Hard Numbers on Stackoverflow Careers

This is a follow-up to Joel Inc., Stackoverflow Careers and Jumping Sharks, posted late last week.

Joel posted Stack Stats this week in which he demonstrates the correlation between Stackoverflow reputation and Careers take-up.

Now the exact meaning of this graph isn’t listed. Is that 30% of users with 50,000 reputation and above have submitted CVs? Let’s assume that it is.

Reputation Percentage Users in Range # of CVs
1,000 8% 3,257 261
2,000 10% 1,196 120
3,000 11% 640 70
4,000 12% 373 45
5,000 13% 244 32
6,000 13.5% 153 21
7,000 14% 112 16
8,000 15% 95 14
9,000 16% 48 8
10,000 17% 220 37
15,000 19.5% 79 15
20,000 22% 58 12
30,000 26% 28 7
50,000 30% 15 5
Total 10.2% 6,518 663

So we have 145 employers (as of 15 Dec 2009) and 663 job seekers of the 6,518 in the sample representing a percentage take-up of 10.2%.

I would guess that the vast majority of those would’ve paid $29 for 3 years so these ~700 uses account for $21,000 revenue over 3 years.

Is this kind of barrier—charging job seekers—really worth that kind of revenue stream?

Of course the hope is both that:

  1. The number of candidates will substantially grow; and
  2. Many (or most) of them will convert to paying $99/year in 3 years.

Three years from now I would consider it optimistic that the users matching the profile might number 40,000 instead of 10 to 25,000. That won’t accurately reflect the natural attrition rate either (there are some users who have already become basically inactive).

Considering that not all users will be looking for work at the same time (assuming Goldman Sachs’ next crackpot house of cards hasn’t come tumbling down yet), it’s hard to imagine the take-up rate being higher than 15-20% and that’s being optimistic.

So if everything goes well 10,000 people are paying $99/year. $1 million a year—basically money for nothing—is nothing to sneeze at. I can’t see it happening however.

Even if it does, it’s questionable whether this is the critical mass required to attract employers. I guess time will tell.

10 comments:

Joel Spolsky said...

First: you're missing all the users with less than 1000 reputation that have paid for CVs. There are actually about 1500 paid CVs in the system.

Is there critical mass? I would say, in major tech/development areas, or for national-footprint employers who relocated candidates, absolutely yes. A company like Google, Microsoft, Pixar will certainly find plenty of good candidates on Stack Overflow.

In smaller cities without big tech industries, and for people who don't want to relocate, mostly the answer is "not yet" although I expect to get there. The little startup in Tulsa that needs an embedded systems programmer but doesn't want to relocate someone... won't find them. The guy in Oklahoma City who won't move elsewhere isn't finding good tech jobs because there aren't any in Oklahoma City, not because we don't have critical mass.

As for the revenue, earning money was never the point of charging job seekers. We charge job seekers a minimal amount because it eliminates a huge number of unserious, unqualified, and other candidates who really don't stand a chance. If it's free, job seekers have an incentive to post their resume everywhere "just in case" which employers hate, because they have to filter through lots and lot of junk. We're actively looking for better ways to do this kind of pre-filtering. I'd like to lower the cost as much as possible without opening the floodgates, and I imagine we'll find creative ways to let high-rep stackoverflow users get a CV without paying very much. Nothing is set in stone.

William Shields said...

Joel,

Thanks for those numbers. I do appreciate that this has been (and is) a relatively open process with numbers of employers and global searches (for instance) being public knowledge.

As for the sub-1k rep users, assuming my estimates are in the right ballpark (based on the published chart) then over half the users are under $1k rep.

As I see it, there are two reasons for someone to sign up:

1. For the "deep integration" with Stackoverflow and they've produced sufficient content to benefit from that; or
2. Because there is sufficient critical mass such that it's still worth your while signing up (call this an associative benefit).

Of course theres also also other factors--especially initially--such as the novelty, hope and the low cost for initial sign up as an enticement.

I'm more focused on those who "actively participate" as this was one of the major driver for SO Careers. It's my opinion that this group will either make it or break it.

I understand your desire to filter out "unserious" and "unqualified" people but it raises the question: how many serious and qualified people are (and will) stay away because of the cost? It's not just the money either. Some will feel quite strongly about the principle.

The question of whether this is even legal in some jurisdictions remains up in the air too.

So my armchair quarterbacking has me seriously questioning the viability of the SO Careers business model.

Anyway, thanks for taking the time to comment.

Anonymous said...

"earning money was never the point of charging job seekers."

ha! Why don't you give all the money to charity then Joel?

jseliger said...

I found this post via Hacker News and was going to post "$29 isn't there to make money, but to improve quality," until I found that Joel had already done so:

"We charge job seekers a minimal amount because it eliminates a huge number of unserious, unqualified, and other candidates who really don't stand a chance. If it's free, job seekers have an incentive to post their resume everywhere "just in case" which employers hate, because they have to filter through lots and lot of junk."

The same idea applies to online dating sites, by the way: from (limited) experience and what I understand from others, the ones that require you to pay are almost always better than the free ones because they're a) free of spammers and b) you're not going to pony up even a small amount like $10/mo unless you're really looking for someone. Thus you improve signal quality enormously; spam has never been as big a problem with postal mail as e-mail because postal mail always has the cost of a stamp associated with it.

For more on the value of free/not free, see Dan Ariely's excellent book Predictably Irrational.

William Shields said...

@jselinger: I understand your point about a (small) fee being used as a filter.

In my first post I explained that the issue was:

1. The pool of potential candidates (being those who "actively participate" in SO and thus will derive some benefit from the "deep integration") is quite small in a global sense, being split in location, level of experience, skills and so on;

2. That pool is further restricted by having to pay; and

3. Charging job seekers is of questionable legality in some jurisdictions.

I agree that in the context of dating sites it makes perfect sense. That doesn't mean it translates to job searches however.

praptak said...

"I imagine we'll find creative ways to let high-rep stackoverflow users get a CV without paying very much."

Doesn't this assume that high rep somehow implies desirability as a job candidate? This cannot be reminded often enough: this is not the case.

Alderete said...

@praptak: While it may not be a 1:1 correlation, I would imagine that the correlation between people who (a) post regularly on Stack Overflow and (b) have their postings rated favorably is going to be reasonably positive. What metric on Monster.com can boast that?

Anonymous said...

Hah, so job seekers (who often.. don't have a job!) that can't afford to pay for every place they post their CV, are not as qualified as those who do. Please, charging job seekers instead of employees the posting fee is such a money hungry scam. Joel pretending like it isn't for the money.. what bs

Anonymous said...

Does your contact form work? Or is my eyesight too bad to read the Catchma?

rogerv said...

"(assuming Goldman Sachs’ next crackpot house of cards hasn’t come tumbling down yet)"

Well, you dropped a clue to your politics here. Perhaps you're aware of the series of investigative articles by Greg Gordon on Goldman Sachs corruption:

Goldman Sachs bet on housing meltdown -- and won
http://www.miamiherald.com/news/top-stories/v-print/story/1310367.html

I've followed these guys since the mid '90s. Their alums are present in administration regardless of political party. Their alums dominate treasury, federal reserve, and trading regulator positions. Goldman Sachs, is no exaggeration to say, runs the United States and has for at least a decade and a half. There is no corrupt financial practice that they can't get away with because presidents and powerful congressmen are in their hip pocket.

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