Between January 1, 2010 and March 2012 there were 157 venture capital transactions, totaling $966 million, funding companies focused on solving HR and recruiting challenges. That’s great news for the HR industry because it means access to new tools and technology designed to help source, recruit and retain new talent.
But here’s the bad news: Three out of four of these new businesses will never return investor capital — they’ll fail. But what if the problem isn’t with their technology? What if the problem is our fear of failure?
I’m going to ask you to make a big assumption: That the reason these businesses are failing is not because of the viability of the idea they’re centered around. Even in the entrepreneurial-friendly climate we’re in, funding an idea typically means verifying that there’s a market for the idea and, at least, a founder or founding team capable of bringing it to life.
The opinions (and data) suggest the 75% failure rate of these businesses is a byproduct of things such as mismanaging capital; infighting; impatience; a lack of a competitive advantage; and simply not properly executing on the idea. It would be hard to find anyone who would argue with any of these things — including the venture capitalists who wrote the checks hoping for a successful exit.
However, there are plenty of ideas that never materialize because they never had a chance. And that’s partly our fault.
The problem is that not all technology is autonomous; even technology designed to be autonomous. Perhaps the most topical and best example of this is the Google self-driving car. The Google self-driving car is designed to be autonomous technology — in other words, self-governing. You get in the car, punch in the address and relax — taking control only when necessary. It’s been wildly successful with their fleet of cars, having eclipsed 300,000 miles of accident free, autonomous driving.
So, what’s holding it back? Well, to name a few things, federal, state, and municipal policies; cooperation from insurance companies; and most importantly, public trust. It’s not the technology.
Now take these same principles and apply them to the HR and recruitment space. Maybe the reason we are still waiting for a mobile apply solution we’re all comfortable with is because we’re not allowing ourselves to get comfortable with any of the mobile apply solutions. And maybe that’s NOT because of the technology. Maybe it’s because we haven’t identified someone to implement and manage it. Maybe it’s something legal. Or maybe it is because we don’t hear about others using it.
Whatever the reason, this isn’t about mobile apply or putting a process in place to adopt mobile apply technology. It’s about creating a process to adopt technology and working together to do it.
I recommend you start by creating your own internal venture capital fund; a fund you can use to try out new things. This fund should be a combination of money to pay for the technology and hours to support it. Give recruiters, members of your HRIS team, and even hiring managers a vote and ask them to participate. Also, try to align the ideas you “fund” with real challenges you’re trying to solve, like creating process efficiencies; new channels for finding candidates; ways to improve the quality of those candidates; or technology to improve your capabilities across mediums.
Additionally, keep in mind most of these startups are very eager to work with you and are willing to discount and often give away portions of their offering if you’re willing to simply share structured feedback about your experience. I encourage you to take them up on it and speak up about your experience.
While the venture capital market may suffer a bit of correction in the coming months and years, innovation in the HR and recruitment space isn’t going to slow down. The battle for finding talent and increasing engagement and retention are challenges every business is interested in solving. Great ideas matched with responsible and persistent execution will almost always find a way, but only when given a chance to be “great.” Let’s give them a chance.