Most college graduates remember the struggle of finding a job, much less in a relevant field. Countless people have ended up victims of that eternal scourge, the barista problem, trapped in dead-end jobs and unable to properly land in the right job.
Eight years ago, this could easily have been blamed on the economy. However, conditions have turned around, but college students still struggle to find the right start to their career. A central problem, according to Handshake CEO Garrett Lord, is the geography.
"Too many students go to great schools, but they simply lack the ease of access to potential employers," said Lord.
Based in San Francisco, Handshake is a platform business that focuses on matching over 3 million students with companies looking to hire top talent from across the country and is fresh off a $20 million Series B from November 2016.
The challenge Lord is trying to solve is connecting students to careers and companies that aren't contiguous to their universities' locations.
While attending Michigan Tech, Lord was surrounded by opportunities from the automotive industry, but he was more interested in the world of Silicon Valley startups. He obtained a position with Palantir and found himself almost exclusively surrounded by students from Ivy and near-Ivy schools like Princeton and Stanford, most of whom had previously worked at companies like Google or Apple.
"Stanford puts you close to startups in Silicon Valley, Princeton gets you close to finance, schools like Michigan State and Michigan Tech get you close to the big automakers," said Lord. "We want to connect students with all opportunities and streamline the whole process for everyone."
Recruiters are increasingly aiming to diversify their company's staff and higher education is under extreme pressure to deliver greater returns on investment, while students are always looking for chances to begin and advance their career.
Finding An Opportunity
While at Palantir, Lord noticed that many companies lost sight of how difficult finding a job can be as a college student, especially when geography and economics are in the way.
When tasked with recruiting some new blood, he returned to Michigan Tech to pitch his friends. At that moment, he had the idea that spawned Handshake. Lord and his friends sneaked into career fairs at schools all over the Midwest to do some scouting.
The burgeoning Handshake team weren't looking for jobs, however; they were conducting market research, asking students and employers about the career search process, identifying what was simple and what was painful.
They largely received universal feedback. Employers were completely dependent on info sessions, career fairs, and the centers themselves, while students found the entire process difficult, confusing, and opaque.
From there, Lord and his team worked around the clock, on evenings, weekends, and even skipping class at times to build the prototype.
To kickstart the business, Lord borrowed some of his dad's retirement money and put 36,000 miles on a Ford Focus while driving to career fairs and centers all across the country. The Handshake team worked to improve and validate their concept, showing mockups to career center staff from all over the country, sleeping the car, and showering in college gymnasiums when necessary.
To attract universities to the platform, Handshake offered the first handful to sign up a massive discount, but it started normalizing pricing once the network experienced sufficient growth.
Since its inception in 2013, Handshake has grown a network of over 3 million undergraduate students, 165,000 recruiters, and more than 100,000 companies, which includes 95% of the Fortune 500.
The path to reaching their present success hinged on a single tactic that significantly differentiated Handshake from its competition and propelled them ahead: it pursued genuine partnerships with the universities and their career service centers. These partnerships have been crucial to Handshake's success in two ways.
Modernizing and Streamlining
First, they solve a huge functional problem that's been rampant in the collegiate recruitment world. Prior to Handshake, there hasn't been any new approach to software handling career services. Thus far, colleges are all carrying out roughly the same process, but have largely been using a hodgepodge of white-label technology leftover from the '90s.
This not only causes frustration when trying to upgrade or adapt the software, but this also creates a tremendous pain point for employers. Before Handshake, recruiters were forced to maintain spreadsheets with countless sets of credentials, one for each college or university's career center web portal.
Thanks to Handshake, recruiters have a single sign-on experience and career centers have an easier time managing their digital offerings. For employers, this makes tracking events like career fairs a far simpler endeavor and enables them to recruit at more schools.
As well, employers have an easier time engaging with students, which boosts the activity at their booths, solving another age-old problem for recruitment.
These improvements for employers have produced a marked increase for engagement, claims Lord. Particularly, HBCUs are seeing significant increases: the Atlanta University Center Consortium, comprised of Spelman College, Morehouse College, and Clark Atlanta University, hosted its largest career fair ever after adopting Handshake.
Additionally, the platform lowers the barriers to entry for smaller businesses, which further increases the diversity of career offerings for students.
The technical improvements for career centers is tremendous as well. Not only is the core software maintained by Handshake, but it uses a more modern approach. Prior to the development of the original software, these offices would use a system of binders, manila folders, fax machines, and other now-antiquated relics of the past.
When career centers started going digital, the software they originally adopted merely mimicked the existing system, rather than replacing it with something better. Lord and his team saw this as a chance to provide a streamlined and universal upgrade to what was a rather arcane methodology.
Building the Network Right
In targeting the career centers, Handshake found a supremely sticky point in the process. Universities will always be in the market as employers and students change from year to year. Instead of chasing a new pool of supply and demand every few years, Handshake opted to build its market as a three-sided one.
The universities can make Handshake accounts mandatory and integral to the students' experience, much as they are forced to set up a college email account. When students turn to their institutions for career services, Handshake is now there to facilitate the interactions.
Competitors like WayUp tend to leave out the universities and only target employers and students. However, this method tends to have severely high churn as students and employers come and go organically; their marketplace isn't very sticky.
Instead, Handshake's primary customer is consistent and holds significant influence over the other segments of the customer base. For acquiring students, it's a matter of policymaking; for acquiring employers, it's about providing access to a large pool of promising talent.
Throughout its entire existence thus far, Handshake has not sent one marketing email to companies nor has it ever needed to market to students.
Too often, career centers are under-resourced to serve the needs of their student bodies and keep up with the hundreds or thousands of interested companies. Handshake's value proposition to universities allows them to remain in the middle of the student-employer relationship.
Handshake offers universities analytics at scale on these relationships, which was previously impossible on the archaic SaaS systems, and this empowers them to demonstrate their ROI to students. This storytelling quantifies the student-employer interactions, which offers greater transparency and helps with landing well in the rankings.
An Upward Trajectory
At present, there are over 170 universities in Handshake's network and the company plans to increase that number to over 200 in the next year, capturing more than half of the collegiate market in the US.
That's how Lord plans to initially employ the recent raise. He views increasing the partnerships with universities as the key to making Handshake the leader in college recruitment and keeping its unparalleled pace of growth.
These days, employers are calling career centers, asking them to switch to Handshake, which speaks volumes of the high-quality network effects the recruitment startup is leveraging.
For now, the company will remain focused on serving students and looking to expand within that cohort. Typically, freshmen and sophomores have very low engagement with the platform, which Lord wants to resolve and, subsequently, grow the company's lifetime value.
Ultimately, Lord wants Handshake to be college students' first platform for their professional development, even seeking to replace LinkedIn with what he views as a more effective, helpful experience.