Being an advisor to a startup is a great gig. The hours aren’t long, and if the company is successful the pay is more than worth your time (Disclosure: I am compensated with an allocation of tokens from the ICO).
However, I’ve been outspoken recently about the proliferation of people who treat advisorships like they treat baseball cards. I’ve witnessed incidents where advisors didn’t know that they were advisors or had to go look it up before they could tell me.
Since co-founding Thumbtack in 2008, I have had many unofficial, unpaid advisorships, but until now I have never taken an official one. I have also decided that with ICO companies that are open to investment from the general public, I won’t take an advisorship unless i’ll make an investment with my own money, and I have.
With all that said, I have recently accepted an advisory role and made an investment in Workcoin.
Below, I’m going to lay out my thought process as to why I think Workcoin is a good bet… the same process I use for every investment.
Having worked on thumbtack for almost 3 years, I’m very familiar with the services marketplace model.
First of all, the market is huge. While thumbtack is mostly in person services, Workcoin is going after remote work. And because of what I’ll mention later, Workcoin is going global from the start. As Fred likes to mention, some decent percent of the United States, and the world, already does remote work, and it’s only looking to increase.
Using real identities is a bonus for users. Most of the other platforms don’t use real identities because they are afraid of losing the commission when users and service providers bypass the platform. That’s not a problem with Workcoin, so you can see exactly who you’re going to hire, including personal and social media sites before you pull the trigger. That’s big.
Seeding a marketplace is extremely difficult. At thumbtack it about killed us. Trying to fill your database with active service providers when they are only providing services in a fixed geographic area is next to impossible. I still can’t believe that we actually pulled it off. For Workcoin, the whole problem is an order of magnitude easier because their providers can do business globally. It’s hard to describe how frustrating it is to sign up a thousand plumbers and realize that that you only have 50% coverage in the United States…and that happens for every vertical. Workcoin will need many fewer service providers to fill the requests on the platform and have a useful marketplace.
Payment, payment, payment! Cryptocurrencies solve so many problems on the payment side. At thumbtack, we tried to do payments, but getting a payment provider that will allow you to deduct a portion of a payment as a fee and then pass the rest onto someone else is extremely difficult…a bit easier today than eight years ago. And if you even manage it, chargebacks are a nightmare. Basing your entire platform on cryptocurrency solves all of these problems and as a bonus allows you to launch worldwide, pricing every service in local currency. It’s game changing. Thumbtack just had it’s 10th birthday and still doesn’t support payments.
They have working apps for every major platform already. While they are definitely an MVP, they are well done and easy to use. Several language translations are finished and ready to launch.
Fred is an experienced entrepreneur with several exits under his belt. I can’t emphasize enough how much you learn your first couple of times through the process. At this point I would almost argue that an experienced entrepreneur is worth 10 inexperienced ones.
And finally, this is just an idea that is going to happen, eventually. It may not be Workcoin, and it may not be right now, but I think it’s the best candidate that exists. Indeed, the space is so big that there are likely to be several winners.
I’m really looking forward to seeing how blockchain changes the landscape for marketplaces, and I look forward to the success of Workcoin.
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