Q&A: BranchOut Founder Rick Marini on How It Raised $18M for a Facebook Professional Network With 6,000 Daily Users

Professional social networking Facebook app and site BranchOut has raised an $18 million second funding round to grow its engineering and sales teams. Previously only available as a destination app, the company is also launching a Jobs tab app for Facebook Pages of companies looking to hire.

We spoke with BranchOut founder Rick Marini about the company’s product roadmap, and why he think Redpoint Ventures, Accel Partners, Norwest Venture Partners, and Floodgate made a wise investment despite the app’s currently low traffic numbers.

When we first profiled BranchOut in August 2010, a month after its launch, the app had a promising and relatively unexplored idea — offer a Facebook-based professional network that lets users discover where their friends work. While it was fun, the app wasn’t focused on helping users and companies find each other, and forming BranchOut connections with one’s existing friend base seemed redundant.

BranchOut’s founder Rick Marini had initially bootstrapped the company with money he made from the sale of his earlier venture Tickle.com to Monster, and revenues from his previous Facebook app, SuperFan. By September, BranchOut had raised $6 million from Accel Partners.

Since then, the professional network and hiring application spaces on Facebook have grown competitive. Simply Hired created a job-seeker Facebook Connect destination site, and Identified recently launched a professional social network based on Facebook data that properly concentrates on allowing users to be discovered by recruiters and approach companies. Work4 Labs has improved its Work For Us page tab app with impressive relevancy algorithms that suggest users jobs they’re qualified for and friends they should recommend openings to.

Q&A

Inside Facebook: This new tab app lets Pages post full descriptions of their openings with links to share the postings and a button to apply by email. The app’s current iteration is very basic compared to Work For Us by Work4 Labs, though, which sorts lists of job openings and friends to suggest jobs to by relevancy. Could you explain the impetus for releasing the Page tab app and how it compares to existing solutions?

Rick Marini, Founder and CEO of BranchOut: The Jobs tab is the second in our line of enterprise products. The first was job postings on [BranchOut’s destination app]. We were focused on the consumer side, but now we’re shifting gears towards enterprise. Companies told us “I don’t only want the jobs on BranchOut, I also want them on my Page.” We didn’t want to have a hole in our product suite, and since its release we’ve signed up Levi’s Groupon, Kiva, and charity: water. They can either pay us directly to have the jobs tab product, or they can pay a $99 posting fee on BranchOut and we give them the app for free. For volume we give them a discount that depends on the number of jobs they post.

The features you mentioned in Work For Us — all those things are in the works and will be available in BranchOut’s app within the next 30 days. We don’t see the tab as a major breakthrough, but it’s an important part of our suite. Work For Us is a service provider, and we are going to have a very similar service, but we have a community of professional networking folks which goes much deeper.

The third enterprise product is a subscription-based product for recruiters. It offers advanced communication and granularity of search akin to LinkedIn’s competing Pro product.

IF: Speaking of your community, though there is a lot of opportunity for professional networking on Facebook, your app only has 6,000 DAU right now. Do you think that warrants the $18 million in funding?

RM: We turned up our viral features in January and got up to 250,000 monthly active users. We eventually grew to about 500,000 MAU, but people were feeling like we were sending a lot of invites and lot of wall posts – it was feeling a little spammy. We’re building for the long-term so we self-imposted limits on wall posts and notifications. We knew it would bring down the numbers but we didn’t want that stigma of being spammy. We reset our user acquisition method to be driven by our core features — recommendations and badges.

I don’t think the consideration was around the size of the user base. It’s around leveraging Facebook — the biggest distribution method. We’re by far the largest professional social network on Facebook, we have the right core team, first mover advantage, and a great relationship with Facebook. Investors are looking for a long-term play here.

LinkedIn is a great company, they built a foundation for professional networking online and gave recruiters experience paying for an enterprise service. But I think all networking, professional and social, will happen on Facebook. If recruiters pay on LinkedIn for a similar service, they’ll pay for it on BranchOut. Facebook has 700 million plus users — it’s 15 times larger than LinkedIn. It’s your true support network, the people who will really help because the strength of connection is really strong. This is why people would want to invest in a large series B.

IF: But won’t you need a larger user base to make that third enterprise product valuable?

RM: The size of the database matters. We are looking for other ways to grow the database such as working with companies to sign on all their employees and recruiters. Recruiters can then tap into the friends of employees and ask for warm introductions, because when you authorize BranchOut, it’s not only pulling your data but the data of your friends. The BranchOut database is quite large in this sense.

IF: How exactly will the funding be used?

RM: The funding is going to be focused first and foremost to build out a world-class team. Three areas to beef up are our engineering team, the product team, and now it’s the time to ramp up our sales. Over 40 clients say “we want to do the same recruiting search within Facebook as we can within LinkedIn.” We need to hire a sales team to ramp that up.

Conclusion

BranchOut’s destination app will still need to convince users that its safe to use a professional networking tool that lives within Facebook where sensitive personal and social data is held. It will also need to provide more value to job seekers rather than viral mechanics like the quiz shown above for it to grow to the size where it will become useful as an enterprise solution to recruiters. Now it has the money to get to this point, but with other companies encroaching on its turf BranchOut will have to truly excel to become a success for its investors.