Open Letter to all colleagues and alumni of JobsCentral

Today is my last day at work. I want to thank everybody for helping to build JobsCentral to where it is today. Over 14 years, we have grown from a 2 man startup into one of the largest regional job portals with over 150 staff in SG, MY and ID. We grew revenue and profit each year for 14 years running. Not many companies can achieve that.

Each of you have played a part in making this happen and I want to thank each of you for that effort and heart put in. It's always a team effort to make things happen.

I hope everyone continues to find alignment between what you want to do and achieve in life and what JC or your current employer is able to offer. Continue to stay true to our company values of honesty, teamwork, easy to do business and meritocracy. These are good values to have in any workplace. Keep striving to improve yourself as a person and professional. Have pride and set good standards for yourself. I hope to see everyone do spectacularly well in life. Don't settle for less.

Last of the ASEAN job portals exit, A New Era Commences

AMENDMENT : Read more about the deal. Jobstreet bought all minority stakes in PH, VN and ID before selling the entire 100% entities to SEEK.  Valuation ranges from 3+ to 8 times sales. Depends on market dominance and EBITDA margins i guess. Anyway good deal for everyone but it means my numbers below for key founders need to drop by about 7-8%. 

Also Seek has a clause to keep Suresh as employee. Wonder how that discussion went. With about 20M USD, Suresh can easily go retire too. Wonder how he will feel running a company that he no longer has a stake in. Maybe he is viewing the overall Asia job and compete with Adrian who is running JobsDB from HK.... even then, at most they pay 1M a year......about same as what his portfolio can return.....


Disclaimer : I am currently still working as a Regional MD with CareerBuilder which acquired JobsCentral back in 2011.

In today’s world of social media, big data, ecommerce and mobile plays, job portals sometimes feel pretty old school as they have been around since 1997 in this region.  However, looking back at this industry’s history, I find it is a good case study of how a disruptive technology grows in a blue ocean and how widespread adoption of the a business model changes the growth and expansion dynamics of the business.

The news of the week is that the last of my competitors – JobStreet has been sold  for about US$520M to SEEK and at a valuation of about 21.6 times EBITDA for 2013 and 10 times sales.  This is a fair valuation as it is 15-20% better to what SEEK paid for JobsDB just 2 years ago. This is a function of market bullishness now rather than anything else. Business wise, the merger makes sense since the JobsDB and Jobstreet business do not overlap much except in Singapore. Someone did ask me why pay 10 times sales for a relatively matured business. I would say that it is not so much 10 times sales but rather paying 21.6 times EBITDA. Jobstreet has a very enviable 40+% EBITDA margin and shown over the last 5-6 years that they can maintain that kind of profitability level. The worse they did was about 30% back in the GFC.

I have much respect for Chairman/CEO and main shareholder Mr Mark Chang who has a 9.9% stake in the company and who now gets to pocket about S$66M for a good job done over 15 years.  I respect him for his ability to manage costs well, share his capital gains with fellow management and to patiently plug at building the business so that it reaches it's current scale. His fellow management team will get a good exit that will allow them to retire if they want. Albert- CTO owns about the same as Mark, Suresh – COO about 3.9% and Greg – CFO about 2.7%. They are all on average 48 years old and up.  His institutional investors too must be very happy with this exit as one year ago their listed valuation on Bursa was only half what SEEK is paying now.

If I have to speculate why they decided to sell when it seems they still have a good 10 to 15 years to work if they wanted, I would say it is a function of things.

First, SEEK has been a major shareholder owning about 20+% of Jobstreet. This would have been fine until SEEK acquired majority of JobsDB. One can imagine how awkward their board of director meetings must have been.

Second, winds of change are coming to this industry. Job Portals in the USA are being challenged by social media players like LinkedIn and HR is exploring owning their own career sites and taking more charge of their own recruitment and branding. As such,  job portals are increasingly challenged to develop more products and services that go beyond the core portal platform to better address and take advantage of these new trends.

Third, globally job portals are consolidating with now about 6 players worldwide who are worth over 1B USD. Jobstreet as a middle sized player in the region will find it increasingly challenging to keep up technologically with the global players.

So what next? Job Portals are a formidable business. In the region, they are worth over S$200M in annual sales and make EBITDA of about 25-35%. This makes job portals probably the most profitable of internet companies in the past 5 years. And they are really an ASEAN industry with multimillion dollar market sizes in SG, MY, VN, TH, PH and ID. 

They have tons of valuable data on employment and candidates, have large reach into HR community and have the technological and marketing resources to bring them all together. It will be interesting to see how these global players morph themselves in the years ahead.  But one thing i know for sure, don't write them off! 

Online Classifieds Heating up back now. Now all acquired!

Enough said. This is my industry so my comments back in 2007 almost all came through. I just feel short of mentioning that many acquisitions and investments will happen for the winners.

To update :

Real estate - Great guys at Propertyguru are SG #1. in MY it is iprop. Valuations in excess of 100M even though no total exits yet.

Jobs space - Only jobstreet left still independent. JobsCentral and JobsDB all acquired in 2010/2011. Jobs classifieds revenue probably 40-50M this year in SG alone.

Cars - Sgcarmart acquired by SPH in 2013 Buy/Sell - Mocca died due to execution issues, Ebay going strong. New ecommerce wave has commenced!

======================================================================= (Article first posted Aug 2007)

There has been a lot written on new internet businesses based on concepts like social networking, aggregation, mash ups etc. Singapore too has seen its fair share of such businesses but I think I am right to say that they are still very nascent and I do not know of any local ones with meaningful revenues. Except maybe xiaxue which is an excellent spunky site!

However, I do see a large battle coming up in the online classifieds space. See the number of online classifieds mass media ads running – ST701, Mocca, JobsDB, Jobstreet, JobsCentral, Monster etc. I predict much more to come. I have always felt this space warrants attention but so far few players have come in to do it. Online classifieds can be very profitable even in a small city like Singapore. I estimate the whole cars, jobs, real estate, buy/sell market is worth at least S$40M this year in online classifieds alone and it is poised to grow dramatically once someones figures out how to handle more than 1 vertical at a time.

Who are the players?

Real Estate – No clear player yet. So this space is wide open for someone to come in and make good$$. Jobs – 5 main players. Combined at about 15M revenue by my estimate. (monster, jobscentral, jobsdb, jobstreet, 701)

Cars – sgcarmart, onemotoring Buy/sell – Mocca, Yahoo!, EBay Personals – Fridae, Trevvy (all Gay sites though)… where is the local large personals for straight population? I think in the next 3 years, you will see lots more ads, lots more competition and the winner will start to emerge.

Ultimately, I feel newspaper classifieds should shrink as more people see the benefits of online classifieds with its unlimited space, search engines and transactional capability. So to all the readers who are keen on internet businesses, i think online classifieds will grow at about 30% per year min. With margins of 20+%, to me it is a very attractive business.

Those good old memories... read this if you want to understand the old 2000 dot com thinking.

This is cute. So i am looking back at an article i wrote. And in that article i was looking back another 5 years. The major difference between now and then is that today, the startups are having to make a lot more sense before we can raise money. In addition, the business models are a lot more developed and targeted and definitely there is a lot more talent available in the market compared to 2000. Interestingly, the idea of doing side software or service projects to make ends meet still applies esp for more bootstrapped outfits.

And even better, some names still exist! Catcha is now back in the game as the originator of iProperty, dealmates, icarasia... Kudos to Patrick and team from Malaysia. Job portals still strong as ever and i believe we are still the most profitable of internet plays. Hardwarezone and Shareinvestor both sold to SPH already. I will analyze those sales in another posting. ================================================================================================ (Article first published in sgentrepreneurs back in 2006)

Sharing my own experience on the topic written before as it got me thinking a fair bit more. JobsFactory was started as a job portal back in 1999. During that time, there were lots of start ups in Singapore which were in dot com. It was our own dot com boom. Companies like Interauct, Commontown, Wizoffice, eJazz, Nececity, Myscissors, asiastockwatch, catcha, zingasia, earth9, surfgold etc etc all raised lots of money and were advertising like crazy in mass media just to get “eyeballs”. The idea was that we got lots of traffic first and IPO. We can figure out the revenue side later. It was really a fun period as there was a strong buzz and young fellas under 30 were sitting in board rooms making contra deals that inflated each others revenues while adding no actual cash flow. Its damn funny now looking back.

We attended quite a few parties and opening ceremonies and they spent so much money on the marketing and image and yet spent so little resource thinking about sales and business model. A typical consequence of cheap money. My list above is for pure dot coms, i am not including players who closed like MPHonline, asiaone.com etc. These have parentage and roots in profitable businesses. Fast forward to 2001 in the aftermath of the dot com crash. Funding all dried up and very quickly those without a revenue stream crashed and closed down. The survivors tended to be those who :

1) Moved into corporate market by tweaking their C2C or B2C software into a purely software vendor for large firms in specialized fields. Example :

a) Surfgold – from online currency type consumer model to loyalty and CRM software vendor for large MNCs. Doing very well now if I may add.
b) Earth9 – from some community C2C site to a CRM software provider for Starhub and others. Doing quite okay too. This company cute, their CEO used to be called DNA.
c) Commontown – Still around. They were some C2C community too and now are software providers for web sites which revolve around community. But i think this one not doing that well.
 d) Of course, you got the suppliers of software like Adroit Innovations, managed to list but also died as nobody wanted to build expensive web sites after 2000. Can’t think of others. That is how few survivors there were.

The other category that survived and doing quite well are those that were in B2C or C2C and went deep into media area within their area of expertise. This group all making $2M – $10M range.
1) Hardwarezone – From just a site, to magazines and events and regional.

2) Catcha – From a yahoo wannabe, gave up online, moved to Malaysia too and now a decent sized publisher of magazines. Juice, Stuff, etc.
3) Shareinvestor – from community of investors to community + investor relations software provider + magazine publisher (new one).
 4) Jobsdb, Jobstreet, JobsFactory – Job portal is a proven business model. So still job portal but branched into running events, magazines etc. So if I do some projection.

Fast forward to 2008, I believe the 2 models will still be there. One as specialist software vendors, the other as media companies who are rooted in online mediums but who also cross synergize with events and print and maybe even TV production (I know catcha is doing this). In a sense group 2 are doing web 2.0, cuz they will be forced to be ever more interactive in their chosen channels.

For my side, job portals which increasing allow users to feedback and interact among themselves about companies and jobs? Or to allow them to search for referrals (ala social networking sites) ? These are all possibilities. One thing for sure, all the surviving companies listed above are profitable already. Sharing my experience. Make your own conclusions