Why in the hell would a well-established company in the employment space randomly change its name from Beyond to Nexxt? Beyond.com is easy to remember and doesn’t fall victim to spellcheck when writing an email or text. Nexxt, with two X’s, on the other hand isn’t so lucky.
Employees at the company would answer my questioning with things like, “We’re moving beyond job postings; we’re what’s next.” Get it? Ha ha, right? Basically, the defense was it didn’t want to be pigeonholed as a job posting site for the end of days. Sounds good in a bar over drinks, but plenty of companies have changed direction without throwing the baby out with the bathwater.
I wasn’t buying it, and for good reason.
This week, a story in the Philadelphia Inquirer detailed what really happened and why Beyond is no longer Beyond.
In 2007, Safeguard Scientifics, an investment firm, put $13.5 million into Beyond. Like most job boards at the time, money was flowing like water until things got upended in the Great Recession which began in 2008. Rich Milgram, Beyond’s CEO, certainly timed the investment just right, and was able to weather the economic storm as a result.
By 2013, however, the Inquirer describes a strained relationship. Times were getting better and Safeguard wanted a return on its investment, which was on a five-year timeline. Because Milgram remained majority owner of the company he started in 1998, he was able to stifle a sale of the company. His team was too important, regardless of the riches.
“You know how you hear in these deals how all the executives made out and the financial guys made out, and then the team got screwed? Well, that was never going to happen,” Milgram told the Inquirer. “I’m not like that, and I am the majority owner.”
So you have an economy that’s blowing up, investors itching for a big return on their investment, and a majority owner unwilling to break-up the band. Something had to give, and it did. Bed, Bath & Beyond, the popular retailer, entered the picture. You see where this is going, right?
In 2005, Milgram bought Beyond.com for $150,000, which amounted to three months of revenue. By all accounts, it was a risky bet, especially in a landscape where most job-related sites had various forms of the word “jobs” or “employ” in them, but as someone who was around at the time and covered the industry, it was easy to remember. Even without a sale, the domain name would’ve been worth the bet.
After numerous attempts and offers, Bed, Bath & Beyond finally made an offer that became an epiphany for Milgram: What if they sold the domain, bought out the investors with the money earned, and were free to start over, team intact, as a result? Sure enough, that’s what happened, sort of. Milgram still has to pay Safeguard $10.5 million more in three years.
“We were able to ultimately develop a solution where Rich bought us out of our position — part in cash and part in a three-year note — resulting in a very nice profit for us,” Stephen Zarrilli, Safeguard’s chief executive, wrote in an email to the Inquirer.
Timing commonly gets overlooked in business, but it’s almost always essential to success. Amazon, in this instance, should get a lot of the credit, even though it has nothing directly involved. The impact it has had on retail has forced incumbents to up their online game to survive. Walmart bought Jet and realizes it must take the fight to Amazon if it’s going to prosper.
That mentality is bleeding into other retailers, which I assume has a lot to do with Bed, Bath & Beyond’s aggressive purchase of the Beyond.com domain. Don’t be surprised to see a national advertising campaign from it in the near future touting its new easy-to-remember URL and revamped online shopping experience.
And who knows, maybe it’ll be Nexxt helping it fill all those distribution centers with factory workers.
Disclosure: Nexxt is a sponsor of my podcast.