Thumbtack Sometimes finding a nearby professional to do a job for you can be challenging. Think of plumbers, moving services, painters, personal trainers, chefs, caterers, cleaning and domestic services, photographers, and construction workers, among others. These professionals all belong to a very large industry called local commerce or local services. This industry is difficult to define; however, estimates of its size range from $400 billion to $800 billion per year. Despite its large size, local commerce remains an inefficient market that depends on phone calls, the Yellow Pages, and, when things go wrong, small claims court. It is difficult not only for customers to find local professionals but also for local professionals to find customers. In fact, every year professionals spend approximately $65 billion on local ads to generate business leads. Now, a company called Thumbtack is striving to create efficiencies in the local commerce marketplace Founded in 2009, Thumbtack (www.thumbtack.com) is a marketplace that connects customers with local service professionals. On Thumbtack, the providers bid on the customer. Customers fill out an extensive questionnaire, and Thumbtack's software forwards the request to relevant and nearby professionals, who respond with a price for, and description of their services. The average job request on Thumbtack is $600, and businesses are charged a small fee for the leads. Thumbtack divides its Jobs into four categories: 1. Home improvement and repair (e.g., plumbing and painting services) 2. Event services (e.g., wedding photographers and catering services) 3. Instruction (e.g., tutoring and music lessons) 4. Wellness (e.g., personal training and chiropractors) When Thumbtack entered this marketplace, it faced two major problems. First, the company had to list enough suppliers (local professionals) on its website to attract demand customers). Significantly, Thumbtack did not cold-call anyone. Rather, they analyzed billions of web pages to create a database of information on local professionals. This process helped them learn where service providers searched online for new business. The company bought targeted web ads on those pages--specifically Google, Facebook, and Bing-to attract professionals to sign up for Thumbtack. As of mid-2016, Thumbtack still did not employ a dedicated sales team to attract new business Thumbtack's second problem was how to get paid. The company's initial policy was to charge fees after projects were completed. However, that process relied on the participating businesses self-reporting based on the honor system. This policy ultimately was unsuccessful. Thumbtack next implemented a subscription model in which professionals would pay a set price for an unlimited number of introductions. Unfortunately, that process led to customers being spammed. Not surprisingly, this system did not provide a positive customer experience. Finally, Thumbtack decided on a pay-per-lead business model, which helped to ensure that professionals would bid only on projects they could complete. This model generated a 500 percent increase in revenue in 2014; the company now makes about $30 million per year. Consider the case of a photographer in Colorado. She tried different online ads to attract customers, but she received few responses because there were so many photographers in her area. She then turned to Thumbtack, where she pays about $4.50 per lead. Now, roughly one in five ads results in a job, which average about $250. She estimated that she formerly spent $75 per month on Google ads to achieve the same result. Thumbtack is competing in the local commerce arena with Yelp (www.yelp.com), Angie (www.angi.com), TaskRabbit (www.taskrabbit.com), HomeAdvisor (www.homeadvisor.com), urwork (upwork.com), and Amazon (with Amazon Home Services; www.amazon.com/services). Let's take a closer look at Yelp and Angie's List, as well as Amazon. Yelp and Angi address different questions and problems than Thumbtack. Specifically, Yelp and Angl allow customers to go to almost any local professional for services (haircuts, Chinese food, etc.). By contrast, Thumbtack enables local professionals to come to the customer. Yelp and Angi List might be considered as directories, whereas Thumbtack goes a step further and actually matches customers and local professionals. Amazon announced in 2015 that it was entering the local services business, initially launching its home services to customers in 15 metropolitan areas including Chicago, Houston, and Miami. The Internet giant maintains it thoroughly screens service providers and individual contractors. It further claims that fewer than 3 percent of applicants survive the vetting process. Amazon charges a 10 to 20 percent referral fee to contractors, and it provides customer support and refunds to dissatisfied customers. . Some professionals have set up anti-Thumbtack groups on Facebook, complaining that unqualified professionals are using the site to challenge them for business. In fact, Thumbtack does not have ratings and reviews, which both customers and professionals rely on to make informed decisions. As a result, the company is building upon its 485-person quality control team to verify the credentials of the service professionals who advertise on their site. The firm is also experimenting with displaying average pricing data on their site so customers can see how much a job should cost in their area. With more than 200,000 unique paying professionals and 3 million successful job leads in 700 job categories per year, Thumbtack sends some $2 billion of business to local firms in the United States. The company has been successful in the venture capital markets, and in 2016 was valued at $1.3 billion Questions . Please visit these companies' website and explain their business, major features including founder, year of foundation, number of users, and revenue. (3 points) a. Thumbtack b. Yelp C. Angl d. TaskRabbit e. HomeAdvisor f. Upwork