Jonathan Swanson

Co-Founder Thumbtack, former West Wing staffer, lover of life

THIS CHAT HAPPENED ON September 17, 2015

Discussion

Jonathan Swanson@swaaanson · President, Thumbtack
​Hey everyone, excited to hang out on Product Hunt today. I'm a former White House staffer turned entrepreneur. I've spent the last 7 years building Thumbtack​ -- we started in a house (where I slept in a closet...) here in SF and now we're a team of 100+ in SF and on pace to help our small businesses earn $1B+ this year. Happy to chat about Thumbtack, marketplaces, fundraising, building remote teams (we have 1000+ in the Philippines), or whatever else you all are curious about.
Ben Tossell@bentossell · newCo
@swaaanson Hey Jonathan! I've just joined the PH team and the transition to remote working is interesting. Do you have any top tips to working most effectively while keeping happiness levels high?
Jonathan Swanson@swaaanson · President, Thumbtack
@bentossell First, create a routine of when you work and when you don't. One of the biggest challenges of working from home is separating work from play. Create a schedule and stick to it. Second, build friendships! Get to know your team members, meet up in person. Work is way better when you have awesome friendships. It's something we really want to facilitate on the team. We organize lots of events for you but encouraging you to organize meet ups on your own as well!
Lomesh Dutta@lomeshdutta · www.near.in
@swaaanson I am building a local service marketplace in India www.near.in . I think the biggest challenge is cost effectively acquiring customers as these categories are need based and in my opinion low repeat. What is the biggest marketing channel that has worked for you? What kind of repeat rates do you typically see in Thumbtack
Jonathan Swanson@swaaanson · President, Thumbtack
@lomeshdutta Hi Lomesh, cool business you're building. :) You're right: acquiring customers and pros in a cost effective way is one of the biggest challenges building a marketplace. Most local services are pretty low frequency (if you need a locksmith, bartender, or wedding officiant every day you have a problem...) which is why at Thumbtack we are building a very broad marketplace. We have 1500+ categories which means while any one category is pretty low frequency in aggregate customers can use Thumbtack for all their service needs.
Jonathan Swanson@swaaanson · President, Thumbtack
@swaaanson Once we decided to build a very broad marketplace (instead of a single vertical, like HomeJoy) we knew the biggest challenge was first how do you acquire pros across 1500+ categories and 100+ cities. And then how do you acquire customers. This is the classic chicken-and-egg problem. To solve it we created a heuristic we called "network independent value" -- in other words, what sort of value could we offer to pros to join thumbtack BEFORE we actually had marketplace liquidity (lots of customers). Chris Dixon has called this "come for the tool, stay for the network": http://cdixon.org/2015/01/31/com...
Jonathan Swanson@swaaanson · President, Thumbtack
@swaaanson We tested a bunch of different tools for pros in the early day but two things really stuck: (1) We allowed pros to create a profile where they could add reviews, photos, licenses, etc. Pros found this useful in itself. (2) We built a tool to allow pros to easily post their services on Craigslist. At the time, most pros used Craigslist to build their business (no longer true) and would have to go to Craigslist a couple times a week to re-post their service. We created a way for pros to do this more easily. Pros LOVED this. And while it didn't create value on the thumbtack platform right away, it did allow us to acquire and build relationships with tons of pros. And then we started focusing on getting customer demand. So, the pros came for the tool, and stayed for the network.
Lomesh Dutta@lomeshdutta · www.near.in
@swaaanson Makes a lot of sense. Good luck to you for Thumbtack! Would love to stay in touch and pick your brain as we continue to build our play.
Jonathan Swanson@swaaanson · President, Thumbtack
@swaaanson In terms of channels we used to acquire professions: we tried EVERYTHING. Traditionally in this space the way you acquire small businesses is by leveraging a massive sales force. Yellow Pages, Yelp, etc have thousands of sales people. This approach works but is obviously super expensive, not scalable, etc. From the beginning of Thumbtack, we thought the traditional sales approach was broken and didn't make sense because we needed to acquire pros across so many categories and geographies. So, we've acquired 1M+ professionals using more modern, programmatic methods -- crawling the web, machine learning, Facebook, etc. Getting acquisition costs to be 95%+ lower than traditional sales methods was key problem we had to solve and we spent 3+ years really cracking it.
Sathya Peri@gosathya · on a leave of absence
While working on Thumbtack, describe a moment when you were on fence and about to quit. What did you do to overcome that obstacle?
Jonathan Swanson@swaaanson · President, Thumbtack
@gosathya The hardest moment at Thumbtack was in the fall of 2011. We went out to raise institutional money for the first time and while raising angel money had happened pretty easily raising VC was REALLY hard. Over the course of FOUR months we pitched 45 VCs. And we got 44 nos. About half way through this process, after a couple dozen nos, we realized that we might not be able to find the money. We were low on cash and so we had to literally start planning to let go of our team while simultaneously continuing on to fundraise. This was obviously brutally discouraging and emotionally challenging. There were definitely times where it would have felt good just to walk away. But the thing that kept us going was we always had conviction that SOMEONE was going to build the Amazon of services. It just felt inevitable. And I just couldn't stand the thought that someone else would do it and not us. :) So we trudged on. And fortunately, the 45th VC -- Javelin Ventures -- decided to take a bet on us. Whew!
daniellevine@daniellevine · Fireside
Hey @swaaanson! Thank's for doing this AMA. I'm wondering, what's the best thing you've come across in the last 30 days and why? Could be anything, a product, an article, a tea, a quote. Anything! Thanks for answering.
Jonathan Swanson@swaaanson · President, Thumbtack
@daniellevine This blog: http://waitbutwhy.com. I'd discovered it more than 30 days ago but never really dug in. But more recently I read a few of the blogs and I am now OBSESSED and read all of them. Highly recommend.
Vikram@j4uvikram · Associate, Nirvana
@swaaanson Great job by you all, Thumbtack today is the role models for many service marketplaces. Just curious to understand how does one ensure repeat usage in high value categories (not on demand categories) & what metrics in you mind talk of a healthy marketplace?
Jonathan Swanson@swaaanson · President, Thumbtack
@j4uvikram The best way to ensure high repeat rate is to build a product that customers LOVE. For us, that means we need to quickly and reliably deliver 3+ quotes on every request on Thumbtack. When we do that, customers love it. But delivering reliably across 1500+ categories and 100+ cities is SUPER hard. Biggest challenge of our business. We have multiple teams working on making our product deliver reliably at all times.
Jonathan Swanson@swaaanson · President, Thumbtack
@swaaanson In terms of marketplace metrics we look at: (1) customer request growth (2) new pro acquisition (3) customer repeat rate (4) pro cohort engagement rate (5) % of requests that get 3+ quotes (our definition of a high quality experience (6) customer support speed + CSAT. And about 100+ other KPIs. ;)
Vikram@j4uvikram · Associate, Nirvana
@swaaanson Thanks a lot Jonathan, was very helpful. Will surely love to seek your insights in marketplaces further.
Erik Torenberg@eriktorenberg · Former Product Hunt
Hi @swaaanson! Thanks for taking the time to chat with us. What's something you've changed your mind on in the past 6 months?
Jonathan Swanson@swaaanson · President, Thumbtack
@eriktorenberg Fun question: This has evolved over more than 6 months but I've changed my mind pretty dramatically on how much I believe in free will. The more I've read and thought about the brain and free will the more I think people are hyper-influenced by their genetic inheritance and early upbringing. This has pretty dramatic implications for how you think about politics, justice, etc. Sam Harris has an awesome book on the topic: http://www.amazon.com/Free-Will-...
Ryan Hoover@rrhoover · Founder, Product Hunt
Hi, Jonathan! What's been the hardest challenge over the past 7 years, growing to 100 people? Side note: I left a previous startup where I joined as #10 and we grew to a similar size. Curious if you experienced some of the same challenges we did. 😊
Jonathan Swanson@swaaanson · President, Thumbtack
@rrhoover Tons of challenges! Every stage is a new challenge which is lots of the fun of startups I think. The biggest challenge for the first 5 years was just not running out of money! We only raised ~$6M the first few years so that meant taking no salary, working in a house, etc. In the last couple years we've raised $150M+ and that transition -- from tiny, intimate, scrappy startup --> really fast growing company with tons of people -- has been hard (and fun).
Jonathan Swanson@swaaanson · President, Thumbtack
@swaaanson One of the hardest challenges has been helping early team members "grow up" with the company. Some team members are able to scale their efforts to grow from managing 3 people --> 30 people. And others aren't. And some like that transition, and some don't. Having really honest conversations with people about when it's working and when it's not is definitely the hardest part -- sometimes the person who was perfect to lead a team or effort at 50 people is not the same person at 200 people.
Jeff Needles@jsneedles · Data @ Houseparty & Maker of Things
@swaaanson Hey there! What's your morning routine? Has it changed at all as you've transitioned professionally?
Jonathan Swanson@swaaanson · President, Thumbtack
@jsneedles 1. Grab my phone. 2. Check twitter. 3. Check email. 4. (Ideally) work out.
Erik Torenberg@eriktorenberg · Former Product Hunt
What do you and your team understand about marketplaces that other people don't but could learn from?
Jonathan Swanson@swaaanson · President, Thumbtack
@eriktorenberg Lots of people who build marketplaces have a "build it and they will come" mentality. We knew from the beginning that building a marketplace would involve primarily solving user acquisition challenges -- finding and acquiring customers and professionals in 100+ cities in a scalable and affordable way. We didn't know HOW to do that when we started though! :) But we focused religiously on solving that problem for a long time. We also knew that the only way to do it scalable/affordably was to do it differently -- we needed a creative solution, a growth hack, etc. We needed a solution that no one else knew about and was using. If other people were using it then it wouldn't be as effective any more or it would be expensive. That was our key insight. We then spent the next few years hunting for our creative solution. We tried a dozen things, but the solution turned out to be roughly: crawl the web at scale (billions of pages), use machine learning to identify the websites/blogs of professionals who were a good fit from thumbtack, create a corpus of these 15M+ professionals, and use this corpus to acquire professionals programmatically online. That sentence took about 10 seconds to write but actually discovering + building that system took 3+ years. :)
Michael Cho@michael_cho · Cofounder, YAM
Hey Jonathan, thanks so much for sharing your insight/story. Could you recount the lowest point of your entrepreneurship journey and how you dealt with it?
Jonathan Swanson@swaaanson · President, Thumbtack
@micoolcho Almost running out of money during our series A fundraising process. Getting rejected dozens of times by VCs and thinking that we might have to let the entire team go = heart breaking, devastatingly discouraging, sad, and generally not awesome. It really tested us as individuals and as a team. As Warren Buffet says, "when the tide goes out, you see who is naked". Getting stretched to our limits really revealed the fault lines in the relationships of our team and fortunately we were able to bind together and really grow stronger as a team. And fortunately we made it to the other side!!
ED@aten · CEO & Designer, Merchbar.com
@swaaanson Knowing that 3 of the 4 Thumbtack founders aren't coders I was curious how that has impacted the company you've built and the way you solve problems? Any insights or advice to non-engineer founders trying to get started? PS How do you feel about Google Glass?
Jonathan Swanson@swaaanson · President, Thumbtack
@aten Well, it certainly made things harder! Especially at the beginning. In an ideal world all the founders would have studied math and CS at MIT. But we didn't and that meant we had to spend more time recruiting a world class eng team. That said, building a marketplace for local services is super operationally intense so having a couple founders who were just good generalist/problem solvers turned out to be really handy.
Jonathan Swanson@swaaanson · President, Thumbtack
@swaaanson I'll wear Google Glasses once they are imbedded in contact lenses. And so will you! :)
Sydney Liu@sydney_liu_sl · Co-Founder of Commaful.com
Hey Jonathan! @jason mentioned yesterday that he thinks you have an amazingly designed product: "The product is super elegant and wildly effective.... and the mobile experience is just delightful. Beyond simple, but seriously complex on the backend." What was your product development process in the early days and how did approach creating an experience that wow'd people? Thanks! Sydney
Jonathan Swanson@swaaanson · President, Thumbtack
@sydney_liu_sl Our product development process at Thumbtack has changed a TON over time. We actually published a blog post that goes into detail about how we organized our product team at various stages of the company. (Just looked for quickly but didn't find it -- you can find it on our blog.) TLDR: We experimented a ton and had to continually reinvent how we did things as we grew bigger.
Jonathan Swanson@swaaanson · President, Thumbtack
@sydney_liu_sl Sydney, I found the blog post: https://www.thumbtack.com/engine... Lots of detail there on exactly how we've organized the product team and how it's evolved over time. Lots of lessons along the way!
Katherine Krug@katherinekrug · Founder, BetterBack + SuperStraps
You've been working on Thumbtack for many years. What has entrepreneurship given you? What has it taken away?
Jonathan Swanson@swaaanson · President, Thumbtack
@katherinekrug Entrepreneurship has given me the opportunity to live up to my potential. The only way you live up to your potential is if you are continually challenged. I got a taste of being really challenged at the White House, and once I tasted that I wanted MORE. And I knew the best way was to start a company that grew so fast you had to continually learn new skills and do things you thought were scary and hard.
Jonathan Swanson@swaaanson · President, Thumbtack
@swaaanson The thing entrepreneurship has most taken away is TIME. I only have time for Thumbtack and my partner and my closest friends. Everything else -- hobbies, tv, etc -- has been totally crushed. But this is a trade off I'm very happy with!
Jonathan Swanson@swaaanson · President, Thumbtack
@swaaanson Alright, I'm signing off now. Thanks for all the awesome questions everyone. High fives!
Koji K@twelvejapan · Web/iPhoneApp dev/legal tech startup
Hi @swaaanson, you mentioned your remote teams (we have 1000+ in the Philippines). I think, there are some offshore development's options in Asia. For example, India, China, Vietnam, Indonesia, etc. Could you tell us why did you choose them? Thanks.
Erik Torenberg@eriktorenberg · Former Product Hunt
A variation of the Peter Thiel Q: What important truth do very few people agree with you on? :)
CameronWoodward@cameronwoodward
@swaaanson Does such a large team in the Philippines effect and influence Thumbtacks company culture — or vice versa? Do remote teams feel like they are a real and contributing part of the company?
Erik Torenberg@eriktorenberg · Former Product Hunt
@cameronwoodward tell us more about how you've been able to organize this and make everyone feel a part of a connected team. it's really incredible.
Jonathan Swanson@swaaanson · President, Thumbtack
@cameronwoodward I'm a huge believer that the bell curve of IQ extends beyond any artificial lines we draw between countries. In other words, 99% of the smartest people in the planet live outside the 40 mile radius of Silicon Valley. That may sound obvious but very few companies actually work that way -- most startups only hire people who happen to live and work within a 30 minute commute of their office. So, know that the world is full of smart, creative, hard working people outside of SF, at the very founding of Thumbtack we started looking for talent in other parts of the world. We used oDesk to try hiring people in India, Jamaica, rural America, and the Philippines. The Philippines turned out to be a HUGE success for us and we now have an awesome team there.
Jonathan Swanson@swaaanson · President, Thumbtack
@swaaanson As for culture, I think remote teams can be whatever you make them. They can feel distant, separated from the company (this is the default path). Or they can feel intimate and close and connected. I've invested a lot of time in personally building the team and culture in the Philippines. It's been a ton of work but it's allowed us to build a team that really feels connected to our company.
Todd Goldberg@toddg777 · 👀 crypto
@swaaanson Thanks for your time today, Jonathan. What was it like building the Philippines team from the ground up? How did you make them feel connected to the company?
Nadina !@nadianamae · Training Specialist
@swaaanson That investment certainly paid off! Even as the team here in the Philippines has grown exponentially from one person to 500+ more, we've never felt distant or disconnected. The foundation of the culture that was built by Thumbtack's founders is so strong that it would take years to undo what has been done.
Justin Edelson@justinede · Co Founder at Instantlancer
Hey @swaaanson, what was your solution to the chicken and the egg question? Did you go after service providers first? How many did you sign up before you started marketing to the average consumer?
Jonathan Swanson@swaaanson · President, Thumbtack
@justinede See answer above to Lomesh Dutta. TLDR: http://cdixon.org/2015/01/31/com...
Emily Hodgins@ems_hodge · Community and Marketing, Product Hunt
Hey Jonathan! What has surprised you the most about each of your different roles?
Jonathan Swanson@swaaanson · President, Thumbtack
@ems_hodge At the White House: I was surprised how much IQ + merit drove success within the West Wing. I assumed that for such a massive organization it would be very political and the best would not always rise to the top. But what I witnessed first hand was that if you drew a line from the President's desk to the offices of people in the White House -- there was a direct correlation in terms of IQ, work ethic, abilities, etc. This was obviously really encouraging to see! The West Wing was filled with good intentioned, smart, great people. The challenges they were trying to solve were just enormously difficult and complex.
Jonathan Swanson@swaaanson · President, Thumbtack
@swaaanson At Thumbtack: I've been surprised by how much I have to continually reinvent myself as a leader. The things I needed to be good at from 0-->20 and completely different than the things I needed to be good at 40-60 and same with 100+. Jeff Jordan has an AWESOME description of an entrepreneur typical journey here: http://jeff.a16z.com/2014/04/17/...
Taufiq Husain@taufiqhusainca · Managing Director at Polar Hills.
Hey Jonathan, how did Thumbtack solve the Chicken & Egg problem for itself when you started out? Would love to know your early traction strategy!