LSA16: $1B in Local Services Spending Runs Through Thumbtack
March 8, 2016 | Contributed by: Joe Morsello
At LSA16 this morning, Jonathan Swanson, co-founder and president of Thumbtack, said that when starting the company’s marketplace for local service providers, the local market was very intimidating and competitive. But today, around a billion dollars in spending on local services runs through the platform and millions in investor dollars are validating the company’s entrance into the market.
Despite entering a highly competitive space, Thumbtack moved forward with the company because they felt a marketplace was exactly what was missing from the space. Jonathan said that the more the team at Thumbtack looked into the market, the more it all looked the same. The directory model was commonplace, and the future of the local space was more than that.
Thumbtack attracted professionals to use the site without a sales force. The initial strategy they used to attract them was offering a service that made it easy to auto-post their services on craigslist. The idea was to offer a service that would tide them over until they could bring consumers directly to these SMBs on the site.
They built their prospect list by crawling the internet and filtering through billions of pages. Somewhat reinventing the wheel by crawling, they felt buying a list of businesses wasn’t going to work. Primarily the businesses on these lists were more brick and mortar when Thumbtack was looking for the dog walkers and yoga instructors of the world.
After crawling the internet, they came up with a list of 10-15 million professionals that were good for Thumbtack that no one else was marketing too. From there they emailed them with access to the Craigslist tool.
The strategy and execution was interesting, because, as mentioned, they did it all without a sales force, which some found hard to believe. Jonathan confirmed this fact.
As to the primary mission of the company, Jonathan said it was two-fold: 1. To build a marketplace where consumers and small local service providers connect and 2. to provide the back office and tools these business owners need to run their business (payments, scheduling, loyalty/retention).