#4— Platforms vs Verticals, Unbundling & A Look at Incredible Health

Hello and welcome to Weekend Reading Volume 4. The online job advertising market is a large market. Naturally, large markets invite heightened competition, a topic explored in more detail below.

Platforms vs Verticals and the Next Great Unbundling (a16z)

As you grow, so does the target on your back. This post provides a VCs perspective on the ability of vertical specific companies to pick off business from horizontal platforms like Indeed and LinkedIn: “One of the holy grails in the newco world is to build out a digital platform that successfully serves the needs of a broad number of adjacent verticals…We know the now-canonical early examples of this: Amazon, eBay, Craigslist. And we also know that once that holy grail of a new digital platform is attained, competitors quickly come a’ callin’. One of the most effective forms of that competition often comes in the form of newcos who aspire to take chunks out of that emergent platform by better addressing the needs of a specific vertical within that platform — by creating a user experience or business model that’s much more tailored to the unique attributes of that vertical. StubHub, for example, took a big chunk out of eBay by creating a ticket-buying experience that was so in tune with the needs of those specific buyers and sellers — with ticket verification, venue maps, and rapid shipping…In all but a few circumstances, the broad horizontal verticals eventually break. They become a victim of their own success. As the platforms grow, their submarkets grow too; their product gets pulled in a million different directions. Users get annoyed with an experience and business that caters to the lowest common denominator…Like clockwork, a new wave of innovation begins to swell, picking off the compelling verticals the new horizontal players cannot satisfy…YouTube, for example…is currently experiencing this…Twitch has seen a lot of success in gaming videos; TikTok has exploded in short-form mobile videos; MasterClass by targeting educational videos; Overtime by zeroing in on sports, with highlights and original content aimed at Gen Z…One of the most attractive “platform” targets we see today, only just starting to be chipped away at, is LinkedIn…Like all these other horizontal players, LinkedIn offers essentially the same user experience across job verticals. For jobs like white collar roles, the site works well. But for other, more specialized verticals — blue collar jobs, engineers, or health care workers, for example — their needs are met much less well…You’ve got very ripe opportunities for disruption by innovators with tailored vertical approaches. We are already beginning to see innovation bubbling up with newcos using this vertical play in the jobs platform space. From engineering (Hired) to blue collar (Merlin, Wonolo) to oil services (RigUp) to hospitality (Pared, Instawork, Qwick) to bookkeeping (Paro), each of these new companies are building a user experience and business model that works better — for both candidates and employers — than the generic LinkedIn model…The great unbundling of LinkedIn may have already begun.”

Source: Platforms vs Verticals and the Next Great Unbundling, Andreessen Horowitz

Incredible Health (a16z)

Here’s a dive into Incredible Health, a vertical specific job site focused on healthcare: “Healthcare also has an ecosystem with a highly specialized and differentiated workforce, unique licensing and staffing requirements, and complex institutional workflows and structures…The systems designed to work across dozens of verticals breaks down when the unique elements of the healthcare industry enter the equation…A myriad of specialized roles and categories means unique terminology and data points are needed to properly map a healthcare worker’s skill set to a facility’s needs. Take the dozens of different types of nurses, ranging from a nurse practitioner to a nurse manager to a nursing assistant. This is on top of specialization (oncology vs pediatrics vs emergency). And then there’s full-time, part-time, travel, and per diem nurses…Healthcare has certain licensing prerequisites and certificates that other industries don’t — and they’re critical to candidate screening…A generic jobs platform with a simple “Apply” button is not designed to navigate the complex decision making process of a hospital the way a tailored platform with batches of candidate, timed-bound decisions, and effective collaboration tools would be…Comparing what hiring should look like in healthcare vs what the horizontal platforms provide, it’s no wonder that satisfaction — for both employers and candidates — is so low…Incredible Health is building the tailored, vertical marketplace…The platform has started with full-time nursing and is built from the ground up with all the tools and features necessary to the profession: automated pre-screening of nursing candidates based on qualifications and licenses, a more structured interview process to move candidates quickly and fairly through the system (employers apply to the talent, not vice versa). The result of all that is access for candidates to a wide selection of the *right* opportunities, a faster interview and decision process, less time filtering roles, and fewer deadend interviews…The results already speak for themselves. Over 150 hospitals and institutions across California already use the platform to hire permanent nurses…For nurses, Incredible Health has improved the odds of finding a great job while also reducing the hiring time by over 3X — in less than 30 days vs the national average of 90 days. On the hospital side, Incredible Health has (incredibly!) managed to simultaneously reduce hiring times, and also increase hiring rates by over 25X…Nearly every broad horizontal platform eventually reaches the time where it starts to get picked apart. Now appears to be the time for healthcare to be ripped out of the broad jobs platforms.”