When they were young

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When Thumbtack was young: the early years

The company had made 450,000 connections a year and half after its launch

Innovation series by Steven Loeb
September 13, 2018
Short URL: http://vator.tv/n/4c06

As our readers know, Vator has started a series called When they were young.

It's a look back at the modest days of startups, what traction they had in their first few years, and how they evolved. In the end, we hope to provide a glimpse into what great startups looked like in their first few years.

Stories like these are always well received because it reminds us that anyone, regardless of pedigree and environment, can rise above the noise and have great influence. They show us the value of being resilient, persistent, and committed. If we can follow their footsteps, maybe we too can have similar success.

This segment is on Thumbtack.

 

— Thumbtack's First Year —

Founders: Jeremy Tunnell, Jonathan Swanson, Marco Zappacosta, Sander Daniels

Image result for thumbtack early photo

(Photo: thumbtack.com)

Founded: August 2008

Initial company description:

IMG_3765

"Thumbtack is building an online marketplace for local services, to change the way you find and book services. Right now, you can go online and buy any product you can think of, but you can’t do the same for services. I’m sure many of you have had the experience that it’s incredibly difficult to find a local, trustworthy and available provider to come and do the jobs that you need done. Thumbtack addresses this problem by creating a two sided marketplace, where providers put up their profiles, with availability, and consumers can find them and book them," Zappacosta says at Vator's Juice Pitcher event in 2010.

First funding, at 10 months from founding: In June 2009, Thumbtack raises $500,000 from a group of investors, including the Co-founder and former Chairman & CEO of Logitech and an early investor of Angie’s List

 

 — Thumbtack's Second Year —

Incorporation, at one year and two months from founding: Thumbtack is incorporated in Delaware on October 9, 2008.

Award, at one year and two months from founding: In October of 2009, Thumbtack wins the People's Choice award at Vator's Juice Pitcher event.

Traction, at one year and two months from founding: Thumbtack has 2,500 service providers on the platform. 

Press mention, at one year and three months from founding: In November 2009, Thumbtack is profiled on TechCrunch in a piece entitled, "Thumbtack Takes On RedBeacon As It Looks To Bring Local Service Providers Online"

"Last month we saw the launch of TechCrunch50 winner RedBeacon, the startup that lets you book local service providers directly from the web. Today it’s getting some strong competition from a new startup called Thumbtack, a local service booking engine that’s looking to offer both a comprehensive directory of providers and a greater degree of trust than you can find elsewhere."

Launch, at one year and four months from founding: On December 8, 2009, Thumbtack officially launches

“The local service market, though enormous, is highly fragmented, fraught with inefficiencies, and largely transacted offline,” Zappacosta says in a statement. “Just as eBay and Amazon moved products online, Thumbtack aims to lead the transition of services online. We know this goal is ambitious, but the trend is inevitable and Thumbtack is poised to create this change.”

Traction, at one year and four months from founding: There are 15,000 providers on the Thumbtack platform at launch.

Second funding, at one year and 10 months from founding, six months from launch: In June 2010, Thumbtack raises an angel round of $1.2 million. Investors include Scott & Cyan Banister (PayPal & Zivity ), Joshua Schachter (Delicious), Jason Calacanis (WebBlogs & Mahalo), Mark Britto (Amazon), Scott Faber (Ingenio), Mark Goines (Intuit & Mint), Auren Hoffman (RapLeaf), Ariel Poler (l/PRO & Topica), Ali & Hadi Partovi(LinkExchange, Tellme Networks & iLike), Vance Bjorn (DigitalPersona), Denis Grosz (wiseGEEK), and Yan-David Erlich(ChoiceVendor).

Traction, at one year and 10 months from founding, six months from launch: By June 2010, over 40,000 service professionals have joined Thumbtack.

 

 

— Thumbtack's Third Year —

Traction, at two years and six months from founding, one year and three months from launch: In March 2011, Thumbtack makes its 250,000th connection between a buyer and seller. 

Traction, at two years and eight months from founding, one year and five months from launch: In May 2011, Thumbtack has made 450,000 connections, with 50,000 connections in one week. The company has 130,000 active merchants. 

Feature, at two years and eight months from founding, one year and five months from launch : In May 2011, Thumbtack begins allowing audio tracks on Thumbtack listings for voice-over artists, musicians, language tutors and guitar teachers.

 

— Thumbtack's Fourth Year —

Features, at three years from founding, two years and eight months from launch: During Hurricane Irene in August 2011, Thumbtack launches three programs to help in the aftermath of the storm, including a recovery center for professionals who can help clean up, repair roofs, fix broken windows, remove debris, and repair water damage.

The company also waives all fees for service professionals in states affected by the hurricane.

Feature, at three years and one month from founding, two years and nine months from launch: In September 2011, Thumbtack adds text message notifications.

"We’re hoping this new program will allow you to respond more quickly and conveniently to job notifications. After all, the faster you respond to a job, the more likely you are to please the potential client and win the job. Responding to a job within the first hour of being notified about it more than doubles your chances of meeting with the client and getting their business," Daniels writes in a blog post. 

Traction, at three years and one month from founding, two years and nine months from launch: In September 2011, Thumbtack is sending more than 100,000 job notifications every week. 

Third funding, at three years and five months from founding, three years and one month from launch: In January 2012, Thumbtack raises $4.5 million in Series A funding. The round was led by Javelin Venture Partners, along with MHS Capital and Tim Draper.

Jed Katz, Managing Director at Javelin, joins the board of directors. 

"We simply didn’t know how to raise venture capital. And we went out, before even we met or talked Jed and Javelin, trying to raise $10 or even $12 million dollars. And that was exuberant relative to what we’d accomplished, so we just had mis-set expectations. So we went out, talked to a bunch of people trying to raise $10 or $12 and realized that that wasn’t going to work for a very simple and fair reason, which is that the monetization piece of the business was early. I think there was some data and I think enough to convince Jed and Javelin that there was something really here, but it was early days in terms of monetization and, I think, with the original ask that we had, we hadn’t proved enough to go take that much money. We sort of recalibrated and then I think, thankfully for Javelin and a few other folks that got interested, it worked," Zappacosta said in 2015.

Traction, at three years and five months from founding, three years and one month from launch: By January 2012, a new user has signed up on Thumbtack every minute of every day for the previous six months. Thumbtack also says it is bringing $40 million of new work to local businesses annually.

Traction, at three years and six months from founding, three years and two months from launch: In February 2012, Thumbtack reaches 250,000 local merchants, doubling in nine months. The 250,000 merchant is a man named Douglas Hoover, who has designed and constructed over 2,000 custom waterfalls and ponds in Southern California.

 

 

— Thumbtack's Fifth Year —

New logo, at four years and one month from founding, three years and nine months from launch:: In September 2012, Thumbtack unveils a new logo that it says is "more personal."

"We designed a logo with more personality because Thumbtack is about those in-person connections. Thumbtack’s design team embellished the base Fox Grotesque font, connecting the letters to be evocative of human handwriting. We designed the bevels in the letters to evoke the tips of a Thumbtack," Daniels writes in a blog post. 

Business model, at four years and five months from founding, four years and one month from launch: In January 2013, Thumbtack switches to an intro-based business model, where it makes money by having professionals pay to contact customers through Thumbtack credits, which are used by professionals to send quotes to customers. 

This is the company's third business model, following a transaction model, where it made money charging a fee on every transaction, and a subscription model, where it charged a $24 monthly fee for customers to use the site. 

"About a year after Jed and Javelin got involved, we made the decision to turn off the subscription model and turn on our introduction based model. We'd done a lot of testing around it, so we felt good about it, but it's still scary to move over a whole population and community over to a new business model. It was super scary, but, thankfully, it worked and was definitely the right thing and it propelled us forward," Zappacosta says in 2015. 

Fourth funding, at four years and 10 months from founding, four years and six months from launch: In June 2013, Thumbtack raises a $12.5 million Series B round led by Sequoia Capital, along with Javelin Venture Partners and MHS Capital.

Sequoia’s Bryan Schreier joins Thumbtack’s board of directors. 

Revenue, at four years and 10 months from founding, four years and six months from launch: In June 2013, Thumbtack is generating roughly $300 million a year in new business for local professionals nationwide.

— Thumbtack Today —

Thumbtack has raised over $273 million in venture funding, most recently a $125 million round in 2015 that valued the company at $1.3 billion.

The company now processes roughly $1 billion a year, and has service providers in nearly 1,000 categories. 

(Image source: web.archive.org)


Related companies, investors and entrepreneurs

14564
Javelin Venture Partners
Angel group/VC
Description: Invests in early-stage tech companies with incredible potential, managed by teams of energetic, trustworthy and capable leaders. Key focu...
4473
Thumbtack.com
Startup/Business
Description: Thumbtack helps you accomplish the personal projects that are central to your life. Whether you need to paint your home, learn a new lang...
Bio: Jed Katz is the Managing Director of Javelin Venture Partners. One of the pioneers of online commerce, Jed has spent his 20 yea...
Bio: Marco Zappacosta is a Co-Founder and the Chief Executive Officer of Thumbtack.

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