The Talent Myth Part V, continued
The Curse of the ATS Marketplace
My last few posts have distracted us from The Curse of the ATS Marketplace. It is now back by popular demand!... This week we return to following the litany of mistakes that have been made and repeated by every vendor in our little market. These mistakes have added up to what I call the path to extinction. So far we've reviewed the following mistakes:
Stop One on the path: They listened to their customers a little too much, and not effectively for their business. (find this post here)
Stop Two on the path: They over-complicated their products while they over-inflated their egos. (find this post here)
Stop Three on the path: They diluted their strength as a vendor by diluting their domain expertise in customer facing positions. (find this post here)
Stop Four on the path: Vendors aggressively acquire customers in large numbers before their infrastructure or product are able to support them. (find this post here)
Stop Five on the path: Vendors fool themselves into thinking their products are incredibly different than everyone else's, then they try to fool their prospects and customers. (find this post here)
Another of the most common mistakes made by vendors in this space has to do with a scary combination of arrogance and ignorance. After living for way too long in the vacuum I described in Stop Five Vendors begin to fall into the trap I'll introduce as Stop 6: Vendors develop a case of Business Model Paranoia and Competitive Denial What does that mean? Read on my friend....
As most of us agree, the vendors that choose to do business in our space have chosen to serve a customer that is technology averse. Given that, HR generally doesn't push the technical envelope - we tend to be just behind the curve of the market in general. Most entrepreneurs that start enterprises in this space come from it originally in some form or another (vendor or corporate). This means the vendors are developing technology that doesn't have a long shelf-life on the leading edge.
At the time when the entrepreneur/founder is developing their company and solution set they are in a mode where the world of possibility is limitless. At this time many of them find incredibly innovative applications of technology available at the moment. They also address infrastructure and scale issues with a combination of the available technologies/practices and the limitations of their, or their team's, experience. This results in an effect where at the point the solution goes to market, and generally for about 12 months after, they are viewed as incredibly innovative.
The challenge here is that while the vendors are developing and going to market with their product, there are scores of others beginning that same process. They, however are beginning the process with the benefit of 12 more months of downward price pressure on technology in general - as well as the benefit of even newer or more enhanced innovative technologies. Yes, things do move that fast. Generally speaking, if you do the same thing for 24 months technologically - from any perspective - application or infrastructure - the world will and probably has passed you by. It certainly has with most all of the vendors in our space.
The vendor's business model is also at risk here. Their sales, service delivery, and general business model is framed by all the underpinnings of the infrastructure and capabilities of the vendor's solution.
Early on when the vendors are more customer and quality focused they keep up via sheer flexibility. However, as they make more and more of the mistakes I've outlined here in The Curse their flexibility diminishes and they begin to live in the vacuum of a world they create for themselves. Early on they are different - visibly - in product and in business model. As the market moves along and competitors adapt they meld into looking more like everyone else. Case in point - None of us can tell the vendors in our space apart any more.
It is in this 24 month timeframe in the vendor's lifecycle that the Paranoia and Denial begins. It starts with the founder's disbelief that any or all competitors can achieve any success with their approach - because they considered it and it just can't work.
The paranoia normally manifests itself around the business model, sales/marketing approach, or strategic product elements relative to the competition. I've heard so many founders and executives that think their ideas were stolen by the competition... "We focused on performance and metrics first." "We were the first with this caliber of hosting facility and they've all copied our model" "We rolled out configurability as a key capability and everyone is copying it now." "The minute we added advanced searching capabilities everyone in the market copied it." "We were the first to focus on the candidate experience" GET A GRIP! Like I said before, YOU ARE NOT UNIQUE! IT'S BEEN DONE BEFORE! YOU WEREN'T THE FIRST, AND YOU WON'T BE THE LAST TO SOLVE THESE PROBLEMS.
The denial tends to manifest itself around innovations the competition have mastered first and the competition's success in general. I have had so many vendors tell me that what I am using right now is impossible - or what I saw in their competitor's system just can't be done - or what I've seen in other commercial systems just isn't available in the market. It is so incredible to me how these folks start out as visionaries and then end up sounding like they live under a rock. Technology is moving quickly folks! Everything is possible and you don't have the franchise on hiring smart hard working people that make new things happen! Get out from under your rock and open your eyes! Start paying attention out there!
The lesson at this stop for customers: Don't take anything your current vendor or favorite prospective vendor claims can't be done or is too large a project to deliver on your time frame as the true answer. Always be looking at the market, viewing what else is out there... and ... network with other peers in the market - find out what they are doing, how their vendors are solving their problem. You'll be surprised. Most vendors are trying to keep you in a box that makes their lives easier by minimizing the level of new development they have to incorporate for you.
The lesson for the vendors: Please lose your arrogance and start to realize that you don't have all the answers. While you were focused on running your company and satisfying your customers, someone else might have come up with the same or better ideas. Get out from your environment - physical and mental - out of your comfort zone - and start looking at the problems you are solving without the constraints of your experience or your customers. Go meet with companies that will invest time to describe what they really need - AND DON'T TRY TO SELL THEM ANYTHING - just learn what the ideal solution would be. Explore the world of technology beyond what you know and what your current technology partners bring to your doorstep.
Moving forward with The Curse I will be evaluating the vendors in the space against the mistakes I've outlined so far. A report card, of sorts, with detailed thoughts - one by one. Please email me which vendors you would like me to focus on first. (Newsletter subscribers will get higher priority with their requests - they have to get some sort of perk!)
Thanks for reading.
Until next time,
Talent.
Wednesday, September 24, 2003
Wednesday, September 17, 2003
Update/Correction on September 16 Post
New data in from Virtual Edge - I did mention that I didn't have much data on them.... They seem to be one of the most active vendors in the space signing 6 new customers this year to date. The customers range in size from 1,000 to 25,000 employees. Their VP of Corporate Development claims that they will be ready to announce another 6 new customers at the October HR Tech Show.
Seems they've just been quietly going about their business. They've hired a new VP Sales from the staffing industry - we'll watch how he makes the transition to system sales - that can be a tough one. We'll wish him luck as he ramps up.
All that success and no one noticing, maybe it's the marketing person that should be worried at VE!
I stand virtually corrected.
Talent.
New data in from Virtual Edge - I did mention that I didn't have much data on them.... They seem to be one of the most active vendors in the space signing 6 new customers this year to date. The customers range in size from 1,000 to 25,000 employees. Their VP of Corporate Development claims that they will be ready to announce another 6 new customers at the October HR Tech Show.
Seems they've just been quietly going about their business. They've hired a new VP Sales from the staffing industry - we'll watch how he makes the transition to system sales - that can be a tough one. We'll wish him luck as he ramps up.
All that success and no one noticing, maybe it's the marketing person that should be worried at VE!
I stand virtually corrected.
Talent.
Tuesday, September 16, 2003
BrassRing Rumor After-shocks
The dialogue here and on the StaffingManagement Blog regarding the sales leaders in this space deserves a little more clarification based upon a few of the emails I've received recently:
I don't share the SMS Blog's opinion of Recruitmax because of their approach in the market - specifically their strategy is singley focused on one issue: price. Their interface looks good - but their technology doesn't scale - they are running headstrong for the challenges every other vendor in this space has encountered after adding customers that cripple the ASP-only service delivery model. Watch them as they address scale in infrastructure and then have another product release - I can hear their customer base churning already. Theirs may be the worst train-wreck yet. Sales execution by dropping your pants on price isn't to be applauded. Those of us that have been around long enough know where they are headed - straight to I*Search-ville.
Expect to see a LOT of turnover in the top sales executive position at several of the players in the market in the next 3-6 months... use common sense and numbers and you'll find that:
BrassRing: A VP of Sales who over 24 +/- months has lost more customers than they have signed new ones. He's got to be looking over his shoulder everywhere he goes. Loyalty is not a trait his CEO is known for. Although, he is one of the B teamers from Lotus - her "yes" crew. October is a time of change - the leaves change colors - BrassRing's annual business model change and re-org - look for big sales changes there.
PeopleClick: If they stay in the ATS market they have to replace their top-heavy sales management team with a more flat organization. 12-15 months and we're not sure they signed more than 3 contracts.
Recruitsoft: For an unprofitable start-up with poor sales performance this year, they have a lot of "weight" in the sales management team to lose. More VPs than most companies 3X their size. Every trade show I meet a new one, it seems. Very top-heavy for a company in their position.
Deploy: 15-18 months for the VP there. They write great white papers, but we're only aware of 2 new customers in that time. Tick, tick, tick.... Oh, and stop telling me about Exult customers, you don't get to count those.
hire.com: already gone....
Virtual Edge: Virtually silent for the last 12 months. May be time for a change. Not much data here, but a qualified guess.
As I mentioned earlier, it should be an interesting time to watch the vendors in our space this fall.
Looking for The Curse of the ATS Market? you can find it here
Next week - back to "The Curse"
Until next time,
Talent.
The dialogue here and on the StaffingManagement Blog regarding the sales leaders in this space deserves a little more clarification based upon a few of the emails I've received recently:
I don't share the SMS Blog's opinion of Recruitmax because of their approach in the market - specifically their strategy is singley focused on one issue: price. Their interface looks good - but their technology doesn't scale - they are running headstrong for the challenges every other vendor in this space has encountered after adding customers that cripple the ASP-only service delivery model. Watch them as they address scale in infrastructure and then have another product release - I can hear their customer base churning already. Theirs may be the worst train-wreck yet. Sales execution by dropping your pants on price isn't to be applauded. Those of us that have been around long enough know where they are headed - straight to I*Search-ville.
Expect to see a LOT of turnover in the top sales executive position at several of the players in the market in the next 3-6 months... use common sense and numbers and you'll find that:
BrassRing: A VP of Sales who over 24 +/- months has lost more customers than they have signed new ones. He's got to be looking over his shoulder everywhere he goes. Loyalty is not a trait his CEO is known for. Although, he is one of the B teamers from Lotus - her "yes" crew. October is a time of change - the leaves change colors - BrassRing's annual business model change and re-org - look for big sales changes there.
PeopleClick: If they stay in the ATS market they have to replace their top-heavy sales management team with a more flat organization. 12-15 months and we're not sure they signed more than 3 contracts.
Recruitsoft: For an unprofitable start-up with poor sales performance this year, they have a lot of "weight" in the sales management team to lose. More VPs than most companies 3X their size. Every trade show I meet a new one, it seems. Very top-heavy for a company in their position.
Deploy: 15-18 months for the VP there. They write great white papers, but we're only aware of 2 new customers in that time. Tick, tick, tick.... Oh, and stop telling me about Exult customers, you don't get to count those.
hire.com: already gone....
Virtual Edge: Virtually silent for the last 12 months. May be time for a change. Not much data here, but a qualified guess.
As I mentioned earlier, it should be an interesting time to watch the vendors in our space this fall.
Looking for The Curse of the ATS Market? you can find it here
Next week - back to "The Curse"
Until next time,
Talent.
Tuesday, September 09, 2003
The BrassRing Rumor
When Sumser noted the rumor about BrassRing in his Bugler today it brought a chuckle out of me. He is so skilled at stirring the pot! While it wouldn't be surprising for BrassRing to implode (they are the poster-child for the mistakes I write about in The Curse of The ATS Market)...
I've fielded a few emails to this Blog regarding the rumor, let me just put it to bed: They aren't ceasing operations in their systems or their outsourcing business. This is confirmed directly with BrassRing and with BrassRing customers and competitors.
Months ago BrassRing announced that they are getting out of what they called "Sourcing", closing their job fair and job board businesses, letting go a couple hundred people, and closing West Coast offices. The alleged sale of the job board to CareerBuilder - and/or the ceasing of operations in support of it - are just that - closing and/or selling the job board business.
They will continue to stink up the market with their poor execution as a systems company - and confuse themselves and everyone around them with their new focus on outsourcing.
The former Lotus executives (serious retreads and domain-weaklings) now running BrassRing have managed to take what was a great systems company (remember Hiresystems?) - chase out all of the Executives in sales and marketing, the top sales people, and the key Product developers and managers that built Hiresystems/Brassring into a potential market leader - and replace them all with the epitome of domain-weak executives I discussed in my post yesterday. She has also inserted more confusion on an ongoing basis about who or what that company is - internally and externally - it's no surprise that to my count 50% of their systems customer base has left since early 2000. It hurts to talk to BrassRing employees and customers. A lot of pain there.
Expect more bad news very soon from BrassRing. The rumor mill says that this time next month we should have even more to talk about.
Update - 9/9/03:
For another perspective, and more insight, check out our friend over at The Staffing Management Blog - We don't agree on everything (although lately we've been on the same page), the latest post there is dead on. We don't share the love for the Recruitmax VP of Sales, but the point they make on Recruitmax's current sales traction being in large part due to that individual's background in the space is on point! There are only a few individuals that have that kind of experience in this market - I watch them closely - I'm surprised that we aren't seeing them emerge at some of the new or surging vendors - should be a fun fall to watch things shake out a bit.
Until next time,
Talent
When Sumser noted the rumor about BrassRing in his Bugler today it brought a chuckle out of me. He is so skilled at stirring the pot! While it wouldn't be surprising for BrassRing to implode (they are the poster-child for the mistakes I write about in The Curse of The ATS Market)...
I've fielded a few emails to this Blog regarding the rumor, let me just put it to bed: They aren't ceasing operations in their systems or their outsourcing business. This is confirmed directly with BrassRing and with BrassRing customers and competitors.
Months ago BrassRing announced that they are getting out of what they called "Sourcing", closing their job fair and job board businesses, letting go a couple hundred people, and closing West Coast offices. The alleged sale of the job board to CareerBuilder - and/or the ceasing of operations in support of it - are just that - closing and/or selling the job board business.
They will continue to stink up the market with their poor execution as a systems company - and confuse themselves and everyone around them with their new focus on outsourcing.
The former Lotus executives (serious retreads and domain-weaklings) now running BrassRing have managed to take what was a great systems company (remember Hiresystems?) - chase out all of the Executives in sales and marketing, the top sales people, and the key Product developers and managers that built Hiresystems/Brassring into a potential market leader - and replace them all with the epitome of domain-weak executives I discussed in my post yesterday. She has also inserted more confusion on an ongoing basis about who or what that company is - internally and externally - it's no surprise that to my count 50% of their systems customer base has left since early 2000. It hurts to talk to BrassRing employees and customers. A lot of pain there.
Expect more bad news very soon from BrassRing. The rumor mill says that this time next month we should have even more to talk about.
Update - 9/9/03:
For another perspective, and more insight, check out our friend over at The Staffing Management Blog - We don't agree on everything (although lately we've been on the same page), the latest post there is dead on. We don't share the love for the Recruitmax VP of Sales, but the point they make on Recruitmax's current sales traction being in large part due to that individual's background in the space is on point! There are only a few individuals that have that kind of experience in this market - I watch them closely - I'm surprised that we aren't seeing them emerge at some of the new or surging vendors - should be a fun fall to watch things shake out a bit.
Until next time,
Talent
Monday, September 08, 2003
The Talent Myth Part V, continued
The Curse of the ATS Marketplace
I'm interrupting the weekly addition of Vendor Mistakes added to The Curse of the ATS Marketplace to highlight one of my previously mentioned mistakes in action - live if you will - at two of the vendors in our market.
A few weeks ago I wrote about Step Three on the path to extinction: They diluted their strength as a vendor by diluting their domain expertise in customer facing positions. (find this post here)
This week it was reported that hire.com let go of their VP Sales, and that Recruitsoft let go of their VP North American Sales (I'll leave their names out of it - this isn't really about them specifically). Both companies have struggled with sales and customer retention in the last few quarters. The mistake here wasn't letting go of Sales Leaders that weren't driving consistent results. The mistake here was hiring them in the first place. These professionals were destined to fail - or at least go crazy trying to be successful after joining on with their respective employers.
The Vendors in our space forget that this market is only "so big" after they taste a little success. They start focusing on being or becoming the leading vendor and forget about what put them on the cusp of that position in the first place. They start fooling themselves that if they build a large sales machine based on software industry standard practices that they will out perform the other vendors in the category and take the lead. It works everywhere else, but how many more vendors need to bottom out - or successful sales managers need to fail in crossing over before the Boards of Directors begin to pay attention?
The reality is that this is a small market with true differentiating nuances. The two gentlemen that were let go in these examples were accomplished sales management veterans - in OTHER INDUSTRIES. They are the latest casualties in a long line of people that did very well in ERP, HRIS, CRM, Networks, Payroll Services, Time and Attendance, and other software markets - then struggle with the nuances in our little space. Implementing the process and rigor that these people are so good at managing in the sales process - building their repeatable sales processes - measurable and forecastable milestones built in to insure better forecasting... These things only work in our little space when they are done so based upon true experience in the domain. Whether you came up through the staffing world having been a recruiter then moved into sales - or whether you came up through the sales ranks in the space it is the real experience in the domain over a period of time that makes a sales person or manager truly effective.
Most vendors try to make up for this by surrounding the sales guru with domain expertise - in support of the sale, in the sales force, or in other places on the executive team. The inherent flaws here are the overhead (this can be expensive if you compensate with costly sales support for the domain-weak sales exec) and in execution - as much as you pay the executive running sales to build the team, manage the process, and drive the forecast - you also pay them for their leadership (company-wide) and their gut-level instincts for the deal. The executive coming from a binary world selling to IT or to any other decision maker in a corporation and then moving into our niche is going to have a hard time applying their gut instincts to this space - specially if what they are keying off of is "filtered" by the domain experts they are surrounded by. Even harder - is attempting to lead a team of sales execs or your company in this space without a true understanding of the buyer - your credibility is shot within a month.
The problem is not just external. It's not just about understanding the quirky HR buyer. It's internal as well - it's being able to understand the quirky HR buyer well enough to then know what levers to push on internally to move your company to deliver the right messages, product, and manage the right relationships to win in the market. In this market, possibly more than any other, the sales force is the front line in not just selling software or subscription fees, but in moving the product vision along. This is a crowded space - and a small crowded space, focusing on the sales process while someone else worries about product and market just doesn't work here.
Vendors: Struggling with slow or no sales? Struggling with not being able to ramp to the sales volume you expect? Check your Sales Leaders resume for real domain experience and success in this space. You don't need to look any further.
HR Team: Sitting across from a Vendor's VP of Sales that just doesn't get it? Do they defer all questions about the profession of recruiting to the Sales Engineer or another executive in the room? Do they do a great job with the power point and repeating buzzwords but when you articulate a real challenge in your process does their head swivel to everyone else in the room? Then think twice about buying from that vendor - it says a lot about their approach in building out the rest of the customer facing part of their team - including support and services....
Until Next Time,
Talent.
The Curse of the ATS Marketplace
I'm interrupting the weekly addition of Vendor Mistakes added to The Curse of the ATS Marketplace to highlight one of my previously mentioned mistakes in action - live if you will - at two of the vendors in our market.
A few weeks ago I wrote about Step Three on the path to extinction: They diluted their strength as a vendor by diluting their domain expertise in customer facing positions. (find this post here)
This week it was reported that hire.com let go of their VP Sales, and that Recruitsoft let go of their VP North American Sales (I'll leave their names out of it - this isn't really about them specifically). Both companies have struggled with sales and customer retention in the last few quarters. The mistake here wasn't letting go of Sales Leaders that weren't driving consistent results. The mistake here was hiring them in the first place. These professionals were destined to fail - or at least go crazy trying to be successful after joining on with their respective employers.
The Vendors in our space forget that this market is only "so big" after they taste a little success. They start focusing on being or becoming the leading vendor and forget about what put them on the cusp of that position in the first place. They start fooling themselves that if they build a large sales machine based on software industry standard practices that they will out perform the other vendors in the category and take the lead. It works everywhere else, but how many more vendors need to bottom out - or successful sales managers need to fail in crossing over before the Boards of Directors begin to pay attention?
The reality is that this is a small market with true differentiating nuances. The two gentlemen that were let go in these examples were accomplished sales management veterans - in OTHER INDUSTRIES. They are the latest casualties in a long line of people that did very well in ERP, HRIS, CRM, Networks, Payroll Services, Time and Attendance, and other software markets - then struggle with the nuances in our little space. Implementing the process and rigor that these people are so good at managing in the sales process - building their repeatable sales processes - measurable and forecastable milestones built in to insure better forecasting... These things only work in our little space when they are done so based upon true experience in the domain. Whether you came up through the staffing world having been a recruiter then moved into sales - or whether you came up through the sales ranks in the space it is the real experience in the domain over a period of time that makes a sales person or manager truly effective.
Most vendors try to make up for this by surrounding the sales guru with domain expertise - in support of the sale, in the sales force, or in other places on the executive team. The inherent flaws here are the overhead (this can be expensive if you compensate with costly sales support for the domain-weak sales exec) and in execution - as much as you pay the executive running sales to build the team, manage the process, and drive the forecast - you also pay them for their leadership (company-wide) and their gut-level instincts for the deal. The executive coming from a binary world selling to IT or to any other decision maker in a corporation and then moving into our niche is going to have a hard time applying their gut instincts to this space - specially if what they are keying off of is "filtered" by the domain experts they are surrounded by. Even harder - is attempting to lead a team of sales execs or your company in this space without a true understanding of the buyer - your credibility is shot within a month.
The problem is not just external. It's not just about understanding the quirky HR buyer. It's internal as well - it's being able to understand the quirky HR buyer well enough to then know what levers to push on internally to move your company to deliver the right messages, product, and manage the right relationships to win in the market. In this market, possibly more than any other, the sales force is the front line in not just selling software or subscription fees, but in moving the product vision along. This is a crowded space - and a small crowded space, focusing on the sales process while someone else worries about product and market just doesn't work here.
Vendors: Struggling with slow or no sales? Struggling with not being able to ramp to the sales volume you expect? Check your Sales Leaders resume for real domain experience and success in this space. You don't need to look any further.
HR Team: Sitting across from a Vendor's VP of Sales that just doesn't get it? Do they defer all questions about the profession of recruiting to the Sales Engineer or another executive in the room? Do they do a great job with the power point and repeating buzzwords but when you articulate a real challenge in your process does their head swivel to everyone else in the room? Then think twice about buying from that vendor - it says a lot about their approach in building out the rest of the customer facing part of their team - including support and services....
Until Next Time,
Talent.
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