How I Launched This Company

Hi, I think it's noon in Sydney and nine o 'clock in Singapore. Welcome to everybody who is joining us for how I launched this company with Tim Fung, one of the co -founders and the CEO of Airtasker. We're going to talk a bit about how he founded the company, tips for entrepreneurs, how the company's been affected by COVID and a lot of other interesting topics. But before we get started, Tim, in case there's anyone out there who doesn't know about Airtasker yet, I know you're primarily in Australia, so they may not be aware. Can you tell us a bit about what the business is? I put your logo up there so people can find it, but tell us about the business. Well, thanks for having me Aliza. So Airtasker is a marketplace for local services and in a nutshell, we connect people who need work done with people who want to work and earn money. I guess, you know, looking at the small starting market, there's the traditional, you know, local services which are starting to come online into e-commerce. So things like, you know, handyman, trades, accountants and lawyers and existing services. But Airtasker actually serves a much bigger market than that, which is all of these things that people need done which aren't existing services. So we actually create new service industries. So some examples of that are IKEA furniture assembly, if that's what you need. Things like TikTok marketing, which, you know, didn't exist a few years ago. And even things like, you know, removing a spider from your ceiling fan is something that, you know, we created over $70,000 worth of jobs in removing spiders from ceiling fans last year. So everything from the really niche to, you know, traditional service industries. And can you tell us a bit about what you did before the company, how you came up with this idea and how long you've been building the company? Yeah, so I'm the co -founder and the CEO at Airtasker. I've been on this journey for about eight and a half years now. So it's been a certainly hasn't been an overnight thing. Before I was at Airtasker, I studied marketing in university. Then I joined an investment bank called Macquarie, which is based here in Sydney. And I did investment banking corporate advisory for about five years. Then in 2009, I wanted to be like Ari Gold from Entourage. So I joined a fashion modeling agency called Chic Management and got the chance to work with people who had discovered models like Miranda Kerr and, you know, the Victoria's Secret models. And that led me to connect with an entrepreneur who is one of the founding directors of Optus, which is the second biggest telco in Australia. It's actually owned by Singtel, you know, Singaporean company. Gave me the opportunity to work on my first startup, Amaysim, which we sort of grew over a few years and that IPO in 2015 before starting Airtasker. And Airtasker, we started in 2012. And the idea for the company came when I was moving apartments. So I asked my friend Ivan to come and help me move because he's got a truck that he uses to do deliveries for his chicken nuggets business. So he does his weekend deliveries using this small truck. And I thought that'd be great, you know, come over and help me move apartments. And this got us really thinking, it's like, why do we ask friends and family to help us do all these jobs when there's so many people out there in the world who want to be able to earn some extra money doing these jobs? You know, unemployment and underemployment is an issue across the world. And we thought, you know, there isn't really a fit for purpose way of connecting with people in your local services, in your local community. You've either got, you know, really heavy processes for full time permanent hiring, or, you know, you're kind of rolling the dice on craigslist or gumtree. And there wasn't really anything that was, you know, be able to create trust, but be fit for purpose for these kinds of services. And that's where the idea for Airtasker came about. And how does Airtasker work that it creates trust more than some of the other market places where you say you're rolling the dice? So one of the things that we do on Airtasker is we're really big on the idea of transparency and accountability. And so you can join Airtasker, and you can, you can do that, you know, in a very low friction way, create an account with your, you know, your Facebook account, or, you know, just an email and a password. But as a user, you're incentivized to provide more information about yourself, because that helps you to connect with other people in your, in your local community and helps you get what you want done. So then once a job is actually completed on the platform, you leave a rating or review for the person, both the customer gets reviewed as well as the service provider. And I think that's really, really important that you have an even playing field there. And then over time, the reputations of both customers and taskers continues to build. And it's all built on this idea of user generated content, all these ratings, reviews, and other information, which people are incentivized to add to the platform. And, and having that, that loop, that every step of the transaction is being, is being handled and managed through the Airtasker platform enables us to create that transparency and that accountability. And underlying all of this is the fact that we really believe that people are much better than we intuitively assume. So I think if you look at how, you know, a lot of the economy is set up, it's set up to kind of assume that people are going to do the wrong thing by default. You know, it's kind of set up to say that, Hey, if I, if I meet someone who's going to do a marketing job for me, what do I do if they turn out to be a serial killer? And, you know, they, they, they want to kill me. And what you actually find out is if you have a transparent and accountable network, people don't want to do that. They certainly don't want to do it on Airtasker. They're going to go off and do that on Gumtree or Craigslist. Okay. Well, hopefully they won't do it anywhere, but hey, one thing we didn't talk about, you mentioned Ivan with the Nuggets truck. Is he your co-founder? No. So Ivan's a friend of mine from university. It was actually, he did come on and help us do marketing at the beginning, but my co-founder is, is Jonathan Louis. And Jono was actually someone who was the first person that we bought into a Mason. So that, which is the startup that, that we built up the back of the modeling agency. So Jono and I had worked on the early stages of, of a Mason, and then he came across to Airtasker as well and helped me co-found this business. So one of the things we talked about when we were getting ready for this is that, although it's not an overnight success, you've been at it for seven years, unlike many companies that I guess we'll still call startups, you're cashflow positive and really doing well. And I think you wanted to talk a little bit about how you got there, which we'd love to hear. Well, yeah, it's definitely a tale of two ends. And it is really interesting when you're building a marketplace product or a social media type product, it's largely built on the idea of network effects. And so at the beginning, you do have to invest upfront into how are you going to build this initial liquidity and get that network effect. And so at the beginning, you do have to invest heavily into making sure you've got the right product and you're doing enough marketing to bring on those users that are going to establish that liquidity. And so typically, compared to like a SaaS company, a marketplace or a social media platform really needs to invest upfront. And that can mean raising capital and burning money in those early stages. And so for the first sort of six years of Airtasker's journey, we had been pretty successful raising money. We raised about $70 million over a few funding rounds from some really great investors. But we found ourselves a place in sort of 2019 where we were burning around $2 million per month. And for me, that was like, oh, my gosh. When I really stepped back and took stock of that, compared to a lot of other companies, it wasn't a huge amount of burn. But certainly in my own personal context, it was a massive amount of money. And we knew that we had a company that had really great operating leverage. So we made the decision back in 2019 to move the company from that stage of investing everything, growth at all costs and establishing liquidity. We moved into a stage of, well, we need to become a sustainable company that can live on and fund itself. So we took some pretty strong actions there. And it really happens that you make this smooth transition from burning lots of money to getting profitable. It's usually like today's the day, everybody, let's go do this. And it was actually quite a remarkable journey. We thought it was going to take two years or more in our forecast to get from burning $2 million a month to profitable. But when we actually shared the context with our team and we said to everybody, hey, we need to turn the company around and get from burning lots of money to profitable, the team really took that in their stride. And it actually only took us about nine months to turn that around. And we did that through a combination of getting more efficient with marketing, taking a look at pricing as a lever for growth, which was something that we didn't look at in the early days. And of course, being able to continue driving organic growth, which I'm pleased to say got us through to profitability much faster than we had initially thought it would. That's interesting. Tell us how pricing as a lever for growth works in a marketplace, because I thought that was being set by buyer and seller. And I wasn't clear if one person was so upset that they paid $70 ,000 for getting rid of the spider in their fan or if that's a whole category. Yeah. So it's definitely not one person paying $70,000. I think there'll be thousands of spider removal jobs. I think they only cost about $35 or something. So yeah, definitely. It's quite a lot of spiders being removed for $70,000. Yeah. So interesting. So when I was talking about pricing, I guess there's two kinds of pricing for Airtasker. There's the pricing that goes on between the buyers and the sellers, the customers and the service providers in the marketplace. And then there's also the pricing that we charge to each of our customers for using the platform. And I was referring more to the latter of those two when I was talking about pricing then. And I think as a founder, in those early days, you're so focused on product market fit that you're really looking at what features or what aspects of the product do I have to build to make the users love our product and be able to acquire them efficiently. But one of the things that is often left out of that is what's the right pricing structure to do that. And it's not just about higher prices, lower prices. I think it's about allocating value to a certain price and then actually making sure that that's really, really aligned. And sometimes that can be quite counterintuitive. It's not always that the things that are the most valuable to customers are also the things that they want to pay lots of money for. It's often and it's often quite unintuitive. And if there's one thing that I could sort of recommend, it's like to look at pricing as a lever earlier on. I think that that's a little bit of a, but sometimes like in the startup community can tend to be a bit of a dirty word or something, you know, like, I don't worry about the money, just worry about product market fit. But actually, I think that pricing is a big part of getting, you know, genuine product market fit. I don't want to ask you to give away your secret sauce, but is there anything you can share about a discovery that was unintuitive? You know, you mentioned that it doesn't necessarily fit that people are willing to pay more for things they value more, which is how I think we tend to think of things when we're building businesses. Is there one insight that you're willing to share? Well, I think one thing for us, and you know, there is a lot of secret sauce in that, so I'm really unintuitive for us is that Airtask is primarily a demand constrained marketplace. So generally, we're putting all of our efforts into bringing on more customers, because there are a lot of people who love our service on the service provider side of the market. And so a lot of our efforts go to driving the customer side. And so from the beginning, we never charged anything to our customers. We never charged an additional fee as Airtask into our customers, because we were like, that doesn't align with trying to bring in more customers. But actually, what we found is customers are much less price sensitive to the service providers. And so because what Airtask was doing for those customers was so much better than the alternatives, actually putting more of a fee towards customers was actually something that made a lot of sense for us. So for example, if you need a spider removed out of your ceiling, whether you're paying $35 for that or $38 for that is actually less important than the fact that Airtask is going to get this spider out of your ceiling. And so that extra $3 actually represents sort of a 7% increase in intake. And for us, that would represent something like a 30% or 40% increase in revenue. And so getting that trade-off correct is really, really important. That is really interesting, because I think a lot of marketplaces have hesitated to ever charge the demand side. It's all come out of the supply side. So that is an interesting insight. Thank you for sharing. I think you mentioned as well that you've got some new features or new ways of packaging suppliers, that what has happened in the past with these kinds of marketplaces in different parts of the world is it's all dependent on what demand is. So I say, I gave you the boring example of needing a house cleaner in Bondi, but you reminded me that there are some suppliers who have really interesting ideas and they now have a way to package them. Can you tell us a bit about that? Sure. So if you look at the way eBay started out, they sort of started with this auction model. Everything was an auction. You'd put it up and 50 people would bid on an item and then the highest bid would receive the item. And famously, a few years in, eBay decided to create a buy it now button where people could say, you know what, I don't want to go through that whole auction process. I'd rather skip all that. I'll pay a little bit more or pay towards the upper end of where the auction might have ended up, but I get to just have it now. And that's really important because I don't want to compete with other people. And so that was a new kind of marketplace model, which opened up a lot of categories for eBay, because it might make sense to auction a famous comic book, but it probably doesn't make sense to run an auction to buy a pair of Nike Air Jordans or something, which are very standard. And so taking a similar thing with Airtasker, what we realized is that our initial marketplace model, which is that a customer comes on, they post a task describing what they need done, and then they wait for offers from taskers and they pick a tasker. That makes sense for a lot of categories, especially for these really long tail of services, like if you need to get a drone stuck out of a tree or you need to get a spider out of your ceiling fan, that makes sense, that model. But it doesn't make sense for more standardized things, or for example, things that require inspiration. You might not need it, it might not be the biggest problem in the world, but it's something that you would love to have. And so what Airtasker is now doing is going through and building different marketplace models, which makes sense for all these different kinds of services. And the one that we're really, really excited about now is this idea of our taskers, our service providers, being able to say, here's a package of services that I'm going to be able to deliver on for a fixed price. And you can come to Airtasker and you can book that instantly. We think that that's really, really exciting because it's moving from needs, where Airtasker started, more towards wants and inspiration. And I think for service providers too, it creates a way of being able to sell your skills and monetize any skill that you have. So if you're a person who knows Kung Fu and wants to teach someone Kung Fu, you can do that through Tasker listings. Or if you're someone, I think we have someone on the platform already who's offering to plan a date night for you, that's their special skill, you can monetize that too. And it really comes back to our belief that every single person has unique skills. And if you just give them a way to be able to monetize them, that's really, really exciting. That is exciting. And especially as we move, I think there's lots of discussion COVID aside about the experience economy. So that seems to play into that as well. Hey, can we switch gears a little bit? And since Cloudflare is a technology company and where we speed up and protect anything connected to the Internet, can you tell us a little bit about the tech stack you're using? Don't go into too much detail, just some basics of how you actually built the business. Yeah, so this is a great question. And I must say, when you briefed me that this question was coming, I must say, the first thing I did is I ran to our lead architect and I said, hey, can you give me the latest on what our tech stack actually is? You can probably tell that I'm more of the marketplace and the commercial side of building a company than the technical side. But roughly speaking, from a client side perspective where we're on native iOS, Android, and React web, we have a Kotlin microservices architecture and we still use some of our legacy platform is built on Ruby. So then from a, I guess, infrastructure perspective, we're hosted primarily on AWS and of course, a user of Cloudflare as well. Thank you. Thank you. I love the little plug, but happy to have you. Should we talk about, I did just mention COVID aside in the accelerated, sorry, in the experience economy, but for many companies, COVID has accelerated things, for others, it's made life harder. How has it impacted Airtasker this year? Yeah, it's a great question. And if you'd asked me, what would a viral pandemic do to Airtasker at the beginning of the year, I think I would have had real troubles reconciling where it's actually ended up versus what a prediction might've been. So the story for Airtasker is we were growing really nicely throughout 2019 and into 2020. And we had our peak month in February and then the pandemic came and we saw pretty quickly about a 14% decrease in marketplace volume. And we were pretty concerned about that. We were thinking at a high level, Airtask is about local and in-person services. And so this could be really impactful for us. And we actually prepared for 80 or 90% drops in revenue. And we had a whole plan laid out, which we had shared with the company, but we had a whole plan laid out for that. But what we saw was actually quite remarkable. After a few weeks at that sort of minus 14% level, we actually started to see the marketplace bounce back really quickly. And the reason for this bounce back was that we saw the demand for services change. So rather than people wanting domestic cleaning, which is traditionally a big category on Airtasker, that actually did drop by about 50%. But then people needed COVID safe deliveries being done. They needed to set up home offices. And bicycles, which apparently went up in sales by 400%, on Airtasker went up by over 100% in bike repairs. So there was this whole changing mix of services. And then we saw actually service providers, it was quite inspirational. They said, I need to take charge here and I need to be ready for this. And so a COVID accreditation, they decided that they could offer a lot of services remotely where they used to do them in person. And there was a huge adaption there. And so what we saw is that actually after that 14% drop, it's actually accelerated faster in 2020. And I think what's really powerful here is that when you give people freedom and responsibility to figure out how they're going to earn their income and how they're going to use a platform like Airtasker, people are much better than you would intuitively assume. They don't just kind of sit back and go, ah, there's no jobs here. They actually think, no, how can I do these jobs? And so it's quite inspirational. That is really, yeah, that is inspirational. And you were talking about how can I do these jobs? You've given us a couple examples from cleaning to drone recovery. Are there any additional outrageous Tasker services that are fit for sharing that you can talk about? Okay, so first of all, Airtasker has some very transparent marketplace guidelines, which makes sure that everything that I do talk about today is also, there's no adult tasks or anything. Family safe, family safe. But there are some standouts. One of the things I like is some of the romantic gestures that are done on Airtasker. So around Valentine's Day, we always get people organizing picnics and things like that for their partner. And one of the ones that we saw with someone wanted their entire apartment decked out like a Game of Thrones movie set. So they had their entire apartment turned into a scene from Game of Thrones. We equally had someone who was obsessed with Star Wars and wanted to get walked down the aisle by two stormtroopers instead of, the more traditional set up there. So that was a really cool task that went down. But we're seeing something like seven and a half thousand tasks a day now on Airtasker. So there's always something interesting going down. That's great. How do you find these interesting ones? Is anybody keeping an eye on them to try to understand what verticals are growing? How do you actually measure that? Yeah, so we do use machine learning and data science to try and categorize a lot of these form tasks into categories, which makes sense. But what we found is that I think the way people have thought about local services is going to completely change because we've always thought about it from a very traditional mindset of like there's lawyers, there's accountants, there's plumbers. But actually like more intuitive from a customer perspective is things like my toilet is broken. My ceiling fan needs to be replaced. I need to put up Christmas lights. And installing Christmas lights, is that an electrician or is that perhaps a handyman? Or maybe it's a carpenter. Who knows how that should in fact be intuitively categorized. So there are a multitude of different ways that we do categorization. But I think the other thing is that the stories behind the people on Airtasker are so amazing. And what we started doing is really going out there and talking and amplifying some of these stories. One example of that is during the pandemic, one of our users is a lady named Tanya and she sent us a video thanking the Airtasker team and her story is that she was furloughed from an airline. She couldn't work or create an income. She jumped onto Airtasker and started doing puppy deliveries. So up and down the East Coast of Australia. And once she'd built up her reputation doing that, she was actually able to get videography jobs on Airtasker 2, which was what she was doing at Qantas. And then she's even been able to make money out of that and enough money to invest into the next stage of her career and is going to move on and become a freelance videographer. So there are just some of these great stories that are behind the content on Airtasker and looking at those is also really important to us. Yeah, those are very heartwarming. You know, we talked about the fact that you have the co-founder, John Louie, I think you said his name, and how do you guys run the business together? How do you split up the tasks? How do you manage that working relationship? I guess you've done it once before, so you had some background with him, but that's something that people are interested in. Yeah, so we were really, you know, because we'd had the experience of working together on a few things before, you know, we knew that it was important to clarify that early on. What are the roles? And I think our skill sets were really compatible. So, you know, where I sort of sat is more on, you know, business development, the commercial side of things and marketing and the customer side of product development. And where John and his strengths were much more in like operations and making sure that we could actually deliver on all the promises that were being made. And so we had this really, really nice, clear distinction between our two roles. And, you know, we made that pretty clear in terms of the, you know, the way we structured the equity and the way that we, you know, created job descriptions and stuff like that. So what I would say there is, I think it is really worthwhile investing into that, you know, early on, if you have a co-founder, to make sure that you're not kicking the can down the road, and then you've got to figure it out when things are really ambiguous. So we did that early on, but interesting to say is that, you know, Jono was, we worked side by side for the first four years of the journey. Then Jono actually had to move to Singapore. So he's based over there in Singapore now, and obviously couldn't continue as the COO at Airtasker, but it was definitely a great experience working together for the first four years of that really, really, you know, in the trenches part of the journey. So when you're a founder or co-founder, I guess you have one person to talk to, the co-founder, but where else do you go for advice, Tim, for the budding entrepreneurs here? Like, where do you get someone to kind of help you? Well, I think the first thing is that, you know, when you are, there's a reason why it's really tough to be a founder. And, you know, the reason for that, I think, is that there's a lot of ambiguity. You don't know exactly who's going, no one's going to tell you the exact right thing that you need to do next. So I think, you know, there's always, you know, that's kind of the caveat, but I do think getting advice is important. So early on, you know, I really sought out some of these mentors who had done things before. The one that comes to mind is one of our early investors, a person named James Spensley, who had built a, you know, an $8 billion telco company from scratch very early on, and being able to go to someone who'd been through it all and just have those honest, raw conversations was really important. And, you know, I don't think I've, you know, I've cried on his shoulder, but I've definitely, you know, let him in on, you know, what I'm really thinking at different times along the journey. One last question, because we're going to run out of time, and I've learned on these that I sometimes go over the time. What is your best tip for people who are thinking about this journey, or partway through this journey, this entrepreneurial journey? Well, I think for people who are, you know, certainly in the early stages of starting a startup, one of the things that I think is really important is to know that, you know, the fires that are burning now, they will pass, and everything's temporary. So I think it's worthwhile just thinking, you know, when you're in that moment of incredible stress, and, you know, you're really down on everything that's going on, it's just to recognize and acknowledge that it's likely to be temporary, what you're going through. And I think when you have that acknowledgement, one, you can put yourself in that mindset, you know, a mindset of positivity that, you know, things will get better. But two is that you can really make sure that you work on the fire that's most important to put out, and acknowledge that there's going to be lots of fires. Basically, everything's broken and on fire at the beginning. But it lets you really just think about which is the one fire that you need to put out today. Thank you very much. So I think the lesson there is prioritization. So I really want to thank Tim Fung, the co-founder and CEO of Airtasker for being on with us today. Take care, everybody. Bye-bye. Thanks, Lisa. Bye.