So I've received emails from Zubka offering me thousands of pounds if I refer somebody in a particular position. With such enticement, I went straight back to the Zubka website and was greeted by a logon screen with such giant characters and big buttons that even Web 2.0's standard for dumb and simple interfaces seems to have been eclipsed. I pressed on.
If you don't recall, Zubka's business model is to faciliate middle-men. It gets ordinary folks like you and me to make job referrals by offering us bounties for successful candidates. Not a bad idea, though I was uncertain where it would go during my first review.
Having returned to Zubka, I don't yet see any huge advances in terms of the website, but I'm not sure it really needed any. What's more important is quite simply whether people are posting jobs and referring candidates....so I plow on...
I see 479 postings, with an average reward of roughly 4% of the annual salary per job, and Zubka's basic fee is supposedly 8% of the job's salary - so half the bounty goes to Zubka, and half to the referrer. The average job looks like it has been sitting there for about 2 weeks, which means these postings are refreshed about 24 times a year. Therefore, it looks as if there's enough volume through the system here for the folks at Zubka to make a liveable wage.
So I suggest the formula is something like this: of the jobs that are posted (X), how many of those are real jobs (Y), how many of those are not filled by other means (Z), and finally: how many remaining will be filled by avid Zubka users (the magic number)?
If I'm incredibly generous with revenue projections, and conservative with costs (say 4 full time people), I can see them making a profit of about 315,000 GBP annually, but I think the real number is closer to about 100K, and could even be lower. While that's great for a lifestyle business, it won't satisfy the VCs. Given that they received investment from Benchmark Capital, and had over 2 million investment by Q1 2007, I think they're falling way behind.
I watched a video of one of the co-founders, David Shieldhouse, and he seemed to be singing music to my ears. "Disintermediation of the recruiting agency...needs to happen." But then he also indicated there was some surprise internally at the lack of takeup of their services. Then he indicated that a lot of recruiters are actually using Zubka, which is what I had guessed. He also said he hoped Zubka would help eliminate the non-value adding recruiters that "match one word on a CV to a job spec." What a wonderful vision! (See all of my earlier postings).
Well, you recall my rather bearish outlook on Zubka from a previous post: recruiters are really the only ones that are going to want to invest the time and take the cash-up-front risk. So really Zubka is just becoming a cloud computing service for the recruiters. That makes some money, but fundamentally means they probably won't be creating or recreating an industry in a way necessary to have explosive growth.
Well, I like to imagine that my projections and strategic readings were correct, so I'll go ahead and pat myself on the back. As far as Zubka goes - it's at best an incremental step in the right direction. But it aint the next big thing. Why? Well, I'm feeling a bit prophetic at the moment, so I'll let the Zubka guys give me a call and buy me a pizza before if they want to hear that. So far, I've gotten two free pizzas.
Saw your blog post about Zubka and as you may be aware I understand that Zubka have now pulled the plug. Out model I believe learns from Zubka and addresses what for me was one of their prime weaknesses - lack of any definable sector or function focus. Our business prefio.com (http://prefio.com) is focused like a laser beam on the UK commercial property sector and even though we only launched a few weeks ago we have hundreds of sector experts signed up as referrers (and they are all genuinely vetted by us - so it's not open to any Tom, Dick or Harry).
Hope you would agree that we present a very differenmt image to Zubka.
Posted by: Tim Latham | May 30, 2009 at 07:27 PM
Tim,
Thanks for your comment. I will have to take a look at Prefio sometime soon and blog my thoughts. Good luck with your venture!
Mark
Posted by: Mark Radoff | June 04, 2009 at 11:17 AM