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Charles Schwab invests in Quora competitor, which is on track to generate $100M in 2012
There's tons of question-and-answer services out there. But very few are places where you can find solid advice worth paying for, with the exception of Pearl, formerly known as JustAnswer.
JustAnswer announced Tuesday that it's re-branded itself as Pearl. It's a name to reflect the wise instruction and advice (in other words - pearls of wisdom) a consumer can get from the service, said Andy Kurtzig, founder and CEO of Pearl, in an interview with me.
At the same time, the company said it's raised $25 million in financing from angel investors, such as Charles Schwab, as well as Glynn Capital. The San Francisco-based company, which has been around for eight years, has been bootstrapped primarily by Kurtzig. Since the company has been making money since it was just Kurtzig coding in his extra bedroom, the question is: Why raise money now?
"Because there’s going to be a $100 billion revenue company in this professional services space online and I want to make sure it’s us!" said Kurtzig. On his way to world domination, Kurtzig plans to first use the funds to expand into France and China, and get a mobile product off the ground.
The funding news comes just a month after Quora, a Q&A competitor, raised $50 million, for a valuation of $400 million. Kurtzig wouldn't disclose the valuation of Pearl, only to say that the company is on a gross revenue run-rate of $100 million this year. Given the going revenue multiples for fast-growing consumer Web companies, it would't be a surprise to see Pearl valued at well over 4x or 5x revenue.
While Quora, which can boast the Silicon Valley digerati as an active community, typically gets a lot of press coverage, Pearl has been quietly building a big business as the go-to place to get answers on medical, legal, tech support, and accounting questions.
There are 700 categories, but 80% of the questions are anwered by doctors, lawyers, mechanics and tech support, said Kurtzig. All told, there are 10,000 experts, who on average make about $1500 a month from Pearl. A few have even generated $40,000 a month.
To date, there are about 10,000 questions answered daily. On average, customers are paying about $30 per question. The customers are actually setting their own price by choosing how quickly they want a response, and how detailed they want it to be. See image below. The customer gets to a page where they move the sliders to make the price go up and down. In the below example, low/low would be $14, middle/middle would be $35 and high/high would be $75.
Pearl takes a fee of 50% of the payment made by a customer.
How does it work? A customer chooses who he/she wants to ask a question from a doctor, mechanic, lawyer, etc. The customer then inputs a question and lets Pearl know how quickly the answer should come in and how much detail they want. Then Pearl takes the credit card information. Depending on how quickly a customer wants a question answered, the first available expert typically answers the question. A customer can then have a conversation with that expert to clarify the question if need be. There is also a 100% satisfaction guarantee policy if a customer isn't satisfied with the answer.
Typically, legal questions cost the most because attorneys charge the most, but doctors do more volume, said Kurtzig.
Pearl also has a subscription plan for $35 a month for unlimited answers. Kurtzig would not disclose how many subscribers Pearl has for this service. But he did say that the subscription allows user to access the 19 million questions and answers Pearl has already aggregated. It's quite an useful library of information if you consider that many questions don't have to be personalized.
Even though there's a plethora of information out on the Web. If you've trolled around forum sites long enough to find out how to get a printer attached to your computer, or to understand certain symptoms, you'll know that paying for the "exact" information from a verified expert is a no brainer. And, $35 seems pretty reasonable for that kind of service and comfort.
The expert community
Pearl prides itself on having a rigorous process and patent-pending algorithm to verify experts. It's not easy to become an expert on Pearl.
In fact, there's an eight-step quality control process, which includes third-party background checks making sure people have licenses. There are even tests that experts have to take. For instance, a Honda mechanic needs to take a test on Hondas. It takes about a day or two to get verified across 50 different data points and approved by the 10-person quality-control team at Pearl, said Kurtzig. And, sometimes experts have to go before an expert quality board, which is often paid $500 an hour just to give their stamp of approval on the experts. There are 30 expert quality board members.
The expert community is just one of the many assets Pearl has created to ensure trust and credibility in its marketplace. It's a long way from where Kurtzig began.
"It's hard to build liquidity in marketplaces," he said. "When I first started, it cost about $1 to ask a question and a person would get an answer in a day." Even today, when response rates slow down to 30 minutes, Pearl immediately investigates and will often find someone to come onboard to answer the question. In fact, Pearl has 20 so-called market makers (similar to those who help match trades on stock exchanges) whose sole job is to make sure questions are being answered in a timely fashion.
Unlocking a supply of answers
Pearl is just one of the many companies that fit into the new trend of start-ups that are unlocking supply. Airbnb has unlocked real estate supply; Uber is unlocking supply of private limos; TaskRabbit is unlocking supplies of workers willing to do small tasks. In like vein, Pearl is unlocking answers.
And, the market is big. If you look at the services sector, it's about $2 trillion. Of course, a lot of this money comes from medical bills at a hospital or legal bills at the courtroom. But only 1% of the services sector is online, said Kurtzig. And, most of that is money that goes toward tech support. "There's many parts of the services sector that aren't touchable by us," he said.
"But if you want a quick second opinion about something, or ask a quick question – you can totally do that."
(Image source: fineartamerica)
(Full disclosure: Andy Kurtzig is an investor in Vator)
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Pearl.com is the world’s largest source of professionals online, and provides people with easy access to 10,000 independent, verified professionals in 700 specialties for one-on-one answers to just about any question or concern. Whether you need a medical explanation, help with a legal question or a way to save money on your car, tech or appliance repair, Pearl.com gives customers access to “wisdom when you want it™.”
Formerly known as JustAnswer®, the company has been growing revenue an average of 123 percent year over the last five years and currently generates revenue in 196 countries and 22 currencies. Pearl.com was founded in 2003 by serial entrepreneur Andy Kurtzig as a way for his then-pregnant and worried wife to talk with an OB/GYN about her round-the-clock health concerns in a more convenient way. Today, the company has evolved into a platform for people around the world to communicate directly with verified professionals in hundreds of categories as varied as pet behavior and tax law to antique appraisal and computer repair, anytime, from anywhere, affordably.
Recognized by the Better Business Bureau with an A+ rating and boasting relationships with brands such as Dr.Phil.com, PetMD and Car Talk, Pearl.com is now one of the largest and fastest growing providers of access to professional services online. The company has increased revenue for 33 quarters since inception and grown an average of 123% per year since 2008. The Board of Directors includes Charles Schwab, Larry Sonsini (Observer), Bob Finocchio and Sandy Robertson.
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Provide a flexible, social, enjoyable and eco-friendly commute through time-shared wi-fi enabled shuttles.
Businesses or riders only pay for the capacity they need.
Riders get convenient commuting options and put their commute time to use. RidePal makes commuters happier.
Companies can extend their recruiting range, better retain employees and increase productivity. There is a diminushing return after a few buses, which can be reduced if buses are shared.
Also the more buses the more overhead in managing the program. Google has a full time team of several people to manage the program. For other companies, this was the reason why they dropped the program.
Transportation companies achieve more revenue and efficient utilization of their vehicles.
Total Addressable market in the US is $1bn in revenue across all top 20 markets (> $500M in profit) -
We believe that there is also an opportunity internationally
Other trends that are helpful (see LA deep dive in uploaded documents, private space)
- Companies organized in clusters (usually by vertical)
- Residential areas organized in clusters too (societal change, people tend to gather up with like-minded people, similar education background, similar professional aptitude, etc...)
- outdated public transportation networks and very expensive to adapt. Not matching current commuting patterns
- Huge traffic issues
- A lot of alternative transportation models already deployed in those areas and are changing people's driving habit, showing that the idea that 'Americans just want to drive' may be no longer true
- Prioritized market and urban areas based on these configurations, usually leading to very congested roads + total number of commuters that drive alone to work today
- We have already received inquiries from Atlanta, Denver and Los Angeles
- Urban areas with these characteristics represent $1bn in revenue for RidePal sustainably
Customer Problem: Companies have a hard time recruiting remote top talent because of a long Commute. They pay a 20% premium on salaries to compensate, or become a high cost transportation agency to remain competitive. Commuting is the daily task most injurious to happiness for people and present serious health risks. This forces people to make suboptimal personal and professional decisions.
Product/Services: RidePal pools demand across companies for shared buses with a turnkey solution. Using real-time ridership data, its route planning technology keeps the routes relevant and efficient for both riders and transportation companies. Social features personalize the experience and build tight communities around each shuttle. Ancillary services organized around RidePal hubs and buses increase loyalty and profitability.
Sales/Marketing Strategy: Seed: direct to Premium Plan companies as anchor to cover Bus Minimums – neighboring companies on Professional Plan to ride along. There is therefore no need for companies to collaborate, they sign up with RidePal to buy seats or Rides as a professional plan, and Premium can create routes (and easily share cost with employeesm later further discounting themselves as they accept to share their shuttles). Create pull among Riders. Scale: Viral nature of product, HR outsourcing/recruiting firms. Distribution via WageWorks and CommuterChecks, on-bus branding, online advertising, local radio, word of mouth, online and social advertising and earned media.
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