With the Affordable Care Act and other legislation, we see two trends: employers offering fewer hours and hourly workers needing enough hours to make a living.
Snagajob is an app that matches employer needs with available shift workers in the restaurant, hospitality, and service industries. Its journey to become the largest marketplace for hourly workers in the U.S. took some careful navigation.
Surviving the Early Years
Shawn Boyer launched Snagajob as a job search engine in 2000. The Richmond-based business survived the dot-com bust, and grew into a national employment network. The company went through difficult years - it tried to solve too many problems but needed to focus before it could seek funding and expand.
By April 2013, Boyer and his board recruited serial entrepreneur Peter Harrison as the new CEO. Harrison had earned a reputation of having the right insights and skills to scale a big solution.
Focus on Solving the Biggest Problem First
Harrison's first priority was to focus on expanding Snagajob’s products and services across the hiring lifecycle in the hospitality industry. In February 2016, Harrison secured a $100 million in funding led by Rho Acceleration alongside NewSpring Capital and the Invus Group. This enabled Snagajob to buy Charleston-based PeopleMatter, a hospitality and retail cloud-based talent management system.
The acquisition added millions of users and 50,000 locations in the service industry. "Together, both companies represent almost 70 million hourly workers and 250,000 employers… making us the biggest marketplace for hourly work,” says Harrison.
Gearing Up to Make Things Happen
Harrison learned how to build and scale businesses by doing it - he worked at Seer Technology, Versata, and GlobalLogic, two of which he took public. "I've never used my own money for my companies. I guess I'm not a true entrepreneur in that way," he says. Harrison shared with the crowd at Startup Grind DC some of the key lessons he learned building businesses:
1. Seer Technology: In 1996, Harrison’s first startup had 150 engineers building client/server products that customers requested. Installations costed $5 million and up and in five years, the company grew from $0 to $120 million in revenue.
Through this experience, he learned that partnering with an established entity is important. “A big contributor to our success was an early partnership with IBM. We had the software of a startup and the go-to-market of a giant,” Harrison says.
From his biggest mistake, Harrison learned that you shouldn’t listen exclusively to customers. Harrison explains that “only a handful of our 150 engineers were building for the internet. That’s because our customers wanted more client/server features. Existing customers by definition tend to be a narrow subset of the market and do not reflect the market as a whole. If you listen only to customers and don’t also listen to the market and prospects, you risk riding a smaller and smaller wave," he says.
2. Versata: This company started in the early 1990s as a software consulting company called Vision Software. It went public in March 2000 and on that day, it was worth $4 billion. The company had revenues of about $60 million and was losing money. It was the height of the dot-com bubble.
Harrison learned that in a fast-paced market, it pays to acquire technology to accelerate your business. “It’s no good growing really, really fast if the market is growing faster. Versata grew 400% every year for three years, but the market was growing faster. You can’t be too purist, especially if you’re working in a very tight window,” says Harrison.
3. GlobalLogic: During the downturn in 2001, GlobalLogic became one of the largest product outsourcing companies in the world.
Harrison highlighted that the lack of science in the hiring process is frustrating. “In my last year, we hired almost 2,000 people. We must have interviewed 10,000. The process of identifying and selecting people was so thoroughly ad hoc,” he says. He mentioned that you also have to be able to identify the right investors and build your relationship and credibility over time by reporting on milestones met. He had taken meetings with around 100 venture capital firms to decide NEA and Sequoia were the right fit. “It took four years to grow the company, and it took at least two years of cultivating a relationship with the right investors,” says Harrison.
Over 10 years, GlobalLogic ended up with design studios and innovation hubs in 15 cities. The travel took its toll on Harrison. When Snagajobs approached him to become CEO, he was ready - as long as he could work from his adopted hometown, Washington, DC.
Company Culture Matters
In all of his ventures, Harrison emphasizes the importance of hiring the best people he can afford who share and maintain the company’s values. Snagajob has no HR department. Instead, it established “Snagger Services” to help its teammates or “Snaggers” with the support of a self-selected Culture Squad.
“We have established a very clear mission and values that we use both to attract the right people and as a lens to hire the best. Then, we use the same values to develop, align, and promote people to ensure our own employees are in the right fit positions. As we work to integrate each acquisition, we use it as an opportunity to refresh and realign values - not the mission because this is largely set in stone - and involve both new and old Snaggers in the process,” says Harrison.