Jobscience makes Force.com-based recruiting and talent management applications that help companies to improve the quality of their talent base by helping them find, train, and retain the most highly qualified employees.
The San Francisco- and New Hampshire-based company was founded by CEO Ted Elliott, who put himself through the University of San Francisco law school at night by working during the day as an executive recruiter. He then worked as general counsel to biotech startups for several years before starting Jobscience, which was initially focused on building online job boards and recruiting apps for the healthcare industry, thereby combining Elliott’s two areas of expertise.
The recruiting and talent management category is over $2 billion a year in spending. There are hundreds of applicant tracking systems (ATS), but only a handful have much traction or more than $1 million in annual revenues. The company says that what was striking was when Taleo bought a Salesforce.com clone called Recruitforce in 2005, and their business took off. So while Taleo has grown to $200 million very quickly, there is tremendous fragmentation. Jobscience says that by “hitching its wagon” to the Force.com platform, it can be the talent management provider of choice to over 70,000 customers spending over $1 billion a year with Salesforce.com. This approach enables Jobscience to leverage Salesforce.com’s 1,000 sales people and, as we saw with Riskonnect yesterday, means that the company doesn’t have to build and maintain an expensive data center for its apps while giving it a rich development environment that makes it easy and fast to build good apps. Salesforce.com’s platform strategy relies on the success of new applications in new categories, so it makes sense that Force.com enables businesses like Jobscience to build and deploy applications.
Healthcare and particularly hospitals and staffing firms have been Jobscience’s historical strength, both because these were the company’s first customers and because they have intense talent management needs. Recruiting firms also are a rich target because most or all of their employees do recruiting and handle candidates, and they also have a customer-facing side of their business that leverages Salesforce.com’s CRM. Recruiting firms tend to be either gigantic or boutique, but the Jobscience solution is designed to work well for both. Beyond that, almost every industry needs help hiring, training, and retaining employees.
The business model is like Salesforce.com’s – a very high-margin application business with recurring revenues from subscription licensing and a small professional services component to help customers go live quickly. Jobscience says that subscription license app models are inherently growth businesses as long as customer renewals stay high. Products include iFind, a dual mobile and office solution that integrates private databases, social networking sites, job boards, and so forth; TalentPath, a product for the healthcare recruiting community; OnBoarding, which introduces new hires to their employer; and TalentStaffing, which combines CRM with applicant tracking functions.
The company received $3.5 million in financing from The Washington Post Group, Tribune Group, and Gannett ten years ago. Each has a minority stake in the company, whereas VCs would have taken 70%–85%. The media companies at the time saw online job boards as the evolution of their classified ad business and wanted to be part of that. Jobscience says that over the past five years it has generated a profit, and 2009 revenues were just under $4 million. The company does not need cash for operations but says that it might consider an investor with name power that could help Jobscience accelerate marketing and sales activity.
The company has over 200 customers and over 30,000 users. Its customers have posted over 500,000 jobs with Jobscience, which has handled over 2 million candidates and resumes. Customers include Cancer Treatment Centers of America, Hire for Heroes USA, United Utilities, Education Pioneers, and Carolina Health Systems.
The subscription license model means that Jobscience starts each quarter with revenue it can count on, and then every customer it signs up adds to that amount. The challenge will be to accelerate that growth, to triple, then double, then double again. This sounds ambitious, says Elliot, but Salesforce.com tripled from 2000 to 2001, then doubled, then doubled again by 2003, so he thinks it’s achievable with this model. SuccessFactors, Taleo, NetSuite, and RightNow all achieved those kinds of phenomenal growth. To do the same, Jobscience will leverage its unique position on the Salesforce.com AppExchange, making sure that every Salesforce.com sales rep knows about the company and how it can help them to make money, and that Salesforce.com management knows that Jobscience applications can extend the Force.com platform to every employee in a company and make the platform even “stickier.”
Elliott says that “it’s hard to imagine that application companies would go public any more, but who would have predicted in 2000 that little Salesforce.com would do go public on the New York Stock Exchange and have a $10 billion market cap. So we don’t rule that out.” More likely is an acquisition by one of the enterprise application vendors. The company could even stay independent and grow as it reaches a critical mass of customers and revenues. At this point the entire focus is on getting to that.
This segment is a part in the series : The 1M1M Deal Radar 2010