The new breed of lead providers for services appears to have slowed down. While Angie’s List is all over the air waves, building its consumer base for an expected IPO, and ServiceMagic is performing well for IAC, and expanding, not much has been heard from such new companies as RedBeacon, Cox’s Kudzu, Likelist, HelpHive , Sears’ ServiceLive, and Thumbtack.
For at least some of them, however, things continue to develop behind the scenes. RedBeacon, for instance, tells us it is now serving the Top 50 U.S. markets and has built out its team.
Similarly, Thumbtack says it has made good progress towards its goal of building out “the largest directory of independent service professionals.” The angel funded company has 11 staffers in San Francisco, and a 120 person support team in the Philippines.
Thumbtack now has a database of 150,000 merchants around the U.S. It is also gaining consumer traffic, and now provides around 30,000 leads a week. It has had 550,000 unique visitors in the past 30 days, driven largely from SEO and social efforts.
Last week, we dropped by Thumbtack’s San Francisco headquarters to visit Marco Zappacosta, the company’s 26 year old leader. Zappacosta says the company may have underestimated how much effort it takes to jumpstart a marketplace. But the company’s flexible model of letting businesses either pay up front for leads or on a commission basis appears to have hit a sweet spot.
The problem with most lead gen companies is they don’t offer leads on an opt in basis. They require a merchant commitment every month. They force them to pay for things they don’t want. “There are times when a merchant is busy, or on vacation,” notes Zappacosta.
Whether merchants choose to pay up front or a higher amount of commission after jobs are completed, however, “varies by category,” says Zappacosta.
In both cases, however, Zappacosta says “we’re underpricing relative to what we’re charging. More established, higher-end businesses, like roofers, want to pay up-front for leads. They have an internalized sales cycle and don’t want to monkey around after an introduction is made.”
Categories on the lower end, such as tutors or handymen, however, don’t have any cash flow. They also don’t trust us,” he jokes. Zappacosta also acknowledges that it has proven difficult to track how much jobs end up costing.
The problem with lead generation sites like Service Magic and now RedBeacon and Thumbtack is that they operate with a lot of overhead and hassle. It is also expensive and inconvenient for service providers and complicated for consumers. Sure, when a good job is finalized everyone is happy but how much effort did that imply and what about the deals that don’t go well?
We do agree that the good old yellow book is no longer a solution but frankly the online solutions so far proposed to the market just don’t do it. Yellow Pages clones? Just some directories, get your phone number and go. Yelp? Sure, but how many reviews are fake? Angie’s List? How about that, paying to read a review about someone you want to hire? Lead generation? What if I want to do my own research when hiring a contractor?
PinBud is frankly the best solution because it lets the user search, review, and select local contractors and professionals and then contact them all with a single request for service. This saves them time and money on quotes for their home improvement projects, car repairs, legal, financial, and other personal matters. PinBud is also a great venue for small businesses as here they can get a free business listing and free, direct sales inquiries from prospective customers. PinBud is not involved in the negotiation process and does not charge any job commissions or transaction fees.
In other words, PinBud is truly the free marketplace for services and it’s going to become the largest. Sorry Thumbtack!