The NFX Podcast

We believe creating something of true significance starts with seeing things others do not. NFX is a venture firm exclusively focused on pre-seed & seed stage startups.

How Marco Zappacosta (Founder & CEO of Thumbtack) Built a Billion Dollar Marketplace

E10 • Nov 11, 2019 • 55 mins

In this episode, Pete Flint converses with Marco Zappacosta and Kristen O'Brien on the growth and evolution of Craigslist and Thumbtack. They discuss the importance of liquidity and network effects in marketplaces, the misapplication of Uber's model, and the future of human capital in marketplaces. They also delve into leadership, fundraising, competition, and the future of online-offline interaction.

Key Points

Thumbtack's early growth tactic involved creating value for professionals by helping them easily republish their profiles onto Craigslist, which attracted motivated pros and established initial relationships essential for marketplace trust.
Marco Costa emphasizes the critical nature of liquidity in a marketplace, highlighting how Craigslist's significant user base remains a testament to the importance of easily connecting supply and demand, despite the platform's lack of other sophisticated features.
The transition from a request-for-quote model to instant matching on Thumbtack was driven by the need to meet consumer expectations for immediacy, while also managing the challenge of scaling supply by automating estimates and fostering pro trust in the platform's representation.

Marco Zappacosta (Co-founder & CEO of Thumbtack) talks with Pete Flint (NFX & founder of Trulia) about what it takes to build a billion-dollar marketplace and the lessons he's uncovered along the journey.

They discuss how they solved the chicken & egg problem, what he would have done differently as an early-stage marketplace, fundraising lessons, and how short-term metrics can actually hinder long-term retention.

Speakers

Kristen O'Brien

Guest • 1%

Pete Flint

Host • 30%

Marco Zappacosta

Guest • 69%

Chapters

0:00	Introduction to the episode and guests
5:13	Observations from the growth of Craigslist and the value of liquidity in marketplaces
10:26	Reflections on Craigslist's network effects and the suitability of the service professionals category for disruption
15:11	Evolution of Thumbtack's business model and transition from a lead generation marketplace to a transactional one
22:43	The need for constant evolution to meet consumer expectations and the misapplication of Uber's business model to other industries
29:05	Managing transitions during major changes and setting expectations
33:58	The future of marketplaces: human capital and its potential & the importance of vulnerability as a leader
40:15	Lessons learned from fundraising and mapping out goals for future rounds
43:15	Discussing competition in the market and the importance of brand
51:22	Future of online to offline interaction in marketplaces and prioritizing customer problems
54:20	Wrapping up the discussion

Transcript

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