AIB Featured Business Leader – Andrew Bassat
In 1997, brothers Andrew and Paul Bassat co-founded the online Australian job marketplace SEEK. It was a big venture in an era where many people didn’t own a personal computer, let alone feel comfortable with the internet, but SEEK has since become the leading online job search agency in Australia. Now the sole owner, Andrew Bassat has steered the company to a public listing valued at $4.13 billion. In 2013, he was named the Australian EY Entrepreneur of the Year.
Bassat co-founded the site as a response to the old classified-ads system. His brother was looking for a house and realised how inefficient it was to rely on newspapers. The duo were just becoming comfortable with the internet themselves and believed that the phenomenon would become more mainstream. The limitations of the paper-based classifieds, they saw, extended past for-sale advertisements and into job vacancies. An online version would allow people to search by location and industry without being limited by their local publication. And so SEEK was born.
Bassat admits to never being a good employee, and instead was actively looking for a chance to build something for himself. He held degrees in computer science and law, as well as an MBA, and had worked as a management consultant and as a lawyer. But he was bored. His education made him well placed to transform his brother’s frustrations into a business opportunity, and together with co-founder Matt Rockman, they took the plunge in 1998. Originally thinking about real estate advertising, they quickly moved the business model to recruitment, as a more fast-paced concept with wider reach. Rockman’s father provided the seed funding and the three found a small office and began. The Bassat brothers took on roles as joint CEOs and remained that way until Paul stepped down from the business in 2011.
SEEK wasn’t the first attempt at an online classifieds site, but the three marketed the company aggressively and made sure that their scaling worked as they began to grow. They were directly competing with the huge print organisations, especially News Corp and Fairfax, which were threatened by the prospect of losing their ‘rivers of gold’, the adverts that funded the journalism. The SEEK founders created alliances with Telstra and NineMSN, using web portals in the era before social media to get their brand out in the public eye. Importantly, their prices were extremely competitive right from the beginning, so that job advertisers were willing to take the risk for the significant discount that going online represented compared to print advertising.
Although SEEK ran at a loss for 18 months as it concentrated on building traffic ahead of revenue, its reputation and user base grew steadily. By the end of the 1990s, the US was already heading into the dotcom bubble, but Australia was some way behind, and in this instance that lag was an asset as it allowed the Bassat brothers to build their company before the crash. By 1999, SEEK was operating in New Zealand, with an eye on a number of other international markets. In fact, the team felt confident enough to consider listing only three years in, in 2000.
In 2000, however, the tech start up world was thrown into turmoil with the dot com crash hitting companies hard. The company wobbled and found itself on lean times, financially. Bassat pulled back from the listing idea and concentrated on solidifying the brand. Eventually, they listed in 2005.
Their next big push came in 2006, when they asked the SEEK board (which by then included billionaire James Packer) to approve a $20 million purchase of Chinese jobs website Zhaopin. At the time Zhaopin was making a loss and the board were nervous. The board signed off on the plan, but that didn’t quell anyone’s nerves: for the following five years, Bassat constantly fielded investor suggestions that they “pull the plug” on China. Today, they’re glad they went ahead with the risk; Zhaopin is the leading job advertisement site in China, listed in New York, and valued at $1.25 billion. Meanwhile, SEEK has penetrated further into Asian markets in a joint venture arrangement which created SEEK Asia. SEEK Asia now owns 80% of JobsDB, a Hong Kong-based job website which operates in nine Asian countries.
In Australia, SEEK doesn’t just beat the competition, it crushes them. Over 80% of Australian online job advertising is found on the site, eight times the number of placement on all of its competitors combined. If you’re looking for a job, you go to SEEK.
SEEK has moved into other areas which support its original focus: SEEK Learning matches students with vocational learning, with an emphasis on distance education. SEEK Commercial matches small businesses and franchises with potential buyers. The jobs sector now operates in 18 different countries. Basset wants to continue this pattern of significant growth, but the market isn’t always with it. Recently, that’s caused frustrations.
Like many entrepreneurs in the Australian market, he wants to see more investment in STEM skills within schools, and better conditions for start-up companies. He’s also expressed his annoyance that investors and boards think short-term, making CEOs reluctant to take risks that will only pan out over the long term. SEEK has deliberately removed all of its short term incentive packages for executive staff in an attempt to encourage longer term thinking.
Looking to the future, Bassat wants to move beyond job advertising and into job creating – helping to develop careers and companies both in Australia and overseas. He plans to keep moving steadily through a field of potential disruptors, and make his moves based on instinct and experience. As for life outside work, it seems that Bassat doesn’t believe in the concept. Asked for his best piece of advice, he offers “Someone once told me not to work as hard as I do. But I ignored that”.
This article was written by Tanya Ashworth-Keppel on behalf of the Australian Institute of Business. All opinions are that of the writer and do not necessarily reflect the opinion of AIB. The following sources were used to compile this article: Business Review Weekly, EY, Smart Company, Australian Financial Review and Switzer.
Photo credit: The Australian