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The Future of Hiring New Employees


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This post originally appeared on Forbes.com.

Technology and data are changing the ways companies do business but perhaps more interestingly is the way they are influencing how companies are hiring, and could be hiring, new employees. In many organizations the human resource department is considered the most important part of the organization. And rightfully so. A company is nothing more than the people within it so it should be no surprise when you hear about how rigorous some hiring processes are. For example, its been said that Google has had candidates come in to interview “as many as 16 times before ultimately releasing them back to the wild.”

So let’s take a look at three new and innovate concepts that may help drive the future of how companies are staffed.

The Social Graph. It’s not what you know but who you know. We’ve all heard this phrase before but we finally have social graphs that are accessible through technology. These are social graphs and social connections that will at some point be used to help us as individuals in our careers. So imagine how powerful it would be if companies could leverage one’s social network to get personal references at scale. A company called Jibe is doing this and their employers have said that Jibe candidates are 4x more likely to be hired than those from traditional job boards. And it makes complete sense. Personal references are invaluable and its why 92% of hiring managers in 2010 used social networks as a recruiting tool, according to CareerEnlightenment.com.

Statistical Data Models. If data exhaust was actually smoke we would all be suffocating by now. The abundance of raw data is staggering and making sense of it all can be a daunting task. It is the reason new cloud computing based companies are starting to emerge. But capturing and understanding data is very different than taking actionable steps from the findings. There is a new school of thought among firms that look to statistical models as the basis by which candidates are hired. For example, every company has an associated cost with hiring and training a new employee. The cost of hiring this new employee is recouped if that person stays for a certain period of time. If however that candidate leaves before that time, the firm realizes a loss in opportunity costs. So what if you could predict with a high level of probability that a candidate will stay beyond a certain period of time? What if you could essentially predict which candidates are retention risks? Well this is what one, stealth-mode Chicago firm is working on and their results could end up saving firms millions of dollars annually in their hiring process.

Niche Data Sets. Hiring a math teacher is very different than hiring a quantum mechanics physicist. As the world continues to slice itself up into niche verticals, it will also be important to have niche data sets especially for the purpose of hiring highly specialized candidates for very specific roles. This is probably the reason why LinkedIn (NASDAQ: $LNKD) has seen its biggest growth in revenue come from its hiring solutions line of business. This is also probably part of the reason why LinkedIn has subtly added new fields like “skills” into profile pages. These fields make it easier for recruiters and hiring managers to look for people with very specific skill sets. And just as the ladders.com tailored to folks looking to make over $100k, I believe there is also an opportunity to specialize on other niche verticals like B2B sales, pharmaceuticals, nuclear engineering, and many, many more.

New solutions will continue to emerge but I think we are beginning to see the future of how new firms will hire employees.

Connect with Dan Reich on Twitter – @danreich.

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“My name is also Daniel Reich, and strange as it seems, I found your blog doing a bing search on my own name.”

This is a damn small world. The Internet makes it that much smaller. Just read the title of this post as proof (or see entire comment here from another Daniel Reich).

For the rest of your life, everything you do and say will be public information and will be easily accessible. You can argue with me all you want but 10 years from now, if by some chance I recall that argument and feel like being in a “I told you so” mood, I’ll be sure to take your most embarrassing picture and make it its own website just to remind you how right I was.

Ok, I probably won’t do that (even though I or anyone else could).

The point is that in today’s world you must control and own your own web presence.

Go to Google, type in your name, see what comes up.

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Monetizing YouTube and the Viral Effect

We used to live in what I will call a Media Dictatorship. A Media Dictatorship is a world where content is created by a few dictators (media companies), and as a result, those few dictators are able to charge a premium to advertisers for access to the eyeballs and ears of the people watching that premium content. This process is called television, radio, print, magazines, and newspapers. Think about the Super Bowl and Super Bowl commercials for a second. One night a year, content providers or dictators (the cable network hosting the Super Bowl) know that they will have an entire country watching their show, and as a result, they are able to charge a fortune to advertisers for a 30 second commercial. According to the Associated Press, a 30 second spot for the 2008 Super Bowl was $2.7M dollars. On this night, everyone knows that millions of eyeballs and ears will be tuned in, and so, advertisers are willing to shell out some big bucks for the opportunity to reach all of those viewers (according to a Nielsen report, there were 97.5M viewers of the 2008 Super Bowl). In this world, the world of a Media Dictatorship, the dictators own the distribution of the content, and therefore they own your attention.

Today we live in a very different world. A world that I will call a Media Democracy. A Media Democracy is a world where content is created by anyone, and as a result, those people are able to charge whatever they would like. However in this world, in this Media Democracy, the people that own the distribution do not force their content on the people (see Google). These distribution owners let the people choose what they watch or listen to and as a result, attention isn’t owned but earned. In order to accrue lots of eyeballs and ears, the content must be compelling and the people must be willing to share. And unless there are lots of eyeballs, it is very difficult for the people to charge advertisers anything at all. Consider that YouTube video that you loved, but only has about 100 views. Although the content may be awesome, 100 views is of little significance to big brand advertisers. Now consider that YouTube video that your friend told you about. The video that you would of never heard of had that friend not said anything to you. Turns out, this video has 100M views. Guess who made money off of this video? No one. There was no $2.7M commercial for 30 seconds. The video itself was only 55 seconds, and yet for 55 seconds, this video had the attention of almost 100M viewers.  This was a mini Super Bowl event that happened organically, grew virally, and was controlled by no one. A true democracy.

Welcome to the new age of the internet. Open, distributed, democratized. More specifically, welcome to YouTube. At any given point in time a video could experience a Super Bowl-like event or what I rather refer to as a Black Swan event.

There has been a lot of talk recently on how to make money from YouTube videos or User Generated Content (UGC) videos, especially after seeing YouTube’s inability to make money off of the recent pop sensation Susan Boyle.

As Simon Cowell might say, this story is utterly disappointing and self-indulgent. But the fact that YouTube and ITV have been unable to monetize the Internet sensation that is Susan Boyle is a rather significant blunder, and highlights some of the archaic ways that business is still done between old and new media. – Mashable, Susan Boyle Video Profits: $0

In the Media Dictatorship, media companies know with good certainty how many viewers they have. In the Media Democracy world, no one knows with any certainty how many viewers there will be. In lies the monetization and advertising dilemma with UGC videos or anything viral online. How do you make money off of videos that MIGHT be huge successes? How could an advertiser possibly know what videos are going to be a hit and go “viral”?

Bottom line: They can’t.

So now what? We know there is a ton of potential in videos that have millions of views, but the question still remains:

In a broad sense: How can advertisers capitalize on media that goes viral?
Solution: Selling dynamic advertising access based on first order traffic derivatives.

In a specific sense: How can advertisers capitalize on viral YouTube videos?
Solution: Selling dynamic advertising in YouTube videos based on the growth rates of video views.

Imagine for a second that an advertiser has the ability to place an advertisement (overlay, video ad, pop up, etc) in a YouTube video at any given point in time during the life of that video. For all intents and purposes, an advertiser can throw an ad in a video, however they want, whenever they want.

  1. Would the advertiser place the ad at the beginning life cycle of the video? Do they try and intuitively gauge how successful the video might be? Would you put up $3M on a video that may or may not be seen by more than 100 people?
  2. Would the advertiser place the ad at the end of the video’s life cycle? After the video has been seen 100M times? Would you put up $3M on a video that may or may not have peaked in popularity?

The answer is no in both examples.

The real solution here is to place that $3M on videos that:

  1. Meet the advertisers target audience (the type of video: comedy, horror, sports, etc)
  2. KEY: Have the highest growth rates for a certain period of time.

By inserting advertisements into videos that are experiencing the highest growth rates, marketers could benefit from the “viral” effect of videos. The $3M would only be spent as the video increases in popularity. The video will no longer be judged based on “top rated” or “most viewed”, but instead, will be judged and purchased by marketers based on “most growth” (The interface might look something like the image below).

Ultimately, if marketers are to capitalize on the “viral” effect they must start to look at the viral aspects of media or videos, and buy them according to their growth or “viral” potential as the growth is happening.

growthratemockup

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The Entrepreneurial Snowball Effect

Starting a business is very hard. In a matter of 24 hours your emotions can range from thinking that your business will be the next Google, to thinking how moronic you were for even contemplating the idea in the first place.

In order to start a successful business, I believe you need two components above all else.

1. A Team
Collective knowledge is more powerful than any one individual. But I believe Eric Schmidt puts it best:

“How should you behave? Well, do things in a group. Don’t do things by yourself. Groups are stronger, groups are faster. None of us is as smart as all of us…..” – Eric Schmidt, CEO Google.

2. The Entrepreneurial Snowball Effect
Beyond having a team, you need a group of people that can feed off of each other. People that together, build continual momentum regardless of the challenges by feeding motivation to and from others in the group. If one person starts some momentum, others can build and build upon it until slowly, that once “idea” begins to grow into reality.

From my experiences, most people have great ideas but fail to see the execution through all the way. And the few that do see execution through quickly stop at the sight of any real obstacles (I’ve been guilty of both in the past).

If your lucky enough to find the right team with an entrepreneurial snowball effect, take your idea and just build something.

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Dear Ambassadors and Respected Representatives of UW-Madison and Education

In the back of my mind I’m always thinking about education and change. Below is an open letter written to some faculty members of my alma-mater about the importance in recognizing that change.

(Before reading this letter, please note that I will be making this letter publicly available on my blog. Also, kindly take note of the recipients.)
To: Chancellor Carolyn Martin – chancellor@news.wisc.edu
To: Provost Julie Underwood – junderwood@wisc.edu
To: Director of Admissions, Steve Amundson – samundson@uwmad.wisc.edu
To: Dean of Students, Lori Berquam – lberquam@odos.wisc.edu
To: Senior Policy and Planning Analyst, Hazel Wade – symonette@bascom.wisc.edu
To: Associate Dean of Students, Argyle Wade – awade@odos.wisc.edu

3/31/2009
Dear Ambassadors and Respected Representatives of UW-Madison and Education,

I am writing to you out of extreme concern for the future well being of my alma-mater and your home, UW-Madison. The admissions process, curriculum structure, and speed to iterate are overwhelmingly frustrating and alarming. The arguments and issues addressed throughout this letter only reflect my first hand experiences, but I firmly believe these issues are far-reaching and not specific to UW. Nevertheless, these issues exist and must be addressed, or at the very least, must be thoroughly considered. By way of introduction, my name is Dan Reich and I am a recent graduate (May 08’) from UW-Madison’s College of Engineering (Electrical). During my four year tenure at UW, I was able to accomplish some great things, including but not limited to:

Additionally, I have a younger brother Jeremy who is currently enrolled in UW’s school of business where he is double majoring in real estate and risk management. I also have a younger sister, who I would like to say is also a legacy, but was recently rejected by the UW admissions office. A sister who admittedly did not score as high as she could have on her SATs, but did have excellent remarks in school, as well as other critical skill sets and experiences (she also attended UW’s summer program). This is an individual who if assessed in relation to her peers, in my objective estimation, is a stronger candidate for success than most. Nevertheless, I believe the admissions process is critically flawed and this belief is not exclusively dependent upon my sister’s recent rejection.

While I believe the admissions process in general could be significantly improved, (which I’m more than happy and eager to discuss with any admissions officer at UW at any point in time), I will start my focus on the issue of networking in light of recent events.

As an individual who is currently working in a digital media and technology startup company specializing in social networks, emerging trends and technologies, I understand the importance of networks. Networks are literally changing the world. We see it happening everyday as companies like Google, Facebook, LinkedIn, Etsy, Twitter and others utilize the power of what Mark Zuckerberg calls “elegant organization.” When a single node is affected on a network, those directly tied to that node, piece of information or person also feel a change. The connections are what is most important. So, how does this have any relevance to the admissions process?

UW-Madison, as well as other schools throughout our society, should know this answer better than anyone else. Since 1848, UW has been building a super network of students and alumni. Every year UW graduates about 10,000 students who go on into the working world thus strengthening the badger universe. These are people who are ambassadors to the UW brand and are lifelong members of the network, and additionally each member has numerous other networks that are additive in value to the primary group: what we call Badgers.

Now you might imagine what I was thinking when I heard that my sister was not admitted into UW. A school that had endured not only my sweat, blood and tears, but also that of my brother. A school in which I had given money, time, but most importantly, a tremendous amount of value through conversation and action. So again, when I heard that my sister did not get into UW, you might think my reaction was “Why didn’t she get in?” but instead, my reactions were:

  • Why is the school degrading the network it has worked so hard to build?
  • How do you review applications? Why do you do it that way?
  • Doesn’t the school consider an applicant’s legacy within the school, and more importantly, their track record (I had a 2.5 GPA first semester and graduated with honors)?
  • Why didn’t I get a phone call from the school saying, “Dan, we just wanted to take the time and let you know that your sister did not get into the school?” or “Dan, if you and your sister are willing, we would be more than happy to go over why she wasn’t accepted?”
  • Why would I want to continue to support an entity that I believe has poor judgment?

In one phone call, you could have showed that you still care about your network in a very personal and meaningful way. Instead of strengthening your network, you weakened it.

How do you expect to compete in a rapidly changing world using obsolete methods and practices? Students are beginning to realize getting a “degree” is less valuable than getting practical, real world work experience. They can take courses online and learn what they need to learn with companies like Phoenix, Kaplan, BigThink, Academic Earth and even YouTube. Why spend $500/semester on books when I can get the same information free online? Why would students want to pay full tuition to an accredited university when at the end of the day they are taught linear algebra by a teacher’s assistant that speaks poor English, makes continual mistakes (which were witnessed by a head of department), and has inconsistent grading (this happened to me junior year. That semester I had a 4.0 GPA until given a C by a TA)? Why implement practices that have students cramming for exams instead of using methods enabling true adoption of the material (I wrote a piece about this on my blog entitled, The University of Nothing. This post received over 60 comments from various communities and sites, and the consensus was that current education systems are in trouble. I’m also willing and eager to discuss this point further with any faculty member. In fact, I had this conversation with one of my engineering professors when he asked my opinion on “why the enrollment in engineering was decreasing.” He was giving a presentation to his peers on this very topic).

In any case, this letter is not intended to bad-mouth or criticize current practices at UW. It is however intended to act as a wake-up call. I only and respectfully ask two things:

  • Please reconsider how you value your network and remember that we among the network are all ambassadors to UW-Madison. We are your most valuable asset.
  • Please reconsider how UW-Madison can take the lead and become the most efficient and attractive educational institution of tomorrow. The world is changing and so should you.

Again, I’m happy to speak to anyone and everyone about these issues. Please feel free to leave comments on my blog or send me an email at reich.ny [at] gmail [dot] com. I most welcome a phone call and conversation.

My Very Best Regards,

Dan Reich

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Dear Jeff Jarvis – Here’s Some GoogleJuice

I recently finished reading What Would Google Do by Jeff Jarvis.

This book is important for so many reasons, but the most important point of the book is that fundamentally, business in general is changing. Economics, supply and demand, manufacturing, education, fashion, government, finance, all of it is changing and unless you understand these changes and adopt a newer way of thinking, you will be in for a rude awakening when you realize everything you learned in Econ 101 no longer applies.

From Jeff’s Book:

Many industries built their value on scarcity. Airlines, Broadway theaters, and universities had only so many seats, which meant they could charge what they wanted for them. They were scarce and thus more  valuable. Newspapers owned the only printing press in town and you didn’t, so they could charge you a fortune to reach their audience. Shelf space in grocery stores was limited, so manufacturers paid for the privilege of selling their boxes there. Television networks had finite number of minutes in the day with only so many eyeballs watching, so advertisers competed to buy their commercial time. Scarcity was about control: Those who controlled a scarce resource could set the price for it.

Not anymore. Want to sell your product to a targeted market? You don’t need to fight for a spot on the shelf in 1,00 stores; you can now sell to anyone in the world online. Looking for a dress everyone else doesn’t have when everyone else shops in the same mall? Today you can find no end of choice only a click and a UPS delivery away. Don’t want to buy The New York Times on the newsstand or pay for access to WSJ.com for news on your industry? There are countless sources of the same information. Even if The Journal reports a scoop behind its pay wall, once that knowledge is out – quoted, linked, blogged, aggregated, remixed, and emailed all over – it’s no longer exclusive and rare. It’s no longer possible to maintain that scarcity of information.”

As the world becomes flat we all become equalized and democratized. Success requires newer business models, stronger brands, and deeper focus. Google is only the beginning.

Well done Jeff. Well done.

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Google and Social Networking

Until now, Google has been trying to identify efficient advertising solutions for social media.

And rightfully so.

Social media has become the premier medium for communication and media, and over the past few years, Google has arguably become the face of the internet.

So Google figuring out the social networking issue is a logical and expected event. The only question is, what would such a solution look like?

In a recent BusinessWeek article, Heather Green discusses such a solution:

“Say there’s a group of basketball fans who spend a lot of time checking out each other’s pages. Their profiles probably indicate that they enjoy the sport. In addition, some might sign up for a Kobe Bryant fan group or leave remarks on each others’ pages about recent games they played or watched. Using today’s standard advertising methods, a company such as Nike (NKE) would pay Google to place a display ad on a fan’s page or show a “sponsored link” when somebody searches for basketball-related news. With influence-tracking, Google could follow this group of fans’ shared interests more closely, see which other fan communities they interact with, and—most important—learn which members get the most attention when they update profiles or post pictures.”  

While the above excerpt may not be completely reflective of Google’s new, soon to be, patented technology for “ranking the most influential people on social networking sites”, the basic premise can be understood, with the premise being:

Peopleactionsinterests, ENGAGEMENT and INTERACTION are the most important aspects of social networking sites.

Can a company, whose core technology is based on search, truly harness the power of engagement and interaction? Possibly (and if anyone can do it, Google will).

Can a company, whose core technology is based on engagement, truly harness the power of engagement and interaction? Most definitely (and if anyone has been doing it, it has been Lotame).

NOTE: This article can also be found @ the Lotame Blog

Google, Microsoft head to MadTown

The amount of countless hours I’ve spent in UW-Madison’s Engineering Hall, should earn me the “GAL” or “Get a Life” award. Instead I will receive a degree in Electrical Engineering from UW-Madison. And perhaps the same reasons I decided to attend this University, are now being considered by Google, as they too plan on setting up shop in Madison, Wisconsin.

In a statement to The Badger Herald, Google representatives said, “We are opening an office in Madison because the city offers an excellent quality of life, a deep local talent pool and commitment to education at all levels, including the University of Wisconsin.”

Madison, WI

Photo © UW-Madison University Communications

And anyone that has ever stepped foot in Madison could agree with that statement. But being that Google is a worldwide leader in software and computer architecture, its main focus will be within the department of Electrical and Computer Engineering. Leading this Madison/Google operation will be “retired professor emeritus of Electrical and Computer Engineering James Smith and 1980s computer engineering graduate James Laudon.”

Add a new Biomedical research to the list as well, and Madison will continue to lead the way as one of the premier research facilities in the world.

Some other great programs within my department, that I have been lucky to be a part of.

  • WEMPEC – Wisconsin Electrical Machines and Power Electronics Consortium
  • WCAM – Wisconsin Center for Applied Microelectronic Devices

It is extremely rewarding to see that my department, its students, and faculty members, have yet another great achievement to add to the list. 

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