Leading Startups Through Uncertainty: Stacy Brown-Philpot, CEO of TaskRabbit
TaskRabbit invented the gig-economy in 2008 with a marketplace that matches freelance labor with local demand for everyday tasks. Stacy Brown-Philpot became CEO of TaskRabbit In 2016 and led the successful acquisition of TaskRabbit by the IKEA Group. During her tenure, TaskRabbit has expanded its presence into 45 markets across the United States, the United Kingdom and Canada with a plan to expand globally. In addition to shaping the future of work, TaskRabbit is now a core driver of the e-commerce and services strategy for the world’s largest furniture retailer with the mission of making everyday life easier for everyone.
In this episode, we discuss:
- Leadership changes
- Growth vs. profitability
Pete Flint (00:32): So it’s a real pleasure today to have Stacy Brown-Philpot, the CEO of TaskRabbit who is also a dear old friend. So thank you for joining us today on the NFX Podcast.
Stacy Brown-Philpot (00:46): Thank you for having me, Pete. Nice to see you.
Pete Flint (00:48): I’d love to just kick off and if you think about in 2020, the technologies in the startup ecosystem, since this day it has exploded. I mean startups and seed funds, it’s like exploding, so it’s almost, on the one hand, is easier than ever to be a founder and start a company and the CEO, but at the same time, perhaps it’s harder than ever to be a great leader. Can you share a little bit about how you think about leadership and is there a crisis today in technology leadership and what can we do about it.
Stacy Brown-Philpot (01:20): What does it mean to be a leader in today’s times is a really hard question to answer because it’s evolving. I would say in the past, people would say if you become a CEO of a publicly traded company, then your number one priority is your shareholders. If you become a founder of a company and you get investors, then your priority is to deliver the value that you said the investors want. And if you create a business and people buy it, you get a return and that’s no longer the case anymore. The expectations, I wake up and I think about not just how much value we’re creating in terms of revenue and profitability, but also the team that we’re building. We have to not just have a mission, but live that mission every day. We have to focus on the culture, we have to talk about the culture, and then we have to look at the external environment and be able to respond to the culture.
Stacy Brown-Philpot (02:08): Outside of TaskRabbit, there’s a lot happening, a lot in terms of the treatment of women. As a woman who’s a founder, I have to come in and have a point of view and maybe not always have the right answer, but create an environment that’s inclusive and people can hear it. As the political environment changes, people are asking me, what should TaskRabbit respond to in these situations? And that never used to be part of the dialogue anymore. It was always very separate. And so I wouldn’t call it a crisis of leadership, I would just say that what’s expected of a leader today goes way beyond just profits and profitability and it extends into how you treat people, what kind of person you are and how you lead and not just what you do.
Pete Flint (02:54): For you as a leader, perhaps I’m curious, you’ve done a whole bunch of different things throughout your career. Was there a particular leadership challenge that was incredibly challenging and perhaps share what was that challenge and how did you get through that?
Stacy Brown-Philpot (03:11): We had a data breach two years ago and … it was almost two years ago at this point, and our site went down and we had to come together as a team to really figure out what we were going to do. And obviously a lot of the work was going into getting the site back up, figuring out what data, if any, was compromised. Making sure that the people who worked at the company employees were taken care of. And of course we were thinking about our Taskers, tasks had to be done. Clients were depending on TaskRabbit for somebody to show up and the app wasn’t up and it wasn’t running. And so we scrambled as an operations team to pull all these things together. We got the crisis response team to manage through it. And one of the things that we were debating was how do we handle it if a Tasker can’t show up for their job because they can’t find out where the client is that day? Do we compensate them for that day or do we not?
Stacy Brown-Philpot (04:17): And there was this moment where we were trying to do the analysis, but we couldn’t do the analysis in enough time that we had to do the press release. And I said, “Forget about the analysis. Let’s just pay everybody for the next two days.” Like if you were going to do a task, we’re going to figure out what you probably would have earned on that task and we’re just going to pay the Taskers because it’s the right thing to do. And so sometimes you just don’t have … you’re in a crisis and you just don’t know what the right thing to do is.
Stacy Brown-Philpot (04:45): And in this case, that was the right thing to do because then we told all our Taskers that was going to happen. You know what they started doing? They started going on Facebook to find their client. They started figuring out, well, did I have this person’s phone number, can I text them and see if I can still show up? And many of them went out of their way to get the tests done even though the site was down and we didn’t even see a dip at all in the growth of our revenues because of that outage.
Pete Flint (05:09): Can you walk us through the, how you figured out what the right thing to do is. Who do you rely on in times of crisis to help you navigate?
Stacy Brown-Philpot (05:16): We are a very tight team and so it was my core leadership team that came together and there was some decisions our general counsel could just make by herself. And there was some decisions that we all had to make as a team and this was one of them. So we had my VP of ops, we have my general counsel and we had the team there.
Stacy Brown-Philpot (05:34): The other thing that I did is we had advisors, we had some great advisors who do crisis management and then I contacted a couple of people who’d gone through this before. And so I have great people in my life who’ve seen many things that I have yet to see and I’m excited to learn what those things are. This is not one that I planned for, but when it happened, I had a couple of people who’d gone through it beforereach out to me, said, “Hey, if you ever need help around this, let me know.” And I remember texting one person and said, “Hey, we’re trying to decide where we’re going to do here.” He said, “Here’s how I would think about it.”
Stacy Brown-Philpot (06:08): And ultimately it came down to our values. Our number one value is caring deeply and that value was more important than anything else that we were dealing with at the moment and we cared deeply about our Taskers. So you said if that’s the value, fine, we just pay everybody.
Pete Flint (06:24): Out of that experience, was there anything that you changed fundamentally from the company or yourself or the things that you learned just going through that?
Stacy Brown-Philpot (06:32): I have two things. One of them is, one of my favorite quotes is by Dr. Martin Luther King, which is the ultimate measure of a man or a woman in today’s time is not how he stands in times of convenience, but how he stands in times of challenge and controversy. And we had yet to have something controversial happen, and this was it. And it really was a test of what kind of team have I built? Is this the kind of team that’s going to stand together? And we completely did. So it was a good learning about the importance of building a team of people who are going to be there with you and through that time of challenge and controversy.
Pete Flint (07:11): Yeah, that resonates with me in the time when I was running Trulia, 2008 during Lehman collapse, it was like … then you’re in the real estate, you’re in the online real estate company, that financial market collapses, real estate collapses. And we were about three years old then, but it was just a torturous time. You just, you do not know what to do. But having built a foundation of a strong culture and values, then people figure it out. Obviously they need clear leadership, but I think the culture is one of those things that certain company values are set. It’s one of those things that certain companies leave too late and they try to add it in when they need it and it’s-
Stacy Brown-Philpot (07:54): It’s too late then.
Pete Flint (07:54): … not authentic and is far too late. But if you’re able to infuse a really strong culture from the outset, then you have no idea what crisis, but there’s going to be a crisis and you’ll be thankful that the infrastructure is there and that culture that will able you to carry through that. Were there any experiences which you had to as a company just get through a certain kind of constraint or challenge? The kind of unlock some value as you think about scaling the business off, whether, I think Ben Horowitz calls it the struggle. In that early scaling period, were there any stories about, okay there was this kind of this hack or this idea or this insight which enabled the company to perhaps go where it is today.
Stacy Brown-Philpot (08:38): When I joined TaskRabbit we were known for, oh this is going to be the next eBay for services. There’s auction model, people bid, people ask and it matches and we were in nine cities and it was going fine. The problem we had is our fulfillment rate, which if you all are running marketplaces, you know exactly what I’m talking about, was like 50%. And so any investor would look at them and say, “I’m never going to put another dollar in because that’s just awful.” We just couldn’t figure out how to move that number. And the struggle as you mentioned was like, we tried everything. We were trying to convince people to set different prices. We were trying to convince clients to pick certain categories and you just couldn’t convince people.
Stacy Brown-Philpot (09:26): Ultimately, we had to change the product and when we changed the product to a direct-hire model where we listed all the Taskers who were available with their hourly rates and what their skills are and then you just go in and hire the person, it was like, fulfillment rate went up, skyrocketed, it was successful, but we had to go through that and tweak and iterate and really try really, really hard to figure out, this thing is not going to work. We actually have to tell people who’re available to do what and how much is going to cost. Otherwise, we’re never going to get our fulfillment where it needs to.
Pete Flint (10:01): So this is a demand-side pick-
Stacy Brown-Philpot (10:03): Correct.
Pete Flint (10:07): … just to say, and then before, what was it? It was opaque.
Stacy Brown-Philpot (10:09): It was, demand-side still picked but you just bid. I want to get my house cleaned. 25 people bid and you go back if you want to and pick, but they bid different prices. The problem with that, you pick somebody for $10 you’re unhappy. You pick somebody for $100 and they still don’t do a good job, you’re unhappy. You pick somebody for $50 you think is amazing, but then, “Oh, but you know what? I’m not available on a day that you want,” then you’re still unhappy. So you just couldn’t make people happy with an auction model.
Pete Flint (10:36): And that reduced that friction. So enabled the matching rate to go up. So it went from 50 to something-
Stacy Brown-Philpot (10:42): Like close to 90%.
Pete Flint (10:42): Oh wow. Okay.
Stacy Brown-Philpot (10:43): Yeah, way better.
Pete Flint (10:48): You have a business. So that was the core pricing change. And what was the reaction from the participants in the ecosystem? Obviously, on the demand side, I think they would probably be much happy, on the supply side similarly, it was like, okay, I get what the company is about. I can easily fulfill orders. That supply-side was elite as well?
Stacy Brown-Philpot (11:03): Yeah. We launched this as a test in London where no one knew anything about TaskRabbit. So when we launched it, super successful. Taskers knew how much they were going to make. People could hire, the person showed up, everybody was happy, and then we brought it back to the US and when we did that, everyone’s going to be equally as happy, right? Wrong. But what we have built was a community that had come accustomed to a certain way of working and behavior. And so our Taskers were worried that if I put myself out there and put my calendar, how do I know I’m going to get hired? I used to have so much more agency. I could bid and now I can’t bid, I’m just waiting for somebody to hire me. I don’t trust you. There was a trust issue. So they had to believe in us that the work was going to come.
Stacy Brown-Philpot (11:52): Likewise, clients like to pick from 25 people, who is TaskRabbit to decide who the best person is, how are we going to know? How do I trust you? So it really pushed us to create a higher level of trust. And initially, the trust was not there. So we had to rebuild that trust for sure.
Pete Flint (12:09): That took like three, six months to figure out that?
Stacy Brown-Philpot (12:12): Less than six months. And the reason why I said that answer so fast of how long that took is because we were watching what happened to our revenues over a six month period, and they needed to reach a certain level for us to know if that was the right decision or not. And we did.
Pete Flint (12:29): But one of the classic … I mean, if you see in the marketplace, businesses are incredibly dynamic. You’ve seen how an existing business model is incredibly hard to change. And one of the wonderful things about marketplaces, they’re incredibly sticky. But one of the challenges is the participants really hate change. So you see people like Craigslist, which just don’t change, but kind of do okay. Increasingly less okay, but they do okay, and then you see in other businesses which are constantly innovating, evolving, and Amazon has perhaps been pioneering its incremental changes over time. If you were to perhaps pioneering. It’s incremental changes over time. If you were to perhaps do that again, and change perhaps the pricing model or business model within a marketplace, what changes would you do? How would you do it differently, or alternative? What was the best thing you did with that change?
Stacy Brown-Philpot (13:17): There’s a lot that we would’ve done differently. We would have chosen that business model, but we probably would’ve done a lot more communication about what was about to happen. We thought we’d do this great press release, and tell everybody, and they were going to be happy. And the truth is, is we should have brought the community along. Because it’s such a sticky marketplace, people are so invested. We didn’t tell our taskers until the day before it was happening. We should have introduced the concept to them. We should have got them involved. We should have encouraged them to participate in the development process, and those are all things we could have done, even if we ended up with the same decision, on the same tight timeline, we would have brought people along. And that’s a unique thing about marketplaces that many other companies don’t have to worry about. But the importance of the community, and how you interact with them was a huge piece of what we would’ve done differently. For sure.
Pete Flint (14:12): As the marketplace ecosystem has evolved, there’s been this sort of tension between horizontal marketplaces, or increasingly verticalization. How do you think about this balance between horizontal versus vertical?
Stacy Brown-Philpot (14:27): That is a tough balance. When we started, we were everything. And so because we were everything, we were nothing to somebody and everything to everybody. Since then, we’ve actually focused, and become a lot more vertical, focusing specifically on 扑克之星亚洲版home services. So a task management network that gives you trusted people to do things around your 扑克之星亚洲版home. It’s a much easier message to communicate. And so while we haven’t specifically said only TV mounting, or only furniture assembly, even though we’re owned by IKEA, or only cleaning, we have put in some boundaries of what we will offer, and what we will do, and what we won’t. And the reason is adjacencies. I think it’s important to have some adjacencies in a marketplace, because a customer comes to you, you spend all that money, and all that time to build trust, and now, they want to come to you for something else. So you’ve got to look at what are the adjacencies. And so we built our marketplace around what adjacencies actually matter for our target customer. And it tends to be things around the 扑克之星亚洲版home.
Pete Flint (15:33): And that adjacency is not only important, I guess to increase the revenue per customer, but also to increase the sort of repeat interactions. The more people use this as a kind of like the habit, this is my go-to, then that increases frequency, increases brand, increases retention.
Stacy Brown-Philpot (15:51): That’s right. It’s all about being this go-to team. And so you have to have enough frequency, and presence in their mind, and in their 扑克之星亚洲版home, for that to really work.
Pete Flint (16:02): With Services Marketplace, one of the big changes have been disintermediation. How do you go kind of like off-platform with the sort of 扑克之星亚洲版home care marketplaces, it’s been a real challenge. What do you do to overcome that challenge of transactions happening off-platform?
Stacy Brown-Philpot (16:16): Disintermediation is hard to manage. We spent a lot of time figuring out how to keep people on the platform, and sometimes to get somebody to come to you, you have to actually just let go. So if you said, “You know what we’re going to do? We’re going to build the best marketplace that we can, we’re going to attract amazing clients who have a lot of demand, and we’re going to give our taskers the best opportunities for work that they can find. They can set their own hourly rates, they can set their own schedule. And you know what? We’re going to back them up. Something goes wrong, we’re going to be there for them.” And that’s the kind of thing we want to build. And so we built that, and so we’ve been able to manage this intermediation because you now have a place that you can go where you now trust this platform to do things for you that you might not otherwise choose to do on your own, or to validate things and uncertainties that you might have about using the experience.
Stacy Brown-Philpot (17:07): And that’s how we’ve done it. I have yet to find another company that does anything that prevents anybody from just leaving the marketplace. And we do have success stories, and I like to call a lot of them success stories, where people will find a full-time job, because they went and did a task, they bartended somewhere, this startup was hiring, and they got a job. So doing engineering, or some other thing, that’s great. That’s exactly what this community is about. If we’re not growing the community that we’re a part of, we’re not doing something more than we thought we were here to do.
Pete Flint (17:41): I guess it’s also a function of the rake as well? What is the kind of pricing, if you try to sort of… if you tried to kind of charge too much, as a marketplace, and that creates problems. If you charge too little, then it’s hard to build a sustainable business, and attract supply and demand. Is that, if you think about that kind of, the evolution of that decision, has there been kind of any insights that you’ve learned over the evolution of TaskRabbit in terms of pricing? Other than just fixed price?
Stacy Brown-Philpot (18:12): Yeah, the take rate, or rake, or however you want to describe it is this weird thing, because you can do the bottoms up version, which is like, here’s our costs, here’s how much we need to cover the costs. This is what it needs to be. And then you can do the outside inversion, which is how much are people willing to pay for this service, and then how much can we make? We have really tried to focus on letting our taskers set their own hourly rates. And we don’t mess with that number at all. So if you want to charge $150 an hour, that’s your decision. And then we’ve looked at what does it take to build a great marketplace? How much do we need to charge? That prices some people out. And it does. But then we educate them on, well, if this is how much you want to make in a week, this is how many tasks you can do at a lower hourly rate, for example.
Stacy Brown-Philpot (19:03): So we try, we do a lot of education around the rate, but because we let them set their own hourly rates, that’s the best thing that we do, because we’re not taking money out of the tasker’s pocket. We may be charging more to the clients, but it equalizes to some degree, the experience on the marketplace, because the client still has a choice on who she wants to hire at a higher or a lower hourly rate.
Pete Flint (19:29): And just as you think about TaskRabbit specifically, demand versus supply constraint, how is that, and we’ll go into sort of geographic expansion, how do you think about, are you supply constrained, demand constrained, in general? And then how do you think about your geographic expansion? What are the kind of gating factors for you to go into different markets? Because it seems to me that many other competitors have just gone out of business, because they’ve either grown to fast in too many different markets, or they haven’t attracted enough demand, or the demand’s not sticky enough.
Stacy Brown-Philpot (20:05): So TaskRabbit now operating in six countries, and each country, including the US is very different. We’ve gone through the cycles of being demand constrained, and supply constrained, in almost all of them. We just launched Spain last month, so that one’s still very new. We have a lot of supply, because we always start with a lot of supply, and enough to meet what we think the demand is going to be, unless we’re way, way off. And by and large, investing in not just the quantity of supply, but the quality of supply has been the most important thing to balance the two-sided marketplace. So even when we get demand constrained, we’ve still got a great supply, and when we’re supply constrained, we can really work with that community and say, “Hey, things are happening. It’s the end of the month, it’s New York. People are moving, it’s the summer, and nobody wants to do it themselves. So, if you want to earn some extra money, this is the time to do it.” So we’ve got that relationship there to manage some of the spikes in demand while we build up the supply that we need over time.
Stacy Brown-Philpot (21:14): Every country is different. We went into Canada thinking this was going to be a slam dunk, and we turned out to be way more supply constrained than we thought. And part of that has been working with IKEA as a partner. So after the UK, we launched in Canada. That was the first country we launched with IKEA. And some of our criteria is how big is the market? What’s the potential? What does demand look like? Readiness for this kind of work, independent contractors. But it’s also where does IKEA operates? How can they really support our growth? And it turned out that the team in Canada really unlocked a lot of growth for us that we just did not anticipate. It was exciting because we can now go meet that challenge. But it created a new dynamic for us in how we scale in a new country, for sure.
Pete Flint (22:02): And is there any frameworks or as you think about geographic expansions, is there any both sequencing different regions as well as timing? Are we ready to expand into another market? As you speak to other marketplace founders and CEOs, are there any rules of thumb that you develop to help to understand this geographic expansion?
Stacy Brown-Philpot (22:20): So one rule of thumb is not to even think about it in regions. You’ve got to think about it not even at the country level, at the city level, make the city. Meaning people say make the market, make the market the city. Have enough demand in that city, where geographically speaking, the people who are doing the work for us are willing to drive as far as that city is big, to go and do the work. And so really focus on making the market, and making the city. We launched in London in one store for IKEA, in the Wembley store. And we didn’t go to the next store until we figured out that that store was a good store.
Pete Flint (23:04): So neighborhood, not even cities, just a neighborhood.
Stacy Brown-Philpot (23:04): Neighborhoods. It’s neighborhoods. And then we didn’t launch in more cities across the UK for a long time after we did London, because we were looking at the numbers, and the potential. We weren’t yet big enough to do enough brand marketing to cover the country. It was not going to pay off. And some of these smaller cities are so small, that you’re just not going to generate enough demand from those. And so the big cities really make the neighborhood, but for the smaller cities, make sure you have enough coverage to afford the marketing around them.
Pete Flint (23:38): So TaskRabbit is a division of IKEA now?
Stacy Brown-Philpot (23:41): Yes.
Pete Flint (23:44): How’d you get to know the IKEA folks? It’s an amazing kind of partnership. How did you get to know them?
Stacy Brown-Philpot (23:51): This is going to sound like one of those Silicon Valley stories, and maybe it is, but in December of 2015, the IKEA team came to visit Silicon Valley and met a bunch of companies, including TaskRabbit. There were like 10 people in the room, around a table, that was not an IKEA table, which they commented on the minute they walked in at our office. We now have IKEA tables, by the way. And we thought it was a great meeting, but one of the most important things we shared with them in that meeting was how many people pay somebody else to get their furniture assembled. And on average, how much they pay, which is often as much, or a little bit less than the cost of the item. And so with that information, and we didn’t even have a relationship with them, we were just like, “Just so you know, lots of people go to Emeryville store, and they then log into TaskRabbit and they hire somebody to come put it together.” So that became the conversation around the partnership.
Pete Flint (24:53): I’ve done that.
Stacy Brown-Philpot (24:53): You’ve done that?
Pete Flint (24:54): I’ve done that. Exactly. That was the first use case.
Stacy Brown-Philpot (24:56): Of course. Lots of people have. And that started the partnership. And from there, we really focused a lot on what value are we going to create? We obviously were creating value for customers who wouldn’t otherwise shop at IKEA. The only reason why they went is because they know somebody from TaskRabbit is going to put that thing together for them. But the company is very values-driven. And so to go from a partnership, to an acquisition was not just about how much money we were making for them, or for ourselves. It was also about what kind of value we were creating, and our own values as a company, and the alignment of those values. So a lot of the diligence was ours on values, and what matters, and what kind of company are we building, and why. And how can we really do that together.
Pete Flint (25:43): And just, how do you manage the culture? You’ve shared with me privately just the values, and it’s really impressive, and the organization, and it’s a remarkable company. How do you effectively navigate this sort of fast-moving, fast-charging, we’re a tech-driven company in Silicon Valley, we move a hundred miles an hour because that’s what’s required and that’s in our DNA, versus a European furniture maker. It’s like night and day.
Stacy Brown-Philpot (26:12): You make it seem so different, Pete. It is very different, but the missions are very similar. So our mission at TaskRabbit is to make everyday life easier for everyday people. Ikea is to create a better everyday life for the many people. Ours was written 11 years ago, theirs 76. So because that mission alignment was there, we could then there’s some forgiveness that happens on both side, which is like there’s this greater mission that we all sort of care about how we get there. We really have been left independent to do that. We’re technically a separate legal entity. We have a board that governs the company and they really didn’t want to, what they say, squash the butterfly and like, let’s just let this company run independently.
Stacy Brown-Philpot (26:54): So part of it is that decision as part of doing the deal. The second thing that we did was right after we announced the deal, we announced in October of 2017 and in January of 2018 we redid our values, and not that we didn’t have great values before but it was a moment and an opportunity for us to create new values if we wanted to, or reinforce the same values, but to establish that this is still going to be a separate entity. We’re still going to have our values, and these are the values are going to carry us through this next phase for this organization that’ll also be around in 75 years.
Pete Flint (27:32): And just can you, through that period, what’s been some of the growth in geographies or any metrics? Just like from the acquisition to where you are today.
Stacy Brown-Philpot (27:42): Yeah, we have seen so much growth. We went from two countries to six countries. Let’s see. When we first met with Ikea and started this partnership, our business was about 2% furniture assembly and now it’s 20% furniture assembly, so it’s grown.
Pete Flint (28:00): It’s still the vast minority.
Stacy Brown-Philpot (28:02): It’s a vast minority but and so it’s fueled a lot of our growth. The business is still growing, and at the same time the customer acquisition from Ikea is also growing and many of these customers are getting something assembled and then coming back and getting something mounted or some other service done, so that’s been impressive. Ikea is the world’s largest furniture retailer, and so imagine having that customer base to tap into. It’s the one thing we were hoping for and it’s really paid off.
Pete Flint (28:32): And if there was, you know, because it’s really unusual that this sort of big traditional company and this fast-moving tech company, it’s hard for them sometimes to work together in this environment. What would perhaps have been some of the biggest surprises of the experience, and then what advice would you give founders that are building high tech companies who are kind of building either partnerships or M and A with other perhaps more traditional companies?
Stacy Brown-Philpot (28:57): One of the biggest surprises is to be the world’s largest furniture retailer, you have to be a good business. The business has to be good and has to be well-run. Otherwise you’re out of business. But the process by which companies make decisions is often very different, and so we’ve got the DNA here of this is the pace. It’s really fast. Let’s just go, let’s go, let’s go. Let’s raise the next round of funding, and now we’re going to be successful. And they’re just very patient. They have like, 40 billion euros on the balance sheet. They can just wait, and they can test and they can iterate, and so their process of innovation, maybe it doesn’t happen as fast, but they have the capital to invest and they have the time to invest and so we had to both get comfortable with how the pace of decision making for sure.
Stacy Brown-Philpot (29:42): So if you’re at all considering a partnership or potential M and A with a more traditional company, number one, the pace is probably not going to be as fast as you want it to be. Number two, often those things align with the strategy of which you have very little influence over, meaning if that company has a strategy that fits with what you’re doing, then it’s going to be very easy for you to get that deal done. If you’re trying to sell in your strategy into a company that’s 20,000 people, that’s exhausting. And so think about where else you should be spending your time. If this is your number one bet, and for us Ikea was the company. You’re like, “If we could partner with anybody, we’d love to,” make sure you set aside some resources but not all the company resources to do it and to focus on it.
Pete Flint (30:33): So trying to create this sort of nimble team of Navy SEALs, kind of running a million miles an hour, but kind of working with the mothership but not necessarily letting them dictate the strategy. So it feels to me like TaskRabbit kind of invented this sort of word “gig economy,” and it’s remarkable. Like, it’s pioneer in the category way before Uber and Lyft I think in terms of the impact on their economy, but a huge amount has changed as that segment of the market has expanded. Tell me a little bit about what’s happening on regulation side and how TaskRabbit thinks about it. You’ve got AB 5 and various kind of measures in flux. What is the right thing for the industry to help all participants in the ecosystem as well as what do you think’s right for TaskRabbit?
Stacy Brown-Philpot (31:20): Leah deciding to start this company 11 years ago, I don’t think she went in thinking, “I’m going to create the gig economy or the sharing economy,” but she just wanted to have neighbors helping neighbors and it turned into a phenomenon that the world was actually ready for. It was 2008 and people were ready for something different. They needed a way to afford to live. Today people need a way to afford to live and more and more people need a way to afford to live, and so whatever regulation that has been passed or is currently in the process of being passed is really I believe in service of that, but the process is different than how many of the companies in our space are approaching it.
Stacy Brown-Philpot (32:04): So what matters for the industry and for the sharing economy or gig economy is that we create a way for people to afford to live. We are creating economic opportunities. We are filling the income gap. We are helping people pay major bills. We are doing a lot of the things that a lot of people say they want to do. It is actually happening because of the companies that we have and for TaskRabbit, we want nothing more than for that to continue. We want to continue to offer our taskers flexibility to set their own hourly rates. We want them to have the option to set their hours for when they want to work, but we also want them to have benefits. We are not against portable benefits. We want to create a structure where that is supported and available to them, and so those are the things that we’re advocating for as we navigate some of the regulatory environment.
Pete Flint (32:55): And is there a Holy Grail out there? What would be the, if you were writing these bills, what would you advocate for?
Stacy Brown-Philpot (33:04): I wish there were a Holy Grail. It is so complicated because when we have these conversations, everybody has something else in mind about what’s important for the group. When we talk to our taskers, they want to be able to save for retirement, like access to a 401(k). They obviously want great healthcare. Some of them want worker’s compensation, but most of them don’t because a lot of them are supplementing their income and they have a job already that provides that. So we would love to be able to offer some way to afford the things that they need when they need it. I don’t know what that looks like because we don’t have a structure today anywhere. W-2 does not allow for that structure. We don’t have a structure today anywhere that allows for that.
Pete Flint (33:48): And there’s no other international market which you’ve seen that kind of does a good job in navigating this? Some of these socialist European countries? No?
Stacy Brown-Philpot (33:57): Six countries and nothing. We found nothing. No. Every country has a point of view around independent contractors that some of them whom are different than in the US. Some of them are more accepting, some are more stringent, and so we’re having to deal with that as well.
Pete Flint (34:15): You know, here we are in the midst of the corona crisis. What do you think about that? I’m sure you’ve had conversations with your team. They’re sort of, on the one hand it’s clearly a travel industry. Is it going to be really challenged? On the other hand, there’s at least speculation that there’ll be certain industries as I saw this morning that Grubhub was upgraded as a stock because people were going to be like, you know, getting their DoorDash.
Stacy Brown-Philpot (34:38): Using delivery services.
Pete Flint (34:38): Using their delivery services. DoorDash, and maybe it’s too early to tell, but how do you think that might impact not only just TaskRabbit, but perhaps this broader ecosystem of the gig economy or shared economy?
Stacy Brown-Philpot (34:52): I think it’s a little bit too early to call any particular company. Obviously certain industries. Where do I think TaskRabbit fits in this? The most important thing that we care about is the safety of our employees and the community, our taskers and our clients, and so we’ve focused on what communications do we need to do to make sure that they are protected at this time? Many of them have to go to work, but we want them to be safe, so we’ve said things like if you have to cancel because you’re not feeling well, then we’ll waive the cancellation fee. Something like that. Something where they feel like they might be penalized for something but they won’t be.
Stacy Brown-Philpot (35:35): I think over time the dependency that we have on services is actually going to go up because now the things that we used to do ourselves, we’re going to start looking around and figuring out, who can do them for us? And that may create some value. It may create some, or it may be scary to people, but if it becomes more of a norm then I think for anybody who’s running a marketplace for any kind of service has an opportunity to demonstrate what kind of value you can create. So we’re just trying to be as safe as possible during this time so people can see that this is a valuable service, whether you’re in a crisis or not.
Pete Flint (36:11): But it seems that there would be some sort of lasting impact from this, and what we’ve seen in so many, when you have these economic shocks or shocks of any kind, then there’s a mismatch between supply and demand. And it’s the smart, nimble marketplaces that can identify these mismatches of supply and demand that can capture market share and then use that as a wedge to expand into other markets. So while I’m just hopeful it will pass pretty soon and we can move back on with what we’re doing before.
Stacy Brown-Philpot (36:38): Yeah, I hope so too.
Pete Flint (36:40): So, thanks again Stacy. This was amazing conversation, and such a wonderful story and such a wonderful leader, so thank you for joining us today.
Stacy Brown-Philpot (36:48): Thank you for having me!