Thumbtack is a Frankenstein's unicorn
“We like to say we are not part of the sharing economy. We are part of the real economy,” said Jon Lieber, Chief Economist at San Francisco-based Thumbtack. “It’s like a direct-connecting Yellow Pages.”
Lieber was speaking earlier this week to a Congressional panel in Washington D.C. that had been convened to discuss the policy implications of the sharing economy. It was the first of many planned hearings on the issue before a subgrouping of the Energy and Commerce Committee. The hearing’s name –The Disrupter Series: How the Sharing Economy Creates Jobs, Benefits Consumers, and Raises Policy Questions – sounds like the title of a breakout session at a tech conference from 2011.
When Thumbtack hired Lieber away from his advisory role in the Office of Senate Majority Leader Mitch McConnell last year, the company joined a growing list of startups to employ economists in de facto marketing roles.
An article on this phenomenon in the Washington Post last year explained Lieber’s new role:
Lieber is charged with making sure that information is disseminated in influential circles, with the idea that it could be used as ammunition for policy campaigns — making the site even more valuable to the micro-entrepreneurs who use it.
During the testimony of Lieber, an alumnus of the neocon/libertarian American Enterprise Institute, his employer announced it had raised $125 million at a $1.3 billion valuation. It had, in other words, sprouted a single horn, becoming San Francisco’s newest, and perhaps most unlikely, unicorn.
Thumbtack began its journey six years ago, inauspiciously. During a recent talk at the Computer History Museum in Mountain View, hosted by NFX Guild, CEO Marco Zappocosta said he was rejected by the first 42 investors he approached in 2011 as he attempted to raise a Series A.
“We basically bucked all the convention wisdom,” Zappacosta said.
This continues to be the case. In the latest version of Silicon Valley, young companies are often advised to settle on a narrow wedge and pound it home. Instead, Thumbtack, which matches consumers with independent professionals, set out to simultaneously conquer nearly 1,000 distinct verticals, from plumbing to wedding-catering to mariachi bands. (Not to mention economics).
User acquisition is lubricated, further wisdom augers, with the simplest possible UX. Thumbtack, however, requires its new users to answer myriad and highly-specific questions about what they are looking for, or what services they offer, prior to registration.
The events of yesterday suggest that all this convention-bucking is paying off, and that Thumbtack may be the company that finally captures a market which many a company has quested after and as many died trying. It’s a market of local independent services, the existence of which was prophesied by the Craigslist example in the early days of the consumer web, but which has proven resistant to digital adventurism.
Years ago, Thumbtack elbowed into a crowd, including Angie’s List and Yelp, which was struggling to serve this broad market with a unified platform while making money. Many other companies were attacking it piecemeal. Zappocosta found himself in the unenviable position of trying to build a base of users and a base of disparate contractors at once.
Time and obscurity allowed Thumbtack to attempt several approaches before stumbling on the one that worked. Currently, the company makes its money by charging service professionals for an introduction to those seeking their services, having previously experimented with commissions and subscriptions. The company claims to have amassed 200,000 professionals in its network, across a thousand American cities.
Back in Washington, Lieber explained that Thumbtack was a true marketplace, not a dispatch service, and so ought to be spared the lawmakers’ regulatory ire. He threw Uber under the bus, in other words, and claimed the Randian higher ground. From this positon he advised Congress to consider tying employment benefits directly to workers, rather than funneling them through employers. A neat trick, by which Thumbtack casts itself as the lobbying wedge for the sharing economy it disavows.
Dogged iteration has vouchsafed for Thumbtack the golden horn, and brought Americans one step closer to making every interpersonal connection, every commercial transaction, through branded portals on their screens.