Knowing When to Hold ‘Em: The Story of Poachable
Their take on a localized version of Reddit’s ask-me-anything interview format was interesting, and it was doing better than their original idea—a community question-and-answer service centered on shopping—but growth had already plateaued.
“We were ready to hang it up,” Leung says. But in the weeks before a small acqui-hire deal was set to close, they took one more shot. “We’re entrepreneurs, so until you grab the ball out of our hand, we’re not going to stop running.”
They opened Poachable, an anonymous online marketplace for technology workers interested in new employment opportunities, on July 8. In its second month, Poachable racked up more users than the prior business, Yabbly, had amassed in both iterations over two years. Earlier this month, they raised $500,000 from Paul Allen’s investment vehicle, Vulcan Capital, adding to checks written by prior investors who decided to place one last bet on Leung and Shafer.
The Poachable story is still unfolding, but for these entrepreneurs and their investors, the journey thus far has honed their ability to detect early on whether a business idea is working.
“When do you stop something, when do you go forward?” Leung says. “That’s something that people will probably try to perfect their whole career. And every situation is different.”
Leung describes Poachable as a “reset” rather than a mere pivot. The only thing they took from their prior businesses was insight into just how hard it is for technology companies to find new hires—that and the cap table from Yabbly, for which they raised $1.5 million over two years. More about how they dealt with that in a minute.
Hiring managers were using Yabbly’s ask-me-anything (AMA) interviews to drum up interest in their open positions. “You have to really be desperate for candidates to do an AMA on Yabbly at that time because we were only like a couple months old,” Leung says.
Meanwhile, they knew from experience and through discussions with people who had recently changed jobs how difficult it can be to make the switch.
“There’s this interesting dilemma in that you’re most valuable when you’re in a job, but it’s also the least-convenient time to look for a job,” Leung says. “You’ve got your day job. You don’t want your boss questioning your loyalty. What if you don’t move and then now they know you were looking?”
Their solution is Poachable, which allows prospective job seekers to create private profiles outlining not only their skills and experience, but also the specific circumstances under which they would consider moving to a new company. They can specify not only desired salary and location, but also company and technology types, and even the kind of corporate culture they desire.
Poachable matches the profiles with openings from employers, who pay for introductions to qualified, interested candidates. Job seekers can rate those matches. If there is reciprocal interest, then the job seekers can decide whether to reveal themselves and proceed with a more formal interview process.
Vulcan Capital managing director Steve Hall says Poachable has the potential to address the inefficiencies of recruiting for both employers and job seekers.
Today, there’s no good way to say on a public network like LinkedIn that you’d be open to taking a new job under a given set of circumstances without alerting your current employer. That information—which is what Poachable is gathering—would be a recruiter’s dream, Hall says.
“Here it’s all anonymous, and I’m not allowing anyone to see it unless there’s a match there and I actually say it’s OK,” he says. “So you’re giving the candidate great control over that data, and now I’m willing to divulge incredibly valuable, targeted data, and enabling these recruiters to search on that data, which they’ve never really been able to do before.”
The recruiting employers are charged $49 per introduction to a qualified, interested candidate. Hall believes that pay-for-performance model will be a strong competitor to candidate databases, which companies typically pay a monthly fee to access, or costly recruiting services that can charge 20 to 30 percent of a new hire’s first year salary.
The real test will be whether candidates found over Poachable turn into employees who stay with the company, he says.
So far, Poachable has attracted some 15,000 potential job seekers. The current focus is on software product development teams—developers, designers, and product managers. Companies including Amazon, Microsoft, Facebook, Oracle, and Zulily have posted openings on Poachable. Its top markets are New York, San Francisco, and Seattle. And Leung says the company is poised to expand in 2015.
Leung says the fact that he and Shafer were on the brink when they tried Poachable—the acqui-hire due to close July 25—was in some ways freeing. “It was a Hail Mary for us,” he says.
But the idea gained traction within a few days. And having seen the tepid growth trajectories of their previous two efforts, they knew something was different with Poachable. They would need to recapitalize the company almost right away in order to continue.
They went to their existing investors with only about 200 job seekers using the marketplace and 10 days of operating data. Enough of their previous backers were convinced to write checks, investing another $300,000 to keep going with Poachable.
“They did it with very little data,” Leung says.
As he went about raising money for essentially a new company, albeit one with a two-year back story, Leung wanted to treat all of the past Yabbly investors—whether they were writing new checks for Poachable or not—fairly. All the prior investors still have shares in Poachable.
“That was really important to us, because yes the technology is different, but as a team, I know that we wouldn’t be here had it not been for the struggle that we went through with Yabbly,” Leung says. “So, we wanted to make it so anybody who supported us from the early days, you’re still going to have a good shot at a positive outcome, and then those who actively followed on and wrote checks for Poachable, they got very attractive terms during the recapitalization.”
Leung gave up a greater share of his equity in the company to make the recapitalization work out for all involved, he says. “It has to come from somewhere,” Leung says, adding that he was fine taking a smaller slice of what he hopes will be a much bigger pie.