Last week, San Diego-based Dayak (www.dayak.com) announced a $1.15M venture capital round from First Round Capital and the Tech Coast Angels. We caught up with founder Allan Sabol to learn more about the company, its experience with the Tech Coast Angels' seed funding program, and what it is hoping to do to for the recruiting market.
Thanks for the interview. What is your service all about?
Allan Sabol: Dayak is an online recruiting marketplace, that matches employers and those who need to hire candidates, with professional recruiters, who can screen candidates for them. It's a hybrid between an online job board, and a recruiting firm. It takes the simplicity of an online job board, and adds the full service you get from recruiting firms. In the process, it saves employers a lot of money, and fosters competition among recruiters.
Where'd the idea come from?
Allan Sabol: Previous to this, I was director of Sales for a recruiting firm, and also happened to get involved in the job board side of the business as well. I spoke with a lot of employers, and what I found was a consistent trend--most employers were frustrated with the existing recruiting resources. With job boards, most employers said it was just not effective, because they'd spend $300-$500 for a posting, and they'd get saturated by hundreds and hundreds of unscreened resumes full of unqualified people. They would post a job, and then it would take days or weeks to dig out from the mess--and they still didn't find what they were looking for. A lot of companies turn to the recruiting firm side of the house when they get desperate, because it works very, very well, and you can fill positions effectively. The problem there is the 20 to 30 percent price tag. Most employers just can't absorb that on a repetitive basis. Talking with employers, I thought there must be a better way to recruit people. What happened is we decided to mix a job board--which employers like, because it's simple to use, you can post jobs easily, and don't have to deal with cold calls from recruiters--and mixed that with professional recruiting firms--who do the screening and provide only top quality resumes. We took the best ideas of both recruiting methods, and discarded the weaknesses.
Talk a bit about your involvement with the Tech Coast Angels' seed program?
Allan Sabol: The TCA seed program was great for us. When we first started this, my original business partner and I had a neat business idea, and that was it. Over the course of a year, we went through the process of development and refining the business plan and execution strategy, and learned an unbelievable amount on how to execute the business and make it a success. It was a great experience for me, and more importantly a great experience for our company. All in all it was a great process.
Now that you have funding, what are you going to do with it?
Allan Sabol: We are looking to get some initial traction in the marketplace. We have our web site up and running, and we're open for both employers and recruiters to use. The money will be focused on marketing and getting the word out, and to create a large and robust marketplace. We'll also be using it to improve our technology and tools and opportunities for users of our site. It's designed to get us to the point where we can raise another round of funding in the next six to twelve months.
First Round Capital is fairly well known for their fairly innovative investments, how did you connect with them?
Allan Sabol: We were introduced to First Round by our chief technology officer, who had known them previously. Two of First Round Capital's principals were former Half.com, eBay Guys, and were familiar with the space and the opportunity. They look at what Dayak is doing as corresponding to what eBay was doing for consumer goods when it first launched. They were interested in the concept, thought the idea was sound, and knew a lot about the industry.
Is there any industry or kind of position you are limited to right now, or can anyone use this for their positions?
Allan Sabol: Anyone can use this. That's the unique thing about the marketplace. It doesn't matter what kind of position, what industry, or where you are, all employers can benefit from Dayak. You can find candidates faster and for a lot less money. For a recruiter, it doesn't matter what kind of recruiter you are -- full time, or part time--it gives you more opportunities to earn money in more different ways. Anyone who is a professionally trained recruiter can use the site.
What's the business model behind the site--I would guess you have some sort of fee?.
Allan Sabol: We have a transaction fee like eBay and other marketplaces. No one has to pay to register or post jobs--the site is completely free to use. However, a transaction fee is charged to employers upon the successful hire of a candidate. They only pay when the employer finds the person they are looking for.
Why would a recruiter take a lower fee and give you a portion, if they're charging 20% themselves?
Allan Sabol: There are lots of reasons. There are lots of recruiters who don't like cold calling. Going out and cold calling for new business is a big drain on time. What our site does, is take out the need for cold calling. That eliminated fifty percent of the cost of a sale, and fifty percent of the cost of this industry. By using the site, we are paying recruiters better than if they were working for recruiting firms today. On Dayak, you can make as much on commissions as working for a major recruiting firm today, but you don't have to do cold calling to develop new business.
There's also more ways to make money. You can not only fill jobs, but you can also offer other recruiters splits, where you can split jobs and have other recruiters help you fill jobs, which is something recruiters like to take advantage of. Finally, there's a referral program and affiliate program, which allows all of our users to refer other users to the site, and make money by doing so. We want everyone to help us build the marketplace, and so we've incentivized people and pay people to help build the marketplace and referral program. If you refer another user to the site--whether that's a recruiter, affiliate, or employer--you'll keep a percentage of any traction that is a result of that registration.
What's been hardest part so far on getting the business up and running?
Allan Sabol: The hardest part has been the fundraising process, which was relatively slow and challenging. It was new for us, and because we hadn't raised money previously it took a while to crack the code. Once we picked that up, it moved pretty quickly. We got the funding executed, created and got the product up and running, and we feel pretty good about where we're heading it now.