Making the Best of a Bad Situation
These startups saw the recession as an opportunity to connect job seekers with employers.
Unemployment levels have been unpredictable lately, but three web-based startups are doing their part to help. All launched within the last year, a generally risky business move that makes more sense given their recession-friendly focus--connecting people with jobs.
Sanjay Sathe's personal experience as both a laid-off employee and an executive who managed layoffs led him to start Transition Concierge--one of the first outplacement agencies to operate solely online.
"I was prompted to look at the outplacement industry that has been offering the same type of service and the same quality of service over the last 20 or 30 years while the rest of the world has changed," Sathe says.
The San Jose, Calif.-based organization launched in August 2008, shortly before receiving $3 million in venture capital funding. It seeks to merge a high-tech approach with personal attention by using "transition specialists," who facilitate customized professional resume and cover letter writing, career-related web seminars, weekly job leads e-mails and information on local career-related events.
"They kept tabs on me. I was really impressed," says Jann Heringer, a Sacramento, Calif. resident whose employer contracted with Transition Concierge after a round of layoffs.
"It was important because I was jobless and I'm older and I was horrified," says Heringer, who found another healthcare job by browsing the HR pages of companies featured in her job leads e-mails.
Perhaps the most noticeable difference between Transition Concierge and its more traditional industry counterparts is the absence of grief counseling or any physical gathering space. The company halves typical outplacement service fees by eliminating these services, which Sathe says market analysis indicated little need for anyway.
"We went back to the drawing board and asked people what they were looking for," he says. "They were often looking to reposition themselves, so they needed a new resume and cover letter, and they needed a job fast, so all the office space and grief counseling wasn't necessary."
Sathe admits it's challenging to bring corporations on-board with the idea of "Outplacement 2.0," let alone the idea of parting ways with outplacement firms used in the past. Nevertheless, Transition Concierge managed to sign several Fortune 500 clients in the past nine months, largely through referrals and social media networking.
When the U.S. real estate market headed south and infrastructure became a governmental buzzword, FastLane Hires CEO Lori Gale got a wakeup call. Formerly a happy and successful recruiter in commercial real estate, Gale decided to start a job board for transportation and infrastructure employment. It didn't hurt that Gale worked 14 years as the fourth-generation owner of a family printing business that dealt only with the transportation industry.
"The real estate recruiting just dried up, so there was no choice but to get really innovative or find something else to fall back on," Gale says. "In my case, it was so natural to step back into transportation with my recruiting skills."
She has been bootstrapping since the site launched in June, but Gale is preparing to pitch investors soon. The site has seen traffic from 40 countries, a pleasant surprise that Gale hopes to develop further. The company's short-term plans include developing a volunteer network of professional mentors and recruiting college graduates into the transportation industry.
"There's a real vacuum in the industry right now in terms of talent," Gale said. "It's not like kids say, 'When I grow up, I want to be a train inspector.' The industry hasn't done a good job of attracting new talent, and with retiring baby boomers, there's a real lack of solid upcoming talent."
The company will also become certified as a female-owned business, placing it in the minority and making it more attractive for quota-driven government funding.
"The amount of money they're going to spend on job board postings is like a drop in the bucket in terms of the quota, but it helps," Gale says. "It's an opportunity."
When discussing the future, Gale says opportunities abound. Transportation is a "green" industry that reduces gas emissions and urban sprawl, and infrastructure is a government priority. It all adds up to bright prospects for FastLane Hires and the professionals it serves.
If starting one business during a recession seems risky, how about 1,150 businesses? That's the number of startup organizations currently listed on Startuply.com, a site that links jobs at new companies with gutsy job seekers willing to take a chance.
"We had all worked at startup companies before, and this industry is kind of our world," says co-founder Luke Groesbeck. "There weren't really any good options for finding jobs at startup companies and offering a good user experience where you can learn more about the companies themselves."
Startuply is run using revenue from sister company Job Syndicate and parent company Job Alchemist and backed by venture capital firm, Y Combinator. It's no-cost approach to job ads and searches is gold in the cash-strapped startup community, as is the ability to connect with like-minded people.
"In the future, I think Startuply should support itself. It's gotten a pretty strong community involved around it," says Groesbeck, adding that the site saw a record high of 75,000 visitors and almost 9,000 job applications in July. "Even in a recession, it's hard to find good people, so if you can deliver good value, there will always be people willing to pay for it."
According to a recent study by the Kauffmann Foundation, over half of this year's Fortune 500 companies began during a recession or bear market. So while it's not the worst time for a startup, Groesbeck thinks the field has taken a hit. He expects to see many more launches after the economy recovers, funding is more available and fear less prevalent. In the meantime, however, there are plenty of businesses seeking workers on Startuply, a company that remains firmly committed to helping these young companies succeed.
"If we could get one person hired at one great company that is going to change the world in some way," Groesbeck says, "then we could play a little role in doing something great in the world."
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