Eightfold Now Valued At $1 Billion: A Platform Not A Product
Over my years as an analyst I run across a lot of HR technology companies. Some start life with a killer application, others start with a vision of creating a network or library of content, and others want to build a platform. Workday, for example, was a platform company from the start – they didn’t try to build a “great ERP system,” they went much further to build an entire cloud platform for ERP, HCM, and more. Avature is similar: the company first came to market as a recruitment tool, but they really built an enterprise platform for talent. Perceptyx is a similar example for employee listening and analytics.
Well the latest such company is Eightfold, a vendor many of you may now know yet. Eightfold was founded by some of the early engineers at Google, and their original vision was to build an end-to-end AI-based platform for talent.
When I first talked with Ashutosh and Kamal, I could see they were building something important, but they weren’t clear what it was. Originally designed as a recruitment platform, Eightfold was designed to collect, index, and analyze millions and millions of profiles, and use advanced AI to match them to jobs, opportunities, and career paths. Of course there’s a massive need for such a platform, but one could argue that LinkedIn already does this and so do most applicant tracking systems.
Well as I dug under the covers and we spent more time together, I realized that Eightfold was something different. Not only was it designed as a highly intelligent matching and analytics system, the team had a lot of “second order” technology as well. For example, in Eightfold not only can you match candidates to the best job fit, you can also look at other important data.
For example, Eightfold looks carefully at “adjacent skills” and understands that your defined skills, people you know, companies you worked in, education, location, and the time you worked in a given company all tell us “who you are.” For example if you worked at IBM in 2016 you probably learned about IBM’s Watson technology, but if you worked at Google during that year you learned a different technology stack.
I have always believed that “skills inference” is a weak signal about what someone really knows. You can try to guess and let the user click on skills, but honestly it isn’t very reliable. What really defines your capabilities is what work you’ve done, who you did it with, where you did it, and what the team accomplished. Eightfold is the first system that really tries to figure this out.
The company spent a lot of time and money building this platform. So in its early days it looked like a recruiting system and companies like American Express and Micron bought it. And they love it, because it not only provides incredibly good matching, it also lets you anonymize resumes (for diverse candidates), look at leadership capability, and create a much more “capability driven” system.
Of course, now that internal mobility is so hot, Eightfold expanded into the Talent Marketplace space and is now highly competitive for these deals. And since the company is basically a fast-moving agile software company, they can build new applications quickly. The most recent win is a large project to match Veterans to jobs as they leave military service and join the private sector.
One of the challenges Eightfold has had is “defining what they do.” When you sell a platform with so much power, the number of applications is wide. Is this a recruiting and applicant tracking system? Is it an internal talent mobility and talent marketplace system? Is it a talent intelligence and workforce planning system? Is it a skills inference and skills database?
The answer is YES. It’s all these thingse. And the company is now starting to grow. This week Eightfold just raised $125 Million at a $1 billion valuation, showing how disruptive the company can be. Eightfold now has more than 80 large customers and I’ve talked with many of them – it’s a powerful and flexible system and it does things Workday is still trying to figure out.
Think about all the needs for this kind of system: recruiting, contingent worker hiring, reskilling, job redeployment, organizational redesign, career pathing, M&A analysis, outplacement – the list goes on and on. While there are many niche solutions in each of these spaces, Eightfold as a platform gives companies a place to do all these things – and build a robust and powerful talent intelligence database for the future.
Building a platform company is expensive and it takes time, but as I talked about last week, it creates the most adaptive and scalable business model and gives customers enormous value. My hat’s off to Eightfold and I look forward to staying close to the company in the future.