DJ 1-Page's Share Price is Up in the Clouds -- Barron's Asia

DJ 1-Page's Share Price is Up in the Clouds -- Barron's Asia

By Bill Alpert

1-Page may be the most revolutionary company you've never heard of. The San
Francisco-based firm says its cloud-based software is the "next generation human
resources solution" for employers and recruiters seeking new hires. LinkedIn ( LNKD
) and Monster Worldwide ( MWW ) should prepare to be disrupted.
1-Page shares soared about 1,400% in the year following its October 2014 initial
offering. If this escaped your notice, it's probably because it took place on the
Australian Securities Exchange, where the stock (ticker: 1PG.AU ) was marketed as the
"first Silicon Valley company to IPO in Australia." At a recent price of
AUD3.55 (US$2.57), Aussies are valuing the Yank business at half a billion Australian
dollars, and Canaccord Genuity's Chris Northwood, based in Melbourne, suggests that
1-Page could be worth twice that, in a recent Buy recommendation entitled "An
American unicorn in kangaroo's clothing?"
Half a billion or a billion is still a small valuation, to be sure. Yet even those
levels are awfully high for an outfit that rang up sales of less than AUD160,000 in the
six months ended July of this year, according to its filings with Australian regulators.
But to investors who might worry that 1,500-times annualized sales is a high price for an
unprofitable venture, Northwood responds in his report that 1-Page revenues will approach
AUD190 million within a couple of years.
Testing the market's steep expectations for 1-Page is difficult, because it's
hard to find people in its industry who've heard of the company. We also spent weeks
trying to get chief executive Joanna Riley Weidenmiller on the phone, but 1-Page said she
was too busy to talk to us. The company began the year telling investors that by
December's end it would have 125 clients signed up who would each spend US$300,000 a
year. With less than a hundredth of that revenue run-rate visible in the company's
six-month sales tally, 1-Page has a long way to go in the last month of 2015.
1-Page sprang from the imagination of its 33-year-old chief executive and her dad
Patrick G. Riley - a self-help guru who wrote a book called "The One-Page
Proposal." As you've guessed, his book explains how to keep a job proposal
succinct. Convinced that brevity could also be the soul of something bigger, they raised
US$3 million from venture capitalists to build software that recruiters could use to pose
online challenges that candidates would solve by submitting one-page job proposals. They
called it the "gamification of hiring." Three years after starting their
company in 2011, they'd lost US$3 million on a cumulative $175,000 in revenue. So in
2014, they transported their notion to Australia and reverse-merged their 1-Page company
into a publicly-held nickel mining stock.
The mining company changed its name to 1-Page, which also changed its game to
gamification. In November 2014, 1-Page acquired a database of 800 million personal
profiles that had been compiled by BranchOut, a company whose flameout had been a
cautionary tale in Silicon Valley. BranchOut's founders had tried to compete with
LinkedIn's professional networking service by automatically scooping up the profiles
of the LinkedIn contacts and the Facebook friends of anyone who signed up for
BranchOut's service. When LinkedIn and Facebook ( FB ) put a stop to that practice
several years ago, BranchOut had to abruptly stop updating its data and its database went
stale. BranchOut's monthly users collapsed from about 40 million to 100,000. Its few
remaining employees were hired by Hearst last year and 1-Page acquired the old BranchOut
database, for cash and stock worth about US$7 million.
That $7 million database is now the basis of 1-Page's half-a-billion Australian
dollar market capitalization. Weidenmiller's company says it has updated the old
profiles that it got from BranchOut and has scraped various Internet Websites to expand
the database's coverage from 800 million people to 1.2 billion. Recruiters will pay
big bucks, says 1-Page, to search the database for job candidates. It reports that
Starbucks ( SBUX ) will search the database for barristas and that Amazon.com ( AMZN )
and Accenture ( ACN ) have also taken looks. But in a recent filing, 1-Page also
acknowledges that its customers are using its data on a trial basis and for "nominal
revenue amounts." When 1-Page asks those customers to start paying upwards of
$300,000 a year, it will face the problem of the competitive offerings available for much
less money from the likes of LinkedIn, Monster and a dozen other vendors.
If 1-Page has proven better at getting money from Australian investors than from
customers, it should come as no surprise. "Since incorporating in December
2011," says the company in a recent presentation, "1-Page's activities
have principally involved raising money."

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