⚡ Get All Content for 20% Off ⚡

This Startup's Biggest Hurdle Became Its Greatest Opportunity TalentBin's founders' plan to foster peer reviews of job candidates didn't pan out, but it paved the way for an even bigger idea -- finding those job candidates in the first place.

By Sarah Max

entrepreneur daily

Opinions expressed by Entrepreneur contributors are their own.

As hiring managers for software firm VMWare and eBay respectively, Pete Kazanjy and Jason Heidema shared a common frustration: Resumes, interviews and references never tell the whole story. "It's really hard to understand who's great, who's good, who's not so good, and who do you want to run screaming from," says Kazanjy.

Seeing the power of peer reviews in virtually everything from Amazon to Yelp, the friends and fellow Stanford University alumni teamed up to start a review site focused on potential job candidates.

They launched their site -- which they originally called Unvarnished.com but rebranded as Honestly.com, in April 2010. Later that year they raised just north of $1 million in seed funding from First Round Capital, along with Charles River Ventures. The concept resonated with venture capitalists, whose currency is their reputation. And at first, the site's early users, most of them in Silicon Valley, seemed to get it, too. When people did take the time to review their colleagues, says Kazanjy, the information was very rich.

What they found, however, was that most people didn't want to spend their online time rating their coworkers, bosses and direct reports. Even simple star ratings and match-up games with questions like "Which of these coworkers would you want on your Jeopardy team?" didn't garner enough reviews to move the needle.

By January 2011, it was clear that the concept would never get the critical mass needed to be a viable recruitment tool. "It's hard enough getting people to update their own online profiles, let alone write about other people," says Kazanjy.

That's when the proverbial light bulb when off.

The founders realized that the very thing holding back their idea -- that most people tend to spend their time generating content on a handful of sites -- was the solution to an even bigger recruitment problem: Finding great talent in the first place. While many people have LinkedIn profiles, for example, they often neglect to fill in key words or keep their profiles up to date, says Kazanjy, unless they're in the market for a new job. And in many cases the best people are never actively seeking a new job.

Rather than rely on candidates, let alone their colleagues, to provide relevant career information, Kazanjy and Heidema would go out and find it.

The Lesson Learned

Paul Lee, a partner with Chicago venture capital firm Lightbank, which recently invested in TalentBin, says that many successful entrepreneurs end up solving a different problem -- or finding a different solution -- than they first envisioned. "Entrepreneurs need to have the foresight to see where their idea is flawed and pivot quickly," he says. "A lot of times people get stuck on the notion of what they thought was true, despite what everything else is telling them."

TalentBin's founders didn't abandon their original idea prematurely, he says, but they knew when it was time to cut their losses and turn their attention elsewhere. Both ideas allow recruiters to gain new insight into would-be job candidates, but the second derivation is a better solution that speaks to a much bigger problem, he says. "I would not have invested in the original idea," he says. "But this one I like."

Certain sought-after professionals -- namely, software engineers and others in the so-called "knowledge worker" field -- are constantly creating digital artifacts related to what they do, says Kazanjy. These footprints can be anything from questions they answer on industry sites like GitHub or Stack Overflow, to memberships with Meetup groups, Twitter posts about relevant projects or patents filed with the U.S. Patent and Trademark Office.

With this new thesis in mind, Kazanjy and Heidema went to work building TalentBin, a recruiting platform that aggregates this implicit career data and mosaic of potential job candidates.

They launched a private beta in 2011 and by the end of that year started getting the word out to recruiters -- who pay a $6,000 annual fee to access a database of potential job candidates. TalentBin's current focus is on software engineers, of which it says it's uncovered roughly 10 million viable candidates globally.

Once the duo changed course, things progressed quickly. TalentBin now has 20 employees and is working with more than 200 companies, including such tech heavyweights as Amazon, Facebook and Microsoft. In July, the company raised an addition $2 million in funding led by Lightbank, the Chicago firm best known for its involvement in Groupon.

In 2012, Kazanjy and Heidema pulled the plug on Honestly. It was a little painful, because in theory "the idea made so much sense," says Kazanjy. Still, they have no regrets about the time they spent on their original idea. "We accidently uncovered what is a fundamentally different way of doing talent search," he says. "It's already showing so much more promise."

Sarah Max is a freelance writer in Bend, Ore. She has covered business and personal finance for more than a decade for such publications as Barron's, Money, The New York Times and The Wall Street Journal. In 2009 Sarah got a first-hand look at the ups and downs of entrepreneurship when she helped launch 1859 Oregon'’s Magazine, a bimonthly print and digital magazine for which she is editor at large.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Side Hustle

The Remote Side Hustle a 43-Year-Old Musician Works on for 1 Hour a Day Earns Nearly $3,000 a Month: 'All From the Comfort of Home'

Sam Ziegler wanted to supplement his income as a professional drummer — then his tech skills and desire to help people came together.

Business News

Costco CFO Reveals Uncertain Fate of $1.50 Hot Dog and Soda Combo

CFO Richard Galanti reveals that the price will stay the same — but only "for a while."

Business News

The Most Unexpectedly Popular Side Hustle of the Decade Has Low Startup Costs and High Markups

A new report shows that vending machines are a popular investment — and the industry is set to grow up to $3 billion by 2031.

Marketing

Ever Wonder Why Certain Websites Rank Higher Than Yours? This SEO Expert Reveals The Secret to Dominating Search Results

It's often the smart use of SEO, now supercharged with AI, particularly in keyword optimization.

Business News

AI Is Impacting Jobs. Here Are the Gigs Affected the Most, According to an Analysis of 5 Million Upwork Postings

The researcher said in the report that freelance jobs were analyzed first because that market will likely see AI's immediate impact.

Leadership

Former Interrogator Shares 5 Behaviors Liars Exhibit and How to Handle Them

Five deceptive behaviors to look for and how to respond to those behaviors when you encounter them.