Ex Cazoo CMO: Why Buying a House or a Car Is Getting Easier … and Hiring the Right Person Isn’t

Spare a thought for the honest used car salesperson and for the diligent, transparent estate agent.

Any new customer they come across will probably think the worst of them. Not because they personally have a bad reputation but because a small number of bad actors in their industry have trashed everyone else’s reputation over many decades.

But the real villain of the piece is something else entirely. It’s ‘information asymmetry’.

To understand this, it’s important to appreciate the common features that the marketplaces for used cars and property share.

From the buyer’s point of view these are high stakes purchases: the most expensive and second-most expensive things you’ll ever buy (or rent); something you’ll use every day; something you’ll be committed to for many years. The excitement of stepping into the buying process soon gets whittled away as the buyer is compelled to rapidly become an expert in the complexities and idiosyncrasies of a whole new world.

The trickiest thing for a buyer to get their head around is pricing - and therefore value. Every house is different, has a different value and therefore a different price. The same is true for used cars (less so for new cars). How do you, the buyer, know what a good deal is? More than that, how are you going to know if you really, really like it once you’ve shelled out a large sum of money, taken on significant debt and (eventually) taken full ownership of what you assume is your dream house or dream car?

And what about the faults you can’t even see: the noisy neighbour, the leaky roof, the dodgy clutch? Unless you’re buying a new build property or a pricey new car, you’ll be buying something that someone else has owned before and one day you’ll likely be selling it on to someone else.

On the other side of the market is the seller or the intermediary. This is a world they know intimately. They’ve operated in it for years and built deep expertise. They navigate through it every day as part of their chosen profession. They know the tricks of the trade and they hold all the cards. They know everything there is to know about their stock of houses or used cars, including the good stuff that helps them close a sale and the bad stuff that might cause a buyer to hesitate or negotiate a lower price.

They have all the important information and expertise. The buyer doesn’t. This is information asymmetry.

But there is good news for the ignorant buyer. Over the last decade or two, innovative businesses harnessing new technology have done a great job at reducing information asymmetry by democratising data and putting more power in the hands of the buyer.

The likes of Rightmove and Zoopla in property and AutoTrader, Carwow and Motorway in cars, have built platforms that collate vast amounts of data on vast amounts of houses and cars and present them to the customer free of charge in a way that puts them more in control. This helps move the buyer a few steps away from information asymmetry and a few steps towards what economists call ‘perfect competition’.

Harvesting, collating and packaging up data at this scale and making it easy to navigate by the customer is no easy feat, especially at the outset when this has never been done before. During my time at Cazoo we sold over 150,000 cars entirely online. Which meant that we bought over 150,000 cars from a range of sources before refurbishing them and presenting them on our website for sale.

To give customers the confidence to buy a used car online with an average price of £18,000 required us to present as much data about each car in a consistent, clear and credible way. To build the capability for us to do this at scale every day was a herculean task for our talented Product Team. Service history, in particular, was a tough nut to crack – vitally important information that underpins the value of any car but highly variable in the way it was stored in different makes and models of car: from onboard computers to paper service logs with illegible writing.

Thanks to the brains, hard work and commitment of teams harnessing new technology at digital marketplace businesses such as these, buyers of used cars and property have become empowered and more in control. The opportunity for nefarious sellers to sell dud products for too high a price has been diminished. Honest estate agents and used car salespeople can start to take centre stage.

But this happy dynamic doesn’t appear to be happening in another key marketplace that involves a high stakes transaction: the marketplace for talent. Hiring the right person into a business is a critical decision for any business. Choosing a company and a role to dedicate your talent, time and energy to for the next few years is a big deal for any candidate. And yet, the rapid spread of new technology within the talent marketplace seems to have made the experience and the outcomes for both sides much worse over time.

The explanation for this comes down to the availability of quality, objective data. For any property or used car there exists a body of objective data that underpins the appeal and value of what is being bought and sold. The challenge is to collate it and present it effectively at scale.

To a large degree, data about people can never be sufficiently objective for this to work. This comes down to two essential reasons: people are infinitely complex; and people lie. Of course, there will always be a role for a CV or resume to present facts and information that can be verified (and also exaggerated).

But the hard yards and face to face human interaction needed to make the right hiring decision remain. The race to deploy technology to streamline, optimise and reduce the cost of this process seems to have – so far – backfired. Thanks to innovations such as the LinkedIn ‘Easy Apply’ button, internal talent teams are overwhelmed with hundreds of unqualified applicants and the superstars can be one missed keyword away from being summarily discarded before they even get started.

Either we need better technology or we need to recognise that there are some marketplaces that aren’t ready to be automated and maybe never will be.

Pity the honest, friendly headhunter!