One of the few high-profile dotcoms generating a profit and maintaining a consistent customer base today, Monster.com is both a player and a dealer in the new economy’s high-stakes talent game. And Jeff Taylor is casino boss. As founder and CEO of Monster.com, he calls the shots with unparalleled accuracy.
But Jeff Taylor’s no hustler.
Since he founded the company in 1994, Taylor has guided Monster through 10 profitable quarters in a row, captured 50% of the Web’s career audience, profited from three consecutive Super Bowl ads, and made Monster.com the 67th most-visited site on the Internet.
Here, Taylor steps back from the fray to analyze the changing recruiting landscape and to defend his comrades — the Internet entrepreneurs who helped build the new economy but did not survive long enough to enjoy it. “One person’s idea can change the world,” he says. “That is one of the most valuable lessons contributed by dotcoms in the past five years.”
Dotcoms have suffered the brunt of the recent economic pounding. How will the Internet industry change in the next five years?
The wheels are off the covered wagon. The new economy has gotten as far as Iowa, but we’re on our way to California. And businesses are going to grow more and more aggressive as they drive toward that goal.
When the dotcom euphoria turned to panic last year, we entered a new era that I call the “dotcoma phase.” It’s a rare moment in business when competitors back off and leaders can reflect on the new economy. Within 18 months, new technologies and communication tools that were created by the dotcom pioneers will reemerge. At the same time, traditional companies will begin to bolster their Internet departments by recruiting from collapsed dotcoms and by poaching from dotcom survivors like Monster. Smart companies will not spit on dead dotcoms; they will try to learn from their successes and failures in order to grow more competitive.
When the eye of this storm passes by, change in business will grow more aggressive. For 50 years, businesses have focused on making small, evolutionary changes to quality. Today, we are operating in a Darwinian business environment in which change is revolutionary. Moving forward, only the fittest will survive.
For example, during the 1999 holiday season, a Darwinian challenge from eToys woke up the sleeping giants at Toys ‘R’ Us. EToys is dead now, but its impact will be felt at Toys ‘R’ Us for years to come. Napster has similarly altered the music industry forever. Such competitive pressure has enhanced and overhauled entire business sectors in the new economy.
How has Monster.com managed not only to survive but to thrive and grow during the dotcom collapse?
The day after this year’s Super Bowl, 42,556 people posted résumés on Monster.com. That’s roughly the same number of people who had been fired from dotcoms. Today, we have 8.3 million résumés on Monster, and that number is growing by 30,000 résumés a day. Most of those résumés belong to passive job seekers — people who realize that their employers are not going to take care of them for life. Employees must be proactive to stay alive today. And Monster helps people take control of their careers.
We’re successful because we don’t rely on banner advertising for revenue. We make almost all of our money from the recurring transactional business of posting jobs and searching the résumé database. We’ve been profitable for 10 quarters. Industry analysts used to make fun us of for that, but those profits have allowed Monster.com to grow while other dotcoms are falling apart.
How will the economic downturn and rising unemployment rate affect Monster.com and its business plan?
Employers spend about $18 billion a year on recruiting. Now less than $1 billion is being spent online at places like Monster.com. We will continue to grow dramatically even during a downturn because companies can save money by posting jobs online. If a company has to choose between a $15,000 newspaper ad and yearlong account with Monster for the same price, it will choose the more cost-effective option during tight economic times.
During the past five years, demand for talent has far surpassed supply. Now that the economy is flattening, a lot of companies are picking up talented people from the dotcom wreckage. Regardless of whether they’ve had a disappointing quarter, smart companies are going to take advantage of this talent boon. They simply can’t afford to let their competitors snatch up all the good people.
How will the talent war change over the next five years?
We will face a generational labor shortage within the next 10 years. Beginning in 2003, baby boomers will be exiting the workforce faster than entry-level workers will be entering it. The economy won’t suffer from skill shortages; it will suffer from body shortages. For the first time in U.S. history, businesses will fold not because their products are bad or their funding fell through, but because they’re not good at recruiting and retaining talent.
In addition, decision-making power has shifted within organizations from a stable cadre of leaders to a more volatile population further down the ladder. A few years ago, a few decision makers at the top of the pyramid drove the people at the bottom. Today, the pyramid’s been flipped upside down, and teams of employees, particularly consultants, are making decisions with clients every day. As that change occurs, I expect to see broadening skill shortages because companies will need people across the organization who can make decisions in various competencies.
That phenomenon will be compounded by the transition from an e-commerce economy to an e-business economy. That means corporations will need to retool, retrain, and recruit with the Internet in mind — which will change the composition of the workforce completely.
As employees begin working with more clients and changing jobs more regularly, they will become more empowered and create a truly employee-based economy. In the early 1900s, a few employers like Ford and Rockefeller controlled huge villages of employees. As the Industrial Age gave way to the Information Age, our economy became crowded with millions of companies that controlled individual armies of workers. In the Knowledge Age, we will see hundreds of millions of contractors, consultants, freelancers, and microbusiness owners create our first employee-controlled environment.
Contact Jeff Taylor by email (email@example.com).