Out of my five former businesses, one of them was in the software (as-a-service) space. The rest are service-oriented.
Which made it hard for me to compute its value proposition since I am not familiar with the intricacy of a software business.
It is made worse by the fact that it is a B2C platform.
I am referring to Career Hero, a resume keyword optimisation platform. Given that many companies use a recruitment system to automatically screen candidates (based on keywords), the premise is to use that knowledge and reverse engineer the right keywords to be put into your resume, to begin with.
This may help applicants to clear the system screening stage and lead to a higher likelihood of a job interview.
It isn’t an original premise.
I learned about JobScan doing the same thing before I got started and I really like using the tool during my career coaching business.
Soon after, I asked if I could be their Singapore partner. They deflected my question twice and when it happened to me for the third time, I decided to do it on my own.
I am since exited from Career Hero and from my recent learnings on ThePowerMBA’s Unit Economics module, I’d like to distil why it failed.
How it makes money
Because the product hinges on job searches, it is not sticky. Similar to how one would quit using a dating service once they found a partner.
And since the premise is one will get a job faster if they use Career Hero, charging a lengthy subscription does not seem to be a good sign of confidence.
Job seekers do apply for many jobs and each application may have to differ, depending on the keyword construct of the job postings.
Hence, I came up with a short subscription model (1-month or 3-month) that allow users to optimise their resume unlimited times.
Although it carries attributes of a recurring model it is really a non-recurring one.
Costs and Customer Lifetime Value
Because this is more of a side project, I did not invest much in customer acquisition. The most would be content marketing that drives organic traffic to the site and towards conversion.
And given the issue I mentioned earlier, customer lifetime value would be short. A 1-month subscription costs USD15 while a 3-month subscription costs USD40.
Even though there are barely any Customer Acquisition Costs, there are still costs associated with hosting on Digital Ocean and Heroku.
Churn Rate was crazy
After the first subscription to Career Hero, either you found a job or you didn’t (and pin it on the service).
The churn for paid subscription will naturally be high and that made it hard to create a consistent stream of revenue. Even though usage is high, those are primarily driven by the people on free trial (they get to optimise up to 5 times a month).
So I am essentially subsidizing freeloaders.
If I had known more about Unit Economics, I definitely would have priced it differently. Looking forward to more learnings from ThePowerMBA.