Staying power: A former UC student's agency focuses on turning temps into permanents
ubranHive's hiring fee the key to growth, success
Kevin Eigelbach | WCPO contributor
7:00 AM, Aug 1, 2017
3:47 PM, Aug 1, 2017
CINCINNATI -- Tom Savoca's new business, a startup called urbanHive, has nothing to do with his architecture major.
Nevertheless, he thinks that studying the subject at the University of Cincinnati prepared him well for an entrepreneurial career.
In no other course of study, he said, do you "sit in a room 18 hours a day, trying to solve incredibly abstract problems that may not have a solution."
And as a small business person, that's just what he does.
What does urbanHive do?
Savoca saw the need for urbanHive in the summer of 2015, when he worked as a co-op student for a small architectural firm in Chicago. One day, he was asked to reorganize the materials library.
As he did, he began thinking about why the firm couldn't have hired a temporary worker to do the job, rather than someone qualified to do architectural work. That started him thinking about how he could make the market for temporary workers more efficient.
His answer was urbanHive, an online platform that automates the labor-intensive process of sorting through resumes to match applicants to jobs.
UrbanHive can inboard job applicants by having them list their skills on its website, a process Savoca says takes about five minutes. It's a low-pressure, low-energy way to gather data quickly and match it to jobs, he said.
How does it make money?
Like traditional temporary employment agencies, urbanHive makes money by charging employers based on the hourly wage of the worker urbanHive provides. In urbanHive's case, the markup is 40 percent.
A pricing feature Savoca thinks will attract employers is that when they hire a temp as a permanent employee, they pay urbanHive a $500 fee.
That's attractive, he said, because most temp agencies charge 10 to 30 percent of the worker's annualized salary, which amounts to at least $5,000. That creates a "massive paywall between the individual and the company being able to hire them," he said.
Rather than trying to hang on to temps, his plan is to get them hired permanently as quickly as possible. What he loses in revenue per temp, he'll make up in volume, as more employees sign up for his service.
Employers will benefit because his lower fee will make it easier for them to hire temps that they might want to hire permanently after a "test drive."
Is he making money?
Yes, but he declined to say how much. If he can get 40 solid employers with recurring business, he said, he can break even. After launching the platform in December, he now has about 10 such employers with 654 potential employees in the database.
He found most of the latter via "guerrilla marketing" techniques such as leaving flyers at coffee shops on campus or hosting a booth where students could spin a wheel for candy and also learn about Urban Hive.
He's put up close to $10,000 of his own savings, friends and family have chipped in about $30,000, and he applied for and received a $1,000 Fealy Bearcat Bridge Fund grant through UC's Center for Entrepreneurship and Commercialization.
Like a true bootstrapper, he learned how to do web design himself.
What has he learned?
In April, Savoca completed the StartupUC Student Incubator program. In its inaugural year, the program demanded little of its participants beyond attending meetings and interacting with mentors, said Ronald Meyers, the program's co-founder.
The baby-faced Savoca, who's just 22, impressed Meyers with his dedication. Savoca rides a bicycle most places, and he rode to meetings in fair weather and foul, Meyers said.
He also showed a willingness to accept coaching.
When he began the program, Savoca was intent on hiring the perfect salesperson and creating the perfect deal to attract one, Meyers said. But he changed his mind after mentors told him it was too soon to walk away from sales and that no one could sell the business with as much passion as he had.
It's less important to make the product perfect than it is to get the word out about the product, Savoca said.
"It doesn't matter how much time you spend on making a great product if no one knows it exists," he added.