10 Hot Startup Sectors for New Business Ideas in 2012
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In his inauguration speech, President Obama paid homage to entrepreneurs. The path to greatness, he rhapsodized, has been paved by "the risk-takers, the doers, the makers of things--some celebrated but more often men and women obscure in their labor, who have carried us up the long, rugged path towards prosperity and freedom."
Almost three years later, it's clear he was spot on. Entrepreneurship has been one of the precious few bright spots in a terribly gloomy economy, and this new generation of entrepreneurs, both intentional and accidental, has taken it upon themselves to keep things chugging along. At the same time, starting a business gained serious cool cred.
Consider American Express' slick ad campaign featuring Patagonia founder Yvon Chouinard; foursquare's founders as models in glossy Gap mag ads; and the cults of celebrity surrounding "the Zuck" and the late Steve Jobs. Even A-list stars like Justin Timberlake and Lady Gaga added headlines to their clip files from startup-centric blogs like TechCrunch and Mashable.
"Entrepreneurship has become sexy in a lot of ways," says Clay Newbill, executive producer of ABC's Shark Tank, which features people pitching their dreams to a panel of deep-pocketed investors, including Mark Cuban.
Entrepreneurship has never been more practical, either. According to the Kauffman Foundation, 565,000 new businesses were created in 2010--the most in 15 years--as many new 'treps were forced into it by the downturn. "Young people know that there's a high likelihood they'll have to make it on their own," says Thomas Knapp, associate director at the University of Southern California's Lloyd Greif Center for Entrepreneurial Studies. USC has seen a 13.2 percent year-over-year increase in students taking entrepreneurship courses at the school.
Here, 10 sectors to get in on while they're trending up. Plus, one trend to watch. --Jennifer Wang
Trend No. 1 - Decision
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Discovery fuels invention (and purchases)
If the more than 27 million pieces of content shared online every day is any indication that collective knowledge is king, then it should come as no surprise that it's now a key component of modern decision making. According to a July study on the psychology of online sharing by The New York Times Customer Insight Group and Latitude Research, 85 percent of those surveyed say reading others' responses helps them understand and process information and events, and 73 percent say sharing helps them process information more deeply. Notably, 73 percent share info to connect with other people with the same interests--a big part of why discovery is an important market, and recommendation engines for everything from music to movies to food are so popular.
"People are looking for a trusted filter to surface good content, good products and good experiences," says Jonathan Hills, partner at New York City-based Bashki Generation, a digital agency specializing in content sharing. Hills notes that for some brands, every person who shares content brings an additional five new unique visitors back to a site, who on average will spend 1.3 times longer on that site, read 1.9 times more content and experience 27 percent favorability toward the brands they encounter within the shared content.
Decision Profile: Get Out of Town With Wanderfly
A late 2010 study by Forrester Research vice president and principal analyst Sucharita Mulpuru found that 62 percent of online retail shoppers think product recommendations are useful, and 15 percent made purchases based on recommendations. "Rather than have a one-size-fits-all approach, recommendation engines let you automate and personalize the site experience for shoppers based on what you can infer about their needs, wants and shopping preferences," Mulpuru says.
Retail was just the start. Decision engines that curate a user's interests, social information and recommendations from others are cropping up more and more--and even the big players are working to keep up: In 2009, Netflix awarded a million dollars to the team that offered the best solution for improving their recommendation engine's accuracy of predictions.
"Given the profusion of content out there," Mulpuru says, "anything to help to filter what is relevant to you makes a lot of sense." --Michelle Juergen
Leading the way
Launched in the U.K. in 2008, the digital music service that lets its 10 million-plus registered users discover, listen to and share more than 15 million tracks with friends officially opened to U.S. audiophiles in July. Along with its Facebook integration in September, CEO and founder Daniel Ek announced Spotify's 2 million paying subscribers, up from 1 million in March.
The iPhone app that serves up restaurant recommendations for about 500,000 locations based on a user's preferences and ratings and other users' ratings is just the beginning for Los Altos, Calif.-based Ness Computing, which publicly disclosed a $5 million financing round in July. CEO and co-founder Corey Reese says the "likeness engine" will eventually offer recommendations for movies, music, concerts, local events, shopping, travel and more.
With the lofty goal of creating a "Taste Graph" of the web, Hunch combines algorithms with user-curated content to provide recommendations to users on things they'll like. The data in the Taste Graph has roughly doubled in the last year and now includes more than 500 million people, 200 million items--from books to boots--and 30 billion connections between people and items. User-added monthly recommendations more than doubled compared to six months ago.
Trend No. 2 - Collaborative Commerce
It's nice to share
A preschool lesson catches on for adults
Sharing is a beautiful thing, and that's become particularly true in the business world. The last few years have seen a veritable Cambrian explosion of startups in the collaborative-consumption space.
Rachel Botsman, co-author of What's Mine is Yours: The Rise of Collaborative Consumption, attributes the trend to consumers' increasing comfort with technology, which has enabled disruptive platforms that allow sharing, bartering, lending, renting and gifting--of goods, skills, money, space or services--at a local, peer-to-peer level, on a scale once thought impossible. It is, Botsman says, "a multibillion-dollar market opportunity."
Decision Profile: With Zaarly, You Can (Usually) Get What You Want
No kidding. The product-rental market (Rentcycle, AnyHire) is valued at $85 billion; the vacation-rental space (Airbnb, CouchSurfing) at $80 billion; the ride-sharing industry (Zimride, liftshare) at $117 billion. In addition, the North American car-sharing market (Zipcar, Getaround) is projected to grow to 1.4 million members in 2012, up from 600,000 in 2011; and research firm Gartner has estimated that in 2013, there will be $5 billion in outstanding peer-to-peer loans (Zopa, Prosper), not to mention the billions invested on crowdfunding sites like Kickstarter and IndieGoGo.
Leah Busque, founder and CEO of Cambridge, Mass.-based TaskRabbit, billed as an eBay for errands, says 2011 has been a banner year. In the last six months, the company has expanded to six cities, up from just two in May, and task volume has increased twelvefold. What's especially interesting about the phenomenon, Busque says, is that these technologies are actually being used to move transactions off the internet and create "meaningful" connections with others in the community.
"Last year I was traveling the world talking about these ideas and VCs looked at me like I was slightly crazy," she recalls. "Now every-one … is pointing to it as one of the big investment areas." --J.W.
Leading the Way
Getaround is a social car-sharing service that enables car owners to make money by renting their underused vehicles to other drivers via smartphone. Launched in the San Francisco Bay Area in May, the company received $3.4 million in funding in the fall. More than 5,000 people have signed up; the average yearly revenue across active cars is projected at approximately $4,000.
Launched out of Y Combinator in January, Grubwithus provides a "social meal experience" by allowing people to sign up to dine family-style at restaurants (and make some friends before dessert arrives). In May, the company, which has brought in solid revenue since day one--it takes a cut from participating restaurants--raised $1.6 million from angel investors. Grubwithus.com is now live in seven cities.
Potentially the Amazon.com for rentals, Rentcycle's "access over ownership" platform aims to help independent rental stores (for everything from sporting equipment to party hires) shift their inventory online, where customers can more easily and efficiently search and book services. Since going live in March, the site has attracted more than 30,000 monthly users. In August, the company received $1.4 million in seed funding.
Trend No. 3 - Customization
Have it your way
Designed and customized, down to a T
"Any customer can have a car painted any color that he wants so long as it is black," Henry Ford once said.
That statement is now as outdated as the Model T. Giving consumers the option to be picky has become a viable business model as the penchant for personalization grows. Mass customization isn't new--expert B. Joseph Pine II published influential work on it in the 1990s calling it "the new frontier in business competition," and large companies like Dell, Nike and M&M's have employed it for years. But the interest hasn't waned: More than 35 percent of U.S. online consumers are already interested in customizing product features or in purchasing build-to-order products that use their specs, according to a study done this year by Mashable. And customers are willing to spend at least 25 percent more to get products built specifically to their needs, according to a March study by research firm The NPD Group. Seventy percent of product strategists currently offer customized products, according to an April study by Forrester Research.
And it's becoming a startup's playing field, made possible in part by the lowering costs of customization configurators--in the past decade, developing one cost $1 million and took nine months to build; today they can be developed for $50,000 in two months, according to research done earlier this year by Forrester--as well as the success of customization retailers like CafePress and Zazzle, whose maturation and market penetration are inspiration for other entrepreneurs, says Frank Piller, a leading expert in mass customization and founding faculty member and co-director of the MIT Smart Customization Group at MIT. "There's still a lot of opportunity in this market," he says. "Even after more than 15 years of research in mass customization, I'm still excited about it." The companies that will be sustainable, Piller says, are the ones that offer products not just with aesthetic value (like the option to choose colors), but also functionality.
Jon Chait, a partner at Waltham, Mass.-based Dace Ventures, says the early stage VC firm has seen a rise in the number of customization companies looking for financing--from about one or two in the startup phase two years ago to one or two per month today. "And it's not just the same companies cycling around," he says. "It's people launching new models."
Take that, Henry Ford. --M.J.
Leading the Way
Customers can build their own chocolate bar online with Chocomize. In the first six months of 2011, the company gained as many new customers as it had in all of 2010; it's also moved into a space four times the size of its old one.
Shoes of Prey
Founded in 2009 by a team of three, this women's shoe customization site now has a 17-person staff, five offices worldwide and averages 60 percent revenue growth quarter over quarter. Since launch, women have designed tens of millions of shoes, down to the heel, toe, fabric, color and embellishments.
Since launch in February 2010, this jewelry customization site has provided more than a million pieces of high-quality, made-to-order jewelry to shoppers and seen 300 percent growth in orders year over year. Monthly page views (in the millions) have grown 20 times since launch and the Boston-based startup has raised more than $25 million in funding.
Trend No. 4 - True Mobility
Leaving the PC behind
Computing power, network speed and quality workers are the three barriers standing between companies and true mobility. In 2012, for the first time, widely available tools can eliminate the first two issues, leaving businesses the opportunity to smooth out the third.
Analysts estimate around 50 million tablets were sold in 2011, with almost 100 million set to leave shelves in 2012. According to Forrester Research, approximately 25 percent of companies either already give tablets to their staff or plan to in the future. Accounting firm Deloitte, meanwhile, estimates that businesses purchased 10 million tablets in 2011, and moving forward, a quarter of all mobile device sales will be corporate.
Connecting these devices will boost the U.S. telecom market from 2010's $367 billion to $443 billion in 2016, says Pyramid Research. Mobile data will be the largest growth factor over that time, and wireless networks will upgrade to LTE speeds to meet the increased demand. This will make it easier for users to feast on data wherever they go, and help connect areas where broadband has yet to roll out.
Already, according to the Pew Research Center, 35 percent of American adults own a smartphone, and 25 percent of that group uses the device as their primary internet on-ramp.
Closing the network gap means the last mile is now in workers' minds. According to a recent CareerBuilder survey, only 35 percent of people working from home log eight hours of productivity per day--but that's an increase from the 17 percent who went all-out in 2007. In this tough economy, bet on an improved remote effort if people want to save their jobs. Companies will continue to trim overhead to survive, which means more workers punching the clock from their kitchen table. --John Patrick Pullen
Leading the Way
Founded by the former enterprise director of Apple's iPhone division, this firm builds and manages mobile software tailored to a specific business. Acting like an app store for individual companies, it's already locked up big players like AAA, Procter & Gamble and the U.S. Treasury. The company received $9.5 million in funding in 2011.
This is the simplest mobile credit card reader on the market. Transactions cost just 2.75 percent for swipes or 3.5 percent plus 15 cents for hand-keyed sales, and there are no monthly obligations. Square pulled in $27.5 million in funding last January, with a $100 million chaser in June. Valued at $1.6 billion, the company has 750,000 merchant users and handles $2 billion in transactions annually.
Salesforce has been refining its virtual office interface since 1999, building a suite of mobile services along the way. Giving companies everything from private social networks to the ability to run apps in the cloud, it serves businesses of all sizes. With more than 100,000 customers, Salesforce reported $1.6 billion in revenue for 2011, a year-over-year increase of 27 percent.
Trend No. 5 - Creativity
The artist within
It's easier than ever for Everyman to express himself
Ten years after American Idol first introduced chasing down dreams as a reality show concept, entrepreneurs are stepping up to help creative wannabes of every stripe do their thing. (Talent optional.)
Creative inspiration is likely rubbing off on Everyman, thanks to the ever-growing presence of artists, writers and musicians on social media and the proliferation of community news sites. Artists are no longer just downtown dwellers--now they're your neighbors.
Creativity Profile: Unlimited Editions With Blurb
According to economic development consultant Mt. Auburn Associates, there are 6 million creative jobs in the U.S., a total that contains everyone from architect office admins to dancers, whether they're self-employed or salaried. Within this group, independent artists, writers and performers account for more than a million jobs, a figure that has increased 15 percent during the Great Recession. A 26 percent lift in photography studios, 29,000 more graphic designers, another 35,000 interior designers and an 11 percent increase in filmmakers--it's all proof that the 2000s have been a decade of living creatively.
Most important, DIY workers are earning good money. Mt. Auburn sets the average creative earnings at $51,488, while the Kauffman Index of Entrepreneurial Activity shows 565,000 new businesses were created in 2010, a figure similar to 2009. According to the Kauffman Foundation, the last 24 months were the most pioneering among the self-employed in 15 years. But with the U.S. Census reporting a 27 percent drop in new employer businesses since 2006, this means more new enterprises are parties of one. And there's no good data to account for people who dabble in creative interests as a side job, a number that is impossible to calculate, as hard as the IRS tries. Dare to dream, indeed. --J.P.P.
Leading the Way
This online marketplace for direct-from-the-artist crafts had $314 million in sales in 2010 and is on track to smash that figure in 2011. With more than 800,000 active shops to date, even if you don't sew or silk-screen, the internationally admired service could serve as an inspiration for another creative, online enterprise. In 2008, Etsy received a $27 million infusion from Union Square Ventures, Hubert Burda Media and Accel Partners.
With video game distribution from Android to Xbox going digital, almost anyone can publish a game. Since 2007, this annual event--which has seen a 200 percent year-over-year boost in attendance--has connected developers with peers and resources to help improve and sell their titles. For the 2011 event, there were 446 game submissions, 500 conference attendees and 5,000 festival attendees.
Linking eager minds with local experts, New York City-based Skillshare sells in-person lessons on everything from guitar to gardening. The company, which launched in 2010, closed on a $3.1 million funding round in August and is already available in many major U.S. cities.
Trend No. 6 - Urban Farming
Urban farming ventures continue to sprout
The push for local local local on our dinner plates shows no sign of letting up, a trend that might eventually reverse findings tracked by the Leopold Center for Sustainable Agriculture at Iowa State University, which reports that from 1980 to 2001, the distance food traveled from farm to table increased 25 percent, to 1,500 to 3,000 miles. Companies focused on narrowing that distance are seeing a boon. Eating locally now means sourced from the backyard.
"There's a push back against larger companies that make too much money and don't support their community," says Suzi McCoy, founder and president of Garden Media Group, a PR firm representing outdoor-living businesses. "People living in cities are transforming small backyards and public alleys into lush green gardens that are kid-friendly and social meeting places."
There's no doubt that urban farming is on the upswing. Fifteen to 20 percent of the world's food supply is harvested in cities, according to researchers at the Worldwatch Institute. As people move from rural to urban settings in search of economic opportunities, urban agriculture is becoming an important provider of food and employment, the researchers say.
The number of farmers markets in the U.S. increased 17 percent last year to 7,175. Further, independent retailers in communities with "Buy Local" campaigns reported an increase in holiday sales last year that were three times stronger (up 3 percent) than those in cities without such campaigns (up 1 percent), according to a survey by the Institute for Local Self-Reliance.
And the craze for urban clucking continues. Companies like ChickenCribs--their modern chicken coops were featured in Sunset magazine--are cashing in on the growing popularity of metropolitan backyard chicken farming. There are now more than 44,000 subscribers to Backyard Poultry Magazine and more than 15,000 members of online forum BackyardChickens.com. The spread of backyard chickens has promoted spinoff businesses that cater to the local market. Some communities are even relying on mobile slaughterhouses to manage and distribute poultry meat, says Jac Smit, president of The Urban Agriculture Network.
Where will it go next? Up. The wave of the future might just be indoor vertical farming, where 1 acre is equivalent to 4 to 6 outdoor acres, according to Dickson Despommier, creator of The Vertical Farm Project.
A growing sector if ever there was one. --Kara Ohngren
Leading the Way
This Oakland, Calif.-based website helps users find out where their food comes from, its impact on the environment and its health qualities. The company has raised $100,000 in seed funding so far.
The Los Angeles-based guerilla gardening company designs vending machines that dispense clay, compost and seed balls that can be thrown into any derelict urban site to temporarily reclaim and transform it into a green space. The company raised $10,000 on Kickstarter. Machines are scattered around the L.A. area and can be purchased for about $400.
This San Francisco-based company's magnetic planter system transforms any wall into a vertical urban garden. Each eco-plastic pot is equipped with large neodymium magnets that are strong enough to hold almost anything to the wall. Urbio has raised $77,434 through Kickstarter with more than 800 backers.
Trend No. 7 - Gamification
Whack-a-mole meets work
"Games are the new normal," declared Al Gore in a keynote at the Games for Change festival in New York City last June. From the looks of things, he's absolutely right.
Most obvious is the massive--and to social gaming newbies, somewhat perplexing--appeal of FarmVille and foursquare. In addition, studies from research firms including M2 and Gartner reveal that by 2015, U.S. companies will spend approximately $1.6 billion on gamification products and services; and more than 50 percent of the biggest companies worldwide plan to gamify their innovation processes.
"Gamification is the concept of applying game-design thinking to non-game applications to make them more fun and engaging," explains Nathan Lands, creator of Gamification.org and co-founder of Gamify, which will soon launch a product that allows individuals and brands to gamify their own virtual spaces. Game techniques like leader boards, badges, challenges and rewards, he says, all have wide-ranging business applications that can be implemented to increase customer loyalty and employee engagement.
Decision Profile: With Kiip, Happiness Can Pay Off
Where games exist, customers seem to follow. A recent survey by research firm Interpret reveals that 24 percent of people who play casual games have clicked on an ad in a social game and made a purchase, which has prompted some companies to take a literal approach to gamification: New Jersey's TerraCycle, an upcycling business that turns recyclables into retail products that are sold in stores like Target, launched a "Trash Tycoon" Facebook game in September and picked up 160,000 users within the month. Others, like DevHub, a free business-website builder, made its tools more fun to use and quickly saw a 70 percent spike in the number of people who actually finished building their websites. There's even a startup incubator called YouWeb, led by Silicon Valley heavyweight Peter Relan, focused exclusively on nurturing games companies.
Kiip (see profile) is even gamifying games by offering free stuff after players reach certain achievement levels, proving, says Gabe Zichermann, chair of the Gamification Summit and author of Game-Based Marketing, that there's no upper limit to how much fun something can be. "Games have transformed our culture, how we view the world, how much fun we think we should be having and how we interact with other people," he says.
The technology now exists to serve that transformation, and many startups and small businesses are experimenting on the front lines of the gamification movement--perhaps channeling Albert Einstein, who famously said, "You have to learn the rules of the game. And then you have to play better than anyone else." --J.W.
Leading the Way
Headquartered in Menlo Park, Calif., Badgeville provides a white label social loyalty, rewards and analytics platform to help web publishers like NBC and Deloitte Digital increase customer engagement. The company has raised more than $14.5 million in funding since its September 2010 launch and already boasts revenue in the millions.
Founded in May 2008, Rypple, which has offices in San Francisco, Atlanta and Toronto, is a social performance management platform that is gamifying the workplace. Facebook and Gilt Groupe are customers, and, in the year after closing a $7 million funding round at the end of September 2010, revenue increased by 500 percent.
The Silver Spring, Md.-based company's app applies gamification techniques to fitness. Just two months after its beta launch in August, 30,000 users had already signed up.
Trend No. 8 - Design
The masses want their goods pretty
High-design products are everywhere--and not just expensive midcentury furniture, but cars, housewares, electronics--even medicine bottles. Americans are finally catching on to the form-meets-function aesthetic of design-savvy centers like Scandinavia and Japan.
With the rise of celebrity designers like Frank Gehry and Philippe Starck, the newfound interest in sustainability, the spread of small chain stores like Design Within Reach and the ability of unknown designers and artists to sell their creations online, quality design is more popular and accessible than ever.
And it permeates all industry sectors: from big-box stores such as Target, which sets an example with its clarified prescription-medicine packaging; to Whirlpool, with its new focus on user experience and sustainability; to small companies like Moss and Muji, purveyors of beautiful, functional objects.
Design Profile: Portable Design With Poketo
"There is a movement toward simplicity and authenticity," says Richard Grefé, executive director of AIGA, the professional association of design. "People are frustrated with …financial markets, politics. It's about moving back to basics."
Because the design field is so broad in scope, it is nearly impossible to quantify. However, the industrial design services market--which includes product design, fabrication services and related businesses--was worth $1.5 billion in 2010, up 3 percent from 2009, according to AnythingResearch. It is expected to grow 10 percent between 2010 and 2015.
Adam Smith, head of the industrial design department at the Rhode Island School of Design (RISD), says the field has shifted in the last 20 years from exploring materials and fabrication processes to designing products that "improve people's lives."
Grefé says companies that previously tried to weather the recession through cost-cutting measures are turning their focus to gaining market share--often through innovations in design. One demographic that has been underserved, he says, is consumers over 60. Design, he says, "affects everything: the size of a doorknob, clarity of language, just thinking about everyday activities."
Meanwhile, RISD is sending its graduates into the world with "artrepreneur starter kits" that include Square card readers and activation codes, so nascent design moguls can process credit card payments via mobile devices, plus info on alumni programs with online design markets Etsy, Quirky and Kickstarter. It's quite the well-designed program. --Carolyn Horwitz
Leading the Way
One Kings Lane
The home and lifestyle products site offers daily deals and "tag sales" of items handpicked by top designers. Launched in 2009, the company has more than 2 million members and is on track to pass $100 million in revenue for fiscal 2011--three times more than 2010's haul. It's raised a total of $67 million in financing.
This design studio with offices in Los Angeles and Jakarta, Indonesia, sells branded cable management systems, device chargers, iPad accessories and other elegant-looking products through 100 U.S. and 35 international distributors. It's been commissioned by Microsoft, Panasonic and Trina Turk.
In beta since June, the e-commerce site aims to take on the likes of Staples and Office Depot with custom-designed stationery and office supplies. Founder Chris Burch was an early investor in design-focused companies such as Voss water and Tory Burch.
Trend No. 9 - Extreme Fitness
The fitness sector gets rock hard
Companies that provide intense fitness options, including military-style training, mud runs and in-your-face personal trainers are bulking up.
High-intensity boot camps were among the top 10 fitness trends of 2011, according to the American College of Sports Medicine. Sean Davis, owner of Davis Training Bootcamp in Centennial, Colo., says 100 percent of his paying clients attend workouts three to five times a week. That's a stark contrast to the estimated 67 percent of health club members who don't attend the gym at all. Tech entrepreneurs are also capitalizing on this trend. Bluefin Software recently developed a $2.99 Bootcamp app that lets users build their own circuit training workouts.
Another sector ripe with opportunities is urban adventure racing. The traditional 5K road race is considered quite the bore these days. Joggers are more interested in dodging giant swinging balls and slogging through mud. The Dirty Dash attracted about 5,000 participants at each of its eight races around the country this year. --K.O.
Leading the Way
Warrior Fitness Boot Camp
This NYC boot camp's membership has grown 10 percent each year since 2009.
The off-road running and mountain-biking event attracted more than 30,000 participants in 18 cities in 2010.
The Brooklyn, N.Y., outfit expects to pull in $25 million in 2011 thanks its 130,000 participants, who spend up to $180 for the ultimate fitness challenge.
Trend No. 10 - Jobs
The Great Recession spurs growth
With the unemployment rate lingering at a dreadful 9 percent and roughly six people competing for every one available job in the U.S., applicants need some help, and many are looking to online tools to get it: 14.4 million people used social media to find their last job in 2011, according to online job search resource Career Enlightenment. In March, LinkedIn reached 100 million users worldwide and is growing at roughly a million new members every week, the equivalent of a professional joining the site every second, says CEO Jeff Weiner.
Naturally, businesses offering employment support are on the upswing, and new job-hunting smartphone apps--like the popular Snagajob, JobCompass, Pocket Resume and Interview.Buddy--are popping up.
Debbie Landa, founder of Dealmaker Media, a network of innovators, and host of annual startups innovation conference Grow, says the employment support sector is rife with opportunity. "The challenge today is that many of the existing job sites are broken--they try to be all things to everyone," Landa says. "There are a ton of new accelerators that are investing in young entrepreneurs who couldn't find a job and are starting up companies to solve that exact problem."
Employment recruiting is booming, too--on a social level, of course. Eighty-nine percent of companies will use social networks for recruitment in 2011, according to Career Enlightenment, and investors are taking notice. Burlingame, Calif.'s Jobvite has secured $30.5 million in funding for a software platform that provides advanced technologies to manage talent acquisition, from sourcing to applicant tracking to reporting. Additionally, Don Charlton, founder and CEO of The Resumator, has raised $875,000 in seed funding for his combination of social recruiting tools to promote jobs inside social media, and an applicant tracking system that makes reviewing résumés collaborative, efficient and paper-free.
Looks like the jobs category may go meta and create more than a few jobs of its own. --K.O.
Leading the Way
Founded in July 2010 by Rick Marini, this San Francisco-based global career networking Facebook app lets users see where their friends, and friends of friends, have worked. BranchOut has secured $24 million in funding.
Founded in 2010, this Santa Monica, Calif.-based website enables companies to post to multiple free job boards with a single submission and vet all applicants through online interviews. Users can toggle between applicants' answers and résumés online as they collaborate to rate and select the best candidate. ZipRecruiter's revenue has doubled every three months for the past year, and more than 650,000 job seekers visited the site in May, viewing more than 1 million job pages. This year is on pace for a more than 1,000 percent growth over 2010.
The "employment networking platform" opens up the social graph of employers and job seekers to identify the most trusted and qualified candidates. Designed to bring the power of social networking to online career search, Jibe integrates Facebook Connect and LinkedIn so employers and applicants can leverage the overlap of their social graphs. The company has secured $6.88 million in funding.
Trend to Watch - Unmarrieds
Try a little tenderness
When the Census Bureau announced that 50.3 percent of American households now have an unmarried person at the head of the table--some single and solo, some coupled but sans marriage certificate, others shacking up with pals or kids or whoever--it marked the country's first-ever shift away from the more-marrieds-than-not norm.
But marketers have yet to take notice. "Our whole society is what I call matrimaniacal," says Bella DePaulo, visiting professor of psychology at the University of California, Santa Barbara, and author of Singled Out. "You look at advertisements on TV or plots in TV dramas or politicians talking about working families, everything is so about marriage and over-the-top hype about [the benefits of] coupling."
But opportunity and, DePaulo says, loyalty awaits those who reach out to the unmarrieds--especially the 31.4 million who live alone--with marketing and product development smarts.
Toss aside marketing messages that play on singles stereotypes (cat lady). And "don't assume that what single people want more than anything else is to become coupled," DePaulo says.
There's also opportunity for those who market to the ever-growing group of singles buying their own homes. According to the National Association of Realtors, single women were responsible for 20 percent of home sales in 2010; while single guys bought up 12 percent of the home pie.
Marketers, DePaulo says, "could actually get some loyalty for being one of the first to treat [singles] respectfully."-- Jenna Schnuer
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