How large? The privately held company’s revenues are up 145 percent over the last three years; it’s added 50 employees this year and intends to add dozens more to the payroll before St. Nick shows up with his bag of goodies. The Sausalito company’s prospects for success are viewed so favorably that it enjoys financial backing from firms like Battery Ventures and Sutter Hill Ventures as well as hedge funds like Tiger Global Management LLC.
More proof? The company moved into a new, 30,000-square-foot global headquarters this summer with views of Richardson Bay. The new digs come complete with a workout facility as well as a game room to help employees unwind. Catered lunches are provided each day so employees need not venture off-campus to find sustenance.
The company, founded in 2007, provides inside information on 300,000 companies to 23 million members and 18 million users per month. Job seekers looking to find out more about companies like Microsoft or Facebook can not only get a pretty solid idea of salary ranges and bonus and commission structures, but they also can gather information on how interviews are conducted, the company’s real culture and even how the CEO is viewed by employees.
The site also includes job postings from companies looking for talent as well as company profiles that are provided at different levels (including free and paying options) by companies that want to get the info in front of the eyes of job seekers.
The prospects of Glassdoor going public in the future are strong, if for no other reason than the big name venture and hedge funds are going to want an exit, collect their profits and move on to other investments. The last round of venture funding totaled $50 million and valued the company at $500 million, according to media accounts of the financing.
How it works
For those who haven’t surfed Glassdoor’s site, job seekers can register for free and gain access to its database of company information as well as job listings, but they must give up some anonymous information to gain access to the entire site—“give to get” is how Glassdoor puts it.
If the registrant uses his or her Facebook account, the job seeker can find out if any of their friends, or friends of friends, works for the firm about which they’re fishing for information. “They can find out if they know somebody at that company and then reach out to them and say, ‘Can you get my résumé in front of somebody?’” says Scott Dobroski, Glassdoor’s community expert.
By persuading the job seeker to use his or her Facebook account to register, Glassdoor also gains some of the information contained in that account. And for a company in the information business, more information isn’t just more information, it translates to another way of helping to link up data and enhance the value of information the company’s already collected.
“When people use our ‘Inside Connections’ feature, they’re giving us access to some very basic information from their Facebook accounts,” Dobroski says. “But we don’t spam them or contact their connections.”
Registrants also can, of course, bring inside information on their current or former employer and donate that to the Glassdoor database so others have more information. That information is given on an anonymous basis, assuring that the employee and the information can’t be connected. This arrangement keeps employers from retaliating against employees who might give the company a less-than-glowing review.
The anonymous nature of the information posted carries with it a philosophical conundrum that the news media has dealt with for years. When a source no longer has to have his or her name attached to the quote, can the information be trusted? Moreover, if the relationship between an ex-employee and employer ended badly, will the information given by that former employee be colored by that departure? Every reporter knows ex-employees can be rich sources of information, since they no longer need to worry about any action the employer might take. But every publication also knows there’s an element of danger in trusting such information without obtaining independent verification, which, oftentimes, is only available from the company.
Dobroski says Glassdoor relies on a few methods to ensure the data accessible to job seekers is accurate. The first is that, while people are free to leave the information they wish, they’re asked to leave both the pros and cons of working for a company, so it’s a balanced review of the employer. Another method is that all data goes through both a human and digital filter. Last, companies can reply to reviews.
“It’s a little like Trip Advisor,” said Dobroski. “If somebody writes they had a terrible night’s sleep at a hotel and that hotel has the worst pillows ever, the hotel might read that and then look at those pillows. They might replace the pillows and get on and post that those pillows are now gone.”
Dobroski says Glassdoor’s internal information shows that people using the website appreciate when a CEO acknowledges that a post made him or her aware of an issue and that the company has taken the time to address it.
Glassdoor was founded by Robert Hohlman, Tim Besse and Richard Barton based on a simple question: What if the salary breakdown at Microsoft was left on the copier for all to see? “What the question really was, is ‘Why is all this information is hidden?’ The truth is, we all spend a lot of time working, and more information would help us make more informed career decisions,” Dobroski says.
The trio’s conversation revolved around the idea that there was more information available to consumers online regarding a $40 appliance or a $50 dinner on Yelp than about companies where they might want to work. And while the companies guarded that information jealously, individual employees certainly had some of that information—as well as their own opinions and impressions.
Holman’s background includes a stint as president of Hotwire.com, as well as president of Classic Custom Vacations at Expedia. He began his career at Microsoft, which, of course, spun Expedia out as its own company. He’s currently Glassdoor’s CEO.
Besse, a senior vice president at Glassdoor, was also an executive at Expedia and lead its international expansion into Japan, China and Australia.
Barton is close to becoming royalty in high-tech circles. He serves as a non-executive chairman at Glassdoor, and is partner at Benchmark Capital, one of the investors in Glassdoor. His résumé shows he founded Expedia in 1994 and co-founded Zillow, the online real estate website, in 2005. All three companies founded by Barton turn on the same key point: How do you give the average consumer more information to make informed decisions?
While Barton and Hohman are both on the company board, three of the seats are occupied by Neeraj Agrawi, Lee Jared Fixel and James White. Agrawi is a general partner with Battery Ventures, Fixel is a partner at Tiger Global, and White is a managing director at Sutter Hill. The trio received the seats based on their firm’s investment in Glassdoor. They’re joined by Erik Blachford of Butterfield & Robinson Management Services, Stephen Kaufer of TripAdvisor Inc. and J. Russell Rueff of RethinkBooks Inc.
Changing minds, turning hearts
What’s really interesting is how well Glassdoor has taken a relatively simple idea—which was guaranteed to piss off companies—and not only ride it into a nice revenue stream but turn some of those same angry companies around to make them paying clients.
Capitalism is a beautiful thing, isn’t it?
Consider your own office for a moment. The vast majority of North Bay businesses are small and privately held. For the most part, the unspoken culture in those office settings is that nobody talks about their salary level with anybody else in the office, and management keeps such information confidential from employees. In this way, nobody’s comparing salaries for the same position and finding differentials that might sow the seeds of discontentment or, worse, cause people to look for pastures with more green.
The model is somewhat related to the age-old experience of buying a new car. You may bargain with a representative over extras and what they cost, but that representative never has the “final” say. He or she always needs to “check with the general manager,” then goes off, behind the curtain, to obtain information you can’t have upfront. Of course, this model is changing somewhat, in that some dealers are now posting the bottom line price on cars. Information wants to be free.
It’s an idea that certainly finds support at Glassdoor.
“In the early days, there were some companies that saw their internal information going up on our website that were like, ‘Why are you airing our dirty laundry?’” Dobroski admits.
This is where the educational process came into play, according to Dobroski. “We explained that transparency in the long run, would help them both recruit and retain their employees. The costs of hiring and training people are significant, and the information that was available could help them not only hold onto their employees, it would help them compete.”
While Glassdoor members were revealing secrets about the protesting company, they were also laying bare inside info on competitors as well.
Early on, Glassdoor was mostly a place for geeks and high-tech types to dish about Silicon Valley. It began with 3,000 pieces of information and profiles of 250 companies. But the site has evolved so that, today, there are 6 million pieces of data and the leading industry sectors now include finance, business, media, education and retail in addition to technology, according to the company.
While Glassdoor’s information mix is unique, it competes with companies and sites such as SimplyHired, LinkedIn, PayScroll, PayScale and JobGrades.
The way forward
Revenues have boomed for Glassdoor, making it a prime candidate to go public. The largest source of revenue, according to the company, is an option given to employers on the website called Glassdoor Talent Solutions, a method for companies to drill down on what kinds of candidates are searching out information about them and where to find them as well as employment branding (making a company more attractive to job candidates). The company also makes money on old-fashioned job listings as well as advertising that appears as banners and space ads on the website.
Hohman has made no secret that the venture-backed company would like to go public one day, though it hasn’t hinted at a particular timeline. Still, there have been a couple recent hirings that point to Glassdoor testing the IPO market sooner rather than later.
The company hired Adam Spiegel in February as its chief financial officer. Spiegel was previously CFO at RPX Corporation, a patent troll. The hiring is significant because investors want to see a specific person in charge of a company’s finances. Spiegel also has a background in investment banking and will be able to give the company guidance as it speaks with investment banks about underwriting its IPO.
The company also hired Muthar Glasgow as its chief marketing officer. While the run up of revenues is important as Glassdoor rolls forward to consider road shows to court institutional investors before the offering, investors will also want to know the company’s plans for continued growth. A successful marketing program will go a long way toward giving comfort to investors seeking a growth story.
Over the last year, the company has increased its sales force and most of the jobs Glassdoor has posted for itself are on the sales side. By bumping up its sales personnel, the company is positioning itself to aggressively push sales.
It’s also looking to grow outside the United States. Glassdoor already has active websites in the United Kingdom, India, Australia and Canada. And the company just opened its first foreign office in the United Kingdom in June. Bessie’s international experience with Expedia should serve Glassdoor well when it comes to penetrating foreign markets.
Finally, Glassdoor received its first venture investment in November 2007, a $3 million payment from Benchmark Capital. Benchmark was part of another round along with Sutter Hill that totaled $6.59 million in October 2008. In February 2011, the company received $12 million from Sutter Hill, Benchmark and Battery Ventures. And in December of last year, Battery, Benchmark, DAG Ventures LLC, Dragoneer Investment Group, Sutter Hill and Tiger Global paid Glassdoor a total of $50 million. All of those figures are courtesy of Capital IQ.
Those financiers are going to want an exit in the not too distant future, and it’s significant that Tiger Global, a well-known hedge fund, participated in the last round. Generally speaking, hedge funds don’t take long-term positions in companies, which leads to more IPO speculation.
The IPO process isn’t cheap and requires some time. Glassdoor is going to need to file with the Securities and Exchange Commission, line up securities attorneys, set up road shows to line up institutional investors and line up auditors for financials that can stand up to scrutiny.
Under the Jumpstart Our Business Startups Act (JOBS Act), emerging growth companies can now initially file IPOs with the SEC confidentially to receive feedback from the regulator before making the offering a public filing. So there’s the possibility that the company has already embarked on the process. If the reception by the venture capital investors and Glassdoor users are any measure, the company’s public offering will be well received when the time comes.
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