Andrew Bassat doesn't just want you to find a better job; his ambitions are to also help you find a better life.
This article is from the February 2015 issue of INTHEBLACK.
Andrew Bassat was getting bored. He’d studied law and science, worked as a lawyer and management consultant and had an MBA – but it wasn’t ticking all the boxes for this smart and strategic thinker.
It was the late 1990s and Andrew’s brother Paul was frustrated finding a place to live via the newspaper classifieds. It prompted the Bassat duo to think how such a search could work online. But they soon switched their focus from real estate to recruitment, “because we could help more people”.
Seventeen years later SEEK, the business they founded, is an A$5.8 billion online employment marketplace operating across the Asia-Pacific (including China), South America and West Africa.
Bassat is a loud voice when it comes to the employment marketplace and the risk-averse mindset in Australia’s corporate environment. He’s a strong advocate for students acquiring the skills that employers want and need (read, STEM skills – but more on that later). What he really struggles with is the short-term thinking in Australia’s public companies, their reluctance to take risk for long-term gain, and a business culture that doesn’t encourage innovation or support entrepreneurs having another go when ventures fail.
SEEK’s success in China is a case study on how to get it right: tap into local knowledge and staff and build from there.
Bassat has been SEEK’s CEO for close to two decades, and told the former CPA Australia chief executive Alex Malley that his ultimate plan for the Australian-listed company is to generate most of its A$756 million in revenue from international operations.
Alex Malley: Take me through what was the first idea and was it what we have today?
Andrew Bassat: I wasn’t a very good employee. I probably always had an inkling that doing something for myself made sense. The specific idea of SEEK came from my brother looking for a house and finding the process frustrating. He grabbed me and said “maybe this should go online”. We did a business plan – I was the management consultant so the documenting and thinking through the strategy was me. We quickly moved from real estate to employment – it was a bigger category, we thought we were helping people more and it was more amenable to online things.
Malley: Talk to me about those early days when you had decided on the concept. What were the best and worst of times?
Bassat: It was interesting. In some way, things were relatively easy for us. We got funding from Matt Rockman [who co-founded SEEK with Andrew and Paul] and his father, which was great. They were the first people we spoke to. That was unusually lucky in a sense that we were pre-dotcom boom in Australia. It was happening a lot in the US and not so much in Australia.
We were probably a bit naive. We didn’t know there was a lot of hard stuff in front of us. I assumed it would be three or four years; the one thing I didn’t anticipate is that I’d still be here 17 years later.
We had fun. It was good. It was challenging. The first year we weren’t getting any sort of results at all. Keeping advertising on board was hard work. Keeping job seekers on board was hard work. With persistence we got through, and after about a year we started to get a bit of critical mass and from then it got a bit easier.
Malley: When you look at employers and their needs, where is the lack of supply in skills?
Bassat: I was involved with the human capital task force with the B20 [a part of the recent G20 event held in Brisbane], so from that and what we see at SEEK, it’s clear that the STEM skills – which is science, technology, engineering and maths – people with those skills find it very, very easy to get work and people looking for those skills find it hard to find staff. The more we can do to get people studying those sorts of things the better off we’ll be.
Malley: You were an internet start-up at the height of the dotcom bubble. Why did you survive when others didn’t?
Bassat: We were always focused on continually driving better outcomes for our jobseekers and hirers and didn’t let ourselves get too distracted by some of the excesses of that era. It wasn’t too difficult to figure out who among potential partners was focused on the right things and could add genuine value and who wasn’t. We obviously tried to avoid the latter.
Funding may have been difficult post the crash but our business was fortunately pretty solid by then and not too far from profitability.
Malley: How do you rate Australia in terms of innovation?
Bassat: Just OK to be honest. You’ve got a reasonable wave of start-ups coming through now, there are some really strong young people doing exciting things. [At] the time we came through, there was not as many as there should have been. In the US you have a go and you fail but they
give you a second chance and maybe a third chance. That tends to happen less in Australia, which I think might discourage some people from having a go, and certainly stops people having a second crack at it. I don’t think culturally we’re as supportive as countries like the US or Israel.
Policy settings are OK but not great. And at the public company level, a big frustration for me is how short-term investors are, how short-term everyone is, and that’s leading to companies being way less innovative and way more risk-averse than they should be.
Malley: I read with a smile that your early thinking around the China strategy was: “We’ve got A$20 million and the worst thing that can happen is that we could lose it.” What’s your advice for those about to enter that market?
Bassat: You need to go in with your eyes open. There weren’t really any sound internet businesses going to China from Australia in those days . Even the US businesses were running into walls. We figured that the A$20 million investment could work and, if we were successful, could be worth a lot more. I was fortunate enough to have a board that was very supportive [Asia casino magnate James Packer was chairman at the time] and they understood that, yes, there is a risk of losing everything but it was a calculated bet that we could afford as a company.
We learnt not to invest in number two companies anymore. We invested in number three at the time in China and we are now neck and neck with number one, but geez it’s been hard work. It’s taken us eight years. All of our subsequent investments are in number one companies.
It was our first international investment and we evolved towards the operating model which we have now and which we think is good. Usually it means us moving to have control over time, but still [having] a very strong local management team that works and feels like owners.
In all except one of our businesses we have locals running the team, no SEEK people there at all. It’s much more about developing good relationships where there’s alignment between us and the management team, where they trust us and we trust them. They are not going to do anything that they are not convinced about, so we don’t go in there saying you must do A, B, C. Sometimes they accept our ideas, sometimes they don’t and we don’t force them.
In hindsight we were more worried about China than we should have been. There are a lot of good and smart people in China and they want to get good outcomes and are happy to share the prize. The Chinese government seems to have the right focus. They want food security for their people. They want jobs for their people. They want better lives for their people. And if you’re going in there as a company with the right mindset – which is, “We are helping you achieve those things, we’re not there just for a short-term profit” – they tend to support you.
Malley: Being a public company and having a CEO who has been there from the start and remains interested and driven, SEEK shareholders have good reason to feel confident about the future.
Bassat: The reality is in public companies you’re only as good as your last results. Shareholders can turn on you pretty quickly. What makes it easier for us is the fact that I think more as a long-term shareholder than as a CEO. I don’t really care about the job that much, I have to do it to feed my family. I want to do a good job and have a good reputation, but I really have a long-term mindset.
"I’m happy to wear the fact that if you make long-term decisions you cop three years of criticism."
Some shareholders turn up to every single meeting and ask: “When are you going to close up shop and admit defeat on China?” For some CEOs – CEOs have an average tenure of three to five years – you can’t actually make a decision like China because it’s not going to pay off until you leave. In the meantime, you’ve got to wear the losses.
I’m less nervous or upset about criticism than some people. I think some CEOs want to do these long-term things, but they can’t get the board to support them, or they do get board support but the sharemarket is going to mark them down substantially. It’s a real problem I reckon; that’s why people aren’t investing much.
Malley: In leadership you’re only as good as your last game …
Bassat: I’m aware of that but it’s a bit unfair. I’m not sure what solves it, but I think you’ve got a very risk-averse public company environment at the moment. Everyone is coming and proudly talking about the fact we shaved this much cost off, but you can’t do that forever.
This article is from the February 2015 issue of INTHEBLACK.