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we're reducing those transaction costs for the two sides to come together and through that empowering professionals to work the amount that they want to work so we see this happening a lot in the creative trades
for these creative um jobs that people didn't know they could do full-time we're definitely bringing that to them
by the own data that these platforms publish what they show is year after year the fraction of workers on the right sharing or we are doing it for fewer hours and a smaller fraction of it is doing it on a full-time basis so the way to think about these on-demand platforms in particular is as the best source of secondary income ever invented
I think uber lyft post maids you know thumbtack have created some sort of a safety net for this gig economy job and those people are now choosing to not take jobs at Starbucks or Target or Walmart that are shift based
the economics when it's a commodity its price race to the bottom and that makes it brutal and like you know they even found a way through it but it's a huge challenge
I think uber taught people the wrong lesson everything became the uber Forex and it's sort of this like oh it just should be on-demand you click and then it's done it's magical and that over-applied a user experience to categories where that was not appropriate
what uber and lyft are doing is getting you a car now it happens require a driver to get you from A to B but the point is that it's transporting you it's a capital asset this is why the experience is a commodity you don't choose the driver you want you say pick me up here I'm going there done and they just send you somebody
when I invested him the two more success will come and save us in thumbtack and uber you know they were nine million or ten million
look what Shopify did right again that's products not services but still like just unleashed this incredible potential that was out there
I think uber lyft post maids you know thumbtack have created some sort of a safety net for this gig economy job ... but we need to be careful not to take that too far and pretend that these are the jobs that we want our future economy to be made up of primarily and in fact at some point they're gonna automate the drivers away
I would argue that what uber and lyft are doing is getting you a car now it happens require a driver to get you from A to B but the point is that it's transporting you it's a capital asset this is why the experience is a commodity you don't choose the driver you want you say pick me up here I'm going there done and they just send you somebody
over the first five years of the company it's less than our annual we spent less than our annual rent now
I worry about founders today because of how much noise there is around the expectations of how quickly things should happen... in 2009 2010 our goal was to just build a great product and survive as long as it took to get it to really click and take off and there was much less of this like sort of like FOMO and pressure and I don't think we could have figured it out if we were starting today
I would I bet it breaks down by age yeah and there's price some cutoff I my guess is it's in the 30s yeah maybe early 40s now we're you know like you'll use the phone to call mom but everybody else gets a text
because at the end of the day were a chat product you connect with pros to have a conversation to schedule to sort of work with and chatting on your phone is super natural
originally you know we started with a website and then it had to be sort of mobile optimized but then about sort of two three years ago which in some sense was late yeah to the party we realized that you know mobile was where all of our best customers were going that's where our best engagement was
the big frontier for us is getting really detailed availability... but availability and getting sort of real-time availability is sort of the next frontier for us such that we can turn it into a sort of an instant book experience
security is the most important thing and if we don't do that nothing else really matters
on thumbtack the average pro's learning more than 50 bucks an hour so it's a middle-class living
the scary part and something that we as a platform after work harder on is providing more security because the biggest challenge with these gig jobs is they are not certain
if you only charge a percent of the job when it's done you have two big problems one is policing... secondly again it goes back to the same issue when the pro knows they only get charged when they win the job... you have a terrible customer experience
what I'm not sure about is whether our business model will be a transactional one so today we charge per lead
we will we will close the loop all on thumbtack it's already sort of like in some sub cases being tested live
I think in some ways we still haven't fully cracked it you know exactly what you charge for what do you give back where do you really take your margin how do you price really really hard things to get right
we tried originally to not have that happen to not have them pay and what would happen is they would kind of like spray-and-pray they'd respond to everybody
in our case the fee makes the experience better because the pros self qualify by virtue of paying
the biggest asset that exists in the world is human talent and the time we have to express it and that is something that I still think is that day not even one day zero of being liberated and that is something we're working on but it's bigger than just us
there is a question of when are you really creating value and are you aligning your fee to that value creation so for example something like some tax we charge for the first match
marketplaces have this beauty that they are positive sum nobody loses when you find and hire a pro on thumbtack you in the Pro wins and we win and that's a great business to be in
it was a narrative violation because historically what we had said to ourselves is our magic sauce what makes us unique is that these are human crafted... people's first reaction was like well doesn't this just make us a list
our biggest competitor is word of mouth... life in our sector it is just really really hard to make that match because it's so specific we're more like a dating service than we are ecommerce
we eliminated the entire step of a pro being in the loop to generate these quotes... we can instantly show you the list of not just two three four but twenty thirty forty... the only way we become the Amazon for services
it actually wasn't due to growth rates growth was pretty strong it was due to actually that quotes per request metric so this had been our North Star we had thrown a ton of engineering and product work and marketing and we never could move it
you might actually buy asking that sixth seventh and eighth question are you supplying the paint or are they supplying the paint I remember was one of the questions when I went through this and if you get if you are not serious about it if you're just looking for pricing because you might be painting next year or you're curious you're gonna drop off so you get rid of the looky-loos it's self qualifies and it actually turns into product marketing
the more questions we ask the customer the more quotes we could give them and despite the fact that conversion rate would dip a little not surprisingly you ask customers more questions some Robert some more are gonna fall off actually less than you would think in our case but not zero got it but when you looked at the value to pros who then had richer data and context to respond to they loved it
for us early on it was getting each customer 3 plus quotes and what that told us was when we got you more than three quotes we knew you had a great experience your MPs was super high your repeat rate was high
thumbtack has always been about accomplishment it's about getting done you have a problem you got a need you come to us you get it done similarly for these pros they're trying to grow they're trying to get that done so accomplishment and that is really important
I worry about founders today because of how much noise there is around the expectations of how quickly things should happen
over the first five years of the company it's less than our annual rent now
I would I bet it breaks down by age yeah and there's price some cutoff I my guess is it's in the 30s yeah maybe early 40s now we're you know like you'll use the phone to call mom but everybody else gets a text
we realized that you know mobile was where all of our best customers were going that's where our best engagement was
availability and getting sort of real-time availability is sort of the next frontier for us such that we can turn it into a sort of an instant book experience
we've done this for about two-thirds of our categories and now we will keep working through and not surprising there's the long tail of stuff like appliance repair that's like an infinite grind to get right but that's also differentiation and defense ability for us to do that work
all the prices come from our pros we don't set prices which also helps us not have any of the worker classification issues that some other platforms have because it's their brand it's their hours it's their prices
the solution was we had to automate this whole process for these pros so instead of them reading and responding they would tell us here the customers I want here's where I travel here's how much I charge here's what I'm available and then we can instantly reveal that to customers such that they don't have to wait for quotes to come back we can instantly generate them sort of search results but not just names and numbers truly actionable results that are tailored to them
the amount of work that it took our pros to read review and respond to every request was so much that they could never respond all the demand we had which meant that our customers didn't get enough options back
we just announced rais $125 million uh from a group of investors at a $1.3 billion valuation
I think it was our process and the rigor that we brought to all of these decisions and we may have said hey we haven't figured this out but here's how we're thinking about it here's the plan of attack here's the metrics we're going to track and I think they realized that we were worth betting on that we had the approach and the mindset that could find our way through any and all of the challenges that were still to come
it took us four years to solve all those problems and in March of 13 we had raised $6.5 million in the uh sort of two years since that I guess it's two in a little bit now uh we've raised you know $270 million
in our series a um we met Javelin Venture Partners who backed us and have been amazing to us and like you they bet on us so they saw the potential in the market everyone saw the potential in the market they saw the potential in us and so they took that bet
when it comes to raising money you can't look back on what you've previously accomplished and sort of try and raise off of that you have to look forward to the next round and realize what is the next round asking of me and how am I going to get there and how I'm going to prove to them that I'm going to accomplish these Milestones such that I can get to that next level
we built a way for professionals to quickly post their Thumbtack profile onto Craigslist
subscriptions had a fundamental flaw and that was we weren't charging on the margin of value creation
we got a bunch of noes when we were raising our series A um and that was by and large because we hadn't solved the monetization problem
we're now sending them a billion dollars worth of business every [Music] year
we've been able to engage 200,000 active paying professionals
we now have 5 million projects happening through the platform a year
we Now cover a thousand different categories
thumb Tac we believe is the easiest and best way to hire a huge number of local services
hiring a plumber is actually more like dating than it is like dining
we just announced rais $125 million uh from a group of investors at a $1.3 billion valuation
despite customers spending $800 billion a year on these categories of services um there's really been no innovation from really the dawn of newspaper classifieds or dawn of the Yellow Pages because the big online players like Craigslist Yelp Angie's List are really online versions of these old offline products they haven't fundamentally reorganized how this interaction happens and that's sort of what we've been chasing and doing for these last four years
we are replacing the Yellow Pages and this is all coming in in just the last minute all across the country
for these creative um jobs that people didn't know they could do full-time we're definitely bringing that to them
we're reducing those transaction costs for the two sides to come together and through that empowering professionals to work the amount that they want to work so we see this happening a lot in the creative trades
so it goes out to on average about 20 to 25 professionals the ones who are in our Network who are qualified and who serve your area
Yelp is great at solving the problem of where should I go if you're trying to figure out a restaurant a spa ... but it's the wrong solution when you're trying to figure out who can come to me it's a very different problem um and for that you really need much more of a Marketplace experience
every review in Thumbtack is by somebody who's actually confirmed to have done business yes so it's who came through us so we see what the request was and we see what the review is so it's tied much more specifically to an actual job it's not a casual just sort of drive by review
last year we sent um almost $700 Million worth of business to our professionals last month we sent them $200 million wow so we've seen uh a lot of growth Forex growth year-over-year and there are now 3 million customers coming um a year sort of getting their projects accomplished through Thumbtack
we actually see conversion rates go up when we ask the right questions... we use that conversion rate as a way of auditing whether we've put in too many questions or too few
we've done this for almost a thousand different categories and basically we're creating the skew of every service you can think of
The Challenge though is then you as the customer have to do all of the leg work to figure out which of these folks is available which one's is interested in my job how much are they going to charge me are they a good fit for me and quite simply it's a pain in the ass it's really hard to get local it's Services it's very hard and so we've basically flipped the model
thumb Tech helps you accomplish the personal projects that are Central in your life be it repainting your house getting in shape helping your kid learn how to play the piano um and these aren't new problem s right we didn't impose this or create this problem but we're going about solving it in a very new way
we're at the high end the higher end yeah
valuations is you know it's an art more than a science ... it was high enough where people were comfortable with uh you know one or two people did walk away maybe because of the price um but which is actually it's good
we thought that 1.2 would buy us the runway that we need to you know become Venture back and to really more than that come to that table with some bargaining power
with that it changed everything you know this social proof thing this credibility ... having that in hand makes the rest of the rest of the game much easier
the reaction was very positive um and so that really is what set us going on our entire Angel round
we paid a third up front and then at 6% Finance the rest over the first year
the internet's so good at bringing people together and intermediating transactions but it really hasn't been applied to this huge huge space
we do have some more challenges finding some good Engineers which is really what our first order hiring it's very hard to find great engineers in the valley
and now there no downside none for them none
the way that we track that is that 45% of the people that hit our signup page sign up
so far we haven't had to pay any money right um we've done it all programmatically
the thing that they're probably the worst at is the individual service provider they all nail the storefront businesses but we want to move beyond that
we want to create a Marketplace not just a directory we want to take things further than Angie's List or Yelp
I think it's something that really separates us from most local plays you know we don't buy data and put it up un claimed we don't scrape content and put it up unclaimed every single one of our posts has been added by that individual
we now have over 50,000 small businesses that have registered on thumb Tech