Tag Archives: Thumbtack

LSA16: Thumbtack Focuses on Creating an ‘SMB OS’

Thumbtack President and Co-founder Jonathan Swanson

Thumbtack is an SMB sleeper. It has raised $275 million, using it to develop a profile-based, one click referral system. Last quarter, 200,000 service SMBs bought some level of lead bundles, which can be purchased in packages ranging from $10 to $600 per week.

Under Thumbtack’s model, service pros only buy the number of leads they want to deal with. Consumers receive a choice of 3-5 referrals per query (yes, sort of like Home Advisor.) The beauty of it: no sales force — the single greatest expense in the industry. Thumbtack simply finds its service pros via sophisticated searches and builds a searchable profile. In some cases, it is enfranchising entire new groups that don’t have storefronts and aren’t typically approached for marketing (i.e. photographers, dog walkers)

We’ll see whether Thumbtack hits a wall with the model, given that many SMBs have needed a push from a sales consultant to keep their foot on the gas. Meanwhile, the Thumbtack team isn’t waiting to see what happens. It plans to deepen its engagement with SMBs by developing a comprehensive SMB “operating system” that will connect all the dots for busy service pros that need help with scheduling, presence, marketing and back office chores.

Speaking at LSA 16 this week in San Francisco, President and co -founder Jonathan Swanson says the company is basically extending its longtime mission of moving away from the omnipresent directory model and be more Amazon-like. He calls it a “features” approach. “The more we looked at our competitors, the more they looked the same,” he says. Competitors include such companies as Angie’s List, HomeAdvisor, Porch, Amazon, Google, Dex, Hibu and others.

Swanson says that the company’s main mission is to extend its relationship with its service pros, and make that relationship more rewarding. Churn isn’t an issue since there is no contract – just new business. “Once a professional is hired (using) Thumbtack, they stay with us forever. If they are being hired, they come back again and again,” he says.

The SMB operating system concept isn’t necessarily a new one. Groupon was talking about it a couple of years ago, seeking to enlist partners from a wide variety of niches to “close the loop” on its payments and loyalty system.

Thumbtack’s vision is to leverage its core competencies, mostly using internally developed resources. “We’re good at Adwords, payments, scheduling,” says Swanson.

With the OS in place, service pros can “open the App, tell us their skills and we can tell them what they can earn in different parts of the country. We’d help you start a small business, get a license and get customers. You focus on what you love doing, and we’ll focus on everything else.” The company, meanwhile, can also educate consumers on their bids and what they can expect to pay. Many consumers, for instance, wouldn’t realize that a quality photographer wouldn’t bid on a $500 photo shoot.

BIA/Kelsey SFO: Home Depot,Thumbtack, Serviz Weigh in on Home Improvement

Home improvement services is a wild new frontier that has just scratched the tip of its potential, according to segment leaders at BIA/Kelsey’s Leading in Local: Interactive Local Media event at San Francisco Airport.

“ServiceMagic/Home Advisor is (only) a couple of hundred million dollars. Angie’s has never made a profit. The market is ripe but no one is there yet,” said Home Depot Silicon Valley leader Anthony Roddio, who also serves as GM of the company’s Red Beacon contractor scheduling service. “The pot of gold at the end of the rainbow is repeat business.”

Roddio noted that a real opportunity for the industry is that many millennials have moved away from DIY. “For some, their idea of a home project is upstreaming iTunes in the living room,” he said. But Home Depot is traditionally geared around DIY. The company hasn’t done enough to develop ‘Do it For Me’, said Roddio.

Serviz leader Zorik Gordon, the former ReachLocal leader, said that the void in the industry is that the segment is not transparent. Serviz will move away from unreasonable 300-500 percent upsells, and provide price charts, and reviews; it will also assign contractors, said Gordon, who says the startup will move beyond southern California, where it launched in July, and will reach 10-20 cities by the end of 2015.

Thumbtack CEO Marco Zappacosta noted that his company recently raised $100 million from Google and others. “What Google and others saw in us is that we have created a unique platform,” he said. “We have 600 unique categories.”

Thumbtack is taking a different approach than Serviz and The Home Depot’s Red Beacon in that it doesn’t assign jobs to service pros or collect money for jobs. Focusing on moving the money is “not the indicator” for the success of a transactional marketplace, he said.

Thumbtack Raises $4.5 Million

Thumbtack, which has set itself to compete against Angie’s List and ServiceMagic in the SMB leads space, has raised $4.5 Million from Javelin Venture Partners, with MHS Capital and Tim Draper participating.

The eight person San Francisco company, founded in 2009, claims nearly a quarter million active merchants — up from 150,000 in July — and “hundreds of thousands” of visits. Founder Marco Zappacosta tells us that the company continues to scale well on “both sides of the marketplace” — merchants and consumers. He says the company will use the funds to hire 12 people as soon as possible, and focus on building the user experience. “The money is all about investing in the experience and really develop a marketplace solution,” he says.

Zappacosta notes that the company provides standard features such as quotes and finding the right people, but “there is a lot more we can do.” For instance, Zappacosta hopes to add payment and invoicing capabilities throughout the site, as well as scheduling.

Thumbtack’s Heady Goal: To Build ‘The Largest’ Service Marketplace

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.

Thumbtack: 30,000 Home and Trade Leads Last Week

The home and trade leads space was getting a lot of attention a year ago, with a number of social media driven leads companies hoping to cut in on longtime leaders such as ServiceMagic and Angie’s List. Among the contenders: Cox’s Kudzu, Red Beacon, Likelist, HelpHive , Sears’ ServiceLive, and Thumbtack

Not much has been heard from the space since then, but it hasn’t been standing still Red Beacon landed a deal with Yahoo; some new contenders have jumped in (i.e. The Washington Post’s ServiceAlley); and Angie’s List has landed another $24 million in financing as it heads towards an apparent IPO.

Angie’s List and ServiceMagic, in fact, are all over the airwaves with their commercials – among the most prominent ambassadors for the Interactive Local Media ecosystem.

Thumbtack, too, says it has been quietly making inroads. The 11 person, San Francisco-based service, landed an angel round in June 2010. Since then, it has signed up 110,000 home and trade pros (and rejected 5,000 that did not pass its background checks).

The site has generated 100,000 leads in the last three months (30,000 in the last week). It also has done well with consumers, generating 390,000 unique visitors last month.

The site’s traffic comes largely from SEO, rather than from media partnerships. It works efficiently because only job specific information ends up in the search results (i.e. San Francisco Plumber). “It means we have what you are asking for,” says CEO Marco Zappacosta.

The service, which is national in scope, rather than focused on individual markets, works with home and trade pros in two ways: they can either opt to pay for leads upfront, or pay commissions after they get the job.

Leads are provided are only provided to home and trade pros on an opt in basis, allowing for vacations or full schedules. That differs from lead gen providers that require pros to accept a minimum number of leads towards a monthly commitment.

Which revenue model that is ultimately chosen varies from category to category. More established professionals in higher end categories, such as roofers, want to pay for the lead up front. They have internalized their sales cycles. After they have gotten a lead, they don’t want to monkey around (with leads providers such as Thumbtack).

On the lower end, home and trade pros such as tutors or handymen want to pay a commission. They don’t have a lot of cash flow, and they may not trust the leads provider to provide a good lead, at least the first few times they use them, says Zappacosta.

Thumbtack, a Service Leads Provider, Raises $1.2 Million

Thumbtack, one of the new breed of service lead companies such as Alikelist, Red Beacon, HelpHive and others seeking to push aside leaders such as ServiceMagic and Angie’s List (and the Yellow Pages), announced today it has raised $1.2 million, and now has raised a war-chest of $1.7 million altogether. The new angel round includes 11 angels, including well known Web leaders such as Jason Calacanis (WebBlogs), Joshua Schachter (Delicious), Scott Banister (PayPal), and Ariel Poler (i/Pro).

Site founder Marco Zappacosta says the funding will be used to expand Thumbtack’s eight person team, which is based in San Francisco. It will also be used to expand key features such as email marketing, appointment management and its “Personal Concierge” service.

Zappacosta tells us that the site has evolved considerably from its earliest days. It is now focused on simple tasks such as invoicing, record management and appointment management. “Payment solutions are really hard to pull off,” he says.

The company remains wedded, however, to its core concept of providing “deeper, richer” background on service providers rather than relying on licensed lists. It now has profiles on 40,000 service professionals in 11 markets, including Atlanta, Chicago, Dallas, Las Vegas, Los Angeles, Miami, New York, Phoenix, San Francisco, Seattle and Washington D.C.