Dorm Room Moguls

B-School Startups: Internship Sparks WorkerExpress


Editor's Note: This story is part of Bloomberg Businessweek's occasional series on the world of startups. The series focuses on MBAs and undergraduate business students who developed their ideas or launched their businesses while still in school, and the many ways their schools helped them get their new ventures off the ground. For a look at some business students trying to build their own businesses, check out our slide show.

Pablo Fuentes' job is finding other people jobs.

After graduating from Stanford's Graduate School of Business (Stanford Full-Time MBA Profile) in June, Fuentes and Joe Mellin—a Stanford design school alum—launched WorkerExpress.com, a website that provides vetted and insured workers to employers looking for temporary hires.

Fuentes began thinking about the idea for such a company during the summer of 2009 while he was an intern at Progreso Financiero, a Mountain View (Calif.)-based financial-services company. Progreso Financiero offers unsecured credit to Hispanic families who experience difficulty securing loans. Fuentes was in charge of creating a system that uses text messaging as a way to communicate with customers. "Seeing so many cell phones used for so many reasons made me realize there could be a market for connecting people and jobs through cell phone technology," Fuentes says.

When Fuentes returned to campus for his second year of B-school, he focused much of his time on developing WorkerExpress. During the initial stages of planning, he reconnected with Mellin, whom he had met while organizing an event for the Hispanic Business Student Assn. the previous year. Mellin, whose thesis was on wealth creation for the day labor market, and Fuentes devised a plan for a business that utilized technology in the job search. "At first the focus was on cell phones, and then we thought bigger and realized the entire staffing industry needed to be upgraded," Fuentes says.

What they came up with was a new online platform for unemployed day-laborers to find jobs.

Matching Workers with Jobs

Here's how it works: Interested workers nationwide fill out an application and get it verified using regional notary offices. After being approved, applicants then build a profile on the site that includes experience, references, tools they own, and, if the workers choose, pictures of themselves and of work they have completed. Once the profile is submitted, a WorkerExpress rep verifies the information and the profile is then added to a database that prospective employers can access to find help.

When a contractor requests workers with certain skills for a specific date, duration, and location, WorkerExpress finds the most qualified by using a matching algorithm. The WorkerExpress member is then sent a text message with the job information asking if he is interested and available, and the contractor gets a list of options for the job, including access to those members' full profiles.

Once employers choose potential workers, WorkerExpress takes care of scheduling and the workers keep 100 percent of what they earn. The employers are responsible for paying workers' comp and employment tax expenses, along with a fee. According to Fuentes, WorkerExpress has been doubling its revenue every few months since the launch.

Stanford Resources

The initial rounds of funding to launch the company were raised with the help of the Stanford B-school community. Fuentes' classmates connected him to investors—one was the boss of a colleague, others were a colleague's family members in the construction industry, and a few other investors Fuentes met through the school's Center for Entrepreneurial Studies. They raised about $500,000 to get the company off the ground.

Additionally, the WorkerExpress founders relied on Stanford's other resources to build the company. Fuentes credits two business school professors in particular as being instrumental in the launch: Peter Reiss, head of the Center for Entrepreneurial Studies, and Peter Wendell, professor of the Entrepreneurship and Venture Capital course.

Reiss sponsored Fuentes' independent study class where he produced a report on customer acquisition costs for two-sided marketplaces. Wendell, who is also a partner at Sierra Ventures, a Menlo Park (Calif.)-based venture capital firm, taught Fuentes and his team how to present a business plan to potential investors. "In so many ways Stanford provided us with the platform to really get started," Fuentes says.

WorkerExpress has three employees, plus the two founders, and more than 1,000 profiles in the system. The biggest challenge is understanding just how contractors and workers in construction use technology, Fuentes says. "This isn't the sort of business you hash out on a napkin in a bar," he says. "We're continuing to develop by working with our customers. The success of our product has been directly related to the time we have spent with our users in the environment."

The WorkerExpress team is placing workers in jobs in California but has plans to expand into other states next year. "I'm a first-generation immigrant, and I love the idea of coming to work every day and getting people jobs," Fuentes says. "Especially now, as we're only starting to emerge out of a recession, this work is important."

Saadi is a reporter for Bloomberg Businessweek in New York.

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