Interview with Tim Besse, Co-Founder and VP of Product & Marketing
May 2, 2009
What is Glassdoor’s business model and how do you expect to make money today or in the future? And how do you frame the space you are playing in or the market opportunity that you are addressing?
So let me talk about the service and then we’ll understand the business model and the differentiators. As for the service itself, Glassdoor is a place where anyone can and for free, can find out what it is like to work at a company. And the way we do that is everyday on Glassdoor, employees and interview candidates are sharing anonymously reviews of companies, reports of their salaries at those companies and even how to interview at those companies. And the reason they do is that we have a “Give to Get” model which means for people to see information on Glassdoor, they have to post their own information on Glassdoor. And the reason for that is that we’re one of the first companies to try to collect this very personal information – what you earn – and so we had to create a special incentivized system to do so in order to build out the content and that is where we’ve been focused.
We launched 10 months ago and since launching from zero to now, we now have content for 23000 companies. We’ve heard from a couple hundred thousand employees in a thousand cities and a hundred countries so it’s a worldwide product. So pretty much, all this has been done without buying ads. It’s been pretty much through PR, its viral and word of mouth
So that is the service. If you want to compare it to something out there, you can say we want to be the TripAdvisor of Jobs. TripAdvisor is a business I’m very familiar with. TripAdvisor is one of the largest user generated content sites on the internet and it is in the travel business and is owned by Expedia.com which is where I started by my career. And that is where the founders of Glassdoor are from – Expedia veterans including our Chairman who gets credit for founding Expedia. With TripAdvisor’s business, they actually don’t let you book a hotel room or buy a plane ticket, but they’ve managed to create a community around travel and a very unique broad resource of user generated content that they’re able to monetize through a variety of media models to the point that they’re making as much money off of a lead as the travel sites are. Because ultimately what they do is align with deep pocketed travel suppliers and intermediaries and do tight integrations with them.
Our business model like I said then is TripAdvisor for jobs. We’ve already forged some advertising relationships with some major national job advertisers such as TheLadders.com and Dice.com. TheLadders is a specialized job site for $100k+ jobs and Dice is tech jobs. What is great about the Glassdoor model is that we know a lot about our users. I know where they live, how much money they make, what companies they work at, what their roles are, etc etc, and we can use that information to target ads to various segments and advertisers will pay a premium for that.
So if you look at TheLadders who’re looking at getting their brand in front of people who are interested in higher paying jobs and because of the information we have at Glassdoor and the type of information we have on Glassdoor, we have a pretty good sense for the salary expectations of a user on our website which allows us to go to TheLadders and tell them that we can target that ad at the right income demographic on a user by user basis.
And so as a result, they are paying a higher cost per click or a higher CPM?
Yeah. Well one way to think about it is that their cost per click or whatever their metric is will be similar to other sites but we can get them to that metric by serving fewer impressions which means that our effective CPM is higher than some other site that cannot target in a similar way. And that is very important in this day and age is a key ability to make an advertising model work these days.
What are the other sources for revenue beyond advertising or is that the primary model now and into the future?
For starters, the service is free for everyone. There are no plans to charge for it either. We have a belief that where the internet is headed is that any information can be free will be free. And as you look at other startups out there that are trying to build a business model around charging for information that is going to become free by someone else at some point, they are wasting their time. Just ask the newspapers.
So we’re building this with the idea that this will be a free service which means that advertising and potentially other things in the future like data licensing, who knows. But right now, the primary source is advertising.
So we’d noticed an interesting post by a blogger who commented that people who come to Glassdoor are coming there for a defined purpose vs. aimlessly wandering/browsing around and so less likely to pay attention to ads that they’ll be seeing. What are your thoughts on this premise, and if it’s true to some extent, what kind of advertising strategies are you using to combat that to ensure your users are engaged with your ads?
I cannot tell you exact numbers, but I can tell you that our click through rates on our ads are very high relatively speaking. And I have ea lot of experience purchasing ads because in my prior life I was Director of Marketing at Expedia and so I’ve been on the buy side and so understand that. But obviously, I cannot share that exact info with you.
The reason the click through rates are high is that they’re highly targeted ads. Let’s think about TheLadders ad for a second. A lot of people haven’t heard about TheLadders despite all the advertising they’ve done so when they come to the site to understand what a software engineer at Yahoo makes and see that hey make $100k, and they see a big branded advertisement that says $100k jobs, they’re pretty interested.
Another example I can give is a pretty nifty Indeed integration we’ve done. So if you look at Deloitte and search salaries, below on the right under TheLadders ad, you’ll see ads for jobs at Deloitte. I see 4 ads for San Francisco and you probably see ads for jobs at Deloitte in New York. And so again, we’ve partnered with Indeed who have a lot of job listings and we’re able to give them very smart information when you’re looking at this page. We know what you’re looking at; you’re looking at Deloitte, where you are, etc. And so again, that ad is below the fold and to the right but it gets very high click through rates.
So all 4 of those listings are cost per click ads?
It all depends. They try to bring back the most results so sometimes it’s on a sponsored CPC basis and sometimes they’re sent off to Indeed, and if they generate a lead, we get a kickback over some period of time. Those are pretty standard models that exist in travel between TripAdvisor and Expedia.
So we’re just getting going. These were quick integrations to see if people like this stuff. And in fact, when we’ve done focus groups with users, they’ve circled those jobs as a benefit. It’s an ad and they’ve identified it as a benefit on the page. So you can imagine that in the future, we can start to mash up all the information we have about jobs with open listings and that is a magic combination. We’re not a job site but once we mash up our info with the info that jobsites have, all of a sudden, you have this magical answer.
So for example, I was a program manager at Expedia, and I would have loved if someone could find for me other program manager jobs that are open right now that paid at least $95k which is what I was interested in at the time and that the program managers really liked working there. And it had to be in tech and in Seattle. Cruz I’m not interested in firing of keywords to find jobs, but if the right one came along, I might consider it as a passive job seeker. And so hopefully, we’ll take the information we have on Glassdoor to create ourselves or with partners experiences like that.
And so you’re able to offer this richer content on top of job listings. But from a competitive perspective, do you think of Monster and HotJobs of the world as competitors?
No I think of them as partners. The same way TripAdvisor doesn’t look at Expedia as a competitor or Orbitz as a competitor but instead as their biggest and most important partners. And so it’s kind of like Monster or TheLadders who have these big salesforces spread around the world to work closely with the employer. And sometimes in fact, they have a bit of conflict because of that. It’s hard for a LinkedIn or a CareerBuilder to let negative reviews make it onto their website when that same reviewer is paying them for job listings. The employer says I’m not paying you to say negative things about my company. I’m paying you to fill my jobs.
That was the same conflict Expedia had for a while. They held off on creating the hotel review portion of their product for very long because they had so much to lose given how close they were to hoteliers. We are setting ourselves up so we can create this very transparent picture of employers and all that goes along with it and it’s not easy. We review every piece of content and there are lots of processes and tools that go into this for end users and employers. At the same time, we can do it without the conflicts a large job posting site would have.
And then lastly, there are synergies as well. What doesn’t make sense to me is all these job boards out there with their own large salesforces which they have to do to compete with each other. I’m not too interested in building my own salesforce either. So I look at all these job boards as a way of partnering to get job listings and then mash them up and then get money and likewise, you don’t have to build a big team of people to get these reviews and you don’t have to deal with the conversations of dealing with employers if they’re not happy.
One of our reviewers, Amy Z, had talked about Glassdoor developing premium offerings targeted at corporations, e.g., selling them data, analytics, etc. Where do you see that in the evolution of Glassdoor? Do you not see that as an opportunity?
It is definitely an opportunity. We’ve already had employers reaching out asking for answers to specific questions around intelligence. However, it is not a priority right now. We’re actually well-funded and we took a nice amount in October/November of last year and that will allow us to end up on the other side of this recession even with some modest revenue assumptions. So we’re focused on building the best career resource for consumers and collecting that content. And so we’ve obviously started monetizing through advertising but again, it’s not the priority. Right now the focus is on the user community and the website. We like to say we’re building a sail and eventually the wind will come.
On the topic of users, how do you keep them engaged on an ongoing basis? Let’s say I’m someone interested in info on Glassdoor. I go write a review and get what I need. What is there that keeps me engaged or makes the site sticky to use a dot com days’ term?
So I guess the best answer is to explain how people use Glassdoor. Simply, however, the best way to keep Glassdoor is sticky is to provide more answers for users. The case that you’re citing where someone wants to know salary info for Yahoo, that is a simple transaction. They give us their salary report and they’ve got their answer.
However, think about the entire job cycle going from passively looking to aggressively looking to being out of work to looking for a promotion. People are constantly in this perpetual job cycle. There is evidence of that. Look at Monster or CareerBuilder. They get something like 30 million uniques and they’re seeing such a large % of the US population each month. So some of the ways people are using Glassdoor are as follows:
Let’s say you are happily employed at Microsoft and not even looking for a job. It would be nice to know how competitive your salary is to your peers or what your salary might be if you go from software engineer to lead software engineer what the people up the ladder make.
Or let’s say its performance review time, and people are getting bonuses. What did other people get? Or boy, they just changed the CEO at the company and I want to hear what others are saying about the new CEO because I have my own opinions. Or I’m actually looking for a job but before I apply to any, let me go read reviews of companies to pick those I’d like to apply to most. Or I actually submitted my resume and they’re going to interview me. So now I need to go read all those reviews so I have questions to ask the interviewer and need to read the interview questions so that I can be better prepared before going in. And so there are a lot of questions we can answer.
We’re even seeing HR departments and hiring managers use Glassdoor to compare salaries or jobs. We even did it. So we hired a senior product manager from Yahoo and he said “My salary expectation is $120,000” and we said “What?!” but then we pulled up our own data and looked at 10 or so reports and then realized it was entirely reasonable based on reviews by other Yahoo senior product managers.
What we’re finding and you’d be surprised is that based on your activity, we try to find relevant information on Glassdoor for you and send it to you on a monthly basis. And that brings back people regularly. Especially to see company reviews. We have actually seen users at companies that have asked for a feature where they get a review every time someone posts a review about a particular company.
That feature is on the roadmap. When we first started, we’ve always been mindful of being very good to user. And so when we talk about a feature to email the user every time a review is posted, it almost seems like a bad thing. But when you have enough users asking for it, you figure out a way to enable it without overwhelming everyone else.
You talked about keeping this free for end users forever. Do you foresee any premium services for consumers of the site or do you envision all capabilities will be free to everyone always?
So certainly, all the information we have out there now will be free. As for whether there will be paid or premium services, the best way to think about is like LinkedIn. For the most part, it’s free, but if you’re a super power networker, there are some pay services that are quite useful.
Could we go down that route? Possibly. I don’t know what the features are now so don’t want to rule it out but you could imagine a business model where there are some premium services vs. free services but for now, the core information around reviews, interviews and salaries is to remain free.
On the competitive front, I wanted to talk about some of the players our reviewers have grouped you with as well as some other companies that we have listed as your competitors on ChubbyBrain. The reviews that were done compared you to Telonu or JobVent. Then the other companies we have listed for you as competitors are Salary.com, PayScale or Vault. What’s the differentiator between Glassdoor and these other players?
To highlight our differentiator, let me highlight some market research. Let’s talk about the salary sites. So you’ve got PayScale and Salary.com and they’re pureplay salary sites. You’ve got JobVent and Telonu and they’re pureplay review sites and they don’t have salary information. Then you have Vault which has a little bit of all of that but you have to pay for it.
Nobody is providing all the information we do in terms of workplace information, company salaries and company reviews and all for free and that is the high-level. We can give you the total picture and that is all that free and that is really important.
Let me give you a more specific example. Clearly people who are interested in salary information want that info but did you know that 77% of people preparing for an interview wish they had salary info before going there. Likewise, people preparing for an interview would also like to know about the company. And so you can kind of see how all these things work together.
And so one of the key differentiators between Salary.com, PayScale and Glassdoor is that they only give you half or a third of the picture. You have to go to other services to find out what it’s like to work there and how to get into the company.
Likewise, another key differentiator for Salary.com and Payscale is that the information is aggregated to a job as opposed to a company. We give you specific information for a job at a company. So it’s very specific. Salary.com and PayScale try to answer the question, what does a software engineer earn in the Bay Area. Here’s the 50th percentile? While Glassdoor, we try to answer what do software engineers in the Bay Area make at Google or Yahoo or Apple or any company you are interested in.
If you look at our review information, you can see how salary is different. It’s all by company and it’s all for free. You said reviews are important. If you look at JobVent, you’ll see it is mostly a vent site. You’ll see some people up there who are almost like vigilantes trying to defend companies amongst a sea of people venting. We’ve talked to job seekers and employers and what we’ve heard is that while it may be juicy to read negative reviews, it’s not a helpful resource. Job seekers want to form their own opinions. They don’t trust a site that is predominantly negative. Likewise, they don’t trust a site that is predominantly positive. Nobody wants a site that is all vents or a site that is all praise pieces. That makes sense, right?
What we did after learning this is that a balanced view is what people are after so that they can get the pros and cons and make decisions themselves. So what we decided to do is structure our reviews as pros, cons and advice to senior management and we have guidelines that say you have to provide all three and we then review every piece of content. And if you didn’t abide by our guidelines, your review won’t be posted to our site.
And so Telonu and JobVent don’t have these guidelines which makes the reviews tend to slant in one direction. They also don’t have a quality control team on the backend that is trying to keep venters and praisers off the site and then frankly, we just have so much more content than all of them as well. We’re the leader of all the sites you mentioned in terms of company reviews and salaries. We have more posts than anyone, and we’re the youngest except maybe Telonu which came out after they looked at us. JobVent came out before us and Vault’s been out a long time. But we’ve surpassed all of them in terms of total content.
To the reviews, we’d imagine there is some self-selection to those who write a review. If you’re happy in your job, you’re less likely to write a review. Of your mix of negative to positive reviews, how does that break down?
More than half our reviews are positive. What you are saying is right and it is a problem for Telonu and JobVent who I’d suspect have mostly negative reviews. And this is where without some incentive system where it’s whoever wants to come write a review can just come write a review. But when there is no give to get model, what happens in that case is you get mostly negative or positive reviews and generally it’ll be negative. But with our give to get model, the people in the middle of the road are very interested in knowing what others are saying. So let’s say you are a regular person at Deloitte, you’re interested in knowing what the person who rated it a 1.0 is saying or what the person rating it a 5.0 is saying but you have to contribute to see that. So what you see is that we pull out a lot more people from the middle than the other sites out there resulting in a much more balanced view of the company.
So if you’ve seen our best places to work list, you see a good example of something that we can do. What’s unique about our list is that it is completely driven by employees. And you’ll see some companies on it that are on other best companies lists as well. And you’ll also find some companies on that list that are not on other lists as a lot of those lists are based on “can you bring your dog to work?” or “do you have a spa” but Continental Airlines clearly cannot let you bring your dog to work and don’t have a spa in a very competitive market where they have to offer a product at a rock bottom price but nevertheless, it’s a pretty good company to work for if you want to be in travel. We’re finding that you take a place like Continental Airlines and get a bunch of reviews about Continental and lo and behold they come out with a rating greater than 4 meaning you have nearly every employee there saying they’re very satisfied to work at Continental which is kind of neat.
So one thing we noticed were comments about blogs by HR professionals who were of two minds. They liked the transparency but also felt that it was too easy to get fixated on a salary number which doesn’t consider prior performance, yrs of experience, et c. And so employees don’t have this requisite context. What do you say to those who say that transparency without this additional context is harmful? And how do you provide that additional color?
Well, you actually can look at salaries by location and years of experience. Really, what it comes down to is pay varying because of performance reasons. And for the most part, our users understand how to use this information. They use it as what it is. They can look at the salary range for Microsoft and see “Huh, I’m at the bottom of the range, I wonder why that is?” And if they’re low on the experience totem pool, they know that. And if they got a 1 out of 4 on their last performance review, they know that too. It’s more difficult when someone has a lot of experience and got 4 out of 4 and then wonders how could I possibly be at the bottom of this range. I need to ask my boss about this. The problem was that a lot of the people who are commenting like what you read don’t think people are smart enough or know how to handle information when most people do. What we’ve found is that if you create a service like Glassdoor, they figure out ways to use it to enrich their lives.
What about employers who don’t like what they see in terms of reviews or who just don’t like this information being so public? Do you have a process or means by which you are coaching them and helping them understand Glassdoor or is it just this is the new reality which you have to get comfortable with?
Most employers are not alarmed at all about this. The vast majority are ok with this because as mentioned, many of our reviews are positive. In those cases where there are negative reviews up there, it falls into a couple of buckets.
Sometimes the employers know it already. In fact, we tend not to hear from them because they just think “oh well, it’s on the internet now.”
There are other cases where the employer doesn’t realize they are a problem employer and there are other avenues. First of all, we’re flattered that they’d contact us in the first place because that tells us we matter. When they do contact us, we basically can look at all the reviews and if they all seem useful, we can explain to them why employees feel the need to share negative information. And in fact, most employers are interested in improving their perception so it becomes a bit of a wake up call that its important employees be happy at their companies.
So for example, when we launched our 50 best places to work, we had a couple of companies call us who didn’t make the list who felt like they were really good employers. Big tech companies for example that we all interact with. They said, how do we make this list next year, and we basically said this list is based on what employees say so if you really want to make the list, be good to your employees and if you really are, encourage them to tell their story and be transparent.
Likewise, we had employers call us when we did a blog post of the companies who were the lowest rated on Glassdoor. One of those companies called us and said we saw this on CNBC and saw this on your blog and wanted to let you know that we’re having meetings with executives this week and next week to improve our image. And so that was one of those great moments that made us say “wow, what is happening on Glassdoor is actually changing workplaces”
We aim to be the world’s most trusted source of workplace information and so as a byproduct of that, if workplaces improve as a result of the information on Glassdoor, that is great.
One main question about the new interview feature. Was this something always in the works or something you fast tracked given the current environment?
You are absolutely right. We’ve seen figures that there are 4 or 5 unemployed for every 1 opening out there. So it’s a tough market. Our initial ideation phase for Glassdoor which was a bit of a Post It note session had interviews so we’ve been thinking about interviews for 2 years but you’re right that we did change our product priorities when the economy went south to get this out sooner than later.
It’s an excellent tool for anyone interviewing. And at this point, there are so many people interviewing that you’re competing against many and in some cases, it may be the only interview you get and your only shot. And so you need to do anything you can to better prepare yourself. And for a lot of people who are unemployed, you have time to do it and this is a great resource. It doesn’t cost you any money and you can basically find out the hiring process at a company so you know what to expect and actual interview questions asked so you can formulate your own answers to those. You can sit down and just read.
And what’s the reception so far been?
People love it. I saw a Twitter of someone who said “Finally Glassdoor has launched an interviews feature. I paid $30 for interviews on Vault and it wasn’t worth it.”
I talk to a lot of college students and career service professionals and amongst that crowd, interview questions will be the most popular feature. So if you are a college student, your ability to negotiate is not much. Salary information is good to have to make sure you got a fair offer but it’s a lot harder for them. What they’re very challenged with is interview information.
What do you worry about as you grow quickly?
What keeps me awake. Clearly you have to be working on a good idea because bad ideas are not successful. But anyone can have a good idea and everyone can have the same good idea so what really matters is execution and speed. And so what keeps me up is the constant looking ahead. I just had meetings to talk about what is going to launch 3 months from now. And so can we continue to sprint at the speed we are sprinting as we get more and more users because I really want to. I’m always fretting about how do we keep going. And so with that, it’s kind of hard to enjoy the success some time. We had all this great stuff happen like we were on CNN this morning but it’s hard to enjoy when you’re thinking about 3 months from now.
What’s the constraint to keeping that spring going?
People is the limiting factor. My other learning about startups is you have to learn from the people before you. And so some of the ways we’ve done is that we have an awesome Board of Directors. We have Rich Barton, the founder of Expedia, and Steven Kaufer, the founder of TripAdvisor. Our actual employees all hail from places like Yahoo and Microsoft and Expedia and Motorola and we come from great companies and so we have a small team of high performing employees. But you know about mythical man months – you can’t just keep adding on people and having them scale linearly and so we’re at a nice mix of the right ratios, got really talented people and we’re moving along but at the same time, we’re always thinking about hiring more people and you have to make the right decisions there considering the tradeoffs it causes around more communication and more bureaucracy etc etc
To be a high performance team, you have to have high performance individuals who’ve done it before.
From an entrepreneurship perspective, for someone thinking about user generated content site, you guys obviously started with a good amount of content when you launched. For someone thinking about a UGC model, how important was that initial seed content in the growth you’ve seen?
It’s an important part and obviously the idea has to be the right idea so it’s not the only thing. I won’t say having content before we launched allowed us to be successful, but it was a key component. What you’re dancing around here is that most UGC sites fail because they fail to become relevant to some audience.
And if I had any other advice to people doing UGC sites, it would be surely your technology needs to be able to work on a national or global basis, but if you’re thinking about nationally or globally from the beginning, you never will get there as you’ll become relevant to no one. You have to focus on something or someone so people start talking about you.
So you guys started with Valley companies?
Yes, you have to start with something you know. So we all worked in these tech companies in Seattle and the Valley and so we said look, if we cannot get this working at the places we used to work at, it’s probably not going to work. So let’s leverage our networks and relationships into these places and let’s try to get it working before we launch. We know people so let’s go get their information and collect it. And put that information into a system. And then let other users look at it and then see if we could a few more thousand of these, we actually might be relevant to software engineers when we launch and that is actually what happened. When we launched, people were pleasantly surprised that when they typed in companies they were interested in, they could type it in and they’d find information that was accurate and good. And it was something they’d never seen it before.
You’ve raised $9.5M from some A-list VCs at a time that raising money was difficult and which was compounded by greater scrutiny on advertising models. Any advice to raising capital? How critical was Glassdoor’s management bench/expertise in getting funding?
Venture capitalists want to see an experienced management team who’ve done it before and where the industry or wind is at your back. Where you’re not creating something new in terms of the need. And an idea that is pretty good.
Since we’re always looking at finding the next big thing, what’s a startup that you think is onto something big?
Beyond simply Twitter, I guess it may not be a startup but I think Digg is pretty spectacular myself. The idea behind people who are like-minded organizing news is pretty neat. |
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