I’m not the first VC, or even the hundredth, to write a post like this. But I still feel compelled to share some business concepts that I’m excited about and believe have massive potential.
1. The personal finance version of 10,000 steps
Fitbit didn’t invent the step counter, but they cracked the code on how to make their device a daily habit with the concept of “10,000 steps”. Suddenly exercise, which previously seemed like an aimless chore, was fun and tangible and social.
Like fitness, personal finance is a “vitamin” — you know you should take your vitamins, but it’s easy to forget, and it’s hard to perceive any immediate benefit. People don’t like to create and follow budgets, and they don’t like to be confronted by the unpleasant realities of their financial situation. It’s the ultimate vitamin.
The challenge is to do for finance what Fitbit did for fitness: make it feel good to manage your money. That starts with delivering a sense of accomplishment and gratification, but it also requires an element of social. How does my spending compare to people like me? I’m dying to know.
2. LinkedIn for “non-career” workers
There are 3 billion people in the world who work, but only 400 million of them have a LinkedIn profile. Why? Because LinkedIn doesn’t work for the other 2.6 billion workers. They don’t care about networking or content or professional status updates. They think of work as a series of jobs, not a career. But these “non-career” workers DO care about getting the best job they can, and they care about acquiring the practical skills needed to prove (and increase) their value to employers. And employers need to hire and train non-career workers at high volumes for service jobs, retail jobs, call center jobs.
Imagine an assessment platform that puts workers first, allowing them to acquire and prove their skills to employers, and enables employers to identify and screen candidates more efficiently than a job board. Actually, don’t imagine it … build it!
3. A hiring platform that can prove it’s efficiency and efficacy
After decades of “innovation” in job boards, sourcing tools, and ATS systems, the hiring process still takes too much human effort and generates far too many false positives (bad hires) and false negatives (good candidates passed over). Companies still use headhunters and employ as many recruiters as ever.
Let’s do some quick math. According to the Bersin Talent Acquisition Factbook in 2011 (the latest year I could find on the open web):
We estimate that the total U.S. market size for talent acquisition is about $124 billion – a figure that includes internal staff salaries, advertising, tools and services.
Most estimates of the talent acquisition software market peg it at ~$10 billion globally, and perhaps half of that in the U.S. That means companies are spending well over $100 billion to employ recruiters, pay headhunters, etc. It’s not clear whether this estimate includes the opportunity cost of the time that employees other than recruiters spend interviewing candidates, so the actual economic value could be much larger.
And yet, most of the innovation in talent acquisition, from LinkedIn to the next-gen ATS vendors, has focused on candidate sourcing (LinkedIn) and workflow (ATSes) without materially reducing the human effort required to take a candidate from first touch to hire.
I believe there’s a big opportunity to unlock economic value by attacking the other 90%+ of talent acquisition spend through smarter assessment and interview automation in a candidate-friendly way.
As a former entrepreneur and product manager, I know that it’s a lot easier to propose ideas like the ones above than it is to build defensible and lasting businesses in those categories. But if you’re brave enough to make an attempt, I’d love to chat.