Labor Markets : 2021 and Beyond. In this article I cover the history of…
By: Promeet Mansata
Tags: LinkedIn, Technology, Strategy, Jobs, Marketplaces

The intent of this note is to explore how the jobs market has evolved over the course of the last decade with a host of startups “craigslisting” Linkedin, Indeed, and all other job boards. Settle in this is a LONG one …

Close to a decade ago we saw craigslist being unbundled and this now familiar picture reflects what happened with Craigslist:

Source : The Gong Show — The Spawn of craigslist Like most VCs that focus…

Of course as it turns out a lot of these products “died” primarily since such vertical marketplaces had several key issues:

From : A Crowded Space — The Rebundling of Craigslist

Death was not necessarily caused by verticalization of a subsection of an otherwise horizontal market but rather the fact that the frequency and size of such transactions made it an otherwise inferior market. There were not enough transactions or volume of transactions in order for the market to take hold, seed, add continuous value, or to wit, make money! Verticalized plays of the past did not add anything, incrementally in terms of the marketplace (tooling and componentization, price setting and such)

In labor markets specifically, this lead to groupedverticalization which has been the market for the past 15–20 years leading to HUGE winners such as Indeed, ZipRecruiter, Upwork. Shiftgig is interesting but not a winner, yet.

Vertical and Horizontal Markets

Vertical markets failed, back in the day, primarily because you needed either high frequency or high transaction size in order to make it work. At this point this is pretty much a moot point since a significant % of labor market now finds employment online and this is only increasing due to mobile proliferation, Millennials, Gen Y, Gen Z, Unbundled education, and of course COVID-19

From COVID-19 and the Great Rehiring, this is literally the most opportune time to create a market since there is a huge constituent of the workforce (around the world) that is unemployed and this is perhaps the right time to unbundle.

Clearly, these are not normal times. So we can’t rely on the “normal” tools we’ve previously used to help people find work: the LinkedIn and Craigslist searches, coffee chats, recruiters, staffing agencies, and so on. Those methods can’t hit the speed, scale, and placement quality that companies or candidates will need coming out of this crisis. But verticalized jobs marketplaces — platforms that focus on one industry, role, candidate type, or demographic — can and will. Now is the time to be building them.

The tools we currently have at our disposal — the horizontal jobs platforms like LinkedIn, Indeed, and Craigslist — are clearly inadequate for the enormity of the task. The average time to hire in 2018 was 38 days. Given the scale and urgency of the crisis, that’s far too long.

Too often, the existing online jobs platforms are a futile exercise in imprecise drop-down menus and trial-and-error search terms just to surface the jobs or candidates you’re interested in, let alone qualified for. These platforms feel like one of those all-encompassing, cross-cuisine diners with a 17 page menu: they offer a broad look at everything you might want, but don’t do any one thing particularly well. They require too much work to separate the signal from the noise, which impacts both the speed and quality of the process. It’s the classic story of a horizontal platform reaching its inevitable breaking point.

And while the typical analog avenues — networking, an endless string of “catch-up coffees,” working with a placement agency — might suffice in a regular economy, they can’t hit the scale or speed needed to meet the challenge now ahead of us. And the most efficient channels for doing so, like internal hires and recruiters, are difficult to scale.

Network theory has a concept called chicken-and-the-egg problem, which essentially means which side of the network can you “mobilize” fast/first in order to make the other side of the marketplace attractive. Essentially, the argument is that given the number of unemployed people today, building a vertical network has both the largest chance of success as well as the significant number of participants. This is not necessarily only true of jobs that have been lost but COVID is reshaping work and a significant % of the “elite” workforce is also rethinking their “job”. In short the best time to go to market is NOW since bootstrapping a network has never been this easy (Entire read is worth it)

This does not mean that one starts a company without thinking about the following:

Friction to Value

What friction are you removing? What value is created and who will be willing to pay for that value. Think of a company such as TripleByte, they add value by pre-interviewing candidates for a 1st round and narrowing the funnel. They do this with quizzes that standardize and rank and “surface up” the best candidates

Tool to Value

What kind of tool can you create that people can use and once they find value use the jobs section? Take Blind for example. No one comes for a job, they come to ask questions about a job or company and stay for the network

Create supply

One of the ways to solve this problem is similar to what Lambda School and Flockjay are doing. They are creating the “supply” and “supplying” highly qualified in-demand candidates to companies and arbitraging on income (ISA’s, though that is rife with issues as is expected in a new market)

Network → Jobs

The starting point is some kind of community or information. Lunchclub for example brings together tech professionals to start with. Once there is critical mass, they can layer in jobs, referrals and such. Blind in some ways already does this with the “can you refer me to x”. And of course this guy below wants to work everywhere!

In the jobs world, the “transaction” was matching. Everything else had to be done by the jobseeker/company. As ‘Deep’ Job Platforms and How to Build Them shows:

The key point in this story in almost all cases the broad horizontal verticals eventually break creating a path to “bundle” not just job matching but other key components into the platform there doing three things: