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.
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."