{"id":6922,"date":"2018-03-05T14:26:48","date_gmt":"2018-03-05T19:26:48","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-digit\/submission\/thumbtack-your-local-handyperson-reimagined\/"},"modified":"2018-03-05T14:26:48","modified_gmt":"2018-03-05T19:26:48","slug":"meet-thumbtack-your-local-handyperson-reimagined","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-digit\/submission\/meet-thumbtack-your-local-handyperson-reimagined\/","title":{"rendered":"Meet Thumbtack: Your Local Handyperson Reimagined"},"content":{"rendered":"

Thumbtack, a multi-sided platform launched in 2009, connects customers to service professionals and has raised over $273M, valuing it at $1.3B. [1] Despite its size, Thumbtack has relatively limited brand recognition, perhaps as a result of its decision to quickly roll out across the entire United States \u2013 CEO Marco Zappacosta claims there\u2019s a paying professional in every U.S. county \u2013 rather than first building a significant user base in a single city or region. Regardless, Thumbtack reportedly has revenues exceeding $100M and a uniquely low burn rate, fueling investor confidence in the company\u2019s potential, especially given its growth has been almost entirely organic to date. [2]<\/p>\n

What\u2019s perhaps most interesting about Thumbtack is the sheer breadth of services offered on the platform. There are many examples of platforms connecting consumers to providers of a single type of service (e.g., Airbnb for lodging or Uber for ride services), but Thumbtack\u2019s value hinges on providing customers with access to professionals for virtually any<\/em> need, a proposition that adds significant complexity to the effort of scaling. With that said, Thumbtack experiences significant cross-side network effects since the more consumers that use the platform, the more valuable the platform becomes for professionals and vice versa.<\/p>\n

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How does Thumbtack create and capture value?<\/em><\/p>\n

Customers answer several questions that capture the specifics of the job they need done. Within hours, available professionals send quotes to customers that include an estimate for the job and details about the business. Customers can follow-up directly with the professionals before selecting the one that is best for them. Customers are also provided with user reviews for each professional. Reviews are an important aspect of Thumbtack\u2019s offering: 85% of professionals that get hired have at least one review, and professionals with over 5 reviews are over 5x more likely to be hired. [3]<\/p>\n

Professionals, when they signup for Thumbtack, indicate what type of work they are interested in providing, how far they are willing to travel, and other relevant details. The platform matches the professionals with customers, and the professionals can choose to send the customer a quote. Thumbtack charges professionals for each quote the professional sends, the primary way Thumbtack earns revenue and captures value. Professionals are only refunded if the customer doesn\u2019t view the quote within 48 hours. If a customer views the quote and chooses not to respond for any reason, the professional is still out the fee. [4]<\/p>\n

Customers value the ability to source local service providers in a quick and convenient manner, to see user reviews before selecting, and to receive multiple quotes to choose from. Professionals benefit from the access to more customers.<\/p>\n

Figure 1<\/em>: Comparing Quotes from Different Professionals [5]<\/p>\n

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What are some of the challenges Thumbtack faces? <\/em><\/p>\n

Despite its success raising capital, there are several persistent issues that have plagued Thumbtack since it first launched in 2009.<\/p>\n