Marco Zappacosta explains why established marketplaces like Yelp and Craigslist are hard to beat. The key: they locked in supply first, creating liquidity that new competitors can't easily replicate. Thumbtack's defensibility comes from the same advantage.
Chapters
We actually had a founder that added a question to the Google Doc that I wanted to ask for him here, which is somewhat related as far as on the notice, you know, defensibility. And so with the kind of competitive nature of marketplaces, and of course, you know, you've been building Thumbtack for quite some time and seen the evolution of them. So how do you think about, you know, with the kind of, you know, new insurance kind of versus incumbents and think about that and kind of innovation and marketplace defensibility? I know that's, it's a lot kind of packed into one, but.
I mean, I think what's notable, at least in our category, is how few players there are who have any real scale and how old, you know, a lot of these players are, right? Like some of our biggest competitors, Yelp, they started in '04, '03, I wanna say. Angie's was like '96. ServiceMagic was like '97, '98. These companies have been at it for a long time. Craigslist. And I think what you see is sort of companies that figured out early on in the evolution of these industries, learn to acquire supply, that supply gives them unfair sort of competitive power when it comes to attracting distribution and customers. And through that, they sort of build more supply and then more customers, et cetera, et cetera. And it's hard to dislodge that. So I think, you know, the enduring power of liquidity is certainly true in our case. Like, I mean, Craigslist, you know, they literally have, you know, not tried, not done anything when it comes to really investing in, call it the customer experience of it all. And yet, and obviously big parts of it have been picked off at this point. So it's no longer what it once was, but that it's anything is still sort of shocking, right? And And even for some critical categories like rental apartments, it's still sort of vital in a bunch of places. So yeah, I think liquidity is incredibly hard to build in a scalable, repeatable fashion and also in a kind of zero marginal cost fashion, right? Like we get one more customer where we as Thumbtack do no more extra work and that that is a defensible sort of moat that is hard to overcome.
