Cocoon is shutting down
Why we have not succeeded in disrupting tech recruitment
Turning tech recruitment into a candidate driven process
We founded Cocoon in early 2015 because we wanted to make the process of finding a new job a more equal, informal and fun.
Many people have an open mind towards new opportunities, but encounter high barriers when applying for a new job. At the same time, tech companies are on a continuous hunt for the best talent. Since the best are very hard to reach as they are inactive on the job market, this is a frustrating and time-consuming process for tech companies.
Can you feel the frustration on both sides of the market? We lowered the barrier for talent and companies to connect and as such, to solve these problems for both parties.
Crafting a product that candidates love
Cocoon has been built entirely to ease the process of finding new opportunities for tech talent. From the very first day of working on Cocoon, we always put talent feedback first. If Cocoon would be the best solution for them, it would be easy to build a pool of great tech talent. And with a good talent pool, it would become an extremely valuable source of talent for tech companies.
It turned out Cocoon became a great fit for candidates. In Autumn 2016 we tested multiple paid marketing channels. After some months of optimising content and target audiences, we learned that Facebook ads were by far the most efficient source for us. With a modest budget we were able to triple our monthly active users in some months. Our product turned out to have a great Hooked cycle of Triggers, Actions, Rewards and new Investments and our retention metrics were pretty amazing. That helped us to increase the number of applications per month over time.
After they would make an ‘online’ match, people were expecting an ‘offline’ coffee or call though. It turned out this would be hard to enforce at our client side.
Why our clients stopped using us
Since there is a real shortage of tech talent in Western Europe and recruiters are willing to give newcomers a try, it was not a problem to get attention. Since our active talent pool was growing, new clients would see many interested talented people that actually match their criteria in the first weeks. Of course, some companies would get a lot more attention than others and we received feedback from clients requesting UX and algorithm improvements.
It turned out our client’s biggest barrier to use Cocoon was the investment of time. People that applied on their company’s career website are more intrinsically motivated than people that expressed their interest on Cocoon.
This is a hard fact we couldn’t deny. At the same time, this was exactly how we designed the product. Remember how we wanted to activate the best tech talent, who were experiencing high barriers when applying for a new job and for that reason decided to stay inactive on the market? We lowered these barriers for them, but that did not mean they were ready to start at a new company tomorrow. These were people that showed serious interest and as such can be seen as qualified leads.
As a company using Cocoon, clients had to invest time in seducing their matches from being interested into being extremely excited about their company. We learnt that if there is one thing most of our clients did not have, it was time. They are under serious pressure to fill vacancies and we were not able to convince them in putting more time in using Cocoon even though we were able to bring them warm leads. As such, we noticed that 3 month client retention dropped to a disappointing low percentage after being over 80% at the 1 month point.
Low retention rates from paying clients are bad for business
We have not been able to actually match the ideal journeys on both sides. After making a match on Cocoon, candidates were expecting to get invitations for informal calls and coffees, while companies wanted to know if candidates were really motivated before engaging in this process.
As we have not been able to fix this vicious cycle, we have not been able to turn Cocoon into a sustainable business. This is obviously a disappointment for not only us as founders, but for all the people that worked on Cocoon over the years, for our mentors and for our investors. We all believed in the same vision to help tech talent in finding new jobs in a more informal, equal and fun way.
We would like to thank everyone who used Cocoon. It was sometimes difficult to receive your brutally honest feedback, but this has been invaluable for us! In case we have not met all of your expectations at some point, we are sorry. To all the people that have send us online or offline thank you messages about finding a new job using Cocoon, thank you! You were the fuel that kept us going!
Also a huge thanks to everyone who at some point was part of our team. We had great fun working with you and it was incredibly cool to work with such a diverse and talented team with people from The Netherlands, Poland, Lithuania, Italy, France (and Corsica), Mexico, Hong Kong and Ukraine.
Cheers, Vincent and Martijn
