It Happens: the Unconventional Dissolution of Koru
Heard of Koru? Although its name for now will live on (as a subsidiary of an acquiring company), this startup (founded in 2014) is now for all intents and purposes defunct. Initially, the idea behind the enterprise was to assist prospective employers in the locating and hiring of best-fit candidates for their job openings – while at the same time helping recent college graduates who sought jobs to find the positions that best matched their skill sets and career ambitions. On paper, it sounds like a good idea, a win-win for those seeking work and their future employers. In 2016, just two years into its existence, the young company changed tactics (rarely a good sign so shortly after founding) and focused instead on the marketing of in-house developed hiring software.
Now the Seattle-based company, as it liquidates and fades away, is selling both parts of its business – to two different parties. Here’s what happened. The hiring software that Koru deployed in 2016 (as it moved away from its original business model), was purchased by Capp & Company, a company based in London. Capp & Company, founded in 2005 (bills itself as a “global leader in strength-based talent assessment”) sounds like a decent fit for Koru’s hiring-software technology, however information about Capp is relatively scarce – in terms of its number of employees and current revenue. The good news is that the U.K.-based company has been in business for over a decade, symbolizing some traction and stability.
Meanwhile the recruiting business (Koru’s original business, was plucked by the San Francisco-based Entangled Group (sounds like it aspires to be the Y Combinator of education-related startups however at the moment it appears to be primarily an education consulting business – however to its credit, it does have a respectable number of employees and an impressive cast of executives).
So what went wrong with Koru – this young (but well-intentioned) startup? The startup was able to attract some significant clients like Citi and Barclays (and the real estate tech player, Zillow) which bought into the idea of evaluating talent based on the unique parameters championed by Koru as imperative “soft skills” (things like curiosity, grit, impact, ownership (whatever that entails), polish (whatever that entails), rigor, and teamwork – but exactly how these qualities would be measured – and measured accurately – is an unanswered question). Measuring employee or associate aptitudes to obtain the best personnel fit for companies is not a unique or new idea. As a matter of fact, my mom worked for a company that did the same way back in the 1980s – and like Koru, her employer could boast some impressive clients – names like General Motors and Coca Cola – (this particular company went away when its founder and driving force passed on prematurely). The point is that despite lofty ambitions (and its on-paper impressive list of clients), this company that gave my mom a paycheck was never a huge financial success or (frankly from my perspective) terribly useful to its clients (I fear very much like Koru). One of the difficulties that the Korus of the world (increasingly) have is that measuring these attributes honestly is at very least problematic. Anytime you’re being evaluated and you realize that you’re being evaluated, the behavior you exhibit is simply not at its norm (especially true today when recruiters and advisors are telling every job candidate precisely how to respond and behave to enhance the chances of obtaining that dream gig). Companies like Koru might be successful if they could strap recruits to a polygraph or administer truth serum to them (I don’t think it’s unfair to compare their results to those obtained of recruits at the NFL combine – let’s be honest, a joke when it comes to weeding out undesirables or potential locker room cancers when participants have been conditioned to death to provide the responses that teams want to hear – at least NFL front offices, because of the investment involved, are financially justified in going back to college coaches, teammates, maybe family members to try assembling more accurate portraits of the players on their radar). Going to such extremes for most companies, for a majority of job openings, simply isn’t feasible. Most of the time, to fill most roles within their ranks, companies must rely (at best) on superficial background checks (and let’s not even get into whether the results of those, assuming that something’s found and somebody isn’t employed as a result, predict a potential employee’s value or lack thereof).
Perhaps these realities explain why, in a Geekwire interview, Koru’s CEO acknowledged that its business model had failed (what the CEO and co-founder, Kristen Hamilton, actually said in her interview was that Koru’s hiring solution was “….unlikely to be the way the market would mature”). In other words, despite the impressive cast of clients, the service was slow to take hold (which probably means that funding was an issue – though Koru had managed in its abbreviated existence to raise over $15 million in venture money).
Hamilton also told Geekwire that she would reserve some time to reflect on the Koru experience before deciding what to do next. She and her Koru co-founder both have a history of achievement (her pedigree includes the founding of a startup called Onvia which ultimately went public, a stint as the COO of World Learning, a company with $100 million dollars in annual revenue, and she spent 2013 at Maveron as an “entrepreneur-in-residence”; her co-founder meantime was an entrepreneur-in-residence at the Bill & Melinda Gates Foundation for 7 years plus).
You bring a start-up to life, you have to be prepared for it to not work, for it never to develop as you may have envisioned or planned. That’s an inexorable part of the startup culture. It happens to the best. I’m reminded of a story a boss of mine told us in a meeting once. He had had the distinction of being invited to Washington D.C. years earlier for a conference (hosted by the Clinton administration) celebrating diversity in business (Hispanic by descent, at the time in question he was president of a successful startup with a few hundred employees). The group sat at a long table one night for dinner. There was an older man seated next to my boss. They got to talking and my boss admitted to his new acquaintance that his company had just emerged from bankruptcy – bankruptcy was a way to streamline and continue operations when that would otherwise have been impossible. You’re a piker kid, the older man said. Turns out he’d been through bankruptcy half a dozen times before one of his many ventures gained traction (and made him a billionaire in the process). If you spend much time traveling the interstates (or need to ship stuff), you’re sure to encounter his trucks along the way.
Here’s the moral for today: don’t forget that it’s getting out there that’s important; when it comes to startups, when it comes to fulfilling your goals, ambitions, lifelong dreams, try to remember that getting out there is where any of that really starts.