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How to Manage A Successful Pivot: Bullhorn CEO Art Papas (Part 2)

Posted on Thursday, Jun 11th 2015

Sramana Mitra: So you’ve been around doing this company for a while.

Art Papas: Yes, we started in 1999. I stayed at Thomson for a year after college. Then, I went and joined another startup that I didn’t enjoy at all.

Sramana Mitra: You really wanted to be on your own.

Art Papas: I really did. I didn’t like implementing other people’s ideas.

Sramana Mitra: What was the idea that you started Bullhorn with? What were you going to do?

Art Papas: It was 1999. Everybody was raising capital. I felt that the Internet was just exploding. There’s so much opportunity. I had a notion about the way people look for jobs and I thought, “There’s something around the way developers and web designers are finding work.” I had two co-founders. We had this thesis that the Internet was going to facilitate people collaborating on projects and freelance work was going to proliferate as a result. We were right. However, we were 15 years too early. You’ve probably seen Elance and oDesk.

Sramana Mitra: I know the founders and CEOs very well.

Art Papas: Elance was doing it back in 1999 like we were. We were actually competitors. The difference was Elance went and pivoted and became something else. They eventually came back to the original idea. We decided to pivot in 2001 and pursue becoming a CRM for vertical markets. Both companies pivoted out of it. It was just way too early. People weren’t comfortable hiring people on the Internet.

People were very comfortable buying books online so the notion of hiring somebody, unseen, to do technical work over the Internet was a bridge too far. Now, you’ll get in a car of somebody that you just met in the Internet. That seems really normal but back then, people were apprehensive. We actually raised venture in 1999.

Sramana Mitra: On the original concept?

Art Papas: Yes. We raised $5 million.

Sramana Mitra: Whom did you raise that money from?

Art Papas: Mostly from angels. Back then, it’s similar to now where you can find individuals who wanted to get in on the Internet gold rush. People were writing $50,000 to $100,000 checks just to get their foot through the door. We raised a lot from angels and then we raised $4 million from GE Asset Management and That was an interesting collection of characters. GE Asset Management got into the business of funding early stage startups in 1999.

Sramana Mitra: Everybody did. In 1999, everybody thought they should be funding early stage startups.

Art Papas: It was really nuts. Now, they do what they always did. They don’t do the early stage financing anymore. We were one of the last early stage investments that they did. doesn’t even exist anymore. We closed that last round in December of 2000. It was probably one of the last stupid venture deals to get done in that era. The market collapsed. It was just a mess.

We said, “We’re too early. Let’s do something else.” A friend of mine said, “Hey, you guys are trying to essentially be a staffing firm online. What if you sold your software to staffing firms?” That was a cool idea. I met with a guy who was a friend of his, and immediately, I thought, “These businesses use CRM systems religiously but they’re all client-server. The offices can’t communicat inter-office.” This was in 2001 gained traction.

We built this guy a CRM software based on some of the original software we had produced for the website. He became our first client and he agreed to pay us $10,000 a month. We dramatically transformed his business. We connected his offices. They can now collaborate.

This segment is part 2 in the series : How to Manage A Successful Pivot: Bullhorn CEO Art Papas
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