Lessons learned on the road to profit
In this topic, we would like to share our experience on the way to creating our first profitable startup - HR Broker . This is not at all an instruction to success, but rather a story about what mistakes we made and what conclusions we learned.
This is perhaps the most important. Subsequently, no matter how much and you will work hard, but if initially the idea is chosen wrong, nothing will help.
Back in 2003, we did not understand this and, as many people think, ideas arose over a bottle of beer. They usually began with "oh, but it would be fun if ...". One of these ideas was IT outsourcing. And this is in 2003! The result, of course, was that none of the potential customers even knew such a word and, therefore, each phone call began with the fact that we told what it was. After many hundreds of calls, the result was a single company that started using our services, and even then these were acquaintances.
Alas, but together with the end of the study, I had to close the IT-aussorsing business. Labor days began in the hr-manager specialty. But the ever-growing popularity of the Internet, and with it the success stories of various Internet companies that are constantly in sight, did not give rest.
')
I also wanted to do something automated, global and mega-profitable. The decision came quite simply (what we regretted more than once). The Yellow Pages directory was taken, and, starting with the letter A, we began to analyze the industries and think about what can be automated in them. We stopped quickly enough, already on the letter G. These were hotels. The idea was very simple and in the west already had billions of trades. It was necessary only to develop a fairly simple software, install it in hotels and allow travel agencies around the world to book Russian hotels online. Software development was outsourced, and sales were entrusted to Mulatto Alex (we never learned his real name), who agreed to work for 8,000 rubles a month. The effect was tremendous by the way. Seeing it, all the representatives of mini-hotels readily installed our software, because they thought that a representative of a large western company came to them.
However, the reality hit us pretty quickly. As it turned out, large hotels are not interested, as they are selling units to large travel agencies in blocks. Major travel agents are not interested in working with us, because they are doing so very well. Small travel agencies are not interested in the base of small hotels, they want to see large ones there. In addition, it was extremely difficult to keep the base up to date. Although we provided mini-hotels with essentially free automation of their business, in 90% of managers (very often aged ladies) stubbornly continued to keep everything in their notebooks.
From here it is worth making the first conclusion : you should not begin to make a startup based on your assumptions and ideas about the beautiful. Very often the market turns out to be irrational and changing stereotypes can be very difficult. You need to have huge budgets to try to rebuild the market.
It was based on this knowledge that we launched the HR Broker recruitment agencies aggregator a year ago. This is not just a startup that seemed interesting to us. We have created a service capable of solving specific problems and tasks in the hr market. And not just some abstract tasks, but exactly what we had to face every day at work. We did not begin to invent something, but simply tried to solve real problems.
The essence of the service is quite simple - by registering you get access to the services of dozens of recruitment agencies and independent recruiters, concluding just one contract on terms and conditions acceptable to you.
The main advantage is that part of large companies are obliged to hold a tender when choosing a recruitment agency. The other part is forced to enter into a mass of contracts, hiring different agencies to serve different needs (depending on the qualifications of the staff).
From here comes the second conclusion : it's much easier to start something with enough knowledge in a particular area, making specialized niche startups. And nothing replenishes it better than work in large international companies.
However, niche startups have their drawbacks. It is extremely difficult to get investments in a fund for them. After all, it is one thing to present a handsome b2c startup designed for satisfying simple living needs to a diversified investment advice. And it's quite another to try to explain the advantages of a b2b startup in a fairly narrow area.
In addition, most investors want to see at least a working prototype of the system. And in our case, this is one of the main cost items. After all, when it comes to the promotion of the system, it is possible to use existing connections, because the project is made for people with whom we have been working and communicating for a long time.
As a result, the most accessible source of investment for us was the so-called three F (friends, family, fools). And here you can draw another conclusion : taking money from friends and relatives for a project in which you really understand and 100% believe in its performance is much easier than convincing anyone of the promising idea that you came up with by browsing the yellow pages or reading techcrunch.
We have never managed to manage multi-million dollar budgets obtained from the fund, but with regard to working in a small budget, we can say with confidence that this significantly increases productivity. This forces not only to look for the most efficient contractors in the price / quality ratio, but also carefully weigh each solution, looking for and choosing the most effective sales channels, rather than buying everything.
For example, we have independently created an independent rating of recruitment agencies vhre.ru , which as a result gives traffic at times more than the banner on superjob.ru.
Affiliate program gives a big influx. It turned out the main thing is not to be greedy. We give half of our commission to our partners. And since this segment is characterized by fairly high transactions, the payment on the affiliate program for each attracted client is on average about 10,000 rubles.
In addition, a free system for finding customers in social networks has proved itself well.
Hence, probably the last conclusion : do not be afraid of the lack of budgets for advertising. If you are very tense, with small budgets you can always come up with something interesting. Search for potential partners. Offer barter. Share profits.
About segment selection
This is perhaps the most important. Subsequently, no matter how much and you will work hard, but if initially the idea is chosen wrong, nothing will help.
Back in 2003, we did not understand this and, as many people think, ideas arose over a bottle of beer. They usually began with "oh, but it would be fun if ...". One of these ideas was IT outsourcing. And this is in 2003! The result, of course, was that none of the potential customers even knew such a word and, therefore, each phone call began with the fact that we told what it was. After many hundreds of calls, the result was a single company that started using our services, and even then these were acquaintances.
Alas, but together with the end of the study, I had to close the IT-aussorsing business. Labor days began in the hr-manager specialty. But the ever-growing popularity of the Internet, and with it the success stories of various Internet companies that are constantly in sight, did not give rest.
')
I also wanted to do something automated, global and mega-profitable. The decision came quite simply (what we regretted more than once). The Yellow Pages directory was taken, and, starting with the letter A, we began to analyze the industries and think about what can be automated in them. We stopped quickly enough, already on the letter G. These were hotels. The idea was very simple and in the west already had billions of trades. It was necessary only to develop a fairly simple software, install it in hotels and allow travel agencies around the world to book Russian hotels online. Software development was outsourced, and sales were entrusted to Mulatto Alex (we never learned his real name), who agreed to work for 8,000 rubles a month. The effect was tremendous by the way. Seeing it, all the representatives of mini-hotels readily installed our software, because they thought that a representative of a large western company came to them.
However, the reality hit us pretty quickly. As it turned out, large hotels are not interested, as they are selling units to large travel agencies in blocks. Major travel agents are not interested in working with us, because they are doing so very well. Small travel agencies are not interested in the base of small hotels, they want to see large ones there. In addition, it was extremely difficult to keep the base up to date. Although we provided mini-hotels with essentially free automation of their business, in 90% of managers (very often aged ladies) stubbornly continued to keep everything in their notebooks.
From here it is worth making the first conclusion : you should not begin to make a startup based on your assumptions and ideas about the beautiful. Very often the market turns out to be irrational and changing stereotypes can be very difficult. You need to have huge budgets to try to rebuild the market.
It was based on this knowledge that we launched the HR Broker recruitment agencies aggregator a year ago. This is not just a startup that seemed interesting to us. We have created a service capable of solving specific problems and tasks in the hr market. And not just some abstract tasks, but exactly what we had to face every day at work. We did not begin to invent something, but simply tried to solve real problems.
The essence of the service is quite simple - by registering you get access to the services of dozens of recruitment agencies and independent recruiters, concluding just one contract on terms and conditions acceptable to you.
The main advantage is that part of large companies are obliged to hold a tender when choosing a recruitment agency. The other part is forced to enter into a mass of contracts, hiring different agencies to serve different needs (depending on the qualifications of the staff).
From here comes the second conclusion : it's much easier to start something with enough knowledge in a particular area, making specialized niche startups. And nothing replenishes it better than work in large international companies.
About investment
However, niche startups have their drawbacks. It is extremely difficult to get investments in a fund for them. After all, it is one thing to present a handsome b2c startup designed for satisfying simple living needs to a diversified investment advice. And it's quite another to try to explain the advantages of a b2b startup in a fairly narrow area.
In addition, most investors want to see at least a working prototype of the system. And in our case, this is one of the main cost items. After all, when it comes to the promotion of the system, it is possible to use existing connections, because the project is made for people with whom we have been working and communicating for a long time.
As a result, the most accessible source of investment for us was the so-called three F (friends, family, fools). And here you can draw another conclusion : taking money from friends and relatives for a project in which you really understand and 100% believe in its performance is much easier than convincing anyone of the promising idea that you came up with by browsing the yellow pages or reading techcrunch.
Pro costs and advertising
We have never managed to manage multi-million dollar budgets obtained from the fund, but with regard to working in a small budget, we can say with confidence that this significantly increases productivity. This forces not only to look for the most efficient contractors in the price / quality ratio, but also carefully weigh each solution, looking for and choosing the most effective sales channels, rather than buying everything.
For example, we have independently created an independent rating of recruitment agencies vhre.ru , which as a result gives traffic at times more than the banner on superjob.ru.
Affiliate program gives a big influx. It turned out the main thing is not to be greedy. We give half of our commission to our partners. And since this segment is characterized by fairly high transactions, the payment on the affiliate program for each attracted client is on average about 10,000 rubles.
In addition, a free system for finding customers in social networks has proved itself well.
Hence, probably the last conclusion : do not be afraid of the lack of budgets for advertising. If you are very tense, with small budgets you can always come up with something interesting. Search for potential partners. Offer barter. Share profits.
Source: https://habr.com/ru/post/127239/
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