Sometimes things are lacking or do not exist so we have to create them; this is how an entrepreneur thinks. Samer Hamadeh and his friends saw a shortage of insider information on careers in the marketplace which led them to creating their company, Vault. Ten years later Vault is still going strong providing quality content on careers for those seeking guidance. Come read about Samer, it’s CEO, as he offers advice for entrepreneurs on how to fund business ventures and what to expect in the long, but rewarding road ahead.
CCB: When did you realize you wanted to work in career development? Is this after working at Chevron?
SH: It actually started before that. I was looking for internships when I was a sophomore in college, around 1988. Stanford’s Career Center was more advanced than most and they had a database of local-area internships that you could search, but other career centers offered absolutely nothing… So, a couple of friends of mine and I decided that there was an opportunity to create some guides that gave people basic info on internships and that we could sell to career centers around the country. We ended up selling these guides to California internships, D.C. internships, and San Fran-Bay Area internships, and they sold reasonably well. We sold them to career centers, not individuals. That sort of wetted my appetite on the information business.
Then when I worked for Chevron during my graduate program year, I realized that this profession, chemical engineering, did not jibe with what I thought it was all about. So, the marketplace needed an information source on different companies and different professions and that was really the genesis for what became Vault. In ‘91/’92, that idea turned into some books for Random House under the Princeton Review imprint. My current partners and I published a few books for Princeton Review about different internships, what it was like at these companies, when the deadlines were. We interviewed thousands of people and asked them about their particular place, what they did, what they thought of it, will it prepare them for a future job, and if that industry was exciting, or why it wasn’t exciting. Very detailed insider guides. Very similar at that time to the Insiders’ Guide to Colleges, but no one had ever applied that model to careers so we were the first. One of the guides, the Internship Bible, ended up being a bestseller on the Boston Globe list. We ran with that for a few years. I then went into management consulting in Los Angeles to further my business training. My partners went to law school. A few years later we started Vault, in the summer of 1996.
CCB: Were you able to apply anything you learned in college to your work, with your science background? (Undergrad-Chemistry, Masters-Chemical Engineering)
SH: Definitely. But chemistry, chemical engineering -- I don’t remember any of it. (Laughs) But, the training we did in terms of analyzing data and figuring out conclusions, making hypothesizes that you could test, that’s what business is all about. I was well trained in that respect. I apply analytical thinking to what we do every single day. More than that I was cognizant at an early age that I would be an entrepreneur, I took some classes in my program at the Stanford Business School. I took Accounting, Operations Research, Corporate Finance, Business Plan Writing, and a few other classes like that. That helped and I got to apply that stuff to my businesses. The management consulting experience was also critical because management consultants do a lot of analysis for clients and at this particular place I was at, LEK Consulting in Los Angeles, every week we had a one or two hour professional development course and we utilized a lot of Harvard Business School case studies. I picked up a lot of MBA like training during those couple of years.
CCB: How did Vault’s business model develop and tie into the internet?
SH: What we do has not changed all that much since the beginning, meaning the overall mission of the company has been to help people advance their careers or find their passion through this insider career information. The way we make money or what we sell has changed significantly over the years as the Internet has really become a force. In the early days we made almost all our money by selling books through bookstores and shipping them to people who had ordered them off our web site. As the Internet took hold, we started to offer excerpts of the books on the Internet. We started to put advertisements around those excerpts. We started to sell PDF versions of the books. We now sell electronic subscriptions in html format. We still sell lots of advertisement around the content. And we’ve become even more sophisticated in the last year in how we make money off of the content. Instead of a little banner, now you have all sorts of rich media, video, audio, sponsored links, and so on. We now have a lot more user generated content. In fact we have more user generated content on companies, careers, salaries, functions, and schools than we have editorially generated and researched product, which is fascinating if you think about it. As long as we keep getting the information that the users provide and it’s reasonably accurate and reliable, it will help us to cover that many more companies and schools than we ever could on our own.
CCB: How do you get people to talk about their companies? What is in it for them?
SH: People always ask us that and the answer is that people love talking about their careers and about themselves. You see it all over the web. They love sharing recipes. They love sharing information on the gadgets they buy. People just love doing this stuff. We are just tapping into something that already exists. The world is fascinated by why some people do it. Some people do it because they are pissed off at their company. Some do it because they love their company. Other people are motivated by our cash prizes that we dole out every month for our best surveys. Not as many as you think, but still that’s another factor.
CCB: Is it also because it’s anonymous?
SH: The anonymous factor helps a lot, which allows them to speak freely and not suffer any repercussions from companies. It doesn’t mean that you can libel a company. That’s still something you should not do. We warn people against that practice. You can’t levy unproved allegations or put truly confidential company secrets up on our site. You can get in trouble for doing so and people have been sued for doing so.
CCB: How did you find funding for your company?
SH: For any entrepreneur the initial way you raise capital is out of your own pocket, credit cards, savings, and asking friends and family members to give you some money. After you exhaust those sources, it really depends on what you are trying to achieve. If, like us, you want to try and develop a company that could ultimately get sold or go public, be a force, you have to go through more traditional rounds of funding. We feel that our company has that potential so we raised money from venture capitalists. What you do is first you tap your credit cards and family members. You try and make as much money as possible, but if you are really trying to grow big you are usually spending more than you bring in. Then you have to go talk to angel investors. Those are wealthy individuals who are a little more sophisticated, who understand how to make risky investments. We got some from those people. After that you decide if you want venture capitalists to invest in your company and if you do you raise money from those people and the company gets more sophisticated at that point, much more involved. We went through all those routes.
CCB: What are your main responsibilities as a CEO?
SH: In general the most important thing a CEO can do is make sure the revenue is coming in. I spend half of my day meeting with clients, talking with clients, helping our sales managers hit their goals. The other half is setting up strategy, launching new projects, trying to hire new managers. I’d say it’s in the following order; revenue, strategy, and hiring.
CCB: What qualities do you need to succeed as an entrepreneur?
SH: Probably number one is tenacity. Your business rarely goes right, especially in the beginning. You have a lot of ups and downs, mostly downs in the beginning where you are trying to figure out how to network computers, hire people, set up systems, and find office space. All that stuff costs money and takes time. At the same time, you’re out there trying to convince potential customers to give you money on a product, a service. In general as an entrepreneur you have to sweat it out. Figure out the product, sell it to people. Keep the company together with minimum money upfront because in the grand scheme of things, most companies don’t raise venture capital. Most entrepreneurs struggle with credit cards, their own pockets, and a few family members. That means they don’t have much time before they have to have created a profitable company, before they run out of money. So you have to be tenacious. You have to be really clever in figuring out where you are going to make your money and how to keep costs down.
CCB: At Vault are you trying to reach out to a particular audience?
SH: In general, we want to offer something for most anybody interested in advancing his or her career, but we still have a focus, even after ten years of growth. We serve college students and young professionals who want to get sales, finance, marketing, and those kinds of professional jobs. At the same time we offer information on business schools, law schools, and universities.
CCB: Do you have any advice for people interested in becoming entrepreneurs?
SH: Take an Accounting class in college, if not two. Knowing basic accounting is very important because ultimately you are running your business to make a profit and a lot of people don’t understand what that means. Accounting helps you understand that better. The second thing I always advise people to do is get a little bit of operating experience. Work for a company for a couple of years; see what it’s really like inside and all the issues you have to contend with, from hiring to payroll to healthcare plans. Join some networking groups in the city you are in. Then you can meet other entrepreneurs and angel investors.
CCB: Where does Vault’s main revenue come from?
SH: Right now we generate about 50% of our revenue from advertising, primarily from the employers who are trying to reach candidates and 50% from subscriptions to content, whether it’s the school or an individual buying the content. It’s a pretty straight-forward, typical media or publishing model.
CCB: You’ve found different ways to use the same content.
SH: That’s a good point. When we develop a guide, for example, that content ends up as a book, as chapters in other print books, as a PDF, as HTML on the website, and as a license to career centers on campus. It can get repurposed in many different ways.
CCB: How important is it to create a niche as a brand?
SH: The short answer to that is it’s very important. You want to make sure people understand the value proposition of your brand. It can’t mean any and all things. It has to be very specific so it resonates. For example, with Google, people think of search. It’s that simple to them even if Google does a bunch of other things. Vault’s brand is insider career information. That’s what it has been since day one. When people think of that subject they think of our company. People thinking about Food Network think programs on how to cook. It has to be very simple, very clean.
CCB: How did you come up with your marketing for Vault?
SH: In the beginning it was fairly easy. We had a few books that we were publishing so you would ask yourself who would be interested in those books. Well, they are targeted at college students so we are going to go promote them on college campuses. Based on the subject matter -- investment banking, management consulting, and law firms -- we are going to go to some of the top 50, 100 schools in the country because those are the most motivated students who want to go into those three industries. You ask yourself who you are going to sell to and then focus your marketing so that those segments actually hear the pitch. We weren’t going to advertise those products on New York City radio because that would be a waste of money. We’d be hitting all sorts of people who would not care about or need our product. Putting ads in the Harvard Crimson paper, the Stanford Daily, a few other papers like that and hitting those campuses. We went to about fifty campuses and put out fliers and sat at bookstore tables with books in tow. That kind of stuff made sense because the people who needed the books most would see the marketing. And of course, we utilized PR…convincing journalists to write about us. That’s the best kind of marketing if you can do it.
CCB: Where do you see Vault headed?
SH: We are just doing more of the same right now. Trying to sell to those other 9000 companies that we think should be working with us, trying to sell to those other 10,000 career centers that should be working with us. Then trying to market ourselves to more college students by adding more industries and functions for them to be interested in.
CCB: Where do you see your career going?
SH: I still keep learning something new every day, week, month, and year. As we get bigger there are new challenges ahead. We made one small acquisition a few years ago of a company called tvspy.com
I imagine more of that will occur over the years. That’s a whole different skill set that I hope to learn, to acquire and integrate another company. I also continue to learn more and more about management.
Check out Samer's companies and find out more about careers: