Stepstone

Stepstone – Short-term COO role to manage rapid expansion

 

Background

Stepstone was the largest online job board in Europe during a period when the value of Internet companies hit its peak in the late 90s. As it went through public flotation Stepstone needed to grow its footprint across Europe as quickly as possible to ensure market leadership. This geographic growth was critical to the market valuation at flotation.

 

Strategy/Business Model

The share value of online companies was very high during this period, and was driven not by present profitability, but future profit potential, which was linked to having a genuine pan-European footprint.

The internal business model was unusual, as incremental revenue had negligible incremental cost. Selling one more job advert on a website has little extra cost as the costs of the website are relatively fixed regardless of volume.

The second key business model issue was that job boards are monopolistic. This means that whoever is the largest in the market has major economic advantages. As with most media, customers want and will pay more for advertising that reaches the largest relevant market. The target market – job seekers – tends to read the media with the largest number of relevant job adverts. This means that the most successful job boards tend to be able to invest in sales and marketing more efficiently than their competitors. Money spent on sales will tend to drive higher volume and prices as they have the largest relevant job seeker base, and investment in marketing to get job seekers is likely to lead to them coming back as you can offer them the most relevant job seekers.

These key facts of market valuation – low incremental costs and working in a monopolistic market – led to the core business strategy which was to drive revenue and geographic reach as fast as possible.

The key success drivers for the company at the time were:

  • Geographical expansion, the ability to show genuine market leadership.
  • Business rapid growth, revenue, number of jobs, and number of job seekers.

 

Implementation

The interim role I took on was to expand the operations of the company across Europe as quickly as possible, either by purchasing existing businesses if they had market leadership, or setting up new businesses. During the 10 months I worked at Stepstone, we acquired or opened businesses in Germany, France, Italy, Spain, Portugal, Greece and Turkey. When linked to existing business, this gave Stepstone a Europe-wide footprint and a sales operations that ensured market leadership in each country.

 

Leadership / People

As we acquired or built our businesses across Europe, I invested time in selling the vision for the company, and explaining the key success drivers, as well as ensuring the structure of the business, its goals and budgets all reflected the business model. This was particularly critical as we acquire companies, and recruited large numbers of new staff.

 

Outcome

At flotation Stepstone had Europe-wide market leadership and raised nearly 500m pounds at flotation.

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Testimonials

"Mark is a visionary CEO with great attention to detail. He is a person you would want as a boss. He is extremely confident, chooses his people wisely and allows them to perform without micromanaging and getting in the way. His proven ability to grow an organization would make Mark a very strong candidate for any senior management position. September 10, 2009."

Ross Huguet, CEO, Go 2 Productions Inc

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