Dillistone PLC’s (LON:DSG) chief executive Jason Starr is disarmingly straightforward about the recruitment software group’s new GatedTalent product.
“If will either fail now or become extremely successful – If it reaches a level of critical mass it will then grow organically.”
Starr, not surprisingly, believes it will be the latter and in that case the question is how long it takes for the substantial potential of the product to show through.
Dillistone has already made some big decisions over the development of GatedTalent, which included not telling anyone outside the company what it was until last October.
The driving force, though, is the introduction of new data protection regulations and especially GDPR, which comes into force in Europe on May 25.
GDPR means major changes
GDPR is all about information on people being stored without their knowledge or approval.
“For executive search firms or headhunters this is particularly relevant” says Starr, as knowing who to contact for a job is the way the business operates.
“Executive search identifies people and puts them in the database without telling them about it, that is how the industry has worked for years.
“So, search firms have databases of senior level executives who often have no idea they are there.
“That was fine until GDPR but from 25 May it all changes” says Starr.
“For all individuals in the database, you have to contact them and tell them: ‘We have your data’.”
“At the most basic level GatedTalent will do that”, he says, “through sending the messages and logging responses, but it is the next step that will establish just how profitable the product can become.”
In the majority of cases, each message that is sent invites an executive to create a profile of themselves.
Those who choose to participate are effectively included in a private network – a private Linked-In if you like set up by GatedTalent.
As most of the senior level executives are being introduced to the platform by headhunters that in many cases they already know and trust, they are more likely to respond.
Starr emphasises these are very high-level employees, typically chief executives, managing directors or general managers.
For mainstream agencies recruiting accountants etc, the situation is different as most people send in their CVs, thereby tacitly agreeing to hand over their personal information.
Dillistone already has hundreds of executive search firm customers all over the world so it is just a case of “tapping into a database of clients where we already have a relationship”.
“The most difficult part is the candidate profiles but this is the clever part of GatedTalent” says Starr “as it leverages the communications the executive search firms have to send anyway due to the GDPR rules.”
What is critical now is the percentage of executives who respond to the message and send in a profile.
Three million messages
Dillistone has steadily increased the forecast of the number of GDPR messages it expects to send from one million to more than three million now.
Search firm conversion rates vary between less than 1% to more than 8%, which is a broad range, but Starr emphasises it is too early to make the final call.
The three million messages are now unlikely to be sent in their entirety until July, so a full picture won’t be available until after then.
Even so, Starr is confident that within a year, the network will attract more senior level executives and search firm subscribers than comparable products.
That will mark the start of a transformation from a CRM software group to a data company, he adds.
Dillistone will make its money from subscriptions to GatedTalent from executive search firms – it already has 160 signed up- but also from a connection fee whenever a search firm uses the platform to contact someone about a possible job.
The more profiles it has, the more potential connections.
A larger database will also mean more search firms will want access as the data it contains will be a unique asset.
A big plus for Dillistone is that GatedTalent should provide a boost for Filefinder – one of its existing products – which will be the easiest way for existing search software customers to access it.
FileFinder is part of Dillistone’s core business supplying CRM software to headhunters, with a second arm supplying software to contingent recruiters including those specialising in doctors and dentists.
Acid test shortly
Dillistone’s core business posted a loss of £71,000 in 2017, though this included £439,000 of cost for GatedTalent.
Revenues were 4% lower at £9.6mln. There was a final dividend, albeit reduced, of 0.5p
But all eyes are turned toward the first slug of response data and Starr is confident.
“Everyone will benefit he says – search firms get clean data and can find candidates quicker and more efficiently.
“Candidates can choose who has access to their data and will be considered for future opportunities.
“We benefit because we are in the middle.
“And if GatedTalent flops, we go back to our two other businesses.”