Andrew: Hey, there, freedom fighters. My name is Andrew Warner. I’m the founder of Mixergy where I interview entrepreneurs about how they built their businesses and I do it for an audience of entrepreneurs who are building their companies as they’re listening to these interviews. I’m here in Sydney, Australia because time difference makes it really hard for me to interview you guys and so I said, “You know, my goal this year is to run a marathon on every continent. As I travel the world, I’m going to be interviewing entrepreneurs who I can’t get access to ordinarily.” So, South America, hard to get to, flew there and did it. Here, I don’t get a lot of time with Sydney entrepreneurs, I’m going to fly here to do it. Africa, I can’t get them. The internet’s bad in many places. I’m going to go there and do it. I’m going to do it all over the world.
All right. And I’m here with Tim Fung. Am I pronouncing your last name right?
Tim: That’s right.
Andrew: Look at me. He is the founder of Airtasker. It is a marketplace for local services, and basically . . . actually, here’s a great example. I came to this Airbnb. I checked it out the day before. I said, “I don’t know about this neighborhood. It doesn’t look that great.” Am I in a good neighborhood?
Tim: I think you’re in a nice part of town, yeah.
Andrew: I am? Okay.
Tim: But it is a pretty quiet part of town, a bit industrial. I love the district.
Andrew: I wanted it to make an impression. I wanted, Tim . . . I wanted you to walk in and go, “This is good. I’m at a great spot.”
Tim: It is a great spot, but I think the road downstair’s a bit quiet.
Andrew: And then, the buzzer wasn’t working and I said, “What do I do?” And I said, “Wait, the Airtasker. This is so perfect.” I went to Airtasker. This was last night. I posted a request for somebody to just come open the door, greet guests, poor water or coffee. I got, I think it was five or six people.
Tim: Awesome.
Andrew: And I picked Richard, like right away. I looked. He had good ratings. He looked like a good guy. His first question to me was, “So, I dress smart-casual,” was the phrase.” I go, “Yes, perfect, smart-casual is perfect.” And so, he came in and he greeted guests. He took care of them.
Tim: Pleasant surprise?
Andrew: No, I was surprised by the speed. I just couldn’t believe that I could get somebody the next day to just show up in the morning at my schedule and do all that. And so, essentially, that’s what I could get. I could get that. I can have somebody paint the walls here if I wanted to, walk my dog, right, any kind of, like, a service.
Tim: Oh, any kind of, like, a service. Yeah.
Andrew: All right. And we’re going to find out how you built up this business thanks to two phenomenal sponsors. The first will host people’s websites right. It’s called HostGator. And the second will help you and anyone else hire great developers. We’ll talk about those later, but first, let’s talk revenue. Your revenue is fairly public. What is it?
Tim: So, we’re doing over $110 million in gross marketplace volume, or GMV, as people call that. Our take of that is around 18% at the moment.
Andrew: So, 18% comes to you and from that you pay for your developers, you pay for this jacket that you’ve got. I like your jacket.
Tim: Yeah. Absolutely. Building a marketplace and running a marketplace is pretty expensive if you want to keep innovating on the platform, bringing new customers, you know, to help our service providers scale their businesses. There’s a fair few costs in there. Fortunately, with Airtasker, we’ve got a very operationally light platform, but we do spend a lot of time, invest a lot of money into product and engineering. So, I’ve got a team of 110 people all based here in Sydney and then another team of 70 people based in Manilla who do all of our support and service.
Andrew: Okay. And so, I’m actually surprised it takes that many people to do it. I tried to get the app. I couldn’t because you’re only in Australia and the UK, right?
Tim: Yes.
Andrew: And so, I had to switch the app stores and I said, “That’s actually not going to work. Let’s see what the web experience is like,” and the web experience worked well, but it was simple. It wasn’t that involved. What are you guys doing that I’m not catching?
Tim: So, I think one of the things from early on is that I think there’s a pretty big assumption or a bit of a hypothesis that people make which is that if you create a community, the way that you’re going to solve for trust and safety is by, sort of, vetting every single person and trying to stop people from doing things unless, you know, they get the authority to do it by the app. In other words, like, vetting people, interviewing them, all these kinds of things.
What Airtasker has done differently is we’ve built everything on what we call the reputation passport, which means that by default you can participate in the marketplace. We make it low-friction for people to enter the marketplace, but as you want to do more things or if you want to be more successful in the marketplace, you need to build your reputation either by generating ratings and reviews, which is pretty traditional, but also by doing things like verifying your ID, adding your bank account details and payment details.
Andrew: What about completion rate? Richard had the highest completion rate. That’s why I picked him. I said, “I don’t know what completion rate is. I think it means he applied for a job and ended up showing up.”
Tim: Yes. So, it’s basically the inverse of your cancellation rate and that’s actually been one thing that we found to be so important, is reliability. And it’s real interesting, as you look at the data, you see that, you know, the best customer experiences come from the most reliable people. So, you know, some people who might get five-star ratings, but, you know, I have a tendency to cancel at the last minute. That creates a poor customer experience.
Andrew: Right. Exactly. I hate that. I’d much rather have someone who can open the door just partially well but show up than someone who may or may not show up. Who makes that jacket? I really like this jacket. The Airtasker jacket. Every photo that I’ve seen of you, except for this one, which I’ll talk about in a moment. You’re wearing an Airtasker [thin 00:05:21].
Tim: Yeah, I think it’s a unique jacket.
Andrew: Really?
Tim: Yeah.
Andrew: That’s [budget 00:05:24] . . . It looks good.
Tim: Well, we definitely, like, you know, if you’re going to make merch, you’ve got to make stuff that people are actually going to wear, so yeah.
Andrew: And are you wearing like a thing around your neck that’s also an Airtasker?
Tim: Yes.
Andrew: You are for your keys?
Tim: I’m a loud and proud Airtasker team member.
Andrew: I feel, kind of, weird with this photo because this you as a kid, right?
Tim: That is me with a mullet haircut in the ’80s with my cousins and my family, yeah.
Andrew: And that’s your dad?
Tim: That is my dad. Is this true? I have it in my notes here. Your first job was plucking out his gray hair?
Tim: Yeah, so my dad had a thing where he would pay me a couple of cents for every gray hair that I would pull out of his head. And I remember, once he upped the budget to 10 cents a hair, which was actually quite a lot as a kid and then he feel asleep watching TV, so I sat there plucking hairs just for about two hours and I managed to extract about 250 hairs. He owed he $25 and I thought I was the richest guy in the world.
Andrew: Oh, wow. I’m literally wincing as you say that. I don’t know why.
Tim: It’s kind of gross, I guess.
Andrew: No, no, it’s just like the pulling and pulling and pulling. Why did you do that? Were you the type of person who was an entrepreneur or hustler as a kid?
Tim: I think I definitely knew what I wanted and, you know, I would put in the extra effort . . .
Andrew: What was that?
Tim: Well, you know, at the time, it was, you know, it would be the latest “Teenage Mutant Ninja Turtle,” you know . . .
Andrew: It wasn’t to put money in the bank. It wasn’t that you were entrepreneurial. It was like, “I want the latest, good stuff. My dad’s not about to buy it for me. This is a way to do it.”
Tim: Yeah. Yeah. I think my parents were pretty, like . . . you know, I definitely had a good upbringing, but I think my parents definitely wanted me to know the value, you know, of hard work and what it took to attain some of these things, so I didn’t get them handed to me on a platter and so I definitely worked for them and made sure I could find a way to get them.
Andrew: Your dad was from Hong Kong?
Tim: Born in Hong Kong, but came to Australia when we was around 16 years old, so he’s pretty Australian. And on my mom’s side, I’m actually fourth generation Australian, so even thought I have Chinese heritage and I look pretty Chinese, you know, my upbringing’s been very, very Australian.
Andrew: What does that mean? What’s the Australian upbringing like? Growing up here, what was it like?
Tim: Well, I think, you know, there’s probably some, you know, good Australian values, I guess.
Andrew: What are they? The thing that I appreciate about Australians in conversations so far is there’s a bluntness. There’s not an embarrassment about who they are. Does that make sense?
Tim: I think, if I was to characterize Australians, I would say there’s a balance of . . . you know, there is some cynicism and some tall poppy syndrome. I think that’s pretty natural, especially compared, you know, to the U.S., you know, standard personality trait or the assumed personality trait. I would say Aussies are very keeping-it-real and I think that that can be sometimes good and sometimes bad. You know, in some sense, it can stop people from getting overexuberant about certain things and not, you know, creating crazy economic bubbles and stuff like that. On the other hand, it can sometimes hold people back from going out and doing cool stuff. You know, like, they might be a little bit like, “You know, how’s this thing going to get profitable in the next, you know, six months,” or, you know, “Really, how are we going to make money out of that?” You know, they might be a little bit . . .
Andrew: Did you find that in your friends, in the people that you knew as you were building up Airtasker?
Tim: Oh, definitely.
Andrew: Really?
Tim: My roommate at the time, he’s in the superannuation business, very successful guy.
Andrew: What’s his name?
Tim: Well, it’s the Australian pension system, I guess, so huge investment and they have to make very low-risk decisions about how they deploy money because they’ve got a lot of it. And I remember, you know, whenever I’d pitch him an idea, he’d be like, “No, that’s not going to work. That’s never going to work and here’s why.”
Andrew: And that’s typical?
Tim: Yeah, I think that’s part of the Australian . . .
Andrew: So, why don’t you have that in you? Why is it that you . . . as I look through your past, you don’t have that. Look, Founder of Circuit Club. Director, Joe Button. That’s your creation, right?
Tim: Yeah, I did that with my wife. Yeah.
Andrew: Cofounder, Tank Steam [sic] Labs. So, why don’t you have that? How did you break through that?
Tim: My wife says that I have a healthy dose of, kind of, like naivety whereby, you know, if people, kind of, tear me down, I don’t really hear them. I don’t even observe it or I just think the best of it. You know, I’ve got an optimism bias where I’m like, “Oh, even though they’re saying something bad about me, they’re probably just, you know, being kind or, you know, trying to offer me some advice.” So, with that healthy dose of naivety, I think I can jump into things. I think jumping into things is pretty good because I think I have confidence that people can figure their way out of most things, so you got to take a leap of faith if you want something to happen.
Andrew: I don’t understand about you. Before starting, I always tell guests, like, “Here are the hard things I’m going to bring up,” and you said, “Okay, I think it’s enough, Andrew. I got it. We’ll go in. It’s fine.” But I took it as like an Australian thing, that you just aren’t embarrassed by who you are. Instead, it’s your optimism. You’re sure that whatever questions I’m about to pop at you from someone who did something like what you did and is trying to figure out how you’re doing it, you were sure it was going to work out. Andrew’s not going to surprise me and destroy me.
Tim: Well, yeah. I’d like to think that I’m keeping it pretty real, so whatever you ask me, as long as I kind of, you know, stick to my own compass, then I’m going to give the right answers or at least some interesting answers. Some good content for your podcast.
Andrew: I was trying to get a sense of your background and find something to talk about. Which of these different companies . . . I’m going to show you my iPad right here with all my notes. This is just your LinkedIn screenshots. Which one of these is the one that had the most impression on you, the one that helped you start Airtasker?
Tim: Well, in 2009, I jumped from working in, you know, an investment bank, which is a pretty, you know, safe environment and decided to go work pro bono for a fashion business called Chic Management. They look after supermodels and celebrities and things like I that and I went and worked there pro bono, and by taking that leap of faith, I met some really interesting entrepreneurs and that gave me the opportunity to really get into building startups. And so, the first company that we started up, you know, from the people that I’d met through Chic was a mobile virtual network operator called Amaysim and getting to work with those, you know, over those really experience entrepreneurs was a great way to do and MBA in startups.
Andrew: Wait, you were working for them?
Tim: Yeah, so it was actually quite interesting. We came up with the idea for Amaysim out the back of the modeling agency, so I was actually one of the owners of the modeling agency. I had an idea to do this . And, you know, as a young guy, I was his assistant. I was one of the founder’s assistants, so I helped bring over four guys from Germany who had built a similar business before, got to, you know, really be part of the journey from the ground up, helped with funding, helped with hiring 200 people, and, you know, taking it all the way to an IPO in 2015. Just being part of that journey was really, really awesome.
Andrew: And that’s why you were also able to raise money for this, for Airtasker so fast, if I understand right.
Tim: Yeah. I think, look, starting a marketplace is definitely a great case of having to take a leap of faith, you know? It’s a very chicken and egg problem and I think it’s virtually, I’d say, almost impossible to start out a marketplace platform without having either some sort of support or funding or some differentiated advantage because, yeah, it takes many, many years to get traction into a marketplace usually. I think it’s a bit more documented now how people can fast track it.
Andrew: How? How do people fast track it now?
Tim: Well, I think there’s a few strategies that people talk about, like starting with building a product for one side of the marketplace, like I think OpenTable’s a classic example of that strategy.
Andrew: Meaning the restaurant needs a reservation system? So have that.
Tim: Exactly.
Andrew: And now, because the restaurant has their reservation system, if I want to book a reservation, I use their marketplace, got it.
Tim: Exactly. So, like, you know, that SaaS tool as the way in and then build the other side of the marketplace afterwards. We didn’t have that kind of strategies, so it was very much a genuine chicken and egg problem all the way from the beginning.
Andrew: So, you were able to raise money because of your experience? I’m looking at my notes here. Somehow, a lot of my notes just disappeared on you. It’s a good thing my memory’s strong because . . . oh, there it is. I knew that you had two different internships that did well for you. A lot of people ask you about your jobs because you run a marketplace for jobs, right? That’s how I found out about your plucking hair for your dad. How much money did your raise right off the bat?
Tim: So, very early on, we did a friends and family round and we put in a bunch of our own money as well. We just raised about $250,000 and that was enough to hire engineers to build out the first version of the platform. But quickly after we launched, we raised another $1.4 million, which back in 2012 and certainly in Sydney, you know, was an interesting amount of money to have raised. At the time, it was pretty significant. It’s interesting now though that you’re hearing about seed rounds that are, you know, easily a lot more than that in the . . .
Andrew: Even here?
Tim: Yeah, even in Australia. Like, you’re hearing that people are able to raise that early money pretty easily now, but it was a big deal back then.
Andrew: So, I was looking to see when U.S. companies had started doing this. I did an interview with Justin Kan who founded Exec, which was his own hire. He hired his own people and then if I needed someone in my office, I can go hire them. If I needed someone to go pick something up, I could do it. So, he started his somewhere around 2012. TaskRabbit, 2008. I’m wondering, were you influenced by these other marketplaces? Did you say, “It’s working in the U.S. We’re going to do it here?”
Tim: We definitely had noticed some of these companies. So, TaskRabbit, you know, was obviously someone who had done a version of our services marketplace back in 2008. I remember also looking at Zaarly when they had launched, but actually, we had already made the decision in 2011 to start Airtasker. So, seeing those guys was definitely inspirational and influential, but certainly wasn’t the reason why we started the business. I think, TaskRabbit, we kind of had seen from the very beginning that they had taken . . . There’s one critical nuance in the platform which is that they had tried to vet all of the members of their community.
Andrew: Oh, really? Okay, I didn’t know that.
Tim: Yeah. So, one of the big differences with TaskRabbit was that they started out, you know, in 2008 and back then I think online dating and, you know, meeting people offline from an online, you know, genesis was kind of seen as a bit dodgy or potentially dangerous or something like that and I think that influenced the decision to try and vet all of the supply-side on the platform, which was an interesting decision because they didn’t vet the demand side, so you could still have, you know, a customer who was unverified meeting a supplier who was verified.
Andrew: But that doesn’t seem like a big risk. If you’re coming into my house, I can be more trackable.
Tim: Well, yeah. Well, actually, I think that it can be the other way around. Like, if all you need is a credit card to be able to sign up to a platform, you know, you could use, you know, a prepaid debit card.
Andrew: And get someone to do what?
Tim: Like, there’s a lot of ways if you wanted to [inaudible 00:16:46].
Andrew: Is that really a risk?
Tim: Well, I think interactions between any two people always carries some amount of risk. But our view is that 99.9% of the community, one, does not want to come over and steal your stuff, break your things or do anything wrong to you. They don’t have time to do that. Two, if they did want to do that, it would be not the smartest thing to go use a trackable online platform to do those kinds of things. If you really wanted to do anything that was uncouth, you’d probably go and, you know, find someone on the street or use, not a verified marketplace to do that.
Andrew: So, I was just reading a lot of articles about you to see where the idea came from and I saw two different stories. One was that you tried and failed to assemble IKEA furniture and the other one, that you asked a friend with a truck to help you move a house. Which one was it or is it just a combination?
Tim: Yes. The very start of Airtasker was, I was moving apartments. Actually, I think we can almost see my apartment that I moved from just out the back window there.
Andrew: Oh, that’s great. You know what, that means it is a good neighborhood that I picked over here.
Tim: Yeah. Well, no. At the time, I was living with three other guys in a very messy and dirty apartment. But what I did is I asked a friend of mine, Ivan, to come over and help me move because he’s got a truck that he uses to do deliveries. So, once he’d help me move, we kind of just got talking, was like, “Why is it that I’ve annoyed you to come over and, you know, do my moving where you’ve got a successful business? You’ve got other things to be doing, yet I ask you to do all these jobs for me when, you know, there’s so many people out there who would love an opportunity to earn money doing these kinds of jobs?” And I remember at the time as well, it was just crossing over that some small bars in Sydney would charge $10 for a beer and it was just like, “Wow,” like that was just a signaling on the cost of living in this city.
Andrew: Oh, it got that expensive.
Tim: It got that expensive and so we just started, like what is the reason for this? And what we, kind of, realized is like, the cost of search, you know, if you articulated into a nice economic pattern, it’s that the cost of search to go and find someone to do a job that’s, you know, anything less than like a full-time job is just so incredibly high. You’re not going to be bothered to like interview people, put up ads, you know, that you have to pay for on Google or on Gumtree or whatever it is. The cost is so high, so if you could reduce that cost, then you’d be able to facilitate so many of these transactions, which I think is a good example of that, you know, the assistant that you found today. You know, if you had to go through a from-the-ground-up search to find that person, that transaction probably just wouldn’t have existed.
Andrew: The way I would’ve done it in the old days was go to Craigslist. But I remember, I bought a couch when I moved to San Francisco and I needed someone to move it in and I went to Craigslist and these two dudes came in and they were the worst. I said, “Can you just take the legs off so you can move it up?” They said, “No, it’s my rent. You better pay me for it.” And I said, “Okay, I’ll pay you.” And they were being so aggressive with me that I was legitimately thinking, like I was in danger. And I went downstairs to the bar. Like, I thought this was how everyone in San Francisco lives.
Went downstairs to the bar and I said, “Can you guys, like give me a little bit of money?” They gave me because they knew I lived upstairs, gave it to the guys and I said, “Now, you guys need to leave,” and they were going to hit me, but they realized they were in a bar and the guys knew me at the bar and they walked away. And I remember after that saying, “Craig Newmark is a really nice guy, but he is so underestimating the dangers on his platform and not modernizing it is causing a real issue.”
That’s the old way and even that old way sucks because there’s no way to know is someone’s going to show up. Forget beating you up. Will they actually show up? That was around the time when you guys launched . . . when people are saying Craigslist is going to be replaced, just like there’s that whole couchsurfing thing on Craigslist, there’s Airbnb. You know, you saw that old infographic, right?
Tim: Yeah.
Andrew: Was this part of that? Was this you saying, “I found my spot. I found the spot of the old way that I’m going to modernize with reputation management, with a clear marketplace, with more of a focus?
Tim: That was definitely what kind of led us to where we sat ourselves in the marketplace spectrum. So, I’d say if you kind of have a look at how you can structure a marketplace, there’s so many variables, you know, like the product and the customer experience you want to craft. There’s hundreds of variables you can use, you know, how you’re going to monetize it? How transparent is it? Is there vetting, no vetting? All these kinds of things. I think, at a very basic level, you can kind of say that on one end you’ve got a classifieds platform or a platform which does communication and that’s it. And then on the extreme other end you’ve got like the agency model where, you know, that the platform does a lot of things, you know, essentially they bring on the supplies and resell the suppliers.
Andrew: Yeah, yeah, yeah.
Tim: So, I think that a lot of these things influenced how we were going to build out Airtasker. And I think one of the biggest influences we would’ve seen would’ve been Airbnb. I think that they took a really good approach of balancing, you know, friction versus quality. So, they’ve brought in enough elements that made sense to create that level of quality without creating, like inordinate amounts of friction that didn’t make sense.
Andrew: Like, I did not have to do too many verifications. Oh, look at that. What is that bird?
Tim: That is a cockatoo. It’s actually like a totally native Australian bird that’s quite famous.
Andrew: And he just popped up right outside our window.
Tim: Yeah, they’re pretty loud.
Andrew: This happens here?
Tim: I think they can be kind of aggressive too.
Andrew: Really?
Tim: Yeah. You might just want to check before you go out there and, you know, tell it to shoo.
Andrew: All I care about is that he’s on mic. I’m not going out there otherwise. Wow. But this is an actual thing for you guys?
Tim: Yeah. This is actually like . . .
Andrew: They’re beautiful.
Tim: . . . really Australian . . .
Andrew: There’s two different ones. Look at this. He’s got a friend.
Tim: They’d like five kilos.
Andrew: That is beautiful too.
Tim: Pretty big birds.
Andrew: Wow.
Tim: Check out those . . .
Andrew: And just standing there screaming. I had no idea.
Tim: Yeah, they’re famous for making a lot of noise.
Andrew: The wildlife is beautiful here and it’s unusual to just walk around the street and see this. What’s that bird with the long beak that I see here on the street?
Tim: Oh. I think it’s called in ibis and they are somewhat affectionately or unaffectionately referred to as bin chickens because they get into the bins and rustle up all of the . . .
Andrew: They look beautiful too. They don’t look like they’re garbage eaters.
All right. I should talk about my first sponsors, a company called Toptal. If you’re looking to hire a developer, one of the things you want to do is go Toptal.com. You’ll let them know what you’re looking for. They will introduce you to developers. You know Toptal? You in that space at all?
Tim: Definitely. You know, it’s pretty competitive for hiring software engineers out here in Sydney. I haven’t used Toptal before.
Andrew: You haven’t? All right, if you were to go to Toptal, what you would do is say, “Listen, Andrew told you’re good. Here’s what I need. I need the best of the best.” Because they don’t do like the lower end. They do the best of the best at reasonable prices. You talk to a matcher immediately. They get to know what you’re looking for. Then, they introduce you and they say, “Okay, here are three people we think are a good fit.” You get on video chat with them. You do some interviews with them, and if you’re happy, you can get started often within a day or two. And then, if you’re not happy, you don’t have to pay for anything, but they will guarantee the best of the best.
Go to toptal.com/mixergy. This is you too. If you go there, you’re going to get 80 . . . I’m sitting here going, “This is the inside information,” because you’re actually really good at giving me like the visual cues. Like, “Go on, Andrew. This is good.” You get 80 hours of Toptal developer credit when you pay for your first city hours in addition to a no-risk trial period. It’s top as in top of your head, tal as in talent, toptal.com/mixergy. I talk very fast. I love talking fast.
Tim: It’s good. People don’t have to speed up your podcast.
Andrew: I know, right? So, the marketplace is challenging. What did you do to get people on both sides of the marketplace? What was your thing?
Tim: So, first of all, I guess, taking a step back and looking at it, like our strategy and what we wanted to create is, we believed that the product was not necessarily the software only. The product was really creating income for people on the service provider side of the market and the product was getting your job done on the customer side of the market. And so, we really referred to what we do as building infrastructure for the local services economy. When you’re building infrastructure, the first thing you need to do is kind of just get everyone together into the marketplace because as you bring more people into the marketplace, you create more data. That helps people make better buying decisions into the future.
So, we actually treated Airtasker at the beginning a little bit like a social network in that you really wanted to like reduce friction and make it really easy for people to be able to join the market. What that meant is that when we started out, it was very much about generalist tasks and generalist services and we focused on quantity, like we wanted as many matches that we could make as possible. And then what we’ve seen happen over time is that we’ve been able to build up strategically how much friction we want to add to the marketplace to trade that off against quality.
Andrew: I’m not understanding. So, you had to get both people who are looking for painters and painters on the marketplace. And I feel like the challenge for you is not just that. You have to then get dogwalkers and people who are looking for dogwalkers, house sitters and people who are looking . . . right, that’s a lot. You didn’t focus on any one area though.
Tim: No. So, at the beginning, we focused very much on like generalist services, so, you know, it might be something like moving some boxes, doing some simple admin, running some errands for me, things of that . . .
Andrew: So, first you found some people that could do it? Where did you find them?
Tim: Yes. So, technically speaking. Yeah, so technically speaking, the first thing that we actually did is we went out to a bunch of universities because our hypothesis was that we could get, you know, university students to do a bunch of jobs and they would be really happy because it was like a flexible work arrangement.
Andrew: Yeah, makes sense.
Tim: So, the first thing we did is we hired a bunch of interns to do marketing campaigns for us. Those interns happened to be influential people at their universities and we used that build up a base of supply.
Andrew: And these people would do anything? It was just like the local kid who could come and do all the handywork around?
Tim: Well, I wouldn’t say they would do anything. They always opt-in on what jobs they wanted to do.
Andrew: So, they’re not going to do carpentry, but they would be able to do the basic things that are unskilled but . . . yeah, unskilled, simple work.
Tim: Yeah. I mean, we would still refer to them as skills. They’re still skills in a certain way, but in the traditional use of the word skill, yeah, it would be unskilled labor.
Andrew: Okay. So, you found a bunch of those and then that’s one side of the market. They’re in your system and I’m imagining we had some way of contacting them fast to let them know that there was a job on the site.
Tim: So, I would say that from a software perspective, the first version of Airtasker was extremely rudimentary and the big challenge for us was generating demand, was absolutely, on the customer side of the market. How do you bring people in? There’s a huge amount of friction because you had to like post every task. There’s huge amount of texts that you had to enter and there was no previous user-generated content to know what you had to do, you know, to guide anywhere.
Tim: Yeah, like now, if I’m on your site, I can see someone saying, “Move a queen-sized mattress from South Bank, $50. Move a washing machine for,” it’s got to scroll, “$61.” This gives me a sense of what I should pay. This didn’t exist at the time.
Tim: Absolutely, and that’s why we focused on this liquidity, because as we got people in, even though the initial liquidity, like the initial experience that people had was very rudimentary, we were building up a database of information about what kind of services people wanted, how much did they cost, how much would people be willing to pay for it, etc., and now that we’ve gone, you know, four million tasks associated with the platform . . .
Andrew: Wait, wait, I’m sorry. I’m still not understanding, then how did you get the demand? How did you get the people who were going to hire these students?
Tim: So, I would say, first of all, it was definitely not an overnight success by any means. It was more a hack, hack, hack and try everything you can.
Andrew: Okay, so what were some of the first hacks that you did?
Tim: I’d say we leveraged PR pretty well. So, one of the first things we kind of observed is, if you look at people like Lady Gaga or Justin Bieber on a lot of these social platforms, those people are drawcards for other people to join those social networks. Similarly, what we started with was just using Airtasker for really cool . . .
Andrew: Random stuff.
Tim: Really cool, random stuff.
Andrew: I’m talking to you with an iPad in my hand, the first iPad you guys got somebody to go wait in line from Airtasker. Wait in line, got the first one. And then, how did you use that for publicity?
Tim: Well, the person who lined up for the first iPad . . . first of all, back then, it wasn’t annoying to people because it was kind of innovative and cool.
Andrew: You mean waiting in line?
Tim: Yeah.
Andrew: It wasn’t like Apple was putting people through this. It was like, “Wow, amazing that their technology is so good that people would wait in line.”
Tim: Exactly. And as I said, I mean, “Wow, there’s a service that can create a job out of this idea of waiting in line.” But we had a really good story because the guy who bid on the task and ended up doing the job was actually a truckdriver who had had recently been made redundant.
Andrew: Oh, okay.
Tim: When he got the job, he actually sat outside the Apple Store for, you know, five days and he actually was studying for a course and that was actually going to be his next career move. And so it’s this great story about, you know, made redundant but could find work in this new style of the economy and then could also, like be really smart about making money, earning money, at the same time, studying or preparing for your next career. So, basically, every media station was outside the Apple Store. We got him on TV. Unfortunately, he forgot the name of our website. I didn’t mention the name of Airtasker.
Andrew: Oh, look, this is him.
Tim: Exactly. He was wearing the t-shirt, which was good. But again, when they actually asked him, like, “Why are you here?” he didn’t actually respond with our website name, which was a bit of a disappointment, but, you know, you live and you learn and next time we did these kinds of things, we definitely briefed the people a bit.
Andrew: What else did you have him do? So, here’s the task. Oh, Tim F., that’s you.
Tim: That’s me.
Andrew: You posted that.
Tim: That’s my actual post, yes.
Andrew: And so, this is the type of stuff that you did. In this article from “The Daily Telegraph” does say, “He’s been waiting there since 8:00 a.m. on Monday after taking up the offer from Airtasker,” so they mentioned it, and this actually sent traffic to your site?
Tim: Absolutely, yeah. And, look, I think, one of the things about building a marketplace is that, at the beginning, you have to focus on traction above all else. Like, it’s not like a SaaS product where each incremental user, you know, you want to be thinking about unit economics being profitable and then incremental user. At the beginning of building a marketplace, you’re throwing everything that you can at the wall to build traction above all else.
Andrew: Tell me more. What other things did you do?
Tim: One of the, I think, early things we did was we obviously spent money on Google ads, so that was one decision that we made there, was that we were happy to be profitable on those Google ads. So, you have to kind of come up with an equation around what’s the value of the network that you’re building in the future, so I think that was quite a critical decision because I think if you are a very conservative, you would say, “Well, why would I spend money on marketing if it’s not generating an immediate profit for me in that marketing?” So, I made some key decisions there.
And then, I’d say another key moment was, we’re pretty early in like building out like lifecycle journeys and messaging and content, so we actually engaged in another Sydney startup called Vero, which is really good, was all about doing triggered messaging and automated messaging. That was pretty new.
Andrew: What do you mean about automated messaging? Email?
Tim: Well, based events on our platform.
Andrew: So, based on what someone did on your site, they would get an email that kicks into their inbox, right?
Tim: Yeah, emails, push notifications, all sorts of triggered events.
Andrew: To reengage them?
Tim: Exactly.
Andrew: So, if I did have the app and I had alerts turned on, I don’t know, what would you do to bring me back?
Tim: Well, we would say, for example, you know, you’d used a removalist job, we could go and trigger, “Hey, since you’re moving homes, we think that you need an end of lease cleaning job. So, we can suggest you different types jobs. Various levels of success on that. But again, as the data builds, you can get smarter and smarter about those things.
Andrew: So, Richard was here. I could’ve just said, “Tomorrow, I need you again. Can I just pay you 50 bucks?” That happens. What do you do about that?
Tim: Well, one thing that’s really interesting is that the economy that Airtasker has created is, you know, estimated to, you know, two or three times larger than the actual GMV, which we’re seeing going through our platform because of all of these interactions which happen outside our platform. So, I think the first thing is to take a stance to what your philosophy is on that. My philosophy is that if Richard doesn’t see value in using Airtasker for the second transaction, then we shouldn’t try to trap Richard into using Airtasker for the sake of it.
So, a lot of people refer to these interactions as leakage interactions. I definitely take the opposite stance to that, which is, we need to sell you every time on what value are you getting out of us. And so, I think there is some very important value that Airtasker creates for further transactions. Obviously, we provide the payment system, the insurances, and all that, all those pieces, but they’re not top of that. People are building their reputation on our platform, and the more that they build that reputation, the more they can actually monetize that reputation into the future. So, there are a number of reasons people would use the Airtasker platform. Right now, it’s very much based around liquidity, like accessing more and more jobs, but we’re working on adding layers to add more value on those repeat transactions.
Andrew: Like what?
Tim: So, currently, we’ve built a new pricing model called tier pricing, which basically says that the more jobs that you do on the Airtasker platform, the cheaper your fees are, so that’s an example of rewarding the people who use our platform even more. We’re also working on, and this is what I’m really passionate about now, is our super store strategy, which is all about . . . We mentioned at the beginning that we started out as a very generalist platform, but we’ve started now building out like verticals, very specific services that we offer for service providers being able to access jobs without having to [quote 00:36:01], you know, on tons and tons of jobs just to get a few jobs is really, really valuable. So, one of the things that we’re doing is rewarding taskers who use the Airtasker platform more with access to these kinds of jobs.
Andrew: So, the first thing you did was you started buying ads online. You started doing these promotional PR things? What else got you more people into the platform?
Tim: You know, I have to say, you know, there was so many attempts. I’ll tell you about one, which is a great failed experiment, but I don’t think that it was any one strategy. Building liquidity in a marketplace is, I think, at the beginning, a combination of time, resilience, and trying a lot of things. So, I wouldn’t say that it was any one, singular strategy.
One example of a hack that we did early on was we created a thing called Airtasker for Business and we actually said to small businesses, “Hey, if you want to give us like a project, which requires 50 people to do that project, we’ll do that project for you.”
Andrew: Like what?
Tim: So, a good example was letterbox dropping, so like dropping fliers into people’s letterboxes.
Andrew: That’s illegal, I think, in the U.S.
Tim: Oh, is it?
Andrew: Yes. The post office owns that. So, here you could?
Tim: Yes.
Andrew: So, if I had like a carpet cleaning company and I needed somebody to go and put coupons into the whole neighborhood’s mailboxes and letterboxes, I could hire your people?
Tim: Yes. And so, we would take on these jobs that, you know, they would be $30,000 jobs and we wouldn’t make any profit on them. We would just kind of take that job and then cut it up into small jobs and put them on Airtasker, so it was actually a great way, you know, it sort of built an increase of 30%, you know, in job volume through doing those kinds of things, which is really good early on in just building that liquidity into the platform. Unfortunately, if you look at like the time versus, you know, value, ROI equation on that, it’s pretty bad.
Andrew: Because managing all those people takes a lot of time.
Tim: Oh, it’s crazy. I mean, I became a person who rather than, you know, running the company, and we had, you know, six or seven employees, I would be out briefing people on how to drop letters into people’s letterboxes.
Andrew: Wow, okay.
Tim: So, you know, there are a lot of these different kinds of hacks, but I don’t think that there’s any one, singular strategy which would account for, you know, a disproportionate amount of liquidity.
Andrew: What about this? One of your investors, how much money did you guys raise?
Tim: So far, we’ve raised about $67 million.
Andrew: Sixty-seven million Australian dollars?
Tim: That’s right.
Andrew: Okay, now Australian dollar’s like $70 U.S.?
Tim: Yeah, it’s cheap at the moment.
Andrew: It is, right? It was on parity at one point with us.
Tim: It was at $1.10 at a time, but yeah. Now we’re 2.
Andrew: There was a period when I was doing a bunch of interviews with entrepreneurs from Australia, for some reason. I forget why. I actually have no idea why. And at that point, it was on parity. I get it. And one of the investors gave you not just cash but part of the investment was in airtime, right?
Tim: Yes, so Seven West Media is one of our investors. They’ve been really fantastic. We partner, obviously on, you know, investment side of things and venture capital side of things, but also on media.
Andrew: They gave you some cash but they also said, “Look, some of this investment is in television time and we’re going to keep promoting Airtasker in those.”
Tim: Yes.
Andrew: That’s what it is?
Tim: Yes. So, Seven West Media owns a bunch of assets, things like “Better Homes and Gardens.” They make television shows like, in Australia, “Home and Away” is pretty famous. They make a lot of content. They own a lot of publications and they also own a big free-to-air television on station. Definitely, for Airtasker, awareness was one of the big things that we needed to drive like mainstream adoption. So, that was about four years into our journey. We started doing advertising on TV and that’s been super, super successful for us.
Andrew: How do you track that?
Tim: With great difficulty, I would say. You know, the ROI metrics on television is still pretty hard to get your head around. I think one of the things about free-to-air television that’s powerful in a domestic marketplace is that you cannot get the kind of scale of distribution through any other channel. So, even if you wanted to go and spend x amount of money on Google or on YouTube, it’s hard to build that kind of scale and mass as quickly as you can on television.
The other thing with television is it has a strong degree of authority, so like people respect things that are on television. It gives people trust in those kinds of platforms because there’s assumptions that things are verified and checked, which is true. You have to go through a lot of scrutiny much more than, you know, putting up an Instagram ad or something. So, that’s definitely been a good strategy for us. It’s a very small part of our overarching . . . for our strategy there.
Andrew: All right, I’ll talk about my second sponsor and then just get a little bit further along with the story. And I’d also like to understand why you went to the UK. Why not the U.S.? How’d you pick that? And what do you do about the fact that every time you get into a new market, you’ve got to basically reestablish this marketplace from scratch?
All right. Second sponsor, a company called HostGator, do you still believe in marketplaces? Do you believe someone who’s listening to me right now who says “You know what, I’m going to start a new company.” Do you think there’s a marketplace that would make sense for them to jump into?
Tim: For sure.
Andrew: What’s a good one?
Tim: Oh, there’s tons of good ones. I probably won’t mention any of the ones in the local services economy because they’re generally the ones that we’re going after, but I think marketplaces can make almost, you know, all asset utilization much more efficient.
Andrew: I’m trying to think of like, what is the thing that we would need? It’s probably, if you want a receptionist in an office, you have to go through one of these agencies that basically hired the receptionist, right, and you’re hiring their employee for the day and it’s kind of expensive. But how many of those jobs can actually be done like, on a marketplace? Do you think there’s a place for a marketplace for receptionists?
Tim: So, first off, I think that we see a lot of these kinds of jobs on Airtasker already, receptionist jobs. But I think also that it’s not just jobs that exist now. The exciting thing about asset utilization, or like in the case of Airtasker, time utilization. There are so many jobs that don’t exist now which could exist if people wanted to create those jobs.
Andrew: You know what, so here’s an example of that. Justin Kan created Exec. I said, “I just want someone to sit and babysit me as I answer email, literally.” I said, “I just can’t him babysit me. what do I do?” I created this little chart. They would sit and watch me do email. As I did email, I would call out the category for each email. Scotch night, interview request and so on. And then, at the end, I would say, “Okay, show me where I’m spending the most time,” and I’d see, it turns out Scotch night was taking a lot of back and forth. I did Scotch night a lot. People would say, “Can I come over Monday? Can I do this?” And a couple of other things, interviews was just another one.
I said, “You know what, from now on, Scotch night, only on Thursdays. No more Mondays, no more back and forth. It’s only Thursday at 5:30 when the office is shut down. That’s when you can come over.” Cut down on email. But I wouldn’t have thought of that unless there was a marketplace. That’s what you’re talking about. All right.
But that doesn’t really help the person who’s listening to us who’s thinking about going to HostGator. I will tell you this then, if you’re looking to bring a website over that already exists but you hate your hosting, go to hostgator.com/mixergy. If you have a new idea for a website, go to . . . Here’s what I did. Go to hostgator.com/mixergy. They’ll give you the lowest price that they have available. Good hosting. Dependable company. Been around forever.
Here’s what I did. I sat and I said, “You know what, I want to do a blog about my journey to get to know people,” and I did it and it was totally stupid. I said, “My goal is to have 1,000 people connected to me on LinkedIn.” I had 10. I said, “This is too much. I don’t even care about them.” Let’s scrap that, so I scraped that and I said, “Well, I’m kind of interested in these people who I’m meeting in my events. I’m going to do interviews with them,” and I did it as an interview thing and then that kind of took off and that becomes this obsession of mine that brought me here to Sydney, Australia and taken me all over the world.
The reason I’m bringing this up, part of HostGator is when you have that plan that lets you create a website, it’s easy to just hit create a website, start fooling around, and then you end up with something that makes sense or you scrap it just like an artist would, just draw on a piece of paper, throw it away if he doesn’t love it or keep it if he does. All right, hostgator.com/mixergy. We got all these cameras, but the camera doesn’t even matter. It’s the audio. I don’t know why I keep looking, like do I look at that? Do I look at that? And on top of that, it’s also getting darker here. So, why the UK?
Tim: So, first of all, I think like, jumping out and starting a marketplace is always something where, I mentioned before, it’s like taking that leap of faith. You got to jump off and then figure your way out of the bottom because it’s difficult and it’s probably, to a certain degree, irrational and high-risk to go and start these marketplaces. And actually, it was interesting, because when we decided to launch our first international marketplace in the UK, it was definitely, you know, that decision being made, again, you know, a bit of irrationality. When’s the right time to go and do this? There is never a right time.
Andrew: By the way, watch when you’re rubbing your jacket.
Tim: Oh, sorry, you can hear that?
Andrew: Yeah, a little bit.
Tim: So, we made a decision in 2017 that we were going to go and launch our first international city. We did a bunch of research on things like trust and safety, which we actually found out in London there’s less homicides per capita than, for example, in Sydney, so it’s quite a safe city. Levels of trust were actually quite high in London. And also, we noticed that the patterns on our consumer behavior research were almost identical to those in Australia. And then, on top of that, there’s a lot of thoroughfare between the UK and Australia. So, all of these were very much traditional, you know, research levers that we looked into before launching to the UK.
It actually has been very interesting. The UK market has shown like incredibly similar user behavior dynamics compared to the Australian market and we’ve built traction there, obviously much faster than we did in the early days of Australia, mainly because we’ve got a better product now and we know what works and what doesn’t work. But actually, when we thought about international expansion further, we have definitely pivoted on that strategy of trying to understand the marketing credibly using research and we’re looking at our strategy now, which is much more based around lowering the costs of entering new countries so that you can actually get actual user data to make decisions rather than doing research.
Andrew: Okay. You want to get in as fast as possible so you get to see what people are really like and then you can expand.
Tim: Yeah, so we’ve worked hard on like lowering the costs of entry into new markets, mainly by focusing on organic acquisition channels and leveraging all the user-generated content.
Andrew: Like what? Let’s be more specific. Organic?
Tim: SEO.
Andrew: Got it.
Tim: So, if you look at like the best product channel fit for Airtasker, the current habit is for people to search, you know, in the search engine, mostly Google, obviously in the countries that we’re in, and so making sure that we’ve got the content and the useful data surfaced to those people is really, really important.
Andrew: Look at this. Yeah, I’m looking at your SimilarWeb stats. It looks like 35% of your traffic comes from search. Why are people looking for apartment vegetable growing and showing up with your stuff?
Tim: So, there’s incredibly longtail of search volume that Airtasker addresses at the moment and actually, we’re going through it now and pulling back on some of these pages to makes sure that we’ve got only the best pages showing. But it just goes to show that there are so many of these kinds of queries or problems that people have which previously have not materialized into like a job or a working opportunity for someone else. And what we’re trying to do at Airtasker is, you know, connect that problem that somebody has, which may not, you know, intuitively be a job, you know, creating a job for someone and turning that into a job.
Andrew: So, for example, people aren’t thinking, “How do I get in my apartment? We’re now on the third floor.” You know this was sold as a penthouse? I thought it was going to be a beautiful view. It is a nice view, but third floor cannot be called a penthouse, right?
Tim: I don’t know what the definition is for a penthouse.
Andrew: I don’t know either, but I know it’s not the third floor.
Tim: Hey, you seem really bummed about this apartment.
Andrew: No, I really want to make sure that it is a good impression on you and I kind of like to lighten things up by sharing something about what’s going on in the environment.
Tim: It’s beautiful I thought.
Andrew: I don’t mean to be negative on it. No, Jane from Showpo did say, “You know, a few years ago, that was where you’d find hookers on the street a few blocks down.”
Tim: Yeah, yeah, yeah. They cleaned that all up though.
Andrew: They did? So we’re good today.
Tim: Maybe that’s why it’s quiet.
Andrew: It does have a really nice outdoor area here, right?
Tim: You can totally have a party here.
Andrew: If I wanted to go and plan something here, what I would do is say, “How do I do it?” and then I’d find it on Airtasker and say, “You know what, I don’t have to do this. Screw that. I’m just going to go and hire someone,” and that’s what you’re thinking.
Tim: For sure. A lot of content strategies though are much high-level than that, right? So, we’re not always trying to hard sell you into, you know, “Get a person now to set up a veggie patch,” but definitely by being helpful . . . by surfacing a lot of the unique data that we have on Airtasker around how much it costs to do services, what kind of services can be provided, etc., we can be helpful to customers and, you know, take them on an Airtasker journey.
Andrew: This is really well done. I’m trying to see how you guys transition me into hiring. You don’t. There’s nothing.
Tim: Yeah, we don’t hard at the moment, no.
Andrew: It’s not. It’s just, well, it’s on the Airtasker blog, and I might be curious about it, but I’d have to really go out of my way to look up and see what it means.
Tim: You can click that airtasker.com.
Andrew: Right, right, I’d have to actually go click to go get a sense of it.
Tim: For sure. I mean, you’ve got to have a lot of integrity with content strategies, I suppose, these days.
Andrew: Not me. Did I tell you about how Toptal is doing? Like, there’s nothing subtle about it. So, what about the fact that all these other platforms, Zaarly, TaskRabbit, the others, they’ve struggled outside? Why is this going to work?
Tim: So, I think, in 2012, around the time that Airtasker started, there were a bunch of guys who actually, you know, who kicked off and tried to make a dent in the local services space. We kind of went through . . . I think that there’s so many different dials that form the product of a marketplace and I think it’s actually small nuances that have made the differences with all of these companies. So, you know, we mentioned with TaskRabbit trying to vet every single user around the platform, I think was always going to be a difficulty.
And also, not just a scalability problem but also a problem with delivering liquidity. You know, if I’m looking for someone with a very specific niche, there’s no way that a platform can vet every single person such that you’re going to be able to find that person quickly, so I think that was an example with TaskRabbit. But I think there have been other people who have done it through lead generation or advertising. But as you mentioned before, in terms of quality, when you’re doing lead generation advertising, you can’t really improve the customer experience because you don’t actually know what happened in the actual service, so I think there are all these . . .
Andrew: You’re talking about something like Thumbtack, right?
Tim: Yeah, so there’s like, you know . . .
Andrew: All they do is lead gen for the local gardener, but they don’t know if the gardener made me happy or not, and if he didn’t make me happy, why not so that they could improve it next time.
Tim: Exactly.
Andrew: It gets some but not enough.
Tim: Exactly. So, I think there are all these like different nuances and then I think that was sort of exacerbated, certainly in the U.S. and China with tons and tons of venture money poured into these O2O or peer-to-peer-type services and that kind of made it so that you had to figure out what you were doing incredibly quickly because you were burning a lot of money along the way. So, that’s kind of left this hole where I think everybody agrees the local services economy is still so inefficient. There are so many transactions that aren’t happening because people can’t find their way around and, you know, don’t trust other people in the community, but yet there’s all these guys who’ve tried and didn’t succeed.
Andrew: So, one of the big challenges is, so the big verticals get picked off, so you’ve got Wag, for example, for dog walking. It’s not, go to whatever or Thumbtack or any of these other marketplaces. People go to Wag. If you need . . . I don’t know any other examples right now, but you get what I’m talking about. How have you dealt with that?
Tim: Well, it’s really interesting. I mean, if you think about the product ecommerce space, you have Amazon, which takes up like a huge amount of the product ecommerce landscape and then you have a bunch of verticals, you know, which are also successful. You know, I can’t think of too many off the top of my head right now, but there are certainly a number of verticals, whether it’s ASOS for clothes or Zappos for shoes, or, you know, these verticals.
But I think what in the long-term is going to be the case is that you need to go to create a platform which has a lot of mindshare, like it’s the go-to place, because there’s a lot of friction in entering each of these new kinds of marketplaces. Like, every time you have to go and set up a new brand, you know, your own personal reputation, you’ve got to set that up from scratch. You’ve got to trust that, you know? You’re going to learn a new way of doing things. And so, I think a horizontal platform is going to take the vast majority of the market and it kind of makes sense because 90% of the customer experience, you know, other than the service itself, is common across engaging with a plumber, or engaging with an electrician, or engaging with a cleaner. You need a payment system. You need a communication system. And I think we focus on building out those common pieces of infrastructure and I think that’s going to be the future of services marketplaces.
Andrew: What are the big services that people are using right now?
Tim: So, big categories are cleaning, gardening, moving homes. So, there have always been the big ones and that’s why people try to address them in verticals.
Andrew: Yeah, so think about cleaning. I would just think, what’s the cleaning company that I would use and I would look for one that’s just a cleaning company. And now you’ve got to get people to stop thinking that and you are. How? How are you getting them to stop thinking where it’s a cleaning company, and instead think, “What’s the services company?”
Tim: That’s a good question. You know, that’s the question we ponder every day. I think that a marketplace product can always get people to have really efficient outcome. You know, it can get you to a good price by comparing to a lot of other people. You can also use all of the information that’s offered by that marketplace to actually compare and make a good decision around things like quality as well. And then, after that, you get a consistent experience, so the messaging, the payment system, the insurances are all covered. So, I think those are the advantages of moving people, you know, just taking a punt on one provider versus, you know, of accessing a marketplace like Airtasker, but it definitely takes time and you need to accumulatively build that up over time.
Andrew: So here’s what I’m learning so far. Number one, stunts work for getting attention and I kind of like your stunts for the iPad. It’s not something that you could build your business on. Why not? Why can’t you just continue to do this?
Tim: Well, I would say, at the very beginning, you’re looking for incremental growth. So, you know, when you’re moving from 0 to 100 users, it absolutely makes sense to go and do a stunt and get 150 users. When you’re trying to grow from 3 million users to 4 million users, it’s almost certain that you can’t do enough stunts to pull in that many.
Andrew: Right, it’s not going to do that much. Okay, all right, that makes sense. So, that. Then, the second thing I learned is, the big thing that is a danger to your marketplace could be what you highlight. If you can’t get past it, just highlight it and make it a key component of it. The example I think about is 99designs. If someone would hire a designer from 99designs . . . I’m sorry, you go to 99designs, you say, “I need a shirt,” you get your shirt designed, great. You liked the designer. You’re going to just keep working with them. What Matt Mickiewicz, the founder, started doing was talking it up, saying, “This isn’t a marketplace where people are disposable, they build relationships.”
So you did the same thing. You said, “Look, we understand that people are going to work relationships outside of our marketplace. We’re just going to say this is one of the key components of it and then find ways to bring them back in so that we’re more and more useful.”
I’m trying to think of one other one that I would bring up here and that is just the . . . oh, I know what it was. It was about getting investment in the form of both money and airtime, money and something else that would allow you to continue to grow. Is that a big one or is that a negative?
Tim: No, I’d say that was a . . . certainly wasn’t a negative. No. We’ve had a great relationship with Seven West Media, but I would say that that was something that came a much, much later stage. I would say it’s really . . . a key takeaway for people building a marketplace is to understand what it is the product that they’re actually selling. A lot of people think that it’s a piece of software because that’s what it looks like. It looks like an app or it looks like a website. But in many marketplaces, the software is not the product. It’s a conduit to actually get value out of the marketplace. So, for Airtasker, what we realized early on is our product was creating an income for the workers on our platform, and by focusing on that, we were able to actually work on what’s important and not so much on the things that weren’t important.
Andrew: And what’s important is just to make sure that they get an income.
Tim: Right.
Andrew: That’s number one.
Tim: Right. For example, if you thought the software was the most important thing, then you would sit there tweaking the UX and the UI. If you believed that the income is the product, then you would focus on, how do I get these people as many jobs as I can?
Andrew: Even if you’re not making money on it, as long as you get them more work.
Tim: Well, exactly. Yeah, you want to focus on the quantity of jobs as much as just the quality of the software interaction.
Andrew: Let me ask a little bit more about the details of it. Yesterday, when I was looking for somebody to come and open the door and be here for random things, I was asked how much I wanted to pay. I wasn’t sure. I’m new here. I don’t know what to pay is of someone to go and open the door, so I just said, “200 bucks for the day.” I said, “Ah, who knows? It’s Australian money. Screw it, $250.” How am I supposed to know? Why are you leaving it up to me to know?
Tim: Yeah, so right now, the part of the platform that you used is what we call Airtasker Classic, which is where you are responsible for creating the job, you know, creating a starting budget of which to be negotiated, etc., and there’s definitely some optimization that can happen in that process. Like, we could surface to you more information about, you know, what you should be paying for this kind of work. But we have actually started focusing on the next wave of Airtasker’s product strategy, which is all around building instant booking. So, we’ve now started launching instant booking in certain categories, and in this model, you would get the pricing from us upfront. We generate that price by talking to all of our service providers and we would skip that step altogether.
Andrew: But you’d give me the price upfront?
Tim: You would put in your information. We would give you a price straight away and you’d be able to book it straight away.
Andrew: Got it. Okay. And then, how did you know to match me to Richard? What’s the system behind the scenes that does that?
Tim: So, we have a very smart group of data scientists who are working on matching, so we have some pretty smart alerting systems which are based on understanding what your task is and then surfacing that to the right taskers. Plus, we have a very highly engaged base of taskers who are constantly looking through jobs and looking for new opportunities.
Andrew: I wonder what it was that I said that would match. I said I need someone to open the door and do other random stuff, but that’s enough for you guys.
Tim: So, we have a tool called Carl, which is an AI tool which basically tries to take the words in your task description and then translate that into skills and then translate that into which taskers have those kinds of skills. Of course, that’s incredibly hard to do for generalist services like opening a door, but that system’s getting smarter every day.
Andrew: Yeah, I like the simplicity of it. The only thing I wish that you guys would’ve done in addition was use Apple Pay. I had to enter my credit card in and it didn’t work and that frustrated me and I think it might’ve been because one of the cards is not accepted in Australia because they think it’s stolen.
Tim: Is that American or Diner’s or . . . ?
Andrew: No, it’s just that I’ve been using it a lot over here and if you don’t tell your credit card company that you’re traveling, they think it’s fraud. But I hate calling up the credit card company and being on hold to tell them that I’m traveling.
Tim: For sure, payment options are a huge growth channel for us. A really great example is, you know, there’s a lot happening now in buy-now-pay-later-type products.
Andrew: Yeah, I’ve seen that here.
Tim: And yeah, that’s one option and it’s really a great value ad for our taskers, our service providers because that’s something that, you know, as an individual, it’s very hard to offer, but through our platform, you know, it’s something that we can offer our customers.
Andrew: I’m not vetted. I just touched the mic. I’m not vetted. How’d you know that I was a decent person that you could connect someone with or does it even matter?
Tim: So, our hypothesis is that like, for any huge amounts of friction, to try and figure out if you’re a decent person is almost entirely not worth it in the long run. So, we could’ve called you up on the phone and that would’ve cost us, you know, $50 to make that phone call.
Andrew: And it would’ve been a pain in the butt for me.
Tim: Yeah. It would’ve been a pain in the butt for you . . .
Andrew: I couldn’t have taken the call.
Tim: And I’m pretty sure that if you were, you know, a difficult customer, that you would be able to get around our phone call system anyway, like if you really wanted to do that. So, we kind of realized, just rather than putting like 1000 locks on your door and, you know, welding it shut, etc., you should, you know, initially try to lower friction, gather data about people, but create a transparent and accountable network so that people certainly cannot do that again and they’ve got very little to gain from doing dodgy stuff through the marketplace.
Andrew: I’m looking at more stuff here from other people who I’ve asked about this business and it’s getting super dark, so we’ll end it in a couple minutes. But what’s the repeat business on something like this?
Tim: Yeah, so, I mean, there’s two sides of the marketplace. So, on the tasker side of the marketplace, we’ve got incredibly high retention rate because there’s a very clear incentive to use the platform and we have really strong incentive mechanisms. So, I mentioned before, tiered pricing, for example, means the more jobs you do, the less are fees that you pay, so we’ve got incredibly high retention on that side of the marketplace. On the customer side, that’s definitely the challenging side. So, right now, we get a few jobs per year out of our users. Thankfully, those jobs are pretty high value on average, but definitely, our challenge is to try and increase frequency on the customer side.
Andrew: I’m trying to think of what you do. Do you know, like what percentage of customers come back?
Tim: So, yes, we do.
Andrew: But you’re not going to tell me?
Tim: But that’s probably not data that we’re going to share with you today. But definitely, the cases not so much around retention but more around frequency, so it’s around surfacing to people how they can use the platform in a different way. So, we have very few people who use the Airtasker platform and then churn on to a competitive model. You know, it’s not kind of like churn from Uber to Lyft or from Uber Eats to Deliveroo. It’s much more the fact that it’s just about staying on top of people’s mind. Like, when they need a cleaner, how are we there for them when they need a cleaner and then how are again there for them when they need a plumber and when they need an electrician, so that’s the challenge and that’s what we work out on every day.
Andrew: Look at this. This is an AirTree vest. You really do have outfits for every day of the week. And not AirTree, Airtasker.
Tim: Yeah, I guess I’m pretty . . .
Andrew: I wanted to do that too for my company because then you could write it off, every outfit that I have that actually has Mixergy on it.
Tim: It’s post-tax fashion.
Andrew: Yeah. Oh, that should be the new domain, post-tax fashion.
Tim: Yeah.
Andrew: We put logos on it. You get to write it off. Buy a couple. Oh, it’s great. How do you know John from AirTree, John Henderson? He’s the one who introduced us.
Tim: Yeah, he’s been really helpful for us, a very respected part of the Aussie startup ecosystem. So, yeah, just hanging and bounce things around.
Andrew: All right. I want to thank John Henderson from AirTree for making this introduction and I’m going to thank you from Airtasker for setting this interview up with me. Thank you so much for coming in here late at night and the two sponsors who made this interview happen. Do you remember who they are? Let’s see how good of a job I did.
Tim: Total and HostGator.
Andrew: Yeah. No, Toptal, like top as in top of your head.
Tim: Toptal and HostGator.
Andrew: Yeah, and tal as in talent. Just tell me I need to slow down, Toptal, again. This is also a mural created by you guys, right, by one of your . . .
Tim: One of our taskers.
Andrew: One of your taskers.
Tim: That’s right.
Andrew: Cool. Thank you and thank you all for listening. Bye, everyone.
