How to Build a Service Marketplace like Thumbtack?

The rise of the Gig Economy and by extension, on-demand service marketplaces, have proved as a blessing for household people and expert service professionals alike. For the former, it’s taken much of the guesswork out of where and how to find the right professional for their needs. For service professionals, it’s added a sense of expectation that the next gig is just around the corner, given marketplaces’ vast coverage and user base. 

The purpose of this blog is to take a closer look at the journey of one such marketplace that has garnered global acclaim due to its business model’s efficacy and the success it has experienced in recent years. It's none other than the US-based home service marketplace - Thumbtack. 

Initial Years & Funds Secured 

Thumbtack was founded in 2008, considerably the golden decade of technology innovations, by Marco Zappacosta, Jeremy Tunnell, Jonathan Swanson, and Sander Daniels. Serving as an online directory, it simplified the process of searching for local service professionals for a range of services including home improvement, finance, legal, and event planning. Following is a thumbnail sketch of the company’s fundraising journey so far. 

Business Model of Thumbtack 

Thumbtack has experienced remarkable success in its several fund-raising rounds. We know that this sort of incremental success depends a lot on a combination of the founder's vision, strategy, proof of concept development, and business model sustainability. Our focus is on the latter aspect of this equation. Following is a scaled-down version of Thumbtack’s business model: 

• A client enters the name of the home service they need to hire an expert for. For e.g. electricity, plumbing, furniture, etc.

• The system fetches a list of qualified contractors from the client’s locality. The results can be further refined using additional filters. 

• The client now reviews the contractor’s profiles and, depending on their rating and experience, selects the pro, they’d like to contact for a quote. 

• If an agreement is reached on the quote between the client and the contractor, the process moves off Thumbtack and enters the contractor’s CRM. 

• The client pays the contractor directly upon job completion. 

Revenue Model of Service Marketplace

Thumbtack generates revenue off service professionals through their purchase of credits. These credits are used whenever service professionals want to start communication with a new client. For context, a single Thumbtack credit costs $1.50 or less if credits are purchased in bulk. Clients themselves aren’t charged any money, nor does Thumbtack take a cut from the payment service professionals receive from clients or their referrals. 

Additionally, there’s a Thumbtack Promote option through which contractors can boost their profile’s visibility on the platform. This increases the likelihood of getting more leads. Additionally, contractors get 20% off on credits when Promote is turned on. On the flip side, however, contractors will exhaust their credit much quicker than if the ‘Promote’ option is turned off. 

Services Offered By Thumbtack

Thumback offers over 1000 services on its website. Some of the main categories listed are as follows: 

• Home Improvement 

• Wellness

• Pets

• Business

• Events 

• Lessons

• Crafts

• Design and Web

• Legal

• Personal

• Event Photography

• Repair and technical support 

• Writing, translation and transcription

Must-Have Features In a Home Service Marketplace Like Thumbtack 

Ascertaining bare minimums for a home service marketplace should be the ideal approach as you don’t want to load your platform with lots of unnecessary features at the expense of obscuring the basic functionality. Based on our research, we found the following features to be vital to validate a home service marketplace idea. If you’re opting for an online service marketplace software, make sure it has most, if not, all of these features. 

• Guest Login 

Guest login should be an option given people aren’t always so keen on registering on a platform until they’ve had the time to explore and find a few things to like about. Also, guest login can lead to higher conversion, particularly in cases where users are in a hurry to get their requirements through. 

• Registration/Social Login

Highly interested guest users will want to access the platform in its entirety and for that registration, the option should be offered. Additionally, there can be a social login option, which is relatively a quick way to get registered on a platform using a range of social media platforms chiefly Facebook and Twitter. 

• Task Posting 

A well-defined task posting makes finding a professional much easier. Generally, this should include the Task title, description, category, location, and time frame, if any. 

• Search Filters

Search filters help users narrow down the results as per their liking. Some of the most important filters are location, category, and price range.

• Scheduling & Cancellation

Scheduling adds a layer of detailing to a task agreement. It allows both the customer and professional to pick a slot for the service, giving due consideration to their daily schedules. This feature works best in unison with notifications/reminders. Likewise, cancellation plays a similar role, keeping both parties updated with the status of their respective tasks. 

• Rating/Review

As well as describing the service experience of professionals, rating, and reviews add an element of trust to the platform. They’re a form of social proof and as such give new users the confidence to hire service professionals, which they might not be so certain of at first. 

• Multilingual Functionality

If your business operates in an ethnically diverse region with many different languages, offering multilingual functionality can be the difference between covering half and the entirety of that region’s population. 

• In-built Chat

The in-built chat is quite handy when customers and professionals want to reach out to the platform’s support team. It’s always preferable to email and call, especially for simple queries. 

• In-app payments 

The in-app payments feature falls somewhere between the must-have vs can-do-without category. However, if your budget allows for it, you should definitely consider it in the initial release. In-app payments facilitate payment making and receiving between customers and professionals, and there’s a log kept of it on the platform, something not possible if payment is made outside of the platform.

• Admin Panel

An admin panel is where you get to change and set the controls of how you wish to operate your platform. This can involve settings and modules to manage everything from content, offers, languages, interests, commissions, time zones, currencies, and process registration requests.  

How to Build a Service Marketplace Like Thumbtack

As highlighted in the previous section, when planning to build a marketplace like Thumbtack, it’s always advisable to make progress little by little, or in other words, adopt an MVP model. This will help you understand the viability of your business offerings, customers’ responses and expectations, based on which you can take crucial business decisions toward building a full-fledged business. 

Interestingly, you don’t have to hire a software development company to give you the architecture and then build all these features from scratch. Ready-made solutions like Yo!Gigs are perfectly suited to pilot your business idea and build a marketplace like Thumbtack.

Moreover, these solutions are built with scalability and customization in mind; so your growth goes on without any halts. To optimize the platform and customize the features, consider collaborating with experienced marketplace developer to specify your marketplace requirements

Conclusion

The success of Thumbtack is a clear indicator that the on-demand economy is in for a boisterous ride ahead. Following the approach and recommendations in this guide, you can start your business journey without risking too much capital. If you’ve got any doubts or queries, feel free to write them in the comments section below: