The new investors are Mike Chisholm, the former managing director of CA-Systems, a Christchurch accounting software firm that was sold to MYOB in 1999 for $22 million, and Ian Jenson, a former director of CA.
Their investment is "six figures at least", said Ryan. Chisholm joins the Real Contacts board of directors and will mentor sales staff as the website expands. "We invested ... because we believe in the potential of the internet to redefine old economy businesses," said Chisholm. "The past three years of technology company busts hasn't stopped the progress of the internet changing business models. Just look at eBay and Yahoo's progress. Real Contacts has the potential to become the eBay of social networking services."
"It's always nice to have another talented entrepreneur add his two cents to the mix," said Ryan. Ryan sold his former company GlobalBrain to American giant NBCi not long after Chisholm sold CA to MYOB and the two became chums.
After the dot-com bubble burst, Ryan and his brother Shaun bought the GlobalBrain search engine technology back from NBCi and created SLI Systems. Shaun Ryan now runs that company and Grant Ryan founded Real Contacts.
The website builds on the science of small world networks, the popularised version of which is known as six degrees of separation. In short, the sociology posits that all people on Earth are separated by no more than six friends or acquaintances.
In the real world of employment, some research shows that more than half of the people who find jobs do so through personal contacts rather than traditional advertisements or online means.
Ryan knew this was true because GlobalBrain hired many of its 30 staff through word of mouth. Staff told friends that a job was open, the friends spread the word to their friends and acquaintances and so on, until somebody with the appropriate skills heard about the job and contacted the company. Importantly, the applicants came with implicit recommendations. They were known and trusted by their friends. With relative ease, organisations learn about the intangibles that can't be conveyed by a CV: is he a team player, does she fit into our style of work?
"There's a glut of information out there," Ryan said. "We trust information from people we know, because it's a valid way to sort information. We created a tool that allows that information to flow in an organised way."
On
Real Contacts (www. realcontacts.com), job seekers, job offerers, and the plain
curious sign up for free and connect themselves to their friends and
acquaintances on the site. When jobs come up, they are posted to friends and
contacts, and word spreads. If an organisation hires somebody via this process,
it pays Real Contacts 2 per cent of the employee's annual salary. This compares
well with conventional recruitment and head-hunting firms, which charge upwards
of 15 per cent of annual salary, Ryan said.