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Startup Profile: TaskRabbit

A Company Creating a New Brand of Social Commerce

By

Startup Profile: TaskRabbit

Image © TaskRabbit

Sometimes it can feel like there aren't enough hours in the day. People are leading busy lives, fitting more activity than ever into the same amount of time. Families of young professionals with demanding jobs can struggle with everyday errands when work demands so much time and attention. TaskRabbit is a technology startup aimed at helping these people, and it is receiving a lot of traction.

TaskRabbit is a web-based app that connects users to people willing to help with everyday tasks, from making deliveries to picking up dry-cleaning to helping to assemble furniture. The assistants, also known as "TaskRabbits" are vetted by the company, and maintain a profile on the platform that tracks reputation -- jobs completed and feedback received. Users can choose from these TaskRabbits to help with a multitude of daily errands.

Making Finding Help Accessible

In this way, TaskRabbit effectively serves as an abstracting layer over a general classified ad site like Craigslist. By vetting the helpers and providing a means to build reputation and score, TaskRabbit has made the process of finding help via the internet accessible. Where Craigslist may provide a larger talent pool, TaskRabbit makes finding help safer and simplified. TaskRabbit also facilitates the payment process, by providing a payments system as part of the platform.

The payments system has become a key feature of TaskRabbit. The company started with a credits-based system, but TaskRabbit now uses an auction based model for payments. Users set a maximum price for a given task, which is then bid upon by TaskRabbits, who make offers. Payment is then made through the platform after completion of the task, and TaskRabbit takes a service fee out of the payment amount. Using a rapidly growing dataset, TaskRabbit also helps users set appropriate prices for tasks by using the historical data to make suggestions.

A New Trend in Startups: Social Commerce

Companies like TaskRabbit represent a growing trend in internet startups -- many new companies are building on the promise to create platforms to empower a more social form of commerce. eBay and Etsy began this trend by creating platforms that allowed peer to peer transactions and exchanges of goods. But this movement towards bringing shared commerce online has now expanded beyond the sale of goods into less tangible marketplaces. AirBnB allows users to rent spare rooms or entire homes for short stays, connecting travelers and property owners looking to make some extra cash.

Part of the reason for the popularity of social commerce startups is macroeconomic in nature. Companies that allow individuals to create additional income are counter-cyclical. In tougher economies, like the current one, an opportunity to make extra money on the side can be helpful. This raises the question whether this form of startup will remain as popular in more prosperous times, when fewer people are searching for additional sources of income.

Scaling People is Difficult

TaskRabbit started in a few urban markets, Boston and San Francisco, and met with initial success by reaching out to busy mothers looking for help with everyday tasks. Since then, they've expanding into other regional markets, including New York, L.A., and Chicago among others. The company is most effective in urban areas, with easy transit and a high density of people in the market.

The challenge that faces TaskRabbit and startups like it is that its main asset is not the technology it is built upon, impressive though it is. TaskRabbit is a people business. And the challenge of expanding an organization whose primary asset is people is an administrative one -- vetting and managing large amounts of assistants while maintaining the high level of safety and service that has allowed the company to grow.

Many social commerce startups rely heavily on people, and unlike servers and code, people don't scale in a linear way. Organizing and administering thousands of people is a much different challenge than for hundreds of people. TaskRabbit has hired a number of high-level executives from across service industries to help with the process and organizational aspects of managing people, and a bulletproof process will be needed. Social commerce remains an intriguing growth area, and companies like TaskRabbit will serve as a valuable proof of concept of how these business can perform at scale.

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