The Last Inefficient Marketplace
Imagine that there are 1 million developers who, at any given moment, might be looking for a job. Now imagine that 1 thousand companies are actively hiring developers. A quick bit of math will tell you that there are 1 billion possible connections between these two groups, which is a useful way to size the the marketplace for developer talent. It also unfortunately comes pretty close to describing the magnitude of how much spam gets generated and time gets wasted during the hiring process.
Sometimes it’s the developer submitting a resume to dozens of companies, many of which they haven’t really researched. Sometimes it’s a recruiter emailing hundreds of candidates with a poorly targeted job description. But either way, both sides of this marketplace are spamming each other and playing a numbers game in the hopes of engaging in a successful transaction. In my case, I was “matched” with both a product management job (good) and a Rails developer job (very bad). Why on earth is this happening?
Internet marketplaces are incredibly mature and well-understood concepts. Whether you’re looking for a dog sitter or buying a used car, both the underlying technology and the behavior patterns on behalf of both buyers and sellers are deeply ingrained into the fabric of how people do business on the Internet. There are dozens and dozens of marketplaces for hiring developers: Monster, Dice, Indeed, StackOverflow Jobs, Github Jobs, the list goes on. However, this long list in actually the first hint that something is wrong in how this marketplace is functioning.
As Ben Thompson points out in his seminal article on Aggregation Theory:
The best distributors/aggregators/market-makers win by providing the best experience, which earns them the most consumers/users, which attracts the most suppliers, which enhances the user experience in a virtuous cycle.
By winning, Ben means winning the market in the same way that Amazon is where people go to shop or Google to search. The act of getting ahead of competitors helps attract more customers, which attracts more supplies, further increasing a company’s ability to provide the best experience. In 2018, it’s fairly astonishing that there isn’t a winner or at least dominant market leader in the market for hiring developers. What might explain this?
Explanation: There isn’t a single market for hiring developers.
The simplest explanation is that there isn’t a single market for hiring developers. You don’t have to Google long before you discover vertical job marketplaces for Ruby on Rails specialists, remote workers, etc. Perhaps these are all each of these markets has its own set of unique customers and suppliers that are reasonably isolated from one another?
A quick analysis of job sites indicates that this isn’t the case. I searched for “JavaScript React Seattle” across several of bigger job sites and found that most of the big, local employers (Tableau, Microsoft, Amazon) popped up across all of these sites. While there are some niches, most companies work with multiple job sites and multiple recruiting agencies in order to maximize coverage, indicating that there is a single addressable market for developers.
Explanation: There isn’t enough information in the marketplace
Based on my conversations with developers and hiring managers, this seems almost certain. Resumes and job postings are notoriously thin on useful data points. If buyers and sellers don’t have enough information to evaluate a transaction, marketplaces can’t function. In fact, highly specialized job boards might simply exist to provide data points (remote friendly, Python experience preferred) that either don’t make it into job postings or aren’t easily searched/filtered by prospective job seekers.
Explanation: The definition of the transaction is wrong
Today, the transaction is the hire and that is how the supply chain (sourcing, recruiting, referrals) are incentivized. This encourages broad spam, since conversion rates from top of funnel to hire are completely irrelevant to people getting compensated per hire.
But what if the transaction was moved upstream and you defined it as the introduction of the highly-matched developer to the company? What if we could find a way to reward folks for making these introductions instead of focusing on the actual hire, which can happen or not based on many fairly random factors. What if there was a way to build durable relationships with people who don’t work for you today, but could work for you tomorrow?
Better Data + Better Incentives = Better Outcomes
I believe the problem with hiring boils to two bits:
- Getting better and richer data on people and companies
- Incentivizing connections, conversations and relationships over hires
This is what we’re exploring at FizBuz, and it’s really exciting! If you are a developer or are trying to hire developers, we should talk! Email me at carter@fizbuz.com or check us out at: https://fizbuz.com.
