In my last post I mentioned how there were multiple ways we wasted a lot of time at Snaptalent. The first was indecision, the second was spending time on things that didn't matter. At Snaptalent we spent way too long on things that had absolutely no effect on ultimate success of our business. 

Stupid Things We Did

- Spending time discussing whether the company should comp founders cell phone plans. (This discussion actually included emails to investors. I still can't believe we wasted our investors time with something this menial.)

- Switching bank accounts three times.

- Having 4 closings on our financing and 18 investors

- Prematurely optimizing our server setup. (we had 5 servers at softlayer pushing 20-50k uniques a month)

- Many more things I don't remember right now.

Lessons Learned

1. Block off time for administration at the front end of your startup after your financing closes. Have one person focus on it and get everything done all at once. Don't do it over weeks and weeks, jump on it and remove the distraction. This includes finding office space, setting up utilities, buying and setting up furniture, setting up health insurance, general liability insurance, payroll, accounting, phones, business cards, company credit cards, etc. 

2. When you get into a back and forth about something with your co-founders there is only one question you need to ask

Is this decision material to the outcome of this business?

If the answer is no make a decision on the spot and don't look back. Even if the answer is yes you probably won't have much more data in the near future so do your best to make a decision on the spot.

I was going back through my old Snaptalent emails getting some ideas for my next blog post and one of the things that was immediately apparent was how much time we wasted. There are two main ways this happened. I will address these in separate posts. First, indecision.

After weak results from the Snaptalent Ad Network became obvious in mid-2008 we spent a lot of time discussing our many different options for changing strategies. We debated a talent auction model in May, job board strategy in June, and a Facebook application recruitment advertising network in July. Our analysis here was naive, as we were not customer focused and were not making data driven decisions based on customer needs or feedback. We were just guessing what we thought the market wanted from our own point of view. However, the biggest problem we had was not making bad decisions, it was not making decisions at all. We also had no real framework for evaluating decisions once they were made. This led to more guessing, and more wasted time.

Once it became clear our blog advertising network was not working well we spent three months figuring out what to build next. In the meantime, we did not admit to ourselves that the recruitment advertising network was not working. We kept the network running while we built another product on the side. This was a big waste of time. We had to maintain and incrementally improve a dying product while building another product at the same time.

We decided to shift focus away from single rec recruitment, which targeted mainly passive candidates, to recruitment branding campaigns that targeted mainly young, college age, active candidates in June. We began engineering the product in early July. However, three months later we were still internally debating the merits of our approach.

"In the end I believe the issue with these lacking clickthrough rates is more a timing issue than anything. Many niche ad networks operate on content level relevance (e.g. Ruby, sports, gay, etc.) while we were able to target at the same level we faced the problem of timing. Standard content level relevance seems to work pretty well because many people on sites in these networks are potentially interested in the product or service at any given time, whereas interest for jobs is not steady on a per-person basis and peaks depending on that person's situation at the time which they are viewing the ad. Instead of having steady clickthroughs and results from a relatively homogenous audience, we have sporadic clickthroughs and applications because even though the general topic matches, timing does not. (i.e. an interested passive candidate ad viewer today may not be one tomorrow) Because of this, we essentially have to charge a higher CPM to the advertiser to make up this difference in interest.

The core problem we have discovered is that (with tech jobs in a small network) the economics to make a purely passive candidate advertising network interesting to companies does not exist. So, how do we fix our economics?

Much of our recent discussion has involved switching to a college network where we focus on selling recruitment marketing campaigns rather than single rec recruitment advertising. I think that there are two key things in this strategy that shift the economics in our favor. First, college students are an active audience. Second, recruitment marketing shifts focus away from filling recs and towards secondary benefits like branding. While we have not fully explored the economics of this market yet with our facebook trial and other projects it seems safe to assume that these two key differences may swing the economics in our favor."

Jamie Quint - email to team@snaptalent.com - September 8, 2008

Looking back, our decision to focus on the college network and recruitment advertising campaigns rather than single rec recruitment advertising never should have been argued for 5 months. We should have made our decision, launched the product, and measured external results. 

Argue only hard data. Make decisions quickly. Evaluate based on external feedback not internal pontification.

We should have not have gone into another product line while trying to maintain our existing product. We should have either focused all our effort on our existing product, or admitted to ourselves that it did not work and shut it down immediately rather than letting it distract us.

Realize a sunk cost when you see one.

In the end, this product never launched. We got distracted and shifted focus to a different college strategy before this product ever made it beyond a single-company pilot. 

Indecision kills.

Resources:

Mark Suster - JFDI (http://www.bothsidesofthetable.com/2009/11/19/what-makes-an-entrepreneur-four-lettersjfdi/)

Fred Wilson - Action Oriented (http://www.avc.com/a_vc/2009/12/action-oriented.html)

Ben Yoskovitz - Indecision Kills Startups (http://www.instigatorblog.com/indecision-kills-startups/2009/12/16/)