From Product to Platform: How Skillit Built Network Effects into Their Construction Hiring Solution

From Product to Platform: How Skillit Built Network Effects into Their Construction Hiring Solution

Building a network effects business is the holy grail of B2B software, but it’s particularly challenging in traditional industries. In a recent episode of Category Visionaries, Skillit founder Fraser Patterson revealed how they achieved this in construction hiring – an industry not typically known for viral growth.

The Data Moat

Skillit’s platform strategy begins with what Fraser calls “extremely data rich, 360 degree profiles that we are able to have built by our workers.” Unlike traditional job boards that offer basic resumes, Skillit created comprehensive worker profiles that become more valuable as more data is added. The platform has accumulated “about 2.1 million proprietary skills, compensation and experience data points” directly from workers.

Enabling Recruiter Collaboration

The key to Skillit’s network effects lies in how they’ve enabled collaboration between recruiters. “Our business naturally has kind of network effects baked into it,” Fraser explains. The platform allows “recruiters to collaborate with one another and share with their subcontractors who have the same recruiting challenges.”

This collaboration feature solved a crucial industry pain point. As Fraser notes, “Historically we’ve pretty much ignored skilled trade workers. The best recruiter, if you will have on them is a kind of online business card.” By enabling recruiters to share insights and candidates, Skillit created value that increases with each new user.

The Subscription Model Innovation

Rather than charging per hire or per connection, Skillit implemented a regional subscription model. “It’s essentially a single fee per month for a region which is a state typically and across all trades,” Fraser explains. This model encourages companies to use the platform extensively within their region, creating natural network effects as more recruiters join and share data.

Viral Growth Through Industry Relationships

Construction companies often work with numerous subcontractors, creating natural opportunities for viral growth. Skillit capitalized on this by “starting to productize some of those and create some viral loops.” The platform’s success is evident in their metrics: their “North Star” metric of connections between recruiters and workers “grew 400%” with “three quarters of those occurred in Q4.”

From Individual Users to Company-Wide Adoption

Skillit’s strategy for driving company-wide adoption focuses on engagement rather than pure user numbers. “I think what I care about the most is building at this stage a product that our customers love,” Fraser emphasizes. “I really believe that engagement and retention are fundamentally the most important growth engine we have.”

This engagement-first approach has even attracted unexpected users. “We’ve had trade schools sign onto the platform, staffing agencies, small companies, very large companies, international companies asking us if they can take the platform abroad,” Fraser shares. However, they maintain focus on their core market: “We’re going after the mid market self performing construction company, GCs and specialty trade companies.”

Building for Long-Term Network Effects

Looking ahead, Skillit aims to strengthen these network effects through data and upskilling. “The big vision here is, can we use that proprietary data and that digital infrastructure to help train and upskill the talent network… to become increasingly valuable to employers?” Fraser explains.

For B2B founders, Skillit’s journey offers valuable lessons about building network effects in traditional industries. Rather than forcing viral mechanics onto their product, they identified and enhanced the natural collaboration patterns in their industry. By focusing on engagement over growth and enabling natural industry relationships, they’ve created what Fraser calls “a category of one” – a platform that becomes more valuable with each new user while solving real industry problems.

The key insight? Sometimes the best network effects come not from artificial viral mechanics, but from deeply understanding and enabling the natural connections within an industry.