This Week, In Recruiting - Issue 125

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Open Kitchen:?Market Fragmentation & the Rise of the Micro RPO

I set up my first business in 2009.

There was no coincidence in the timing - the Great Financial Crisis had hit and it was easy to forecast that my earnings as an agency recruiter were going to be hit hard by the economic downturn we were going to have. I wasn't prepared to do the same job for half the pay, so I left to set up on my own, thinking that if was going to take a financial hit, I might as well do so under my steam, rather than being crushed by management's inevitable and escalating exhortations 'to do more with less'.

I didn't know it at the time, but I was part of what is now a fairly well known phenomenon - a surge of new business formation from experienced employees setting up businesses during economic downturn. These are people who are not likely to secure equivalent compensation by either staying in current role or by finding a viable new role in a newly recessionary market.

We're at this moment again in the recruiting industry. Recruiter comp peaked in 2021 in 'the Great Recovery' - many of us secured career all time highs - and now find ourselves high and dry now that the multi-year investment tide of the ZIRP (zero interest rate policy) - itself a response to the GFC - has gone out, effectively ending the hyper-scaling era. There are fewer jobs, those that are there are oversubscribed and 'below our level'. Hence, easy decision into solopreneurship.

I welcome the shift because many great businesses will be born in this period, customers will get more choice, and better value as increased competition lowers cost. A lot of use will succeed, but a lot will fail also. I know, because I failed 2 out of 4 businesses I have set up since and have only latterly figured out the key principles which have made the most successful business - Recruiting Brainfood - succeed. I'm going to outline some of these principles in today's Open Kitchen, in an effort to increase the number of successes and reduce the number of fails.

Here we go:

1. Product / Service Distribution > Product / Service Development or Delivery

Reid Hoffman - the founder of this site - was the first to really explain why any modern entrepreneurial business needs to focus as much (if not more) on product / service distribution vs product / service development or product / service delivery. I forget the precise quote but it goes something like this:

An average product with superior distribution, beats a better product with weak distribution.

It's the VHS vs BetaMax argument for the 1980's kids out there - and it's absolutely true. There is no point having a great product or service, if not enough people can find it to buy it. This was why my first business failed, because I spent most of my time, resources, mental energy into product / service development, then on product / service delivery on the few customers I did manage to get, rather than build a product / service distribution channel which would make it cheap for me to get customers.

The above screen shot from an early talk from another PayPal alum - David Sacks - who outlines what seems to be a conscious strategy even at the time - PayPal were thinking about customer discovery, and innovated new ways which were proprietary, hard to replicate and cheap-once-made, therefore sustainable.

Solopreneur Lesson 1:

Monitor how much time you spend on product / service development or product / service delivery. This is important work, but less important than building an effective distribution channel for whatever it is you're selling, especially at the beginning of the solopreneur journey. If needs be, you need to cut down what you plan to be delivering, it if consumes too much time to deliver it. The split should at minimum by 50/25/25

2. Concatenate Customer Discovery + Marketing

Everyone knows you have to speak to customers. Conducting 'customer discovery' has become one of the hygiene factors of setting up a new business - it would be unthinkable for a first time entrepreneur to not be doing extensive research on the market before launch. However, too many times wannabe entrepreneurs fail the first test of entrepreneurship - how I can get most value for least effort?

Thankfully, this is not a problem for people like Adam Gordon, who last week launched his new tech product, Poetry HR (see What's in the News segment). Now Adam is a friend so I'm biased, but I have been super impressed with his concatenation of customer discovery with marketing of the product. The approach is simple - instead of doing 1-2-1 private conversations with what you think might be prospective customers, why don't you do 1-2-1 public conversations with the same people? The effort level is broadly the same, but the return is orders of magnitude higher - every conversation serves as a piece of pre-marketing for a product yet to be launched. There's now a YouTube channel which has hundreds of 15 minute videos on it, each on with Adam talking to an experienced Talent Acquisition leader on 'recruiter enablement'. This is not only a valuable resource for internal use, but also a powerful connection of the identified problem with the person / product who is going to solve it.

Solopreneur Lesson 2:

Public is better than private. Almost always this is the case, so if you find yourself doing a lot of private meetings, zoom calls etc where the only people who will ever know about it are the two people participating in it, you are not optimising the value of your time. You can concatenate customer discovery + product marketing with simply doing it in public.

3. Understand Your Cost of Sale

Hung, how much should I charge for XYZ?

People ask me, as if I know.

I don't, because I do not know what costs are involved in you selling whatever it is you're selling. Things are not objectively cheap or expensive - they are relatively cheap or expensive based on your liabilities and what you could be doing otherwise. An entrepreneur how has taken out a bank loan to set up, agreed to a rent an office for 12 months etc, needs a much higher price point than a person who is running a side hustle, siphoning off value from the company which is currently employing him. Hence, the numbers are going to be personal to your circumstances. What is much more important is how much you are spending to get that number in. This is the 'cost-per-sale' metric and one of the most important measures of whether your business has a chance of making it.

Stack Overflow (not sure if they still do this) used to measure their sales team not only on revenue but also on 'number of contact events' with prospects before they converted. The more contact events, the more expensive the cost-per-sale. Hence, there are 'good' sales and 'bad' sales - ones which take a low amount of time / effort to convert to income, vs those which take so much time that the income does not compensate for the effort required. Most professional sales departments will measure in this way, but most solopreneurs never do.

It is essential that you do this, not only because it will help you avoid the window shoppers who are never going to buy, but also help you crystallise how much exactly you should be pricing your product / service at. If, for instance, your conversion rate per sale is 3 x contact events, how much you value the time spent on those contact events is a variable to go into the price.

Solopreneur Lesson 3

There are much smarter pricing gurus than me - check out Nick Kolenda for some cool downloadables or Jon Brooks who is an expert consultant in this space. My takeaway for you is just that you need to be aware of your time, and actively avoid increasing Cost Per Sale. Doing pitches, customising slide decks, doing constant demo's, or God forbid, endless Zoom calls with too many stakeholders - all of this inflates your CPS. If you don't watch this, it will sink your business.

There's loads more but this essay is already becoming far too long so I am going to stop it here. Let me know if you want me to keep going on this, there is probably a part 2 or even a part 3 on this. Comment below if you want to see this - and, if you're a solopreneur or just starting out, what are you learning in your journey that you'd be happy to share?

Out of the kitchen, onto the lounge ??

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What's in the News?

Perceptyx acquires Humu

Exit for Humu, Laszlo Bock's employee engagement and management learning platform. Perceptyx with the blog PR here . Bersin also weighs in with his analysis, which I think is fair; it's hard to do HR Tech. Have a read.

Adam Gordon launches Poetry - Recruiter Enablement

Well he's been banging on about it long enough, but good to finally see Poetry see the light of day. It's a tool which is going to adopt Sales Enablement philosophy to recruitment, an idea which is not before it's time. Interestingly, LinkedIn now provides a decent way to for employers to interact with prospects - you can apply to get started directly on Poetry's LinkedIn page here

If you are a recruitment technology vendor with some news to share, comment below and let me know your news

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What's On Offer?

Purpl are offering FREE & Discounted Training and Workshops - see below

Helping internal and embedded recruitment teams in the tech world upskill through peer-to-peer learning. We create on-demand, actionable videos with senior recruiters from the world's most innovative talent teams, covering areas such as sourcing, interviewing, using data, DEI & working with hiring managers.

Website: www.gopurpl.io ?

Offer details

1. We have 6 different free workshops to choose from (topics ranging from Google X-Ray sourcing to writing better job ads) linked here
2. Any TA professional currently out of work we will support to upskill them - book a call with me here and we will pick some workshops relevant to them & share for free (leave a note e.g 'open to work')?

20% off any annual paid licenses, can book a demo here (leave a note like 'Recruiting Brainfood' in the details box)

Thanks Joe Atkinson for the offer - let me know how you get on!

If you are a vendor and have something you want to offer the recruiting community, comment below and let me know what the offer is. It will go in next week's issue. PS: I don't accept affiliate deals, so everything you offer gets passed on entirely and directly to the community!

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What's Going On?

Big List of Recruiting & HR Events to Attend in 2023

In person events are critically important to the community folks - especially in times when the eco-system is under pressure from bosses telling us 'to do more with less'. We need to lean on each other and ensure that information continues to flow bilaterally between the nodes in the community. You can do that best by being in person. Big List is up and updated, so bookmark it?here !

Brainfood Live On Air - Ep217 - LinkedIn Algorithm Updates Redux!

Given the snafu last Friday, we're re-running LinkedIn Algorithm Updates with Andy Foote , who we didn't even manage to get on screen last time. 400+ people registered for this, I am hoping at least half of you will tune in again. Register here !

#truChatathon , Tues 8th August, 4-8pm, Nash Squared, 3 Noble Street London EC2V 7EE

Love this series from the Master of Master of Ceremonies in Bill Boorman . If you are one of those who think that you learn best by doing, then these Hackathons on Generative AI are going to the breakthrough moments for you when it comes to getting to grips with these new technologies. Hosted by Nash Squared at their London HQ. It's after work and a great excuse to learn and connect - tickets?here

Brainfood Live On Air - Ep218 - Turning Employees Into LinkedIn Talent Influencers , Friday 11th Aug, 2pm BST

Excited for this show, especially as this is a technique which I think of lot of us can use, at relatively low cost. Imagine a scenario where you have all of your employees advocating for the business on LinkedIn? How do you get them there? We're with Vicki Saunders , Employer Brand Lead (ex-Curry's plc), Richard Bradley , VP Strategic Sales & Customer Success (Kelly), Leah Wise , Global Employer Branding (HelloFresh) & Marian Jarzak , Employer Brand Partner. Register here

Founders Focus - Ep39 - Raj Mukherjee, VP & GM of Indeed , Thur 17th Aug, 3pm BST / 10am ET

Indeed are one of the few recruitment technology companies which can change the landscape and alter the product roadmaps of everyone else. 2023 has been a year of change for the company, with dramatic changes such as RIF, as well as shift to Pay-per-Application model. More changes to come from Indeed, and we've got none other than Raj Mukherjee himself to tell us about it. Register?here ?folks.

Pragmatic Applications of AI in Recruiting , Tes 22nd Aug, 5pm BST

Look at this line up - we're going at it with AI in Recruiting, Ep6. Have to say each one of these panelists I've been keen to get on screen with, and I'm delighted to have them all together for this next continuation of our series on AI in Recruitment. With Glen Cathey , SVP (Randstad), Jane Curran , Head of TA (JLL), Marcus Kohlein , CEO (Camyylyon) and Mike Wolford , Director of Analytics (WilsonHCG). Register here

Adway After Work , Thu 31st Aug, 4.30pm, The Folly, 41 Gracechurch Street, London, England, GB, EC3V 0BT

Everyone should come to this! Adway have started an amazing monthly drinks meet up in central London, to help the community commune. No sales, no pitches, just a load of people from all parts of the recruiting ecosystem getting together and sharing some down time. Free to attend, drinks on the house...but you got to register here

Recfest Nashville , 13-14 Sept, Bicentennial Park, Nashville, TN, USA

Recfest comes to the USA, and I'm coming along with it! Going to give a talk on AI and whether technology can ever deliver us freedom from drudgery or will the value always be captured by the few. It's not a talk I want to give, but I think it is one I have to give. Smarter people than I will be in attendance, along with 1000+ delegates from all over the world. Tickets going fast - get them?here

In-house Recruitment London , 21st September, Islington Business Centre, London

Look at this line up here. I'm going to be there, talking about who knows what, but the chat elsewhere is likely to be worth seeing. Tickets are free, but you have to register here

Employer Branding on a Budget , Wed 27 Sept, 2pm BST

Well this is proving to be a popular one already - a proper topic for tough times! If you are a TA leader looking to upgrade how the market perceives your employer, how do you do it with low or no budget? We're going to be talking about the DIY techniques you can use to elevate your business above the competition without spending a penny. Register here

Candidate Expectations, Frustrations & Preferences , Thurs 28 Sept, 3pm BST

Reviewing the Cronofy report on candidate expectations - going to be deep dive on some proprietary research which tracks the changing expectations of candidates, especially on interview logistics. Register here

Talent Acquisition Summit , 3-4 November, Bogota, Colombia

So I suppose this is happening! Good job my favourite coffee stall on Hoxton Street Market is ran by a Colombian family, I will use the opportunity to brush up on my Spanish. Or rather, learn it, as I don't have any! Looking forward to the event by my buddy Carlos Guillermo Lopez in his home town, and delighted to be bringing friends from Europe along for the ride. Tickets?here ?- see you there?

If you have an event, webinar or podcast going on next week and want it featured on next week's newsletter,?comment below?with the link and event details. Don't forget to at mention me so that I see it

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Who's Hiring?

People Operations Specialist , Blinkist, Berlin, Germany

Senior Recruiter , Western Union, Vienna, Austria

If you are hiring for recruiters or HR people, you are welcome to post jobs FOR FREE on the Brainfood Jobs Job Board. Use coupon code: BTCFREE for 100% discount.

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Whose Story?

Denise Pereira , Fractional Sourcing Lead

I've known Denise for years but seeing as we are on opposite sides of the earth, we don't often get the chance to properly connect. The excuse arose to do the Brainfood Tribune so I eventually got Denise to do it. I asked her 20 questions - here are her amazing answers.

If you want to answer 20 Questions comment below to volunteer. This is an exercise in fostering community and open to all

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Whose Available?

That's 367 members of the community. If you are a recruiter or HR person that is looking for work, join the Brainfood Talent Collective?here . If you are an employer hiring recruiters, apply for a company account?here , and use the code: BTCFREE to freely post jobs and search the db.

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Who's Moving?

Wim Dammans joins Enexis Groep as Tech Recruiter. Never going to take long before Wim gets snapped up; expect some innovative things coming from Wim, this is a fella that tech sourcers really should be following.

Tena Lyons joins Harri as VP of Product Marketing, having previously lead the Marketing functions at Aliro, AMS and ADP. Employee Experience is a growing category with some obvious end points - going to be interesting to track which of the players in this nascent segment get to it. Good luck Tena!

Klara Hermesz joins Uber as Global Program Manager - Talent Development, after spending 6 years at Meta in people development. Great to see Uber back on track, recording a profit for the first time in 2023, and reinvesting this into people development.

Ruth Batley joins ClearChannel as Head of Recruitment, UK & Tech Europe, having previously led Talent Acquistion functions at Amazon and the BBC. Some people have much better CV's than me ??

Ali Memar joines Wego.com as Talent Acquisition Partner, having spent the past 4 years in internal TA with hackajob. Going to be out in Dubai later this year, so will to connect with the recruiters out there and figure out what is happening in West Asia - seems like plenty!

Promotions to celebrate: Kevin Granger II goes full time and gets promoted to Senior Talent Acquisition Partner at Trane Technologies, Alan Hiddleston goes up to Vice President of Global Sales at Thought Industries, Luke Govier is promoted to VP of People at Veriff and Susan Coetzee is promoted to Team Lead at Paracon. Congratulations all!

If you have made a senior exec appointment to your business,?and feel the wider community needs to know about it,?comment below?with the details and see it featured in next weeks issue.?Don't forget to @ mention me in it so that I see it

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What Are You Doing?

Not much it seems - let me know when you're back from holiday and have some news you want to share ??

If you are doing something new,?comment below?with what it is and share a link to where you want people to go. Don't forget to mention me in it so that I see it

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End Notes

Hyper busy week this week, as I seem to be out every night, like some sort of teenager. I'd call it a midlife crisis but I am really just responding to invites more than going out on my own initiative! Anyways, I'll report whats up on the 'gram. Let me know if you're out and about, decent chance I'll bump into you somewhere

Have a great week everybody

Hung

Hung Lee is the curator of?Recruiting Brainfood , and now This Week In Recruiting. Subscribe to both if you are into recruiting or HR or just interested in world of work.