After hitting 15 million users across across 73,000 cities and towns, Freelancer CEO Matt Barrie says the company has finally reached global liquidity and has enough users to start thinking about offering local services.
“If you can crack the nut with local, there’s a huge potential there. If you look at the local jobs market size there’s probably 10 times larger then the online markets size. Just the issue is, you need to have liquidity in local markets,” he said.
It’s a different approach to building a marketplace which offers local, physical services. Barrie has reverse engineered it, going from a big – no touch – marketplace where it doesn’t necessarily matter where you are to offering a service to one where a freelancer can go pick up your dry-cleaning from down the street.
Australian startup Airtasker has been attempting to build out a similar local marketplace and since launching in 2011, has attracted over 200,000 customers.
“If you wanted to build a TaskRabbit or an Airtasker from scratch, where you could do plumbing, you could do pest control in a bunch of different cities… you end up boiling the ocean to try and change consumer behaviour,” Barrie said. “That costs a lot of money.”
Although TaskRabbit said it costs very little to launch in each city.
Barrie argues the issue is, you need to have market saturation.
“Weâ€™ve got global liquidity,” Barrie said. “If you were to start from scratch it would be really, really, tough and that’s why Airtasker and TaskRabbit have had a really tough time.”
“You can build a little bit of liquidity in certain areas or a little bit of liquidity in certain job types but it’s really tough to build a mass market, local offering.
“It would consume a huge amount of capital to do it from scratch but because we had liquidity we thought ‘let’s do it’.”
Tim Fung, Airtasker CEO, who is currently establishing that local market from scratch commented on Barrie’s move saying it was “interesting”, but didn’t agree with the strategy of building out global liquidity and then returning to establish a local footprint.
“I would definitely say that if you look at how most local businesses work, they generally start locally, and if you want a network affect and a product that is customised and built for a local market place you kind of have to immerse yourself in it to a certain degree,” he said.
“Global liquidity is probably a weapon when you’re trying to focus on fighting the global war with eDesk.”