
Building Thumbtack: Six Years, Forty-two Rejections, and a Singular Obsession - ttunguz
https://www.thumbtack.com/blog/building-thumbtack/
======
physcab
Its interesting reading about their decision making process with regards to
their business model.

 _Then we tried a subscription model. It was super easy to understand, which
enabled us to sign up 10,000 paying pros—great! But in the long run, it meant
the cost to the pro stayed the same each month no matter how much new business
we brought them—not so great. We needed our revenue to grow in lockstep with
the value we create.

Cue the pay-per-introduction model we have today. What matters to pros is
flexibility and a profitable return. So we made sure that’s what they got. It
was simple. Plus, it let us guarantee our customers high-quality quotes from
pros who were serious about providing a great service._

Based on my other comment [1], I wonder what would have happened if they stuck
with a subscription model and then augmented it with value added services to
their larger customers, something akin to LinkedIn. That seems more fair to
how their system currently works.

[1]
[https://news.ycombinator.com/item?id=10294811](https://news.ycombinator.com/item?id=10294811)

~~~
birken
There are a couple main reasons subscriptions really didn't work.

First, the scale difference between "power" pros and regular pros is pretty
large. A "power" pro might spend thousands of dollars per month, whereas the
median pro is probably spending a few bucks a month. How do you pick a
subscription price that works for both of them? IIRC, when we switched over
from subscription to the pay-per-introduction model, something like 80% of
pros could have used Thumbtack exactly the same as they did before and pay
less. It was just the huge power users would end up paying much more (though
presumably still getting good ROI on their spending).

Second, when people had subscriptions fully paid for, they were incentivized
to just respond to everything, even if they were not a good fit for the
consumer. Any chance of getting hired is better than no chance. This is just a
waste of time for both the pro and the consumer.

This process also played out over the course of years and wasn't based on any
master plan. I created the subscription model when we were struggling to raise
a Series A because the previous model wasn't really working and we needed to
start making money or the company was going to go out of business. I had no
idea if it was going to work or not, and when the first few people signed up
it was incredibly exciting. Then it sort of got out of control where too many
people signed up for it and then we realized the problems that came along with
it. Though in the meantime we raised a Series A and didn't go out of business
so that was pretty good!

------
xg
Marco and Jonathan are the real deal as entrepreneurs—they always think for
themselves.

------
monochromatic
"1 Obsession a Big Problem" isn't exactly the same as "a Singular Obsession
With Solving One Big Problem."

~~~
dang
We changed the title from "Building Thumbtack: 6 Years, 42 Rejections, 1
Obsession a Big Problem" to (a prefix of) the article title.

