It’s Time for a Change
My brother and I started a company in 2018 to help other companies hire software engineers and data scientists. We grew BeamJobs to $109,000 in revenue in 2019 but we’ve made the very difficult decision to move on from that business.
Right now, our business will run out of money at the end of August and I want to make the most of that runway. Startup culture loves to idealize the concept of a “pivot” but frankly, there’s nothing glamorous about pivoting. It sucks to fail. I feel anxious and stressed and disappointed.
But still, I feel relief that we’ve decided to move on from a business that we no longer have confidence in. While running BeamJobs we experienced the difficulties that otherwise really qualified engineers had when building a resume. Engineers who would have gotten job interviews were rejected out of hand because of poor resumes. So we're now focusing on solving that problem.
As a side note, we made this decision about a week before the coronavirus outbreak happened here in the US so that didn’t really impact our decision. I hope everyone is staying safe and staying inside. As a pick me up, here’s a picture of my dog Lila when I accidentally dropped cake on her head.
With that, I want to lay out the reasons we decided to pivot. We may have been able to overcome one or two of these problems by themselves but the combination of all of these issues led to our decision to move on.
Two-sided Marketplaces are Hard
Two-sided marketplaces are notoriously difficult to get right and we witnessed that first hand.
First, you have to make sure you have enough of one side of the market to make the other side of the market interested. For us, that meant we had to get enough qualified engineers and data scientists looking for jobs before companies would pay us to hire those engineers.
But with job hunting specifically there is only a finite time window in which people are looking for jobs. So retention was a big issue. For example, if we had 100 qualified engineers looking for jobs today only a certain percentage of them will still be looking for a job in a month.
We also ran into an issue with getting a concentrated pool of engineers in a specific geography with a specific skillset. If a company was looking to hire a senior data engineer in NYC well only a small fraction of our total user base were data engineers based in NYC.
What we eventually realized is that the requisite number of qualified job candidates you need to build a sustainable marketplace was significantly higher than we initially anticipated.
With this pivot we’re really excited that there is a direct path to monetization. Our tool solves the problem of creating effective resumes for engineers. There is not an ambiguous path to monetization. Solve this problem, get revenue.
With v1 of BeamJobs, we built a job recommendation engine that hundreds of data scientists and software engineers loved but still we were nowhere close to meaningful revenue.
Hiring was Not the Right Space for Us
I don’t like the hiring space. It feels really good to get that off my chest. I wish I realized that earlier but better late than never.
I severely underestimated the importance of founder-market fit. When you don’t like the industry in which your company operates then at times small tasks can seem monumental. Small losses seem like the end of the world.
Why did I come to not like the hiring industry? First and foremost I hated the unpredictability of it. When we were operating as a recruiting company most of the time we worked for free. We only got paid if a candidate we sent to a company got a job offer and that candidate accepted the offer.
We were working with a company for two months and they were looking for a senior full-stack engineer. We iteratively learned what kinds of candidates they were looking for over the course of that time. Finally, we had someone who was poised to get an offer. Then, the company decided they no longer wanted to hire for that role. Two months of effort down the drain.
This kind of practice is commonplace in the industry. While we had some great partners along the way who treated job candidates with respect and kindness we also saw some truly horrible hiring practices. Blatant age discrimination, unreasonable requirements (we once worked with a company hiring a data scientist who wanted someone who was an expert in Python, R, and SAS. Why?), and ever-changing expectations were far more common than I could handle.
No Clear Path to Recurring Revenue
In recruiting, momentum doesn’t build on itself. When you place a candidate at a company and get paid it’s a great feeling since the check size is generally $15,000-$25,000. But then, the next day, you’re essentially starting from 0.
It’s not as if companies are constantly hiring for roles that you can help fill. Companies want to avoid using external recruiters because of the aforementioned price tag so you’re in constant competition with their internal recruiting team to see who can fill a given role first.
Once you place a candidate for a role there’s a potential adverse impact to the likelihood of that company using your services again in the following months. Why? Because they already used some of their budget on the last role you helped fill.
It was like the story of Sisyphus. We kept pushing the boulder up the mountain. Once we got to the top, the boulder came crashing down and we did it again.
With a SaaS product, there is of course still variability. Your customers can lose their budget, they may find a better product, your advocate in a company might leave for a new role, there might be an unprecedented international pandemic, etc.. But at least collaboration is encouraged.
If you can solve a customer’s problem, and continue to understand how to evolve your product as their problem evolves, then you have a direct path to recurring revenue.
We Didn’t Experience the Problem We Were Solving
With the previous iteration of BeamJobs, we never really experienced the pain-points of our would-be customers. We looked and applied for jobs in the past so we knew intimately how much that sucked but we never really hired for the roles we were helping fill.
We talked to internal recruiters and hiring managers to understand what tools and processes they used to find qualified engineers but we were still one-step removed from really understanding the problem. If we wanted to test a new candidate acquisition strategy we first had to run it by our customers.
This led to a slower and less effective development process since we weren’t eating the dog food we were making. Startups have an advantage over incumbents because they can niche down and move quickly. If you inhibit the speed with which you can move you’re essentially trying to slay a giant with one-hand tied behind your back.
With our new product, we’re solving a problem that I experienced first-hand when I was applying for jobs. I know how to code, not how to write resumes.
Now, I understand first-hand the goals and hurdles of the market we’re trying to sell to. This means we’ll be able to iterate quickly and most importantly, make our lives easier!
What’s Next ???
We’re really excited about this new direction. Although right now it’s tough to balance the feeling that everything that isn’t life-or-death feels a bit trivial, we’re going to continue to work hard to make it easier for people to land their dream engineering job.