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You've done it! You've gotten to the final portion of our three part series on why job search sucks. I've had a blast diving into jobs products, and hopefully you’ve learned something along the way. Previously, I talked about the missing element of discovery in the job-search, as well as the how jobs products take you away from the rest of your online experience. Today, I'm going to be discussing how recruiting marketplaces get worse as they get bigger.
Here's a quick refresher on the argument:
Job aggregators are not really designed to understand your interests
Online jobs products are destinations, they take you away from the rest of your life so you can "be on the hunt”
Recruiting marketplaces have negative network effects— the larger they are, the noisier they get
The next LinkedIn won't be another LinkedIn.
So what will it be?
It might not be a native hiring platform to begin with.
Something interesting is happening...
There is an infinitely large surface area of digital centers of gravity where people are now congregating: newsletters, bloggers, YouTubers, small professional communities on slack or discord, open-source projects, hackathons, boot camps, you get the point.
What's interesting about these little pockets of the internet is that an increasing volume of recruiting activity is funneled through them, but it's all held together with duct tape. A hiring channel in a slack community, analog referrals are done through email, wherever it is, it isn't efficient.
But there is power to this recruitment activity, because of the distribution these centers of gravity offer. When a product management job is sent into a slack community built for product managers, the job is meeting the talent where the talent exists.
Even in an informal setting, all jobs products and pipelines are essentially multi-sided marketplaces. You have recruiters, companies, job-seekers, and the platform itself.
What does a robust talent marketplace look like?
When each party has ample opportunity to discover and connect with each other.
Participation in a marketplace is ideally supposed to signal some important aspects about yourself. But traditional recruiting marketplaces have a funny reality: the bigger they get, the more your participation loses meaning.
Let's examine the current realities of horizontal and vertical job products.
For those who make a profile for the first time, LinkedIn does a really good job of encouraging you to fill that thing out, insisting that entering in as much information as possible is going to benefit you in the long run (it probably does).
They've even added these little gamified sliders to make the whole process a bit more fun. So when you finally do get around to adding a codified summary of your "expertise and interests" you'll receive that tiny little dopamine hit when your profile goes from "beginner" to "intermediate" (or whatever comes after beginner I haven't gotten that far).
But why does LinkedIn need so much? Why isn't your profile going to stand out naturally? Why doesn't the act of entering a professional network mean anything?
It boils down to size. When you make a LinkedIn profile, you join an ocean of other users, (756 million to be exact) who've all been prompted in the same exact way to enter "valuable" information about themselves. LinkedIn requires so much information because the actual act of creating an account says nothing about who you are. They leverage user-input information to amplify signals beyond the actual participation in the marketplace i.e. what school you went to, your most recent job, etc.
Meaningless participation extends to the other side of the marketplace as well. What does it mean to be a company on LinkedIn? If you've ever searched for jobs, you know the feeling of finding a potentially sweet gig on one of the huge platforms; but the company doesn't feel right. The job listing has no company logo, the description is sparse, and no information regarding the number of employees they have. You need to augment with a google search JUST to make sure the company actually exists. Because really, any company could be on LinkedIn— and you're not sure whether you've found an amazing opportunity at a high-growth startup still working out of an apartment-turned office or an equally scintillating opportunity to join a cult-like multi-level marketing agency.
One of the latest responses to large-scale horizontal jobs-platforms that cater to every job-seeker and every company is what people in the tech world call "the unbundling". You rip out a portion of a platform (like, say, all the product managers on LinkedIn) and specifically focus on the needs of that portion. You create a new user experience (and in some cases even a new business model) that better addresses the needs of that specific vertical. And a vertical hiring platform is born. As A16Z writes:
The moral of the story is this: In all but a few circumstances, the broad horizontal verticals eventually break. They become a victim of their own success. As the platforms grow, their submarkets grow too; their product gets pulled in a million different directions. Users get annoyed with an experience and business that caters to the lowest common denominator.
Essentially, there are enough nurses (or any subcategory) looking for jobs on platforms like Indeed that it makes sense for competitive newcomers to focus specifically on the experience nurses go through while looking for jobs.
But what happens to these vertical marketplaces over time? They're quite well suited to remain small and enjoy a relatively profitable business, but they choose not to. In the last five years, we've seen all sorts of these platforms, from Triblebyte to Markterhire to Hired receive venture funding, with the expectation of scaling their products.
When you start with 500 front-end engineers, the process is quite smooth. You can vet each one with some sort of proficiency quiz, log personal information more authentically through 1:1 contact. Effectively, you can ensure quality on the talent side.
Your business, at this stage, is people– understanding them, figuring out what kind of work environment they'd thrive in, how good they are at their craft, it's a high-touch business.
But once you start scaling, your business becomes lots of things. You need to focus on optimizing – building out your website funnels, user acquisition, retention, and all of the sudden, there are misalignments in cost and value structures. Instead of doing what you do best (vetting and placing), you're focused on making sure you're reaching the right demographics to scale quickly.
Now you've spent a boatload of money hiring growth marketers and focusing on optimizing your landing page and its achieved what you wanted— 500,000 front-end engineers. The problem is you've trapped yourself into the same negative network effects you find on LinkedIn. Eventually, participation in the marketplace means very little, and recruiters and companies are essentially forced to rely on the same signals they'd rely on anywhere else— third-party institutional stamps of approval. You've lost sight of the high-touch vetting process that made your platform so valuable in the first place.
The question isn't, how do we create another job-search experience to compete with legacy products, but rather, how do we vertically integrate into the places people are already congregating, and bring the job-search to their day-to-day lives?
So what's the solution?
We take these online centers of gravity and we give them the recruiting stack to start their own marketplace. A marketplace built on top of a natural social activity, not one built specifically for an activity that's only done in a very specific sliver of time (when you're actively looking for jobs).
These marketplaces actually send signals through participation, because their initial inception is not necessarily based in the act of getting hired— imagine a blockchain company recruiting from LinkedIn versus a community of solidity engineers on discord. When you hire from these pockets, you're more likely to receive authentic, genuine responses, and you're more likely to be sure you're reaching the right people in the first place.
The first step is providing job boards which achieves two key things:
- Offers hiring companies the opportunity to reach this valuable distribution
- Creates a community library which members can continuously return to
But it's only the start, tools need to be built for the full funnel, from referrals, to posted jobs, to more transparent application portals.
In the same way that niche recruiting agencies don't need to scale, neither do these communities of people. And we don't want them to! Instead of finding a solution for the recruitment of X position, and trying to multiply that ad-infinitum, we unlock talent marketplaces that don't quite know they're talent marketplaces yet (or do and haven't quite found the right solution).
We want them to remain exactly what they are, niche pockets that provide outsized value because of concentration and engagement. There will never be a need to scale them, only to scale our acquisition of each one.
The next LinkedIn will be the platform that powers the hiring infrastructure for online communities. It will be the platform that allows any group of people to create a small-time recruiting agency, relying on the work they've already done to get to know each other, and the understanding if they'd be the right fit for X position. In many ways, if you have any sort of network, you've already acted as a recruiter. You just haven't been paid for it. Yet.