The future direction of JobStreet

A story from Digital News Asia today regarding the future direction of JobStreet.com:


KUALA LUMPUR, Nov 28 — It was in March of 2013 that Mark Chang, Jobstreet.com founder and chief executive officer (CEO), first mooted the idea to Andrew Bassat, CEO and cofounder of SEEK Ltd, the Australian online recruitment company that already owned a 22 per cent stake in JobStreet.com.

“Since he already owned our competitor JobsDB [with an 80 per cent stake at end-2011], I thought it made sense for him to consolidate and merge resources,” says Chang, who first spoke to Digital News Asia (DNA) in New York while attending the Nasdaq listing of MOL Global on Oct 9, with follow-ups after he had returned to Malaysia.

That was of course the sale of JobStreet.com’s online business to the Australian Securities Exchange-listed company, first announced in February and concluded on Nov 20. SEEK also owns 20 per cent of the listed company.

While some in the market speculate that he sold the Internet assets of JobStreet.com because of the looming threat of competition from LinkedIn, Chang waves aside that speculation.

“LinkedIn … you name it, competition could have come from anywhere and as an entrepreneur, you have to respond,” he says.

Indeed, in a May 2013 interview with DNA when JobStreet.com first crossed the RM1-billion market capitalisation mark, he made the observation that if JobStreet failed, it would only have itself to blame. “It means we failed to reinvent and make ourselves relevant to the market.”

But responding to competition and staying relevant, he notes, can be costly as it involves the redevelopment of new products and services, and the requisite dedication of engineering resources.

“But once you have consolidated resources, it makes more sense to respond,” says the Malaysian entrepreneur, who is known to be frugal both in business and in his personal life, and is also a DNA Digerati50.

Be that as it may, that suggestion in March 2013 was the catalyst for Basset to eventually pull the trigger on the US$568-million (RM1.9-billion) acquisition.

There were various factors that compelled Chang to sell, and he won’t say if any one was stronger than the rest, but the almost 20 years he had been an entrepreneur was a key factor as well for the low-key founder who has always been a bit uncomfortable with the responsibility of being a CEO.

This he admitted to DNA as much in our May 2013 story above: “The CEO job is NOT (emphasis Chang) an easy role for me.”

And while he will be looking forward to the next 10 years where he aspires to help create the next 10 hot billion-ringgit startups with his personal funds, he will still be running JobStreet.com Bhd, the Malaysian-listed entity that even after selling off its Internet assets, will have other assets worth around US$100 million.

These assets are a combination of cash, physical assets and stakes in four existing businesses in the region, starting with Innity Bhd (22 per cent) in Malaysia, 104.com (22 per cent) in Taiwan, Asia Travel (four per cent) in Singapore, and 1010.com, a printing business in Hong Kong serving the China market.

Of course there will have to be a name change and then it will have up to a year in which to find a new business to focus on. While Chang does not discount buying out an existing listed entity, it has to be in the technology space and specifically, “be a consumer Internet” company playing in Southeast Asia.

Interestingly, in terms of timing, Chang cautions shareholders that they will see little action from JobStreet for the first 12 to 18 months, at least until his senior management team has been fully deployed back in the listed entity.

“Till then, we have a one-year commitment to help SEEK manage the transition,” he says.

That team however is lean, with the listed entity only consisting of 10 people.

Whether or not JobStreet ends up buying an existing listed company, investing in emerging ones is certainly on the cards.

“We will focus on startups from Malaysia, Indonesia and the Philippines,” says Chang. “That is where our core competency lies – that is, knowledge of South-East Asian markets.”

But the companies have to be scalable, with revenue, a proven product and a team in place, he emphasises, “because larger competitors can swamp you if you are just a single-country play.”

What JobStreet will not be doing is focusing on particular verticals. The idea is to keep its options open and to let entrepreneurs come and convince Chang and his team of the viability of their ideas and market opportunity.

And if Chang and his team feel they have the skills set and experience to help the entrepreneurs, they will make the investment.

Provided, that is, that the valuation is fair. Chang shakes his head at some of the deals he has seen, both in the United States and in the region.

“Valuations are way too high,” he says declining to highlight examples in Southeast Asia, as “the investors are friends and people I know,” he says, laughing.

This is also why he feels coming in as an investor in 2016 would be sweet timing as by then, valuations will have come back down.

So, if anything, he will be even busier running his private seed fund and ensuring shareholder value is enhanced in the listed company. No short break to bask and reflect in the satisfaction of building a RM2-billion company over the 11 years it was listed.

Chang is fine with that. “I need the momentum to be there as I build something meaningful over the next 10 years.” — Digital News Asia

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