What you need to know:

• Airtasker went public in March, nine years after spotting a gap in the market for people to provide local services via an online marketplace.
• Its growth was turbocharged after striking an equity deal with Seven West Media, giving it huge TV exposure via a media contra.
• Seven exited at IPO, using its substantial gains to pay down debt.
• Now Airtasker must find new ways to build the brand and remain a household name in Australia – while attempting to crack the US and UK without a major media partner.
• CEO and co-founder Tim Fung is backing tech smarts, new models and better service and content discovery to drive growth, as well as strategic acquisitions to scale globally.
• But he’s currently grappling with a supply-demand imbalance – and seeks Mi3 readers’ help.

Small tasks, big bucks

ASX-listed ‘gig economy’ platform Airtasker struck an equity partnership with Seven West Media that powered massive brand growth in Australia. With Seven cashing out at IPO last March to pay down debt, Airtasker is now attempting to scale internationally – and crack the US and UK – without the backing of a major media network.

Although Airtasker is not about to stop advertising, CEO Tim Fung is placing his faith in the platform’s scalability, network effects, new models and service discovery to deliver customer growth. It’s a big play, but he thinks there is “blue ocean” in terms of competition, or lack of it.

Meanwhile, in post-pandemic Australia, demand is “booming” as closed borders create a sustained skills crunch across the economy, leaving Fung and his team grappling with a thorny issue: They need to fuel growth by adding new content and service discovery models – such as Airtasker Listings, which puts services in the shop window – while finding enough ‘taskers’ to keep up with demand, sustain liquidity and dampen price inflation.

No mean feat. But Fung is quietly confident Airtasker’s platform – which enables people to set the price for any skill they choose to offer, not tell them what to do and how much they will get paid – will ultimately succeed.

After all, in a globalised, automated, AI-driven world, local skills, services and delivery may be one of the only games left in town.

Chicken and egg: How to build a marketplace

Building a marketplace is chicken and egg. You need both sides or it won’t work; a chicken omelette of supply and demand.

Assembling those pieces, along with the uinderpinning infrastructure usually takes a lot of time and a lot of money. So far, Airtasker has been in business nine years, going public in March 2021.

Looking back, "it’s definitely a J-curve,” says Fung. “It looks like we weren’t doing too much [in the early years]. But it felt like we were doing a lot.”

On the supply-side, the platform has attracted service providers, or ‘taskers’ because it removes friction, says Fung. They can offer services easily, with no risk – Airtasker doesn’t take a cut until they get paid.

In the early days it started out with students doing odd jobs – picking up food, cleaning fridges, flyering – for quick cash. But by 2016 it was getting to a point where an increasing number of professional ‘taskers’ were touting services via the platform, and customers were getting responses in minutes.

As Fung puts it, “it's such a rock star proposition that the taskers just kept coming.”

At that point, “solving the demand-side of the marketplace become a major problem”. It needed more customers. So it struck a deal with Seven.

Network effects

At that point, Airtasker was booking about $15m/month revenue through the platform (Fung says it is “in excess of ten times that size” today).  To bring more customers to the platform, increase utility and get stronger ‘network effects’ that come with higher usage, it struck an equity deal with Seven West Media.

Part of the equity was media contra. While today every new tech start-up seems to have cottoned on to traditional media’s power to build brands, as opposed to the ‘legacy’ approach of Youtube and social media first, back then going ‘old school’ was a novel approach.

Fung says it changed the game.

“It was one of the best partnerships and moves that we made in the history of Airtasker,” says Fung. After launching the ‘Like a boss’ campaign, it “immediately saw 35 per cent week on week growth,” he adds.

“It was a step change in moving brand awareness from roughly two per cent to something like 25 per cent in the space of six to 12 months, so that was absolutely massive.”

Future marketing mix

Airtasker is hardly about to pull back from marketing, given it aims to crack new markets. But it’s also looking at other options.

“It's been fantastic to get Seven an exit and help them pay down debt. But it's also great for us, in that we can now take budget that we used to have to spend in free to air television and have freedom and flexibility to deploy it across all types of different channels, both in Australia and internationally,” says Fung.

While it’s investing in product and headcount, “brand building is absolutely still part of the mix for Airtasker”, says Fung. “It’s incredibly important. We want to be top of mind, a household brand name so that when you need something done, you think of Airtasker.

“We’ve got to keep driving that message. So we’re not going to turn off TV and put everything into Facebook or YouTube. The objective here is building the brand, and that could happen through a mix of Facebook, YouTube, above the line, and outdoor too.”

The shifting model: discovery equals growth

The original Airtasker model involved people posting jobs and taskers offering to do them. But the latest model, Airtasker Listings, aims to unlock latent demand through discovery. So far it’s booming, says Fung.

He says the original model, from a customer perspective, was like walking into a shop with empty shelves. “But where the store attendant comes out front and says, ‘hey, what can I get for you. I can get you literally anything. In some senses that is fantastic. But … you can’t really see what is possible.”

So the firm started interviewing customers, who told them how much they loved Airtasker. “We would say, great, so why do you only use us at a frequency of 1.9 times per year?’ They would say, ‘well, I didn’t need anything done’,” says Fung.

“So we would say, ‘what about your tax return, can we help you with that?’ ‘Okay, amazing.’ ‘Maybe we could help wash your windows too.’ That’d be amazing.’ So we realised we needed to inspire customers about what’s out there.”

Which is precisely what the new Airtasker Listing model, aims to do.

“It's enabling anybody to be able to prepackage services and effectively put it on the shelves of the Airtasker store, so that as customers browse through the store, they can see or be inspired by other things you can get done right,” says Fung.

Listings launched in February, a few weeks before Airtasker’s IPO. Since then, taskers have created 17,000 listings, and the shop is no longer empty. But that has created its own new set of challenges.

“We’re overwhelmed with stuff that's now on the shelves – and we're really struggling to make the shelves intuitive so that you can actually find stuff,” says Fung.

Meanwhile, "our bookings in the marketplace have growing at about 20 per cent week on week." 

Showing the US how to do marketplaces?

Airtasker’s attack on the US market started in earnest last month, when it paid circa $3.4m for Zaarly, a local services platform with 900 providers and just shy of 600,000 registered users, largely in Kansas City and Dallas.

Airtasker has since raised $20.7m to “move into that market, be agile, invest, see what works and double down on that.”

It’s a calculated risk, but Fung is backing Airtasker's long tail focus to success where Zaarly struggled. Zaarly CEO, Bo Fishback, said it had tried to specialise in home services and “spent the past five years telling anybody who wanted to do long tail tasks to go away”. But he will now lead Airtasker's US operation and try to repeat its Australian model.

“They need to scale, right? Newly public company, high expectations – a household name in one country trying to break into a market where no one has ever heard of them,” Fishback told Kansas City start-up website Startland News. “It sounds fun.”

Setting up shop in the US to tell Americans how to do marketplaces is nothing if not bold. But Fung says it’s an area where Australia “massively” punches above its weight. 

“Over the last decade or so Australia has been remarkably successful at building marketplaces,” he says, citing Seek, Domain and Carsales as examples of “really successful 1.0 marketplaces”.

Fung puts some of that down to populations concentrated into metro areas, whereas “in other countries, say in Germany, you have much more spread. And I think that constraint and that geographic density helps to build network effects early on. And that's really important in building a marketplace”.

So what’s the grand plan for the US?

“As the saying goes, the plan is nothing, but planning is everything. You have to plan for the next three years, but in two months, you’re probably going to plan the next three years again, and again, and again,” says Fung.

“So I wouldn't say that we have a grand plan. What we do have is a great team of people who are empowered to get out there and be agile and serve the mission.”

“What we are really fighting against is how do we get the word out in the quickest time,” adds Fung. No doubt the smart media owners in Kansas City and Dallas are now beating a path to its door.

“But the great thing about our model is that we can keep investing into the software, the data systems and the product. It's all centralised," he says. "So we can just keep investing more and more into creating a better software product that really scales globally.”

Alongside the new Airtasker Listings, Fung says there are “new models coming”. He can’t talk about them yet, or commit to a launch date, for fear of being “murdered” by his engineering team. But it’s going to be sooner rather than later.

“One of the things that's been great about investing into such a strong product and engineering team is that things now happen in weeks – not months and quarters.”

Closed borders, skills crunch, exploding demand

When Covid bit, Fung planned for business to collapse and told staff to prepare for hours to be cut, and if demand dropped by half or more, to axe jobs. Not a nice conversation to have, but Fung says it actually helped "build trust" with staff, by giving them a clear understanding of what would happen at certain thresholds.

Yet the opposite happened: taskers adapted their services and drove Airtasker’s best calendar year on record.

But supply and demand economics rule all markets and in a closed, post-pandemic Australia, upward price pressure on services is starting to concern Fung as much as it is every other boss.

Skills shortages “are definitely challenging as we try to scale, we can’t hire fast enough”, he says. Meanwhile on the platform, “demand is exploding”.

“We have tens of thousands of taskers who are working their butts off every single day. But we need more people and I do think [lack of] migration, having closed borders, is a major issue.”

Fung, a former marketer, doesn't miss the opportunity to urge Mi3 readers to join him on the platform. He’s hustling pitchdeck reviews for $500 a pop – and says people are paying (confirmed by his reviews, which go back nine years to his days as a platform runner, and unearth Fung’s deep appreciation of turtles).

$500 is cheap he admits, “but you have to dogfood your own product.” And that's the starting price – Fung's looking to upsell the $750 option.

Don’t call us a gig platform

While price pressure and keeping up with demand is a challenge, Fung says the community – the market – sets prices. Which sets Airtasker apart from other 'gig economy' platforms such as ridesharing or food delivery.

“The way we see it, a 'gig economy' platform is characterised by the app or the platform determining the scope of work, telling you what to do and defining the price you’ll get paid for it – accept or reject,” says Fung.

Those kind of platforms are increasingly being regulated, with that prospect spooking Deliveroo investors, which listed around the same time as Airtasker.

“Airtasker is very different from that [model], we are an open marketplace that is community-driven," says Fung. "The customers define the problems. The task is to find the solution and how much they want to be paid for delivering that solution."

As such, he says Airtasker is "completely different ... we are not determining the price and the scope of work, it is the community."

Fung thinks Airtasker should therefore be relatively clear of regulatory risk, leaving a clear run at “completely untapped” markets.

Locally, there are numerous companies taking an advertising approach, such as HiPages for tradies, and various takes on the Yellow Pages classifieds business, but few are facilitating an actual transaction between buyer and seller, says Fung.

“So in that space, Airtasker is really in a blue ocean in Australia. And then interestingly, when we went to new countries like the UK and the US, we were looking around and were like, is anybody doing this?

“We've got a whole bunch of Yellow Pages 2.0 type companies, but no one is just doing local services e-commerce.”

That may be because it is hard to turn a profit in local services. But then few platform businesses actually make money. If Fung can solve that problem locally and internationally, he probably won’t have to do the pitchdeck thing any more.