A Q&A with Venturocket co-founder and CEO Marc Hoag. The San Francisco-based startup, which is a profile-based employment marketplace that scraps the job application process, closed a $700,000 Series A funding round in mid-July, led by Runa Capital. It was founded in 2011.
SUB: Please describe Venturocket and your primary innovation.
Hoag: Venturocket’s primary innovation is its keyword-based skills marketplace. If any other marketplace were as inefficient as today’s job market, we wouldn’t even call them a market. It’s the 21st century, and the job market is in an abysmally poor state of affairs. In fact, job sites have a profound financial incentive to keep the job market inefficient so they can charge ridiculous fees to post jobs and find talent. Well, we’re fixing all this. We’ve developed a market economy solution which enables several ‘firsts’ in the job market: 1.) we can now actually assign a quantitative, financial value to keywords that represent hard skills, soft skills, professions, and certifications as a means of leveling the field and bringing an end to inflated, padded résumés and increase job seekers’ chances of landing a job; 2.) we can now actually show job seekers a distribution of their competition, i.e., other job seekers competing for their same skills, just so they know what they’re up against; 3.) we enable spontaneous, serendipitous connections between employers and recruiters, and job seekers, without any applications, without any searching; 4.) we eliminate costly job posting fees, we don’t ask for any outrageous subscription fees, and we don’t make any commission fees—instead, we just charge a few dollars per connection based upon the market supply of job seekers, where more job seekers competing for the same skills increases the price to produce a downward force and get job seekers to be more honest about their abilities. Net-net: the elimination of résumé spam, and an increased likelihood of landing a job best suited to one’s skills and experience, in far less time, and thus at far less cost to either the employer or the job seeker. That, and the entire process to post a job or job seeker profile takes less than five minutes.
SUB: Who are your target markets and users?
Hoag: We’re currently open to job seekers looking for tech jobs in the San Francisco Bay Area—e.g., web dev, mobile dev, etc.—and plan to expand to other major tech hubs like New York City, Boston, etc., in the near future.
SUB: Who do you consider to be your competition?
Hoag: Job seekers on Venturocket cannot apply to jobs directly, and Venturocket is not an ATS. So technically, we don’t have any competition. Rather, we expect employers to use Venturocket as an initial screening tool to curate their perfect applicant pools, and then to send those candidates through their usual application process. Think of today’s job market as a Brita water filter—great at filtering water, but not so great at filtering raw sewage. We’re trying to clean the job market so that other products can make better use of the water going through the Brita. Put another way, we see ourselves as a supplement to, rather than a replacement of, existing job platforms.
SUB: What differentiates Venturocket from the competition?
Hoag: First, as mentioned above, Venturocket is not a job board. It’s not an ATS. Job seekers can’t even apply to jobs on Venturocket. Venturocket is a ‘talent discovery platform,’ or TDP. We are simply a filtering mechanism, designed to help employers curate the perfect applicant pools. Instead, job seekers get automatically connected with jobs for their particular skills and experience without any search or applications. Employers don’t pay any job posting, subscription or commission fees. Pricing model is per connection, where employer and job seeker both pay a few dollars based upon the competition of job seekers competing for the same skill. The price is based upon job seeker competition: more people claiming to be the best drives the price up, creating a disincentive to exaggerate one’s credentials. Result—the more honest a job seeker is, the more likely they are to land a job, and the less expensive it will be. This is totally different to other systems like LinkedIn’s so-called ‘premium job seeker’ accounts, where wealthier job seekers can shamelessly pay their way to the top of the pile.
SUB: What were the first steps you took in establishing the company?
Hoag: First of all, not being able to land a job coming out of law school—and as a first-time California Bar passer, no less—was really the catalyst that made me stop and think: ‘wait, what’s going on here? What’s the problem? Why can’t I even land an interview, let alone score a job?’ I was basically unemployed until late 2010, when the idea for Venturocket’s unique marketplace model came to me one evening. Realizing I had to do this, I immediately embarked on a mission to get the support of my parents and closest friends—I don’t have any siblings, so I rely on the people closest to me to say when I’m wrong. Everyone liked it. They said it was pretty crazy, but they liked it. Fortunately, one of my closest friends of the past 13 years has a large, very successful startup in Silicon Valley too, so getting him to come on board as our first advisor was a huge deal. Little did I realize that nearly two years later, he would also become one of our investors. Then I had to build my team—this meant relying on the very problems we were trying to fix, i.e., using LinkedIn and other job boards to find the perfect co-founders. The disastrous results of that search bolstered my determination to build Venturocket. A month later—October 2010—our team was assembled by dumb luck by a mutual friend’s referral, and by January 2011 we incorporated ourselves. And it’s been non-stop since then.
SUB: What was the inspiration behind the idea for Venturocket? Was there an ‘aha’ moment, or was the idea more gradual in developing?
Hoag: Venturocket in its present form came about by my difficulties finding employment after finishing law school in 2008 at the height of the recession, as I mentioned before, and the ‘aha’ moment was indeed one evening in 2010. I believe it was August 1st. I was in San Diego, driving home from the Coffee Bean in Mission Valley across from Borders. It just hit that this crazy economic model was the trick to eliminating résumé spam, and that disallowing job seekers from applying to every job on the planet was the key. A filtering mechanism—a paywall of sorts. But on a more fundamental level, the idea of Venturocket for me goes way back to around 2001. I was taking one of two leaves of absence from my undergraduate studies at UCLA when I realized there was something missing in our high tech world: there was no quick, efficient, easy, effective way to immediately connect two groups of people. Every existing service was either too expensive, too inaccurate, too complicated, or some combination thereof. Over the years, I experimented with various concepts, but none ever came to fruition until 2010.
SUB: How did you come up with the name? What is the story behind it?
Hoag: We knew early on we didn’t want a Web 2.0 sounding ‘noise’ of a name. As I used to say, we didn’t want any ‘bloops, yoolps, or boings.’ No noises, no sounds, no silliness. We wanted something that would stand the test of time, and not be pegged to the 2000s and 2010s. We also knew that branding would be a very important thing for us, and we knew that Venturocket was trying to help solve a critically important problem in the world. So, thinking back to some of the great brands in history—some had great names, some had great logos, some had both, but all of them conveyed a sense of strength, confidence, and reliability. A not-widely known fact is Venturocket’s official mission statement: ‘To help make the world a more productive place.’ This means that we try to help connect people. We are a connector. A platform for connecting people. That we happen to help place people in jobs is but an effect of our primary purpose, i.e., filtering and connecting them. In keeping with that mission, then, the idea was always to help people be more productive so they could venture out and do whatever they wanted. The concept of the rocket was to signify the strength and utility of our platform, and ultimately convey the image of taking off and accelerating faster, and with more accuracy, than anything around. Hence: Venturocket. Why the weird spelling? Well, we can be a little Web 2.0-ish, right?
SUB: You recently raised $700,000 in Series A funding. Why was this a particularly good time to raise funding?
Hoag: We’ve been building Venturocket since around October or November of 2010. That’s a long time to be without money. I ended up moving home with mom and dad again, my two co-founders, Joe and Derek, were forced to stay in San Diego working from home, and we were restricted by our lack of having a full-time designer on board. After launching an Alpha back in April 2011, and launching our public beta in August 2011, we really needed to bring everyone under one roof, hire our first additional team member, and this all required money, of course. So raising the $700K now was really just perfect timing for us. But that’s not what’s cool. What’s cool is the investors who took a leap of faith to support us: they have extraordinary experience in the job space, and have become invaluable, hands-on members of our team. They’re brilliant, they’re engaged, they know their stuff in this space, and, on top of it all, they just happen to be all around awesome guys. We couldn’t be any luckier.
SUB: Do you have plans to seek additional venture funding in the near future?
Hoag: I don’t have any comment on this question at this time.
SUB: What have the most significant obstacles been so far to building the company?
Hoag: Getting people to understand why Venturocket works. In fact, we have discovered that if people don’t like Venturocket, then it means they just don’t get it; if they get it, then they love it. More specifically, our challenge has been to re-educate people—or perhaps, recondition them?—into realizing what it means to pay for something: first, it’s not that we humans don’t like paying for things—it’s that we don’t like paying for things unless we get something of greater or equal value to the money we spent; and second, people don’t like to part with money needlessly. Apart from disproving this argument, for example, if I asked you to give me even just 10 cents for no purpose at all, you—and anybody else—would toss a peculiar look my way and shrug it off as if I were a bit weird. But if people are presented with a win-win scenario, like on Venturocket, where you pay if and only if you actually get something of value—here, an actual connection with a human hiring manager or recruiter for a job for which you are probably a good match—then not only will you not mind paying, you will happily pay. This isn’t such a weird concept. In fact, this is how a capitalist society works, isn’t it? I mean, let’s face it: apart from insurance companies, you generally get something when you pay for it. So why should the job market be any different? It’s unregulated. Huge mistake. Well, we’re trying to regulate it in our own special way.
SUB: How does the company generate revenue or plan to generate revenue?
Hoag: As discussed before, our revenue model is simple: if and only if an employer or recruiter and job seeker connect, then both parties pay a small connection fee. This is usually just a few dollars, and is based upon the price of the matching keywords that produced the match. To control one’s costs, we utilize a pre-paid credit model: you simply load up your account with however much money you’re comfortable spending, and then we deduct against your remaining balance. Connections are automatic when employers or recruiters try to connect with job seekers who have enough credit; if they do not, then the job seeker has two days to add sufficient credit. To keep employers and recruiters from getting spammed, job seekers can submit connection requests to employers and recruiters—kind of like ‘pinging’ them—but those connections must be authorized by the recipient employer or recruiter.
SUB: What are your goals for Venturocket over the next year or so?
Hoag: The amount of praise and—especially—gratitude we’ve already received from employers, recruiters, and job seekers alike, has absolutely blown us away. We literally have several pages of quotes and testimonials from people saying how much they love what we’re doing. Some will definitely be going up on our homepage soon. I’m not saying this to show off, but to make a point: I for one never anticipated the profound joy and satisfaction that would come from getting real, actual notes from people—especially job seekers, but also employers—saying how much we were helping them; or how awesome they think our product is; or how grateful they are for doing this; or how slick and easy it is to use. But more importantly, this illustrates a much larger picture, and ultimately, our larger goal for the next few years: we have a profoundly important task ahead of us—connecting people in the world quickly, accurately, and efficiently. Poverty, unemployment, and malemployment are tragically huge problems not only in the U.S., of course, but across the entire world. Put another way, it is inexcusable that finding a job or talent is so time consuming and expensive in the 21st century. I was a kid who grew up watching Star Trek, that painted a beautiful, optimistic view of the future of the human race, full of technological wonder and social marvels: no more famine, disease, or unemployment. Well, we’ve done a pretty good job bringing iPads into the world, and I’d like to believe we can do our part to help reduce unemployment. And even if we can make things just a little bit better, well that’s still better than nothing at all. So for sure we have to keep trying. This really matters. And judging by the emails we’re getting, people are counting on us now. That’s a pretty tall order, and a huge, humbling responsibility.
Venturocket – www.venturocket.com