- Thumbtack is an online platform matching services professionals with customers in more than 1,000 categories.
- Users can chat with service providers, discuss their project details, check provider availability, and hire the provider, all from within the platform.
- Thumbtack makes money by charging service providers for leads.
Marco Zappacosta, Sander Daniels, Jonathan Swanson, and Jeremy Tunnell founded Thumbtack in 2008. Interestingly, the company launched at the peak of the financial crisis. The company has headquarters in San Francisco, California.
Despite the company having a "unicorn" valuation of $3.2 billion, management has no intention of taking Thumbtack public with an IPO.
Instead, they choose to raise funding for the business through private investment.
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What does Thumbtack do?
Thumbtack is a virtual marketplace connecting local service providers with homeowners and business owners in their area searching for services.
The company focuses on services like handypersons, home, and office cleaners, painters, tilers, and more.
The company experienced success by saving the consumer time and money searching for local service providers.
By logging onto Thumbtack, customers don't have to waste time visiting individual websites to find the service provider they need. It's a user-friendly platform with everything they need in one place.
How does Thumbtack work?
Thumbtack's marketplace operates through a customer-facing platform.
Users enter their ZIP code and chooses their service from hundreds of categories.
Customers then select their preferred contractor from the list of service providers generated by the platform.
They can filter their search results by the number of reviews, pricing, estimated completion times, and available dates.
Contractors post profiles of their services, with past customers rating their services to build their reputation on the site.
Customers can use the platform to chat with service providers and discuss the details of their projects before selecting their chosen provider.
After hiring their chosen provider, the customer completes the transaction outside the platform.
The Thumbtack Guarantee program. Ensures that the customer receives the service they expect.
All customers receive a $1,000 money-back guarantee should the contractor damage their property.
How Thumbtack makes money
Thumbtack makes money by charging a fee to its service providers for bringing them leads.
The company doesn't interfere in the transaction, and they earn regardless of whether the customer chooses to hire the recommended vendor.
Thumbtack also earns through "Thumbtack Promote," where service providers pay an additional fee to promote their profile and listing.
By taking the Thumbtack Promote package, service providers get better visibility over other normal listings on the platform, boosting their business.
The pricing for leads varies depending on several factors.
Some of the contributing factors to the service fees generated by Thumbtack include the type of work, competition in the service providers' niche, their geographic location, and others.
Thumbtack service providers purchase credit with Thumbtack before activating their profile and listing. This strategy lets the service provider plan their week and bid on projects automatically.
Thumbtack introduced its "Instant Match technology" in 2017, with its AI pairing customers with providers.
Before this innovation, service providers had to big manually on jobs, resulting in many missed opportunities.
However, the AI proved to cause problems with service providers, damaging the platform's reputation on the service provider side of the model.
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While the platform AI automated the process of matching service providers and customers, it wasn't initially popular with service providers.
Many disclosed that the new AI model matched them with customers that don't reside in their local area or are less likely to convert to their service offering.
As a result, service providers received less value for their marketing budget than they did with the previous manual system.
Thumbtack launched its "Opportunities" page on its site to resolve the issue, displaying potential leads that have yet to convert into paying customers.
Thumbtack launched its "Instant Book" feature in 2021, where customers have the option of immediately booking a service provider.
The Instant Book service focuses on small tasks rather than large projects.
Thumbtack competes with other websites offering matching services between homeowners and business owners looking for professional services in their local area.
Some of the top competitors in the space include the following companies.