Businessmodel of Thumbtack

Customer Segments

Thumbtack has a multi-sided business model, with two interdependent customer segments that are both needed in order to operate:

• Consumers: Individuals seeking services from qualified local professionals
• Service Providers: Individual professionals and small businesses seeking customers ### Value Proposition

Thumbtrack offers three primary value propositions: accessibility, convenience, and brand/status.

The company creates accessibility for consumers by connecting them with local service providers who may not be listed in larger directories such as Yelp. Services are provided in over 1,100 project categories, from home services to wellness, and are available in all 50 states. Thumbtack creates access for the providers by identifying consumers who are seeking their specific types of services. Many of these providers are small-scale operations who may not have an online presence.

The company offers convenience by making its service easy to use. Consumers begin the process by answering a few quick questions about the type of professional they are looking for. Within a few hours, they receive a free listing of up to five options that fit their needs. Information provided includes the provider’s time availability and custom price quotes based on specific needs. They can then compare the quotes, as well as provider profiles and reviews, to choose the best one for them.

The company has established a strong brand as a result of its success. It bills itself as the world’s largest online and mobile marketplace for hiring local professionals. It hosts over 500,000 professionals, who earn over $1 billion a year. It oversees more than 160,000 customer request per week and over 7.1 million customer projects annually, submitted by 5.2 million customers.

Channels

Thumbtack’s main channels are its website and mobile app. The company promotes its offering through its social media pages and participation in conferences.

Customer Relationships

Thumbtack’s customer relationship is primarily of a self-service nature. Customers utilize the service through its website and app while having limited interaction with employees.

The site provides a number of self-help resources, including cost estimates for specific services based on zip code, tips for hiring the right professional, house moving guides, and answers to frequently asked questions.

Key Activities

Thumbtack’s business model entails maintaining a robust common platform between two parties:  consumers and local service providers. The platform consists of its website and mobile app.

Key Partners

Thumbtack does not maintain a formal partnership program; however, it does form strategic partnerships from time to time in order to advance its interests.

For example, in February 2016 it announced an alliance with social recommendations service WhoDoYou, through which Thumbtack will serve as an exclusive service provider for WhoDoYou’s customers.

In July 2016 it announced a partnership with ornamental/edible plant seller Monrovia, through which Monrovia will direct its 8 million annual website users to Thumbtack for landscaping and related services.

Key Resources

Thumbtack’s main resources are its engineering employees, who maintain and update its platform for customers.

As a relatively new startup it has relied heavily on funding from outside parties, raising $273.2 million from 21 investors as of September 2015.

Cost Structure

Thumbtack has a cost-driven structure, aiming to minimize expenses through significant automation and low-price value propositions. Its biggest cost driver is likely marketing expenses, a fixed cost.

Other major drivers are in the areas of administration, product development and customer support/operations.

Revenue Streams

Thumbtack has one revenue stream: the fees it charges service providers to have their businesses listed in its database.