What’s Next: The Monster Dilemma

By David H. Freedman

For business owners plagued by a dearth of candidates for key job openings, the Web was supposed to provide an ideal solution. Job-search sites like Monster.com (NASDAQ:MNST) can put postings in front of millions of applicants instantly. And newer business-oriented social networking sites like LinkedIn provide similarly fertile recruiting territory, supplying access to the contacts of thousands of people. On the other hand, anyone who’s actually tried to hire someone through the Web knows the truth: You post an ad and are immediately flooded with hundreds of resumés, many from people whose backgrounds are wildly inappropriate. So much for the Web making things easier. It’s enough to make you long for the days of print newspaper ads and snail mail.

But just as technology created the problem, newer technology aims to solve it. A new generation of hiring tools promises to screen out inappropriate applicants, allow the suitable ones to put their best foot forward, and even hunt down good candidates who haven’t applied. As these new services get better at these tasks, they may well change the balance of power in the job-recruiting industry and could even redefine the way we think about jobs.

A shot at diverting a river of weak applicants is the chief advantage offered to employers by Protuo, a Woodstock, Georgia-based start-up that launched its service in January. Protuo isn’t only a job-listing site; it also forwards its clients’ listings to some 270 established job-listing sites, including Monster. But applicants can’t respond to a Protuo posting unless they spend seven minutes or so filling out a survey that asks about experience, skills, workstyles, and job preferences. Employers can customize the survey by choosing from a wide field of prepared questions or by adding their own, and they specify which responses get a candidate’s resumé past the screen. Has the candidate managed a technical project? Is he or she willing to move? The approach is modeled, to some extent, on the sort of compatibility gauging one encounters on a matchmaking site like eHarmony, notes Jennifer Gerlach, Protuo’s co-founder and vice president of marketing. Gerlach went through the dating process on eHarmony just to research the technique. “I learned a lot,” she says. “And I met some very, very nice people.”

With online job postings sometimes pulling in more than a thousand applicants, the ability to winnow the flood could mean the difference between being able to retain control of the hiring process and having to bring in a professional recruiter–at a typical cost of $30,000 for a midlevel hire. The time and expense of dealing with a huge influx of resumés is all the more frustrating because much of the flow comes from online applicants who indiscriminately bombard hirers with resumés. You can try a keyword search on the resumés to narrow things down, but applicants have learned to load their resumés with them, often by pasting in phrases from the job posting. Even LinkedIn has suffered from inflation, as many users aggressively build networks of people they don’t really know in order to make themselves appear better connected. “There’s no value in a lot of these contacts,” says LinkedIn user Chris Knudsen, who heads business development for podcasting company Podango in Salt Lake City. “It can just be someone whose card you got at a trade show.” (A LinkedIn spokesperson commented via e-mail: “Anyone can join the LinkedIn network; however, the quality of your own personal LinkedIn network is the responsibility of each individual.”) But a well-designed survey, contends Gerlach, allows users to skim the cream.

Fred Donovan, who runs Donovan Networks, a seven-employee computer network security firm, has been flooded with applicants responding to previous postings to Monster.com and other online job boards. He is currently conducting a Protuo search and likes what he’s seen so far. “I can specify that I want to see only resumés from people who say they have 10 years’ experience in negotiating sales and are familiar with the software development process,” he says. “I’m seeing a small, better-qualified subset of the applicants.” There must be something to the idea. Other hiring sites, including Market10, Jobster, and Taleo (NASDAQ:TLEO), are introducing their own approaches to automated candidate screening. And Monster is doing the same, making available–for a fee that adds about 20 percent to the cost of posting a job–the ability to direct applicants to a questionnaire designed to rank the suitability of candidates.

Sure, candidates can try to game these surveys by being less than truthful. But Gerlach insists that surveys can be designed to stymie such people by asking questions that don’t have an obviously right answer–such as whether the person prefers to work independently or in groups–and by warning candidates that they can be rated as overqualified. Protuo, which costs hirers $44 to $295 a month depending on the number of jobs they’re posting and is currently free to job seekers, also offers applicants a chance to do more than post a resumé. The firm invites users to create online portfolios that can include whatever documents, photos, videos, or other material that best represents that person’s career to date. (Monster is currently testing a similar capability.)

ZoomInfo, in Waltham, Massachusetts, takes a different approach. It assembles profiles of potential job candidates from all available online data, whether or not they’re looking for jobs. Starting with the same techniques that Google (NASDAQ:GOOG) uses to gather Web data associated with a person’s name, ZoomInfo adds the significant additional step of crunching the results to pull out the most relevant information, weed out data referring to other people of the same name, and assemble a professional profile. ZoomInfo has an R&D team of 35 working on the technology. So far, the company has assembled some 34 million profiles, and as far as I can tell, most of them are fairly informative and accurate. (Check out your own name to put it to the test.)

But somebody has to pay for all those scientists, and that somebody is you. The company charges $5,000 a user per year for the ability to dig up personnel profiles by company or industry. It sounds like a lot, but ZoomInfo’s COO, Bryan Burdick, notes that if you get the right candidate for a single vacancy, the price is one-sixth that of using a recruiting firm. The company also offers less expensive, more limited searching capabilities aimed at smaller companies, as well as free access to searches on individuals. Many major executive search firms, along with some 500 other corporations, already use ZoomInfo, claims Burdick. “I can find personal information, professional backgrounds–and, sometimes, damning evidence–on tens of millions of people without having to go through 1.5 million Google hits on each one,” says John Boehmer, managing partner at executive search firm Barlow Group in Norwalk, Connecticut.

Boehmer is quick to point out that as ZoomInfo-like services get better, and more companies get comfortable using them, corporate hirers won’t need professional recruiting firms like his to turn up candidates. “It’s commoditizing the front end of what we do,” he says. “Eventually, everyone will know where everyone is and how to get hold of them, so we won’t be able to charge for identifying and contacting candidates.” Search firms will still be valuable for assessing candidates, he contends, though he acknowledges that new e-hiring systems could eventually eat into that end of the business as they get smarter and have more online data to work with.

For that matter, it’s easy to imagine the not-all-that-distant day when online tools make it so easy to find people to fill a specific slot that the notion of permanent jobs becomes irrelevant for many positions. Why hire a manager for years when you can find a new one with exactly the skill set needed for the precise tasks at hand? That’s not necessarily bad for employees: Think of an economy where top employees are constantly being sought out and bid over by companies that recognize them from their Web trails as the perfect short-term solution. And talented employees would be just as smart about whom they choose to work for–using similar services to weed out companies that aren’t good matches for them. You’ll want to treat those people well. If you don’t, and they post that fact online, it could haunt you for a long, long time.

Source:

Online marketplace for people renting items and those who need to rent them

 

by Errol Pierre-Louis

Zilok is an online marketplace for people renting items and those who need to rent them. The simple, intuitive interface helps visitors connect and facilitates the transactions. It’s a nifty site that’ll get more useful as the community grows.

Provides an easy-to-use platform where you’ll find items you typically wouldn’t see for rent and can make money renting out items you use only occasionally. Facilitates the transactions. Provides PayPal deposits to insure your items. A calendar shows when items are available.

Too small a community to be useful right now. The service will stop being free come 2008.

We all have a ton of stuff we barely use that’s just gathering dust in the garage or closet. You could justify your purchase of that cordless drill or ski set by inventing new ways to use them between uses, but why not put them to work making money for you? Zilok.com gives you an online place where you can easily do just that and also easily find items you’ll only need for a short time. The creators hope to make their site the one-stop online shop for locating anything you need on a temporary basis.

The site is like a Craigslist for rentals, showing available items in your area, but it also assists in the rental process, giving you the tools needed to set up terms and facilitate the transaction online. For instance, using Zilok search I found someone in the New York City area offering a Nikon D80 Digital-SLR camera and a 2GB memory card at a daily rate of $12 for 1 to 15 days. If that met my needs and budget, I’d send in a rent request, wait for an acceptance from the lender, and then set up a time and place to meet and pay for the item. It’s that simple.

You can sign up for the service as a business (if you’re a professional rental service) or an individual. As a lender, you can give potential customers peace of mind by becoming a verified member. To do so, you supply Zilok with your cell phone number, and in return, you’ll receive a text message confirming your information. Verification links an account to something concrete, giving potential renters more reason to trust you. Member profiles include ratings and customer feedback, which give you a good feel for who it is you’re renting from.

The stipulations you place on items you’re willing to loan out—the per-day price and length of rental—display online on that item’s page. A Zilok-provided rental agreement template for users to sign covers everything that happens in case of damage or lost of rented items. You can also set up a PayPal deposit as insurance on your goods.

To find items for rent, you search by keyword or category, then look at Zilok’s Google Maps mashup, which shows what’s available in your area. You can click on the image of the item to view the terms of rental and the lender’s profile. The item’s specs, supplied by the lender, appear below the map and the rental terms. A helpful calendar on the items page shows when the item is available. When you find something you like, clicking on the rent item button sends you to the booking page where you propose a start and end date for your rental and how long you’re willing to wait for an acceptance reply from the lender.

Once the rental request is accepted things move from the virtual to the actual. The lender and renter set up a meeting location by e-mail, where they meet and hash out the final details, such as payment method, and complete the transaction. After that, Zilok is no longer part of the process. The site doesn’t handle the actual exchange of the item and payment. The rental agreement, which according to Zilok ensures that “the consequences of an incident are governed by this contract and of course by any legislation that is in effect,” confirms the deal and conditions, helping to safeguard both sides.

As of this writing, the service is free, but that may change in less than two months. Starting January 2008, you might have to pay to put items up for rent. Site reps told me they’ll evaluate the site density, and if there are enough users to support it they’ll implement a charging scheme similar to what newspapers charge for classified ads. If there aren’t enough users, the site will remain free until later in 2008.

You can already find places to rent specific items, like cars, tuxedos, power tools—whatever—on- and off-line. But Zilok will create a marketplace where you’ll find not only those items, but others you don’t typically see—all in one place. The site is still too small to be tremendously useful right now. As of this writing there are only about 180 items up for rent in the U.S. I’m also not sure that imposing fees is the best way to promote growth. I doubt craigslist would’ve achieve such massive popularity if it charged a fee, no matter how minimal, to post ads. Regardless, Zilok sounds like a fantastic idea, and I’ll be interested to see if it will work.

Source:

Investing: The Net Wisdom of Peers

by David Bogoslaw

Two years ago, Eric Wolff, 25, was handed the reins of a $5 million family trust after his family saw how badly it had been managed by a full-service brokerage firm. For the four months ended Oct. 31, the $1 million in accounts that he directly oversees has returned 13%, something he attributes to advice he received on Covestor.com, an online investing community, and top-notch research he’s found at other financial Web sites such as Valueinvestorsclub.com and Seekingalpha.com.

People saving for retirement are equally inspired to find the best investment advice. Increasingly, they’re less willing to trust brokers who they believe are motivated by greed and tend to put their own interests ahead of their clients, according to a 2004 study commissioned by the Securities Industry Assn.

Burned Retiree Tries His Hand

Bob Craft, 64, a retired pilot for Delta Air Lines, joined online investing community ValueForum.com in early 2004 after losing 82% of his defined pension when Delta filed for bankruptcy. At the time, his assets were invested in mutual funds. Nervous about his retirement savings, he split his portfolio three ways—between Fidelity Investments, Bank of America, and his own trading account—to compare the investment results.

Craft’s brokers told him that over the long run, he wouldn’t be able to beat their performance because they invested for a living. At the end of the first year, his account had increased 30%, while the money managed by the brokerage firms was up just under 8%. His returns far outpaced those of his brokers in the second year as well. “The highest return every year has been by me, so I just moved all my money to me,” he said, adding that he couldn’t afford his brokers’ low gains.

Craft now manages 100% of his portfolio, spending about six hours a day reading up on stocks he hears about from fellow members at ValueForum and placing orders through Fidelity’s ActiveTraderPro. Year-to-date, his portfolio is up 38.2%, he says, and he no longer worries about his retirement nest egg.

Communities’ Key Asset: Transparency

As more individual investors like Wolff and Craft take control of researching and buying stocks, options, exchange-traded funds, and mutual funds online, they’re joining a new generation of online investing communities to help them reach their goals. So instead of following recommendations from full-service brokers or advisers, for investment advice they’re turning to people who are putting their own money on the line. The online investing communities take the old forums and message boards to the next level by offering tools to verify the track records of and rank up-and-coming investing gurus.

Unlike the social networking platforms TradeKing.com and Zecco.com, these new investing sites don’t execute trades. What they’re selling is the ability to pull in and aggregate trading data from members’ existing brokerage accounts so they can track each person’s total portfolio.

Tracking capability is important because these communities aim to level the playing field, paving the way for a new type of investment adviser, one who’s more credible because you know what stocks he owns. Full-service brokerages and other incumbents are afraid of this, since nontransparency protects their profit margins, says Rikki Tahta, chief executive of New York-based Covestor.

What Investors Want

Before launching publicly in mid-September, CakeFinancial.com, a San Francisco-based online investing community, conducted several focus groups to see what online investors were really seeking. Steven Carpenter, Cake’s founder, said investors want to find peers with the same basic outlook or trading strategy, but better performance results. Cake also learned they want advocacy—the assurance that the customer’s best interests, not the adviser’s, come first—more than education.

Cake tracks stocks, ETFs, and mutual funds and plans to add options and fixed-income trades in the future. While all the trading activity that Cake imports can be measured, members don’t have to reveal their net worth, the amount they’re investing, or the number of shares they’re trading. Eliminating the sensitive information allows users to communicate freely with each other, says Carpenter.

Cake’s service is free, but once membership has grown to at least 10,000, Carpenter says he’ll create low-cost, customized asset-management services based on the aggregated performance metrics of Cake’s members. The idea is to take aggregated performance data and overlay it on a member’s portfolio to show what stocks he should sell and which ones he should hold on to. A premium service would show members the asset allocations of their top 10 model investors and notify them via e-mail whenever one of these people buys or sells a stock, or even adds a stock to his watch list.

Fund Management Insight

For Covestor, the imperatives are verification and evening out the playing field for retail investors. By giving them the same tools that a hedge fund manager has, such as the analytics that help them understand the risk they take vs. the returns they get, and how those compare with their peers, benchmarks, and professionals, Tahta hopes to “burst open the fund management world.”

Covestor is currently a free service, but plans to go to a compensation business model sometime in 2008, under which members would pay a fee to follow top performers’ portfolios, and Covestor would collect a small percentage of the fees charged by its top performers.

When ValueForum launched in late 2003, it offered a flat fee for lifetime membership to the first 200 people to sign up for the service, and within six weeks it had sold out. Through those early adopters telling friends, the community has grown to 1,400 members—most of them age 55 and older and retired with an average portfolio of $1 million, says co-founder and Chief Operating Officer Adam Menzel. Members pay an annual fee of $220 to use the site.

ValueForum doesn’t import and track members’ investment accounts, but it gives members the chance to gauge each other’s performance in other ways, such as quarterly contests where each person chooses three stocks they think will rise during that three-month period.

Growth in Self-Directed Portfolios

Another reason that investors are looking for new ways to exchange financial advice is that broker-advisers are showing less interest in handling portfolios valued under $1 million. That leaves 15 million U.S. households with assets between $100,000 and $1 million looking elsewhere for investing advice. These households’ assets total $4.5 trillion, or 35% of U.S. retail assets, most of which is being serviced by the mutual fund industry, according to a study by Forrester Research published in March, 2006.

Institutional investors are also getting involved in online investing communities. Marketocracy.com, a San Mateo (Calif.)-based investment company that launched in July, 2000, uses a social network to generate the research that informs its funds’ investment decisions.

Marketocracy’s founders, Ken Kam and Mark Taguchi, opted for an alternative to Wall Street research based on what they learned while co-managing a top-rated technology fund at Firsthand Capital Management in the late 1990s. Kam, who had previously worked in the medical devices industry and was running the fund’s health-care/medical portion, found that the best ideas about a company and its business prospects came from people working in that particular industry, not from Wall Street analysts and brokers.

“It’s a process of asking the right questions of the right people,” says Kam. “People on Wall Street aren’t the right people because they rarely have the experience to ask the right questions.”

Kam and Taguchi believe it takes at least five years of tracking a person’s trading decisions to be able to discern their skill level. But after a year and a half, they felt confident enough in the collective wisdom of a select group to pick the top 100 out of about 40,000 members to serve as model portfolio managers for the mutual fund they set up. Six years later, the Marketocracy Masters 100 Fund has roughly $45 million under management and, since inception, has returned 92.42%, compared with a 53.37% return by the Standard & Poor’s 500-stock index, including dividends, over the same period.

Wisdom of Crowds vs. the Individual

One bone of contention among the next-generation investing communities is whether the financial rewards of following a single individual match those of tapping into the collective wisdom of the crowd. Cake believes in taking what seem to be the best practices among groups of like-minded investors and showing members how they compare to others who are doing better than they are, both as individuals and in the aggregate, says Carpenter. It’s not a herd mentality that Cake enables members to tap into, but the collective wisdom of the few who resemble them and consistently outperform the markets over time, Carpenter says.

To identify such model investors, Cake has a feature that gathers up to 10 years of back data from the trading accounts members have opened at 11 of the top brokerage firms. Data extending over that long a time span are more convincing than the three months’ worth of back data that most other sites import, Carpenter says.

For Covestor’s Tahta, it’s the idiosyncratic thinking of individuals with insights into particular sectors that’s paramount. He cites one member, a doctor in Wisconsin, who has a unique understanding of relative strengths and weaknesses among medical equipment makers. Given all the factors that inform investment decisions, such as goals and risk tolerance, he believes it’s a waste to limit this information to a single investor’s account when it could help others with the same basic approach.

Marketocracy believes it’s beneficial to be able to access the group’s aggregate wisdom and that of individuals at different times for different reasons. Their model portfolio managers, a rotating group of the top 100 performers, tend to know the right questions to ask, based on their trading experience in certain sectors. But they often turn out not to be the people with the right answers, says Kam.

“Through our forums, increasingly what we’re finding is that you want to let everybody post [comments], because the person who has the answer might have a poor portfolio overall but may have the key piece of information that will make a great investor have conviction in the stock idea,” he says.

High-Quality Discussion

It’s likely that even without the functional bells and whistles, online communities would attract investors based solely on the quality of the discussions—a welcome refuge from the junk many say is clogging the message boards on financial portals at Yahoo.com and AOL.com. ValueForum even allows members to vote to dispatch off-topic posts to a separate discussion board called the “Coffee Shop” so that the main discussion threads stay focused on investing matters.

Online investing communities have also begun to extend their reach beyond the virtual into the physical world. Take InvestFest, an annual conference organized for and by ValueForum members. Now in its third year, the conference offers presentations not only by members who specialize in certain investing topics, but also by industry professionals such as investment newsletter editors and occasionally a company chief financial officer. Cake is also envisioning local investor cocktail parties around the country in the future.

Many people tout the Internet, and message boards in particular, as tools that are democratizing the flow of information. But for Kam and Taguchi, research by social network is more about meritocracy than democracy. It’s about weighting people’s voices by their track records and giving commensurate attention to the most talented. Says Kam: “Other social networking sites looking to make a play in investing are interesting and share the same goals as us, but it’s going to be years before they have anything substantial to prove to investors that they can add value.”

Source:

Start-Ups Mine Database Field — Nimble Software Helps Make Sense Of Information Tide

By Don Clark

Most databases are based on technology that originated 30 years ago. But change is in the air.

A mob of start-ups have been developing variants of the software, which provides the equivalent of filing cabinets for corporate information. Customers say the offerings are generating faster answers to questions that require sifting through huge volumes of business information

[…..]

See more here

Source: