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Behind The Money: Path 101 founder Charlie O'Donnell on seeking $2M in tough times

Published November 3, 2008 at 6:17 PM

In another time and another place, as the saying goes, Path 101 Inc. might have venture capitalists lining up to fund it.

The New York-based online employment startup has an enthusiastic and über-connected CEO, Charlie O'Donnell, who makes such a strong case about the need for newer, better services than established Internet job companies, such as Monster Worldwide Inc., that when you talk to him you almost forget to ask how his startup plans to make money.

Although one-year-old Path 101 seems to lack the proverbial elevator pitch and actually links the "about" section of its Web site to a lengthy PowerPoint presentation, its basic premise is that most people follow a circuitous path to find their true calling. Rather than just matching keywords from a person's résumé with online wanted ads, career sites need to take a more nuanced and thoughtful approach to helping people find suitable jobs, O'Donnell says.

Path 101 has so far collected 750,000 résumés as part of an initiative that lets users track the career paths of like-minded or similarly educated individuals. The idea is to offer insights into the work they'd be happiest pursuing, much as visitors to Amazon.com can see book purchases by shoppers with similar profiles. It also offers a personality quiz to provide more insight on the most appropriate careers.

Problem is, it's not 1999, when all sorts of consumer Internet businesses with fun features but no track record raised lots of money. Not to mention, that Path 101 doesn't operate in Silicon Valley, where even in today's tough funding climate, there's a strong fellowship in the startup community that provides at least some moral support when no financial backing is forthcoming.

The company, which angel investors have funded to date, is seeking a modest $2 million in Series A venture funding, and behind his passion and optimism, O'Donnell sounds a little concerned.

"Certainly, if we had a quarter of a million users, it would be easier to raise money--but we don't," says O'Donnell, who also writes the blog ThisIsGoingToBeBig.com, which chronicles New York venture capital.

O'Donnell concedes that the online employment search arena is quite crowded, but he draws a distinction between jobs and careers and argues that there's a dearth of sites that do anything more than match resumé keywords with job openings.

Why the need? Because O'Donnell, who says his rejection from Stanford University's Graduate School of Business turned out to be a blessing in disguise, is convinced that many other people who didn't follow a linear career path are looking for help. Of all the people who complete law school, he says, fewer than half of them are practicing law three years after graduation.

Path 101 is considering several different business models. One possibility is to charge companies for recruitment services, connecting them with job candidates screened not only by their resumés, but also by their personalities and most suitable career paths. That sort of service is likeliest to appeal to small and midsize companies with limited human resource budgets, O'Donnell says. "We will not be like a black box that just spits out careers," he says. "The service we can offer employers is really knowing the candidates."

O'Donnell also sounds confident about Path 101's prospects despite the falling levels of venture capital funding and generally challenging economic environment for startups. He maintains it is better to have no venture funding than one round at an unrealistically high valuation that could deter follow-on backers.

Moreover, recent events on Wall Street underscore how working at a cash-guzzling startup is no riskier than employment with a big established company. "The perception of risk is changing," O'Donnell says. "A lot of those big safe jobs at big banks have turned out not to be so safe after all."

As 2008 winds to a close, O'Donnell also expresses confidence that the venture funds will appear. In the meantime, although he would like to cut costs to reduce cash burn, he says that Path 101 has operated on such a shoestring budget from day one, even squatting in the offices of one of its angel backers, that there's little excess.

"We've been quite obsessive about conserving cash all along," he says. "I don't want to be naive, but I can't imagine where we would cut."

In our Behind the Money video interview with O'Donnell, he discusses the challenges of raising funding in the current economic climate and his own career path, which included a stint as an analyst at New York VC firm Union Square Ventures and founding NextNY. --Andrea Orr

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