This is a letter that I sent to all Student Source supporters during the week of June 3, 2013. It details the current position of the company, and my short term goals. It was one of the most difficult letters I have ever written.
Dear Student Source Supporters,
We have officially reached the 1-year anniversary of our entry into the inaugural class of the Uptech Accelerator in Northern Kentucky. Congratulations.
As some of you may have heard, we have recently decided to shut down Student Source (SS). Over the last several months we made several key discoveries about our business model that lead to this decision. 1) Employers want students to execute work on-site and not virtually. When this happens, students are viewed by the IRS as W2 employees instead of 1099 independent contractors. Classifying each student as an employee would radically increase our costs, and also provide incentive for employers to pay students directly – bypassing our commission and eliminating our only remaining revenue stream. 2) We tested a pay-up-front model and discovered that employers are only willing to pay for recruiting services for hard-to-find employees (IE mid-level and above; not entry-level). 3) We also discovered that employers favored SS to be a full-service recruiting services company, instead of a self-service software tool. At that point, SS would no longer be selling software, and would become a standard professional service agency.
As I reflect over the last year, I am proud of everything we accomplished. Throughout it’s lifecycle, Student Source grew to a maximum team size of 5, scaled to 174 universities with close to 1,000 student workers across the US, was featured in several news publications, won a handful of awards both nationally and locally, launched 4 iterations of the web platform, and employed the youngest institutionally-funded CEO in the state of Kentucky. We also helped to advance the “Cincinnati Startup Ecosystem” - a trend I hope to continue. It’s been an unbelievable learning experience for us all. I wanted to thank everyone who helped along the way, with a special thanks to Tony Alexander, Jay Moore, Michael Wohlschlaeger, Derek Brown, Josh Johnson, Ry Walker, Tim Metzner, SCORE, and the entire team at Uptech.
Using the remaining capital resources, SS has partnered with Differential (www.Differential.io), and started a new project that will recycle the Student Source brand and domain name. Also, I have accepted a temporary position as Entrepreneur in Residence within Differential, until I can find my next full-time position. In true “Lean Startup” fashion, beginning immediately I will be offering my services as a contractor/consultant to any local company. Outside of my next tech venture, new position within Differential, and my consulting efforts, I will continue to blog about components of Student Source and my experiences at AdamTreister.com.