Building a digital marketplace is hard, but MyTime is off to an impressive start
“The connective tissue of the Internet provides an opportunity to link the players in a particular market, reducing friction in both the buying and selling experience,” writes Benchmark Capital’s Bill Gurley in a discussion of the factors to consider when evaluating digital marketplaces. The Silicon Valley legend knows a thing or two about hit marketplaces, having invested in several including OpenTable, Yelp, Zillow, oDesk, GrubHub, 1stdibs, UShip, DogVacay, and Uber. “Highly liquid marketplaces naturally ‘tip’ towards becoming a clearinghouse where neither the consumer nor the supplier would favor an alternative,” he adds.
Building a successful marketplace is hard. But the benefits of doing so successfully are enormous. A week ago, MyTime launched in Los Angeles to offer consumers a place to find and book open appointments in dozens of different categories within the same portal, while also offering service based businesses marketing and yield management services.
The company has created a curated marketplace, inviting only the best four and five star rated merchants to participate, and even offers a money back guarantee should consumers be dissatisfied with their service. Consumers pay in full upon booking an appointment and can cancel outside of 24 hours for a full refund. MyTime currently offers approximately 60 different service categories, including broadly, Automotive, Health and Beauty, Home and Garden, Medical and Dental, Pets, and Sports and Fitness. If you’re into cliche mashup descriptions, it’s like Angie’s List plus CitiSearch plus OpenTable.
Much like Amazon did for product-based online retail, MyTime looks to offer a single, one-stop-shop for any service you can think of. It’s already the only place on the Web that you can discover and book appointments for a dental cleaning, an oil change, a gardener, and a manicure all in a single sitting. It can also be done from anywhere, at any time. The complexity of doing this well, while catering to the various nuances of each service is astronomical. For example, the booking processes for a haircut and a maid service could not be more different. MyTime has to consider and accommodate the “architecture” of each service offered on its platform.
Merchants can choose between two MyTime services. The first, a free service, simply integrates with their calendar (12 calendar platforms are currently supported), and allows customers to book and pay for appointments through the platform. There is no commission taken on such bookings, and the company even absorbs credit card processing fees, although this is likely a short-term perk.
Secondly, merchants can choose to promote open appointment slots utilizing the platform’s online marketing and dynamic pricing technology. In these cases the platform’s dynamic pricing engine looks at the services being offered across its platform, normalizes the data to the extent possible to make sure it’s comparing apples-to-apples, and then determines the best pricing to offer to fill that slot. Merchants have the option of setting a floor and ceiling between which the price fluctuates. The system then uses a combination of Google AdWords, Facebook and Twitter advertisements, and email marketing to drive traffic to these open appointments.
For this, MyTime takes a 40 percent cut. While this rate may seem a little steep at first glance, consider that the appointment was likely to go unfilled otherwise and add in the potential of acquiring a new customer, and it’s unsurprising that MyTime has a 70 percent closing rate when pitching merchants to join its platform.
One of the big differentiators between MyTime and other discovery or deal portals on the market is that it’s not just aimed at new customers, but at a merchant’s existing customers as well. The calendar and appointment setting functions make life easier for both the merchant and the consumer, yet merchants don’t have to pay a fee for booking pre-existing customers. Consumers simply indicate at the time of booking that they’re a returning customer and the merchant is not charged.
The company has gone to great lengths to educate merchants that it is not a daily deals platform. Rather, it views itself as a marketing partner, which assists service providers in keeping existing customers by creating deeper engagement, and acquiring new ones by being accessible on demand.
“A true marketplace needs natural pull on both the consumer and supplier side of the market,” Gurley continued in his marketplaces discussion. “Aggregating suppliers is a necessary, but insufficient step on its own. You must also organically aggregate demand. With each step, it should get easier to acquire the incremental consumer as well as the incremental supplier.”
Just one week after cutting the ribbon and inviting consumers to book one of 500,000 available monthly appointments with more than 1,000 businesses across the greater Los Angeles area, MyTime is already rolling out several new features it hopes will make the experience more powerful for merchants and consumers alike.
In the last week, MyTime has added vanity URLs for each merchant (e.g. http://sportsmassageextreme.mytime.com), embeddable online booking buttons, free business cards which include “book me online at [URL],” and free $20 off referral cards to hand out to existing customers with MyTime absorbing the referral fees. Additionally, the company introduced a Life Reminders feature which promises to help consumers remember the services they need, and prompt them when it’s time to re-book with an existing merchant, or find someone new should they prefer. Combined with the sheer simplicity of booking online – something offered by only a fraction MyTime merchants prior to joining the platform – and consumers have no reason not to use the plaftorm.
One of the most thoughtful decisions made by the young company concerned its launch strategy. It would be easy to get caught up in launching MyTime in every major city in the US, for fear that a competitor would eventually crop up in any market you elect to ignore. Rather, the company decided that merchant density was the most crucial factor in its success and that to achieve the proper concentration of highly-rated service providers, focusing on a single market at launch was the best course.
Anderson points to Yelp and ZocDoc which successfully took a similar depth over breadth approach at their earliest stages. Another consequence of this strategy, is that the startup can more effectively advertise across various channels to acquire consumers to its platform. MyTime took nearly 18 months building its initial technology and onboarding merchants across Los Angeles. The company initially operated under the name OfferSlot while quietly growing its marketplace out of the public eye.
The San Francisco-based company chose to launch in LA because it’s a large market whose merchants and consumers are far less inundated by startup pitches for “new and innovative services” than SF. Nonetheless, the company actually has more than 100 SF merchants on the platform – despite making no effort to market within the city – and describes it as being on the short list of markets to target after Los Angeles. Given the time that it took to curate and achieve sufficient merchant density in Los Angeles, duplicating the process elsewhere will be no small feat.
A less intuitive early decision was to roll out MyTime as a Web-only product. Founder and CEO Ethan Anderson believes that a mobile product will be necessary eventually, but with only 30 percent of the company’s current traffic coming from mobile devices feels its absence is not not a deal breaker currently. This is actually one decision that I have to disagree with, but as someone who has been accused of being connected to my smartphone by an umbilical cord, I’m on the far end of the mobile-first spectrum.
MyTime raised a $3 million seed round led by GRP Partners, with participation from 500 Startups, David Tisch, Jason Calacanis, LegalZoom and ShoeDazzle founder Brian Lee, Facebook advertising engineer Greg Badros, MerchantCircle founder Ben Smith, and others. The round actually closed in November 2011, but was only announced this month with the public launch of its product. The company currently has ten employees, five on the technical side and five in sales and marketing.
Anderson’s vison for MyTime comes from his previous startup, home service discovery and booking portal and TechCrunch 50 winner Redbeacon, which was recently acquired by Home Depot. GRP Partners partner and MyTime board member Mark Suster calls Anderson “one of the more talented entrepreneurs I had come across in San Francisco,” and describes the connection between Redbeacon and MyTime as making him line, not a dot, and thus very investable.
There are several vertical competitors in the category, but few that are taking as ambitious of an “everything to everyone” approach. Redbeacon is still well-known in the home services space, as are StyleSeat and MindBody in the beauty and fitness categories respectively. Thumbtack is more broad than these, but doesn’t offer consumers the curation of only top quality vendors, or merchants the marketing and dynamic pricing tools available through MyTime. Finally, at the very low-end of the spectrum, are Craigslist, Angie's List, and Google, which offer merchant discovery but little else. None of these are directly competitive to MyTime from a value proposition, but all are significantly more well known.
MyTime is in its earliest days, but the vision for the product is a compelling one. And unlike so many others, the company has effectively positioned itself as a partner and resource to both consumers and merchants. Now, Anderson and his team have an enormous challenge ahead of them to build awareness and maintain quality.
Gurley writes that the marketplace tip “only happens if your momentum is increasing, and both consumers and suppliers are sensing an increasing importance of your place in the world.” MyTime isn’t there yet, but it certainly seems to be in the cards.