At the preseed, pre-VC database phase, future of work themes seem to be on a continuing big trend. I’m seeing all manner of variety in recruiting, hiring, training, relevant interviewing at scale for everyone involved. How do they stand out when they all seem to have the same secret sauce? Certainly it does depend upon who they are chasing; which segments, what the spend is in the market, and use cases.
The entrepreneurs who are paying attention to the market problems in hiring and HR are trying to fill the gap in a way that makes sense to them, either through automation/technology, through recruiting, or education/mentoring.
The broader theme these entrepreneurs are chasing is in response to structural shifts in the workforce, and perhaps there is a cyclical element. Some of it certainly is pandemic-related, but other factors are in play. Many people have retired, recent uncertainty around H1B visas have to some extent stressed the candidate pipeline for work across the spectrum, and the workforce infrastructure at all levels (physical and tech) are short on support. Physicians, nurses, AI talent, biotech, restaurant workers, plumbers, you name it… Remote-work and services have come to the rescue in the interim, in some cases, but not all.
Inflation seems to be turning into a medium-term trend, which could influence a shift of incentives in the workforce. If we have a few more emergencies to put pressure on logistics, then prices could remain held artificially high for longer. Its effects can certainly feel long term to the everyday participants in an economy who suddenly have to deal with diminished buying power.
Long-term, people have been having fewer children and we’ve been relying on tech/immigration to fill in the gaps. Remote work has become normal. Some companies are trying to push for their employees to meet in person, but strictly in-person companies will not be cost competitive against those who continue to hire remote workers. Nor can they compete/provide the intangible benefits of working from home. Amidst all this, entrepreneurs are chasing an HR Tech wave with all manner of solutions. The tech can, it is believed, replace some of the work that was being done before.
For entrepreneurs to differentiate in a market where everyone is seemingly solving the same problem, without much thought/analysis, it can feel like execution/results is the bare standard objective metric that an investor should use. There are market forces at work that shape the opportunities, but predicting market direction can be difficult. Less objective, more gut-feeling-based, observations about the management team don’t necessarily solve the problem either. With deeper industry knowledge, it is easier for an investor to parse through the opportunities. Even with industry expertise, markets shift and it can still be difficult for an investor to stand in the shoes of the customer to determine what their actual needs are and how one solution is better than another, if the entrepreneur doesn’t know to begin with.