What Happened to the Hearty Network?
You have to start a business to learn which business you should have started
Welcome to the latest entry in The Captain’s Log. You’re in good company with thousands of fellow entrepreneurs and innovators who have subscribed!
I’m your host, Bob, and my mission here is to share personal, behind-the-scenes stories of ups and downs from my career leading tech startups and corporate innovation.
I write to make you think, smile, and discover a shortcut to success or a trap to avoid.
Here we go…
The other night, I got this text out of the blue from Bill, one of our company’s biggest supporters, who referred hundreds of members to the business network we created in 2021:
“Where did the Old Hearty Go?”
This post is for Bill and the many other friends and allies who invested their precious time and hope into our team’s attempt to build a better LinkedIn. While I’ve shared details of our recruiting business here, I haven’t fully explained what happened to our network and why we’ve pivoted.
I’d like to properly explain and share a lesson: Sometimes, you must start in one direction to realize you’re on the wrong path.
How We Got Here
In the closing days of our earnout at our last company, Ryan, Ross, and I gathered offsite to plot our next adventure together. We had decided months before that we didn’t want to stick around with our acquirer and that we really enjoyed working together in startups. So we got a membership at a co-op office space in town and met every two weeks to whiteboard potential business ideas.
Our ideas were all over the map. I’ve forgotten most of them, but one we strongly considered was adding medicine to ice pops to make the yuck more palatable for kids. Your call on whether that’s nutty or brilliant…
As the weeks passed, our attention kept returning to a better way for companies to discover great talent. This was something we felt like we had cracked the code on at our startups—mostly by making mistakes along the way. In general, our worst hires were the ones who looked great on paper and in the interview process. And our best hires were those recommended by people we knew and trusted. They worked out even when their resumes wouldn’t pass a screening algorithm, and their interview skills were rusty.
We knew how critical it was in our business journeys to find that right person at the right time—and sometimes the company-threatening pain of hiring the wrong person for a critical role.
Yet we had no great technology solution to make it simpler to mine our trusted contacts for the people they loved to work with. It’s hard to know who to ask, much less how to add another request to their busy day. And when we are asked to recommend someone, it’s incredibly hard to mine your own brain for people beyond the handful that are closest to you. LinkedIn never fulfilled its promise to fix this. “Connections” mean nothing, and the “Does anyone know a great X?” post gets virtual crickets in our feeds.
We decided this was the problem we wanted to solve, and eventually came up with an idea: What if we put the faces and names of the people you have worked with over the years in front of you and did a version of swipe left or right to recommend them? This would jog people’s memories, and company recruiters could use the output to unlock many more hiring referrals.
We named the company “Hearty” because we had experienced how special work life can be when you’re working with teammates who put their whole hearts into the effort of building something great together. It also comes from the pirate phrase, “Ahoy, me Hearties!” The pirate lifestyle is what many a startup founder feels: a sense of adventure and the camaraderie of a band of misfits stuck together on a ship heading into the unknown. (For more on our early steps, check out this post from three years ago.)
By this time, we had pulled in Chris and Jake, two kick-ass developers from our last company. We put them to work on an MVP. The product was a tool that pulled in LinkedIn connections and created a game-like way to uncover recommendations and a database that recruiters could access.
First, we drafted some friends to go through the tool. I knew we were onto something when I saw their faces light up as they came across people they hadn’t thought about in years. Often, they would stop and say, “Oh, I loved working with him!”
Next, we went to some small business leaders we knew and asked them to trial our tool as a team activity. Covid meant that this was all done via Zoom, but it also worked well. Employees were willing to download our Chrome extension and spend 30 minutes going through their connections. We generated hundreds of people for HR teams to go after.
Unfortunately, hiring wasn’t on a lot of minds back then. And we saw how challenging it is to sell anything new to the HR team. We were warned of this by a handful of other People Tech founders who shared tales of woe.
But our instinct and a few investors suggested that there was a bigger idea here. Why keep this as an internal tool that employees feel is a chore mandated by their company? Everyone needs to tap their networks for help finding people—for jobs, vendors, advisors, babysitters, whatever. Recommendations make the world go round.
Plus, a big network would be a lot more valuable, creating network effects that might even let us follow in the footsteps of multi-billion-dollar LinkedIn. Sure, Facebook is huge, but there’s room for Snapchat, Pinterest and Reddit. Why can’t we build the next new and improved business+social network? Someone’s got to do it. Why not us?
From B2B to B2C2B
So, we whole-heartedly lept onto a social network path with the hope of building a community of like-minded givers that would generate a database of recommendations with many monetization paths.
We read countless books and papers on how to get a network off the ground. And our tiny team—still working with the $1 million we raised from friends a year earlier—did incredible work building a web and mobile app with all the bells and whistles you would expect: Leaderboards of talent, surveys, badges, individual and group messaging, a chat feed, and countless ways to invite new members to join and current members to return.
Our progress came in fits and starts. Some tricks worked for a few weeks, then faded. We had good weeks and bad weeks for signups and retention. People wrote to say they loved it, and others asked to have their accounts deleted. But we were determined, kept shipping, and continued to grow the network.
We were in good company trying to crack this code, as a flood of other startups saw that in a work-from-home world, many of us were searching for new ways to stay connected. We watched the meteoric rise of Clubhouse in the social media space and Polywork’s new approach to business profiles. Both raised ungodly money and made us jealous.
While we were determined to learn from our last company, where we raised and spent too much VC money too early, we started to see that it would take much more than our pre-seed round to win this game…
The Big VC DM
It’s June 2021, and my iPhone buzzes to show me I have a new direct message in the Hearty app. I look down and see it’s from Mark, the most well-known investor in the Midwest. Mark worked at the top VC firm in the Bay Area and led investments to huge successes—including LinkedIn. He then moved out here to tap a rich vein of underfunded founders. I had never met him, but I remember sending several invites to populate our Top VCs Leaderboard. Mark took the bait and sent me this message through our app:
“Hi Bob! I just discovered Hearty and it reminds me so much of the early days at LinkedIn. Would love to learn more. Happy to drive down to Cinci. Cheers! M”
I pause to make sure one of the guys isn’t joking with me. But they confirm it’s real, and we all get really excited. I’m blown away that the guy who led the first VC round at LinkedIn is so excited by our product that he’s ready to drive down here to talk!
I start to think that this will be the key to our meteoric success. We’ll get all the funding we need, intros to the top minds in the world, and lessons from someone in the room when LinkedIn happened.
Flash forward two weeks, and our team expects Mark’s arrival at our office. About an hour before the planned time, we see a brand-new blue Corvette pull into our parking lot. We cannot see the driver, but we suspect it’s him. In doing our research, we learned that Mark is a huge motorsports guy. In that car, the 100-mile drive from Columbus probably took just a half-hour, and now he’s on the speakerphone, listening to another founder’s pitch in its supple leather seat.
Eventually, he came in, and the meeting is a bust.
I expected a fun, free-wheeling conversation of batting things around—yet it felt like he was going through the motions and coming up with stuff to ask to kill time. There was no energy. He was struggling with a cold, which might have been part of it. We were all coming out of COVID and catching up on bugs we had missed.
I also suspect his team soured Mark on us. They had developed their own in-house talent discovery tool, and we saw two days earlier that the guy who built it had been poking around our app for a few hours. Who knows how the minds of VCs swirl?
Mark did perk up when we asked him to tell some stories of the early days at LinkedIn. Among various odds and ends, he told us that “Reid (Hoffman, the founder) was a great fund-raiser…despite not having any ideas on how to make money for the first 4-5 years.” They eventually got a $1 million check from the Google recruiting team and realized they had found a winner. He advised us “to not worry about revenue for a long time—it will come if you get the network.”
Mark parted with the promise to “talk it over with my team.” I haven’t heard from him since his Corvette left tire marks in our parking lot.
A Pivotal Realization
Lots of thoughts went through our heads in the days and weeks that followed. It might sound weird, but the universe sent us a message through Mark. This was not the right path for us.
To be fair, we were starting to see that our vision for a “recommendation network” was something people wanted to exist but had challenges that would be very hard to overcome.
First, there’s the issue of a Viral Loop—the key to unlocking social platform Nirvana. To grow, each new member must get at least one additional member to join. That was easier for LinkedIn, as you could invite anyone you’ve ever met (and many people you’ve never met). But our invites came from recommendations. You might know 3,000 people in business, but you only know and like, say, 300 people enough to publicly recommend them.
Second, there’s the pain killer vs. vitamin issue—another startup classic. People will pay and act quickly when they are in pain, but they are very slow to act today in a way that might help them months or years down the road. Our entire app was about asking people to make recommendations of other people now so that they might find help in the future. As nice as our members are, it was a tough ask.
But the bigger thing we realized was that we just wanted to build a business where we could provide a service, get paid, and keep doing good work together. We rediscovered that we like “normal” businesses. Service businesses are almost always profitable, and customers keep returning to services in a world of do-it-yourself software. And we knew how to build technology to make our services more effective and efficient for our clients and our bottom line.
We had friends in recruiting teams at companies in town that asked us to help them find talent to hire—for money. You know, like a recruiting agency. In Spring 2022, we tested this for a couple of local companies. We did some work “by hand,” and it worked! We placed great talent with great companies and were paid a tidy sum. Wow, we were a real business!
In the following months, we evolved our software, service, and positioning. We focused on placing Midwest engineers in early-stage startups. A big difference was that our CTO, Ross, personally did the sourcing and screening of talent. It certainly grabs candidates’ attention when a CTO reaches out, and it’s a big plus when a CTO talks with a CTO about their hiring needs and process. And our software helps make the whole process more efficient and scalable. We’re bringing clients higher-quality talent in less time—after all, Ross’s time is valuable!
In the months after this pivot, we’ve made many mistakes that career-long recruiters could have warned us about. But we also used our fresh, client-side perspective to do things better than many others. We’ve also experienced the greatest talent rush in history in mid-2022, followed by an absolute cratering of the market and mass layoffs in early 2023. But the market is coming back—startups never stop—and we’ve got several active roles for the best group of clients we’ve ever had. Life is great.
We’ve even got an updated website here. Check it out: https://www.hearty.xyz/
Sticking to the Original Vision
After all the lefts, rights, ups, and downs, we’re really still heading toward the calling we had to start Hearty together in the first place. All day long, we get to help great talent and companies find each other. And in the hours in between, you’ll find me Zooming, texting, and emailing with people in our network looking for the right source of advice or intros.
We’re also creating new service business models to help current and new clients and friends. Next time you ask, “Can you recommend a great X?” I might point you to our own portfolio of providers. More about this in the months to come.
Some will look down on this as merely a "Lifestyle Business”—which I used to cringe at. Now I see this is ideal. I can’t put it better than Shaan Puri in this clip. We do still expect to get a nice return for our pre-seed investor friends. It might take longer, but it will be a higher chance of success. I am so grateful we didn’t raise a traditional round or two during the bubble times.
But I’m mostly grateful for the support of thousands of people who joined our network and proved that you can put together a big group of people on the promise of mutual support. I’m sorry we couldn’t scale that up to a billion members with a blitzscaling decacorn, but I know you’re out there scaling your impact the old-fashioned way: By making introductions and sharing advice with people in need each day. Thank you.
How we might work together…
My team and I lead Hearty, a boutique recruiting service that helps tech-forward companies hire proven talent. Our senior team of operators sources and screens, saving you time and money. When you need help, let’s chat.
Feel free to schedule time together during my Open Hours for questions, feedback, networking, or any other topic!
BONUS: Cool Content of the Week
A little something I found meaningful. You might agree…
Beckham on Netflix - The top trending show on Netflix and at the top of the news feeds for a reason: It’s interesting stuff. Whether or not you know much about this power couple, you’ll enjoy a peek behind the headlines. And there are some career lessons, too. I was fascinated by the tension created by coaches who wanted to control Beckham, which often happens in the corporate world—where bosses frequently fear their reports sharing the stage. But in Beckham’s case, his outside interests gave him the opportunity to keep some control.
It’s a lesson to keep a side hustle and exit strategy on hand at all times, even if you’re an A-player who’s showered with cash and benefits. If you’re working for someone else, there’s always a chance they fear you are eclipsing them.