The Matchmaker

The numbers
"I was going to make it into a war room or something," Hyman is saying, gesturing dismissively around his all-but-vacant office, "but I haven't had time." One of his few wall adornments is a soiled place mat, attractively framed, bearing the scribbled words "$1 million in 1997" and six signatures.

That's the revenue goal the team of founders set for themselves back in June 1996. They didn't make it: 1997 revenues checked in at $560,000. The company projects revenues of $4 million for 1998, $12 million for 1999, and $35 million for 2000. Losses, meanwhile, were approximately $550,000 in 1996 and $600,000 in 1997, and the company projects a loss of $2.5 million in 1998. But Hyman hopes to catapult quickly into the black, earning profits of $3 million in 1999 and $12 million in 2000. His rationale for such optimism? Once Career Central's placement rate improves, he figures he can raise prices. He's also eyeballing expansion opportunities in Europe and Asia, and the possibility of using his sales force to sell ancillary items, such as subscriptions to career-related magazines.

Much of this year's loss was due to a twist in strategy. Abandoning its exclusive focus on M.B.A.'s, over the summer the company changed its name from MBA Central to Career Central and launched two new services: one for software developers, another for marketing professionals. Hyman doesn't rule out the possibility of entering other niches to further leverage, as he puts it, the company's existing technology base.

Success or failure, of course, will hinge directly on how many searches Career Central can sell and complete. Subtracting the $1,200 it costs to perform each search, and the fact that 13% of sales currently come from "subscriptions," whereby customers receive a 20% discount for buying searches 10 at a time, Career Central makes a gross profit of $1,717 on each search. Overhead expenses are currently running at $4.7 million annually ($700,000 for engineering, $1.3 million for marketing, $2.7 million for selling, general, and administrative expenses). To reach breakeven, then, Career Central calculates that it needs to conduct approximately 1,750 (successful) searches a year. Hyman hopes to perform 1,500 this year, and 4,500 next year.

For now, anyway, Hyman can draw on a war chest flush with cash to try to hit that mark. Following three earlier rounds of venture-capital financing that totaled $5.1 million, last August Career Central closed on another $9.3 million from IDG Ventures, Arthur Rock & Co., Allen & Co., SoftBank Technology Ventures, and Technology Crossover Ventures. "That should last us until the endgame or going out of business," says Hyman. "I can't imagine pissing through $10 million. If we can't figure it out with $10 million, we're not going to make it."

The challenge
Curiously, about 5% of Career Central's business has come from the very group it wants to render extinct: headhunters. Some high-priced recruiters, it seems, have quietly been using Career Central's $2,995 service as a cheap means of finding candidates--sort of like the San Francisco restaurant once discovered to be purchasing freeze-dried food, tarting it up a bit, and serving it to patrons at gourmet prices. Or so it seems to champions of Career Central's approach.

Hyman clearly finds the irony delicious. "They're middlemen on the verge of extinction," he declares of the old-fashioned, Rolodex-flipping headhunters. "Those guys are gone. History. Toast. Stick a fork in 'em."

But before Hyman and his band of technologists can fire up the hibachi, a few things have to go right.

"The biggest challenge to this company is that we have three different customer sets, whose needs often conflict and only one of whom pays us," Hyman says. And indeed, the company suffers from a classic chicken-and-egg syndrome: to attract clients, it needs a robust database of job seekers; but to attract job seekers, it needs a strong list of clients. In fact, Cindy Lundin, originally in charge of drumming up new job candidates, once bore the informal title of "chicken-coop director." The solution, initially, was to give away free searches to clients in exchange for the right to use their names on Career Central's client list. That practice has tapered off, but the challenge remains to expand both constituencies simultaneously. "If the balance gets out of whack," says Lundin, "it'll be a problem."

On the chicken side, Hyman says, he'd like to grow the database of job-seekers by a factor of five over the next 12 months. Besides its relationship with business schools (Stanford's career center distributed the registration software with a letter touting it as "a valuable service designed specifically for M.B.A.'s"), the company has formed a strategic alliance with on-line job board CareerMosaic. A partnership with several International Data Group publications, including Computer World, has resulted in an aggressive advertising campaign. And to encourage existing members to update their profiles via Career Central's Web site and thus remain lifelong members ("If they don't update, we lose them," notes Hyman), the company distributes a monthly electronic newsletter full of career-management tips.

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