has big plans for the business, which he named Love Your Work after a brainstorming session with a friend in a restaurant.
“We want to break into the market, match Jobs Jobs Jobs, then MyCareer and then Seek,” he says. “They are stepping stones though as I’ve always planned the site to be international.”
Astute People Solutions
Taking on the big recruiters doesn’t just mean providing a slightly different or better version of what they do. Astute People Solutions developed an online time sheet offering before any of the big companies entered the space.
The business started as a recruiter five years ago but in 2008 it realised that its timesheet system was a better bet to be the backbone of the company.
“Recruitment is an $18 billion industry yet amazingly no one had thought of this solution,” says co-founder Marcus Webb. “The need for recruitment administration is enormous and there’s a huge amount of time taken up by using paper. Our system removes the process.”
Astute now has a broad range of clients, from small firms to large corporations. Webb feels there is space in the sector for start-ups with good ideas.
“Seek is well in front, so it hasn’t seen the need to innovative too much, it just wants to protect its position,” he says. “There is certainly scope for companies to come in and be innovative.”